A consumer revolution - no more debt
I used to live a care-free lifestyle, sort of, in my 20's, sharing a mortgage-free house with my brother and sister, could pretty well get by spending $6-12k/year, shared a car with my sister. I worked part time, or contract work, earning more than I needed, and then freetime between.
Now I'm a bigboy double-mortgage holder, finally buying out my sister's share of the house in 2003, and borrowing an extra $40 for 20% down on an investment property for a friend, got my debt up to $230k, and a fair interest rate 5-year ARM, until the dreaded August 2008, but otherwise a 30 year mortgage. At least my debt balance is down to $162k or so, and maybe can get my little home mortgage paid off next year and start paying down the other mortgage. I certainly can't complain. Of course all supported by a good job for a small company, which I have to hope will keep supporting my debt.
A 30-year mortgage scares me silly, although I suppose in a couple years my new ARM interest rate might change my preferences. A 30-year mortgage is truly a modern wonder, allowing so many people to get into home ownership, and all the consumeristic requirements of that lifestyle. I mean there's no end to furnishings, repairs and such to keep the money flowing.
It is amazing to me my parents purchased our house for like $15k in 1965 - cash. They lived in an apartment a few years, had savings, and got help from my dad's parents. I don't know what $15k was worth THEN, but a lot more than NOW, and it still seems large.
Actually to can estimate what month was worth by the CPI
http://research.stlouisfed.org/fred2/series/CPIAUCNS/downloaddata
Looks like $15k in 1965 is worth about $100k in 2006 money, so my frugal 30-something parents/grandparants had the equivalent of about $100k savings to put down on a house, a house now claimed value a perhaps modest $160k. Even if houses are now twice as expensive as then, it's still astounding to imagine saving $100,000. I'll have to give them credit as being good savers, but perhaps income was better then comparatively?
Even for less fortunate folks, a mortgage payment is the smallest of smallest risky debt to hold, overall, but I'm with my parents - if you can find a way to pay off a mortgage sooner than later, seems like a plan to me. Why are so many people so willing to accept debt these days?!
I think credit is easier now, and that makes a difference, and I think there's a lot more interesting trinkets to buy now - I mean they didn't have wall-sized plasma TVs back then! And no Amazon.com, no credit cards? Anyway I do think it is easier to spend more money now in numerous ways.
When I think about how to "save the world", how to "save ourselves" as economic conditions will require as energy costs more, and the U.S. status must decline, I can only think debt-is-slavery. If you owe money, you are dependent upon the system to keep the money flowing, and you have a vested interest AGAINST change that costs more now, even if it helps more in the long term.
So I suppose I'm still hopeless, but at least I have one starting point, for those who want to reach the first stepping stone - find a way to live without debt - pay down debt you take on.
Maybe I'm dumb - maybe stock returns really do beat mortgage interest rates, but I feel like paying down debt is a guaranteed return, and I sort of like that, whatever the future holds.
I think to the April 14, 2007, "Step it up" Rally around the country:
http://events.stepitup2007.org/
An amazing goal - reducing net carbon production by 80% by 2050. How will it be done? Lots of options, but most will require more hardship than most people will be willing to take. Even if 80% of the population cut our CO2 by 100%, we'd fail our goal if the rest just kept walking up the hill.
Whatever the process I'm sure getting off the debt machine must be part of the solution. I like the idea of 3 uses of debt: (1) Investment (2) Consumption (3) Speculation. Only the first is a productive use of debt, even if always a risk. Speculation sounds good as long as you believe the pyramid keeps rising.
It would be fun someday to start a "zero interest loan" process for community investment. When you don't have promises of money, you gotta believe there's other returns of value. Having a community that can handle financial downturn seems like a good investment. Having a community that can support its own debt, what an idea!
It is fun to imagine some day that communities could be measure their financial health by their collective assets and debt.
Anyway, "Step it up 2007" must consider these things!
Now I'm a bigboy double-mortgage holder, finally buying out my sister's share of the house in 2003, and borrowing an extra $40 for 20% down on an investment property for a friend, got my debt up to $230k, and a fair interest rate 5-year ARM, until the dreaded August 2008, but otherwise a 30 year mortgage. At least my debt balance is down to $162k or so, and maybe can get my little home mortgage paid off next year and start paying down the other mortgage. I certainly can't complain. Of course all supported by a good job for a small company, which I have to hope will keep supporting my debt.
A 30-year mortgage scares me silly, although I suppose in a couple years my new ARM interest rate might change my preferences. A 30-year mortgage is truly a modern wonder, allowing so many people to get into home ownership, and all the consumeristic requirements of that lifestyle. I mean there's no end to furnishings, repairs and such to keep the money flowing.
It is amazing to me my parents purchased our house for like $15k in 1965 - cash. They lived in an apartment a few years, had savings, and got help from my dad's parents. I don't know what $15k was worth THEN, but a lot more than NOW, and it still seems large.
Actually to can estimate what month was worth by the CPI
http://research.stlouisfed.org/fred2/series/CPIAUCNS/downloaddata
Looks like $15k in 1965 is worth about $100k in 2006 money, so my frugal 30-something parents/grandparants had the equivalent of about $100k savings to put down on a house, a house now claimed value a perhaps modest $160k. Even if houses are now twice as expensive as then, it's still astounding to imagine saving $100,000. I'll have to give them credit as being good savers, but perhaps income was better then comparatively?
Even for less fortunate folks, a mortgage payment is the smallest of smallest risky debt to hold, overall, but I'm with my parents - if you can find a way to pay off a mortgage sooner than later, seems like a plan to me. Why are so many people so willing to accept debt these days?!
I think credit is easier now, and that makes a difference, and I think there's a lot more interesting trinkets to buy now - I mean they didn't have wall-sized plasma TVs back then! And no Amazon.com, no credit cards? Anyway I do think it is easier to spend more money now in numerous ways.
When I think about how to "save the world", how to "save ourselves" as economic conditions will require as energy costs more, and the U.S. status must decline, I can only think debt-is-slavery. If you owe money, you are dependent upon the system to keep the money flowing, and you have a vested interest AGAINST change that costs more now, even if it helps more in the long term.
So I suppose I'm still hopeless, but at least I have one starting point, for those who want to reach the first stepping stone - find a way to live without debt - pay down debt you take on.
Maybe I'm dumb - maybe stock returns really do beat mortgage interest rates, but I feel like paying down debt is a guaranteed return, and I sort of like that, whatever the future holds.
I think to the April 14, 2007, "Step it up" Rally around the country:
http://events.stepitup2007.org/
An amazing goal - reducing net carbon production by 80% by 2050. How will it be done? Lots of options, but most will require more hardship than most people will be willing to take. Even if 80% of the population cut our CO2 by 100%, we'd fail our goal if the rest just kept walking up the hill.
Whatever the process I'm sure getting off the debt machine must be part of the solution. I like the idea of 3 uses of debt: (1) Investment (2) Consumption (3) Speculation. Only the first is a productive use of debt, even if always a risk. Speculation sounds good as long as you believe the pyramid keeps rising.
It would be fun someday to start a "zero interest loan" process for community investment. When you don't have promises of money, you gotta believe there's other returns of value. Having a community that can handle financial downturn seems like a good investment. Having a community that can support its own debt, what an idea!
It is fun to imagine some day that communities could be measure their financial health by their collective assets and debt.
Anyway, "Step it up 2007" must consider these things!
posted by Ares Olympus at 5:13 AM
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