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Friday, January 16, 2015

frugal living 4


FRUGAL LIVING 4

NO DEBT

When you don’t have a car or rent, you can easily live on a quarter of what everyone can.  If not less.  If you have no debt, you can afford the luxury of not working every month.  Okay, granted, almost all of us do work regularly.  I would go out of my mind without the daily anchor of work, even part time work.  So we are not talking about early retirement or being a beach bum or being a lazy slacker.  We are talking about the freedom from life altering stress for when something goes wrong.  Sudden unemployment.  Or the US economy drives into the crapper after the Russians and Chinese figure out how to destroy the PetroDollar covertly enough to avoid nuclear war ( it isn’t a question of if we lose control of global pricing in the Greenback, but when ).  Or, something as simple as your landlord selling out the place from under you ( yes, I know you are not supposed to be renting.  My point is that any number of things can jerk you around financially through no fault of your own ).  If you have debt, you are literally one paycheck away from being homeless.  Now, I’m talking about bad debt.  Good debt is not what you might think.  It certainly isn’t debt as previously sold to the gullible public- but more on that in a moment.  Bad debt is consumer debt.  Any credit card, any auto loan, hell, even a two year contract on your cell phone or wireless TV, is debt that hangs over you like a guillotine.  A mortgage is the worst of all because of its size and longevity.  Look at it this way.  Would you take a job that included a rent free dwelling?  That sounds exciting, freeing up half your income, yet if you do you are always in danger of being homeless as well as jobless.  With a mortgage, you have thirty years of being in danger of being homeless, should you miss a payment ( yes, I know it takes more than one missed payment.  Even if six were allowed, jobs are too precarious anymore to provide any kind of security in this regard ).

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Being out of debt means that losing a job is tough, but it isn’t catastrophic.  It is inconvenient rather than life changing.  Now, you might need SOME debt.  Most of us can’t cough up enough cash for land, even if it is $2,500 for a lot in West Texas ( check out Dell City, south of the New Mexico border.  Most other spots in West Texas are suicide distances from town or water ).  So you get into debt for that and make $100 a month payments.  Far better to pay cash, but two grand in debt for land is far better than two hundred grand.  If you must own a car to get to your paid off land from a job, okay.  At least if you are in debt with a vehicle, if you lose the job you just repossess the vehicle.  And are NOT homeless.  Also, if the choice is picking between paying off your land or staying in debt longer, in that case debt is going to be a necessary evil.  Far better to have a place to live the banks can’t take, or the cops can’t harass you because you own it so you are not a homeless guy trespassing, than to have no debt.  But that old standby, getting in debt to own a business?  Don’t fall for it.  Owing on the means of production used to make sense as profit paid the loan.  But anymore large corporations are driving out all the little guys.  I wouldn’t do a small business, myself, unless it was without debt ( this alone gives you a clear daily advantage financially ). 

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I don’t hate debt because I hate bankers ( although, of course I despise central bankers ).  I don’t hate debt because it is “bad”.  I hate debt because it is rarely helpful, and without it you are free to enjoy your life to a much better degree.  It is liberating.  If you must be in debt, do so carefully and constructively and  on a very small scale.  But try to avoid it completely.  It is a quality of life issue.  It is like exercising.  The discipline sucks, and there is no instant gratification, but by doing so you increase the quality of your life.  You feel better just BEING. 

END

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8 comments:

  1. Lord James, it's amazing how you can re-spin old wisdom in such a way that even us old hands find it refreshing. What did we figure, I've been following you since 2006 or something? This topic could be expanded too...I'm sure that is the plan.

    For the newer folks, listen to the Master's wisdom. I have on several levels. Yes I have a truck and a note (I sold my V8 and bought a 4-banger Toyota and hope it lasts) but it allows me to have my side business (lawn mowing commercial properties clearing about $25+ an hour) that pays most of my vehicle expenses. I also live 14 miles from anything and almost 40 from my main job. My mobile home is paid for and a friend holds my land note. Not Ideal but he won't foreclose as its land by his retreat. He says if I can't pay, it's doubtful anyone could buy it. I have a pension too which I could live on if not for the evil child support. I have paid off alot of debt also thanks to Jim's ideas.

    I have buckets of wheat, beans and pasta. I have bolt action rifles and revolvers. Granted I have other weapons that I acquired prior to Jim's teachings but thats another post for James wisdom.

    ReplyDelete
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    1. I appreciate it. I'm always trying to be fresh, either added marginal updated utility or just humor, because I know I drone on about the same core topics. I try to be a bit broader than most, but there is only so much you can do.

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  2. Utterly true.
    Almost all debt is bad debt to be in. Education Loans are the second worst.
    The worst is the loans that have liens on things you need to live - Profession/business, shelter, etc. If you have a lien on any of these things you
    are just asking for your own demise or enslavement.
    Now once you have been an adult for a couple of years (or decades) you are almost guaranteed to have some debts.
    How you get out from under these debts is the big problem confronting people like myself.
    If I put 100% of my gross income toward my debts for the next decade I could not pay them off.

    ReplyDelete
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    1. I think we all fall for the debt, greed being the human condition. I got lucky I didn't care about low income- it helped keep the debt down. Then I got lucky when forced to bankrupt ( ex #2, of course ), which was a year before the law changed. I'm telling you, Baby Jesus looks after me.

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  3. I'd rather have the repetition than silly posts on "Sewing after TSHTF." (hint: its pretty much the same as now, just without the carefree shopping for supplies.)

    ReplyDelete
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    1. Some of the "material" out there is moronic. Rewording of Wiki crap barely beyond a shopping list.

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  4. You could delve into the more detailed aspects of how you built your underground abode, materials and methods used, etc., and how your array is established, water septic hook-ups, etc., etc. Most people have no idea how these sort of things work.

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    Replies
    1. See today's table of contents ( posted at the usual 7am )

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