“Sold” now hangs below the real estate sign in front of our house. All the contingencies have been cleared and it should be smooth sailing until the closing date about a month from now.
In the next few weeks we’ll be going thru the myriad of chores involved: Packing, finding a mover, switching services, dropping our home owner’s insurance, picking up renter’s insurance, selling stuff on Craig’s list. That last is an adventure worthy of its own post. Maybe with the money we raise, we’ll even buy a new mattress.
For only $175,000 this one sounds nice…
…but we actually bought this one.
The other day a lovely young couple stopped by to pick up a variety of garden tools we are unloading. They were very excited as they just bought their first house. It is, as she described it, a “fixer-upper” and they got it in a short sale. They are happy with the deal and busy shopping garage sales and Craigs list for all the stuff they’ll need. She can’t wait to put in a garden. They are putting down Roots.
I’ve owned this house we’ve now sold for 13 years. The one before it for 15 years. That’s 28 years of homeownership for a guy who really doesn’t much like owning houses. As houses usually are when you run the numbers, they were lousy investments. But, I’ve no regrets. They served their purpose both as a place to raise our daughter in a great school district and just because we wanted the ownership lifestyle at the time.
Critical to making this work was that in both cases we bought far less house than the world of real estate agents and lenders told us we could. 1/2 to 2/3 less. Given the reaction of these professionals we may have been the only people in human history not to have bought the absolute maximum house we could afford.
Now we are on the verge of returning to the blissful, carefree, unencumbered life of renting. Instantly, we’ll have far more flexibility and far more mobility. We are spreading our Wings.
Roots & Wings.
Many years ago when our daughter was still very young I read, or was told, that good parenting boiled down to giving kids roots and wings. Made sense to me then. Still does.
She’s just a couple of weeks shy of her 21st birthday now and has already traveled to almost as many countries and continents as I. At the moment she is in France completing her junior year of college. While there, and part of the point of going, she’s seen a fair amount of Europe. She’s just back from a weekend in Geneva. At the end of April we’ll head over to spend a week with her in Prague.
Clearly, we’ve done well on the wings side of things. And our close family relationship provides the roots. But she’ll never really have the “old family homestead” sort of roots. We are more wing type people.
The whole rent v. own financial conversation tends to generate very strong and very emotional reactions. That always seemed a bit odd to me. It is, after all, exceedingly simple to run the numbers and see which is the more financially prudent course in any given case. From there you’ll know if your preference will cost or save you money. If it saves, you need only celebrate and do what you wanted anyway. If it is going to cost, you are able to decide if you want to spend the extra money your living preferences require.
In our case, the numbers always pointed to renting as the better financial path.
Right now that’s a beautiful thing. We get what we want and it costs us less.
But even when what we wanted was a house that cost more, that was fine. What was critical at the time was understanding how much more that buying choice would cost. It was that understanding that lead to us always buy less house than we could “afford,” and that in turn made for a far more comfortable home ownership experience.
Not being privy to the numbers, I have no way of knowing if the young couple who bought my tools have made the best financial choice. But what is clear is that they are very excited about putting down roots. They certainly have made the best emotional choice.
That being the case, and assuming they’ve not spread themselves too thin, even if the house costs more over time they will have made the “right” choice. Life choices are not always about the money, but you should always be clear about the money choice you are making.
Anthropologists tell us that we humans, Homo Sapiens, have been running around the planet for just about 200,000 years and that we have been “behaviorly modern” for the last 50,000 or so. For the vast majority of that time, we were nomadic hunter-gatherers. More wings than roots.
But then some 10,000 years ago something very profound changed. After 190,000 years of roaming around, we began farming. We began settling down. We began building cities. We began to go to war over territory. We began to put down roots.
Why this occurred is the subject of much debate and research, but nobody really knows. But occur it clearly did. It has become hard wired in our historical myths and stories:
Abel v. Cain
Hunters v. Farmers
Nomads v. Settlers
Own v. Rent
Cain Slaying Abel by Peter Paul Rubens
a bad day for Abel
Abel v. Cain
Did “Able v. Cain” sound odd to your ear just now? It does to mine. “Cain v. Abel” is how I’ve always heard it. The farmer is named first. The farmer survived and reproduced. The hunter is killed off. The west is settled. The nomads exterminated or rounded up. Hunter-gatherers teeter on the brink of extinction. No wonder this debate is so emotionally charged. Our biases are showing.
They are even written into our tax code. Mortgage interest and real estate taxes are deductible. Home ownership is a national good and as such is rewarded. It’s worth noting that both these deductions, and the very concept of mortgages being widely available, grew out of the Great Depression. It was time of dangerous unrest. The fact that a settled population is more docile was not lost on the policy makers of the day.
We might also look at this as…
Expansiveness v. Efficiency
Personally, we fall on the side of Efficiency. We like owning exactly what we want, need and value and not a single thing else. The apartment we’ll be moving to has a bit more than 1/3 the space we are leaving. It is exactly what we need and not a square foot more. Maybe even a few square feet less. But I’d rather pare down to fit.
The problem with houses is that, even for people like us, there is the relentless tendency to expand to fill them. For those who value Expansiveness, that’s just one of their charms.
The far side of Expansiveness can be found on the TV show:
If you haven’t seen it, the program follows two guys who drive around the country looking for old things they can buy and resell at a profit in their stores. They seek out places filled to the rafters and across the fields with junk that owners have collected, most often for decades. The people who own these places and all this crap are the pinnacles of the Expansiveness motif. Once the house is filled, the barn is next. Then the out-buildings, fields and trailers they’ve hauled onto their land to hold still more.
It is hard to imagine a more different mindset than my own, and that’s likely what makes it endlessly fascinating to me. Well that, and the idea of buying low and selling high, of course.
The beauty of our lives is the endless variety of how we can choose to live them. The point of this blog is fundamentally to discuss how and why to accumulate F-you Money and the freedom it provides in making those choices.
Roots or Wings.
The choice is yours. But as with every thing you chose to buy, be sure you take the time to know what it will cost.
My pal the Mad Fientist and his wife are definitely ‘wings’ people. Here’s his plan for achieving FI with a brilliant insight into how renting will help: The Shortest Path to FI.