I've been touting the Possum living way of life for so long that most of the people who know me just kind of tune me out after a while. Since I first became acquainted with Dolly Freed's philosophy, it has been my goal to pay off my house.
A year or two ago, I was having a conversation with a dear friend about such things. We talked about the benefits of investments versus owning one's home, and at the time, the thought was that it was better to carry a mortgage and put extra cash into a 401K or other investment savings account (a lot of people still feel this way). My friend admitted knowing some older folks who'd lost HUNDREDS OF THOUSANDS of dollars when the stock market slumped a few months prior (this was more than a year before the talk of the recession began,and before the stock market crashed in September 2008).
At the time, I insisted that a better use of one's money would be to invest it in one's home. I said installing things like low-cost/no-cost heating systems, self-sufficient energy sources, gardening tools, seeds, food storage facilities (cold closets, root cellars) were a better use of the funds than carrying a mortgage and having a stock portfolio. My thought was that if we're self-sufficient, if we don't have a mortgage, if we can produce our own electricity and grow a bit of our own food, then we don't need a huge income.
In addition, I argued that owning the house with its self-sufficient systems makes one more secure, because one wouldn't be subject to the fluctuations of a fickle marketplace.
This morning I read this story, which is about a woman who is living my ideal. She's in her sixties and is self-sufficient, living without the help of government programs. She's eligible for a social security stipend (widow's benefits), but has opted to wait a few years when the payments will be larger.
She owns her home, and she has a small income from some creative enterprises (including a rented apartment over her garage). The author of the piece is her nephew, and as he says, she's living better than those of us working 40 hours per week - because she was frugal and thoughtful with her finances ... and because she chose to "own" her home rather than play the stockmarket.
I don't disagree with having a "nest egg", just in case, especially if one has a mortgage, because having that cash in the bank provides a nice feeling of security. In an emergency, we know we can pay for the next meal.
But having the mortgage (or a rent payment) locks us into the money economy, and we have no choice, but to work - often at jobs we hate. If I had, in savings, the amount of money I owe on my mortgage, I would pay the mortgage. I don't care that I would be "losing" money over the long-term. If something happens to the banks (and it has in the past, without warning!), or if my money is invested in stocks, and something happens to the stock market, I lose that money. It's gone, like so much smoke up the chimney.
My house, though. My house is a tangible thing that I'm sitting in right now. It's a piece of land that I can dig into and grow things out of, so that we can eat, even if we can't afford to go to the grocery store. It's a roof that can have solar panels so that I can have electricity even if I can't afford to pay the bill. It's walls that keep the wind and rain and snow from soaking my clothes. Properly managed, this little land with this little house can satisfy all of my basic needs.
Sure, I can think of lots of instances where the house and the land were lost, but right now, more people are losing their homes due to money issues than are losing their homes due to natural or manmade disasters. Despite all the senstaional news reports about floods and mudslides and wildfires, statistically, my money is more secure invested in my land and house than it is as a bunch of numbers on someone's computer screen.
Which is why, *I* would rather have no mortgage and no savings, because if I own my house with a small piece of land and a few chickens in the yard, I can feed myself and my family, and potentially, earn a small income to pay for the other things (we think) we need to be comfortable.
If we had no mortgage, Deus Ex Machina could quit his soul-sucking job and stay home to tan those hides in the backyard, or go hunting, or whatever else he wanted to do. The point is that his time would be his own, and he'd be free to chose the activity rather than having the activity dictated to him.
What it all boils down to is freedom.
The lady in the article has it, and it's what we all say we want. But some time ago we all bought into the notion that money would give us that freedom, not realizing that we'd sold our freedom to the highest bidder, and he's been collecting ever since.
Yes, in our world, some money is essential, but instead of investing to make more money, in my opinion (and in the real-life examples of the lady in the article and my hero, Dolly Freed), it makes better sense to make our lives as low-cost as possible, which means not investing, but paying off.