Wednesday, May 19, 2010

My Minimalist Response to the Current Economic Crisis

My last post outlined my ranty take on the current economic situation. Now there's plenty of reasons (and methods) to complain about what is going on but it really doesn't matter how much people rant about a situation, if you don't take steps to deal with what is happening then you are just expending your energy but not changing your outcome. Here are some things I am doing which I hope will help me deal in a positive fashion with the current economic situation:
  • I don't use credit cards. I opted out of the "live beyond your means" game a while back. I paid off and cancelled my credit cards and now if I want something, I pay cash for it. I'm guessing my credit score is about 0 and I am quite happy with that. Thanks Dave Ramsey.

  • We have one vehicle. For nearly 20 years we had up to five or six cars for two (!) drivers plus the random kid that would come back home to visit. About the time that gas rose to $4.50 per gallon a couple years ago, I realized that I could continue and play the game or not. While I didn't entirely opt out of the car ownership game, I stacked the deck in my favor to the point where we use much less fuel than before, we don't have a loan or a "fleece" on a vehicle, and we pay much less for insurance than in years past.

  • We would like to sell our house which is too big for just two people and buy a smaller place with cash. This will help in a number of ways: owning the place you live free and clear rocks and a smaller place costs less to heat/furnish/maintain/cool/etc. Now some people take the minimalist concept even further and live in an RV, rent a uber-cheap place, or even trade living accommodations for services such as maintenance work or house sitting. I don't intend to go that far. Unfortunately property values are declining, but fortunately if we don't sell, it won't be that great of a problem since the house is on its way to being paid off. I just don't like heating a big house but I guess I will just have to deal with it.

  • I am continually educating myself. This does not include taking out massive college loans. In fact, every time I hear of a new graduate who owes nearly six figures for a degree that may or may not get them a good enough job to even start paying back Sallie Mae I cringe. With a good education (not necessarily from college), the ability to figure things out, a wide variety of skills, and the desire to "hussle" in order to make a living, you can earn money just about anywhere. That is why I take all educational opportunities that come my way--community ed classes, university classes if they meet very specific needs, and even a class at the local Y--not only does having an expansive education make you a more valuable commodity in the workplace, it provides you networking opportunity over a depth and breath of industries which is unparalleled. People who think they can train very narrowly for a job then do that job for the rest of their life will be very disappointed when a) the job simply goes away, b) someone comes along who does the job better, or c) the job changes to the point that your skills are no longer useful.

  • We are minimizing our possessions. Having a ton of possessions ties you down both literally and figuratively. We are to the point now where all of the most important things we own can be carried with us or stored in a safe deposit box. If we want to travel the world for a couple of years, I would have no problem simply locking the door to our house and leaving what minimal possessions we have behind. The less stuff we have, the less we will be worried about guarding it, protecting it, insuring it, etc.

  • We are working towards "self insurance" for many of the items noted in the previous post. Healthcare, unemployment, Social Security...the things that people let guide their life, determine what job they will have, and where they will live, is another game I wish to opt out of. I plan on fully funding my own retirement so if Social Security goes away, it won't be a major crisis for me. This is done in a variety of ways including cash savings, having minimal expenses, investing in a variety of areas, and continuing to work in some form because I think I would be bored silly if I just decided I wanted to stop working all together and sit home collecting a tiny check from the government. Unemployment is, well, a non-issue for me as I am self employed and have been so for nearly my entire life. If I lose a client, I go find another one, if my product isn't selling, I find another product to sell, if the market totally changes, I better change right along with it. Plus, if I need some quick cash for a major expenditure, I am not above hiring myself out for the right price to the right company. This is the "hussle" I talked about above. People can make money, they have just forgot how with the "working for the man, do what you're told, collect your paycheck" mentality that is ground into people from the day they start school all the way up through retirement. Blech. And, while I realize that healthcare is a big issue which impacts people differently, I am fortunate that I have good, nearly free, health insurance. I am doubly fortunate that I use it maybe once every few years. My grandmother, from the time she had her last kid until the time she was close to death which was a period of over 50 years, saw a doctor exactly twice in that period. She preached keeping herself healthy and avoiding the medical establishment like the plague which is kind of my theory as well. Other options I will consider if necessary include trading services for care with a few doctors I know and traveling overseas to have pricey procedures done if for some reason my health insurance should go away.

The bottom line is that life is a game. Much like Monopoly, you can kind of keep track of who is winning the game by looking at the other's player's status'--are they running low on cash? Do they own appreciating assets or depreciating "assets"? Do they have the wits to pull themselves out of tough situations and not rely on someone else (like the government) to do it for them? And unlike the game of Monopoly, life is one of those games where you can actually make up your own rules if you like.

1 comment:

  1. And like Monopoly life can come down to a roll of the die too. It makes a difference what square you are born on. Like you said skills and education tip the hand in someone's favor.

    I may think the most important assets are personal attributes - intelligence, curiosity, mental toughness, self discipline, honesty, industry to name a handful. These are the things that payoff no matter what you do.