Mortgage apathy: Financial cyanide

“Is it ignorance or apathy? Hey, I don’t know and I don’t care”

Jimmy Buffett

We were out riding the hills of far away places with mates. Between sucking in oxygen we talked about life in a single income family. One of my riding buddies is just having his first which means that his wife will be on maternity leave for 12 months.

It is interesting because they are spenders. I’d always assumed his wife must be on very good money because I’ve worked with him at a number of different companies and so I am certain he is on a good, but not great salary.

Last year they bought their first house. A five bedroom place in a very good street. Probably in a neighbourhood where you wouldn’t get much change out of $750,000 for a house like his. They immediately added a $50,000 deck, $25,000 of new carpets and then went off on two international holidays. Upon returning they installed a superb surround sound system and a massive plasma flat screen. Needless to say I like to visit.

So with all this spending I just figured that their joint income must be pretty good, but I also wondered what would happen when they had kids, especially if they were buying some of this stuff on hire purchase.  Anyway turns out they probably weren’t on a massive double income. Their mortgage was so big and it seemed like it was so futile to them that they were extending it to buy all this stuff and take expensive holidays.

One of the other guys in the group is a bigwig company director. He’s likely on around $500,000 a year, but he still wears his old high school rain jacket out riding (pretty much everywhere actually). We are on vastly different incomes, but we share a pretty similar approach to life. Hence the long friendship. I‘ve written a bit about him before. Anyway I thought he was going to have an unhim moment and slap our otherfriend for being so stupid with his money.

With any mortgage you might pay say $1300 every fortnight or $34,000 per year. When most of that payment is interest the results can be quite depressing. In a single year for $30k in you might only reduce your debt by $5000! So you start to think that borrowing another $100,000 for toys would only make that payment $1500 instead of $1300. To most people this sounds like a good plan.

This is what I call mortgage apathy.

It all comes crashing down when $1500 become ¾ of your family income. Like if you lose a job, you get sick, you have a kid or you retire. Worst case your house gets sold by the bank you end up homeless, but you still owe the bank money on top of rent.

The normal payback period for a mortgage is 30 years. The average life for the flat screen (mostly due to planned obsolescence) is two years. Makes no sense at all to be paying that TV off over 30 years as part of your mortgage.

What does make sense is to have the tiniest mortgage you can afford.

Be as aggressive as you can in paying it back.

Pay as much off as early as possible.

Set payback targets.

Celebrate like your team won the super bowl when you exceed your milestones!

Make charts that your kids can colour in as you destroy the debt.

Figure out what proportion of your home you actually own and how much is the banks. When you start out you may only own the curtains. Three years later you own the kitchen. Realise this is what you are buying with your paycheck. You are buying the bedroom that you sleep in. The bathtub and the drywall in your child’s room.

The key is to become as excited about being debt free as you are about a new couch, a playstation or a holiday to the Carribbean.

 

Running on a smile

“The miracle isn’t that I finished. The miracle is that I had the courage to start” 
John BinghamNo Need for Speed: A Beginner’s Guide to the Joy of Running

We really like to run. We used to run a lot. About the only times we weren’t running was when we were asleep or riding our bikes. I’d run to work, run for an hour plus in the middle of the day, and then run home. On non-work days I’d run more because I always had time to. Ms S would run a couple of hours whenever she could. Then we had kids. Now we have other priorities. Kids only stay small kids for a very short time. You don’t want to miss out just logging clicks. So we’ve adjusted. We run less now. But we still get to run some. Like when we are chasing a runaway vagrant child that’s toddling into traffic or playing tag or soccer at the park. We’re destined to get back into our stride and become a running family.

We’ve never really entered into a marathon. We’re not interested in competing with other people. We don’t want to pay for running which in our opinion is best enjoyed free. If we ever want to compete with ourselves we can start timing regular running routes. For what reason I don’t know, but lots of people seem to enjoy it. We just run to run. We run on fun.

When I run I like to smile.

I smile because running is fun for me. I also smile because smiling is also good for me and I smile because smiling is a good advert for running. I like to think that at any moment I might run past someone and inspire them to try running because it looks like a fun way to stay in shape. I also smile because once I am running I know that I am already past the hardest part. The hills, the open road, the heat or the cold are all relatively easy to deal with. The hardest part of running, by far, is taking the first step. Just rolling out of bed before dawn and slipping into the mist or breaking out of a meeting to actually get that running fix. That is the biggest challenge. That’s where routines help. Running is a very important cog in our happiness routine. Running we’ve found has a huge impact on our weight, our self esteem and our moods. For me it’s the third most important element of any day behind cultivating loving relationships and eating a plant based diet.

Running is meditation. Running is medicine.

Running, it’s a beautiful thing to bring into your life.

Dead in the deapan

“I saw this whino. He was eating grapes. I was like, dude, you have to wait”

Mitch Hedburg

The delivery of my humour is kind of deadpan. Not kind of actually.

I don’t ba-da-bing the punchline.

Most people get it and it seems they are pretty amused. Often times I don’t say much and the dead pan works, but sometimes it goes bad. Bad with a bang.

Walking home today I found an elderly man stuck in his mobility scooter. He’d run aground turning around a community garden. His cart was tipped over a bit and his back wheel was spinning out in the dirt.

Never one to be afraid to row up to a bad situation (first aid, breaking up streetfights, punishing the unjust…kidding) I went straight to his aid. My mother always drummed in that we are all in this together and tomorrow that will be you. I think it was a good lesson and I will try to pass it down the line.

So I launched at this poor old chap with “zero to 100 in…?” as my introduction.

Being that he had obviously missed the turn and sort of fallen off the sidewalk I was implying he was doing 120 km/h in a mobility scooter = he is an irresponsible user.

I was a bit on the heels when he launched into a tirade about me, my personal hygiene and my sexual preferences.

So I laughed, said “good one -funny” and then told him I was happy to give him a hand. Putting myself in his shoes I suspected he was proud of his independence and probably quite defensive about crashing his scooter. Maybe the same thing happened with his car and the authorities came in and tookit away.  Perhaps he was totally stressed, maybe he’d double dosed the wrong medication or maybe it was just my deadpan comment…but he was white hot angry.

As I shoved back end of his 300 lb scooter back onto the sidewalk, with him still in it, he whacked me across the back of the head and neck with his cane. I flinched. It actually hurt like hell, but I said (still deadpan) “Don’t whip the mule ’til you’re out of the ditch!”. I went back and finished pulling him up out of the planter garden. He didn’t hit me again but as soon as all 4 wheels hit the ground he zoomed off muttering about how much I enjoyed sex with myself.

It’s nice when people thank you for taking time to be helpful, but that’s not why I help people. So today’s misadventure hasn’t put me off helping. Instead it’s made me realise that I need better communications skills and that I really need to better introduce myself and better explain myself before trying to help. In this case I didn’t take enough time to get to know this old chap before I presumed to know what to do to solve his problems without even saying hello.

 

Wonderfully poor simply happy

“I don’t want to make money, I just want to be wonderful”

Marilyn Monroe

There seem to be so many celebrities that are unhappy. They have heaps of money, all the opportunities in life but they end up dead in a ditch or in rehab burnt out on drugs.

There are also millions of people with no money. Dirt poor. They have none of the money and maybe not even the basic stuff they need to survive day to day, but they are happy and grateful for their lives.

Then there is the rest of us. That’s everyone in between. People with an average deal who are high on life and others who are dredging the doldrums.

Our family is in the top 1% of the world’s wealthiest and so are you if you have power, a computer and clean water to drink. It is not about our economic resources or our social opportunities.

It is about appreciating simple pleasures and being grateful for the good things that happen in our lives. I am teaching our son about happiness. It’s the most important thing I can pass on as his parent. I wish more people gave up the rat race for money and put their energy into the happiness of their family. It would be a wonderful world.

Re-cycling those great childhood moments

“What can ever equal the memory of being young together?”

Michael Stein

Yesterday was a workday, but I spent the afternoon chaperoning 15 30-67 year olds on a cycle tour. It was interesting to discover that almost ¾ of the group owned a bike. I was less surprising to learn that only about half of those that owned a bike had been on it in the previous sixth months. I think this says a lot about how activity friendly our cities are.

The cool thing from this experience was the smiles from some of the people that hadn’t been on a bike since the day after they got their drivers licence. In a couple of cases that was over 50 years since they last straddled the saddle. You could just tell that riding a bike took them back to the moments of their childhood. At points where we regrouped you could look into eyes who’s mind was a thousand miles away.

I could wax lyrical about the many personal and community benefits of using your bike more, but for me seeing these guys today, the main benefit or the most compelling reason to ride a bike is that it is enjoyable. Ditch the excuses. Get out of your car and try cycling. It is fun!

Peasant poor pony-tail people

“To find the universal elements enough; to find the air and the water exhilarating; to be refreshed by a morning walk or an evening saunter… to be thrilled by the stars at night; to be elated over a bird’s nest or a wildflower in spring – these are some of the rewards of the simple life” 
John Burroughs

I’ve previously mentioned the woman that cuts my hair for free. Unfortunately she’s now in another town which is making a haircut an infrequent event. In line with limiting distractions by reducing distinctions I’m considering letting my hair grow and tying it back. Ms Simple has always had lovely long blonde hair that she usually wears in a pony-tail or pigtails. Being that I’m a man (with a beard) I’m not really sure that having long hair will be as attractive on me. The other alternative is periodically shaving it all off. The way I’m figuring is to monetise my hair. So instead of paying $40 every six weeks what I may do is grow it for two years then shave it off completely and sell the hair to a wig company that I’ve found. Any regular readers will know that making money from a waste product is totally my bag.

I’ll admit to being a little unsure about this long haired plan. For one thing Ms Simple’s father frequently comments (on many occasions) about my suitability for his daughter.

I get it. I’m a pacifist vegan that rides a bike, doesn’t work very much, and would rather share than compete.

Add a pony-tail and I’m probably most father’s worst nightmare. In truth a lot of our lifestyle is driven by Ms S and that’s why we get on so well. I find my Father in-law’s attitude more amusing than annoying and I also believe you can’t let yourself get held back in this life by what others may think of you. If you want to farm your hair for cash then farm, farm away.

Clever Ape Automatons

“For God’s sake, let us be men not monkeys minding machines or sitting with our tails curled while the machine amuses us, the radio or film or gramophone. Monkeys with a bland grin on our faces” 
D.H. Lawrence

Cars are like modern day equivalent of the wolf.

Parents are terrified of them. They pull their children tight when cars are near. They plead with their children to keep safe from cars and when there are cars around they severely restrict children’s mobility and play opportunities for fear they might suffer the equivalent of being devoured by the beast.

It’s a really sad state of affairs. We have given these hunks of metal more importance than the safety or happiness of our children.

In less than 60 years we have completely redefined life around the rights of motorists. Now there are signs warning drivers to look out for pedestrians. Like they are some strange alien life form that should not be expected on a city street.

When we harness technology for our benefit we exemplify the clever ape.

When we allow technology to constraint or subvert our humanistic impulses or our behavioural freedoms we are simply automatons.

The machines are programming us to compulsively check our mobile phone for new facebook messages. We think it is our choice and that we have decided to structure our life around a television program…

The question is whether you are are running someone else’ s (marketer/government/banker) programs or whether you the clever ape adapting yourself to the best life that the jungle offer?