Tuesday, June 17, 2014

Minimally Frugal

So, I've finished Radical Frugality: Living in America on $8,000 a Year. I will say it's a well-written, interesting, entertaining book, for a book about personal finance. Their system of viewing your finances as "zones" (zones correspond to how fiscally fucked you are) is easy and clear.

However, as with all of these "You can live your dreams on a shoestring!" books, the ideas for doing so are...somewhat less than real world. Imagine that.

Spoiler alert: the 8k a year guy is a young single guy who moves to Laramie, WY, has a roommate, no car, no health insurance. How does he live without a car in Laramie, WY? That's easy: he has friends with cars! They give him rides, transport things he can't carry on his bike, etc. Alrighty then! I wouldn't have to own a car either, if I could just bum rides whenever I needed one!

The other examples: a married couple without kids; a couple with two kids; were more realistic, and also not entirely real world. The married couple with kids let their underwater house go in a short sale. The authors made sure to point out that you need professional advice before doing this, and that this couple lived in a non-recourse state. (Non-recourse means the lender can't come after them for the difference between the sale proceeds and the mortgage balance.) Only about a dozen states are non-recourse. As with every other idea in this book, it assumes a set of facts and circumstances that don't apply to most of the population.

I also took issue with their dire predictions that "The housing market is going to take 20 years to recover!!! OMG, Eleventy!!! Nobody should own a house!!!" They cited Florida as a state where homeowners are all screwed and will never be right side up in their mortgages and OMG, it's all so overbuilt, it'll be DECADES before anybody needs to build a new home there!! Of course, this is bullshit. The average house price is where it was in 2008 again, new home building is coming back strong, and while the unfortunate people who bought during the mad inflation of 2005 through the end of 2007 are not going to see the wildly inflated price they paid anytime soon, everybody else is getting back to where they would be if the unnatural inflation had never happened. Oh, and Orlando also has FABULOUS public transportation! How did I live in the metro area for 30 years and not notice, or ever hear anyone mention how much they loved it? This book was so educational.

I won't go into how vehemently I disagree with their take on homeownership ("Rent! Owning is for suckers!") and their bland assumptions that all homeowners buy more house than they can afford, etc. (The couple who let their house go had a mortgage payment I never would have dreamed of taking on in the first place on their incomes.) I disagreed with just about everything they said, except that their example couple needed to dump that house.

My takeaway:

Basically, if you want to live your dream on a shoestring, you should plan to inherit a fully paid for house in a low cost of living college town within walking distance of everything in a state with very low/no taxes. Then you too will be able to ditch your unsatisfying job and become a play-writing metal sculptor who moonlights as a musician and massage therapist. Let's all get right on that, shall we?

I had the same sense of "Oh, okay," from this book that I did from my prior Kindle experience: Miss Minimalist: Inspiration to Downsize, Declutter, and Simplify. Miss Minimalist is very proud of not owning anything - she and her husband get by with the bare minimum of kitchen equipment, dishes, etc. So what do they do when they want to have a party? Easy: she borrows from friends! Yes! Just borrow the dishes, pots and pans, serving pieces - you are a minimalist, you don't own nonsense like that! Other people do!

So, the secret of being a frugal minimalist: maintain a network of non-minimalist losers with jobs that can cover cars and gas and furniture, and mooch off them with a smug sense of superiority - YOU aren't tied down to those possessions/that job that pays the car insurance! No, you are A Speshul Snowflake!

If I hadn't read both books essentially back-to-back, I might not have been struck by this thought: Extreme Frugality and Extreme Minimalism to follow your dreams can only work if most people DON'T do it.

The extremely frugal examples in the book gave up regular jobs to "live their dreams" - 8K a year guy wanted to write plays. The couple without kids wanted to travel, and did so half the year, while the other half the year, they worked live-in at a resort. That does sound like fun, actually! The couple with kids wanted to become a welder and a massage therapist. That's lovely, but...what if everyone decided that extreme frugality was the only way to live? There are damn few theater tickets or massages or vacations or impulse purchases of metal sculptures (he made things out of metal, he didn't go get a boring day job as a welder) in the world of the extremely frugal. So, like being a super-minimalist and borrowing plates and silverware (and pots and pans and chairs and...everything) from non-minimalists when you need them, being radically frugal is quite dependent on other people's paychecks, credit cards, indulgence and impulse purchases. Without the people who go to the theater, buy expensive coffee drinks, get massages, take resort vacations and buy art, the play-writing barista/musician, the massage therapist and metal sculptor, and the resort managers who only have to work a few months a year would be totally SOL.

Pardon my rproofreding. I'm fixing typos as I spot them. Long day.


besshaile said...

LOL - Thanks for the snark. Still and all - I suppose if someone was sunk in debt and wanted to try to live her way out of it - maybe she could borrow my punch bowl.

Catherine said...

Oh heck, I'd have to borrow a punch bowl, I don't own one! This girl borrows everything - she has just enough for herself and her husband, so if she throws a party borrows everything else! Good thing other people aren't as minimalist as she is, isn't it?