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Money trap.

"Sixty percent of families have so little savings that, if they lost their jobs, they could sustain their lifestyles for only about one month. The next richest twenty percent could only hold out for three and a half months."

--Source: Rosemary Brown & Cindy Mitlo. "It Pays to Plan." Co-op America's Financial Planning Handbook. 2001 Edition. Page 8.


Escaping the Job Trap
Its a Matter of Time, NOT Money!
By Thomas J. Elpel, author of
Direct Pointing to Real Wealth

      As someone who has successfully built a resource-efficient home and a green publishing business, people often ask me what they can do to make their own life situations more sustainable. That is a challenging question to answer, since sustainability issues tend to be tied to all aspects of the way we live and work. It can be difficult to make real change without changing everything. Creating a truly sustainable lifestyle can require a whole new approach to the way you make a living and achieve your Dreams. The key to success is in being able to escape the Job Trap.

      I meet a lot of people with great Dreams. For many it is a Dream to own their own home without a mortgage. For others it is a Dream to start their own business, to be free from an existing job they are not satisfied with. Some people simply want to travel the world or be free to sit under a tree and play a guitar. Most people I meet have a million dollar idea they would love to bring to fruition, but neither the time nor the resources to make it happen. Other people have described to me their frustration with being trapped in a way of life they do not believe in and how they Dream of living a more sustainable lifestyle. Nearly everyone I meet is too busy treading water, trying to stay afloat among the bills and debt to even think about their Dreams anymore. Like a mantra, I hear people say it over and over again: "I know I could break free if I could just make a little more money." That idea is one of the grand illusions of the universe.

      It is unfortunate to see wave after wave of kids graduate from school and fall into the same trap. It is the powerful allure of money. Junior is delighted to get that first job, flipping hamburgers, making the minimum wage. Its new. Its different, and he gets more money than he ever had before. So he spends it. Stereos, CDs, clothes, movies, dates, Saturday night. It doesn't take long until what seemed like a lot of money is no longer enough. But then he discovers credit cards and payment plans and pretty soon he has a nice car and quite a bit of debt, and oh what a thrill it is to have his own apartment too!

Chopped credit cards.       Realizing that this flipping hamburger thing won't do, Junior goes off to college, accumulates more debt for student loans and works an eight-hour shift each day after school to keep the cash flowing. All that studying and working makes him kind of crazy and reckless by the weekends, so he spends more than he should just to "loosen up and have a good time".

      He goes back to the weekly grindstone, only to discover a couple months later that he on his way to becoming a Daddy. Suddenly there's another person and a baby in the picture and a whole lot more bills. But he makes it through college okay, gets a better paying job, rents a bigger house to have some "elbow room" for the family, and still can't quite make ends meet. He feels trapped, disillusioned and ultimately desensitized to his childhood Dreams, working not because he is inspired to, but because he has to keep going day in and day out to keep the trap from snapping shut and devouring him and his family completely.

Frame house.       The sad thing is that Junior could have gone into virtual retirement by age twenty-two, with just a little clairvoyance to avoid the usual pitfalls. Here's one simple example. Junior could have joined the military. That may not be everyone's dream job, and I sure didn't go that route, but he would be accepted without any job skills at all. Starting with absolutely nothing, he gets paid to learn, with free room and board to boot. Being wiser than your average eighteen-year-old, he saves every penny possible, buys a house for $25,000 in a quaint little country town where real estate is cheap because everyone else left looking for work. Then he invests in energy-efficiency measures to reduce the power bills, and buys a secondhand car and some used furniture. When Junior leaves the armed forces a few years later he has some decent job skills, but more importantly, no house payment, no car payment, low energy bills, and no real need to work. Junior has the freedom to do whatever he wants, to go hunting and fishing, to make a million dollars, or to raise a family while working just two or three months a year to buy basic groceries--easily supplemented by weeds out of the garden and roadkill off the highway.

      When you ask people what stops them from pursuing their Dreams to write a book, start a business, or spend a month watching polar bears in the arctic, it all comes down to the same mantra, "I know I could break free if I could just make a little more money..." The funny thing is, it isn't actually money that most people need. It's time.

      Have you ever heard someone say: "I know I could make a million dollars, if I just had 250 grand to invest in my ideas." They may be joking, but they are also telling the truth. I bet you could invest 250 grand and make a million too. But where do you come up with the dough to start with? Well, if you had 50 grand and a few years of free time to pursue your ideas, I'll bet you could make that 250 grand. Simple enough. We can play this game backwards until you only need a thousand dollars and some free time to make the 10k you need to make the 50k to make the 250k you need to make a million. From that standpoint, you could make a million with the money you have, but not right now because you've got to go to work to pay the bills before the landlord bumps your family out on the street--or worse--the cable company disconnects your Show Time channels. Most people are so busy treading water trying to stay afloat, that they never have the Time to make a million dollars or to pursue any of their other Dreams.

Coins.       So you see, the key to success is simply Time, having the freedom to do pursue your Dreams without worry of being dragged under in a sea of bills. True, more money would sure help to eliminate those bills, so here's a suggestion: Go ask your boss to quadruple your hourly wage. But if you don't think that will work, then stay here and let's consider some alternative means.

      I am frequently asked for financial advice, usually from people who earn a lot more than I do. Together we can review their life and work situation, but its not like we can just punch some numbers into a calculator, spin it around and come up with enough additional money to solve all their worldly problems. Real results require real change. It's not about working harder. The key is in conserving materials, energy, money and time to get more out of what you have. Since all things are connected, saving some of one tends to lead to savings of the others in a positive feedback loop that just gets better and better. Conserving energy conserves money which conserves time since you don't have to work quite as much. And if you have time to spare then you can achieve your greatest Dreams. The opposite is also true, wasting resources encourages a negative feedback cycle, encouraging more and more waste.

      Consider a lightbulb. An incandescent bulb is cheap up front, but costs more to operate and burns out quickly. A compact fluorescent bulb, on the other hand - or better yet, an L.E.D. light bulb costs more up front but lasts longer and uses much less electricity. In the long run you can realize a net savings of up to $40 for each energy saving bulb you use. The trouble is that most people are already strapped for cash, and it is difficult to justify spending $120 on a dozen new fangled light bulbs, especially when there are a dozen incandescent bulbs sitting on the same shelf for only $12. So you buy the cheaper bulbs and pay the cost for more electricity, and guess what? When they burn out and need replacing, you are still strapped for cash, so again you go for the incandescent bulbs, virtually guaranteeing that you will be broke when those burn out too. It is a negative feedback cycle where poor choices lead to further poor choices. Wasted energy translates to wasted money, which translates to wasted time. And if you are short on time then you probably won't get around to weather stripping a leaky door either, in which case you will waste more energy, money, and time, and so forth. Follow this line of reasoning and eventually you discover that the whole reason that you are stuck in a meaningless job in a world where you cannot get ahead is simply because you bought the wrong bulb! Switch bulbs and you will be able to quit your job. Sound far-fetched? It may not by the time we get through examining these cycles of waste.

      Let's take a look at the home mortgage, since that is typically the biggest investment as well as the biggest loss that you will ever make. Normally you buy the largest house you can possibly afford payments on without starving your family for more than a few days each month. Let's say the purchase price is $100,000 with payments of $665 a month at 7% interest for thirty years. In the beginning, most of the payment is lost towards interest. Only $81 actually goes towards the principle the first month. You might as well take a match and burn the other $584 spent on interest. It's gone! Twelve and a half years later, you've paid the bank $100,000 for the house, yet only $20,000 went towards the principle. By the time you actually own the building, you've paid out about 2.3 times it's value. Is that a bad investment or what?

Brick house.       Just think about how much you are paying for rent or a mortgage now. Imagine if your home was all paid off and you could spend that money any way you wanted to, or simply quit your job. Sound impossible? Not really. Regardless of their income level, most people make enough money to pay off a house in just a few years, but waste nearly 100% of their income on things like interest payments, unnecessarily high energy bills, and really bizarre things such as garbage bags which are purchased for the lofty purpose of throwing them away!

      So here is one alternative: Buy a house that costs half as much ($50,000), but pay the same $665 a month that you would for a $100,000 house. At that rate you will have the house completely paid off in less than nine years and you will have $50,000 in equity, which you can still put towards a bigger house if you want.

      Some people are forced into a situation where they have to pay a premium for rent - or so they say - because they have to live close to work. They have a great paying job, but they have to pay such high rent to stay in the area that they remain trapped, having absolutely nothing to show for it. A $64,000 income and they can barely scrape by from paycheck to paycheck. That's bull! Buy a house for the family in a small country town for next to nothing. You can keep your fancy, schmancy high paying job in the city and pay off the house in less than a year while you live in a camper parked alongside all the other truckers at the travel station. Then you won't need the high paying job and you will have the freedom to pursue other avenues that could ultimately bring you much greater rewards. Sound a little extreme? Not at all! A year of discomfort versus a lifetime of slave labor? I'll take the short cut any time.

      I had one marketable skill when I graduated from high-school: I could start a fire with a bowdrill set, basically rubbing two sticks together. At the age of twenty I got a job as an instructor in a wilderness therapy program, taking troubled teens on backcountry expeditions. I earned $1100 for three week segments of hiking around the desert with kids that were only a few years younger than I was. The food was free, even if it was only rice and lentils and ashcakes. The rent was free too, since we each carried a wool blanket and poncho and slept on the ground. Soon my partner was leading these trips too, and our incomes went up with experience. In the summer we quit, bought land, moved into a tent and started building our Dream home. That was in 1989.

Elpel house.       With a combined income averaging $10,000 to $12,000 a year we lived simply and invested everything we could in building materials. Building the house more than doubled the value of our income. Avoiding interest on a home loan doubled our money again. Construction proceeded slowly throughout the process, due to our chronic lack of money. We moved into the house after the second summer, with no doors, few windows, and no insulation in the roof. Winter stopped about three feet from the stove. That might sound a little rough, but I later realized that we saved at least $150,000 in interest payments by eliminating the need for a loan. That is not a bad wage for a couple years of camping out!

      If you averaged our total income over several years, combining our wages, plus home improvements, plus avoided interest payments, we were squeezing at least $50,000 a year from our marginal income. Given that all things are connected, how much do you think we paid towards income taxes? Practically nothing. Our W-2's said we were only making ten to twelve grand a year! Eventually, we even installed solar panels to generate electricity and run the utility meter backwards. We could readily afford this investment because we had so few other living expenses.

Solar panels.       I have given these different examples for paying off a home mortgage quickly and efficiently because that is usually one of the biggest expenses people ever face, and because it is a limiting factor that governs so many other decisions. For example, as long as you are obligated to make a $1,000/month house payment then you are less likely to do something risky like quit your job and start your own business. But if you first find a way to eliminate the mortgage, then you can easily afford to make $1,000 less each month, for as long as it takes to get your business up and running. That alone can make the difference between success and failure in a new enterprise.

      I know with certainty that I would not have made it as an author and publisher if we had to make mortgage payments through all the years that I stared at the computer learning to write, but not having much to show for my efforts. Nor would we have been able to afford to start a family or to buy a fancy canoe and spend a couple weeks each year as a family paddling down scenic rivers.

      With mortgage payments we would have been dependent on a regular income instead of our own resourcefulness. We would have been forced to take lower paying local jobs, only because they were steady and dependable, unlike the higher paying opportunities that come and go on short notice. We would have spent more time commuting back and forth each day, and we may have frittered away more funds just because we were in town and tired of working. We could have gotten stuck in the machine, supporting an unsustainable way of life because there seemed to be no other way out. Treading water in a sea of bills, we would have bought those incandescent bulbs because the compact flourescents were way to expensive up front. One decision limits another, and it is difficult to make real change without changing everything.

      When you do successfully eliminate mortgage payments, high energy bills, and other similar limiting factors, then you will find that the world is a new and exciting place full of grand opportunities. You can continue to be idealistic and optimistic because you have a unique freedom to pursue your Dreams, whatever they might be. If you want to spend a season photographing polar bears in the arctic, then go get a job for a couple months and save up your money. It doesn't take long to save up a pile of money when you have few other expenses. This is true financial freedom--or should we call it freedom from finances?

      Admittedly, the path we took was not always easy, nor is it the solution to everyone's problems. For years, while struggling to launch my writing career, we often felt both immensely wealthy and desperately poor. Our house is the sort that people look at and exclaim, "Those people must be loaded!" Yet we could rarely scrape up enough change to go to the movies.

      The point that I want you to take home from this is simply a different way of looking for solutions. Sure, making more money is definitely helpful, but not always something you can control. If you find yourself chanting the mantra, "I know I could break free if I could just make a little more money." then maybe it is time to look for another way out.

Transitions
      One question that must be faced is how do you change your life situation from where you are? I know my wife and I had a pretty idyllic situation when we started out. No debts, no payments, no kids. Just the two of us and an old, but very reliable car. Other people I talk to have big credit card debts, or student loans left to pay, and dependents. Certainly, these factors make it more challenging to pay down a mortgage and quit a job, but also probably more worthwhile to really go for it.

      The reward for your efforts is directly proportional to the amount of change you decide to make in your life. Switching lightbulbs, riding a bicycle to work, or eating weeds from the garden will make small, yet positive differences in your financial situation while also helping to make the world a slightly better place. But, if you want to make real change--to be out of debt and successfully unemployed--then you need to stack up as many changes as you can. You need to step outside the cycles of waste and create a whole new lifestyle, conserving energy, resources, money, and time whereever you reasonably can. It is almost like creating a whole new identity--you as a person who is free from the treadmill of waste, free to do whatever you want for the rest of your life. Let me give you an idea of what can be achieved, based on the success stories of people who are making real change in their lives.

      The first is of a school teacher who read the early draft versions of my book Direct Pointing to Real Wealth. He wrote to say how he was deeply in debt, but very inspired by my book. In fact, he moved out of his apartment and into an old chickenhouse on a neighbor's property! Now, I wasn't quite sure what to make of this. I found it a bit alarming that this otherwise rational person "flew the coop" after reading my book. But later he sent pictures of a small log cabin he was building. He did not own the land, but had permission to build the cabin and live there for twenty years. The last time I heard from him he had just been fired--or at least forced to quit--his teaching job. Apparently he left work without permission to audition as a candidate for the Survivor show. He wasn't selected for the program, but didn't mind losing his job either. In our three or four years of correspondence he went from being deeply in debt to being debt-free, with enough money left over in the bank to live on for the next two years without working. More importantly, he had Time on his hands to pursue all of his Dreams. So I consider that a true success story and I hope to inspire many more people to get fired from their jobs!

Direct Pointing to Real Wealth.       Another man I know is losing his job in phases. He works as an environmental economist for the state. I met him while I was working on the current edition of Direct Pointing to Real Wealth, and I asked for his help editing the book. In the process he became sufficiently inspired that he has since undertaken several projects to increase the energy-efficiency of his home, plus he paid off the rest of his home mortgage in short order. He wasn't 100 percent satisfied with his job, but not ready to lose the pay and benefits, either. I understand that completely. It took me about eight years of tinkering at my own business before it finally produced a sustainable income. So, he asked to have his job cut to a four day work week, and he got it! Now he has three-day weekends to go play, or to work at other jobs. Suddenly he is exploring all kinds of new frontiers, learning nature awareness skills, working with disabled people, editing other books, and working part-time for an energy-conservation company. He even took fire-fighting training just for the experience of it. He has opportunities "coming out of his ears," as my grandmother would have said.

      A third success story-in-progress was a family I met while on a business trip to Saint George, Utah. Being a thrifty kind of guy, I drove around looking for a quiet and safe place where my son and I could roll out our sleeping bags on the ground for the night. We found a good spot early in the day, then didn't make it back to camp until well after dark. I was surprised upon our return to find that the place had become a kind of transient subdivision. But our neighbors were not in sleeping bags. These were landless families who lived in motor homes and just drove out to park on this piece of state land each night after work. The family I camped next to actually owned land farther away and were getting ready to build their own home, but for now they were minimizing expenses where they could, raising their kids in a motor home. They also had a small commuter car, but basically they drove their house to work each day, successfully avoiding rent payments to save up for their own home.

      In other words, where there is a will, there is always a way. The key to success is in being able to escape the job trap. Having great debts or being straddled with dependents will not make the path to freedom and sustainability any easier, but there is always a way out, if you commit to finding and achieving it. When you successfully eliminate most of your expenses and the need for a regular income, then you will find clear sailing ahead, and a freedom that you probably have not experienced in a long, long time.

Electric Bill.



Letters from those who are Breaking Free

Hello,
I was threading thru your website and found some of your work very inspiring. My name is Jim Smith. I'm 29 years old living in San Diego (yes, the biggest little town in the country). I discovered myself about 2 years ago when I went thru a life changing event.

Palm Trees. I was in the rat race, living from paycheck to paycheck. When I discovered myself, I also discovered that I was making about $80k/yr. Going with the territory in San Diego, a 1 bedroom condo would cost about $300k, so there were very few places that I could afford.

Well the funny thing is, my dream was to wake up in the South Pacific, in the tropics somewhere, enjoying the warm air, warm water and gorgeous beach. Of course going there would require me being a yachtsman's making millions.

Well, after a little research and patience (and a lot of people, including my parents saying that I'm crazy) I got myself a $1,500 boat. It's a 25 foot sailboat. It has a galley and a head. I modified my V-berth into a closet, converting my saloon into a 6'x3' bed. I installed solar power. So now it's pretty much my bachelor pad.

I looked at options to anchor my boat at different places for free, but restrictions would require me to move it, and my job would make it hard for me to commute. I ended up with a mooring about 1/4 mile from a parking lot (10 minutes of exercise rowing) for $120/month.

I now live on less than $12k/year (all expenses, including treating friends out and major repairs) and everything else goes into my savings. I plan to work for another 6 years (nothing like having a bundle of money to give you all sorts of options) and learn more about boating. The boat that would be perfect for me costs about $25,000 brand new.

I'm also learning about ways to live off of the ocean, fishing, beans, and seaweed. I'm planning my first trip to Mexico when I retire (6 years from now). The cost of living in the Baja peninsula is about $200/month for me if I choose not to fish or harvest seaweed. It would be practically free for me if I choose the more natural ways. Of course, as of this moment, I could quit my job now and still have enough money for the rest my lifetime (but having more options is cooler).

I try to preach this to some of my friends and co-workers but they all look at me kind of funny. I guess it's hard for them to see that I'm not really dependent on a job to maintain my life. I could go sailing to the south pacific at a moment's notice when my job no longer needs me.

I think you did great and you are fortunate to have a partner who understands your journey. Maybe I will see you some day in one of your wilderness classes, as basic living is one of my interests. Keep on teaching people how to break free. I guess you can say that I'm a fan of living wisely. -Jim Smith


Tom,

I attended your school for a few days back in 1994 and will remember the enlightening experience forever. I didn't want to leave. However, I did return to Bozeman and eventually finished my degree in Architecture. I was very glad to see that you made it into Fine Homebuilding as I think this is one of the greatest magazines (no BS and good hands on info). I have been collecting them since I was a student and working summers in Bridger Canyon as a carpenter's helper. I don't exactly fit the mold when it comes to Architects. I tend to like projects more along the lines of what you are doing. I have no desire to build tall glass corporate monuments or McMansions in the suburbs of Denver.

In fact, everything that you have done, from building sustainable buildings to teaching primitive skills, is what I always dreamed of. I admire you for finding your vocation so early in life.

However, at a point in my life back in the late 80's while I was living a simple life, I was convinced by friends and relatives with good intentions that I "needed to get serious about a career". So I committed to enrolling at MSU and finishing a degree program.

I now find myself with a very good career but trapped in a way by the modern world. I have student loan debts and a mortgage which are substantial but not really overwhelming like many people I know living here in Denver. Most aspects of my life are modest and in control and I am quite happy and healthy.

I have been heavily influenced by the writing of Thomas J. Stanley PhD.. I would describe the way I live my life here in the big city as a combination of The Millionaire Next Door and Direct Pointing to Real Wealth with a little bit of Participating in Nature thrown in for excitement. I am definately an anomoly among my peers.

My perception of the success to your approach is that Montana is a very free place to "do-it-yourself". This equates to not necessarily needing formal education, running water, conventional toilets or code-compliant anything. This gives the average hardworking individual an opportunity to improvise and live cheaply without some standard or restriction enforced by your local government. This also leads to a much less infrastructure dependant lifestyle. You obviously have flourished in this environment.

My questions to you are......

1) Do you think you could be as successful if you were required to apply your philosophy and skill in a major metro area where regulations abound?? I have done some work with Habitat for Humanity and it is amazing how the building code gets in the way of doing the right thing for the right price.

2) What means do you use in your current lifestyle to plan financially for childrens education, emergency healthcare, and retirement? I currently utilize IRAs, and have extensive benefits via my employer. This seems like a real costly challenge for most independant business owners.

3) Do you know anybody that has "undone" conventional committments (house, job, college/retirement saving etc) in an ethical way to return to a way of living similar to yours?? I hear many stories of "City People" selling their assets for a simple life in the country. This only works if you are already affluent. We are not. We are already simple and struggle to survive in our current environment without becoming infrastructure-dependant-brainwashed-consumers like most people we know here. It is actually quite funny, they all say "if only I could make more money, my problems would be solved". NOT!!!

I am curious to know if you think a happy medium is achievable in this day and age for the average person? Many of the options are very attractive to me, but may be considered extreme by my wife and daughter. I am not optimistic that people will realize the benefits of sustainable living and control over consumerism in the near future. Most do not even realize they are being manipulated by marketing and they sure don't understand the exchange of calories for $$$$ concepts.

I hope you don't mind me asking these questions. Your opinions would be greatly appreciated. I really hope that I can join one of your school functions in the future with my wife and daughter. I really believe you are a pioneer in your thoughts and lifestyle and I am proud to have been able to experience this for myself back in the early days of your school.

Take care and thanks for any advice you can offer,

Edward "Lee" Taisarsky

Lee,

Thanks for writing. It is good to hear from you.

I know what you mean about taking advice from well-intentioned people who think you should have a good career. I hear that from a lot from people. I never experienced too much of that myself, or maybe I just never heard any of it, since I was so stubbornly focussed on doing my own thing. I do recall that my mom offered repeatedly to pay for a college education for me. I think I turned 30 before she gave up.

As for your questions:

1) Do you think you could be as successful if you were required to apply your philosophy and skill in a major metro area where regulations abound?? I have done some work with Habitat for Humanity and it is amazing how the building code gets in the way of doing the right thing for the right price.

Answer: I think that building codes generally serve a good purpose, and I always recommend that people build to exceed code. On the other hand, strict codes tend to suppress innovation. For example, while strawbale houses are commonly accepted by code now, I highly doubt that the first few were built where there were any codes. If we didn't have places where codes were lax, then strawbale construction may have never emerged as a viable building technology.

Nevertheless, I think that it is very possible to live a truly sustainable, even "wild" lifestyle in the city. For example, one of the things we do here is to find some way to improve our household energy situation every year, regardless of the price of energy, and you can do that wherever you live. Projects have ranged from sealing the mortar chinking between our logs with latex to block air infiltration, to building a masonry fireplace, to replacing poor quality doors and windows--even insulating under a flower bed to keep cold air from creeping under one wall of the house. Sometimes we strive to reduce our need for firewood to heat the house. Other times we strive to reduce our electricity needs. Last year we bought a super-efficient front-loading washing machine, which uses less hot water. We heat our water in a wood cookstove and by solar panels, so getting a more efficient washing machine helped to give us longer hot showers. Last fall we installed a 2500-watt photovoltaic system, so we are now producing all of our own electricity. If you do just one energy-efficiency project a year, you will slowly but steadily wean the household from fossil fuels. Now that our house is no longer dependent on fossil fuels, we are inspired to get a super-efficient car to reduce our gas consumption. Conserving resources is a good sport, and you can do it no matter where you live.

Extreme Simplicity. You might also check out the book Extreme Simplicity: Homesteading in the City for some good ideas.

As for the "wild" part, I've always been fascinated by how many wild food resources are available in the city. That is because cities were often founded in places of great abundance. Someday I think it would be fun to shoot a series of urban "wilderness survival"videos. In each one we could go to a major metropolitan area like Portland, Los Angeles, Denver, etc. and take a group of people out to live for a week or so migrating across the city, foraging and camping all the way. We could release them with titles like "Wilderness Survival in Dallas, Texas" and so forth. Sounds like fun, huh?

2) What means do you use in your current lifestyle to plan financially for childrens education, emergency healthcare, and retirement? I currently utilize IRAs, and have extensive benefits via my employer. This seems like a real costly challenge for most independant business owners.

Answer: For most of our adult lives we have done nothing about these issues, simply because we were living on $10,000 to $15,000 a year and either building our house or raising our kids.

We initially had no house insurance, but we did build our house to be resistant to disasters, so there was no real great risk in not having house insurance.

We had no retirement fund, but no debts of any kind either, so we could retire on next to nothing if we had too. However, the way I figured it, if we had no debts, than it shouldn't be too hard to eventually make enough money to put away some kind of a nest egg. Income-wise we finally made it into the middle class for the first time in 2001. The fact that we have no mortgage payment or any other debts means that we are doing pretty well. In 2002 we had enough extra cash sitting around to open an IRA. We picked the greenest fund we could find (Portfolio 21) and put in $5,000 to help lower our tax bill.

We still don't have health insurance, but we live a pretty healthy lifestyle. We've been talking about getting a health insurance policy, or at least opening a health care fund of our own, but haven't gotten around to it yet.

At this point our business is booming, and it would not be too difficult to support our kids in college. We intend to support their choice to go to college or not, and we try not too influence them either way too much. However, the lifestyle we role model for our kids is that you can do just about whatever you want in life without a college education, if you want to. You just have to start doing it.

One thing to keep in mind is that the lower your income is, the more subsidies there are to support your family. For example, we used to get free school lunches for the kids because of our income level. We also used to look forward to tax time because our income was so low--and with multiple kids--we paid nothing in and got back a couple grand every year from the IRS due to the Earned Income Credit (EIC). There were a lot of perks like that. The EIC always seemed like a crazy waste of public dollars to me, but we certainly didn't refuse it. Instead, we've tried to make wise decisions with our own spending, and we've always invested our time and money in ways to make the world a better place.

Question 3) Do you know anybody that has "undone" conventional committments (house, job, college/retirement saving etc) in an ethical way to return to a way of living similar to yours?? I hear many stories of "City People" selling their assets for a simple life in the country. This only works if you are already affluent. We are not. We are already simple and struggle to survive in our current environment without becoming infrastructure-dependant-brainwashed-consumers like most people we know here. It is actually quite funny, they all say "if only I could make more money, my problems would be solved". NOT!!!

I am curious to know if you think a happy medium is achievable in this day and age for the average person? Many of the options are very attractive to me, but may be considered extreme by my wife and daughter. I am not optimistic that people will realize the benefits of sustainable living and control over consumerism in the near future. Most do not even realize they are being manipulated by marketing and they sure don't understand the exchange of calories for $$$$ concepts.


Answer: One of the first people who read my book Direct Pointing to Real Wealth was a teacher heavily in debt with student loans. Inspired by the book, he moved into a chickenhouse with no rent, paid off all of his debts in a very short time, and no longer had to work full time for a living. He left his teaching job when he no longer needed it and has been off on many creative ventures since then, including a boxing career. He sent a postcard just a few days ago to say that he and his girlfriend now go around to schools and businesses as motivational speakers. I think he includes primitive skills in his talks.

I highly doubt that you and your wife and daughter are going to move into a chickenhouse tomorrow, but you don't have to either. I would start with some creative imagining as a family... "If we could live our lives absolutely any way we wanted, what would we do?" The possibilities are quite limitless.

Kayaking. In 1999 we had a net income from all sources of $14,000. That was enough to support us and our first three kids. That summer we spent $2,000 from that income on a fancy canoe and a two-week canoe trip down the Green River in Utah. In spite of our income, I felt like the richest guy in the world to be able to take our family on that kind of an adventure. This might seem surprising, but we schedule our family vacations first, then fit our work goals in around that. One year we home-schooled our kids, learned a little Spanish, and spent three weeks touring in Mexico when it was cold and snowy in Montana. I'm not trying to brag about our lifestyle. The point is simply that you can do absolutely whatever you want in this life.

I think one of the most damaging things that our schools and society teaches people is that you cannot live any way you want to. You have to get a respectable degree and jump through the right hoops to get anywhere in this world. I think people (parents, teachers, media, peers) are well-intentioned in that respect, but it is hard for people to "think-outside-the-box" when they never realize there is an outside to the box. The one thing I've learned over the years is that the outside of the box is a heck of a lot bigger than the inside. There are simply too many rules inside the box to get anything done. But I also realize that the transition from one lifestyle to the other requires a significant re-wiring of the brain, and that's not an easy thing to do. We've been trained to see the world one way. But to jump the tracks and make your own path, you will have to learn to see the world in a completely different way.

I hope this helps!

Sincerely,

Thomas J. Elpel


Direct Pointing to Real Wealth.

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Foraging the
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