I'm a bit older than most folks on the board, I think. I'm in early retirement now, but not extreme. In retrospect I probably could have done it much earlier, but that was unheard of back then. Wish the ERE blog, book and forum were around when I was in my twenties! (the 80's). No internet to share ideas such as this back then. I got the idea by reading books such as "The Joy of Not Working", and "The Wealthy Barber". Back then I wanted to follow the "American dream" of home ownership but it was completely out of my reach. Prices were increasing faster than wages (much like today). While the "Barber" author thought home ownership was essential for financial security, one little paragraph in that book offered an alternative - it suggested renting the cheapest place you could handle, invest into low cost index funds the difference between that amount and the amount that would have gone into the mortgage/prop tax/utilities/ins/mtce of a full blown house. An unheard of idea at the time, for sure, but I chose that. That worked quite well.
I really enjoyed that ERE book. You don't come across such raw, logical books often. Most are sugar coated. It really brought into focus a lot of the ideas that were more or less learned through experience, but not analyzed, not honed. I now walk everywhere, cook at home, examine every purchase through a lens of value, repair rather than replace, etc. This stuff should be taught in high school or at least introduced.
Hello from Canada
Hello from Canada
Last edited by SallyJo on Thu Feb 20, 2020 9:47 pm, edited 1 time in total.
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jacob
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Re: Hello from Canada
About 1-2 times a year people email me with this exact sentiment. Having independently discovered what works.
I agree that this stuff should be taught in high school ... or at least by one's parents. Gen X could in principle still learn it from their grand parents if they're still around.
For 70s material, I think Callenbach's How to live cheaply with style was the greatest source. The 70s was also the heyday of other publications... appropriate techonology, small is beautiful, ...
I agree that this stuff should be taught in high school ... or at least by one's parents. Gen X could in principle still learn it from their grand parents if they're still around.
For 70s material, I think Callenbach's How to live cheaply with style was the greatest source. The 70s was also the heyday of other publications... appropriate techonology, small is beautiful, ...
Re: Hello from Canada
So if you were in your 20s in the 80s you must be in your 40s now. So, very young to retire. Nice!
You couldn't buy a house in the 80s? I thought the out of control housing bubble boom was a post 2000 phenomenon? Certainly seems that way where I am anyways. My god all the super chic areas in the city central area of my city you could buy a place for $80k to $100k easily in the 80s and now they are worth at least 1.5 million +
You couldn't buy a house in the 80s? I thought the out of control housing bubble boom was a post 2000 phenomenon? Certainly seems that way where I am anyways. My god all the super chic areas in the city central area of my city you could buy a place for $80k to $100k easily in the 80s and now they are worth at least 1.5 million +
Re: Hello from Canada
I'm just revisiting after years and see the replies (my bad!).
The 80's and now have some parallels. In Canada, the huge boomer cohort came of age in the 70's and drove up the price of housing as they started forming families. Prior to that you could buy a modest house on a single, working class salary. After that it required two professional salaries. In the 70's houses cost 2.5 X the median salary. By 1989 they were 7 X median salary. It finally crashed in 1989 by 30% and stayed down for 10 years. The salaries caught up a bit. That's when the late boomers and Gen X, a smaller cohort, were finally able to get in if they wanted to.
The bubble started again in 2000. It has yet to pop in Canada. We have dumb little wartime brick bungalows going for over a million. The price is 10-15X median salary now. Shows you just how inflated real estate is relative to the 'norm'. That's a compound return of 6% or 7%, before expenses. That is unusual for real estate which normally tracks inflation plus a percent or two. Even still, equity markets did better, so renting cheap and investing was a better strategy for the period in retrospect. Salary inflation over that period was about 3.5%, so you can see why everyone is in debt up to their eyeballs now. The house values are probably due for a correction like the 90's to let the salaries catch up, but the low interest rates, debt acquisition and gov't policies are preventing it. Who knows how it will play out. They say we are now in the position the US was in in 2007. Yikes!
The 80's and now have some parallels. In Canada, the huge boomer cohort came of age in the 70's and drove up the price of housing as they started forming families. Prior to that you could buy a modest house on a single, working class salary. After that it required two professional salaries. In the 70's houses cost 2.5 X the median salary. By 1989 they were 7 X median salary. It finally crashed in 1989 by 30% and stayed down for 10 years. The salaries caught up a bit. That's when the late boomers and Gen X, a smaller cohort, were finally able to get in if they wanted to.
The bubble started again in 2000. It has yet to pop in Canada. We have dumb little wartime brick bungalows going for over a million. The price is 10-15X median salary now. Shows you just how inflated real estate is relative to the 'norm'. That's a compound return of 6% or 7%, before expenses. That is unusual for real estate which normally tracks inflation plus a percent or two. Even still, equity markets did better, so renting cheap and investing was a better strategy for the period in retrospect. Salary inflation over that period was about 3.5%, so you can see why everyone is in debt up to their eyeballs now. The house values are probably due for a correction like the 90's to let the salaries catch up, but the low interest rates, debt acquisition and gov't policies are preventing it. Who knows how it will play out. They say we are now in the position the US was in in 2007. Yikes!