I have had several mortgages over the years - I was never comfortable owing that much money so each time sold the house & paid out the debt. Have settled for a small dwelling in a small town for which we were able to pay cash. The relief of not owing a mortgage, or paying rent, is about as close to freedom as I think I will achieve.
Thanks for the kind words, Ma Mu. I very much agree with your advice to live beneath one's means and try to become more self-sufficient in whatever way one can.
My only substantive comment is about the distortion effect that lending/expansion of credit has on markets; in other words, the introduction of lending into a sector results in rapid price appreciation which can quite quickly price out people from that sector who do not accept the burden of debt. We have seen this certainly in the housing market; even if one saves a lot of money it becomes close to impossible to actually buy a home without taking out large mortgage, then one becomes "house poor" and lives to service the debt with all the stress that involves...this is ultimately because of the free flow of credit into the housing sector, but not many people understand this... I am sorry to hear about your father and the stress that caused him....
This same principle is true of higher education and other goods and services as discussed in this great post in the context of government involvement in general: https://www.aei.org/carpe-diem/chart-of-the-day-or-century/ (housing costs don't look terrible in the post but have risen enormously since it was written in 2018). This is the pernicious influence of credit based economies...
I have had several mortgages over the years - I was never comfortable owing that much money so each time sold the house & paid out the debt. Have settled for a small dwelling in a small town for which we were able to pay cash. The relief of not owing a mortgage, or paying rent, is about as close to freedom as I think I will achieve.
Thanks for the kind words, Ma Mu. I very much agree with your advice to live beneath one's means and try to become more self-sufficient in whatever way one can.
My only substantive comment is about the distortion effect that lending/expansion of credit has on markets; in other words, the introduction of lending into a sector results in rapid price appreciation which can quite quickly price out people from that sector who do not accept the burden of debt. We have seen this certainly in the housing market; even if one saves a lot of money it becomes close to impossible to actually buy a home without taking out large mortgage, then one becomes "house poor" and lives to service the debt with all the stress that involves...this is ultimately because of the free flow of credit into the housing sector, but not many people understand this... I am sorry to hear about your father and the stress that caused him....
This same principle is true of higher education and other goods and services as discussed in this great post in the context of government involvement in general: https://www.aei.org/carpe-diem/chart-of-the-day-or-century/ (housing costs don't look terrible in the post but have risen enormously since it was written in 2018). This is the pernicious influence of credit based economies...
Fantastic piece and great advice ..funny enough the word mort-gage when translated into English is actually death pledge.
Words to live by, MaMu. Thank you