One of my favorite new websites is called Mint.com. Basically it is a financial website that allows you to manage your money, but it also has this amazing blog. I have now vowed to never rent if can avoid it. I have been there, done that and found it that the outcome was less than desirable especially compared to that of living in a Tiny House.
The bloggers over at Mint have put out an interesting article about renting, they propose that they are in fact better off renting. The big assertion they make is that if you are modest renter, who can manage your budget, that it is actually better at building equity. By paying less than a mortgage, saving the difference and not assuming the risks, you can do better.
I found this story over at CNN, its about cage homes in Hong Kong. If you haven’t heard about these, they are essentially bunkbeds that are sealed off with cage wire so that people can lock them when they aren’t there. They are the size of a single bed and are about 4 feet tall for each “unit”. You have to share a bathroom with everyone, but the kicker is this, guess how much it costs for one of these in Hong Kong? $167 a month!
There has been recent outcry about the deplorable living conditions which a large number of people live in. Above is a photo of one of these cage homes that was used in an art exhibit to raise awareness of the growing trend. Among the cage homes, cubical farms have been cropping up where people pay to live in, about the same rate. In a city where houses have sold as much as $9,200 per square foot, no wonder why people go to these extremes. The questions is, what is the solution? With such densely populated urban centers, space is getting less and less accessible.
Freedom from stuff, freedom from excess space, freedom of time, freedom from cleaning. All of these things take time, energy, money, and resources, going smaller means these demands are reduced drastically. You then have freedom to do what you want, what is important, what really matters in your life.
McMansions cost allot of money, I am sure you have noticed. The average US house costs around $265,000. But it doesn’t stop there! In order for you to get into that big house, you have to get a mortgage, which by the time you pay for it; it will cost you two to three times that, so roughly $800,000. Then add maintenance, insurance, furnishing such a large space, cleaning products, etc.
Then there is the risk that comes with a mortgage, even with buying a house that is conservative for your income, even if you save for 3-6 months of pay in case you get laid off (which 95% of Americans don’t budget for), you could still lose your home after paying it off for 28 out of the 30 years you have on it. So factor the cost, plus risk, then consider the opportunity cost, you could be well in the hole close to 1.5 million dollars and then be left homeless.
I try to keep most of the content a least loosely related to Tiny Houses and Tiny Living, but I found this to be very note worthy and thought I would share. So today I came across these two videos about a Former CINGA Insurance Executive coming out and talking about some of the industry secrets and his comments on the movie Sicko by Michael Moore.
If you haven’t seen the movie, Michael Moore has posted the video to watch for free here
Please share your comments and thoughts on the matter in the comments section!