Tiny Houses .... Yes Please!

I've written in older posts about the explosion in the sizes of houses in North America during the past 30 years, and how the blight of McMansions has led to the consumer's over-consumption of land, energy, consumer products and debt. This has definitely been a contributing factor to the current economic crisis, where the over-extension of leveraged debt has caused a massive meltdown in liquidity, equity and net worth.

This has led to a return to (hopefully permanently) more sensible proportions of homes, a renewed emphasis on the environment, and a diminishment of rampant materialism. As I have mentioned before, my first home was my largest, and I have been downsizing ever since. I have always been intrigued by small space living - when reading design magazines and books, the issues that always excite me are not of sprawling mansions, but compact living spaces.

I have once again contemplated living in a small cottage or a boat. If I lived in a warmer country than Canada, I may just have made the jump already. However, with the Canadian winters, a lot more thought needs to be given. I have just finished browsing through a fabulous little (appropriately) book called Tiny Houses by Mimi Zieger. It profiles 36 unique abodes that are 1,000 square feet or less. What I love is that it proves that space can be used far more efficiently, a unique home need not be only for the rich and that these spaces are far more interesting than your cookie-cutter, suburban monster-home.

Does a Peasant Lifestyle Increase Longevity?

I've recently finished reading Dan Buettner's book, "The Blue Zones". You may have heard about it or seen it profiled on TV programs such as Oprah. The Blue Zones are areas in the world where there is a much higher than average proportion of the population that live beyond the age of 100. There numbers are quite astonishing, and the author spent time researching these elderly residents and tried to find out what contributes to their longevity and good health.

These identified "Blue Zones" are mainly located in smaller communities in Japan, Italy, Costa Rica and even the US (Loma Linda, California to be specific). While certain aspects differed, what was common among all of these communities was leading a simple lifestyle, eating healthy (with little or no meat in their diets), maintaining strong connections with family and friends and regular exercise.

For some (especially in the poorer communities) regular exercise was a function of their livelihood, i.e. if they were farmers or herdsmen, they spent time in the fields or walking up and down the hills. Even the women who may not toil in the fields, did spend part of the day making meals from scratch, including grinding grains by hand in order to make bread. In wealthier areas such as Loma Linda, there was regular exercise like walking or going to the gym.

The absence of stress was also a common denominator. While there was some stress regarding money and maintaining a livelihood, it was not the same stress that most of us might associate with having a high pressure job, sitting in traffic, trying to make money to maintain a consumer-oriented lifestyle, etc. In fact, when interviewed, there was little to no mention of materialism.

Diets were simple, and while they did indulge during special occasions, generally their diets were simple, yet very healthy. The Italians would drink a glass of wine every day, the Californians were mainly vegetarians who ate a lot of nuts, while the Japanese ate many root vegetables.

Instead of the western disdian for the aged, in these communities elderly people are revered for their wisdom, and treated with respect, rather than shipped to an old age home. They sit at the head of the table, as the matriarch or patriarch of an extended family across many generations, and showered with love and respect. In all these communities, the social network means human contact, not Facebook or Twitter. Meals are important gatherings that bring the family together.

Aside from the residents on Loma Linda, the residents of the other "Blue Zone" communities live an extremely simple life, almost a peasant-like existance. Yet, they all apear to be healthy and content. Perhaps living a peasant lifestyle is the key to longevity?

Start Saving Money ...... Right Away

In these tough economic times, unless the upcoming global recession is short and shallow, people all over the world will be forced to adopt a new way of living. This is especially so for Americans whose access to free-flowing credit will dry up as lenders continue to turn off the taps.

As I had commented in a previous post, there may be a silver lining to this dark cloud, as people wean themselves off consumerism and credit, and start to live more authentic lives and within their means. It will be a long road, as mindless, wanton spending has become a bit of an addiction for millions of consumers.

I have just started to re-read a book that I had last read over 10 years ago, but one that is especially relevant these days. Called "Your Money or Your Life" by Joe Dominguez and Vicki Robin, it provides an interesting view on our relationship with money. Its concepts are not for everyone, but is worth a read.

The book does give tips to save money which may be useful to some readers. These include:
1) Stop shopping - or at least, only shop for things that are essential

2) Live within your means - Cut out all unnecessary expenses and luxuries such as eating out and travel holidays

3) Take care of what you have - This will reduce or eliminate the need to keep replacing things, often unnecessarily. This will also reduce the amount of items that are thrown away or wind up in a landfill.

4) Wear it out - Most of us replace things well before the end of their useful life because we see something cheap or on sale, or spend because we are bored or think we should keep up with technology.

5) Do-it yourself - Learn how to fix things yourself rather than spending money having someone do it for you.

6) Anticipate your needs - Impulse spending occurs when you do not know exactly what you are looking for. This is especially prevalent (and exploited by grocery retailers) during your weekly grocery shopping trips. Have a shopping list before you head out the door and stick to it.
7) Research before you buy - Do your homework before buying. Reading reviews will help you make an informed decision to get the best deal, whether based on price, quality, value or durability.

8) Get it for less - I never pay retail for anything, as I know that there is always somewhere to get an item cheaper, be it on eBay, Craigslist, online discounters, liquidators, using coupons, waiting for sales.

9) Buy it used - There's very few things that I wouldn't buy used, but a careful shopper can get great deals on gently or hardly-used items that people are trying to get rid of because of a multitude of possible reasons, including gifts that are unwanted, a need for quick cash, dissolution of a marriage, a move, remodelling of a home, upgrade in technology etc.

While these are obvious tips to me, I know some people who never think of these options.

This Month's Quote

"After a man has made a lot of money, he usually becomes a bad listener" - Paul Theroux

This is so true! When everyone was (seemingly) becoming more prosperous from easy credit and rising house prices, they failed to listen to warnings. Only after the house of cards has collapsed, are people starting to take heed of advice.

When Living on the Wrong Side of the Tracks Can Put You on the Right Track Financially

It has always amazed me how much stock people place in living in the 'right neighbourhood'. My first home was in the trendy 'Beaches' neighbourhood in Toronto. I no longer live there, but do visit occasionally. It is a lovely area that, as the name suggests, comprises a stretch of sandy beach adjacent to Lake Ontario. As such, it is wonderfully lively area and a favourite among yuppies and tourists. There is nowhere in Toronto that has a higher per-capita rate of baby strollers, dogs or convertibles. The main thoroughfare through this neighbourhood is Queen Street, and any house that is south of Queen Street commands a much higher price than any house north of Queen Street. Such is the popularity of the area, and by extension the desire to live there, that there is even an area called the Upper Beaches. The northern (and invisible) boundary of the Beaches 'proper' is Kingston Road, and any property south of Kingston Road will command a much higher price than anything north of Kingston Road, lest any self-respecting snob be caught living in the 'Upper Beaches'.

The point I'm trying to make is that people can, by merely crossing a street or two, save tens, if not hundreds of thousands of dollars - by locating to the edge of a trendy or desirable neighbourhood, rather than spending the premium for the right address within the actual neighbourhood itself. One might ask if this strategy would not affect resale values. My response is that, if a neighbourhood is that desirable, it will encroach upon its outlying areas and bring up the property values with it (the 'all ships rise with the tide' theory). Also, the money you would save on the mortgage payments will provide you with a lower debt burden, and if those savings we funneled to a savings or retirement account, would lead to a better qulaity of life and retirement. Many people have mistakenly thought of their homes as their retirement nest egg, but the recent market turmoil has shown that this is not a sure-fire retirement strategy.

In Ottawa, Ontario, there are many people who work in Ottawa (where salaries are higher and opportunities more plentiful) but who live across the provincial border in Hull, Quebec where housing prices are significantly lower than in neighbouring Ottawa. With a short drive across a bridge, people have been able to increase their revenues but minimize their largest expenses.

I have also previously lived in an area that was considered to be 'sketchy', but bordered another neighbourhood that was becoming gentrified and subsequently became known as the 'Gallery District'. The previously 'sketchy' hood is now home to stylish boutiques and cozy coffee shops. With it, rising property prices have followed. I actually prefer a neighbourhood that has some grit and realism to it, rather than the vacuous falseness of many of the high-priced, lily-white neighnbourhoods.

Start thinking outside the box and you may want to live on te other side of the tracks.

Are More People Abandoning the Rat Race?

I have, for now at least, abandoned the rat race. It is not an easy thing to do, nor easy to explain to people, especially when most others of my age are hitting their peak earning years. I had often wondered whether I was a pioneer or just a social misfit. While I was definitely not ahead of my time, I am probably just the tip of the iceberg of millions of people who are willing, but maybe just not ready yet, to drop out of the rat race.

With the recent financial crisis, many ordinary workers are probably wondering what good all of their hard work over the past few years has gotten them. Hundreds of thousands of pink slips from the financial industry, the auto sector, the construction industry and airlines? And while they may be (involuntarily) re-evaluating their career options, this is just a repeat of another time not that long ago when similar decisions were made. Remember the dot-com era of the late nineties and into the new millennium? Many technology workers regularly spent mind numbing 15-18 hour workdays, while others either slept under their desks or pulled all-nighters in order for their companies to be the next Yahoo! or eBay. Sure, the lure of stock options and huge capital gains from impending IPOs were the driving force for many, while others were just youngsters excited about building a company that could or would change the world. However, the luster soon wiped away, and while some were fortunate enough to cash in and retire at a young age. Interestingly, many such as Jeff Skoll, Pierre Omidyar of eBay and John Wood of Microsoft started charitable foundations. Others were not so fortunate but decided that what these digital dropouts valued more than money was a balanced lifestyle, a personal life and a need to do something meaningful.

We're starting to see more of this thinking again as the economy sours. More people are opting to work in less stressful occupations or work for themselves. My cousin who worked in the finance industry just lost her job, and her employment search now revolves around opportunities within the charitable sector. A recent article highlighted how many Wall Street casualties are looking to buy small retail businesses or franchises. Others are opting for work that that is more flexible when it comes to work hours, ability to work from home or take longer vacations.

Some are being even more radical, moving to smaller communities where their dollar goes further or where they can get away from the craziness associated with large cities like New York. Some like Geoff Goodfellow, who started and sold his tech company called Radiomail, wound up moving to Prague in the Czech Republic. Even in my hometown of Toronto, there was an article about a rising trend in residents originally from Atlantic Canada, returning to their hometowns after becoming tired of long working hours, high housing prices and exhausting commutes in Canada's largest city. As one rat race escapee said about society's view that your worth is measured by how much you make, "I have a fresh appreciation that there are a lot of Americans making $22,000 a year and they are worth something".

Gen-X and Gen-Y employees are also more likely to rebel against the workloads thrust upon the backs of their Baby Boomer parents. In other words, they are finding greater value in working to live, rather than living to work.

How Some Things From the Past Never Change

At the World's Fair held in Chicago in 1893, a presenter named Mary E. Lease made a bold prediction about the future. Her statement was, "3 hours will constitute a long day's work by the end of the next century. And this work will liberally furnish more infinitely more of the benefits of civilization and the comforts of life than 16 hours' slavish toil will today".

To some degree she was true, in that many of the items we now take for granted as being staples, would have been considered as luxuries not that long ago, and certainly unfathomable during her times. Now ubiquitous electronic items such as GPS, home theatre systems and cell phones were out of the reach of mainstream consumers when they were first introduced to market. In fact, cellphones were never designed with the average consumer in mind, but businesspeople and the military. Most of the above-mentioned consumer items are now manufactured in low-cost developing countries and then sold widely and inexpensively through retailers such as Wal-Mart. This has led to increased buying power, but also contributed to rampant consumerism.

On the other hand, Mary E. Lease and others after her, were way off the mark when they predicted that technology would allow workers to toil fewer hours at their jobs and have more free time. In fact, the opposite has been true, with the majority of North Americans not taking the full allotment of their paltry (on average) two-week vacation time. Mobile technology (think e-mail, laptops, cellphones, Blackberry) that was once the purview of the executive ranks, has now enslaved even the levels of middle manager. The pressure to respond immediately to e-mail on a mobile device has helped to cloud the boundaries of what constitutes the number of hours of a typical workday.
A friend and previous colleague of mine was a reporter, and she observed an interesting distinction between the North American and European attitudes to work and their boundaries. When she was doing a story and was seeking a quote or an interview from a specific American spokesperson or source, the organization would inform her that the person was on vacation, but would be willing to take the call to give an interview or quote, if a specific time was set up. When she requested something similar from a European organization, she was politely told that the person was on vacation and therefore unavailable, and to please call back upon their return from holidays. Even more surprising is that attitude exists even when European companies give far more (if not double the amount of) vacation time to their employees than their North American counterparts receive from their companies. You would think that the response would have been the exact opposite for both parties.

So, I guess you could say that Mary E. Lease was right about the 16 hours of slavish toil - she just didn't think it would still exist 105 years after her prediction.