Fruitfulista » Simplicity

It’s All About Your Priorities

Cassie — Tue, 07 Sep 2010 17:40:18 +0000

We often get asked “How do you do what you do”? Meaning, how do we have investments like ours at our age. And how are we able to have enough money to do it? Well, the answer is not that hard. We have priorities that (these) others apparently don’t.

We know people who earn much more money than we do, but who have virtually nothing to show for it. Their priorities went into buying concert tickets, new brand name clothing, coffee shop lattes every morning, a new car with car payments (maybe 2 or 3), the largest house in the “best” neighborhood, going out to the movies, going out to the bars, going out to dinner, new shoes, new furniture, pay day loans (?!), vacations, kitchen gadgets, hobby supplies, subscriptions to various things (cable tv, special cell phone, internet, magazines). And the list of things you can spend your money on goes on and on… and on.

So what do we do? How do we do it? Well, we prioritize. We say, I would rather have a rental property paid off earning us income more than I want a new DROID or iPhone. I would rather have a large sum of savings than to go out to the movies every weekend. I would rather have a small side business than go out to lunch with co-workers 3 days a week.

These priorities are hard if you don’t have any goals. If you don’t know what you are saving for, then it seems like “what’s the point, you only live once, life is too hectic to plan” etc. We’ve heard these things over and over again from people. But if you only live once, wouldn’t you want to be able to achieve the goals you set for yourself? Wouldn’t you like to see your dreams come true? Wouldn’t you at least want to try?

So our overriding goal is to be “of independent means”. Which I guess you’d say would be that we don’t have to work for someone else. We are basically there. Within that, we would like to live in Puerto Rico, and we have a few goals for what we would like to do there. We may want to live elsewhere on the planet -or take an extended world tour- and that would be within our reaches as well once we achieve these overarching goals.

So we’ve prioritized our life. We don’t want more material things, we want less. We want to be free from the “junk” that clutters our lives and our abilities. The things we buy we try to make “income-producing” assets. We try to eliminate liabilities, we try to moderate on the things that are necessary but not income producing. We try to bring in more income and cut out spending.

Because we have these larger priorities in mind, this has become basic, standard operating mode for our household. If we want something, first we prioritze it, and if we would like it but don’t need it, we look to see if there is an inexpensive or free version of it. If we absolutely need it or it would in one way or another enhance our life, we consciously decide we will splurge on it. But this is after careful thought and usually quite a bit of time in consideration (the pros and cons). If we can turn these things or events into income producers as well, all the better!

I think most people don’t prioritize what they want in their lives. Things just fly in and out and at a whim they make most of their decisions. So is it any wonder when they look at people like us that they say “now how did they do that?”, or “where did all of that SAVED money come from?” like in the classic Saturday Night Live skit.

Most people think “they (we) must be rich”. That’s the easiest explanation. But that is not the case. It really doesn’t matter how much you make, it is how much you save. Sure, making more can help you to save more, but not if you just spend more the way many high-earners do. We try to live as we did when we first entered the job force making $10/hour. Even then, we saved up thousands of dollars and I paid for college and two master’s degrees with no student loans and with no financial help from my parents AND we bought our first house, albeit with a mortgage. Now that we are making more than that, we have a whole lot more to save -and now invest to help us save more! It’s an upward cycle!

Many people have just the opposite: a downward cycle of debt, bills, late fees, and consumption that only causes more and more problems. But you can turn it around if you are just cognizant. If you are in the negative pattern, set your priorities: get out of debt, don’t get late fees, have a moritorium on anything that does not keep you alive and start saving. Think of your dollars as freedom fighters, or whatever metaphor will motivate you to keep them. Make them “sticky”. Make it hard to let them go. The more that you have, the more they will fight for your freedom.

There may be things in your life that you just seemingly cannot live without. That is fine. Just prioritize. It is like eating dessert. Do you want the chocolate cake OR the mousse OR the pie OR the ice cream? These are all fine in moderation, but you should not have all of them at once! Many people think they can have anything and everything without fully comprehending that this thinking, this lack of priorities, is what’s causing their problems. You want the DROID? Well, you might have to cut the weekly movie outing. You want the lifestyle of living in the expensive, trendy town? Well, you might have to cut out your monthly shoe habit. There is an opportunity cost one way or another. Do you want it now or later? Many people pick later by delaying this fact (through buying things on credit, borrowing, ignoring bills, etc) but eventually it WILL catch up to you. So it is better to prioritize now -pay the piper- than to delay it and have it all come crashing down later with you wondering…now how do THOSE people do it?

Remember that whatever life you have created now came about through a series of actions and events, most of them your own. And even if they weren’t your own, you have a choice on how to respond. You can prioritze and set goals on how you want your life to look. Think long and hard about this and write these goals and dreams down. Prioritize them. And this will set you on a path to success.

Beholden to Beauty

Cassie — Wed, 21 Jul 2010 16:18:33 +0000

Who decides what is beautiful? Is the old saying that “Beauty is in the eye of the beholder” true? It certainly seems that at least in America, the standard of beauty is white, female, white-blonde hair, large breasts, pouty lips, and a thin, tanned body. But is that what beauty truly is or is that just what has been packaged and sold to us?

It seems to me that beauty is whatever is most difficult to achieve, and therefore most profitable to push by the beauty industry. When most lay people worked outside in the sun, having tanned skin was a sign of poverty. Nowadays with most people having office jobs, keeping a tan is a signal of wealth and luxury to either be able to travel to warm places or go to tanning salons.

Being thin is the same way. It used to be that skinny people were that way because they didn’t have much money to be able to eat. Plump was the “in” thing -just look at all the masters’ oil paintings. Now it is the opposite: the less money people have, the more they weigh in developed nations. So now there is a premium on thinness. And then to make it just a little harder for the naturally thin women to easily slide through the societal beauty contest, they need to have huge breasts -something most naturally thin women lack.

And while white women are at an advantage over other races in terms of what society has deemed beautiful, most white women don’t have large pouty lips, so this becomes the next hard-to-get beauty feature.

This Playboy Bunny has to do a lot to maintain America’s beauty standard. Even in the “before” photo she has dyed her hair from brown to blonde and only goes blonder as time goes by. In the “after” photo, she has an orange tan glow, thicker lips, thicker hair, a more refined nose, and dark eye-defining makeup.

So, in order to achieve this standard, you have to diet, dye your hair, use all sorts of lotions and potions, wear makeup, wear “slimming” and “boosting” clothing, go tanning and maybe even have plastic surgery -especially if you are going to be a model of what beauty is -like in the example of the Playboy Bunny. All of these are huge money makers.

And then, if that weren’t enough, not even the very few people who have what society deems to be the right stuff, are left alone. No one is perfect unless they have been “photoshopped”.

This video shows some of this process. I find it ironic that Dove sponsored the “Real Beauty” Campaign because they are in the very business that their ad campaign seems to condemn. However, it is still a good video of some of what goes on to make even the models “presentable” as models of American beauty.

And after all this is done and you have the perfect photoshopped image what becomes of you? Well, for women over about 30 -MAYBE 40, that’s the end of the line. You are tossed out as not even a contestant in the pagent and a new group of girls are indoctrinated into the male-dominated world of beauty.

Even in magazines for older women with good jobs and a family, there is still this unattainable beauty standard. They may put more “real world” celebrities on the cover, but they are dramatically photoshopped as well as in this example of Faith Hill.

I was thinking about this topic because I recently saw a quote by make-up magnate Helena Rubenstein that said “There’s no such thing as ugly women, only lazy ones”. Which on the surface sounds reasonable -all people are born beautiful and stay that way if they work at it, right? Well, there are so many things this quote assumes.

For instance, why is this only limited to women? Why shouldn’t men have to work to be seen as beautiful? Why are women automatically judged first based on prettiness, second on anything else (their job, their wealth, their family, their personality) whereas for men it seems to be the other way? And is this limited to external beauty or should we work to be internally beautiful as well? I don’t think compassion, kindness, generosity and other “beautiful” personality traits usually just appear, but take some time to work on too.

I do think that with both external and interal beauty there are things a person can do to be more beautiful. For external beauty, you shouldn’t stop caring completely in order to rebel from society’s mandate. Taking care of your health, having good posture, keeping hygeinic, and sprucing up extra nice every now and then all can help with confidence and keep you happier and healthier -and may even help with your internal beauty if you feel good about yourself. Attractive people are also at an advantage in society: They’re more likely to be hired, earn more money, have better grades, have more polished social skills, and even commit fewer crimes. And other people are more likely to help them.

But overall, beauty should not be purely dictated by outside forces where the standard for beauty changes based on how easy it is to achieve and dangles like a carrot on a stick, never to be truly reached. You should not feel beholden to beauty.

The Oil Addicts’ Shot at Redemption

Cassie — Mon, 07 Jun 2010 16:05:30 +0000

There is really no getting around it anymore. We (in all industrialized countries and now many, many developing nations) are addicts. Oil addicts. And like most addicts, we try and deny and lie and say there is no problem. It feels too good. It is too easy. We don’t want to work hard to do the right thing.

Well if there is one good thing that has come out of the BP Disaster, it’s that we can no longer play ostrich and pretend there is not a problem. In the Stages of Change model, it says people go through various stages before finally making a permanent change (or relapsing).

These are the stages of change.

The Stages of Change

Precontemplation (Not yet acknowledging that there is a problem behavior that needs to be changed)
Contemplation (Acknowledging that there is a problem but not yet ready or sure of wanting to make a change)
Preparation/Determination (Getting ready to change)
Action/Willpower (Changing behavior)
Maintenance (Maintaining the behavior change) and
Relapse (Returning to older behaviors and abandoning the new changes)

Before the British Petroleum disaster I think the majority of people were in precontemplation. Not even thinking about it. Not even aware, or wanting to be aware. I would say, at the very least after this disaster we have moved to comtemplation, but hopefully further into preparing to change.

And what would it take to fully change and break our addiction to oil? A lot. It is not just in our vehicles which are slowly moving away from awful gas mileage. It is about everything that is made out of oil. And I don’t think we will ever be 100% off oil, but we could at least use it for things that we don’t automatically throw away 2 minutes after we buy it. The big idea? Get off plastics.

If we did just these two things (limit vehicular oil/gas and stop using disposable plastics), we could break our addiction to oil, or at least manage it.

The oil industry has done a great job of throwing doubt on global warming/climate change and BP is trying to manage public perception of this whole debacle. They’ve tried to greenwash and confuse, but I think finally, like tobacco, there is going to be a tipping point where enough is enough and we see through all the blood money.

It is much easier said than done, but the answer really lies in NOT BUYING SO MUCH STUFF. Especially junk you just throw away. And we need to hold policy makers and businesses accountable for making reusable things again. This is both an individual’s responsibility (in voting with what they buy) as well as the industry’s responsibility to stop making all this crap. And it’s the policy-maker’s job to make the better choices easier than the worst ones.

To limit oil consumption, we should:
Give incentives to people who walk or bicycle to work, or telecommute
Give cash-back incentives/deposit returns for reusable items like glass bottles
Increase the price of gas dramatically to fully capture the true extranalities, decrease shipping things in and out, and create local economies and encourage new, clean technologies
Institute policies that discourage driving in general and go back to mass transit, bicycling, walking, and better-planned communities -”active community environments”
Stop using plastic bags and plastic water bottles! -Stores should charge for (cloth) bags that they provide and then give a larger discount for people who bring their own. Disposable plastic water bottles should not be sold. Period.

There are probably many, many more, but this is a start. We need to look to what we can do individually, how industry needs to adapt, and what policy makers can influence. It will not take any one answer, but the biggest help would be to STOP BUYING SO MUCH! When you do buy, buy with care. Think about what you are buying, where it comes from, who you support by buying it, what it is made from (anything with plastic is oil) and what you will do with it -or the packaging- when you are done.

I just hope our contemplation of these things leads to some serious changes on the part of individuals, but more importantly society in general. Addiction doesn’t seem so bad until you see the consequences of it – in this case on the environment, on our health, on our bank accounts, on our future - on us all.

How to Live Long and Prosper

Cassie — Sat, 22 May 2010 12:20:46 +0000

I think that Star Trek has the best greeting phrase ever “Live Long and Prosper”. But what does that really mean? I love to read about how people do it “right”. Recently, National Geographic did a study on the people who lived the longest, and most fufilling lives. Because what good is extending your life by a month if you are tied to tubes, taking pain medications and are in and out of consciousness. Doesn’t sound too prosperous to me…

So what does it take to live a long, fufilling life where people die comfortably in their sleep with their family and friends around them? According to this research from across the world, it takes a variety of things.

Here are a few of the traits that I really thought were worth capturing here:

1) Move naturally. This is different than exercise. It is incorporating physical activity into what you do with your life.

2) Eat in moderation and eat naturally. Do not stuff yourself with food. Eat food that is in your local area. In the Italy (Sardinia) example it was a lot of sheep, Mediterranean plants and red wine. In Japan (Okinawa) it was fish, fermented soy and vegetables. In the California 7th Day Adventists it was a vegetarian diet.

3) Surround yourself with people who love and support you. This one should be easy, but it is increasingly difficult in our detached, technologically driven society. Belonging to a faith or reverence community is very supportive to this. Surrounding yourself by other people who are living in a way that will extend and improve their lives will help yours!

4) Have a purpose to your life. This, again, seems easier said than done. But a purpose can be anything that makes you get up in the morning…preferably something you are looking forward to waking up for.

5. Decompress, daily and weekly. Meditate, pray, and otherwise “downshift” from stress-mode, to peace mode.

These seem like relatively simple things, but in industrialized nations, the number one killers (cancer, heart disease) are usually a reflection of not doing many of these things. Smoking, overeating, lack of movement, high stress for prolonged periods, and social isolation are all killing people 10-20 years earlier than they should be living. And it is also taking with it the good quality of life we are looking for.

Happiness is not found in a bottle or burger or any other consumer item, but in the things we often neglect the most. It is an attitude and lifestyle adjustment. It is when you realize that living long and prospering is about shifting priorities and putting what many people place on the back burner (setting time purposefully for family, friends, movement, cooking and eating good food, and slowing down) to the front.

The Prison of Long-Term Debt

Cassie — Tue, 11 May 2010 21:57:34 +0000

I was just thinking about how long I’ve lived in my current home. Seven years. It’s gone by pretty fast. And as our lives have improved, my husband and I both advancing in our careers and getting higher paying jobs, we have stayed put in our “starter home”. And we have bought a few rentals in that time period. We’ve made investments and achieved quite a bit. It has been tempting to find another place in town; a bigger McMansion on the “good” side of town, but we so far we have just stayed. But I wonder, how great would it be if by now our house were paid off!? How many more fruitful things could we be doing with that extra money? I would love to have a mortgage burning party! It would signal that I have been freed from this prison sentence.

So today I was thinking about what it would have been like if we had gotten a 7 year mortgage loan on our primary house instead of a 30 year. Why are 30 year home loans the standard? How many people actually pay off their homes (or even stay) in 30 years? Wouldn’t it make more sense for a home loan to be a much shorter period of say, 7-10 years? To better illustrate this, look at the difference in interest that you will pay over 30 years @ 5% interest compared to a 10 or even 7 year loan @ 5% interest on a $100,000 property:

$100,000- 30 year mortgage- 5% interest =Principal and Interest: $536/month
Total interest paid: $93,255.78! Or in other words, a $100,000 house for about $193,000.

$100,000- 10 year mortgage- 5% interest =Principal and Interest: $1060/month
Total interest paid: $27,278.62 -total about $127,000

$100,000- 7 year mortgage- 5% interest =Principal and Interest: $1413/month
Total interest paid: $18,724.84 -total about $119,000.

(Figures calculated at Bankrate)

So, let’s look at that objectively. The monthly payment is much higher for the 7 year loan than the other two. In fact, it is nearly 3 times as high (2.6) as the 30 year. However, the amount of interest paid over the period of 30 years is 5 times as much as the 7 year loan! Compared to the 10 year loan it is 3.4 times as much interest and less than twice the mortgage cost per month. In other words, you could pay off your house in a 1/3 of the time (on the ten year example), but pay barely twice the cost of the mortgage payment and save about $66,000 in interest in the process.

This also doesn’t take into account that the interest rate on a shorter term loan is usually lower than a longer term loan making it even more attractive. What’s more, is that since most people don’t last the full 30 years, they take out second mortgages, refi (usually to another 30 year loan!) or otherwise prevent themselves from owning it outright.

People need to remember on any loan that is amortized, the first payments pay virtually nothing toward the principal and the last few payments pay almost everything towards the principal. For a longer term loan, it is much harder to pay down the principal. Which speaks to another reason for our housing bubble crisis. When we had such low interest rates (as we still do), the policies should have encouraged people to get the shortest term loan possible and the goal in the end should be to have as many people as possible in houses free and clear!

Imagine what a different society we would have if half the population (or more!) owned their own homes outright! Wouldn’t that change things? Especially when housing costs are almost always the highest costs for people. If we could get people out of the cycle of debt and more debt on top of old debt and instead move people (with our policies) toward a debt-free lifestyle I think we could eliminate many of society’s ills.

The argument would be that this might push people who otherwise could barely afford a house with a 30 year loan out of the running for the “American Dream” of home-ownership. Well, if they can barely afford it with a 30 year loan, it might not be the right time to buy a home. This is similar to the argument of why people shouldn’t have to put down the 5 or 10% down payment. If they can’t come up with at least that much, they have no business in getting into bigger debt on a house! This is kind of like a test to prove that you are serious and stable. If not, you should wait until you can. Simply put, not everyone is prepared to get into this type of debt obligation.

A house is an expensive, ongoing cost that pretty much mandates the ability to save. Maybe they need to learn the ABC’s of financial literacy first before jumping in to home ownership. A requirement to put money down is a good practice because it makes people remember that they have a piece of skin in the game; that they really want this and aren’t just going along with it because everyone else is. They would be much less likely to default on the loan if they had a lot of their personal hard-earned money on the line. People would also be more likely to buy a house that is truly within their price range instead of stretching to get the biggest, fanciest thing possible to “keep up with the Joneses”.

In fact, I would say decreasing the standard mortgage term from say 30 to 10 or 15 would actually help people out a lot. The current 30 year loan standard is much more unfair. It takes so long to get out of debt that it feels you never will. After 7 years on a 30 year $100,000 loan, guess how much you still owe?! $87,774.63! You have barely made a dent. And after 10 years? $83,276.42

If you could see your loan coming up to its end in a decade or less (year 7 on a 10 year loan $100k loan you only owe $34,476.30 compared with year 7 on a 30 year with $87,774 remaining) with huge amounts of your payments going to the principal, wouldn’t that give you motivation to finish it off and pay it? I mean, really, would we want people with 50 year loans because we could barely scrape them into qualifying? Isn’t that taking advantage of the system and the most vulnerable people? If we start to look at 30 year loans that way then we can see that they are really taking advantage of people like a wolf with sheep’s clothing.

The reason it looks like a sheep (ie a good thing) is because it seems like you are doing the responsible thing…you are keeping your payments low in order to be sure that you can pay them. But really, for all the reasons I listed above, you are probably doing yourself -and in turn, society- a disservice. Because of your fear, you have created a monstrous beast called endless (or at least 30-year) debt.

Remember that the word mortgage and amortization have in their etymology the latin word “mortus” which means “death”. So, break free of them (and let them die!) as soon as possible and go live fruitfully!