I snowboard 8:30am – 4pm, Monday through Friday. What do you do during those hours?

There’s one major key to living your dream. Before I get to it, however, there’s one major roadblock to living a go-anywhere, do-anything sort of lifestyle.

A mortgage is probably the worst investments a dreamer can make. There are better and worse mortgages, of course; I don’t mean to be categorical in calling mortgages evil. If you put a lot down (say 50%), choose a short term (say 10 years), and the payments are easy to make, then it won’t be a drain on your income. It might still be hard to get out of, and those payments might keep you locked down when there’s so much in the world to see.

This is where I am. Where are you?

A house is not a place to live; it’s an *expensive* place to live. If your mortgage is a giant chunk of your salary, such that you bring a sack lunch to work every day because you can’t afford a $7 lunch out, then you’re paying way too much for your house. $2000 a month for a place to live and $120 a month for food is crazy. I think those priorities are backwards. Food is nutrition; it’s health; it’s life. Shelter is cheap.

Buying a house is an investment. If you don’t know where the real estate market is, you could be where many people are today: upside-down on your mortgage. Even if you own your home outright, it’s not a liquid asset. In a bad market, it could take a year to sell the house — if you’re willing to wait that long. And every year you still have to pay taxes, insurance, and maintenance fees.

I’m surprised at the amount of money people will dump into redoing their kitchen or bathrooms. For that kind of money, I could live easy for a couple years. Throw that money into investments and it’s a good chunk of living expenses on its own. The money you pay in interest is pure bank profit; it’s a huge amount of money that YOU pay so that you can live in a nice place for a few years. In decades past, the interest was about 2/3rds of the monthly payment, but with modern low-down-payment and long-term loans, that percentage is creeping up.

Debt is the #1 roadblock to chasing your dream.

I used to feel guilty about having never bought a house, but I moved so much, I thought — soon as I find a job that I want to keep for five years, I’ll buy a house. Layoffs, bad bosses, crappy jobs, and better opportunities kept me moving; luckily, I moved up the responsibility and salary ladders too. Everyone else had a house, going over to visit them was cool, but… it was never for me. Never looked seriously.

With the tankage of the market in 2008, I suddenly felt very good about renting an apartment. I’m mobile, my living expenses are tiny, and I never bought a house full of furniture. Say your monthly mortgage payment was $2000. $1300 of that is interest, and $700 is principal — ie investment. Instead of paying  $1300 in interest to the bank every month, I put around $800 that “disappeared,” ie didn’t turn into an asset. How is paying interest better than paying rent? And what if the rent is lower? A family of four could live in a nice apartment for $1300 a month, skip expensive insurance and
maintenance fees, and instead of putting $700 of principal payment into a slowly-appreciating asset (that might not even be appreciating!) you could put that $700 into much better investments.

Yes, the stock market cratered in 2008. If you’re going to invest, invest smart.  There’s a lot of crossover in the paleo community with other non-mainstream groups, including the crowd that follows sites like Mish (and others) that saw housing headed for a bust back in 2005. But that’s a topic for another day.

So, where was I? Oh yeah.

I was able to move to the mountains! My monthly expenses are now about 14% of my old salary, and even that’s a bit inflated due to a new car and the insurance costs that go along with it. If I had traded my old car 1:1 for a used buggy that would do well in the snow, and… I’d be looking at 11% of my old salary. At this point that kind of comparison gets silly.

The first thing that let me go live my dream was low expenses. That’s the one major key.

If your dream is to travel the world and stay in first-class hotels and eat at 5-star restaurants every night, the only way to get there is with lots of cash. But is that really your dream? I’d like to do that, but I don’t think it would make me happy. I’m much happier going out and snowboarding five days a week. I could be doing that by staying in a mountain-side room at $150/night, etc etc, but again that luxury wasn’t essential to my dreams. It’d be nice, of course.

Being rich is a dream that requires more than a full-time investment. It’s an 80-hour a week thing, and it requires talent or smarts or luck, too. And what it gets you is money. What do you do then? Live in luxury? I’ve had jobs where I could just sit there and twiddle my thumbs and still get paid. Those jobs sucked. It was boring. I felt like I was wasting my time, learning nothing, getting better at nothing, not furthering my career or my life. I can’t understand those that say they’d like to sit at home and watch TV all day. That sounds like a fucking bore to me.

To me, happiness is a specific thing. It’s chasing my goals. Right now, snowboarding every day is hella fun. And in six months, maybe I do something else, but for the next six months? I’m in heaven.

I’m also using my spare time to build software products that I can sell. This is a 4HWW sort of thing; build or buy a product and sell it. This goes hand-in-hand with having low expenses. It won’t take much for a few software products to pay my living and travel expenses. I’d love to talk more about that part of my life, but I’m waiting for a few more products to get out there in the market.

In the meanwhile, I’m living it up, cheaply, here at 8000 feet elevation.