Individuality And Getting Rich

I was talking about standards of living with a friend of mine. His position - one that you've probably heard repeated in the media multiple times - is that people are worse off now than they were 20 years ago. I produced data to show otherwise: Disposable income and the wage cost index have both out-paced the consumer price index. I know that's not the whole story, but the point is that the prima facie evidence suggests that people are much better off now than they used to be; moreover, in order to make the opposite case, you have to get into a rather complex analysis of the economic indicators, and with that complexity comes additional nuance and additional debate. All said and done, it's incredibly difficult to argue that people are worse off now than they were 20 years ago. Meanwhile, it's rather easy to argue that we're better off now. So, that's what I believe.

Another friend of ours joined the conversation by asking: If disposable income is so far up, why do Millennials have such high rates of debt and low rates of home ownership? The answer to that question is that Millennials have high rates of student debt; in other words, Millennials prefer taking on debt for their schooling, rather than taking on debt for their housing. Others might disagree with their preferences, but that's beside the point. The prefer what they prefer - that's not a problem with disposable income. (Besides, as anyone with a mortgage or a student loan knows, it's possible to have both debt and disposable income at the same time.)

Well, this conversation got me thinking about wealth, and about the choices I've made in my own life. I'm not wealthy by any stretch of the imagination, but I'm more comfortable than others. What did I do that other people couldn't, wouldn't, or didn't?

I was still maintaining this blog back in 2012, when my wife and I moved from Canada to the United States. We deliberately moved to a place with a low cost of living and low housing prices. On one income and zero credit history, we were able to purchase a duplex within the year at a pretty low price; but keep in mind that we bought less than what we could afford. We lived in one half of the duplex and rented out the other half. We paid the mortgage off early, bought a detached home, and rented out both sides of the duplex. We now had two incomes along with the rental income from the duplex. That's when life started to feel really comfortable for us.

This is not a revolutionary way of living. Thousands if not millions of young couples get started in just the same way. All it requires having little to no debt (so, don't buy anything that requires debt - including an expensive college education) and the willingness to postpone your "forever home" for a little while (live in a cheap duplex instead of your dream home for as long as you can stand it).

Everything that we did 10 years ago was pretty much the opposite of what was popular, normal, and expected at the time. My wife and I had good jobs in Ottawa and were making pretty good money. We were on the verge of sinking $300,000 or more into a home in the Ottawa area, paying 14% sales tax on everything, spending lots of money on winter accessories every year, paying Canadian tax rates, and so on. When people found out we intended to move, they were surprised; but when they found out we wanted to move to Texas, they tried to talk us out of it. They made fun of us for it. We were doing the "wrong" thing.

There were obvious reasons to move to Texas, however. Texas has no state income tax, which saves us a lot of money every year. Even now, home prices and real estate prices are far below the national average, making it a great place to invest in income properties. With year-round warmish weather, I'd be able to run outside all year long, keeping my diabetes in check, and thus saving a lot on future medical expenses. Food is cheap here, too. 

So all of the arguments against moving to Texas involved the fact that Texas isn't particularly cool, while all the arguments in favor of moving to Texas involved minimizing expenses and maximizing potential revenues. Economically, the choice was plain as day. We simply had to sacrifice our X-factor. I think it was a fair trade.

When we became landlords, people made fun of us then, too. They called us "slumlords" and talked about how they'd never want to have to "deal with" tenants. Some people told me that the idea was "lame," which I guess just means that it's an uncool idea. But economically, it enabled us to afford a home, food, clothing, and living expenses on just one person's income, while my wife waited for just the right job opportunity to come along. Eventually it did, and she parlayed that opportunity into quite a great career. For a while, however, she had to be the uncool one being supported by a white man husband while she stayed at home without a job. 

When you get down to brass tacks, the secret of our success, to the extent that we are successful, is that we didn't allow social trends to dictate our behavior. In order to be successful, in order to make a really comfortable living and expand your horizons a bit, you have to be willing to do the uncool thing. You have to do really "lame" things like:
  • Moving to an uncool place
  • Taking an uncool job
  • Taking an uncool risk
  • Starting an uncool business
  • Not listening to all your cool friends
There might still be an opportunity for you, dear reader, to come to Texas, buy cheap land, and do what I did; but every passing year makes it slightly more difficult for you. The next generation of "people like me" will need to look at even more "uncool" places to repeat a similar pattern. You might have to move to Mississippi or Kansas. You might have to live in a small town. You might have to delay going to college until after you've set yourself up with a good income property or two. Heck, you might even have to go to trade school instead.

I mean, who knows? I don't know how to "make it" in the future, I only know how to "make it" in the past, and perhaps the present.

What I do know is that in order to "make it," you're going to have to do things that are different from everyone else, different to the point of being uncool, different to the point where your friends tease you relentlessly and your family thinks you've become a crazy Republican who moved to Texas to fight abortions and socialism. (Yep, that's what my family thinks.)

Getting rich mostly means being able to recognize things that will be cool before they are actually cool. A lot of people will criticize you along the way, but that's how it goes. If doing what everyone else does was the way to get rich then everyone else would be rich. If they're not, then you have good evidence that what they all choose to do is probably not going to make you rich, either. 

So, don't be afraid to be uncool, take a risk, and be different. You might find out that that's what works in the end.

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