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Your American Dream is NOT my American Dream

I know we don’t have the picture perfect “Leave it to Beaver” American family lifestyle.  We don’t have a “brick and mortar” residence, we don’t have traditional careers, we don’t have ANY savings or investments.  We get an earful of flack about once a year from certain family members that just don’t understand WHY we live this way and confuse our lifestyle choices with an entitlement mentality where they think we either ‘expect’ the government to take care of us or we’re mooching of our family to avoid re-entering the “real world”.

It’s a losing battle to explain the world has changed.

I will admit we are VERY lucky to have been able to rely on family during our darkest hour.  We’ve been lucky that our family has been in a position to offer aid and comfort.  Not too many years back, we were in that same position and we offered aid to family in return.  It’s a two way street.  Everyone goes through Ups and Downs, you pray that when you’re down, someone is up. And vice versa.

Issaac Newton once said this famous quote;

If I have seen further it is by standing on the shoulders of giants.

Believe it or not, we’re not alone out there.  This is not the moon.  Family, through blood or friendship, is where your humanity is revealed.  If you can’t break down and grieve, show despair, ask for comfort, aid- what are we left with?  Relationships no deeper than a smile and handshake.  A knee jerk response to the everyday question, “How are you”?

I believe it takes great strength and courage to have a little faith in humanity.  It’s a give and take. I can fulfill the best part of “ME” through my kindness and compassion to others.

Blah, Blah, Blah with the new age crap. You’re making excuses.

OK, some folks can’t go there.  How about this?  We borrow start up capital in order to insure, in the long term, we WON’T be a drain on our family.  We desperately insure we pay the short term, interest free, loans back as soon as we have cash.  Why not just get a job and save?  I can’t.  In fact, I can’t and all evidence leads me to believe you can’t either, you being most of the population of the US. From a numbers standpoint, a job at this point will not generate enough cash after taxes to even cover living costs.  Consider, we would need a place to live, furniture, all the related expenses like utilities and insurance and we’re WAY in the hole with no hope of clawing our way out.  Remember, it’s not just me.  Lone dude with little or no baggage, capable of sleeping on the floor until the first paycheck comes in to buy furniture.  I have a family, two kids to house, feed, care.

You should have thought about that before going broke!

Going broke wasn’t my first choice.  But it was my last.  Being self employed, I didn’t qualify for unemployment benefits. No more cash but bills to pay.

I’m a smart guy.  Surely I could land a job that pays enough.  If you add it all up, I would need to find a job starting at $68,000 a year just to break even and not accumulate passive debt like credit cards.  I have a degree from a fine school and a history of chronic self-employment.  Regardless of my skills and experience, there’s a line of individuals out there with resume’s that read like the stock picks from the Wall Street Journal.  Sadly, Home Depot is probably a better bet.  That’s the NEW reality.  The median income for a middle class family is $50,000.  To me that indicates, there’s a lot of families living on debt.  No surprise there.  I can’t do that for a few reasons.  One, no one in their right mind will offer me credit.  I’m a failed, bankrupt developer.  Two, I’m not going there again.  I played that game and I don’t like the rules.  I am loathe to invest another twenty years of my life into building a business that can be taken away in a year through forces outside my control.

So What to Do?  The million dollar question.  How do we lay the ground work to build a solid base for the future?  A future financially independent of family with savings for long term retirement?  Let’s use the ‘lemonade stand’ analogy.  In any business we have ONE GREAT TRUTH;

In any business, you have income and you have expenses.  What’s left is profit.

I don’t think you can get any simpler than that.  But it is the driving principle in business.  In our lemonade stand we sell a cup of lemonade for $1 (income) but it costs us $1.20 (expense) to make the lemonade because of the ice, cups, lemons, and sugar in each cup.

That’s just stupid!  Nobody would start a business to lose money.

Yup. That’s why we can’t settle down and rent a nice little house and get a nice little job.  In the lemonade stand example you can’t raise the price of a cup of lemonade.  Nobody would buy it.  You’re only other option is to reduce your expenses.  If you can make a cup of lemonade for less than $1 you have a profit.  This is our life.  Income is pretty straight forward- it’s income.  The expenses are cost of living.  Profit would be savings.  If we followed conventional wisdom, settled down and got a job, I would have to borrow money every month to survive.  From who?

So how do you do that?  You think outside the box.

What’s the biggest bill families pay each month?  Rent or a mortgage payment (hopefully).  OK, we nix that.  We nix utilities.  We nix all the little stuff like magazine subscriptions, internet, cable, gym memberships.  There’s still a cost associated with housing, but the objective is for it to be LESS than before.  The goal is to drive down expenses.  If I can get my cost of living expenses BELOW my income, I can actually start saving some money.  If I can start saving, I can invest in the future.  We could buy land, build a house, save for retirement. Remember, Hil and I have about 25 more strong and active years until the magic Social Security age (not that we can count on that but it is part of our retirement plan).  We have some time to regroup, rebuild, and save for the future. But it all has to be based on cold hard cash.  No more credit.  It’s not comfortable, it’s not easy, but this plan is the only way I can see to get out of the hole and start putting money in the bank (that’s more figurative now a days).

To start any business it takes time.  No one really expects a business to overcome the investment capital and operating costs to become debt free and profitable in the first year.  That would be like paying off your house, all your bills, and putting money into savings with just one year’s salary.

So while it may look like we’re freeloading, care free gypsies to some, We are actually methodically investing in a business called “our lives”.  Believe me, it’s far harder than following the pack and believing in the same dogma of the “American Dream” my parents did when they were my age.  That reality is gone.  It’s time to face facts and build a new reality.

You’re results may vary.

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2 comments to Your American Dream is NOT my American Dream

  • kevin Lancaster

    Well put! I’m a graphic designer that was working in the furniture industry when the 08 colapse happened. The good I was able to be a stay at home dad and collect unemployment while searching for jobs in our area as our home value fell off the map… Finally after a couple of years and no more unemployment, I take the first job offer I get and I’m making $25k less than I was 2.5 years earlier and I have burned what savings and investments I had to keep our family afloat. My wife and I had planned a liveaboard life several years ago and did not jump when the best opportunity was there… Now with 4 and 7 year old boys, a dead end job that pays crap, we are ready to sell everything and see what that leaves us with to buy a boat and set out to live our lives together instead of learning about each others day over dinner in 45 minutes… I didn’t sign up for that when I said I do, or when each of my boys came along… I commend you for taking chances, living, prospering on what the wind and water bring you as well as the summer fun of the Rocky’s. I hope we join you soon soon as water gypsies, learning more about each other and the world we find. Simple is better.

  • Tim Rowe

    January 9, 2014 at 7:23 am
    I live in Ireland, property crash, architect, gone bust. That is us. Now live on a boat. Downsizing really difficult. Quite funny and entertaining.

    On my 50th birthday I was walking in the Scotish Highlands on a 220 mile walk carrying my food and tent for three weeks, when I was 60 I was half way across the Bay of Biscay on route to the Mediteranean. My wife asked what was the plan so we have decided we will be at least half way across the Pacific on my 70th birthday.

    Keep the costs down, start living. We have friends coming out to us for 5 weeks and we will pootle a bit further south to the Greek Islands. Like you I fish, always for food it is great. Time is now the friend and not the enemy because if it takes me three weeks to fix something it means I am not spending money. If I spend a couple of hours a day laying out a line and/or lobster pot we eat well. Some nice salad and a beer or wine from the nearest farmer or small holding and we are eating for a couple of euro.

    I met an old boy who had sailed up from Malta to Northern Spain and was heading on to Falmouth single handed. This year he is heading to the Greek Islands. Old John is 78. I reckon I have at least 18 years of this life style left.

    Well done to you for the change of lifestyle and best wishes to you and your family.

    Tim Rowe