Lots of things on the agenda today, but I am taking a short break to clear my head some and think into the future a bit. The kitchen renovation is ongoing currently and hopefully today, the fridge and freezer can be installed, as that is something I need a bit of help with, as I am not as strong as I used to be. The last kitchen renovation I did six or seven years ago, I did it by myself and although hard, it was manageable.
I'm getting too old for this.
Well, perhaps I am not and more likely, I am just getting too out of shape, weak and disillusioned by life that I feel that instead of putting in the effort, I would rather just sit back and watch someone else do the work.
But that takes money.
That I don't have.
Well, we are using professionals for what I can't do of course, but I think that given the events of the last few years, if I had a little bit more, I would have them do all of it. Wouldn't that be nice? Wouldn't it be great to never have to worry about money?
How much would it take?
For us at least, not really that much, since we tend not to be over materialistic. However, that is the challenge, because when more comes in, it often ends up going out just as fast, as we tend to expand our tastes and preferences based on available resources. Double the income and near double the monthly expenses and then, when things take a downturn, we are still left with the processes of pre-crash, so we not only likely have greater obligations, but also our habits of desire - more consumption.
From talking with friends over the last few months, I get the sense that lots of us are in this position, where while things were humming along nicely through the growth and stability periods, suddenly we have found ourselves overextended and chasing. One of my friends has bought a house, car and had a child in the last three years, with two of those being largely on credit and the third carrying only costs with no utility for eighteen years.
And, I think that this isn't uncommon, where during the "Covid years" people expanded their tastes and obligations, getting into a habit of spending more on less and buying on debt at higher prices than they would normally have paid. Now things are heading in the other direction, they are still saddled with the debt, but have a decreasing ability to service it.
In Finland, inflation has returned people to what was 2013 levels of purchasing power, but the problem is, that in 2013, people were more financially cautious. Now though, there is the "throw caution to the wind" mentality in terms of spending, but with less to do it with, which leads quickly into a debt spiral that will take years to pull out from, and some never will.
Living a little too gold.
And this is the problem with "living within your means" because normally, that means spending less than what one earns. But there is an expectation that what we earn is going to stay static or increase going forward. When what we earn decreases through job loss or inflation, we very quickly are unable to leave within our means unless we adjust equally as fast - something that is hard for most of us to do at a species level. Once we are accustomed to do something and have something, we don't want to give it up.
This happened a lot in 2008, where a lot of people continued living "their best life" despite the global financial crisis, which left them less capable to take advantage of the investment opportunities at the time. I think it is happening again now, where even though it is clear that the economy is struggling and inflation is high, after a couple years being "locked down" (for no reason), people feel that they should expand their lives, because they deserve it.
Maybe we do deserve it, but what we need to remember that deserve or not, fair or not, it will be us who have to pay for it and live the consequences of our actions. Soend what you want, go on holiday, buy a car and a new TV, invest into a house - but know that going forward, these decisions are yours and living with what happens is yours too.
Ownership of actions.
That is owned too. Like it or not.
Sometimes I think that we should have held off on doing the kitchen, as while we haven't taken on additional debt, it means that we are less capable to deal with the coming conditions of economic crisis and increased expenditure on necessaries for living costs. However, I also try to remember that if we didn't do the kitchen, we would have still been unlikely to save all of outlay or invest it and we probably would have taken a holiday instead, as well as spent more on other items. While we would still be financially better off and have more of a cushion, it isn't a 1:1 relationship.
And, worst case scenario...
If we do have to sell, at least with a new kitchen it is going to sell faster, as the entire living area of the house is now newly renovated, something that a lot of people don't want to do now, because of the massive costs involved, due to material and labor inflation. This would mean we would have to downscale in order to benefit from the sale however, as the prices of real estate have also gone up. But, for us who bought pre-Covid, we likely still would have more equity in the house than we have invested, so it should be okay.
Did we live a little too gold?
Yes.
Like many, we are overextended and overinvested. This weighs on my mind a lot at times, but I am also seeing it somewhat like the dips in crypto, just have to ride it out. As long as once things recover we are in a position that we can grow quickly from (meaning not too much debt obligation), things should be okay.
Nothing is set in stone though.
Especially these days.
Taraz
[ Gen1: Hive ]
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It's definitely something to think about for those thinking of having kids in this day and age. Not a great investment :p
I think to me I'd wanna get one or two when I know that money isn't and won't be an issue for a long time. There are also a lot of things people will have to consider how they do nowadays with Internet having taken over and being accessible to everyone at any age easily. I don't think it's something I'd want my kids to grow up with early on seeing how social media is built up these days and how it is affecting those having grown up constantly around it.
I'm in the same boat, though, where I wouldn't need too much to be content with the money situation. No luxury required here, mostly just helping family out so they don't have to work too hard for it or too long and they as well can eventually enjoy some more time with their bad 18 year investments.
I have been thinking about what would happen if Hive were to get to a price where you could sell some off and live without worry for the rest of years. I wonder how much I'd want to keep here knowing in case I'd need to I'd still get something out of it at some point no matter the price at the time. Will be interesting to see who is going to be content with what they've managed to take out by then and who will stay staked up to use it for the future of the chain and more importantly what they will do with it.
As volatile as crypto is, one really doesn't need to choose. Just take some out during obvious temporary pumps, then buy back low and power that up. The best of both worlds :) ...
This is the plan - I fail every pump though!!
In what way???
Wise of you to think of having kids when you can afford it, as so many make the mistake of having kids and then life happens. We have many small boys at the traffic lights begging for money every day.
Life definitely happens, even when prepped for kids :)
There is a popular saying; You make your plans and then life happens.
A terrible investment - but the smart ones might be good value down the track.
I am so glad that we kept Smallsteps largely analog for so long. Compared to many of her friends, she probably seems an idiot considering she can't use any tech, but I am pretty sure I can teach her down the track.
This would be nice. Just a little extra here and there.
For sure. I am planning to stay pretty well staked into the foreseeable future, but I also think that I have to start taking something out on the spikes at least, so then I can buyback on the inevitable dips. I would also love to be able to use it for chain investment into new applications and businesses on Hive. :)
I recently hired people to do housework, but it was cheap. But I changed the refrigerator, TV, washing machine in December 2021. About 4000 dollars for 1 ETH was then the rate of cryptocurrency.
Not a bad deal if using ETH.
Buy back now and then next round, dishwasher, oven and new car? :D
Yes of course. When Hive price will be $2.40)
2.40 - 10.40.... :D
5-7 billion capitalization, still a bit much, 1-2 billion just right
The more income, the more demands that must be satisfied.
Everyone is dissatisfied with their wishes. Needs should be the benchmark.
Fulfill needs, not wants. That's their suggestion. But who doesn't need anything? Only possession made him stop. That's why debt is the fastest way out and really becomes a problem when we are unable to service it. What you have said is very true, Mr. @tarazkp.
The tendency to choose investment is the best choice in any economic condition. The kitchen is an investment, for needs and wants. You've done it, and it will only improve with time.
Hopefully, your kitchen project is finished quickly and it is getting "warmer" to be there.
Sometimes I wonder what life would look like now if I kept the same spending habits as when I was a student, whilst earning what I have since.
Dead people. Pre-dead people however are very demanding.
Not too long for the kitchen - another week only I hope.
I think any renovation at home here would not last that long. Also, I wouldn't like to have an irregular part at home.
Renovation should add in value when selling any property as long as it is not too old.
Renovations can take time here for various reasons - though in our case, it is because they are doing it in the evenings and around other work :)
Building a house from scratch can take a couple years, depending on the type of house.
Debt is indeed a major problem nowadays and everything constantly gets more expensive. In a way I am thankful for my poor upbringing as it taught me not to live beyond my means. A habit to avoid debt at all costs. We live with only the very basic needs and no luxuries.
Some of the cases that we work with at Papillon are so sad, as many have lost everything due to Covid.
So methinks that I am already a dead person as I want for nothing. Seriously.
You have a great investment with that house and it will continue to grow in value.
It has been terrible for some who had spent years getting to their feet, only to be knocked down again.
Agreed and the problem is that they have made it so easy to get debt. Many fall for it at their own peril.
Humans are creatures with infinite desires! No matter how much they have, they still want more! When we are bombarded with advertisements, we feel we have to do this! They urge you to participate in it! You must have it or it will be too late! You fall behind! You put yourself on fire to be a small part of the new wave!😤
In the world of crypto, how many of us have regrets in retrospect? Really all of us!😁
We all regret seeing the course of Bitcoin price that we wish we were there before this rise or fall! The world around us is full of regrets that we suddenly say to ourselves when we see each new wave: Maybe this is the next one! Let's ride it!😪
Does this challenge take us backwards? Maybe yes or maybe not!🤑
The FOMO on consumables is crazy - there is generally an endless supply for those who want, so they make it seem like those who buy early have advantages - generally they can post about it on instagram ;)
Bitcoin price is okay now - if you bought in 2020 - or 2016... or 2011
I call this movement by inertia. It's hard to stop a car at full throttle. It is also psychologically difficult to eat pasta today if, until yesterday, I was eating purely oysters.
Did I really write leave?? Oooppps. My brain knows what it wants to write - my fingers do something different. The words that come out generally sound similar or are said the same - like right and write. As an English teacher for so many years.... this kills me :D
I wonder what goes through people's heads when they "had it all" and ended up losing it. I have met a couple who this has happened to and they tend to do okay, but it depends on how they lost it.
They say you can't buy happiness with money. That's not the whole story. Money buys us a lot of ease and in return we are able to buy many other things.
Lol. That's another problem. Mmmm. I think we need to be mindful about our expenses and keep them always in certain limit.
Money buys a much nicer sadness! :D
Live within our "worst scenario" means.
I am wondering what you really meant by NICER sadness?
When you come back to the basics of money is just a medium of exchange. In your case where you are in your mid 40. You can manage your body and let someone else move the fridge and take the time to write a good article. :)
Exactly - it is just a tool to use to do the things we can't or don't want to do for ourselves.
If the property is an investment, it makes sense to keep it in top shape. But I don't think things will get that desperate for you???
I don't think it will get that desperate no, but it is never certain what happens so it is good to be mentally prepared at least :)
True :) ... But we should also plan for both best and worst case scenarios?
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what a masterpiece photograph you've added in this blog, I become your fan of photography and writing art, so many things to learn from you! I liked each point you discussed in this blog. Thanks for sharing such wisdom for we little hiver.
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It's something that is very common. If you have more money to spend, then it makes sense for them to pay for the extra convenience while the rest of us go through whatever is in our price range. It's a part of life that I have come to accept and I remember the construction on my parents home took forever until my parents decided to fork over some extra cash to speed things up.
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it's essential to take your time and think about what you want and how to do what you want
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I think buying and renovating your house was probably the best investment you will ever make. With our first house purchase back in 1978, we put down a large down payment, we had money then, but no children. Over a three-year period, my husband and his brothers added a level, making a 2 bedroom into 4 bedrooms with a huge open family room, more than doubling the sq. footage.
Our 30k down on a 45k purchase turned into being worth over 300k, the market was hot.
Instead of selling we took out a home equity loan and built a house on the property we purchased in Upstate NY. We have now retired to this bought and paid for home.
Just got lucky? Nope, the big guy had a plan all along.
I tell everyone who is thinking of retiring, start out debt free.
Nice post as usual.