If you're new here, this blog will give you the tools to become financially independent in 5 years on a median salary. The wiki page gives a good summary of the principles of the strategy. The key to success is to run your personal finances much like a business, thinking about assets and inventory and focusing on efficiency and value for money. Not just any business but a business that's flexible, agile, and adaptable. Conversely most consumers run their personal finances like an inflexible money-losing anti-business always in danger of losing their jobs.
Here's almost a thousand online journals from people, who are following the ERE strategy tailored to their particular situation (age, children, location, education, goals, ...). Increasing their savings from the usual 5-15% of their income to tens of thousands of dollars each year or typically 40-80% of their income, many accumulate six-figure net-worths within a few years.
Since everybody's situation is different (age, education, location, children, goals, ...) I suggest only spending a brief moment on this blog, which can be thought of as my personal journal, before looking for the crowd's wisdom for your particular situation in the forum journals.
The answer is that is simply comes down to the optimal choice for our personal situation. We paid $14200 out of the door and about 20% on top of that in repairs and equipment. We pay $475 a month + electricity and gas (water is included) to park it. Compare this to $1100 a month for one-bedroom or studio apartments around here and it is almost a nobrainer unless you’re stuck on the apartment idea. We are two adults and a dog, so roomies are pretty much out of the question. If you are willing to become someone’s room mate, you can get away with paying $600-800 or so although I once saw someone offering a rebate if you happened to be a male bodybuilder willing to pose on occasion (I am not making this up!).
So why not buy? Verily, the perils of a specialized professional career. We have the kind of work, where you have to move to get it. I can be employed about a handful of different places in the US. Two places in Canada, one in Japan, and so on. Also, I have the kind of work which is not just “up or out” but simply “out”, limited term contracts. The research community still subscribes to the idea that people are best developed by moving them around from university to university. While this would have been true in a world before the telephone was invented, it does not make so much sense anymore. Institutional inertia, I guess.. This excludes buying, but even without this career problem, buying would still not make sense. Consider that houses around here are still $300000+ coming down from $500000+ (most of which is land-value, since the houses are generally made out of wood and plastic), at 6% monthly interest payments alone would be $1500. This is much more than our RV rent, hence it has tremendous opportunity costs to buy a house here.
That is the monetary reason we got the RV. The present alternative was to get a boat which I figure is much like an RV except that it could sink if you don’t flush the toilet correctly (at least in an RV that only builds up a stink – everybody has strict instructions on how to go on the can – I’ll be posting a sign for guests). As a long term alternative I am considering a straw bale house in a state-that-is-not-California or an Earthship.
