It’s fitting that “misfortune” is a synonym for “burden.” It aptly communicates the fact — if indirectly — that the acquisition of too much stuff is a hindrance, that spending money on things you don’t need is the opposite of “fortune,” one’s position in life as determined by wealth.
It’s because of stuff that my dad isn’t in the financial position he could be. The sooner you incorporate Mustachian principles into your life, the better off you’ll be. Allow my dad to illustrate.
I am visiting my dad for the holidays and very much feeling the burden of his accumulated stuff. I have taken it upon myself to clean out at least part of my father’s basement, one large area of which has become “hoarder house lite.” When I noticed this during an earlier visit I was horrified, yelled and said the basement looked like the place where they found Saddam Hussein, and generally behaved in ways not recommended by the therapists on the Hoarders TV show.
But it worked. Not long after, my dad cleaned out most of one bedroom that had been filled with loosely piled crap. He painted the bathroom. He repaired, sanded and refinished a front entry way. He has moved some things out of the packed basement, which is large, the entire footprint of the house and garage.
But the scale of what remains is overwhelming. Taking entire SUV loads of stuff to Goodwill appears not to have made a dent.
“Herculean task” is another synonym for burden. So are “weary load” and “thorn in one’s side.”
Selfishly, perhaps, I do not want to deal with a more serious hoarding situation down the road. I want to stop it in its tracks. During my visits, I soldier on: one bookshelf at a time, one drawer at a time, one closet at a time.
It’s just sad. Pitiful. My dad could easily have a paid-off house and a lot more savings, if not for all this. I point out his mistakes not to cut him down, but to illustrate how a series of “normal consumer” choices add up to prevent not only early retirement, but a good retirement at typical retirement age.
Mistake #1: Lack of Strategic Thinking
My dad may not have spent much compared to many people (which is not a good baseline to use, anyway) and can be incredibly frugal, but he has never thought strategically about his spending or his goals. According to both of my parents, they never even discussed retirement.
Like all of us, my dad has personality traits that get in the way of success if we fail to recognize and change them. My dad is bullheaded, stubborn, convinced of his rightness and defensive. He is not a curious person: He doesn't ask people about their lives in conversation but talks a lot about his. He believes he already knows everything, which got in the way of him obtaining any education beyond (and even in) high school: the teacher was always stupid or did something that annoyed him, and so on. These characteristics mean that he did not examine his behavior, and was not open to behavior change that might have helped him manage, save and use money more effectively.
Mistake #2: Not Paying Off the House
Dad’s house should be paid off by now. Without being all that frugal, dad could have easily made double mortgage payments every single month, or at least every other month, for most of his working life. If he’d made just one or two extra payments/year, his 30-year mortgage would have been a 20-year one and would be gone by now.
Dad is a recently retired factory worker with no pension. He relies completely on Social Security (SS). He has a little over $100k in retirement savings and about $20k in cash savings. Though it sounds precarious, none of this is actually problematic, despite the talking heads who panic and foretell starvation for those who live on Social Security alone.
Dad’s monthly Social Security payment is $2,000. His house payment, which includes his property tax, is $450/month. His health insurance is less than $200/month and he starts Medicare next month anyway, so that ~$200 will be freed up. This gives my dad $1,500/month for utilities, groceries, and everything else. Since his car is paid off, he should be able to save money from his Social Security payment.
My parents divorced during my first year of college, so my dad bought a new house in 1995. It cost $112,000 and he put 20% ($22,300) down, leaving a balance of $89,700. Of his monthly $450 mortgage and property tax payment, $190 of it is taxes and $260 is the house portion ($3,120/year for the non-taxes portion).
This means that, even while living on Social Security, my dad could afford to make an extra mortgage payment every month.
Most years, my dad made $40-$60k/year, depending on overtime. He had no required child support or alimony to pay after his divorce. My parents split amicably, I was 18 and my brother not far from it, and they worked it out between themselves just fine. Neither of my parents gave us a penny for college (which we expected and think is the right thing to do), so dad had none of those expenses, either. He did not buy us any cars or pay for car insurance, textbooks, room and board, utilities — nada.
I can’t figure out how he managed not to pay off his house during the past 20 years. It certainly didn’t go to cash savings. He has no fancy cars, no second property, no boat, no expensive hobby (or any hobby at all), and he hates travel. He has not improved anything about the house since he bought it, save for the kitchen floor, paint in two rooms, and one new dishwasher.
It’s a strange feeling to be surrounded by rooms of junk yet asking “Where did all the money go?” The answer is right in front of your eyes, but somehow seems impossible. Could all of this have cost… that?
Mistake #3: The High Cost of Junk
Though it’s difficult for me to believe, money can apparently be frittered away. Where has dad’s money gone?
Some items are easy to identify. He has four motorcycles, for example, only one of which he actually rides, only two of which are in working order, and three of which he promises to sell, year after year. Each motorcycle was bought used but still cost between $1,200-$4,500.
Dad has also bought quite a few parts for these over the years, many of which I find as I dig through the basement midden. When operational, each motorcycle requires a license plate and associated registration and renewal fees, as well as insurance. Insurance is eye-wateringly expensive in Michigan because it is a no-fault state.
The motorcycles alone may be the difference between a paid-off house and not. Each bike is six months to two years of extra mortgage payments, to say nothing of the parts and associated operation costs.
Dad also likes guns and has an arsenal of them, though he hardly ever goes to a range to actually shoot them. He does not hunt and never has. He also buys ammunition for various guns. These, too, are some of the difference between a paid off house and not. Dad tells me each of his guns cost between $100-$900, which adds up to several thousand dollars ($5,500-$7,500 to the best of my calculations).
Each gun is at least one extra mortgage payment, some of them several.
Dad also has nice power tools that he does not use at all: a wood jointer and planer (about $3,000 based on an online search), an $800 table saw, and a few other things.
I’ve found some unworn, brand new clothes (including a $200 Filson sweater I gave him for Christmas years ago… glad I bothered), though there are not many of these items.
The point is not what Dad spent his money on, but that he spent his money on things he admits he does not use at all and has not touched in years. Two motorcycles don’t work and can’t be ridden. The guns aren’t shot. Ammunition sits unused (possibly a good thing). It’s totally wasted money.
Mistake #4: Lack of Will
Dad says it “sure would be nice” to have a paid off house, as if mortgage payments come from the sky or happen magically for other people. When I tell him what we did in order to pay off our house, however, he balks. Sometimes he tells us not to be cheap.
He’s simply not willing to do it. This is the hardest part for me to watch and accept.
He complains about the high cost of utility bills but “doesn’t like the look of” LEDs, and leaves a light on in the basement all the time. I can hardly believe the latter, coming from the man who taxed my brother and me $.25 EVERY TIME we walked out of a room and left a light on.
He insists on keeping a land line phone, a noisy interruption I haven’t had in my life for a decade and do not miss. “It’s only $30/month,” he says.
Dad complains about the “high cost of decent food.” There is a massive, south facing back yard with no shade behind his house. The lot size is just under 10,000 sq ft. and the house is 1200 of those. Is he growing more than a few tomato plants? Nope.
He goes on and on about how he needs to get in shape. Will he ride his 10-speed bike anywhere, or walk the two blocks (literally, two short blocks) to his girlfriend’s house? Nope. This is the man who, when he was laid off, would ride his bike to hand deliver a bill payment rather than spend $.25 for a stamp.
And before you say “But he lives in a suburb,” yes, he does. But he lives in an older, 1950s suburb immediately adjacent to Detroit. There are great mom-and-pop businesses within 1/4 mile of his house, which I walk to when we’re here but to which everyone else drives. There’s a wonderful old-school Italian bakery, multiple drugstores and restaurants, and even a new brewery, coffee shop and pilates studio. Most of the time, dad doesn’t need a car any more than I do in San Francisco… and it’s flat here!
Dad lacks the will to change and, at his age, probably isn’t going to. I don’t like to mention lack of will because I sound like some GOP bootstraps person, but it’s true.
The Surprising De-Hoarding Strategy that Worked
I cannot believe I’m typing this, but… I have learned something valuable from watching Hoarders. Yesterday, dad was getting a little anxious about the number of old books I had boxed up to give away. None of these books have been touched (literally, have not moved from their shelf positions in the basement) in over 20 years. I said, “They’re just going to the staging area, the review pile, before we move them up to the garage and then into the car for Goodwill.” The knowledge of a review pile and “staging area” assuaged a lot of his anxiety.
But THE winning strategy for my gun-toting, NRA-magazine-reading dad was taxes. He came to it himself: “If YOU take this to Goodwill, you get the tax write-off and can screw the IRS!” Never mind that charitable deductions are perfectly legal and an IRS-approved item. Set your rational, fact-loving thoughts aside for the moment. Dad believes he’s “screwing the government” and that’s what matters. That belief will get stuff out of the house, so that’s what I went with.
Hey, whatever works.