[sfjailbird]

> if you really want to 'reap the benefits' or our more productive society, you can work 15 hours starting today. The tradeoff is that you'll need to move to the middle of Colorado, buy a small plot of land, build your own house and purchase a straight edge razor.

What if you owned the home you live in, though? Lately, I've become a bit obsessed with this idea. The reason the 'wage slave' concept exists is that most of us have to do the 9-to-5, or we would unsettlingly quickly find ourselves homeless - the ultimate social catastrophe. I sometimes compare this with the lifestyle I see in some 'less developed' countries, where it is still customary for a family to own the house they live in. The result is that even when the breadwinner is frequently un- or underemployed, and with parts of the household staying at home exclusively without generating an income, their lives seem a lot less stressful. Even when they worry about money and basic necessities, they survive, turning down consumption to a minimum in financially challenging times. The equivalent for us, with regards to the subject at hand, would be to work 15 hours of productive, enjoyable work and still get by. Or alternatively, to work 40 hours of really interesting, challenging stuff that might not pay well or at all for a while.

The conclusion would seem to be to work single-mindedly on owning your home. As you said, one option is to move to Colorado and buy a barren plot in the middle of nowhere. But a more reasonable alternative might be to work your freaking ass off to pay off your property as soon as humanly possible. If you are really scrappy, you should be able to do that in around 15 years, depending on where you live and what your salary is. The problem is that people don't want to live like that. We want to live comfortably, with the biggest car we can afford the monthly payments on, with nice vacations, consumer goods etc. etc. Well you pay for that - the price is working 9-to-5 in a job you hate.

[DrPhish]

The book you are looking for is "Mortgage Free!" by Rob Roy. He shows you how to go this route ie. buying cheap property and methodically building a house as you have the money to do it (and how to hunker down when you don't). Also, read Walden

I took a slightly different tack, but also own my own home outright without ever having had a mortgage Algorithm is: -Save up enough money to have 1/2 the value of the worst house you can find in a neighborhood that isn't too bad -Use that money to purchase the house using a line of credit backed by the house you're buying. You are allowed by the bank to take out a line of credit on a house you are buying equal to 1/2 the tax assessment or 70% of a formal valuation -Put all your income directly against that line of credit. No maximum payments or other mortgagey bullshit to deal with. You must be disciplined in order to do this effectively. No buying toys! -Spend all your free time renovating in ways that will increase the value of the house: Kitchens, landscaping, new flooring, paint, trim, siding etc -Look for deals on properties (esp. bank repos) so that you can leapfrog up to better properties while still managing on the line of credit. I paid off the previous place before moving up, but I'm sure you could figure out ways to move up before then

Voila. I have owned my own house for the past 7 years. Only took me 3 to pay off my first place, and another 2 to pay off the next, despite costing twice as much Current place is a 1850sqft split level on 1 acre of land with a 30'x50' 2 level shop. 5 minute drive to city centre

Full Disclosure: -I live in a relatively rural area in western Canada. Homes now cost $300-500k. I got mine as a) a steal from a couple that needed a quick sale and b) a bank repo I jumped on the minute it hit the market -We are a family of 5 with a stay at home mom. This is significant in that there is no second income, but all meals are home cooked which saves huge dollars. Also no child care costs -My income not huge, mid to high 5 figures range -I started off with about $50,000 I had saved up prior to marriage -This adventure began at 25yo. I am now 35. I've been mortgage and debt free first at 28 and then again at 31 -The whole thing works best with low interest rates (obviously). I negotiated my line of credit at prime -I had access to tools, know-how and traded labour from relatives (mostly my Dad). I only bought or rented about half the tools I needed -Working in the lumber industry meant access to cheaper lumber -Personal frugality and a frugal wife were huge accelerants. -Being a car salesman's son probably endowed me with better negotiating ability than most

[eru]

Wouldn't my time be better spend taking on a second job as, say, a programmer (which I am good at) instead of becoming a mediocre craftsman?

[DrPhish]

Quite possibly, but I _personally_ found that working with my hands complimented working with my mind alot better than putting in 16h days of straight programming. The returns may not be as good as a second job, but I also didn't burn out.

Of course, that assumes that you enjoy the reno/carpenter/craftsman thing.

That said, whatever way that allows you to bring in the most (net) money in the least amount of time will obviously be the most efficient way to pay down debt.

[eru]

Oh, if you enjoy crafting as a hobby, that's something different, and then obviously worth it.

[AJ007]

You still have property taxes, maintenance, and upkeep costs on a home. In condo/co-op situations you have a building maintenance fee. In an urban environment it is difficult or impossible to be self sustaining because there just is not enough land to do so.

An article (I can't reference) in the WSJ on the Greek economic crises discussed a middle aged adult who left a job in Athens, returning home to the country side to milk goats, his income dropping to a few hundred dollars a month. At least there was a country side to return to.

I would argue that a good portion of the "reason we don't work 15 hours a week" is related to government policy. I am speaking globally here, not isolating one country or another. Government policies raise property taxes, rezone areas, sometimes seize property for development (happening at mass scale in China), and do a whole lot of other things to increase economic activity. Generally, an individual sitting in a home not doing much does not maximize the growth of the particular municipality or nation. Thus, that individual finds themselves with many opposed to his or her interests. The only defense is both very strong property right laws and a general belief system ready to support them.

[icedchai]

15 years? you need to be more ambitious.

i paid off my home in less than 7 years (small condo, under 200k) in my early 30's.

i had a friend do the same thing, except his house cost a bit more.

the key is living below your means. you don't buy the biggest house you can afford, because you probably don't need that extra space anyway.

for anyone with a decent job and some discipline, it's possible. finding the job is the easy part...

[3825]

I don't mean to derail the conversation but I wonder how much would it cost to buy a piece of land outright -- with no future obligations in terms of property taxes. Is this a wild goose chase? There will always be public cost of building roads and bridges and schools and firefighters who all have to be built/paid somehow.

It doesn't apply in your case as your property tax is probably much less than your maintenance fee to the property management. I know it is silly to think this way but I can't shake the feeling that I can lose my house that I own if tomorrow I don't have enough income to pay property taxes.

[clarkm]

https://en.wikipedia.org/wiki/Allodial_title

[icedchai]

Yes, I think buying land "outright" is impossible. Perhaps in some unincorporated area or whatever?

Property taxes are relatively high where I live(about $350/month, though I pay quarterly.)

[mikeash]

I imagine you could purchase some sort of financial product that would pay out continuously to cover your taxes. Basically a perpetual annuity, with some wiggle room built in to account for changes in tax rates and property valuation.

I don't know what a realistic rate would be for such a thing, but probably quite low. So you'd probably have to put in something like 50x your annual property tax payment.

[briandear]

While that would be cool, the concept of never owning your land smacks of feudalism. It's almost like we're sharecroppers to the government. Taxes are important, however, those taxes could be collected instead by taxing the consumption of necessary resources rather than just having the piece of ground. For example, fire protection -- it could be argued that the virtue of owning land itself doesn't necessarily require fire protection. So rather than using the land as effective collateral to ensure tax payments, why not simply charge the landowner for fire protection in lieu of taxes? If they refuse to pay, their land isn't seized (as is the case now,) they merely have to assume the fire risk. Of course, getting insurance on the land (or improvements) would necessarily require fire protection, so the tax base would be minimally effected, yet not make a person subject to losing their home and land as a result of taxation.

Water and sewer is already paid for by taxes on those services. Really the big issue is with the schools, however existing income and/or sales taxes could compensate.

The problem with taxed land is that the taxable value determines the taxed amount rather than some other, more objective measure. Valuations on land and improvements are subject to external, market forces and by their nature are unfair. Imagine a family that purchased unused Napa farmland 100 years ago. Their real income has stayed the same (or declined) yet their taxes have increased with no correlation to their income. Even if the land was prime vineyard, unless they're actually making income from it, the effective output of the land didn't change from when they purchased it. So by the mere fact that they chose not to plant grapes and produce wine, they could lose their land due to an inability to pay the taxes. That then puts economic pressures on landowners that would lead them to selling out to large conglomerates.

For example, if you have prime farmland and choose not to capitalize on it, you'd have a big incentive to sell-out to a company like Monsanto, or else lose the land or go bankrupt paying the taxes. Yet if you were taxed on the land's income (and services consumed,) you'd be able to afford the taxes which would be based on output rather than potential output.

This would benefit everyone, except perhaps country property appraisal offices. As it is now, you're taxed based on potential market value and not necessarily real value. Real value can't be determined until someone actually pays money for a property -- anything before the actual purchase is just somewhat educated speculation.

[gohrt]

Feudalism in service of society is a good thing. Permanent land ownership is literally the source of aristocracy and a huge problem where it exists.

http://www.infoplease.com/timelines/voting.html "1790 Only white male adult property-owners have the right to vote."

[mikeash]

Life, ultimately, requires continuous activity to sustain. So I don't get very bent out of shape about the perpetual nature of property taxes, because it's fairly minor compared to e.g. the perpetual nature of food.

You can come up with ways to replace property taxes, without a doubt. There's nothing necessary about any particular tax. The question is just whether it's the best way to do things.

Water and sewer would work fine without it, I agree. A bigger problem, I think, is roads. Highways are mostly funded from gas taxes but local roads are not. It's not practical to directly charge for use of local roads.

You could compensate with other taxes, but now you're taxing (and thus somewhat discouraging) productive activity.

The scenarios you paint don't necessarily seem bad to me. Unfair to the owners, perhaps, but it doesn't seem to benefit everybody else as you say. You correctly infer that property taxes encourage productive use of land and discourage allowing it to sit fallow, but isn't that a good thing? If we make the strong but at least partially true assumption that money is a proxy for value, land that produces enough money to pay for its taxes is producing more value than land that does not. Someone sitting on prime farmland and not actually farming it is a net negative to society unless they're getting more value out of that land than a farmer would.

I don't mean to go all Ayn Rand here and start acting like nature, parks, and anything that's not economically productive is valueless. But still, I think there is value to be had in encouraging land owners to put their property to some actual economic use.

I'd be more upset if property taxes were higher, perhaps. Here, for example, they're about 1%, which is not much. If you can't afford 1%, then you have an enormous amount of money tied up in your property without much money outside of it. It's hard to fit right into a spot where you could afford to maintain your property, but can't afford the taxes. For the vast majority of property owners, the mortgage is by far the major question when it comes to losing one's house or land because they don't have money. Pay off your mortgage and have some savings and you are nearly safe from losing it due to property taxes.

[Yen]

From another perspective, some of those downsides could be considered behavior as intended.

Basically, in a tax-less scheme, there's a strong financial advantage to just showing up first.

There is an absolutely limited supply of land, and society has an incentive to make sure this limited supply is being used effectively to produce wealth. Society also has an incentive to make sure that everyone is housed, financially stable, and healthy. These are competing concerns.

Say there were no property taxes, so the only incentive for selling land would be a high enough price. Your hypothetical family would be sitting on prime Napa farmland, not producing wine, and society would have that much less wine to drink.

An aspiring young wine-grower might like to purchase this land, and could even trade a bit of land of his own. If the original family doesn't want to move, though, the aspiring wine-grower is out of luck.

A property taxation scheme encourages people to use their land to produce wealth, either by producing it directly, a la farmland, or by housing people and keeping them healthy, such as houses or apartment buildings.

In a tax-less scheme, there's a strong advantage to just showing up first. The lucky few to first colonize Napa can maintain control of the land indefinitely, and younger generations and immigrants are at a financial disadvantage, as they won't have the option of owning their own land, but they'll be in a marketplace competing with persons who don't have to worry about housing at all.

[jdmichal]

> If they refuse to pay, their land isn't seized (as is the case now,) they merely have to assume the fire risk.

The problem being, of course, that fire has a habit of not staying put.

This kind of idea becomes even more ridiculous if you apply it to police service instead. Are they not going to arrest the criminals because the person didn't pay their quarterly police stipend? Do they get arrested after they step off the property, and the stolen goods just auctioned off?

There is a societal benefit to having these services, so therefore society as a whole is requested to pay.

[13rules]

I've long thought the exact same thing. Taxation of property based on the government’s assessed value seems unfair simply at face value. It punishes the financially responsible citizens who pay off their property in the scenarios you mentioned. It seems to me that if you buy a piece of property you should be able to live there as long as you want without paying any taxes on it. Why should you be indebted forever to the government?

[eru]

Econically speaking, taxing land ownership directly is pretty efficient. After all, it's hard to evade this tax since you can't hide land, and the tax won't affect the (fixed!) supply of land either.

[gohrt]

If you have a family and kids, you will need a bigger more expensive place, so tack on those years to the total.

[quadrangle]

You mean, you will prefer a bigger place. It's not a need. We live in the most spoiled country on Earth and think that our absurd norms are the same as necessities. Having a decent safe home in a decent place with modern technologies is the most anyone needs.

[npsimons]

My grandparents on my father's side managed to pay off a mortgage in seven years, twice. And that on a professor's salary and sending two kids to college with no loans. Of course, the argument can be reasonably made that wages haven't really kept up with inflation . . .

[icebraining]

How's the health quality of those less developed countries? What's the life expectancy? How many years until the kids have to starting working?

Where I live, a Southern European country, we don't really have big cars and nice vacations, but we do have cheap health care and high life expectancy (80 years).

And there aren't many less developed countries on the top of this list: https://en.wikipedia.org/wiki/List_of_countries_by_life_expe...

Is it worth the 9-to-5 (or higher)? I don't know.