It's a bit of a 'non-day' here, today. No new work arrived in my email in-box, no interesting post dropped through the letterbox and, so far, there have been no visitors. The coalman did deliver a half tonne of coal early this morning, mind you, and it was the brief chat with him that prompted this post.
The topic of discussion was property and assetts, mainly about what happens to them when an elderly person ends up moving out of their home and into residential care. With a family member in this situation right now, I understand the trauma and upheaval it causes. I'm failing in my attempts to convince family members that their life's work of striving for a lovely home with savings in the bank is pointless unless they plan for the entire future.
Frugaldom is about frugal living, finding the most cost-effectve ways of creating own little microholding of self-sustainability, working from home to earn what we need to cover the costs of living, while investing anything left over into our future, whatever that might be.
Buying the property outright was our only option - no bank would offer a mortgage to the likes of us, we are self-employed and debt free with no fixed, regular income... banks and building societies hate that! It seems that the more debt you take on, the more it becomes available to you, which is great, IF you can service those debts regardless of the outcome of any unforeseen changes. Anyhow, debt free is how I intend to stay, even if it means renovations take many years. Whatever way we look at it, if it all went pear-shaped, we do have a (currently leaking) roof over our heads and a big enough garden to grow food, rear poultry and generally keep us busy. Home can be anything you make it as long as you feel secure. In my book, that means no unreliable landlords.
One of today's 'junk' emails arrived announcing that, "The fine wine market has outperformed oil, gold and international equities for the past two years." It went on to invite me, the "Dear Investor", to register my details and claim my free copy of their 'Wine Investment Guide'. I didn't, of course, because I have absolutely no intentions of 'investing' in fermented sugar and fruit pulp that I can't drink. Let's face it, a bottle of store's own 'Lambrusco' is about as close to a fine wine as we get these days. Even then, it's only if someone brings a bottle as a gift! The frugal version of longterm investment in fine wine is looking after your rhubarb patch, bulk buying sugar when it's on offer and, if you're really 'up market', tending your grape vines in your makeshift lean-to greenhouse.
I should add that if anyone receives the above email, look at the date of the Bloomerg statistics they are using to 'sell' us their brilliant idea... April 2010! I'd check for more recent trends before pursuing anything any further, or else simply hit 'delete'.
Bricks and mortar, now that's a sound investment! Nothing beats owning your own house! It can drain you of every penny while trying to keep it wind and watertight, leak money from every corner while trying to heat it during winter and swallow up every bit of your savings in one fell swoop if you buy it for cash. On the other hand, it can equally do all of these things, but cost you three or four times as much if you choose to spread the payments over the duration of a mortgage, accompanied by whatever other insurances they deem necessary.
Why do I think bricks and mortar investments are far superior to any other longterm investments?
In my humble and frugal opinion, it's more a case of valuing a home and the land upon which it sits. Land should be the longterm investment, for whatever reason you can imagine. Think about it... society can offer us everything we need. We can make our own wines, sew our own clothes, build our own homes, manufacture practically anything, grow our own food, rear our own livestock, create any manner of fantastic, technological device, heal the sick, offer financial support to the needy... but we cannot make more space on this planet!
No amount of wheeling and dealing, investing, trading, developing, exploring, researching or data analysis will ever create land. Let the sheiks build their paradise islands, let the 'high heid yins' spend vast fortunes in making fortunes that need fortunes spent on them to avoid paying fortunes in taxes, let the designer-clad city folks pamper and spoil themselves, let the rich property tycoons and landowners lord it over their tenants, but never let it be said that life is their way or no way. We have a choice - to be indebted or not. Frugaldom means freedom.
So, frugal readers and those of you who are just being nosey while having nothing better to do, be prepared. Think long and hard about your portfolios, holdings and longterm investments. They're worth nothing if there's no room at the inn.