Robert Paterson's Weblog

My grand daughter's first day at school - I know I am late in posting this but as the Ampa - there is a natural delay

The Cost of a Job? Your Life? Extract from "You Don't Need a Job"

We all need jobs! Maybe not. We all need an income and that is not always a job. We think we need a job because jobs do have income attached to them for sure. But also attached to a job are costs. 

The problem for many of us is that the costs are much higher than we imagine and that the costs of a job keep us pooor in every way. You don't believe me? Here are my numbers. My story is not yours but the principles behind my story are everyone's life. So as you look at my situation think of how your job attaches costs to your life. Not just in monetary terms but to all your life.

Then start to think of how you might change this. Freedom comes from needing less not having more!

The Cost of a Job

20 years ago, I was a “successful” banker. I had a big title, a big house and a big income. But I woke up to the fact that I was poor. No matter how much money I made, it was all consumed by my lifestyle. I could see that as a wage earner, my expenses would always track my wages. As a wage earner, there could never be an ownership windfall. I was just like a factory worker but with bigger numbers. 

I could not see a way out of this trap. What was I to do? I chose not to have another job because I started to see that most of my costs that trapped me were directly linked to my job.

The Chains of Indenture

We see the Job as our source of income but it brings with it the chains of indenture too. 

We often start life with a student loan because we need that degree to get a job. We move to the big high cost city, or stay in it, to get a job. We take out a mortgage in high cost housing to stay in the job game. We need a car per person to keep our jobs and to commute. We spend money on meals and clothes as part of having a job. We spend money on child care to keep our jobs. We put up with crazy bosses to keep our job. We endure misery at work to get the pension that depends on our job. We keep our jobs to pay for healthcare. 

The job also comes with a time cost. Fixed long hours and a commute eat into the time we also need for the rest of our life. The web means that we are never home. We are always on call. Most people are time and sleep starved. Every other part of their lives can suffer as a result. 

When you step away from the focus on the job, all these costs start to go away and you start to be free. Here is what happened to me.  

As a senior banker, I used to live in downtown Toronto with a big house and a really big mortgage. I left that job and that world for a network life. I chose to move to PEI. Where I have a much nicer place and no mortgage. My old mortgage was was $2,200 a month. I have been mortgage free for 15 years. I have saved $396,000. I would have paid this mortgage from after tax income. That would be close to a million dollars gross. That is quite a saving!

The trade off is that there is a more work in Toronto. But with these savings, I don’t need a lot of income. I can now choose the work that I like the best. I work for people all over North America. I don’t work for crazy people. I only do work that I want to do. I can afford to be choosy. Most people have to take what they can get. I have a lot of control over my work life. 

I also work hard to keep my fixed costs still shrinking. I do not invest in the “market” I invest my savings in my own life. My objective is to reduce my fixed costs and to create a hedge against future higher energy costs. (I will say a lot more on this topic in “You Don’t Need a Stock Broker) My main home investments include: insulation, wood heating and solar water heating. I use about half the normal energy requirement for an average house on PEI. That is a saving at current oil prices of $1,500 a year. So in 15 years, I have saved another $22,500 and I also have a hedge against higher energy prices.  All of my energy savings are of course tax free! 

My focus on energy is not confined to my home. How we get about, and in particular how we get to work, is the next. This is where another part of having a job drives fixed costs. 

A lot of why we need cars is centred about the job. We used to have 2 cars. We needed them because of my need to go to work. We have one very small one now. If I need another car, I rent. By having only one car, I save at least $10,000 a year after tax. 15 years of working online has saved me $150,000 in car costs alone. If you commute by train, this costs at least as much as a car too. 

When we are at work in our job, we create other fixed costs as well. Clothing is one area. Working as a senior banker, I used to buy at least 2 suits a year. Women have even more clothing costs. What do you spend on work clothes? I have worn a suit once in the last 15 years. Most of the time I am in jeans. 

And the small costs add up to be large. We often don’t think about a coffee or a snack but let’s say you spend $20 a day on them. $20 a day for 200 work days a year is $4,000 in after tax income. What else can you buy for $6,000 a year before tax? 

It is the job that drives these direct costs. Add yours up and see what your real take home pay is. I did this for a senior banker friend. He discovered that he was earning the equivalent of minimum wage!

And lastly, the job costs us in time and so in stress. 

We don’t cook anymore and so eat out and buy processed food. Poor diet drives the epidemic of chronic illness. Many Americans pay at least as much in health insurance as they do in mortgage payments. Most get at least one chronic illness by 50. 42% of women will get breast cancer. Having the time to cook and so avoid processed food and eating well removes most of this risk and cost. 

We cut into our sleep time. Most Americans get less than 6 hours a night. The commute and the clock at work drive all of this. Many people get 2 weeks vacation a year. If you were really lucky, you might get 4 weeks. I don’t take much formal vacation as a net worker but I do get a lot of time for me and little pressure to meet someone else’s clock. When I don’t have a pressing deadline, I get up when I want. My alarm clock never rings! I have also got 2 hours a day of my commute time back. That is 61 working days based on a 49 week year. That is 2 months of my time a year. In 17 years I have got 3 years of free time back! And I only had a one hour commute.

What would it be like for you to have this amount of time back too? What would this mean for your marriage? What would this mean for your kids? What would this mean for your health and sanity?

The Job is the main source of our fixed costs. We can do much better with less income provided we work in the networked world. You can be so much more free.

 

 

Family - Why we moved

3 Grand Kids - in laws and outlaw granny aka Bi Bi

We can do this all the time here.

Status - Keeping Up with the Trumps = Being a Chump #youdon'tneedajob

What is status today? I suspect it is in "Keeping Up with the Trumps". The Jones who live next door are no longer the goal. Media today has elevated the Jones to the ostentatiously wealthy like Mr Donald.

Many of us aspire to showing status with their car and their home and even their clothes. 

But what does this really do to your status?

On the outside it looks as if you are rich and so high status. But for most of us - all of this is purchased through debt. The net result is that we are at best serfs at worst slaves. I know that was true for me as a senior bank executive back in the day in Toronto. I was earning what looked like a high salary, but every penny was committed to this lifestyle. I was as tied into the system as tightly ny weekly wage earner.  I was poor!

Of course the truly rich are rich and none of this applies. 

I think that the new high status will be "Are you free?"

To be free - to have TIME - to use your time as you choose - to speak your mind - to be with your family and friends - to available to yourself - to have time to think - pick your freedom - is rare today but we can all aspire to finding it.

Wouldn't you like to be free? 

"Freedom 55" comes not from a high savings rate - you cannot have a high savings rate in the current system - nor does it come from a high salary - that all get applied to your Trumpy Lifestyle - it comes from having a low cost base. 

I explore this topic in detail in my new book coming in late October - You Don't need a Job - in a later post I will show you the kind of costs that you can get rid of by choosing to find your status in being free rather than trying to keep up with the Trumps.

Part 2 - How much cost can you get rid of by downsizing - tomorrow - I will show you my numbers.

Dinner in our new garden

It's 7pm on Sept 5th

Where I live now #Knowlton

The red dot is close to where we live now. The larger lake is Brome Lake.

My local hamburger and drink stop - regretfully closing for the season this weekend - 1 minute walk

Small places and community - Waving and Stopping in the Street - Size Matters!

This morning the school bus driver waved at me as I walked the dog. When I meet people on the trail with the dog, the form is to stop and say a few words. Knowlton, population 5,600, is at a scale where you cannot ignore people.

Asking for a plumber - having a problem installing the  washing machine - my goto guy Dennis at the General Store - Barnes - called a pal and gave our address as "pres de Mdme Blackwood". Having a General Store that has EVERYTHING and using this kind of addressing is also a sign of "Right Scale"

So as many of us seek better and healthier communities, my move to Knowlton has brought a key fact up. Size matters. There is a gradient of population size that drives a personal response.

The school bus driver and Dennis don't know me. But I elicit this response not because of anything about me but because of the size of the community.

So in Toronto, the norm is to put on social armour to protect us from the overwhlem of all the people.

I bet that there is a gradient here as there is for social groupings. As we struggle to design community, we will need to find out what this scale is.

Any thoughts?

Scaling Down - Early lessons

It is day 3 and we are still unpacking but some things are becoming clear. We thought a lot about reducing our books and clothes. We got rid of a lot of furniture. But we did not think about our kitchen.

Over the years we have every gadget known to man and more pots, containers and china ware than a major restaurant.

Our tiny kitchen cannot cope.

Yard sale?

 

Our new small home

We just moved in this weekend. A long unpacking period ahead and lots to do but it is so sweet. We are on a very quiet street. The Marina is 2 minutes walk and there are trails all over where the dog and I will get our exercise.

At about 1,300 square feet - not a "tiny house" but for us who had 3 buildings with over 6,000 square feet before, this is small. And so are the bills and so is the mowing job. 4 plus acres to 1/3 of an acre.

Just got the internet back after more than 40 days and nights - I know now how desperate I am for that connection. The old iPhone kept me just in touch but it is bliss to be back in the full stream.

Next month I will be getting ready to launch the books but for now - it's unpacking and planning what we have top do here.