Switch to Riches

Introduction

photo credit: vagawi
From time to time, I like to write opinion articles on how and why I perceive personal finance has changed over the years.  I don’t claim to be an expert in any of these matters, however, with a degree in landscape architecture, I can’t help but notice the link between the framework of how the places we live and he relative factors that influence personal finance issues have changed .   Recently, I wrote a post entitled Who’s Protecting My Money.  The focus of that article concerned the wavering economy and the value loss of Americans’ homes.  I want to expand on this theme a bit more. 

Somewhere over the past 60 years, a change occurred in American Society.  The American Dream that used to dominate the scene post-World War II began to give way to greed and the desire for bigger and better.  Instead of a place to raise a family and enjoy a comfortable life, people began viewing their homes as an asset…an asset that could be traded like any other commodity or security.  We began seeing out homes as an ATM rather than as a long-term equity builder.  Home equity lines of credit have been used to pay off other debts that probablyy should not have occurred anyway.  In many families, this is seen as a ‘free’ revolving credit line.  As soon as equity becomes available, another home equity loan is taken out to pay down another debt. 

The Real American Dream No Longer Applies!

Is it peer pressure, or just the desire to greatly improve our lives?  What ever happened to good enough?  This is the classic tale of the lonely old miser who hoards every bit of money he cans, that he forgets to use it.  We have fallen into the same trap.  There has got to be a point where we say “My life is what I want it to be Right Now”!  and “Further Improvement is not required for me to be happy!”  Post-World War II, The American Dream at its most fundamental core meant an opportunity for home and land ownership for all!  However, the American Dream failed us.  Now, what we fail to realize is that our HOUSES should be our HOMES.  Why should we need a value number assigned to our homes if it is truly where we want to be?  The Answer, we have become a migrant workforce.  We drop the hat on new opportunities to move away and start fresh, either for a job, or otherwise, because we are constantly in a race to outdo each other.  If our house is truly our homes, and everyone in the neighborhood has the same plans, then we should set root for our families’ sake.  House values will be less volatile.  In general, people will be happier to be a part of a sense of place.

A Sense of Place

Let’s say that I have an $800 fixed rate mortgage.  If I am content with where my life is, and my neighbors, for the most part, are content with where their lives are…then why on Earth would I care what the housing market is doing?  I will continue to pay my $800 mortgage for the next 25 years (which theoretically gets cheaper and cheaper as inflation occurs) until the house is paid.  Meanwhile, housing fluctuations should not interfere with my personal finances.  A strong sense of place in an established neighborhood with established neighbors should not have to deal with such fluctuations.  The problem, finding such neighborhoods.  Neighborhoods and homes, in general, built today seem to be disposable.  It is a rare opportunity where you’ll find a timeless home in a timeless neighborhood that is affordable, simply because there are not enough to go around.  Find a neighborhood where neighbors interact, people walk their dogs under a shade-dappled canopy, people’s children play together and networks and bonds are created.  Find a neighborhood like that and you won’t have to worry about the housing market!

Related posts:

1. CNBC – Who’s Protecting Our Money?
2. FHA 203k Home Loan – An Alternative Loan
3. The Search Begins! The Hunt for Our First Home
4. Deal or No Deal! Your Finances and Your Aspirations
5. Guest Post- Debt Consolidation

Jim L. Homebuying, Opinion american dream, debts, home equity loan, Homebuying, inflation, mortgage, owning a home, sheila bair