Saturday, December 1, 2012
Economic Contrarian Living
My own personal finances aways seem to be opposite to what's going on in the general economy. When the country is in a recession, I'm doing fine. When things are booming, I'm suffering.
Part of if is just dumb luck, both good and bad. Other times planning and lifestyle actually pay off.
The country was just sort of bumping along when I landed a decent job as a firefighter. The pay wasn't really all that great, but it was a steady paycheck. Since I was used to getting by on part time jobs, it was a big improvement. When you don't know what your income is going to be week by week, it's hard to plan. At that time I bought a little Honda Civic when nobody bought little cars. Soon after, the price of gas went way up and small economy cars were selling at a premium.
In the early 80's inflation was pretty bad. I got a house loan with a 14% interest rate. Who the heck buys houses with interest rates like that? Almost nobody. That's why I only paid $15,000 for my first house. Even with the high interest rate, monthly payments were much lower than a rental apartment. The loan was one of those variable interest rate things that was tied to the rate of inflation. At the time, the expectation was for inflation to get even worse. As it was, every time my loan was evaluated, my house payment went down.
Remember the big tech boom of the 90's? I sat that one out. That's when I got hurt on the job and it took 4 years to settle with the retirement system. My income dropped to $700/month and my heath was terrible. Almost lost everything I owned.
A bit later the Internet bubble crashed, but not that long after, I won my case with the retirement system and got my pension plus 4 years back pay. That did a lot to straighten up my finances. Of course, I'd gotten used to living on a much lower income, so the pension, even being much less than what I used to make, improved my lifestyle.
What did the 2008 crash do for me? Well, one thing it did was really lower the price of good used sailboats.
What does the future hold? Looking at the state of the economy right now, I'm expecting to live like a king.