Tag Archives: low income

What Happens When You Aren’t in Control Anymore?

This is a guest post from Sheryl in Ontario, who is 40 years old with a grown daughter, and is trying to rebuild her retirement dream just 20 years too late for early retirement.

** I know that living in Ontario, we are very lucky to have the health care we do, but the system is not perfect.  It is easy to take the system for granted and believe that all our health care will be “free” for our entire lives.  I’m not writing this to complain about paying for health care, but rather to perhaps give the young(ish) crowd around here something to think about when doing their own planning. After all, forewarned is forearmed.**

Around here, financial independence is the common goal, and from reading this, and other PF blogs (and associated comments) most of us seem to be an independent bunch in the rest of our lives as well. My parents have always valued being able to take care of themselves and their family, and have instilled their fierce sense of self reliance in their children.  Their own parents lived in their own homes far into old age, and either passed away in their home or in hospital after being admitted for a few days.

My parents have always been hard working physical people. The home they currently own is a bungalow. They originally bought a small house on a decent size lot with plans of building another house on it, but then they found another house for sale that was going to be demolished by a developer if it wasn’t sold, so they purchased it, had it moved, and then my father built the basement up underneath it, lowered the house onto the block walls, and moved in shortly there after. (Welcome to my childhood, I knew how to mix concrete and mortar, and how to lay cinder blocks when I was 9 years old).

They have some money saved, a small pension coming in (we moved countries in 1976 so my father only had about 18 years to contribute to it), and they have enough money for what they need, a fairly frugal lifestyle with a few luxuries like going out for seniors lunch once a week.

Now everything has changed. My father’s health has declined significantly in the last few months, to the point now where he can no longer roll himself over in bed, let alone stand or walk. The hospital will only release him to one of two options, either to a nursing home, or to his own home providing there is 24 hour nursing care (cost of that is $400 per day). As much as my mother wants him home and to look after him, she is not physically able to pick him up etc,.
In Ontario, nursing homes are either public or private. Private ones can charge whatever they want, public ones are controlled by the government, and they all must charge the same. Ward beds are $1620/ month, semi private are $1,863 and private are $2,167. Financial assistance is available, based on income, for ward rooms only.  Additionally, once a hospital declares you are medically stable, they charge the patient the same rate that would be charged in a nursing home, until the patient is released.

As I’ve been going through the limited options for my fathers care, I couldn’t help but think about how we all talk about frugal living, keeping our costs low, etc.. What happens if we are faced with not being able to look after ourselves, either through an accident when we are younger, or later on as a result of age? Even if we have set up our budgets to live on $1000 or $1500 per month in (early) retirement, our choices for our own care are drastically reduced, especially if you live as a couple, and one person still has to live at home from the money saved.

My parents never thought they would have to face this, so much so that they wrote into their wills that any offspring that “put them in a home” would forfeit any inheritance.  I have always respected their opinions about this, but now feel it has been irresponsible of them to not plan for if there came a time when they could not look after themselves.

I must admit, this experience is making me re-think how much I will need before I feel I have enough.  Perhaps I will work a few more years to ensure I have enough to fund a private room if needed (I don’t play well with others), or maybe a series of part time jobs so as not to touch my nest egg as much.  I know how much I need to live on now, and now know how much I might need to live later.

If I don’t end up needing it, I’m sure I can think of some way to use the extra money before I die.

In the FI/RE community, I haven’t read where anyone has approached this subject, and I’m interested to find out how others are planning for any kind of large expenses that could change your plans.

Book Review: The Moneyless Man

Here is an interesting thought: can you go an entire day without money?  Not earning any, or spending any.  Given how often we use or make money that would be difficult, but possible.  Now, can you do the same thing for a weekend, a month, or how about… a year?  If you are like me, the first thought you have is you would have to be insane, which granted is what many people though when Mark Boyle did the same thing for an entire year.  He then wrote about the experience in a book called The Moneyless Man.

As social experiment goes this one was definitely on the fringe, but like any experiment there has to be some ground rules.  For example, Mark could barter for things, that he could accept things in any normal context (like dinner at a friend’s house, but not every day).  He would also try to reduce his fossil fuel usage to nothing and try to help others where possible.  That last point is rather critical to Mark’s theory about the experiment.

You see Mark makes the argument that money has left us disconnected from the world around us.  We have little idea of where the products we use come from and the difficulty in making them or the society costs we pay in pollution.  Money also changes the game from cooperation to competition.  People prior to money were just in the habit of helping each other: for example you help me with my harvest and I will help with yours.  Now days we typically expect to be paid for a similar arrangement.  So the heart of Mark’s experiment would do two things: one bring him back into difficulty of having to either make, borrow or trade for everything he needs to live.  The second part would be to try and get into the habit of helping others with no expectation of getting something back.

The second point might not seem all that important until you realize prior to the invention of money our economy worked on the idea of you give support to others and receive support in return.  Typically these daily exchanges weren’t kept track of like money so by giving freely Mark hoped to get back to that concept just a little bit.

Now the majority of the book is the strange tale of how Mark spends his year without money and how it works out.  Overall the entire thing comes together fairly well for him.  He gets a free trailer from someone who does want theirs anymore and sets it up on an organic farm in exchange for working at the farm three days a week, so that was his shelter.  For food he grew some of his own on the land near the farm or he bartered for some, forged for wild food or hit a dumpster or two for perfectly acceptable food that was still in its packaging (just one day past its expiry date).  Then transportation was with a bike and he did buy a small solar panel prior the experiment to charge a cellphone (incoming calls only or 911) and his laptop (so he could write about his experience on his blog or email others).

Overall the book was an entertaining read and it reminded me of a fact a lot of people forget: there is no one right way to live.  While Mark’s lifestyle would be a completely not for you, it doesn’t invalidate that it might work for him or others.  What’s struck me as interesting about the experiment was basically a large part of it was based on the fact of using what other didn’t want anymore.  We waste so much as a society that in moderate climates, like England, it is possible to live off that waste stream.  Obviously it can’t work for anyone since you need a certain amount of waste to sustain those that choose this way to live that way, but if it turns your crank have fun.

If nothing else I enjoyed reading this book as a reminder.  We often talk about needing so much money to hit early retirement, but the fact is if you just want out of the system you don’t even need a dime to do that (depending on where you live).  It may not be for you, but it is an interesting reminder of you can get buy on less than you think.

So would you ever try something like this?  Or at what point in your life did you live on the lowest amount of money?  I personally recall right after university and prior to my first career job, my wife and I both made about $6 or $7/hour and we managed to do fairly good.  We were broke, but happy.

Low Income Isn’t Poor

Perhaps the one thing that drives me the most crazy is those people in North America that give up because they have a low income.  They seem to resign themselves to their current life with no hope of a long term happiness.  They believe their lives suck because they are poor.  Yet if you ask if they are doing anything to get out of that trap they look at you funny.

Low income isn’t poor.  Poor is more of metal state, then barely having two cents to hold on to.  Poor is saying there is no point in trying to make things better because I don’t have the income.  It’s laying blame for your life at the feet of your paycheck, but never trying to improve that paycheque or build up a little bit of savings to help cushion the blows of regular life.  Poor is about giving up on getting a better life and living in a viscous circle of blame.

I’m not saying that being low income in easy.  I actually have a deep respect for those that don’t make a lot of money, but they spend it wisely and try to improve their lives.  It’s not easy to do, but the results can be stunning over a long period of time.  In general being low income improves the value of each dollar you have.  You resources are even more important because you have a limited supply of them to do all the basics in life and work on being a little bit happy about everything.

I’ve been at a low income before right after university for a year, but I’ve never been poor.  I never let myself fall into that trap, but I’ve got friends who seem to resign themselves to being poor.  You try to help, but it never seems to work because you can’t help them until they want to help themselves.  Yes, being poor sucks, but being low income doesn’t have to.

So what’s your view?  Is poor and low income two different states of mind or not?