Another way to decrease your debt: Recast your mortgage

We lowered our mortgage payment by more than $1,000 without refinancing. Here’s how to recast your mortgage

recasting your mortgage

Image courtesy Sujin Jetkasettakorn via FreeDigitalPhotos.net

As I alluded to back in May in Save money with a tool library, there is some potential that we may decide to rent out our house for some period of time. We have a few different ideas in mind, some of which aren’t ready for public eyes. However, since we wisely chose a 10-year mortgage when we last refinanced our house, our payment has been large enough that we’d have negative cashflow at current market rates.

So we had a bit of a conundrum. We didn’t want to restart the clock on our mortgage term, but we wanted that payment to go down. Fortunately there’s an option that perfectly fit our needs and it could fit your needs as well.

Hold up! I suppose it’s time I explain myself. Since I’ve started this blog, I’ve simultaneously mentioned that I don’t have  a mortgage payment and have also said that we’re still working on paying off our mortgage. How can both be true?

The answer is really pretty simple. Being several years older than my wife and because I had a chunk of change from selling some real estate a few years ago, we decided it made sense for me to pay off my half of our mortgage earlier so that I could move toward pretirement (although I still pay my share of the escrow costs). Pretired Mama had quite a bit more saving to go (although she’s far ahead of where I was at her age). But that’s why I had the freedom to quit my job and stay home with the baby (even though I’m still shy of being fully pretired). (I also have two more mortgage payments related to some property I own with my brother, but that’s a story for another day.)

Anyway, here was the situation on our house as 2013 was winding down:

  • Mortgage (1st): $186,000 (10 year loan paid down from $251,000 — all of this is Pretired Mama’s debt)
  • Mortgage (Home Equity Line of Credit): $10,000 (leftover from a deck we recently had built and some other stuff – half of this was my share)

The payment on the first was around $3,000 including escrow. The payment on the second is just $100 (the minimum it can drop to under the terms of this loan.) We could probably rent our house for somewhere around $2,500/month so we’d need to drop it a fair amount to get into positive cashflow territory.

Pretired Mama has been faithfully following my patented template for rapidly paying off a mortgage (seriously — check it out if you’re working on paying off your mortgage. I have yet to see anyone produce a more efficient way to get there quickly.) She had some $40,000 in side savings built up so we had some options. Originally we had planned to do a refinance later this year, but we realized we could get to the same place easily without paying any expensive fees.

Recasting — the easy way to lower a mortgage payment

The method is called “recasting your mortgage” and it may just be the biggest secret in the mortgage industry. A recast of your mortgage simply means the bank will reset the amortization clock based on your current equity situation plus any funds you may wish to bring to the table. The timeframe of the loan remains the same, only the principal drops. She had been paying roughly three years on a 10-year loan so effectively the recast was equivalent to starting a seven-year loan at the new balance.

The bank’s rules (a local credit union) were that you had to be in good standing on the loan and you had to have a minimum of $10,000 to apply toward the recast (either that much equity or cash you brought forward). The processing fee was $150. No appraisal, no credit check, no income check. All we had to do was making a principal payment, call the person in the special products department and tell her the payment had been made, sign and notarize some documents (called “loan modification agreement” — probably the same documents people use when the bank agrees to lower the principal for people who are underwater) and wait. It really was that easy. There was one other question I asked the woman from the bank: “So does our other debt have any impact on this process? For example, if we withdrew some money from our HELOC would that impact our ability to complete the recast?” She said, “No, we don’t look at that at all. You bring the money and we recompute the amortization. That’s it.”

The biggest hassle was trying to get notarized. The bank’s paperwork was unclear about whether we had to have a witness to the notarization or not so we wasted an extra hour with a bored baby at the bank trying to figure that out. (People were scowling at us as we dealt with the signature issue and I’m pretty sure they were assuming we were deadbeats trying to get a loan modification. Heh!)

So here’s how we ended up structuring things. I paid off my half of the existing HELOC ($5,000) as originally planned. Then, we actually pulled some additional funds out of the HELOC to combine with Pretired Mama’s side savings. So effectively, we brought $86,000 to the table from the bank’s perspective (even though half of it was their own money). The remainder on the first mortgage would be $100,000 and the HELOC would now have around $51,000.

When we were done, the loans looked like this:

  • Mortgage (1st): $100,000 (still officially a 10 year loan, but with just seven years left — still all Pretired Mama’s debt)
  • Mortgage (HELOC): $51,000 (this is now all Pretired Mama’s debt as well)

The new payment is $1,800 on the first (including escrow) and it’s still $100 on the second. Monthly savings of more than $1,000/month! So now we’re well below what we could get in rent and Pretired Mama should have the HELOC paid off in a year or less. From there she can either stay on the accelerated plan to pay off the first mortgage or she can shift over to rapidly building up her pretirement fund. Another interesting fact is that the bank said there is no limit to how many times you can recast. So it’s possible we could do one more of these before our loan term is done.

Will your bank allow you to recast your mortgage?

Since I was dreading the high costs and hassle of a refinance, I’m now in love with the recasting concept.

Unfortunately, not every bank is on board with letting you recast your mortgage. My brother and I tried it with another piece of property we own together and they told us they don’t offer this service. And why would they, really? They lose thousands in interest. The only advantage I can see from their perspective is that they retain your business vs. letting you refinance away to another company. But since we use a credit union that offers good service, it’s still an available product (although one they don’t advertise at all).

But if you’re in anything close to my situation, it’s worth a phone call to find out. With a sky-high stock market it can be tough to find a good place to put money. If you’re sitting on cash and are worried about buying at the top of an overpriced market, a recast could be a good solution. You could recast your mortgage, lower your payment significantly then invest the savings on monthly basis, thus dollar-cost-averaging your way into the market — all with less debt hanging over your head.

It made sense for us right now, but every situation is different. Be sure to do your homework. For me, though, I’ll be confirming any bank I take a mortgage from in the future offers a recast. I like having options.

How we saved money with reusable cloth diapers

We saved a bundle by switching to reusable cloth diapers. Here’s how we did it.

cloth diaper bubble butt

What’s not to like about a cloth diaper bubble butt?

This post is going to talk a lot about feces. If you don’t have a baby already or in your future or if you just don’t want to read about how to restrain the mud bunnies, you might want to explore another corner of the internet for awhile.

That’s because there’s a lot of hell’s candy involved with babies. If you’re one of those people who gets squeamish at the site of chimp chunks you might want to just be sure your birth control situation is locked down because there is no escape from the butt brie once the baby arrives.

Now when you have a baby, one of the first decisions you’ll have to make is what kind of diapers you’re going to use. We knew we weren’t going to be purist about it so we accepted that some disposable diapers were in our future. At the same time, the image of how many diapers our baby would use before being potty trained was disturbing. A typical baby will go through some 3,800 diapers in its lifetime.

Our strategy was to minimize the use of disposables as much as was reasonable. We decided to go with a local diaper service company. At $100/month, the price was comparable to what we’d likely be paying in diapers given how many he was going through in the early stages. More importantly, the convenience and waste reduction made it worth it to us.

The service would deliver a nice, fresh packet of diapers to our doorstep each week and take away the bag of diapers soaked with pee and pocket pesto. Pretired Baby really seemed to like the diapers and they were very easy for tired new parents to deal with as well.

All the pieces for using reusable cloth diapers

All the pieces you’ll need to contain the poop

But once he started sleeping blissfully through the night at three months in, our minds cleared and we began to re-evaluate our diaper strategy. Eventually we settled on washable cloth diapers. We canceled the diaper service and purchased used GroVia diapers from DiaperSwappers.com.

These diapers, along with similar versions, consist of a cloth insert that snaps to a waterproof cover (or “wrap”). We bought about a dozen wraps (you can use them a few times before they need to be washed) and more than 30 diaper inserts. In retrospect, we could easily have gotten by with a few less of each. The trick to how many you need is to estimate how many diapers you need in a day, decide how long you want (or can stand) to go between washing and do the math. (You can always buy what you think you need and buy a few more later if you find you’re running too low before you do laundry.) We bought all our diapers and wraps used and paid about $400 for everything. That seems like a lot (even considering we broke even in four months), but keep in mind we’ll also be able to sell these again when we’re done, hopefully at a minimal loss.

We’ve been using these diapers for about a year now and really have no problems to report. Right now we’re still using one disposable at nighttime as our one attempt at an overnight cloth diaper resulted in soaked sheets.

How to use reusable cloth diapers

OK, so we’ve established that we no longer just pull off the diaper covered in butt butter and just drop it into the bin to be left out for the diaper service company. Now we were up to our elbows in squishy baby gravy — what are we supposed to do with it all? There are a number of subtleties to using these diapers you’ll need to know about if you’re planning to go this route. Nothing is terribly difficult once you get in the routine, but expect a little trial and error as you get started.

Reusable cloth diapers ready to install

Assembled and ready to install

Now if you do any amount of research on these reusable cloth diapers, you’ll sooner or later come across someone touting the use of a “poop spatula.” The idea is that you keep an old spatula next to your toilet that is clearly marked “POOP”, or “MUD”, “DEUCE” or whatever you like. (The labeling is so you don’t accidentally end up mixing this spatula up with your cooking supplies.) We read about this concept and said, “Um, no.”

Fortunately there’s a better way to get the paydirt off your fancy new cloth diapers. It’s called a BioLiner and it acts as a handy barrier between the black banana and the diaper you’ll be tossing into your washing machine.

So proper assembly involves the outer wrap into which you’ll snap the cloth diaper, then you’ll add on a single BioLiner. Snap the kiddo up and you’re on your way.

Adding a booster to reusable cloth diapers

For naps and other long stretches, you’ll need to add in a booster for extra pee storage to make sure the reusable cloth diaper can handle the volume.

But, wait, you say! Does that little strip of cloth really hold all that pee? Doesn’t it leak out? Well for normal, daily usage when you’re able to do a diaper change frequently, it can easily hold it. But for longer stretches, such as a nap, it’s not typically enough. The solution for that is something called a “booster.” It’s an additional strip of material that you add to the mix to hold the extra liquid. For boys you’ll want to fold it in half and place it right in the front.

How to wash the reusable cloth diapers

So say your crumb cruncher suddenly goes quiet and with a focused look begins grunting and straining. You know what lies in store. “Are you poopin‘?” you ask softly.

Sure enough, you pull back the diaper to reveal a fresh new set of moon rocks! Here’s what to do: Get your next diaper all prepped. Take off the offending diaper and carefully set it aside. Clean up the perpetrator and put him or her somewhere safe.

Next take the whole smelly mess to the bathroom and shake off the stink brick, kerplunk! right into the toilet. Now the BioLiner is supposedly “flushable” but that doesn’t mean it should be flushed. These “flushable” products are notorious for clogging up your home’s plumbing and are hated by utility companies who must contend with sewage systems that aren’t geared up for products that don’t break down in water. That said, there’s been two or three times when the chocolate surprise was so squished into the liner that it ended up going down the drain. You could alternatively bag it up and send it out with the trash, though. But generally I just hold the BioLiner by a clean corner and give the whole thing a little shake and the stinky pie drops into the water. Sometimes a little number 2 gets on the cover or the diaper where the BioLiner wasn’t covering well enough. That can be rinsed off or wiped off with some toilet paper.

So that gets rid of the nut log, but you still have the diaper to contend with. Unsnap it from the cover, pull out the booster if you had one in there, and drop the whole thing into your airtight diaper container. You’ll want to have two reusable diaper pail liners so that you can rotate them as you do your laundry.

Before you have kids, you imagine the nonstop supply of Wendy’s Frosties being the worst part of the diaper experience. It turns out it’s actually the eye-watering urine smell. It really builds up after a few days of urine-soaked cloth diapers sitting in a diaper pail. So I generally end up washing smaller loads twice a week instead of one big load once a week.

Washing reusable cloth diapers

Rinse then wash. Then rinse again.

So here’s how to wash your cloth diapers. Hold your breath and quickly open the diaper pail and pull out the pail liner, closing it quickly. Once at your washing machine, hold your breath again and dump it in, making sure to spread them around. Then turn the liner inside-out and put it in there as well. We generally just wash the covers with the regular laundry but if some of them get a little butt hail on them, they can be washed with the diapers as well.

Don’t add any soap! First, you’ll run a rinse cycle on warm to get off any nuggets that have managed to escape the system so far. Once the rinse cycle completes, you’ll add the soap — and yes, you need special soap. We use Country Save Laundry Detergent and it seems to work great. Toss in a scoop, run the wash cycle on warm and add another rinse cycle at the end.

It doesn’t seem like that’d be enough to keep them clean, but they actually do come out perfectly clean on the other end. Unfortunately there’s one last step. Remove any covers and the liner bag, which can’t be put in the dryer. Hang those up to dry. Then turn each and every diaper inside-out so that it can dry completely. Run the dryer on medium heat and for as long as a cycle as your dryer has.

That’s it — put them away and they’re ready to catch another load of poo stew.

Just a couple other tips:

  • Don’t use any Vaseline or waterproof diaper cream because those will ruin the absorbency of the diapers.
  • Skip the dryer sheets. They leave a waxy (chemical) film on the material, reducing the absorbency. You’ll want to pick up a set of these dryer sheet alternatives instead.
  • Over time they can start to smell a little woofy. Not like a sewer, but more like a wet dog. When that happens, or if they lose some absorbency, they need to be “stripped.” There are several ways to do it, which you can do your own research on, but we just washed ours a couple times in hot water and it seemed to do the trick.
  • These diapers can get a little stained over time. When that happens, you can lay them out in the sun for a few hours (we have to wait until there’s some sun here in Seattle, which could be awhile). That should whiten them up enough to be tolerable.

OK, I think that’s everything I’ve learned about using reusable cloth diapers. What do the savings look like? Well, we were spending $100/month on the diaper service before and now we only buy one pack of disposables from Costco every few months. Obviously our utility costs have gone up a bit, although it’s been subtle enough I haven’t even noticed it, and it’s impossibly hard to measure. But I’d estimate we’ve easily saved at least $50/month and maybe as much as $75. That’s not too shabby. But the best part is all the disposables we’re not using. Having a baby is one of the worst things you can do for the environment, but hopefully we’ve eased that burden at least a little bit by using reusable cloth diapers.

Here’s your shopping list if you want to go this route. Remember to buy used whenever possible!

 

How to make your own Braun shaver cleaner

Wondering how to make your own Braun shaver cleaner? Turns out it’s really easy

How to make your own Braun cleaning solution

How to make your own Braun cleaning solution — just clean out the cartridge and replace with isopropyl alcohol.

It wasn’t long after the first Earth Day in the 1970s that a nascent environmental movement began growing from a tiny group of committed citizens and started spreading into the mainstream. I was in grade school at the time and looking back it was easy to see the very early stages of environmental enlightenment seeping into our lives.

I remember stickers (stuck on everything in sight, walls, poles, bus seats, you name it) shouting “Don’t be a litterbug!” I remember some hippie visiting our classroom with her acoustic guitar and teaching us Creedence Clearwater Revival’s “Rolling on the River” except the lyrics were changed to be “Rolling, rolling in pollution.” Then there was the guest speaker from the local energy company reminding us to take shorter showers. And of course our teacher spent a lot of time explaining why overpopulation was the biggest environmental problem of our generation (using math to show the compounding nature of population growth). A lot of those lessons stuck and while I don’t claim to live a sustainably perfect life, I do try to make reasonably good environmental choices.

One of the lessons that stuck with me was from a large school assembly. I think the presentation was from the local nuclear power plant (ironic given how awful nuclear power is for the planet). Anyway, the only takeaway I remember at all was that the speaker asked the audience which shaver used more resources: the electric version in his left hand or the disposable razor in his right hand.

Many of the kids shouted that the electric shaver used more resources, because it uses electricity. The speaker, enjoying tricking the kids with his question, explained that while the electric razor certainly did use power (he was from the power company after all), disposable razors had to be manufactured, wrapped, shipped, purchased then replaced. Over and over again. While I was still years away from the arrival of my first peach fuzz, I imagined a lifetime of disposable razors accumulating in a mountain behind me. It may have been one of the first moments that I became aware of the heartbreaking waste of our disposable society.

When my first soft, breezy whiskers arrived, I scraped together a few dollars and bought myself my first electric razor (like all my coming-of-age rituals, it was strictly DIY.) The tiny bits of blond hair were washed down the sink with the rest of my childhood. I used that trusty razor right up until the day I caught my stepmom using it on her nasty legs. (Ew)

In the decades since that horrible image was burned into my eyes like white fire, I’ve only owned maybe three or four other razors. I have never shaved with a blade. My current electric razor is just a few years old. Unfortunately in recent years I’m either seeing a sharp downturn in product quality or an increase in stubble strength as I reach middle age. Probably both.

On the other hand, one of the innovations I really like has been the advent of built-in cleaning mechanisms so your razor stays clean and sharp and ready to go. Before the self-cleaning versions came out, you had to delicately clean the cutter with a little brush and it never really got as clean as you’d want. Now you click a button and the next day, voila! clean razor! My current one is an older version of the Braun Series 5.

There is a problem, though. In the business world, there’s a famous saying that the money is in the blades, not the razor. It’s the classic replenishment business model. Printer ink is another great example. Give the razor (or printer) away for cheap and people will pay a lot more for the blades (or ink). Braun sells replacement cartridge refills but here we are again on the replenishment treadmill again! The price has really come down on these lately so it’s not as annoying as it used to be, but still! Plus here we are again with more plastic for the landfill.

The design of the Braun is also very annoying because the cleaning solution isn’t used up in the cleaning process. Most of it just evaporates! I tried putting the little cover over the cartridge holes but it basically had no effect on evaporation unless I sealed it on tight, which is not practical on a daily basis. (I’d say a cartridge maybe lasts two months when used normally.)

So I wondered: How can you make your own Braun shaver cleaner? Was there a way to hack my Braun to give me the sweet cleaning power I desire without the waste of buying replacement cartridges all the time? I looked around for bulk cleaning solution, but didn’t find much out there. I did find this Sandalwood Tree Cleaner that I have not yet tried, but may in the future just to see if I like it. But surprisingly the choices were pretty scarce.

I did finally try a solution that has been working well so far. It was simple and I’m very happy so far. Here’s what you do:

Once the razor solution is too low to do any cleaning, dump it out in the sink and rinse out the container as best you can. It doesn’t need to be completely spotless.

Then refill the container with Isopropyl Alcohol, inexpensive and available at any drugstore. I don’t know if the percentage makes a difference. I used 91 percent since that’s what we already had on-hand. I imagine the lower percentages might be gentler on the shaver. Don’t fill it up to the brim. Just fill it as full as the new ones, about two-thirds of the way full. Put the cartridge back into the device and you’re ready to clean. It does smell like rubbing alcohol but not so much that it’s overpowering. Adding some lemon essential oil would probably help, but I haven’t tried that so far either. The cleaning solution you buy also supposedly lubricates your shaver, which could be a problem long-term, but so far I haven’t noticed any difference. I may buy one new cartridge a year or so just so I can occasionally start with a clean one (it’s impossible to get all the hair trimmings out of a used cartridge). That might help if I did need some lubrication help. If it becomes a problem, I might add a little baby oil in as well to see if that makes a difference, but so far so good.

Before I tried my new homemade Braun shaver cleaner, I was thinking I was probably due for a new cutting head because the razor just wasn’t getting the job done. After enjoying a nice, crisp shave with this cheap solution, I think my cutting head is fine for awhile longer. So far I’m saving a little bit of money and the mountain of plastic behind me will be a little smaller because of it. And that alone makes it all worth it!

UPDATE 2/13/14: I founds some essential oil around the house so I dropped 3 or 4 drops into my reservoir to see what happened. OMG, it was the final piece! The Braun razor ran much smoother and was less abrasive on my skin. I’d say this mixture is AT LEAST as good as the store-bought version now! 

Disclaimer: Alcohol is flammable. Be careful when refilling and using this technique. Also, I’m sure Braun does not recommend using anything but their own solution. You could severely damage your razor by using a product other than what the manufacturer recommends. Try it at your own risk. Also, links in this post are affiliate links so I may get a few pennies if you make a purchase.

It’s time to stop being afraid of socialism

afraid-of-socialismQuiet little Seattle made national news last week when a (very) longtime city councilman was defeated by an upstart and previously unknown candidate. The shocking part, though? She was a (gasp!) socialist!

Economics professor Kshama Sawant seemed to be far behind on election night, but in the days following the election vote-counts shifted strongly her way, eventually putting her win well outside the margin that would trigger an automatic recount. By last Friday councilor Richard Conlin conceded, ending 16 years on the city council.

Media outlets on the right and left immediately overreacted to the news.

Why is Seattle Socialist Kshama Sawant Allowed to Teach Economics?” whined a writer from Forbes after the election. Um, what??

Seattle’s election of Kshama Sawant shows socialism can play in America,” said the Guardian. Let’s not get carried away, Guardian!

The reason Sawant won, in case any of you outside of Seattle are wondering, is that she actually ran a tight, organized and well-messaged campaign. In contrast, her opponent, a very friendly (Democratic establishment-type), non-offensive guy (I’ve chatted with him several times) never viewed her campaign as a serious threat even as she was drawing crowds to her get out the vote rallies.

I’ll stay away from drawing too many broad conclusions about the meaning behind her victory. But there is one unarguable takeaway that I think is important: At the very least, the “socialist” label wasn’t something scary that would keep people from voting for her.

And I think that’s a good thing, because the hysterical fear of “socialism” is something that’s causing Americans a great deal of unnecessary misery and struggle.

Unfortunately for our country, the education system has been gutted to such a degree that I’d bet a majority of voters couldn’t give a proper definition of socialism. Because people aren’t generally educated in various economic systems, they are easy to manipulate with overwrought smears.

But when you label everything as socialism, suddenly socialism isn’t that scary anymore. One can almost imagine a voter thinking “Well, if Obamacare is socialism, then I must be a socialist.” (For the record, it’s not. I guess technically you’d have to say the Affordable Care Act, which requires buying a product from a private corporation, is part of our Corporatocracy — corporate interests running the government. Or I guess you could argue it’s Fascism, but let’s not get into that.)

It’s important that people begin to stop being afraid of socialism because socialistic programs are the strongest protections we have ensuring we enjoy a stable, safe place to live and they are some of your most important tools for leaving work at an early age.

Doesn’t this make us a bunch of freeloaders?

Pretired Baby struggling to survive under the ills of socialism at Ercolini Park

Pretired Baby struggling to survive under the ills of socialism at Ercolini Park

Let’s dispense with the trolls right away, shall we? The classic pushback against any form of socialist endeavor is that we’ll all become weak and reliant upon the expensive nanny state government. We will no longer strive to do better and we’ll have a country of deadbeats. Worse, since we’re talking about socialism in the context of pretirement, it’s easy to imagine the complaint that the government is forking over piles of money to a bunch of lazy people.

But even people in true socialist countries have no trouble working hard to make their lives better. They don’t, however, seem to have the same fear of the financial abyss as we do in America.

And it’s silly to accuse the pretired of not paying their fair share. Most of us worked very hard for several decades. Just because we would prefer to opt-out of the final few decades of pain doesn’t mean we didn’t make our full contribution.

But socialists are weirdos

We don’t need to join the Socialist Party, stop bathing and stand on the corner handing out manifestos to recognize the value in pragmatic social support systems. We’re stronger when we join together and help each other.

The two most recognizable socialist entities in America are Medicare (“free” health care for all citizens aged 65 and up) and Social Security (basically an “insurance” program providing a small pension for older citizens). Not coincidentally, these are among the two most popular government activities every time it’s polled.

But other examples of what are technically “socialism” are all around us although often the lack of socialistic programs are often more apparent.

Obvious examples include the electricity grid you’re using to read this right now (even though our lack of investment means the American power grid is in sorry shape), the roads you drive each day (falling apart under our tires), the public education system (also starved and under assault), mass transit systems (adorably out of date), police and fire departments and, of course, our military. Those public institutions are usually well-loved, even when they frustrate us. Interestingly, though, our most hated institutions are private: our outsourced renegade army (Blackwater), private health insurance companies and Wall Street, for example.

Why are we so afraid?

So why are Americans so afraid of socialism? My opinion is that it’s the aforementioned poor education combined with an easily exploited fear of authoritarianism. Mark my words: If we ever end up with a real dictator in the U.S., it’ll happen because we were falling all over ourselves out of a fear of a hypothetical dictator.

Authoritarianism is the belief among some that they are imbued with special powers and they are therefore superior to all others and we should all submit to their crazy will. Authoritarianism actually is quite dangerous and completely possible here. Note also that authoritarians are also the first to acquiesce to power. They either need to be in charge or subservient to a strong leader. (Check out Conservatives Without Conscience for more on this. Fascinating read!)

Many of the dictatorships that live most vividly in American memories arose from left-leaning perspectives (usually locations of U.S. military intervention, see histories of Russia, Cuba, Vietnam, and North Korea, etc. for example). I think the images of those regimes become conflated with the perspective they originated from, when in fact the economic or governmental theory is irrelevant to how much your life sucks under a dictatorship. No matter what the political theory is behind these guys, it always ends up being a tiny group of insiders bossing everyone else around and stealing all the money. Concentrated power is the real enemy, not some theory on the role of government. A Communist dictator is equally as bad as a Fascist one. Big Government, Big Business, Big Religion — I hate them all equally. And when they work in collusion, I hate them all even more.

As usual, it’s about your freedom

But this isn’t meant to be another Pretired Nick political rant, fun as that may be. We’re talking about maximizing the enjoyment of your life here. We want to get out of the rat race as soon as possible and spend our time with fulfilling activities.

We reach pretirement when our passive income is higher than our living expenses. Which is why a true socialist government could complicate matters for a pretired person living off investments. From a strictly income perspective, making your pretirement numbers work is easier under a system designed to benefit the wealthy. High taxes on investment income could negatively affect many who live off their investments. Indeed, the pretired are basically structuring their lives like the super rich — on a much smaller scale. However, the cost side can be much higher without a good dose of socialism.

Either way, I don’t see much chance of investment income becoming a target for high taxes anytime soon. Our system is essentially geared from the ground up for raw capitalism. We have a long way to go in simply excising corporate cash out of the government, let alone shifting the entire system to a worker-based economy.

Hopefully people will begin to see social programs as a way to support our fellow citizens and not as equivalent to dictatorship. We have a lot of needs in this country and it’s a shame we’re ignoring so many of them. But beyond government policy, those seeking pretirement would be wise to consider how social institutions can help them reach their goals. A community that has invested in itself is a better and cheaper place to live.

Living where there is an adequate mass transit system, for example, could save you thousands of dollars each year. A community that has invested in smart development, professional police force, good lighting and has a healthy economy, is safer. You won’t need to seek out an expensive “safe neighborhood” or gated community to keep your family safe. You won’t need a ridiculous alarm system. You may not need the house with the big yard if you have great parks nearby. You can spend less on books and movies if you have a good library.

You may even wish to consider moving to another city (or country?) that has better support systems than where you are today. Seattle, for example, has great libraries, but a crappy transit system. But it is very safe. If you’re saving for college, public university in Canada costs a fraction of what it does in America — plus sweet, sweet socialized health care!

Hopefully the U.S. is maturing out of its adolescence and is ready to put away the inflammatory language whenever government spending is discussed. Strong social supports don’t limit our freedom, they expand it.

What do you think? Is it time to start being afraid of socialism and push for pragmatic changes that can make our lives better? Would you move to take advantage of a better social support system? 

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