Living on $5,000 a year, on purpose: Meet America's 'intentional poor'

http://inplainsight.nbcnews.com/_news/2013/10/13/20923154-living-on-5000-a-year-on-purpose-meet-americas-intentional-poor

by ca98am79 • 13 years ago

47 71 13 years ago

inplainsight.nbcnews.com

ColinWright• 13 years ago

Discussed at length just over 2 weeks ago: https://news.ycombinator.com/item?id=6544012

However, that's now old enough that comments are closed, so if you have anything extra to say, you'll need to say it here.

ctdonath• 13 years ago

$13/day. I want your suggestions on how to make it work.

Starters: $1 per meal, see http://abuckaplate.blogspot.com ; creative use of http://Zillow.com or http://Trulia.com can find undeveloped building lots for under $2000.

(Naysayers, this subthread isn't for you.)

shubb2• 13 years ago

I'm writing from the UK, where living on the road is hard due to legals and climate. But if I lived in a high rent area of the US, I'd definitely look into getting a nice RV.

In a city, this would at first seem impractical. But if you cut back to a much smaller vehicle, there is generally safe free parking to be found at night. Especially if your friend has an apartment, but doesn't use the parking. Gym membership for showers, kitchen at work, maybe a games room. You really only need a box to live in most days.

This would let you pull in high wages, living low and gathering savings, then retire to the country to bootstrap your amazing SaaS business.

Oh fantasy.

Back in reality, I currently rent a bedroom from a fairly rich family. Especially during the winter, I save a huge amount on bills. The only problem is the lack of private space, but temporarily that's fine.

larsonf• 13 years ago

Hey shubb, I've read your posts for a while; like the way you think. Let me buy you a pint next time I'm in London (in US right now, but there often enough). Thoughtful tech people in London good to find.

an email that I made: specialemailforthisrightnow@gmail.com

rubidium• 13 years ago

It's easier to do if you're willing to live without a car and health insurance.

I keep good track of what I spend, and live pretty frugally, so here's some info on "what's possible" (assuming a single person living in the midwest US).

I eat for ~$90 a month (oatmeal, fruit, beans and rice, peanut butter and jelly, spaghetti, chicken once a week, ground beef once a week).

I pay:

-$200/month for rent and utilities (live in a house with 4 others guys in midwest collegetown). And it's a decent sized place with cable internet, so you could probably get cheaper (though likely not on the east or west coast).

-$30/month for cell phone plan.

-Computer was homebuilt from parts and is 4 years old.

-$200/year for clothes/toiletries.

That comes to about $11 a day.

Now, my expenses or higher because I opt to have health insurance, a car, travel, and go out every now and then.

It's the health insurance, living in high cost-of-living places, car, going out, and travel that makes your goal difficult.

selectstar• 13 years ago

What do you do for fun? Are you active in the dating pool? How often do you socialise in situations that require spend? (Be that a trip to the cinema, or a coffeshop, or a bar or taking beer/wine to a BBQ.)

As an aside, why I know this type of lifestyle is not for me and why I find it so alien...

"-$200/year for clothes/toiletries"

...is blown in one quarterly trip to Aesop.

Avshalom2• 13 years ago

Pretty much. I spent last year saving for a car and my monthly expenses came to about 6-700 but I live in Austin so ~450 went to rent/utilities/phone plus ~70 for gas/insurance for the car I was borrowing.

Once you've got housing/transportation knocked out to your satisfaction 400 a month is pretty much living like a god damn king.

altoz• 13 years ago

$30/month for cell phone? If you go pre-paid with a provider like ptel, you can easily spend less than that if you're not using too much data or using too many minutes.

drbawb2• 13 years ago

As far as maintaing cars on a budget goes, I feel I could offer some pointers. Going by the "$5000" figure I guess I spent about "$2/day per car." (My yearly maintenance costs are about $1,000 on years when I'm buying fresh rubber or doing large jobs. Significantly less than that on years that only require servicing consumables like brakes and fluids.)

0) Find a reliable car. This seems like a no brainer, but honestly some cars are just _built like tanks._ This is the toughest part as you'll end up spending more money since these cars naturally hold their resale value a bit better.

   Find something like an older Toyota with an S engine [Camry], or perhaps a Volvo, etc.
   My rule of thumb? If you don't get search results for "[Car in question] + 300,000 miles" -- you're about to buy the wrong car!

   My Mustang has 300,000mi+ on the clock, my old minivan had 240,000, and it's not hard to imagine my Camry making it to 300,000mi
   if I continue to maintain it.

1) Find an honest mechanic that's _willing to install customer supplied parts._ Sadly: all shops will charge [what I consider] an outrageous markup on parts. This is usually to "subsidize" whatever warranty they offer on their work.

   So be aware that you're effectively making a bet that the part you're buying isn't a dud. Otherwise you're going to find out
   why they charge such a ridiculous markup. (Hint: the shop won't make you wait 2 weeks while their parts supplier processes the RMA. -- 
   They swap in a brand new part in 24 hours, and hope that the RMA goes through.)

2) Perform certain maintenance yourself. Here's how I see it.

   * You should be able to: rotate your tires, change your own oil, change air & cabin air filters, check the levels of all other fluids.
   
   * It's nice if you can: top off & change other fluids, replace belts, change spark plugs & wires, replace a distributor cap or similar component. (Only applies to older vehicles with a cap or external ignition control module driving the ignition coils. On modern vehicles you'll have coil-on-plug fired directly from the ECU.)
   
   * You're doing _really well_ if you can: change your own brakes [pads, rotors, drums, and shoes], swap out components on the accessory belt (anything pulley driven, like your pumps, alternator, etc.), replace _any_ suspension or steering components.

Unless something goes _wrong_, nothing above really requires any specialty tooling. Air tooling is nice, but honestly I've gotten by for years with nothing but an electric impact wrench [for removing & installing wheels]... everything else can be done with a good set of wrenches, a breaker bar, and a dash of blood and tears.

(As a precaution: the last category involves some _very dangerous jobs._ -- Improper installation of brakes will at best render your vehicle immobile, at worst it will endanger the safety of yourself and others on the road.

As for suspension: those springs support a significant amount of weight. They are _incredibly dangerous_ if not handled properly.)

---

To elaborate a bit on point #1 we will use a fairly recent example.

I had a timing belt installed: I purchased the components [the belt, idler pulleys, water pump, various gaskets] myself for $90. These components have a 5-year/50,000 mi warranty on the parts themselves.

(The shop offered a 2 year / 12,000 mi. warranty for comparison.)

The labor comes to $375 because I have a mechanic that will install customer supplied parts. Total I spent: $465 for a job that costs $600-$800 in my area.

If you want to know where the extra money comes from: let's look at the parts I _didn't supply._

I needed a thermostat & gasket, a power steering belt, an a serpentine belt. The thermostat and gasket were $25, the belts were $40 a piece, for a total of $105. I could've bought my own thermostat and gasket for $12, and I could've gotten _the same exact belts_ for $9/piece. (A savings of $75 dollars.)

At this kind of markup: my timing belt kit would've cost $200+ instead of $90, which falls right in line with the $600-$800 estimate from other shops.

If you're used to paying for parts through a garage: you're probably paying twice as much as you need to for parts. Finding parts is a cinch: you can either ask your local part store [and then source the parts there, or online] -- or you can use a parts catalog like RockAuto which has their inventory broken down by make, model, year, and engine. When it comes to car parts: it's worth shopping around to save money on shipping; auto parts can get quite heavy, and it makes a huge difference if you can get them shipped from a single warehouse.

kfk• 13 years ago

If you charge the costs of your pension (I challenge you can make even 5k when you are 80+ years old) and health on society, sure, you can live on that amount.

VLM8• 13 years ago

That was also my first reaction to the title, "so I see they've met my grandmother". Prop tax on half a house and some maintenance is a couple hundred a month, and some food, that's about it. She obtained about 4,5,6 who knows how many times as much from pensions and from SS but she actually only spent perhaps $5K/yr on herself. Too old to drive safely, not into consumer electronics other than a top of the line TV and top of the line satellite subscription (only old people watch TV anymore), loved to cook / didn't like restaurant food / very picky about food, not into clothing fashions, what is someone like that supposed to spend money on for themselves, anyway? Mostly gave her money away to charities, family, etc.

netcan2• 13 years ago

It's often useful to have someone exploring extremes. Philosophical extremes, lifestyle extremes, physical, etc. For example, I think reading Ayn Rand is useful even though I disagree with here on many points.

I think many people feel like much of our modern wealth is "wealth." Long hours at Jobs we don't like. No free time. Dept. Constant financial worries. Social alienation.

Hopefully they find some useful things that other people can use.

hrkristian• 13 years ago

The article makes no mention things like health insurance and other safety nets. What will he do when he grows too old to be autonomous?

I'm all for the idea of going back to basics, advanced stages of anything usually comes with a lot of negative baggage, our western society included.

However, living "intentionally poor" means you're distancing yourself from everything, you're essentially back to the Middle Ages, and your quality of life depends solely on your genetics and luck in life. He breaks his foot, and suddenly he has to come crawling back to the "system" he once was a slave of. A system he no longer deserves to be a part of because he's stopped contributing to it.

tonyedgecombe• 13 years ago

"A system he no longer deserves to be a part of because he's stopped contributing to it."

It seems to me he is contributing in many ways, they just aren't financial.

netcan2• 13 years ago

I'm not sure that living "intentionally poor" means anything in particular. The article gives two example: a guy in a hobbit hole and a girl in a cheap NY room. Both are using macs and making a little money online. Doesn't sound medieval to me.

Anyway, the article isn't about a "mid sized country" deciding to live in a hobbit hole. It's about a few individuals. They're trying to find a satisfying way of living. This anger about not contributing to the system feels very off to me.

pinaceae• 13 years ago

only rich and bored people want to be poor. this is like painting yourself black to prove you can live under racism.

ChikkaChiChi• 13 years ago

No, that's called blackface, racist.

sanoli• 13 years ago

In Brazil there's a saying: "Poor people like luxury. The ones who like poverty are intellectuals."

oftenwrong• 13 years ago

I would say "The ones who like poverty are not poor"

spurgu• 13 years ago

How about people who don't feel like locking themselves to a certain job and/or wage level, just to be able to afford and maintain the lifestyle mid+ income earners see as a necessity (when it most certainly isn't)? Freedom comes in many forms.

personlurking• 13 years ago

I've lived poor on a little more than $5000/yr for several years now, though it's due to living in developing nations and/or countries with hard-hit economies.

I still want things but I fully recognize it's just a want and not a need. Would I live 'normally' if I made more money? Well, I've come to find that paying for experiences is more important than having status or things that represent it.

Most of my current friends are not as poor as me but they aren't rich either. Though, I spent all of my teens with 'rich kids', for one reason or another, and they seemed to have no clue about how good they had/have it. If we all had to start from scratch, I'd survive while they wouldn't.

When the basics aren't covered automatically, there's a large psychological toll (the scarcity trap) that affects every single decision made. I'd rather know the art of being frugal than be oblivious to it (and how much of the world lives)...but I must say, the scarcity trap can be hell to deal with.

Shivetya• 13 years ago

Living on 5000 is enough is simple enough when you start out with everything that is expensive already in your possession.

I have seen people live frugally, none of the cases in this story are meaningful. I am more interested in the unintentional poor, because by calling these people intentional means its a lifestyle choice. Lifestyle choices let you stack the deck prior to taking the choice. Its the perfect choice of vapid selfish people.

bluedino2• 13 years ago

$50/month for a phone, plus a MBA and iPad is an easy $1500, and that's buying used stuff.

pilom• 13 years ago

Its not like he has to buy the MBA or the iPad every year. Also cell phones in the US are way less than $50/month if you don't go with ATT, Verizon, Sprint, or T-mobile. I get Unlimited everything (with no data caps) for $20/month on Republic Wireless.

fennecfoxen• 13 years ago

“I don’t believe in houses or mortgages. Who in their right mind would spend their lifetime paying for a building they never get to spend time in because they are always working?”
The intentional poor are “looking for something real that goes beyond commodity,” said Karen Halnon, a sociology professor at Pennsylvania State University and author of "Consumption of Inequality."

See, the historical edition of "something real" and the mainstream reason to pay for the house is called "your children". I don't expect many of these people are raising any, so there you go.

codegeek3• 13 years ago

Exactly. I bought a house right after my first kid was born (second on the way) and I would not trade it for anything else. Yes I am paying the mortgage+ taxes and what not but I know that my kids are getting the environment we want as a family to grow up. Yes you can always argue that kids can be raised in rented apartments, condos etc. but to each his own. I recently painted one of the rooms for the kid and loved doing it. Imagine dealing with landlords asking for permission to put a nail on the wall. Many more things like this.

tl;dr: People buy houses not because they see it as investment in terms of money (well thats also there to an extent but besides the point in this context), they buy it to call it their home where they have the freedom to do whatever the heck they want.

atwebb2• 13 years ago

As someone forced to rent with kids for the past several years (apparently contracting isn't a real job to banks), you got it exactly right. Floating around, without a defined base is really difficult and affects you more than you realize.

Though you have to pay for upkeep on a house (and HOA/insurance/taxes) renting brings it's own issues (fees,deposits,moving expenses) and, in our area, rents are about 30-50% higher than a mortgage for a comparable house in a comparable neighborhood. Not to mention, the nice, stable neighborhoods don't have much rental action around here.

onion2k• 13 years ago

"I bought a house right after my first kid..."

I don't think it's right to buy children. ;)

VLM8• 13 years ago

"Imagine dealing with landlords asking for permission to put a nail on the wall."

LOL back in the real world, it never costs a penny over the security deposit.

Usually people who cry the loudest about home=freedom live in a HOA where you need to ask the Warden's permission to plant flowers, which I always find pretty amusing. Thank god I'm free of that landlord, although now the HOA controls my every decision and waking moment...

In my younger years I found that you tend to get what you optimize for WRT real estate. So if you optimize solely for location size and price, all you get is a good location size and price. The landlord will probably be a total jerk or insane. My bachelor pad was not the most convenient and relatively small and somewhat expensive but the landlord was awesome and reasonable and fast and effective. "permitted" to paint? Heck, he not only permitted it, he paid for it. You tend to get what you optimize for.

Adirael• 13 years ago

Why are children the reason to buy instead of rent? My parents were renting till I was around 13. Then they bought a house. Years later they sold it and moved to a different one (they bought that one too). It never made a difference to me.

DanBC2• 13 years ago

In theory they get a big load to buy a house, and pay it off over their lifetime, and about when they finish work or soon after they die, leaving you the house. You either move in or sell it, giving you a lump sum.

Or they don't die, but need expensive medical care. Being able to sell the house to pay those bills is handy.

tekalon2• 13 years ago

Kids cause damage. They spill on carpets and draw on walls. My biggest reason for me personally, be able to take down walls, paint, dig holes, build XYZ without asking landlords permission.

microcolonel• 13 years ago

You have to remember that for dudes(still typically willing to work more), are not finding those relationships attractive, especially when they're in a tight spot.

They're trapped between welfare and work, and the group is growing; do you think these people care about mainstream motivations or even peer pressure?

buckbova2• 13 years ago

A house is also an investment in the future. I'm sure these folk don't believe in the future either.

yardie2• 13 years ago

The future says there is a backlog of overvalued houses for the next 3-5 years. A house can be a good investment, but it becomes a bad investment if you are caught when the bubble bursts.

Luc• 13 years ago

Perhaps there's something peculiar to where you live, but I've never felt I needed to buy a house, and I have kids and pets, and I'm not shy about putting nails in the walls either.

'Brits buy, Germans rent' http://www.theguardian.com/money/2011/mar/19/brits-buy-germa...

hackerboos2• 13 years ago

There's no security in the rental market in the UK. You can be out of your home or have large rent increases with very little notice.

In contrast with Germany which has strong rights for tenants including gasp rent control which seems to be hated here on HN.

DanBC2• 13 years ago

The guy in the photo in the article has 2 children.

I find it odd that he lives in a hobbit hole, but then travels 4,000 km to avoid winter. Why not just live somewhere more temperate?

lelele• 13 years ago

See, the historical edition of "something real" and the mainstream reason to pay for the house is called "your children".

Your children need you way more than a pretty room. If saving on accommodation lets you spend less hours in the office and more hours with them, they will be happier for sure. The amount of space paid for and wasted in average houses is mind-blowing.

Pay for what you use, not what you think you need. That's the gist of the article.

goshx• 13 years ago

[off-topic] I feel like I have been experiencing many dejavu's here lately. Doesn't HN have a detection for re-posts?

https://news.ycombinator.com/item?id=6544012

sp332• 13 years ago

The repost detection is pretty fragile and often just doesn't work. It's up to the poster to make sure the story isn't a dup.

tehwalrus• 13 years ago

I'd love to try this sort of lifestyle, but I can't help thinking I'd be bored out of my mind after a few weeks (without power to run a computer - programming problems in the evening might be interesting enough.)

I once worked minimum wage at Starbucks for a couple of weeks full time (gap between A-levels and starting uni.) I had worked there a day a week for about a year, and I enjoyed working there for that proportion of my time, alongside challenging-ish studies. But - when I hit the third or fourth day, the tiredness set in. Sweeping/mopping/hoovering a large store three evenings in a row, after being on your feet all day making coffee and smiling at people, is seriously hard work. And don't get me started on cleaning the loos. I am very courteous to people who work in retail.

It's not quite doing odd jobs around the town, but it's certainly the order of magnitude of work required to live this kind of lifestyle. Also, does the $5,000 a year seriously cover a return flight to Hawaii?!

up_and_up• 13 years ago

I had friends that lived like kings in Santa Cruz CA for easily less than $500/year.

They lived for free in hidden tents/camps above UCSC, ate/made free food with Food Not Bombs, biked everywhere around CA and generally just lived it up.

There are other ways to exist and thrive in this world outside the grind.

poulsbohemian• 13 years ago

Joseph, OR, where the guy with the "Hobbit House" lives is a really unique place. There are a lot of people who live on very little there - many are artists, some are hermits, most are just plain poor as it is a difficult place to make a living. My family ranched there for several generations and we still spend vacation time in the area. The people that live there - and really, you could extrapolate this to much of middle america - are living for a lifestyle, not in pursuit of the almighty dollar. It's pretty typical in Joseph to see a $50K pickup and $30K snowmobiles in front of a 40 year old single-wide trailer - whatever money they have goes into their "toys." Is this existence better or worse than the urban "keeping up with the Jones?" Depends on what you want in life. But make no mistake about it, even someone who chooses to downgrade their wants and needs doesn't automatically have life easy. There is already snow on the ground around Joseph and it won't warm up again until about June. I've been snowed on there on the 4th of July. You could spend thousands just keeping yourself from freezing to death. The Oregon department of fish and wildlife has to deal with a lot of poachers - some because they feel entitled to a "lifestyle" but others, it's probably pure survival. I see articles like this as mostly propaganda, trying to position the reality in which most americans live as a positive choice rather than the consequences of stagnate incomes, et al. We have shanty towns, hunger, malnutrition, unclean water - all the problems of the developing world - but they are perhaps less visible and/or effect a smaller number of the overall population in a visible way.

jlneder• 13 years ago

with that much you would live like a king in Argentine.

matt__rose• 13 years ago

Umm, this has been happening since the 60s. They called it "Going back to the land" Anyone interested should look up The Farm in Tennessee

Living on $5,000 a year, on purpose: Meet America's 'intentional poor'

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