The reason this comes to mind is that I have several friends who are in the throes of indecision about becoming a full-time vandwellers. One of them is a retired widow who lives in a house, but she has itchy feet and has already bought a nice Ford conversion van and is taking long trips in it, including a multi-month long trip to Alaska where she saw the whole state and even drove the haul-road to Prudhoe Bay. She is falling in love with the lifestyle, but is torn between going full-time and keeping her house. And I can completely understand that. Home ownership is truly many peoples primary goal in life and the idea of walking away from it is very frightening. But as we sit around and visit in camp, she has to admit that this is as good as life gets. She admitted that when she is at home she just spends all her time inside puttering around and it really was a pretty empty life. But since she has been here she has found friends, connected with nature and the stresses of life have fallen away and been replaced by contentment.
Then we got to talking about finances and the economics of home ownership. Her house payment is $750 a month and she pays another $500 a month for insurance and taxes, so she is paying a total of $1250 a month. But that isn’t all; she is also paying for utilities and maintenance on the house. That’s hard to average out but $250 month is a reasonable number. That’s means she is spending $1500 a month for a house she isn’t sure she wants to own. That may sound acceptable by the month, but when you think about it in a longer period of time it starts to sound horrible:
- $18,000 per year
- $54,000 for three years
- $90,000 for five years
- $180,000 for ten years
She is going to spend $180,000 for the dubious “pleasure” of living in that house for the next 10 years. She is in her early 60’s, in very good health, and the genetics of her family are to live healthy well into their 80s. So she can easily expect to live in that house for 20 years which brings the total cost to $360,000 (*See note below). That is a lot of money. Think if she had the discipline to keep making all those payments, but instead wrote the check to herself and put it all into a money-market-account!! She would literally be rich!!
I think her story has a lot of important lessons for many of us.
- When you think of the cost of home-ownership (or living in an apartment) over a longer period of time, it becomes starkly obvious that the cost is so high as to be incredible. Even if you live in an apartment and are paying half as much per month, it is still a huge amount of money.
- Buying a van and getting it ready to live in may cost you some money at first, but then you own it (you will probably NEVER own your house). Other than insurance and maintenance you don’t have to pay again. Your long-term costs are nothing by comparison to a house or apartment. If you add solar panels you are essentially off-grid and don’t have any cost for utilities except a few dollars a year for propane and water. I’m sure I have never paid more than $100 in a year for propane and water combined.
- Maintenance and repairs on a van can get pretty expensive in the long run, but again, it is nothing compared to the long term costs of a home. Eventually every house will need a new roof, furnace or air conditioner, and they are very expensive.
- Buy the best van you can afford now, and then move into it. After a few months or a year you can take your savings from not making those monthly payments and upgrade your van, travel or simply work less.
- Do whatever it takes to not have to work or to work less!!
* Footnote: To be fair there are tax breaks and appreciation to offset a lot of the cost of home ownership, but it still works out to be a lot of money. Most vandwellers don’t work much (Hurray!!) so they don’t make enough money to need tax breaks. And who knows if the housing market will ever be the same after this huge crash. Society is changing; people buy houses less often and are becoming much more mobile so houses don’t fit for them anymore. So many people are working at lower paying jobs home ownership is simply not an option for them. The bottom line is that the appreciation of home prices we have seen in the past may not come back, eliminating one of its main selling points.