I see more jobs than any time in my career. Fully half of all my business clients are hiring or have hired in the last few months. Tax Prep & Accounting Services hired three bookkeepers this summer, more tax preparers for tax season, and one or two more will be added this week to handle the phones and front desk duties. Either the national statistics are wrong, will soon reflect the growing economy, or my clients are the only ones experiencing economic expansion.
The only real explanation is the economy is finally gaining traction. Once the wheels start turning, the rust can get ground off, and America can be back in the saddle again.
It has been a long economic pullback. Even though the government says we are in a mild expansion for a few years now, it never felt like it was. Certain statistics tell me we are due for better days ahead. The average car on the road in nearly 10 years old, the oldest fleet on record. Households have reduced debt for several years. With lower debt and an old auto fleet, vehicle sales should continue to grow with all the jobs it requires. As old, worn out things need updating, either repair or remodeling is required or a new purchase.
I feel good for my clients. I feel good for their new employees. As people get jobs they can update old cars, furniture, or buy a home. The economy always works best when people feel good about themselves. We took a serious body blow in 2007 and 2008. When sentiment is crushed that hard it takes time to get back up and running again.
I hope we are all running again real soon.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Saturday, October 22, 2011
Monday, August 1, 2011
Create Your Own Job
As the economy grows at a slow pace and jobs are scarce, a certain group of people have discovered the secret of previous recessions when applying for a job. These job opportunities are offered to anyone that applies. Unlike the past, fewer people are taking advantage of these jobs. These "create your own job" offers are called "starting your own business."
I have been in the tax business since the early 1980s and see business creation accelerate as a recession ends every time, until now. For some reason (maybe government interference and lack of a clear policy) people are creating jobs at a slower pace this time. When current employers refuse to hire, smart people find an unfilled demand and fill it.
Several of my clients have started a new business. Business ownership has its risks, but the rewards are really good, too. Starting a business as the economy leaves a recession has fewer risks as demand is increasing and there are ample opportunities to fill space vacated by businesses that closed during the recession.
Owning a business is not for everyone and has unique issues related to it. Still, nothing beats business ownership. Yes, the hours are long and risks abound. But losing one client does not break the company where losing the one and only job you have is a severe body blow.
The people that started businesses over the last year in my office have done well. It seems to me there is significant unfilled demand waiting to be filled. Some of these businesses may fail in the future, but for now things look all roses.
You can beat the odds when starting a business by following a few simple rules:
I have been in the tax business since the early 1980s and see business creation accelerate as a recession ends every time, until now. For some reason (maybe government interference and lack of a clear policy) people are creating jobs at a slower pace this time. When current employers refuse to hire, smart people find an unfilled demand and fill it.
Several of my clients have started a new business. Business ownership has its risks, but the rewards are really good, too. Starting a business as the economy leaves a recession has fewer risks as demand is increasing and there are ample opportunities to fill space vacated by businesses that closed during the recession.
Owning a business is not for everyone and has unique issues related to it. Still, nothing beats business ownership. Yes, the hours are long and risks abound. But losing one client does not break the company where losing the one and only job you have is a severe body blow.
The people that started businesses over the last year in my office have done well. It seems to me there is significant unfilled demand waiting to be filled. Some of these businesses may fail in the future, but for now things look all roses.
You can beat the odds when starting a business by following a few simple rules:
- Use little or no debt.
- Hire professionals to help you start and run the business (accountant, attorney).
- Start small, if possible, and build from there.
- Plan each step of the way. Have a business plan.
Wednesday, July 13, 2011
It's the Jobs, Stupid
I could have titled this post Wasted Opportunity, but elected for the more in your face approach. For two and a half months (or longer) Washington has focused all its attention toward the spending limit on their credit card when the real issue is jobs. Balancing the budget on spending cuts or tax increases will only slow an already comatose economy.
If anyone is serious about bringing the national debt under control it will require tremendous effort on the jobs front. More jobs also means a better economy. In a recent article I argued that government regulation and interference is holding back job creation. The other half of the story is what the government can do to jump start the economy via job creation.
Governments around the country are cutting jobs while the private sector is adding a small number of jobs. I agree with selective downsizing of government payroll. The government should not create jobs by hiring more people. Washington can create jobs by providing focused funding. A large part of our electric grid was built in the 1930's and is in need of an upgrade; out road look like a page out of a developing country and our bridges collapse from time to time; our transportation system is outdated and more efficient, high-speed alternatives, need investment. Honing spending to targeted areas of infrastructure is the fastest way to create jobs without installing another permanent level of government spending/bureaucracy.
All the debate on the spending limit, spending cuts, and/or tax increases has created no jobs and never will. When unemployment is over 9%, why are we talking about anything other than jobs?
If we had jobs and a better economy the budget problems would largely vanish. One third of the deficit is from lower tax revenues directly related to the slow economy. Unemployed people pay few taxes, payroll or otherwise. Another third of the deficit comes from increased spending on food stamps, unemployment, and other social programs to help the people harmed by the economic conditions. The remaining third of the budget shortfall will require attention in the future when jobs are on the upswing.
Every politician in Washington that is debating the budget when jobs are the real issue should be fired. Both political parties are at fault. The only time jobs are considered is when it is used as an argument to further a political agenda.
Stop talking about the debt limit. It creates no jobs. Raising taxes or reduced spending creates no jobs. If we spent the last three months talking jobs the way we talk credit limits our economy would be humming. Our trade deficit was over $50 billion in May. There is work to do. Now we need to get out of our way and start hiring.
If anyone is serious about bringing the national debt under control it will require tremendous effort on the jobs front. More jobs also means a better economy. In a recent article I argued that government regulation and interference is holding back job creation. The other half of the story is what the government can do to jump start the economy via job creation.
Governments around the country are cutting jobs while the private sector is adding a small number of jobs. I agree with selective downsizing of government payroll. The government should not create jobs by hiring more people. Washington can create jobs by providing focused funding. A large part of our electric grid was built in the 1930's and is in need of an upgrade; out road look like a page out of a developing country and our bridges collapse from time to time; our transportation system is outdated and more efficient, high-speed alternatives, need investment. Honing spending to targeted areas of infrastructure is the fastest way to create jobs without installing another permanent level of government spending/bureaucracy.
All the debate on the spending limit, spending cuts, and/or tax increases has created no jobs and never will. When unemployment is over 9%, why are we talking about anything other than jobs?
If we had jobs and a better economy the budget problems would largely vanish. One third of the deficit is from lower tax revenues directly related to the slow economy. Unemployed people pay few taxes, payroll or otherwise. Another third of the deficit comes from increased spending on food stamps, unemployment, and other social programs to help the people harmed by the economic conditions. The remaining third of the budget shortfall will require attention in the future when jobs are on the upswing.
Every politician in Washington that is debating the budget when jobs are the real issue should be fired. Both political parties are at fault. The only time jobs are considered is when it is used as an argument to further a political agenda.
Stop talking about the debt limit. It creates no jobs. Raising taxes or reduced spending creates no jobs. If we spent the last three months talking jobs the way we talk credit limits our economy would be humming. Our trade deficit was over $50 billion in May. There is work to do. Now we need to get out of our way and start hiring.
Monday, November 8, 2010
Political Promises and the Value Added Tax
The election is over and democracy did its job. Whether you agree with the outcome or not, there is new leadership in Congress. History shows that President's can do a better job when forced to work with the opposition party in Congress. President Reagan and President Clinton both saw the economy improve after the opposite party took control of one house of Congress. Things work best when ideas from both sides of the isle are employed.
The high voter turnout for the midterm elections show how polarized the electorate is over issues of taxes, government spending, and social programs. What got lost in the coterie of attack ads and promises is a cold hard truth: taxes will go up. I hate to say it because I hate taxes as much as the next guy, but the numbers do not lie.
Taxes have declined on a nearly steady pace for thirty years. With the exception of a few years in the nineties, the federal government has run a sizable budget deficit. And more tax cuts are on the way. The promise of fiscal restraint will die now that the votes have been cast. The deficit is here to stay for a very long time.
Raising taxes is difficult at any time and the tax increase required to balance the federal budget deficit will make a balanced budget impossible. Taxes would need to increase nearly 100% to stop the red ink flowing. That kind of shock to the economy makes it unlikely the deficit would be erased under such a scenario.
Cutting spending is always popular. Cut waste and balance the books is a recurring political promise. There are only three programs large enough to make a difference: Social Security, Medicare, and the military. The cuts required from these programs would have to be massive to stop the red ink. It is political suicide to even suggest cuts of the size needed.
Another option is raising taxes and cutting spending. Again, the size of the tax increase and spending cuts would shock the economy and would be impossible for any politician to swallow. So what options remain?
Everyone knows that President Reagan orchestrated the largest tax cut in history up until that time. What most do not remember is that Reagan also increased taxes. While income tax rates were reduced, the payroll tax was increased to the level we still have today. The payroll tax is the Social Security and Medicare taxes, referred to as FICA, that is paid on all wages and self employed income. Everyone pays regardless of income level at a flat rate. The demise of Social Security and Medicare were pushed out decades. The problem is now rearing its ugly head again.
Politicians today will take a page from President Reagan's playbook. Income taxes are a difficult sell, but increasing other taxes is very doable. So in comes the Value Added Tax (VAT). You only pay the VAT when you buy stuff. Don't spend and you don't pay. It encourages saving and makes cheap goods from China more expensive. The VAT works in a similar way to state sales taxes. The concept is different, but consumers will see it as a sales tax.
The VAT will be sold in the following manner: Income taxes will be cut in half or more, the Alternative Minimum Tax will be eliminated, the standard deduction will increase significantly so fewer people pay income tax, and the estate tax will have a higher exemption or will be eliminated. In exchange for massive income tax cuts a VAT of 12-15% will be instituted and could rise to around 20%. Food, shelter, and medical will enjoy exemption from the tax.
There is good news and bad news with the Value Added Tax. The good news is that a VAT reduces the amount of fraud so the government collects more of what it expects; VAT tax collections produce massive additional revenue to balance the budget; and foreigners traveling here also pay the tax.
The bad news is that it is a tax increase; if it were not the budget will not get balanced. More people will pay, especially lower incomers. The added revenue will provide a temptation for politicians. Consider President George W. Bush. He entered the White House with a large budget surplus and spent the entire thing for 10 years at the stroke of a pen. Then reality (terrorist attack) set in and the only way to defend ourselves was with borrowed money.
Right or wrong is not my point. I think we have a VAT in the United States within 10 years. Handled correctly it should be no problem. Still, history is not encouraging when it comes to government management of money.
The high voter turnout for the midterm elections show how polarized the electorate is over issues of taxes, government spending, and social programs. What got lost in the coterie of attack ads and promises is a cold hard truth: taxes will go up. I hate to say it because I hate taxes as much as the next guy, but the numbers do not lie.
Taxes have declined on a nearly steady pace for thirty years. With the exception of a few years in the nineties, the federal government has run a sizable budget deficit. And more tax cuts are on the way. The promise of fiscal restraint will die now that the votes have been cast. The deficit is here to stay for a very long time.
Raising taxes is difficult at any time and the tax increase required to balance the federal budget deficit will make a balanced budget impossible. Taxes would need to increase nearly 100% to stop the red ink flowing. That kind of shock to the economy makes it unlikely the deficit would be erased under such a scenario.
Cutting spending is always popular. Cut waste and balance the books is a recurring political promise. There are only three programs large enough to make a difference: Social Security, Medicare, and the military. The cuts required from these programs would have to be massive to stop the red ink. It is political suicide to even suggest cuts of the size needed.
Another option is raising taxes and cutting spending. Again, the size of the tax increase and spending cuts would shock the economy and would be impossible for any politician to swallow. So what options remain?
Everyone knows that President Reagan orchestrated the largest tax cut in history up until that time. What most do not remember is that Reagan also increased taxes. While income tax rates were reduced, the payroll tax was increased to the level we still have today. The payroll tax is the Social Security and Medicare taxes, referred to as FICA, that is paid on all wages and self employed income. Everyone pays regardless of income level at a flat rate. The demise of Social Security and Medicare were pushed out decades. The problem is now rearing its ugly head again.
Politicians today will take a page from President Reagan's playbook. Income taxes are a difficult sell, but increasing other taxes is very doable. So in comes the Value Added Tax (VAT). You only pay the VAT when you buy stuff. Don't spend and you don't pay. It encourages saving and makes cheap goods from China more expensive. The VAT works in a similar way to state sales taxes. The concept is different, but consumers will see it as a sales tax.
The VAT will be sold in the following manner: Income taxes will be cut in half or more, the Alternative Minimum Tax will be eliminated, the standard deduction will increase significantly so fewer people pay income tax, and the estate tax will have a higher exemption or will be eliminated. In exchange for massive income tax cuts a VAT of 12-15% will be instituted and could rise to around 20%. Food, shelter, and medical will enjoy exemption from the tax.
There is good news and bad news with the Value Added Tax. The good news is that a VAT reduces the amount of fraud so the government collects more of what it expects; VAT tax collections produce massive additional revenue to balance the budget; and foreigners traveling here also pay the tax.
The bad news is that it is a tax increase; if it were not the budget will not get balanced. More people will pay, especially lower incomers. The added revenue will provide a temptation for politicians. Consider President George W. Bush. He entered the White House with a large budget surplus and spent the entire thing for 10 years at the stroke of a pen. Then reality (terrorist attack) set in and the only way to defend ourselves was with borrowed money.
Right or wrong is not my point. I think we have a VAT in the United States within 10 years. Handled correctly it should be no problem. Still, history is not encouraging when it comes to government management of money.
Tuesday, August 24, 2010
Kids, Money, and the Frugal Lifestyle
Living a frugal lifestyle is difficult as it is; add kids and it turns downright challenging. It is back-to-school season and the schools have the longest list ever of stuff kids need to bring the first day. No wonder teachers complain they make too little. Most seem to lack basic money skills to get, keep, invest, and manage their money.
Once the school has your wallet open it is time for peer pressure from fellow students and their parents to encourage more stupid spending.
The reason is clear to me. Advice given is meant to serve the person giving the advice, not you. The government wants you to borrow and spend more to help the economy; the financial planner says to NOT pay off your mortgage and invest the money; the banker says to borrow for a car or boat. All that advice is wrong. The elected government official wants to get re-elected; the investment advisor wants a commission; the banker, interest.
Even I am not immune. The amount of time I grant toward convincing you to live debt-free is small. I am your accountant. If you really think paying the bank $10,000 in interest is worth the $3,000 you get from the government is tax savings is a deal, go for it. I can point out the extra refund I got you, charge you $300, shake your hand, and go home. Of course, I will use the $300 to pay off my mortgage of fill my bank account.
The day you find pride in living a frugal life; the day you grin ear-to-ear because someone points out your strange frugal ways is the day you are truly free from the rat race.
Think about the pressure you get to spend money. Ask yourself: What is in it for the advice giver? Ask yourself: What is in it for you?
Bowing to peer pressure and refusing to teach your children fiscal responsibility IS child abuse. By withholding these basic needs in managing money you condemn your children to a life of servitude to money.
Money problems lead to crime, alcohol, child, and spousal abuse, stress, insomnia, divorce, and a litany of other health and social problems. Teach your kids by example. Live within your means and really enjoy life.
This is the greatest gift you can give your children and the lesson is never taught in school.
Once the school has your wallet open it is time for peer pressure from fellow students and their parents to encourage more stupid spending.
- Did you drive your kids to school in an over-priced, gas-guzzling SUV? Then you are a mean mommy. Your kids will be scarred for life.
- Did you buy your children the latest electronic toy, gizmo, cell phone, iphone (i anything), or gadget from Apple? Then you are a mean, good-for-nothing daddy. Your kids will be scarred for life.
- How much did you spend on the summer vacation? Not enough. Did you even go on a summer vacation? No? What will the other students, their parents, and the teacher thinks when the class shares their summer activities? Your kids will be scarred for life.
- Is your home over 3,000 square feet? Flat screen TV? No? What is the matter with you? Now nobody wants to be your child's friend. Only a low-life would treat their kids in such a manner. They will be scarred for life.
- Please tell me you bought your kids the latest and trendiest cloths for the first day of school. No? What is the matter with you? Child Services should be called. That is child abuse. Your kids will be scarred for life.
The reason is clear to me. Advice given is meant to serve the person giving the advice, not you. The government wants you to borrow and spend more to help the economy; the financial planner says to NOT pay off your mortgage and invest the money; the banker says to borrow for a car or boat. All that advice is wrong. The elected government official wants to get re-elected; the investment advisor wants a commission; the banker, interest.
Even I am not immune. The amount of time I grant toward convincing you to live debt-free is small. I am your accountant. If you really think paying the bank $10,000 in interest is worth the $3,000 you get from the government is tax savings is a deal, go for it. I can point out the extra refund I got you, charge you $300, shake your hand, and go home. Of course, I will use the $300 to pay off my mortgage of fill my bank account.
The day you find pride in living a frugal life; the day you grin ear-to-ear because someone points out your strange frugal ways is the day you are truly free from the rat race.
Think about the pressure you get to spend money. Ask yourself: What is in it for the advice giver? Ask yourself: What is in it for you?
Bowing to peer pressure and refusing to teach your children fiscal responsibility IS child abuse. By withholding these basic needs in managing money you condemn your children to a life of servitude to money.
Money problems lead to crime, alcohol, child, and spousal abuse, stress, insomnia, divorce, and a litany of other health and social problems. Teach your kids by example. Live within your means and really enjoy life.
This is the greatest gift you can give your children and the lesson is never taught in school.
Tuesday, August 10, 2010
The Not So Big Problem of the U.S. Budget Deficit
One and a half trillion dollars in added debt per year seems like an insurmountable problem, but is it? The red ink pouring out of Washington has so many people up in arms that our economy may falter or sink into a double-dip recession. Our leaders should review the 1930s before embarking on such austerity.
After World War II, the United States had a national debt of around 120% of GDP. The United States never paid any of that debt down... ever. Okay, there were two years with a small budget surplus, but that was so small it was only a fraction of a percent and the next year it was spent. So what gives? The national debt was huge in 1945, never paid down, and became a small, manageable debt in subsequent years. Why? And more important, how?
We need to fast forward to the 1990s and the largest budget surpluses our federal government ever had. (On percentage terms President Andrew Jackson paid off 100% of the national debt. It did not last long.) How did President Clinton run so many and so much surplus? It was simple really. President Clinton understood that the budget deficit can be eliminated by increasing spending slower than economic growth. It takes a few years, but it always works and keeps the economy humming.
Let me illustrate. If your national economy is $1,000 and the government takes in $90 in taxes and spends $100, you have a budget deficit of $10. If the economy grows 5% the next year to $1,050 and tax revenue collected remains the same in percentage terms, you collect $94.50. If spending increases 2%, your government spends a total of $102. The budget deficit for the year is $7.50, a decline of 25% in your budget deficit.
When using really big numbers, like the size of our real economy and government finances, the numbers are compelling. The federal government can spend more and actually be financially in a better fiscal position as the debt is a smaller percentage of the economy. Running a budget surplus can injure a national economy, especially in weak economic times. The real trick is to increase the total national debt less than the economy grows.
During a recession the economy shrinks so the debt burden grows fast and scares politicians and guys on the street. It shouldn't and here is why. Economic performance is measured in inflation adjusted terms. If the government reports 3% economic growth and inflation is 2%, the economy grew 5%. The government adjusts the numbers to reflect real growth. However, the economy grew 5% in dollar terms. If the national debt grew less than 5%, not he 3% reported, the deficit is easier to manage than the year before.
With all this said, $1.5 trillion deficits are not something we want to repeat each year. However, the sky is not falling. The national debt of the United States is well below all-time highs compared to GDP and is currently under 100% of GDP. The concern is how fast we are increasing the debt burden.
Congress does not need to irritate the President into lowering spending. Just increase spending slower than the economy grows and in a few years we are back in the black.
Now you can smile and enjoy the day.
After World War II, the United States had a national debt of around 120% of GDP. The United States never paid any of that debt down... ever. Okay, there were two years with a small budget surplus, but that was so small it was only a fraction of a percent and the next year it was spent. So what gives? The national debt was huge in 1945, never paid down, and became a small, manageable debt in subsequent years. Why? And more important, how?
We need to fast forward to the 1990s and the largest budget surpluses our federal government ever had. (On percentage terms President Andrew Jackson paid off 100% of the national debt. It did not last long.) How did President Clinton run so many and so much surplus? It was simple really. President Clinton understood that the budget deficit can be eliminated by increasing spending slower than economic growth. It takes a few years, but it always works and keeps the economy humming.
Let me illustrate. If your national economy is $1,000 and the government takes in $90 in taxes and spends $100, you have a budget deficit of $10. If the economy grows 5% the next year to $1,050 and tax revenue collected remains the same in percentage terms, you collect $94.50. If spending increases 2%, your government spends a total of $102. The budget deficit for the year is $7.50, a decline of 25% in your budget deficit.
When using really big numbers, like the size of our real economy and government finances, the numbers are compelling. The federal government can spend more and actually be financially in a better fiscal position as the debt is a smaller percentage of the economy. Running a budget surplus can injure a national economy, especially in weak economic times. The real trick is to increase the total national debt less than the economy grows.
During a recession the economy shrinks so the debt burden grows fast and scares politicians and guys on the street. It shouldn't and here is why. Economic performance is measured in inflation adjusted terms. If the government reports 3% economic growth and inflation is 2%, the economy grew 5%. The government adjusts the numbers to reflect real growth. However, the economy grew 5% in dollar terms. If the national debt grew less than 5%, not he 3% reported, the deficit is easier to manage than the year before.
With all this said, $1.5 trillion deficits are not something we want to repeat each year. However, the sky is not falling. The national debt of the United States is well below all-time highs compared to GDP and is currently under 100% of GDP. The concern is how fast we are increasing the debt burden.
Congress does not need to irritate the President into lowering spending. Just increase spending slower than the economy grows and in a few years we are back in the black.
Now you can smile and enjoy the day.
Tuesday, July 27, 2010
The 3 Hour Workday
My first exposure to the concept of the three hour workday comes from the book Your Money or Your Life by Joe Dominguez and Vicki Robin
. I have read similar articles on the subject over the years and it makes total sense to me.
From the beginning of mankind (ladies included) the amount of work required to secure the necessities of life (food, clothing, and shelter) takes about three hours a day. This has held true from Stone Age to modern man
. Before the modern era, man would hunt for a few days and then cure the meats acquired. Gardening complimented gathering. The time needed to build shelter, hunt, garden, process and cook foods, and produce clothes took about twenty hours a week per adult. Some days and weeks required longer hours of labor, but over a year, the work required to survive averaged about three hours a day. The remaining time was spent with friends and family playing games, talking, sharing and other pleasurable passtimes.
Then we got civilized. Then we decided that anyone that worked less than 10-12 hours a day is lazy. Now we admire those that work 14-18 hour days. All this insanity started around the beginning of the 20th Century. Only the task of nonstop labor was appreciated.
Working longer than 50 hours a week in unhealthy and leads to all kinds of nasty diseases
. Lack of sleep has brought humanity some of our greatest disasters
. Is it really comforting to know your surgeon hasn't slept in eighteen hours as you go under for bypass surgery? Do you feel safe knowing your airline pilot only slept four of the last 30 hours? Are you a better driver when sleep-deprived and high on coffee?
Where did we go wrong? Can we get sanity back into our lives? I believe we can.
The basic necessities of life took three hours of labor a day on average in the past. Today, with machines and other time saving technologies, we can support our needs on 10-15 hours per week. "Needs" need to be defined to understand how we can live comfortably working only 15 hours a week.
"Needs" include food, clothing, shelter, and in our modern world, transportation. Food costs very little if prepared at home. In 1970, food consumed about 12-15% of our income, depending which study you read. Today we spend 6-7% of our income on food and that includes meals out. Preparing food at home easily reduces the expense to 2-3% of the average household income.
Clothing is also inexpensive unless you need a closet choked full of trendy threads you only wear a few times if at all. Transportation costs will depend on your location. If you live in a large city, public transportation is available and the cheapest route. If you live rural, you will need a car. You do not need a $30,000 gas-guzzler. You need a reliable vehicle that gets you from point A to point B economically.
I saved shelter for last. Housing costs have risen significantly in the last 40 years; some argue even faster than inflation. However, when comparing apples to apples, housing costs are affordable. You see, in 1970, our society (I am talking the United States here) lived in homes of around 1100 square feet. Today we live in homes over 3000 square feet and fewer people live in each home. The price of an 1100 square foot home today is the same as it was in 1970 adjusted for inflation, maybe less than inflation with the housing market problems of the last several years.
Now we come full circle. How can we live a decent life without working ourselves to death? I am not asking anyone to try living on three hours of works a day. You could, but if you want other things, you will work more. The questions is: How much of your life do you want to sell in the form of employment to someone else to get more stuff? Understand there is nothing wrong with wanting and/or having stuff. I am asking you to consider balancing your wants with the selling of your life energy, as Dominguez and Robin call it, and the real pleasures of living your own life your way, with friends and family.
We work 40 years in the workforce because we want to, not because we have to. Most of the stuff we buy ends up in a landfill in less than a year. We work countless hours to satisfy these fleeting desires. If we balanced our real needs with modest desires, we could all easily retire by age 50 or earlier. We choose to work ourselves to death.
Is it really worth it?
. I have read similar articles on the subject over the years and it makes total sense to me.From the beginning of mankind (ladies included) the amount of work required to secure the necessities of life (food, clothing, and shelter) takes about three hours a day. This has held true from Stone Age to modern man
. Before the modern era, man would hunt for a few days and then cure the meats acquired. Gardening complimented gathering. The time needed to build shelter, hunt, garden, process and cook foods, and produce clothes took about twenty hours a week per adult. Some days and weeks required longer hours of labor, but over a year, the work required to survive averaged about three hours a day. The remaining time was spent with friends and family playing games, talking, sharing and other pleasurable passtimes.Then we got civilized. Then we decided that anyone that worked less than 10-12 hours a day is lazy. Now we admire those that work 14-18 hour days. All this insanity started around the beginning of the 20th Century. Only the task of nonstop labor was appreciated.
Working longer than 50 hours a week in unhealthy and leads to all kinds of nasty diseases
. Lack of sleep has brought humanity some of our greatest disasters. Is it really comforting to know your surgeon hasn't slept in eighteen hours as you go under for bypass surgery? Do you feel safe knowing your airline pilot only slept four of the last 30 hours? Are you a better driver when sleep-deprived and high on coffee?Where did we go wrong? Can we get sanity back into our lives? I believe we can.
The basic necessities of life took three hours of labor a day on average in the past. Today, with machines and other time saving technologies, we can support our needs on 10-15 hours per week. "Needs" need to be defined to understand how we can live comfortably working only 15 hours a week.
"Needs" include food, clothing, shelter, and in our modern world, transportation. Food costs very little if prepared at home. In 1970, food consumed about 12-15% of our income, depending which study you read. Today we spend 6-7% of our income on food and that includes meals out. Preparing food at home easily reduces the expense to 2-3% of the average household income.
Clothing is also inexpensive unless you need a closet choked full of trendy threads you only wear a few times if at all. Transportation costs will depend on your location. If you live in a large city, public transportation is available and the cheapest route. If you live rural, you will need a car. You do not need a $30,000 gas-guzzler. You need a reliable vehicle that gets you from point A to point B economically.
I saved shelter for last. Housing costs have risen significantly in the last 40 years; some argue even faster than inflation. However, when comparing apples to apples, housing costs are affordable. You see, in 1970, our society (I am talking the United States here) lived in homes of around 1100 square feet. Today we live in homes over 3000 square feet and fewer people live in each home. The price of an 1100 square foot home today is the same as it was in 1970 adjusted for inflation, maybe less than inflation with the housing market problems of the last several years.
Now we come full circle. How can we live a decent life without working ourselves to death? I am not asking anyone to try living on three hours of works a day. You could, but if you want other things, you will work more. The questions is: How much of your life do you want to sell in the form of employment to someone else to get more stuff? Understand there is nothing wrong with wanting and/or having stuff. I am asking you to consider balancing your wants with the selling of your life energy, as Dominguez and Robin call it, and the real pleasures of living your own life your way, with friends and family.
We work 40 years in the workforce because we want to, not because we have to. Most of the stuff we buy ends up in a landfill in less than a year. We work countless hours to satisfy these fleeting desires. If we balanced our real needs with modest desires, we could all easily retire by age 50 or earlier. We choose to work ourselves to death.
Is it really worth it?
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