Homeownership: The American Dream or a Lifetime Lease
Hitting submit on your final mortgage payment feels orgasmic. You are finally free and own your home free and clear after 20-30 years of back breaking payments. But do you really ever own your home?
8 years ago, we moved into our newly constructed home with a very manageable mortgage payment, and cheap(er) utilities. Our property and school taxes combined were approximately $3,500 per year in 2018 and our electric bill was $135 per month. Fast forward 8 years and after diligent spending habits, and working hard, the mortgage was paid off. Our particular property has 2 rental units on it which helped tremendously in crushing the mortgage. While having no mortgage is exciting and liberating, taxes and utilities follow you to the grave.
Spiraling out of control: Taxes
Our taxes in 2018 were $3,500 annually
Our taxes in 2025 are $6,400 annually (83% increase)
Our projected taxes in 2045 at the current rate of increase will be $56,200
That figure is nauseating. My wife and I will be 63 and 67 years old in 2045, leaving us with a $4,683/month payment!
Spiraling out of control: Electricity
Our electric bill in 2018 was $135/month
Our electric bill in 2025 is $420/month (211% increase)
Our projected electric bill in 2045 at the current rate of increase will be $79,800 or $6,650 per month!
Will our taxes and electric bill continue to increase 12% and 30% annually? Most likely not BUT even half that is crippling. Maybe in 20 years robots will make up 99% of the workforce and Universal Basic Income will provide $150k annually to families? Maybe nuclear power, solar, online schooling and robotic highway machines will REDUCE taxes and electric costs? Maybe the grid will be shut down for 3 years from an EMP attack, killing 80% of people, leaving us with no choice but to resort to living how we did 100 years ago. Maybe renting will become the only option for 99% of people. If you asked me 5 years ago if renting was smart, I would have said no. Today, I am not so sure. With rising taxes, repair costs, utilities, lawn care, plowing, landscaping and insurance, renting is starting to look more appealing. No one really knows what the future will look like. You can only control what you can control, which is more than most people think. Take control of your health, spending habits, relationships and investing. Putting full effort into these areas will most certainly lead to a better life no matter where the future takes us.