Up From Wage Slavery

Financial Freedom Through Economic Thinking

Kevin

Six Reasons Why You Should Not Buy a Home in a Good School District

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Six Reasons Why You Should Not Buy a Home in a Good School District

My businesses are usually built around challenging conventional wisdom, so I tend to gain by taking the other side. It’s been very profitable and entertaining for me — Mark Cuban

Washington DC: Rapidly appreciating homes, poorly performing schools.

The conventional wisdom is that it is always a better investment to buy a home in a good school district.  Just like with much other conventional wisdom, this commonly held belief is often wrong.  Good schools may have been the number one factor in real estate appreciation at some point in the past, but I don’t believe that is true today. However, after decades of being told specific trends are true, people stop looking at the data and fail to notice the changes that have taken place.  

From an investment perspective, choosing a home because it is in the best school district often turns out to be the wrong choice.  I am not going to argue that you should never buy near good schools, or always buy in bad school districts, but in many cases, the conventional wisdom on this topic is out of date, incomplete, or just wrong.

Analyzing a Denver area home appreciation map from the past 20 years, I noticed that the greatest appreciation seemed to occur in what were considered the worst school districts, while the areas with the best schools had sub-par appreciation.  When I started analyzing data from around the country, I found this trend to be common in many other areas as well.

Let’s look at the six reasons why you should not buy a home in a good school district: [Read more…] about Six Reasons Why You Should Not Buy a Home in a Good School District

Taking Advantage of Government Incentives and Handouts

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Free Suitcase of Money
Free suitcase of cash, courtesy of your government.

Our government, which is comprised of an almost infinite number of Federal departments and agencies, and state, county, and local entities, etc. is filled with uncommonly generous people who have created policies and laws that reward people for making certain life choices.  This incredibly complex and inefficient set of incentives encourages various behaviors, rewards constituents, employs hundreds of thousands of accountants and lawyers, and can help you financially.

Now, just to be clear, these people are being generous with other people’s money.  The politicians and the agencies they run are generous in a way that helps them gain power and prestige.  But, for today’s purpose, instead of dwelling on the sad reality of how politicians and political parties maintain power through the strategic taking and giving of others’ money, we are going to focus on how to take advantage of this never-ending generosity.

The outward goals of many subsidies and other government incentives are generally to promote some sort of economic growth, modify behavior so that we live more sustainably, or to promote social and economic stability or equality.*  It is useful to know these goals, so we have an idea of where to start looking for these endless funds.

One question I have had to wrestle with is whether or not it is ethically acceptable to take advantage of government incentives, even if I disagree with the programs themselves.  I have decided that I will not accept government funds if I have to violate my own moral code, but I will happily accept government funds whether or not I believe in the economic value of the program.  For example, I would be ok with accepting a “green” tax credit for an electric vehicle even if I didn’t believe that this was a financially effective way to “save the environment.”  On the other hand, I would turn down a grant that paid me to evict low income families in order to build a new football stadium (a common practice in our football loving country). [Read more…] about Taking Advantage of Government Incentives and Handouts

Why I Think Investing in Depreciating Assets is a Great Idea

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When I tell people that I have been unusually busy lately because I bought a mobile home, the most common response is, “Don’t you know that mobile homes depreciate?”  Well, yes.  Everybody knows that.  That is exactly why I started looking that direction for financial opportunities.  What? You are thinking.  Why on earth would I decide to spend my time, energy, and money on what everyone knows are depreciating assets?

In general, when everybody says that something is a bad idea or a bad investment, I think extra hard about doing it, or investing in it.  Because if everyone collectively writes something off as a bad idea, even without researching it, there is probably an opportunity to be had there, and the competition will likely be thin.  

One of those opportunities is mobile homes. [Read more…] about Why I Think Investing in Depreciating Assets is a Great Idea

What Wells Fargo, Timeshare Companies, and I Have in Common

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Not a bad bedroom view...too bad it isn't mine.
For the cost of a motel 6, this could be your bedroom view…


For years I have wanted to attend a timeshare presentation.  You know, the kind where the most talented, aggressive, and tricky salesmen in the world convince vacationers to purchase a vacation property for one week a year forever.  I am not interested in a timeshare, but I have heard so many horror stories of people buying property they didn’t actually want to buy that I thought this is something I need to see in person.  On a recent trip with my family to Puerto Vallarta, Mexico, I decided it was the time to fulfill my dream.  (I was actually more excited about a timeshare presentation than seeing the ocean, and I love the ocean.)  Arriving at the airport, we were instantly swarmed by dozens of timeshare sharks, pretending to be there to help us get a taxi, hotel, or whatever else we may have needed 30 seconds after walking off the plane.  I didn’t feel like booking a timeshare right then, so I did what seemed to be the polite thing.  I pretended like they didn’t exist.   [Read more…] about What Wells Fargo, Timeshare Companies, and I Have in Common

What Have We Learned in the Past 4,000 Years?

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ass-cart-2016-bc
Quite the Stylish Ass Cart, Model Year 2016 BC

I recently had a dream.  First, I saw seven fat and joyful office workers, but then seven emaciated office workers came up and ate the fat ones, yet remained sickly and thin.  Then I dreamt of seven beautiful new Teslas, but there, in front of my eyes, they were replaced with seven 1980s Ford Escorts.  I am not exactly sure of the meaning of this dream, but I have some ideas.

We Americans have become accustomed to living in incredible luxury and wealth, which is great, but we need to realize part of the trade off of living in a (mostly) capitalist economy is that we tolerate some economic insecurity in exchange for greater overall growth. There are many boom years, but there are also bust years. There are years where money flows freely and times where finances are tight.  We know this.  We can look back and easily see the trend.  With this knowledge, why on earth do we live our lives like there are only good times ahead?  “Refinance the house honey, I’m goin’ shopping!  We can pay off the loan over the next 30 years with my secure union factory job.” [Read more…] about What Have We Learned in the Past 4,000 Years?

Expert Advice is Dangerous Advice

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Don't Believe“Don’t believe anything your teachers tell you!”  I used to tell my economics classes this in the beginning of each semester. Usually one or two students would respond with, “Wait, can we believe that?”  “Good question kid.  If you believe it, you can’t believe it.”  I use this paradox as a starting point for the students to see that critical thinking and questioning are integral parts of life.

But, the other point about this statement is the importance of questioning those who are seen as experts in their field.  Before believing an expert, we need to know what their incentives are when giving us advice, and whether their incentives and our incentives line up.

As a social studies teacher, my incentive may have been to convince hundreds of young adults to vote for my political party.  (Aspiring political activists, keep the teaching field in mind.) On more than one occasion I had students ask, “Why would you lie to us? you are a public school teacher!”  I appreciated their confidence in me, a government employee, but I was not too sure that made me a dependable source of information.  After all, if the government had your best interest in mind, would they try to sell you lottery tickets? [Read more…] about Expert Advice is Dangerous Advice