Tuesday, September 08, 2009

What's the Difference Between a Home and a Homestead? Part 1

In my first post, right at the very top, I briefly gave my description of what I think the difference between a home and a homestead is.  This concept is very central to me in my ideas for the future, and I have chosen to elaborate on this in my next two posts.  As I mentioned in that first post, the backbone of my thoughts on the difference between a home and a homestead is the idea that a house consumes, and a homestead produces.  What do I mean by this?  Let's start by describing the way a house consumes.  I will describe this in today's post, and will go more in-depth on what I think a homestead is in my next post.

Let's briefly run through the life-cycle of buying a house.  This life-cycle will be the "traditional" way of buying/owning a house, not the house-flipping-selling-every-three-years cycle that prevailed in the last couple decades (and which probably won't work anymore now that the housing bubble has burst).  First, you start saving up in your 20's, to have enough money for a down payment.  Once you find something you can (hopefully, if you were smart) afford, you put about 20% down and take out a 20-30 year mortgage on the rest of the cost of the house.  This debt will own you until you finally have the house paid off.  It will consume your time and your freedom by forcing you to work your life away, even if you hate the job you have, or risk losing the biggest investment you'll likely ever make.  I'm not knocking having a job, I think working hard is an important part of being a happy human being.  But is working hard at a job you hate, that you can't quit for fear of losing your house, the path to being a happy human being?  I don't think so.  Wouldn't it be nice to be able to take a month off with the kids during their summer vacation?  Or two months off to find a new career, because the one you're in isn't satisfying you anymore?  In this manner, having a traditional home consumes your freedom.

Next, a traditional home comes with costly accessories.  You must pay for utility bills, insurance, repairs, improvements, homeowners association dues (if you're unlucky enough to be stuck with CC&R's), and any other number of items that will cost you even more time and energy to pay for.  What's more, all of these items are themselves consumption or consumers.  The electricity, water, gas, and whatever other utility you pay for probably comes from non-renewable sources.  The insurance, repairs, and homeowners dues are all consumers of your time by making you work to pay for them.  The house, in many ways, is consuming everything that comes near it.

In my next post, I will discuss my definition of a homestead, and how it is different from a normal house.  I will also talk about some ways that even a normal house, and not one designed from the ground up to be a homestead, can move in the direction of being more of a producer than a consumer.  Thanks for reading!

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