Which is wiser?

[Tsadiyq]

My husband and I have been discussing about moving and buying land & build our own home in the past several weeks...

I am wondering which may be the best option...

We move as soon as our debts are paid off in full and have a downpayment for the land so we may begin farming and living self-sufficiently with more things to do instead of being stuck in a small apartment with no yard and no laundry and nothing to do but spend....We have four children also so I would like them to be young still and experience farming and caring for animals - plenty of outdoor activities and fresh air.

OR

We move after paying off debts and saving enough to buy land & cover majority of expenses in building our home in case the recession or depresson comes along and we lose our land due to mortgages...but this way is much longer waiting period and more time stuck in the apartment...

I would choose the first option if I knew we will have time to pay it off at the new place (five years max. is all we need to pay off the land and cover the expenses of building our own home using our own trees off the land we bought)

So any insights?

I look forward to hearing from all of you!

Yvonne

[Cabin Fever]

Move now, live in a cheap used mobile home, pay off debts while you live on your new homestead, build your permanent home stick-by-stick as the funds become available.

[Morning Owl]

I second Cabin Fever.

[quiet mountain farmer]

I agree with Cabin Fever. Here in north Idaho, I have personally known three people who bought a two to three bedroom mobile home for between $3,500. and $5,000. All three were perfectly livable, very nice homes. The $4,500. one was a double-wide. The $5,000. one needed two repairs in the floor, and was filthy, but it's amazing what some elbow grease can do. (Carpets helped too.) A lovely home now. I know because that's the one we bought for our daughter and her husband. The last two both happened this winter.

Right now, the housing slump makes it even more possible to get a cheap one, probably in many places.

So you don't have to have tons of money to get a home. Just concentrate on the land, and where you want to be, and what is possible for you. Count in costs of moving the mobile home, making sure you have water, electricity and some kind of foundation to set the home on. If a cold climate, make sure you skirt it. These initial costs are well worth getting your very own land and new life.

I wouldn't wait. Children don't wait. Think of how much harder it would be to teach them a new way of living, five years from now, when they're half grown. The younger they are, the more magic life has for them. Perhaps that goes for adults too ... !

[Pink_Carnation]

How much difference between rent and mortgage payments? If they are close the choice is easy...now.

[Jim S.]

I'd take Plan B. You don't mention your sources of INCOME, and that is why I'd take Plan B. Are you keeping your present city jobs? Or does "farming and living self-sufficiently" mean you will be relying on the farm to bring in all the income? Or will you be relocating to a small town and taking small town jobs?

If you keep the city jobs, you'll make the most. The small-town jobs will leave much to be desired versus your city jobs. Farming and "self-sufficiency" for your income is the highest possible risk endeavor. I say this in every reply I make to "I'm gonna homestead" threads, and I will repeat it here: Farming is a low return on investment business. If you are not prepared for that, meaning if you are not willing or able to work your fingers to the bone for very little pay in return, DON'T DO IT! Buy a country place as a rural lifestylist and leave the farming and self-sufficiency parts behind, while keeping your city jobs. You'll be better off, and may actually survive as a couple. (That's kind of a joke, but I know of several divorces coming out of moving a marriage to the farm from the city.)

My advice is not to dream your way into bankruptcy. I have seen many, many folks come to my county too early and with insufficient capital, only to watch it all collapse after an average of about 3 years. We seem to be living in a time when no one wants to wait or save for anything, but as my full-time farmer father-in-law used to say, "Interest is a dead horse, and you can't ride a dead horse." Savings are better than debt when undertaking a lifestyle change of this magnitude.

Do you know the answer to these:

1.) What will you produce?
2.) Is there a PROVEN demand for those things?
3.) How will you market them?
4.) How many hours will it take to produce these things?
5.) What are the customary input costs?
6.) Can you mitigate those?
7.) Who will perform the labor? (VERY IMPORTANT to know this precisely.)
8.) What are your equipment and facilities costs?
9.) How MUCH can you get for your product (in proven prices)?
9.) What is your 5-year plan for the farm?
10.) How will you survive if things don't go as planned?
11.) What is your plan if there is a natural disaster (flood, drought, tornado, crop failure, etc.)
12.) What is your plan if there is a personal or family disaster (sudden grave illness, injury, breakup or other calamity)?


I also question by your talking of "a small apartment with no yard and no laundry and nothing to do but spend" whether you are mentally prepared for the lifestyle to which you aspire. The matter of spending is not linked at all to having nothing to do, and yet you make a relationship there that is dangerous to your farmstead's future. Spending can be related to two things, need and want. You are spending in boredom because you want to. Should you decide to go now and start "farming and living self-sufficiently," this difference will become apparent to you real soon. Because rural life has a lot of times when there is no ready entertainment, and the chores are done. If that signals "time to spend" to you, you'll be back in an apartment shortly.

If you want something to do now that doesn't involve spending, take the kids to the city park. Go to the city library and check out books (maybe about farm finances and accounting?) and read them at home. Start a video exhange with other apartment neighbors and share DVDs, or get them at the library (many have them now).

You'll have to rethink your fiscal priorities to switch to the life you dream of, and there's no better place to do it than while you are at the apartment, while the future of the farm and your family does not hang in that balance. Because it is one thing to dream while having risked nothing and quite another to actually be doing and risking. Make sure you are ready to make the transition.

Whatever you decide -- Good luck!

[Tsadiyq]

LOL Jim! I wonder what kind of picture I must have protrayed in your head?? But I appreciate your insight and I will ponder on them as I agree with you.

Thank you everyone who replied!! :0)

I have been thinking & planning (it is all on my computer) this for almost a year now.
When we move we still will be holding city jobs - have to find it first in the new location! - while we live on the farm. Yes, we have considered the implication of communting but it will only be for several years until we paid off the small mortgage we plan to get. So no worries - we don't plan to live off our farm immediately or even for some time - only we want to live at the farm while we work til we own it rather than waiting here at the apartment til we can buy out the place in cash which means we would haved missed out several years.

What's holding me back is that I have been reading and hearing stories about the possibility of a recession or a great depression. I do not want to move there and owing money on mortgage and because of it lose our land. That is the question I was asking you guys - whether it was wise to save up first so we can buy out in cash the land and have $$ to build and have little expenses once debts is paid. This way we are better off than moving there with debts and mortgage and if/once great depression comes - we lose it all because we owe $$.

But I don't want to look back and realize that I did have time to move there, pay off debts & mortgage and see those years wasted here in the city in the apartment when we could have spend our time on the farm while working to pay off debts & mortgage.

So I guess parts of it is fear and I will overcome it but parts of it I want to be cautious so we don't get in over our heads if that were to happen.

Jim, I want to clarify that when I say nothing to do but spend *as in entertainment* - I was meaning we realize that we are better off without the entertainment that this city is full of. Our farm we can enjoy being on without needing to spend in order to enjoy the outdoors. I do realize we can do that here too when we go to the parks, hiking on the beautiful mountains here (I shall miss that) go to the beach, bike riding playing sports. But I much prefer enjoying most of this from the comforts of my home on our farm.

I am looking for more simpler life for us - not necessary easier or whatnot - I do understand that it is hard work. I actually look forward to that. I like keeping busy and that is not easy to do here in the city, especially when having to leave the home.

(I do not want to raise my children having them associate fun and outdoor activities as being away from home as that happened to me as a child so I never wanted to be home and let's not get into this please, hehe :0))

I hope that we will move, at the latest, by the end of April of 2009. The earliest would be in November of this year. So it is somewhere around there. I say the sooner the better, particularly, if the economy will be fine enough for several years.

Thank you all!!

All this talk is making me wish we could go tonight! Hehe - but I have my college courses to take starting in Feb. and debts to pay! And I would like to have this all well planned out to minimize wasted time & money.

[Alice In TX/MO]

Pay off current debt. Save down payment and safety net account. Move. Live simply and build as you can afford it.

[rambler]

A problem with trying to save first, if we have inflation you lose, those who spend wildly win. You scrimp & save & inflation eats away your savings, while those who overspent either get bailed out using your money (like the current morgage mess) or they get to pay off their debts with inflated money - their real property increases in value as money (you savings) decrease in value under inflation.

With a recession, you are ok _as long as_ you can keep your job(s).

Inflation hurts everyone, esp those who try to save money.

Recession causes a lot of unemployment & really hurts those people, but not so much to the rest of the people who are self employed or keep their good jobs.

Now, spending & saving has a lot of other tests as to how sound a plan it is, me I only like debt for real estate - some here don't like any debt at all save it all first. Have to do what makes you comfortable.

If your jobs are somewhat more recession-proof - like a nurse, or special ed teacher, or working in the govt unemployment office, then you will do ok through harder times. If your jobs put you on the bottom end of a manufaturing plant that is just getting by & they make products people can do without....... Then be real careful. That job is gone fast in a recession.

My opinion, & I don't know much about it so don't plan your life on my poor opnion.

--->Paul

[Freeholder]

I think it depends on what you and your husband do for work. If your jobs are pretty secure even in a bad economy, then I would go ahead and find the property and get moved in. It's looking like we are more likely to see a lot of inflation rather than deflation, which means that AS LONG AS YOU ARE ABLE TO KEEP WORKING, your mortgage would be getting easier and easier to pay off, rather than harder. You'd be paying off today's debt with inflated dollars. Now, please don't anyone go out and get into all kinds of debt in order to take advantage of future inflation! You are still best off being out of debt completely. But if you are pretty sure you will still have in income, and can find someplace that you can afford -- buy WAY under your budget -- then I think you'd be best off on your land where you can grow some of your own food.

Kathleen

[EDDIE BUCK]

I agree also with first option. As long as it works without being in a bind money wise. If thats your dream go for it. The quicker the better. Lot of folks never live long enough to enjoy their dreams. I'm enjoying mine and if the GOOD LORD leaves me here a while longer I"ll thank Him because thats a while longer I"LL have to keep on enjoying my dreams till He does call.
Eddie

[Quint]

Cabin Fever be a wise man. That would be my plan as well.

[piglady]

I am a big beleiver in following your dreams but one thing I have found is nothing ever goes as planned. I agree you should keep your job if you can but if you need to find a new job to move to your land, then that opens a whole new bag of surprises. You will then be the new guy in the office when times go bad so you would be the first to go. If You can find land close enough to keep your current jobs, I'd do that. I also like the idea of getting a used mobile home. We did that. It looked horrible and was cheap but we did all the fix up work ourselves and turned out not too bad. Lived in it for years before we got the house. If the only debt you have is your land and you are able to keep your jobs, then I don't know why you couldn't afford the land payment and live in the mobile home. It would be best to try out this new life anyway. I drive an hour one way everyday of the week but not everyone would want to do that. Sometimes it gets old. Good luck and keep us posted.

[indypartridge]

For years we had talked about moving to a log cabin "someday". After DW's 2nd time thru breast cancer, we decided on no more "somedays". We moved to a log cabin in the woods and haven't regretted it. I have a long commute to the city, but didn't have to change jobs. My job is about as stable as one can ask for in these times.

We have debts, the budget is tight, the commute is a bear, but we wouldn't change a thing. Moving from the city to the country has made a HUGE difference in my kids. I am very glad we didn't wait until they were grown and gone to make the move.

It's a difficult decision. If you wait until you're "ready", you may never get there. If you jump too early, it may not work out. Good Luck.

[Big Dave]

Life is what happens while you are making plans.
Do it now. Look back in hindsight at any regrets. I doubt there will be any.

[Jim S.]

Thanks for your reply, Yvonne. The hitch I see there is, "When we move we still will be holding city jobs - have to find it first in the new location!" Be careful of that gap.

It is pretty clear to me at age 50 that I definitely prefer, based on my track record so far, to save and buy rather than to use credit to buy anything. It is a good feeling to know you own your stuff, and not to have the burden of payments hanging over you and also reducing your future income. I completely understand how this attitude, taught to me by parents who lived during the Depression, is absent in younger folks. They will have their time to learn these lessons. Myself, I am pretty safe from the banker taking my stuff. It's because I saved for it first. Now that I am so secure, I love going to forced auctions to buy for pennies on the dollar the stuff of others who lived the "do it now, no matter what, it'll be OK" mantra.

Particularly with what is about to hit us over the next 3 years, I would be very cautious about how much risk I would want to assume.

[Cabin Fever]

Jim S, while I agree with you for the most part, I always suggest to people that borrowing $$$ for land is almost always a safe investment. Generally speaking, land will appreciate and even if for some reason you find out later that you can't afford it (loss of job or whatever) you can sell it and probably still come out ahead.

In Yvonne's case what would be the worst that could happen? If they lost a job and consequently lost their land, they'd probably have to move back to the City and live in an apartment. In other words, they'd be back to square one....nothing gained and nothing lost.

[Jim S.]

Originally Posted by Cabin Fever

Jim S, while I agree with you for the most part, I always suggest to people that borrowing $$$ for land is almost always a safe investment. Generally speaking, land will appreciate and even if for some reason you find out later that you can't afford it (loss of job or whatever) you can sell it and probably still come out ahead.

In Yvonne's case what would be the worst that could happen? If they lost a job and consequently lost their land, they'd probably have to move back to the City and live in an apartment. In other words, they'd be back to square one....nothing gained and nothing lost.

Well, since you asked...the worst things that could happen...

They fail to find jobs (or more likely, they find jobs at wages far below their old ones) and lose their land, plus anything they have invested in a farming infrastructure like tractors, troughs, equipment, feed, hay, storage, livestock, seed and plants. Everything is sold to bidders for the lowest possible buck at forced sale by the foreclosing firms, since the value of their land had dropped and so they were unable to sell it themselves and get what they paid for it. (I saw this happen A LOT in Illinois 1981-83.) Their credit is ruined and it is taking a severe strain on their marriage, but so far they are managing to hold it together even though there are lots of arguments about who's idea it was to jump from a generally comfy city life (now idealized cuz it is in the past) and the farm (a not too pleasant current experience). There are other fights about how to spend their dwindling resources, or whether to spend them at all. These battles then in due course take in other accumulated gripes and differences that had been subdued in better times.

So they have a really hard time getting an apartment back in the city with ruined credit, but they finally find one. Then they can't go back to their old jobs, which are taken or gone, and they can't seem to find new ones cuz of the economy. Finally, they land some low-buck jobs to scrape by. One of the kids gets sick and has to be hospitalized for a couple days. They have no insurance, and so those bills are added to their burden.

Finally, it is all too much for the marriage, which ends after 2 years of woe.

If you think this is some fictionalization, I'll tell you it is not! I know at least 10 couples who went through this 1981-83 in Illinois. I have friends who literally threw the house key on the porch and drove away.

I know at least four families who have gone through it recently, in the last 5 years, after moving to my county to go "back to the land." There are others; these are the four I know but I go to the forced auctions of many of them. It is an angry and a sad experience to go through, and I have seen couples who were the best of friends and lovers just come unglued in the face of financial collapse. Talk about your high pressure.

My folks' teachings plus all that I have seen have always guided me to be cautious. For me personally, I say no thanks to high risk. In nearly all instances, I'll wait til I have the money first, and especially in high-risk endeavors. There is one rule about savers that I will admit is true. We never fly as high during the good times as those who borrow and spend. But we never crash as hard, or worry under pressure as much in the low times, either.

To me, I find it hard to square the "buy it now on credit" mentality with the so-called homesteading and self-sufficiency one. The family that eats all its green beans in summer has canned none to save for winter. Ah, don't worry about it! It's what you want! You don't want to regret later NOT eating those beans now while it is warm and sunny out, so go ahead! That attitude just flies in the face of steady as you go self-sufficiency, doesn't it? To me, striving to be self-sufficient starts with owing as little money as is possible, preferably none at all. Because how can you be self-sufficient when somebody else actually owns your stuff? And like I say, there are risk factors on top of risk factors in the scenario originally described, even if you don't calculate in the fragile national economy. That to me means time to go slower and be cautious.

OK, so what to do now if not jump into the farm? How about joining a community garden? How about volunteering to help on a nearby truck farm, in exchange for learning about farming? How about the book reading I mentioned? How about enrolling in Extension classes on farming crops and livestock, to learn about the business end of it? Even with city jobs, the ideal place is for the farm not to eat up too much money due to losses, but rather at least break even. That requires some on the job learning if you have never done it.

Anyhow, just my admittedly fiscally conservative opinion. ALWAYS plan for the downside.

[Cabin Fever]

All I suggested was they buy the land "on credit" (read mortgage) and buy the other things with cash as it becomes available. It appears that you believe that they should stay cooped up in an apartment untill they have enought money for "land, plus anything they have invested in a farming infrastructure like tractors, troughs, equipment, feed, hay, storage, livestock, seed and plants." Heck, they'll be 80yo before they have that kind of cash on hand (and how many years of throwing rent money down the toliet). The OP said they will continue their city jobs.

I thought I was conservative. I say follow your dreams and be fiscally cautious.

[Silvercreek Farmer]

There is no time like the present...