One of my very favorite aspects of our minimalist journey is what I call “leveraging the leasing lifestyle.” Our experience leasing places to live has turned out even better than we anticipated, as five of the six places we’ve lived the past six years not only have been furnished but also have included utilities.
And though we hadn’t planned on leasing our vehicles, that part of our journey has been such a good experience that we don’t intend to purchase another one. Driving a warrantied vehicle equals considerable peace of mind for us. And the free car washes don’t hurt.
Along these lines, I recently read a thought provoking article by the contrarian James Altucher on his website here. It’s entitled “It Is Financial Suicide to Own a House” and it reinforced my own convictions about selling our house so we could move at will instead of the whims of a capricious marketplace.
I personally think the title is a little over the top, as we enjoyed owning our dream home for a dozen years and it appreciated about 3% per year, which more than outpaced inflation. And since we refinanced it, we had considerable equity when we finally sold it, which in turn has enabled us to do what we are doing.
But it is important to note those were factors that made it work for us. As Altucher points out, the average homeowner owns their house for less than 5 years and the average house has appreciated a measly 0.2% per year for the past century, both of which make buying a bad bet.
So, what do I see as the chief benefits of leasing versus buying? I am glad you asked! As I mentioned earlier, the mobility we gained from selling our house was a big deal to us. We never had kids or pets to root us, the costs of maintaining an aging home were escalating, and with the tidiest house in a declining neighborhood, it was time to move.
Leasing also gives us the flexibility to adapt to our changing circumstances with relative ease. For example, while I work remotely, Linda typically works in a more corporate setting, which we all know is susceptible to fluctuation. With our fluid living situation and low maintenance lifestyle she can afford to temp or work part time if necessary.
And the liquidity of our assets affords us the ability to shift our finances around as necessary rather than tying them up in illiquid investments. When the markets tank again, which they invariably will, we are able to pull up stakes and move if we like. And we utilize online banking, even paying bills electronically and depositing funds via an app.
Finally, I cannot stress the liberty we enjoy by not owning. One of the maxims my late father left me with was “try to use other people’s money.” In our situation, it could be said that our dealership and landlady help fund our lifestyle. If something needs fixing, we simply notify them to take care of it. So, whatever your situation, think about leasing!