July 12, 2011 § 5 Comments
We bought our land in 1997. At the time, we were living in a tent on our friends’ land, saving our loot and waiting for the right property to present itself. I was working at a bike and ski shop, and Penny was working on a vegetable farm; over the previous handful of years, we’d managed to save about $15,000, in large part owing to summers spent camping or under the hove-in roofs of decrepit cabins we rented for $100/month.
It took us nearly a year to find the right place. It was a dispiriting year, spent trudging through swamps and logged-over stubble, trying to convince ourselves that we could make something of it. The land we eventually bought (and currently make our home and farm on) was found almost by chance, as a small for-sale-by-owner listing in a local paper. It was 40 acres, with about 10 in pasture. It was set far back off the main road. It was $30,000. It was perfect.
The bank matched our $15,000, although the interest rate was rapacious. Twelve percent, if I remember correctly. Our good friend Jerry, a fast-talking New Yorker who’d fled the city for rural Vermont with the proceeds from the taxi medallions he’d inherited and sold, lent us another ten grand with which to build a shelter. The interest rate was only slightly less insulting: ten percent. Jerry was a friend, but he wasn’t a fool.
We built what I euphemistically term a “hippie shack.” Sixteen by 32-feet, concrete piers for a foundation, a loft we accessed via an aluminum ladder and, for the first year-and-a-half or so, no running water. Another friend had gifted us three weeks of labor as a wedding present. It was enough to get the shell up and keep the rain off our heads.
By 2000, we’d paid back Jerry’s loan and convinced a different bank to loan us $50,000. This was no small feat, as our home was situated at the end of a 1300-foot driveway, and was not – nor would ever be – connected to the electrical grid. Banks aren’t really down with alt energy, but at this bank there was a family connection from way back, and he called in a favor or two and badabing, badaboom, we had our money. Or credit. Or whatever you want to call it. I remember being slightly stunned by it all; never in my life had I ever imagined I’d possess such a sum, although of course I didn’t really possess anything. It was merely numbers assigned to my name.
So we jacked up the hippie shack, poured a basement under it, along with a basement for an addition that by itself was larger than the shack. With our 50 grand, we bought materials. I took the summer off from the bike shop, and Penny starting taking three-day weekends. Our friend Bob, an experienced builder, came every weekend. By the end of summer, our shack had become a house. If you stood back far enough and squinted, you could sort of imagine what it would look like with siding and paint.
That winter, Fin was born. Appropriately enough, Penny went into labor at the lumberyard. When the midwife came (both boys were born at home), she looked around and said “you’ve got a long way to go.” I never had liked her much; I liked her even less after that. Fin’s arrival slowed our progress for a few weeks, but frankly, not as much as I’d expected. By the next summer, our house was finished enough that the bank converted our construction loan to a regular mortgage, which dropped our interest rate from 9% to 6%.
For the next six or seven years, we did everything in our power to pay off our mortgage. I have some theories regarding the genesis of this overwhelming, almost compulsive desire to absolve ourselves of debt, but they’re too complex and lengthy to get into here. Suffice to say that we eschewed many of the assumed comforts of 21st century America so that we might make double and occasionally triple payments. As such, our mortgage was paid off before either of us hit 40.
I hope this doesn’t sound self-congratulatory. I don’t mean for it to. But as I embark on my quest to better understand money and debt and austerity, I can’t help but reflect on my own history with these things. For as long as I remember, I’ve felt compelled to avoid debt, although obviously I haven’t avoided it entirely, and I’m extraordinarily grateful that we bought and built when we did, pre-real estate bubble. Even now, prices are at least double what we paid. There’s simply no way we could do now what we did then without a much greater debt burden.
For the most part, I think, I’ve avoided debt because I’m lazy. That is, one can draw a fairly straight line between having debt, to servicing debt, to working in order to earn the money to service the debt. It’s always seemed to me that the best place to shift that trajectory is at the outset: No debt = no need to service debt = not having to work to service the debt. It’s pretty simple, really, although I have to admit there were times – particularly when shivering through cold-water sponge baths in those pre-running water days – when it felt anything but.
Anyhow. Long enough. That’s part of my debt story. If you’re inclined, please share yours.