Thursday, August 26, 2021

Tell me again how this is a waste of money?

A few days ago, I stumbled across an article on the Wall Street Journal called "The Biggest Ways People Waste Money." I'm always interested in issues of frugality, so I read the piece with attention.

As is typical for these kinds of articles, the piece addressed financial leaks from small (daily coffees) to large (mortgage payments). The author interviewed several financial experts to seek their advice, including someone named Robert Shiller, a Nobel Prize-winning economist and Yale University professor.

It was Dr. Shiller's advice that caught my eye. Here's what this expert had to say: "Big houses are a waste. People are still in a mode of thinking about houses that is kind of 19th century. As we modernize, we don’t need all this space. For example, we don’t need elaborate kitchens, because we have all kinds of delivery services for food. And maybe you don’t need a workshop in your basement, either. You used to have a filing cabinet for your tax information, but now it’s all electronic, so you don’t need that, either. And bookshelves, for people who read a lot. We have electronic books now, so we don’t need bookshelves anymore."

Wha-a-a-a-a-t?

Okay, I get his point if he's talking about the wasted space and massive mortgage of a typical McMansion. But is he implying a kitchen, a workshop, a filing cabinet, and bookshelves are economically wasteful? I don't mean to sound insulting, but this logic is so astoundingly urban.

"We have all kinds of delivery services for food." Really? Constantly eating takeout food is economical? What about those of us who live far away from restaurants? What happens if food delivery is unavailable due to weather or pandemic lockdowns?

"Don't need a workshop in your basement." So, presumably, says a man who is likely unfamiliar with tools and how they can save untold thousands of dollars in standard repairs or modifications.

"You used to have a filing cabinet for your tax information." A file cabinet is a waste of money? I've done our business and household taxes by hand since 1993. I need somewhere to store the paperwork since I sure as heck ain't putting our sensitive financial information in the "cloud."

"We have electronic books now, so we don't need bookshelves anymore." Um, no. Just......no.

It makes me wonder what Dr. Shiller's home looks like. Does he live in sterile, minimalist space with no home comforts? Does he live in a tiny home (in which I understand space concerns)? Frankly it sounds like he's doing his best to strip away anything that makes a house a home. Home-cooked meals, a workshop for everything from a woodcraft business to DIY repairs, a file cabinet to keep critical paperwork in order (forget the "cloud"!), and the comfort and beauty of bookshelves – how are these things a waste of money?

Of course, I could be completely misinterpreting Dr. Shiller's point, but it seems his ideas of economy are at odds with our ideas of what brings us economic freedom.

Yes, economic freedom. There comes a point where purchasing the goods or services of outside providers is more costly than the slightly larger home space necessary to provides those goods and services for one's self.

I'm not the world's greatest cook, but a kitchen of sufficient size to get a job done is critical. I think of the endless cooking and canning projects I've done in our kitchen over the years, and wonder how Dr. Shiller can think food delivery is somehow a better financial choice.

As for a workshop, this is essential for those with a self-sufficient mindset. Not only has Don supported our family through the woodcraft business for three decades, but the number of things he's built, fixed, repaired, improved, or MacGyver'd over the years is astounding. It has also saved us a stinkin' fortune. When we were getting ready to sell our old home, he did all the improvements himself – because he had the right tools. It would have cost tens of thousands of dollars to sublet out those skills. Believe me, a workshop is not a waste of space or money.

Filing cabinets? I've done our taxes by hand since we started our woodcraft business in 1993. Over the years I've gotten compliments from various professional tax preparers on how I can always find whatever I need at a moment's notice to document whatever deduction we've taken or justify any financial decision we've made. I keep every possible receipt for every expenditure we make. Sorry, I'm not about to change my ways over the space needed for a file cabinet.

And anyone who claims bookshelves have no place in a home is just plain nuts.

Look, we just moved from a 3600 square foot to a 1400 square foot home. There certainly comes a time in life when downsizing makes sense. But it would be fiscally absurd to give up the space and the things that allow us to live a frugal, non-wasteful lifestyle simply because some economist apparently can't grasp how having room to do things is cheaper than hiring someone else to do those things.

But maybe I shouldn't be too harsh on Dr. Shiller. He predicates his advice by reminding us, "People are still in a mode of thinking about houses that is kind of 19th century." Maybe that's the difference between urban and rural. Most people in rural America are very 19th century by preference.

The only reason I can fathom for why Dr. Shiller gave this kind of economic advice is because he's never had the opportunity to step outside his ivory tower bubble and see how Middle America lives. It would be an interesting academic exercise to invite this Nobel Prize-winning economist to visit us and tell us why our kitchen, our workshop, our file cabinets, and our home library are a waste of money.

But it'll never happen.

31 comments:

  1. Um....I wouldn't dis Robert Shiller on anything. He's a giant in the world of economics, particularly when it comes to housing.

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    1. Just because he is an expert on the housing market at the macro level does not make him an expert on the micro level. No way in heck would I ever buy a house with a small kitchen, and the only reason we don't have a workshop in the house anymore is because we built a 1500 square foot pole barn for that (which is the same size as the house, fwiw). This is a homestead. He is obviously not an expert on the needs of a homestead. YMMV, but an appeal to authority is not a reason to accept an argument without question.
      XaLynn

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  2. He is probably just trying to be helpful and nudge us all to the Great Reset, "where you will own nothing and be happy about it"! (And yes this is sarcasm)

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  3. Besides being a big name professor at Yale that has won a Nobel prize, according to New Haven, CT voting records, he lives in a 3,900 sqft house worth just under a million dollars (https://www.zillow.com/homedetails/201-Everit-St-New-Haven-CT-06511/57964201_zpid/).

    Sounds like he doesn't believe in his own advice.

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  4. Here's Robert Shiller.

    And, what's that behind him?

    https://live.worldbank.org/experts/robert-j-shiller

    And, what's on the table beside him?

    https://www.wsj.com/articles/robert-shillers-nobel-knowledge-wsj-money-spring-2014-1395845900?tesla=y

    ;-) Keith

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    1. If he had a bookshelf and a file cabinet he wouldn't have such a messy desk! :)

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  5. This is akin to those "tiny home" shows on TV. These people want us to get used to paying tons of money for almost nothing. Call it shrinkflation on steroids. I'm not buying it! Anyone who thinks not having a decent kitchen or workshop is a "savings" is among the disconnected set...

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  6. His advice cracks me up! We are a family that prioritized a big kitchen when we moved 8 years ago. The volume of canning, dehydrating, and cooking I do could happen in a tiny kitchen, but it would be crazy, crazy hard. And no, with our food challenges/allergies there is no way we could rely on takeout, even if it was available out here, which it isn't. Bookshelves...yeah, that is what we've spent the majority of the money we've put into improving the house. My husband isn't super handy (but he's getting better) and he has a desire to support our friends who are, as well as a desire to have well made, beautiful shelves. As such, we've had quite a few gorgeous built ins and free standing bookshelves made for our 7,500 books. We have multiple filing cabinets (self employed, did our own taxes for years)and we've built up a pretty sizeable collection of tools as we continue to learn to handle more things ourselves. We aren't nearly as able to handle things ourselves as you are, but we would NEVER follow his advice!

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  7. If he doesn’t know how to cook or make household repairs, these would be a waste of his money. We, on the other hand, have great use for them. I can’t imagine being without a large kitchen, our shop, and the many books we have housed in our bookcases.

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  8. https://news.yale.edu/2019/11/04/robert-shiller-power-narratives
    Read this article where he talks about the importance of Narratives. Obviously, he has never read information like yours. I think you should contact him.

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  9. It's absolutely about priming people's thinking for The Great Reset they are desperately trying to push on us.

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  10. Post Alley CrackpotAugust 27, 2021 at 12:39 AM

    "... including someone named Robert Shiller, a Nobel Prize-winning economist and Yale University professor ..."

    The greatest gift that the COVID-19 Scamdemic gave us ... was a deep-seated mistrust of every authoritarian impulse in those who believe themselves to represent unquestionable expertise.

    I remember his pompous quote about markets.

    "Money management has been a profession involving a lot of fakery -- people saying they can beat the market, and they really can't."

    He failed to realise that some people have no desire whatsoever to be part of a "market", preferring instead to exit markets in favour of communities and shared goals.

    The media only brings this economist clown act out when they want to have an official expression against the "paranoid style in American politics" with economics-flavoured sound bites.

    Right now that "paranoid style" looks a lot like people cashing out of their "stonks" and hard-to-move commodities so that they can accumulate things in larger storage spaces that they can control.

    So it's natural that these people couldn't understand it, and it's obvious that contacting them would produce no useful results.

    They bring out Schiller when it's deemed necessary to undermine your personal rationality with someone they believe is so far beyond question that you wouldn't question him.

    Fools.

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  11. I love, love, Love, your use of the word "urban"! ALL of my family members are "urban". Their points of view are almost all nonsensical. With all the catastrophies in recent years, a couple of them have actually started storing a case or two of water. One of my sisters literally doesn't cook unless she's at some boyfriend's house but she usually finds ones that cook. She once said she didn't need a kitchen, that it was wasted space except for the fridge... for cold drinks of course. I could in all seriousness live on what she spends eating out and having food delivered from eateries.
    She will not read books but is addicted to Netflix.
    The list goes on. She thinks my rural life is " not living in the real world ".
    It's funny that since co-vid arrived especially, realtors are snowballing my mailbox with offers to buy, plus letters almost daily from all over the country again from realtors. All of us rural folks are probably getting them.
    Again, funny, but a new family next door actually used the word "homestead" then quickly backtracked to keep their prepper status secret, of course. We have a dozen or so new families around here doing the same. All in secret of course. Utterly hilarious.
    Old timers around here are helping out some of these clueless urbanites to some extent. They need their brains roto-rootered, and hard work is going to do it. One couple who moved here when 44 was in office and did make a lot of adjustments, is throwing in the towel for a retirement community in a more urban area. Tired of all the work. They aren't old yet. Just middle aged. And the folks next door on weekends when the power is not off from the multitude of storms, shoots 10 times more than the whole rest of the community combined. They may be a doomsday group. They're doing all kinds of exercises with guns in the woods too. Some local men paid them a visit to explain about property lines, and the fact that people live in homes all around them that their bullets can travel to. Again, urban people. Clueless to rural life and making up rules for themselves without any consideration for community. These folks I'm asking the Lord to remove because they're self centered and dangerous because of it.
    What a world we live in today.
    The people lauded for being brainiacs have no common sense applicable to self sufficiency. Yet there is a stampede of folks wanting to suddenly become self sufficient who I wish the best of luck.
    I wish us all the best of luck with many prayers attached.

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  12. I agreed with EVERYthing you said. You covered all my reasons to think that idea was loony. Step out of his ivory tower is o see what the rest of us think and choose to do happily I might add is so true. I couldn't help but think of The Great Reset with the article.

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  13. The thing that oozes from the article is dependence: you will be dependent on everyone for everything else.

    It also presumes a stable world where emergencies never happen, food and fuel is always available, and no-one want to do anything but work and live electronically.

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    1. Well stated Toirdhealbheach. What can possibly go wront?
      Montana Guy

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    2. Absolutely, the endless commercials and ads for delivery services make me insane. We’re creating a generation or two that won’t know how to do anything for themselves but pick up their phones and order stuff. And, while I will access the electronic books and audiobooks my library offers, my physical books, whether for information or pleasure, are my treasures and bookshelves aren’t going anywhere. As my late mother used to say, “what happens when the electricity goes off?”

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    3. This is exactly what I thought. No need for me to make the same comment.

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    4. Crunchycon - In my particular case, I fire up the candles or solar battery charged headlamp and keep reading my hard copy!

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  14. I have never understood downsizing after all the children move out. We raised five; they are now all adults and our four boys live elsewhere, our daughter lives with us to save money while attending graduate school. One of our boys is married with two children, two others have girlfriends. It is my experience that adult children multiply! When we had to move, after all the children left home, because of my husband's job change, we bought the biggest house we could afford. Just so we'd have room for everyone when they come home for holidays and family reunions. I enjoy our large home. And it is filled with bookcases, has a workshop in the garage, and the kitchen is big enough to be remodeled into the modern efficient one I really want. (The house was built in 1898, set on 1.25 acres, two blocks from the "downtown".) We live in a small town (pop. 4700) in MN. As others have said, people writing those kind of articles live in overcrowded mega cities and need to get out into the heartland more.

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  15. I believe his overall point was correct, (most people don't need all the house they have); but his examples weren't applicable to everyone. If someone doesn't use the kitchen or workshop space much, then they don't need large ones. If someone doesn't have a home business or uses an accountant, then a big home office isn't needed. Using books for decoration (books by the yard) can be a waste of space. I think he was taking aim at the McMansion trend.

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  16. Welcome to the age of insanity from the elites...Credentials mean nothing to me..
    JESUS is the Only One that has all the answers.
    They should seek Him and His advise and they would
    be happier...
    And I love the bookshelves, Patrice...I can almost smell the books....
    Love from NC,
    Sandy

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  17. It's the Wall Street Journal. They are city people. Great, let them live on top of each other. Just leave me alone.
    I'm happy with a tiny home and a BIG shop/garage.
    Montana Guy

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  18. I imagine his advice makes lots of sense for the sort of person who would turn to the Wall Street Journal for advice on financial savings in the first place. A workshop you're never going to use anyway is hardly worth having. It would interest me to see the reaction if the Wall Street Journal started publishing basic recipes and a primer on hand tools... :)

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  19. Dear Professor Shiller....a kindly word of wisdom: Do NOT MESS WITH PATRICE LEWIS' SPACE! Pun intended. (Not a good pun, but a pun indeed.)


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  20. Patrice, A long time ago you posted an article where you had your readers suggest jobs that can be done at home. I am having trouble finding it. Would you mind sharing the post's title? We are trying to get ready to choose between losing job and the shot...

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    1. Try this:

      http://www.rural-revolution.com/2020/05/making-money-from-home.html

      Good luck, keep us posted.

      - Patrice

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    2. Thank you! I looked at the date you posted it and it was only May of last year. Wow! It sure felt a lot longer ago than that. It sure has been a year!
      I will let you know how things go for my husband and my friends who are in the same boat.

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  21. He is obviously not an expert on the needs of the homeschooling family, nor aware of the growth in the number of homeschooling families (thanks, 'Rona!)... which might have an effect on the desire for large kitchens, workshops, bookshelves, etc. Just sayin'
    XaLynn

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  22. It sounds like Professor Shiller advocates the sort of living-in-a-cell-in-a-honeycomb setup found in E. M. Forster's short story "The Machine Stops." As you can guess from the title, that story doesn't end well.

    https://commons.erau.edu/cgi/viewcontent.cgi?article=1057&context=oer-main

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