A Mortgage vs Your Life’s Work
I think a mortgage is anti-life. It’s become so commonplace and so necessary in this distorted new world, but that doesn’t change the fact that it’s fundamentally anti-freedom in my book.
I prefer something cleaner: living in short-term stays across the world while honing talents & perception, and then buying (in cash) in a nice spot while retaining openness to serendipity.
As for the home … transform it into an integrated system that kindles your nature, and turn every day into a series of fun and immersive experiments, where, you continue building out your life’s work, following your heart.
Making money is easy, but making money while having fun is the code to be cracked.
A mortgage makes it considerably more difficult to crack this code.
By taking on a mortgage, you are guaranteed to have relatively large recurring costs that you must pay. And because of this obligation, you are now required to play — what I call — the Two Games.
The first game is the steady income game: get some regular cash coming in to pay the mortgage, because those bills are not stopping.
The second game is the capital allocation game. Those mortgage interest payments will, over the years/decades, have you paying way more than the actual value of your home. So, do you have a business that can make use of your spare cash and produce an outsized return? If not, then the public markets (stocks/gold/crypto) it is; ride those drawdowns, and hope for the best.
Now there are some, though rare, who take on a mortgage and play these Two Games with flair. They either own a positive cashflow business, work a job they truly enjoy, and/or are master capital allocators. You may be one of those people, and if so, I take it that a mortgage has turned out to be harmless for you. And in such a case, you may have cracked the code.
But a mortgage, by its very linear and leveraged nature, effectively forces the vast majority of people to play the Two Games in the most spirit-crushing ways possible.
Renting, to me, is a dead zone. You’re building nothing permanent, but you’re also not free to move. You’re tethered to a lease, a city, a landlord. In fact, I think moving to a big/expensive city solely for the job market in which you are a blank-face applicant is a type of sophisticated poverty. But maybe you are working for a company that truly values you, your dream job, and you are having the time of your life. Or maybe you are a master of leverage/investing. That’s amazing … and you are the exception.
I always knew that if I can harness the internet and build via a laptop, I can live anywhere. And “anywhere” includes places where houses cost what houses used to cost. Smaller towns, other countries, place not yet fully colonized by financialization. Places where buying in cash is actually achievable.
We were meant to give ourselves fully to work that matters to us.
Over the past several decades, housing became an “asset class”, you know, mortgage-backed securities, investment portfolios, speculative capital flows … all that. This is financialization: the process by which financial motives/markets/institutions gain increasing influence over every aspect of life.
Things that were once settled become perpetually negotiated/managed. The consequence of this is that ordinary people get conscripted into playing the Two Games in a brutally painful way: doing unloved jobs and taking financial advise.
Your average Joe is forced to make a capital allocator out of himself just to tread water on his enormous interest payments … as if managing leverage and calculating whether to lock in a mortgage at 4% and invest the difference at 5% were his true calling.
Why are things the way they are?
I like to say … the closer to nature, the fewer the problems. Put another way, the further from nature, the greater the abstraction.
Take, for instance, a person who lives close to the land. She plants, she harvests, she eats. She builds a shelter to live in. Her actions are connected directly to her outcomes, that is to say, there is nothing man-made in her way.
Now, allow the population to grow rapidly. Direct relationships become impossible … you can’t know everyone. You can’t trade face to face with every person involved in your survival. So what to do? Create abstractions to “manage” this complexity: money abstracts value, contracts abstract trust, institutions abstract coordination, markets abstract exchange.
A village of 150 doesn’t need a banking system. A city of 10 million does, apparently (I still don’t buy it, but that’s for another time). The abstraction may start off innocent, but over time, it stops serving reality and starts serving itself. Entire industries exist purely to manage abstractions of abstractions. This is a whole topic in and of itself.
Industrialization has a hand to play here too. Production concentrated in factories, factories needed workers nearby, workers flooded into cities. Land near economic centers became scarce. Scarcity + financialization, among other things, create prices that bear no relationship to the actual utility of dwelling.
Industrial logic still largely remains to this day, and it treats humans as interchangeable units. You go where the jobs are. Sophisticated poverty.
Is this not the exact opposite of living your best life?
In nature, there are no abstractions. The bee doesn’t have a concept of pollination. It drinks nectar, and pollination happens as a byproduct. The system is integrated at the level of direct action.
The modern human is an expert in building systems of abstractions. Most of us can’t tell these abstractions apart from the reality. We optimize; we create metrics and chase them … from the individual, to the company, to the country.
I write about this in The Integrated System … the false trade-offs between work and play, health and pleasure, security and freedom … and these are all symptoms of living in the abstraction layer.
A house owned outright is real. But with a mortgage, it’s mediated by interest rates and banks.
I like the idea of buying in cash somewhere the game hasn’t fully taken root, say smaller cities/towns or rural areas where prices still reflect utility rather than speculation.
To make a living (from anywhere) doing what you were made to do … that is the move of this era. There are a million different configurations to achieve this.
When your fixed obligations are high, you have to generate predictable income to cover them. Monthly mortgage. Monthly investments to offset the mortgage. Monthly scrambling to stay ahead. Your life becomes a series of positions to manage.
This rhythm tends to pull you away from the kind of work that actually fulfills your destiny. The kind of work with asymmetric returns, that might fruit nothing for months/years, then fruit enormously; the kind that requires full dedication, deep focus, and the freedom to take risks because your downside is covered. To become available to life, to pour everything into the unpredictable, creative, genuinely valuable work … work that often feels like play …. this is my standard.
Modern society has, in fact, not made this standard harder to attain, despite what people say. It’s always been there for the taking, provided you have a high level of clarity about both yourself and the mechanics of reality. There’s a lot of noise out there, and it’s only growing, but I think that’s about all that stands in the way.
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