This post should have been first, but the anvil was hot on the other topics. Reading through them, though, I realize I haven’t even discussed my philosophy. Why am I so interested in a log home? Why not a brick home or a traditional frame home? Why not a stone house? How about straw-bale, cinder-block, timber frame, trailer (hey- they are cheap, if nothing else)? And why not just buy a traditional home that someone else built and save myself the trouble?
I think it boils down to a few things:
Most Americans’ financial path looks something like the following:
live off parents (0-20+) -> get a minimum wage job (16-20+) -> go into debt for a cell phone and a car ($10k-$20k) -> Go into debt for college ($20k-$60k) -> Get married (go into debt for ring – $2k, honeymoon- $6k) -> go into debt for a house – $180k, credit card debt – $40k -> go into debt for a minivan – $20k -> get a blue or white collar job and hopefully break even by the time they retire.
From the point they go to college until the point of retirement, they live in debt- something like 45 years of debt, and anywhere from $300k to $350k of debt. Student loan debt, car payments, credit cards, home loans- by the time we’re done paying off our homes, we could have bought two of them. Why do we (as a country) follow this path? Why doesn’t the path look like this:
live off parents, learn how money works -> get a minimum wage job, save for college or tech school -> go to school debt-free, while working and save for a home and drive a crappy car -> get a job, save even more for a home -> hefty down payment on home, go into debt only $100k – $150k -> able to use leftover from small house payment to maintain a modest car, or save for a nice car -> pay off house early, set up investment accounts -> retire early -> enjoy retirement.
The answer is really and simply: easy credit. It is getting easier and easier to borrow money.
A few years back, I was living the dream like I described- all except for the car payments, credit card debt, and student loans. But while my job paid well, I was in debt for a house, and was going to pay for it for the next 30 years. My then-wife (now ex-wife) was also working, so we had a bunch of extra cash. We decided to buy a vacation home near a lake (Bear Lake, Utah). It was great- 20 acres and a cabin. Then we got divorced, and had to sell. In the middle of selling it, I got remarried and moved to Alabama. When the cabin finally sold, it sold for more than double what we paid for it. After paying off the loan, and giving my ex her share, I had just enough to buy a fixer-upper hud-home. So we were still debt free. But I was having a hard time getting ahead financially- the economy wasn’t my friend. After going back to school for a second degree – this time in Mathematics, and a scary sidetrack as a teacher, I ended up finding a better job as a systems support engineer.
My credit is awesome. I should get a loan….Which brings me to my principles.
“Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation. … Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.”~J. Reuben Clark, famous attorney, and prominent leader in The Church of Jesus Christ of Latter-day Saints (Mormon Church).
Being a slave to debt: I would like to avoid debt as much as possible. If I should suddenly kick the bucket, I do not want my wife to have to go get a job to support the family, or pay off the house or debts. After my LDS mission, I had a goal of “be debt free by 35”. I actually reached that goal….and then went back to school (and into debt)- that was a mistake. I could have probably saved in between each semester and paid cash for my classes, but my income from contracting fluctuated wildly, and it was hard to determine ahead of time where our next meal was coming from. But the house was paid off, and so were the cars, and we had no credit card debt.
Of course, the idea is to earn interest, not pay it. Still working on this one. The stock market- over the last 8 years at least- has been funded by funny money from the U.S. Treasury, so land or gold seems to be where it’s at if you want any security.
This is where it gets interesting: just look at the layers on a brick home: you have bricks, some kind of moisture barrier, maybe some OSB, some 2×4 framing, insulation, drywall, and then paint. A stick home is worse- instead of bricks, you have vinyl siding or something, moisture barrier, OSB, then the 2×4’s, etc. All of those layers require a specialist- a brick mason, siding person, a framing person, someone to insulate it, a drywall specialist, and a painter. How about a log home? Well, you’ve got logs….and that’s it. I actually think you use less wood for a log home over a stick home by the time you cut all your 2×4’s and OSB, but that’s probably debatable. At the very least, logs require far less processing than 2×4’s. Why isn’t this more popular? Well, it takes longer….
How about special skills for building a log home: the ability to follow directions, the ability to sweat a lot, the ability to finish what you started. Little 90 lb women are building these things with a block and tackle. As far as I can figure, you lay out your logs so that a big end will alternate with a small end. With the butt & pass method, you don’t have to “cope” or carve the logs to fit- just butt them up against the corner of the other one. Then spike the whole thing with rebar every 2 feet. Add a ridge pole and purlins or support beams for the roof, add decking and shingles or tin, then chink as necessary. Put in floor, stairs, interior walls wherever you want (the interior walls are never main supports- the outer walls hold everything up). Plumb, do electrical, HVAC, counters, appliances, finish and enjoy. Lots and lots of work, but when it’s done, it costs literally 10-15% of what a home of similar size (but not quality) would cost you.
4. Philosophy of life
So, how do you avoid going into debt and still buy a house? Building your own home does not seem possible to most people. But why? My two favorite reasons:
- It seems complicated- Permits, engineering, materials, tools, heavy equipment, labor, inspections, and general know-how seem to be just out of reach for most people. I’m lucky enough to know which end of a hammer to hold, so half of those issues are not an issue. What’s weird is that when you go to college- it’s just as complicated- maybe more so: you have no idea how to pay for it, you don’t know what to expect from each class, everything changes every semester, you have to learn what each professor expects, you have to juggle your schedule to get everything done, not to mention if you change your major (which everyone does). So what is the big put-off? I believe it’s reason #2:
- Media/commercialism: the media tells us that you get a loan to buy a house. “It’s my money, and I want it now.” It seems easy- just get a loan, and then pay for it for 30 years. I was thinking that way, too- until my cabin tripled in value (yes, I only sold it for double what it was worth- that was in 2007- looking back, I’m lucky I sold it when I did). I could sell it after 5 years and make a profit because the market had changed, and it was suddenly worth 3 times what I paid for it. I didn’t have to remain in debt.
Doesn’t it make sense to – if you could – spend 3 years building a house, and then the next 50+ enjoying the fruits of your labor? What if you could get it all done debt free, but the price was 3 years of your life? Well, the alternative is: it costing you 30 years of your life, which is the Master Mahan principle- turning life into property: the bank turns 30 years of your life into their property (interest). Enter the Skip Ellsworth log home method.
I’ve looked at log homes ever since I bought my cabin. The guy who built it was in his 70’s when he started building it. It had a rock-pile-and-cement foundation, gas lighting, a loft, a living area, and a kitchen. But it wasn’t a log cabin-it was framed in. I started looking into how to build a log cabin- there were classes, methods, builders, dealers, kits. And everyone was saying it takes years to learn how to do it, and you can’t do it yourself. Hmmmmm. Then I found the Skip Ellsworth method. You do it yourself. In a nutshell, you find property, get logs for free or very cheap ($0.05-$0.10 per log – yes, really!), peel them, build a foundation, stack the logs, put a roof on it, chink it, finish the interior. A few have done it for $9,000. Most do it for under $60,000. A few end up at $100,000. The quickest people get it done in 9 months. Most people take about 2-3 years. A few masochists really enjoy not finishing things they start, and end up taking 25 years (no. just no.). Then, if you decide to sell it, log homes always sell for more than regular homes- most of the owner built log homes sell for more than $300,000. Yes. Spend $40,000 to build, sell for $300,000, profit = $260,000. And you don’t have to pay off the bank. Skip goes on to say that at that point, you can use the profit to build 4 more log homes, sell them, and now you retire. You’ve made your millions.
I think we’ve been duped as a country to believe that “that’s just the way it’s done” on waaaayyyy too many issues. They (whoever they are) have got us right where they want us: believing there’s only one way to do anything. I’m not buying what they are selling. I guess I’ve never done things the traditional way; maybe that’s been a mistake- maybe, if I put my nose to the grindstone long enough, I’ll get rich….but I think I’d rather build a cabin.