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Guest Post: The Only Leverage We Have Is Extreme Frugality

Tyler Durden's picture


Submitted by Charles Hugh-Smith of OfTwoMinds blog,

Debt is serfdom, capital in all its forms is freedom. The only leverage available to all is extreme frugality in service of accumulating productive capital.

There are only three ways to better oneself financially: marry someone with money, inherit money or accumulate capital/savings and invest it in productive assets. (We'll leave out lobbying the Federal government for a fat contract, faking disability, selling derivatives designed to default and other criminal activities.)

The only way to accumulate capital to invest is to spend considerably less than you earn. For a variety of reasons, humans seem predisposed to spend more as their income rises. Thus the person making $30,000 a year imagines that if only they could earn $100,000 a year, they could save half of their net income. Yet when that happy day arrives, they generally find their expenses have risen in tandem with their income, and the anticipated ease of saving large chunks of money never materializes.

What qualifies as extreme frugality? Saving a third of one's net income is a good start, though putting aside half of one's net income is even better.

The lower one's income, the more creative one has to be to save a significant percentage of one's net income. On the plus side, the income tax burden for lower-income workers is low, so relatively little of gross income is lost to taxes.

The second half of the job is investing the accumulated capital in productive assets and/or enterprises. The root of capitalism is capital, and that includes not just financial capital (cash) but social capital (the value of one's networks and associations) and human capital (one's skills and experience and ability to master new knowledge and skills).

Cash invested in tools and new skills and collaborative networks can leverage a relatively modest sum of cash capital into a significant income stream, something that cannot be said of financial investments in a zero-interest rate world.

We hear a lot about the rising cost of college and the impossibility of getting a degree without loans or tens of thousands of dollars contributed by parents. I think my own experience is instructive, as there is another path: extreme frugality.

At 19, my two sets of parents were unable to provide me with more than a rust-bucket old car. My father sent me an airline ticket to visit him, but nobody ponied up any cash for tuition, books, or living expenses.

Step One was eliminating housing costs until I earned enough to pay rent. By good fortune, I was able to secure a work-trade housing situation: I was given a room filled with boxes of accounting records, and a path through the boxes to a bathroom and tiny kitchenette in trade for yard work.

Step Two: cut all other expenses to the bone. Since I was working for a remodeling contractor, I needed the car to get to the various jobsites, but I bicycled whenever possible to save on gasoline. I prepared all my own meals and avoided buying snacks, drinks, etc. until my income rose enough to swing such luxuries. I can count the number of drinks or meals I bought on campus in four years on one hand.

Music purchased: none. (We played our own music or listened to the radio on the jobsite.) Clothes purchased new: none. (That's what church jumble sales/bazaars are for: $1 shirts, etc.) And so on.

Step Three: find a job with upside earnings and skills. I'd worked in snack bars and mowed lawns, but construction opened up opportunities to advance my skills and gain sufficient proficiency to deserve a raise in pay.

Since I wasn't guaranteed any opportunity for advancement, I volunteered to work Saturdays for my bosses or anyone else on the crew who had sidework on the weekends. I volunteered my construction services to community groups to gain experience (there's nothing like being responsible for the project, as opposed to just following orders) and open access to new networks of productive, accomplished people.

For example, I rebuilt the rotted redwood rear steps to the historic Agee House in the back of Manoa Valley for free. (Sadly, this wonderful building burned down a few years later.)

In business, the word "hustle" has the negative connotation of high pressure sales or a scam. In sports, it has a positive connotation of devoting more energy and effort as a means of compensating for lower skills or physical size. Step Three requires hustle: when you don't have any advantages of capital, connections or skills, you have to acquire those by hustle and initiative.

Step Four: apply for obscure, small-sum scholarships. $500 may not sound like a lot, but it means competition will be lower and if you get it, that's $500 you don't have to earn. As you build your networks in the community, put the word out you're looking for small scholarships for next semester's tuition. In general, people tend to respond more positively to helping you with a specific goal rather than an open-ended or undefined goal such as "I need money for college."

Step Five: work productively and ambitiously, i.e. work a lot but work smart. It never occurred to me that working 25+ hours a week and taking a full load of classes (4-5 classes and 15+ credits a semester) was something to bemoan--I was having a great time, and earned a 3.5 grade point average and my B.A. in four years.

60-hour work weeks should be considered the minimum effort necessary--but only if those hours are 100% productive work, not hours interrupted with games, phone calls, goofing off, etc. Those 60 hours are flat-out, power-out-the-work hours, not hours diluted by half-effort, distractions, etc.

Step Six: learn to do things yourself that cost money, such as maintaining your car. It's not that hard to change the oil and other basics of maintenance.

If you push yourself and maintain a disciplined life, huge amounts of work can be ground through in a few hours. This is as true of digging a ditch as it is of plowing through texts and writing papers.

Tuition at the state university I attended (the University of Hawaii at Manoa) has risen enormously in the decades since I worked my way through college (roughly $9,000 a year now), but it's still possible to work one's way through if the student pursues all six steps assiduously and with perseverance and hustle and secures full-time work in summers.

One reason I did not bemoan working long hours and practicing extreme frugality was that this was still the default setting in a few dwindling enclaves of our culture and economy. The idea that you could borrow money for everything you wanted had not yet conquered the culture and economy: thrift in service of big goals was still a cultural norm.

In other words, what I did wasn't heroic or unusual; it was the norm.

I should mention that my university years overlapped with the deepest recession (at that time) since the Great Depression: 1973-74. Work was hard to come by, gasoline skyrocketed in price, and inflation started to outpace wages, especially in the low-wage jobs typically available to college students.

It was not a cakewalk by any means.

The upside of relentlessly pursuing Steps One - Six is tremendous: personal integrity, financial independence, and the other powerful freedoms that accrue to these foundations. Measured by income and things I owned, I was "poor." But measured by independence and by skills and networks gained, I was wealthy in many important ways.

Extreme frugality enabled me to not just finish college in four years but to buy a (cheap) parcel of land while still a student with cash and have a substantial savings account by graduation day.

I don't look back on those years of voluntary deprivation in service of independence, freedom, knowledge, and social and human capital as "poor me:" I see them as the extremely positive, productive template that I have followed in the decades since. I never did marry or inherit money, and so whatever I have now is the direct result of extreme frugality in service of integrity, independence and the accrual of capital that can be productively invested.

The only leverage available to all is extreme frugality in service of accumulating savings that can be productively invested in building human, social and financial capital.

Debt is serfdom, capital in all its forms is freedom.

Debt = Serfdom (April 2, 2013)

How Frugal Are You? (August 7, 2010)


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Fri, 12/27/2013 - 09:37 | 4278813 Catch-22
Catch-22's picture



There are two rules for success…


1.      Never reveal everything you know.

Fri, 12/27/2013 - 09:47 | 4278828 falak pema
falak pema's picture

And always use invisible ink for the rest! 

Fri, 12/27/2013 - 10:28 | 4278907 max2205
max2205's picture

What's in your wallet? 

Fri, 12/27/2013 - 10:47 | 4278938 Hulk
Hulk's picture

Spawn of Karl Malden...

Fri, 12/27/2013 - 11:46 | 4279038 SafelyGraze
SafelyGraze's picture

the problem with this "be frugal and save for your old age" mentality is this:

if everyone were to adopt this behavior, nobody would buy and sell.

that would deprive the state of much-needed taxes.

taxes for projects like roads and bridges.

we all need roads and bridges.

taxes for projects like helping the needy.

one day, we will all be needy.

taxes for projects like defending our state.

we all need defense.

taxes for projects like colonizing mars.

we all need mars.

so rather than being "frugal" and storing up "savings", it is much wiser, and much better for the economy and the state and the community at large, if you let others provide your needs through their various efficiencies.

that way you can concentrate on your own effiency and be the most productive employee you can be.



Fri, 12/27/2013 - 12:58 | 4279257 WeeWilly
WeeWilly's picture

I get the sarc about taxes to help the needy. However, the author and most of my ZH bretheren are missing the necessity of charity in one's life. There are truly needy people who require financial help. I disagree with the state taking over the role of "helper", but as individuals, we bear responsibility for assisting those less fortunate.

Fri, 12/27/2013 - 13:18 | 4279326 Apply Force
Apply Force's picture

Disagree - very few if any need financial help.  It seems you are stuck inside the "money is help" box, when really any soft/fiat currency only serves to enslave you further.

Some neighbors and friends might need help with gardening, housing, clothing - all forms of help that one can offer through their time and experience in days gone by... If we weren't chained to the dot gov company store, working 50% of our time to "earn" in our fake-money system, neighbor-to-neighbor charity would again be the norm.  Charity NEVER comes from dot gov - - only chains and propaganda from them.

Fri, 12/27/2013 - 17:20 | 4280130 WeeWilly
WeeWilly's picture

Interesting point Apply, thanks. I might agree with you at some point in the future. However, in my area the utilities are still stuck inside the "money box" as well. Using fiat to help with an old lady's power bill works out fine for her. Helping a hard working kid pay his community college tuition with fiat works as well. We're heading the way your post espouses, but we're not there yet.

Fri, 12/27/2013 - 23:28 | 4280941 Apply Force
Apply Force's picture

IMO the ride will be like a roller coaster.  We rode up the first big hill nice, steady and slow to the peak of (energy, humanity, complexity) and the ride down will be much quicker.  Perhaps some smaller ups and downs and maybe a loop or two, but the first car is over the edge of that first hill.  Do what you can to keep you and yours on the rails - no one knows for sure how many cars are hooked together and how long it will take for drop speed to go exponential.

Fri, 12/27/2013 - 13:01 | 4279271 falak pema
falak pema's picture

Well as the doomers WANT ASSET DEFLATION while the OLIGARCHY wants monetary deflation of $ reserve to write down debt but NOT assets; all the world believes in frugality.

The OLigarchs want frugality of Asset deflation and conservation of their bandit treasures; all WS paper denominated.

THe Sheeple want frugality of $ Deflation and conservation of their pensions, salaries and buying power. 

So frugality is a universal theme; its just not about the same things! 

My concern is frugality of DEBASEMENT of our environment and energy threads; but there nobody cares! 

Its the crux of the APex of  debt/asset mountain conservation mania but which destroys the essential.

Who cares about the non essential : $ hegemony or WS asset spiking to eternity! 

What says the Lord Byron of our ZH star gazing guest posters on that front???

Fri, 12/27/2013 - 13:22 | 4279343 Ghordius
Ghordius's picture

well said. btw, I "did it" in the fourth way: build up enterprises. I find it amusing that CHS does not mention that. a sign of his environment?

Fri, 12/27/2013 - 15:37 | 4279812 falak pema
falak pema's picture

Ghordius, OT /

I posted this earlier; care to comment it ?

Manifest of 11 German Economists to reinforce the governance of the <Eurozone. 

A very forceful and realistic view of the troubled BAnking sector of EZ and its fall out on EZ economic growth.

It condemns the current complacency reigning in German government circles today post Mutti coalition. 

Vers une Union de l'euro

Question to our friend Ghordius :

Do you know of these eleven signatories ? 

What do you think of this eleventh hour common sense?

2014 will be a crucial year in EU as the parliament and Commission Heads of EU change. 

Fri, 12/27/2013 - 16:17 | 4279939 Oracle 911
Oracle 911's picture

Either you forgot the /sarc tag or made the gay coming out on twitter/facebook after account hack.

Fri, 12/27/2013 - 09:53 | 4278837 Muddy1
Muddy1's picture

"Debt is serfdom"

A wise person said long ago, "The borrower is slave to the lender."

Fri, 12/27/2013 - 09:59 | 4278848 augustusgloop
augustusgloop's picture

Unless the borrower is a corporation or private equity. in which case the borrower is the master of the universe.

Fri, 12/27/2013 - 10:09 | 4278865 dick cheneys ghost
dick cheneys ghost's picture

banks are borrowers.........NOT lenders.

Banks only exist to steal your labor thru interest and inflation

Fri, 12/27/2013 - 10:50 | 4278949 Stuck on Zero
Stuck on Zero's picture

If you borrow $10,000 from the bank they control you.  If you borrow $10,000,000 from the bank you control them.


Fri, 12/27/2013 - 10:04 | 4278856 Colonel Klink
Colonel Klink's picture

What's the other?

Sun, 12/29/2013 - 04:58 | 4282897 Colonel Klink
Colonel Klink's picture

Apparently 4 people didn't get the joke.  ROFL

Fri, 12/27/2013 - 14:35 | 4279644 Canoe Driver
Canoe Driver's picture

Hey CHS, first of all, when you were 20 you looked like a 13-year old Grace Kelly pretending to wait for the Hamptons Jitney. (I bet you were glad to never be sent to prison!) Second, did it ever occur to you that the main problem with opportunity is its frequent and total absence, not people's lack of "initiative?" Third, try imagining how your coming of age would have been different had you been,, or oh, I dunno, maybe Hispanic, or perhaps a homely female.

Fri, 12/27/2013 - 09:44 | 4278819 wisehiney
wisehiney's picture

Coasting down hills in neutral gear with engine shut down to save on gas.

Coffee and Nabs for lunch.

Becoming an expert at imitating nightclub "PAID" stamps on the back of your hand.

Throwing parties at the old shack you lived in every weekend instead of nightclubbing.

Hooking up with rich chicks.

Finding jobs that allowed one to study while being paid.

Back to work, more later.

Fri, 12/27/2013 - 10:14 | 4278855 hedgeless_horseman
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Show up for work.

Buy low and sell high.

Be honest.

Do not whine.

Live in the present.

If it is down 10%, then sell it.

If it doubles, then sell half.

Fri, 12/27/2013 - 10:06 | 4278858 brewing
brewing's picture

Finish the sentence - I'm so cheap...

Fri, 12/27/2013 - 10:45 | 4278936 wisehiney
wisehiney's picture

WAS. For YEARS. Not so much now. That's the thing. Meet you in Sun Valley. Bring a good bottle.

Fri, 12/27/2013 - 21:01 | 4280622 Abbie Normal
Abbie Normal's picture

I just reused the same Tazo tea k-cup five times and it still has flavor.

Fri, 12/27/2013 - 21:57 | 4280739 barroter
barroter's picture

...that I use razors till I bleed.

As far as honestly goes and being humble. I hate to say the the little twerp in the movie Syriana was right.  "Corruption is why we win."

Sat, 12/28/2013 - 09:41 | 4281497 wisehiney
wisehiney's picture

...that my gold is tungsten plated!

Fri, 12/27/2013 - 09:45 | 4278824 new game
new game's picture

what i've been saying all along



Fri, 12/27/2013 - 09:45 | 4278826 falak pema
falak pema's picture

CHS at Twenty looked like Lord Byron in Athens, lost in rebellious transfixion of Ottoman despotism.

At least CHS survived unlike Byron to become Little Lord Fauntleroy of American dystopia. 

Fri, 12/27/2013 - 09:49 | 4278829 Wilcox1
Wilcox1's picture

Great post. 

Fri, 12/27/2013 - 09:50 | 4278831 overmedicatedun...
overmedicatedundersexed's picture

if you are an honest man, you remain poor, unless you marry well or inherit. by honest i mean you do things against your own self interest, because they are the right thing to do. corzine is not a honest man, but he is also very very wealthy. the elite have created an economy where honest men dare not go.

Fri, 12/27/2013 - 09:52 | 4278836 NoDebt
NoDebt's picture

Live below your means.  Don't go in debt.  If you do, get out of it as quickly as possible.

My neighbors might have better cars and bigger houses than mine, but what they don't know is I own everything outright and my monthly expenses are minimal.

I don't earn what I used to, but then again, I don't need to.  I still clear more than they do (if they clear anything at all).

Fri, 12/27/2013 - 11:33 | 4279007 czardas
czardas's picture

My dad always said up to the week he died, "Live beyond your means at the first, then you can live beyond them later.  The reverse is also true."   The tendency to overspend is cultural.  I volunteered for some time teaching immigrants English.  What I noticed was the packrat mentality and voracious savings of these folks.   They'd save at least 50%, buying a shirt or shoes only a religious holiday, eating at home, carefully driving an older car.  Needless to say, their kids developed a tremendous work ethic and excelled in school when their peers were screwing around - literally and figuratively.  They took academics seriously!   

Years later, they are successful and far happier than those who mindlessly buy cheap crap for no other reason than it makes them feel good. The next generation will struggle less and consequently, not work as hard.  It's ingrained in the fabric of our culture. 

Fri, 12/27/2013 - 22:02 | 4280744 barroter
barroter's picture

"better cars and bigger houses."   Well, anyone can live large on credit!

Fri, 12/27/2013 - 10:01 | 4278847 Papasmurf
Papasmurf's picture

This is stupid stuff.  Go to an Ivy school, daytrade for the squid, move into government, then circulate back to the squid for the payoff.

Fri, 12/27/2013 - 10:02 | 4278849 new game
new game's picture

only dick you have to run up their ass is the no debt dick...

Fri, 12/27/2013 - 10:04 | 4278852 CheapBastard
CheapBastard's picture

Some call me a Cheap Bastard but I prefer, "Frugal Bastard."

Too bad the savings yield is 0.01%. Traditionally this was a safe haven of sorts for the Middle Class. 0.01% really distorts the economy and forces even more frugality on wrong people.

Be Smart, Be Cheap [aka, Frugal] and absolutely stay out of Debt!

Fri, 12/27/2013 - 10:07 | 4278863 eddiebe
eddiebe's picture

You can do what the author says to do but that is working for peanuts. What you do to make real money is: Get born into the right family, sell your soul and work for the masters of the universe a la Jamie or Loyd.

Fri, 12/27/2013 - 10:35 | 4278923 i-dog
i-dog's picture

Fucking class envy bullshit! I retired in my 30's with real 'fuck you money' without any of your nonsense prerequisites and without working in the FIRE sector. Get off your ass.

Fri, 12/27/2013 - 11:42 | 4279026 czardas
czardas's picture

You are describing a miniscule percent of wealth people.  The dirty little secret is that almost all worked HARD to obtain their wealth.  They didn't show up at 8, run out at 5 and call in sick with a hangover.  They weren't satisfied to do the same damn thing day after day while bitching about the "big guys". They took chances, met other like-minded souls and if they failed they tried again.  I came here as a kid from the USSR and depended on the charity of Americans - the most generous folks on the planet bar none.  But we were all working immediately, pooling resources, saving literally every dime and now I've retired early because we lived below our means.  This did not mean depiravation - it meant using common sense. 

Fri, 12/27/2013 - 10:24 | 4278873 withglee
withglee's picture

Debt is serfdom, capital in all its forms is freedom.

Pick your model.

1) A properly managed Medium of Exchange (MOE) where you have free certification of trading promises and inflation is guaranteed to be zero at all times everywhere. You make a trading promise to exchange 100 equal monthly payments for a house. This trade is certified (i.e. money is created); you exchange the money for the house now; you return 1/100th of the money each month which is extinguished. You have use of the house for the full 100 months. You have owned it all along because you made a trading promise to own it. Making such a promise is this ugly thing they call DEBT.

2). An improperly managed MOE where inflation averages 4% per year. You make a trading promise to buy a house in 360 equal monthly payments. This trade is certified by a capitalist who creates money and you exchange the money for the house now. In the first 20+ years you put a tiny fraction of your payment toward the house ... the majority goes to the capital supplier and is called interest. After 25 years of doing this you have still paid mostly interest to the capitalist. In reality, he owns the house all that time. A very small fraction of your payments have gone the house. It's not until the last 5 years you actually buy the house. In the end, you've taken 3 times as long to complete your promise, and you have paid for the house twice ... once to the builder, and once to the capital supplier. With 4% inflation you are tricked into thinking the house after 25 years is worth 2-1/2 times what you paid for it so you are happy with this arrangement. And the capitalist who created the money and collected, he loses ... right? Well, not exactly. He collects 6% interest while losing 4% to inflation making 2%, right? Well, yes, but he has 10 to 20 times leverage. So his 2% is actually 20% or 40%. Where your house doubled in a little more than 20 years, his so-called capital doubled in 1-1/2 to 4 years.

Frankly, I think this so-called capitalism stinks ... and with the high leverage we see in CDOs and derivatives, the leverage is enormous, and the level of actual CAPITALISM becomes infinitesimal.

Number 1 is the only reasonable, viable, fair, and sustainable environment.

Todd Marshall
Plantersville, TX

Fri, 12/27/2013 - 10:24 | 4278888 nodhannum
nodhannum's picture

Duplicate post

Fri, 12/27/2013 - 10:19 | 4278889 nodhannum
nodhannum's picture

One thing that immediately caught my eye was the authors comment on never marrying.

Many of the educated folks that I went to the university with are broke in their retirement because of two things that were under their control and one that was not. The one thing not under their control is having a set of nuts a in a society that is gynocentric. The two things that were under their control we're a) getting married and b) making bad choices in a mate if they did marry (they all did). Never, ever, step into a family court in the US if you have an X and Y chromosome.

I had a similar upbringing to the author, making less than almost all my friends that I knew from my university days but live quite well now in retirement. How I lived is strangely similar to CHS.

Fri, 12/27/2013 - 11:47 | 4279048 czardas
czardas's picture

There is an evoutionary reason our species developed the tradition of marriage - it allows individuals to focus on other things besides sex and impressing others, acts that compose an incredible percentage of our time.  Marriage provided a "back up" for injury and sickness and raising children.  It aided food production and allowed some folks the freedom to experiment with technology or new ideas. I married late and it was the best thing I ever did.  My wife serve as a rudder, a calming agent who redirected all my energy into productive pathways.

Also, two CAN leave cheaper than one - lots cheaper - if both are of the same financial mindset.

Fri, 12/27/2013 - 12:09 | 4279125 MachoMan
MachoMan's picture

If you want a chance at getting into or staying in the middle class, then you'll almost certainly need a solid marriage or similar partnership arrangement... 

Fri, 12/27/2013 - 12:11 | 4279131 Sean7k
Sean7k's picture

The reason we marry is because the Catholic church wanted to keep young men working and more responsible instead of buggering each other in their youth. You might want to read some history before you try to explain culture.

Fri, 12/27/2013 - 19:40 | 4280451 kareninca
kareninca's picture

I think that you (reasonably) misread the sentence, nodhannum:  
"I never did marry or inherit money . . ."

I think CHS is saying that he never did marry money.

From reading his posts, and googling around, I am pretty certain that he is married to a Japanese-American woman from Hawaii, and that they have been together for many years.

He listed "marrying money" as a route, and then at the end he mentions that he did not take that route.

Fri, 12/27/2013 - 22:06 | 4280756 barroter
barroter's picture

Heard plenty of divorce court horror stories and know a few guys staying in un happy marriages to avoid divorce.  Stay single and bop 24 yr olds if you can.

Fri, 12/27/2013 - 10:19 | 4278890 20834A
20834A's picture

I would add: treat your family well. Encourage them to think like a 'tribe'. Because even if they can't help you with money, they can help with knowledge, volunteer services (car repairs, babysitting, etc.), and their contacts.

Fri, 12/27/2013 - 10:20 | 4278894 whoopsing
whoopsing's picture

Great post full of sound advice. Sadly as a nation we are bombarded mercilessly by the PTB on a daily basis to act counter to this model.

Fri, 12/27/2013 - 10:27 | 4278900 yogibear
yogibear's picture

The Great Depression forced people to live within their means.

We have a Fed these days that want people to be credit junkies with 0 savings. 

So the Fed is the credit pusher. Eventually the junkies die from an overdose. 

Fri, 12/27/2013 - 10:36 | 4278918 monad
monad's picture

Fucking fairy tale. The burning building should have had more meaning to you.

Fri, 12/27/2013 - 10:37 | 4278921 Sean7k
Sean7k's picture

Another CHS article and tip of the hat to the status quo. Live like a slave, in the hopes of escaping slavery, in a game you cannot win. If you end up holding on to capital, you have lived like a slave to achieve it. Then gave it to Elites to play with in their casino, always taking the lion's share.

This type of argument is why people are poor. You don't play three card monty for a reason. You cannot win. It sounds good, it allows you a philosophical high ground, while you dive for rubies in the dump.

As long as we have a system that employs law, taxes and coercion, we lose. They control the content and administration of law, they control your earnings through taxes and jail you or kill you while your fellow inmates cheer them on.

Yet, this argument will win kudos. Slaves.


Fri, 12/27/2013 - 10:42 | 4278928 dick cheneys ghost
dick cheneys ghost's picture
'Residents form 'vigilante groups' after cuts to sheriff department's budget mean police only respond to life-threatening incidents'

''Outraged residents in rural Oregon have formed amateur armed patrol groups to replace the budget-stricken police department.

The unusual move comes after Josephine County sheriff announced officials will now only respond to life-threatening situations after losing necessary government grants.

But county governors, fearful of anarchy, have condemned the organisation, urging citizens to hike their taxes instead.''

coming to a town near you...............

Fri, 12/27/2013 - 15:11 | 4279759 Things that go bump
Things that go bump's picture

Small towns and rural areas have always had their volunteer fire fighters, why not volunteer peace officers? It probably scares the county governors half to death. Good.

Fri, 12/27/2013 - 10:51 | 4278943 darteaus
darteaus's picture

"Debt is serfdom, capital in all its forms is freedom."


You want something? Then, bust a move!

Fri, 12/27/2013 - 10:52 | 4278951 JEHR
JEHR's picture

Very interesting post.  There was a time when almost everyone lived frugally mostly because they had no choice.  Debt was to be avoided at all cost.  If someone wanted something, they saved for it. Good ideas in this post.

Fri, 12/27/2013 - 10:58 | 4278964 ZeroPoint
ZeroPoint's picture

But..but..Obama is going to pay my rent......

Fri, 12/27/2013 - 19:32 | 4280440 MrBoompi
MrBoompi's picture

Romney said he would pay off my house for me.

Fri, 12/27/2013 - 11:16 | 4278981 Henry Chinaski
Henry Chinaski's picture

Good post. This method worked for me.  Work hard and smart, avoid debt and keep a low overhead.  Keep in mind that everything you spend on niceties is after tax money.  If you don't buy all that crap, you win twice.  It helps to be lucky, but luck favors those who work hard and are prepared to capitalize on opportunities.  Retired at 53 (no gov't entitlements) and I answer to no man.  Wife is another story.

Fri, 12/27/2013 - 11:34 | 4279008 icanhasbailout
icanhasbailout's picture

Faking disability is something that will come to bite you in the ass when they repurpose that list of disabled persons T-4 style.

Fri, 12/27/2013 - 11:48 | 4279041 Dr. Kenneth Noi...
Dr. Kenneth Noisewater's picture

So..  Inflation or deflation?

Cuz if it's inflation, better to buy hard assets (especially those that yield) with cheap debt and pay off with devalued dollars tomorrow.

Fri, 12/27/2013 - 12:03 | 4279052 Hayabusa
Hayabusa's picture

I have a 2nd job - which pays as much or more than my primary job minus benefits.  It is my own business and when I invest in it, I invest in myself, my own skills and future.  Frugality is the easier and more time consuming way out of debt surfdumb - I  peddle faster and harder early on in life and build a business that produces an ever increasing stream of income.  Hell, even the immigrants (Mexicans, Chinese, etc.) with little or no education have this figured out (they start restaurants, roofing companies, paint, landscaping, lawn mowing, etc.).  As far as I'm concerned, the author of this article was borderline lazy... I put in over 100hrs a week... 60hrs a week, are you kidding me!!?!.  What I see are a lot of lazy people out there who believe they can buy some PMs and wait for the price to increase, count on the economy to tank and profit from it somehow, eat Top Ramen every meal, etc.  If there's one thing I can count on as a hard-working, self-disciplined business owner it's that people are inherently LAZY undisciplined credit card using interest paying perpetual debt slaves who will work for me for a fraction of what they earn for ME.  Of course if one is going to invest in themselves and a business they'd better make damn sure it's a business that will survive and even florish as the economy continues to deteriorate and unemployment increases.  It's not difficult to extrapolate to the future is one is paying attention.

Of course one always has to be mindful that the government (the biggest and best organized/powerful criminals) can swoop in at any moment and take it all from you for any reason they can manufacture and the reality is, there is NOTHING you can do about it - although you can improve your circumstances, you cannot beat them at their own game... the best you can do is become one of the game managers... become one of them - it's good to be the king.

Fri, 12/27/2013 - 11:51 | 4279055 drbill
drbill's picture

I enjoyed reading this post. Reminds me of my younger days too. It probably sounds like heresy to today's young. but I have no doubt that in the not too distant future this type of behavior will once again become the norm.

Fri, 12/27/2013 - 12:37 | 4279203 monad
monad's picture

After the purge there won't be any private property anywhere. This is it.

Fri, 12/27/2013 - 12:52 | 4279235 overmedicatedun...
overmedicatedundersexed's picture

kinda funny, those that posted I retired early!! what you folks seem to miss is this nwo economy is new, what you did back then does not work today. Crime at the largest scale in human history has changed the rule books, crime as in corruption of public office, mis use of the legal system, mis use of military and police I said if you are an honest man you will never keep wealth.

Fri, 12/27/2013 - 14:29 | 4279615 FredFlintstone
FredFlintstone's picture

Crime and corruption is not new and is not any greater than it ever was. I am reading a book "1877: America's Year of Living Violently". Things were much worse then. I agree with the misuse of military power part.

Fri, 12/27/2013 - 15:13 | 4279736 monad
monad's picture

The mob thanks US taxpayers for free healthcare, free housing, welfare and free education. Now please also provide free pension. And please stop complaining so much about your representatives giving us all these things at your expense. Just sit there and enjoy the porn we made with your daughters. See how this one fights back? Not for long however. They all cry in the end. Watch, it only gets worse.

Fri, 12/27/2013 - 12:01 | 4279100 put_peter
put_peter's picture

Marriage is not freedom regardless how much wealth you can access.

Fri, 12/27/2013 - 12:20 | 4279162 Hayabusa
Hayabusa's picture

Put-peter said "Marriage is not freedom regardless how much wealth you can access"... I was married for 25 years.  I could NEVER get ahead... I earned, she spent.  We divorced 5 years ago and I ended up bankrupt after attorney bills, medical bills, alimony and child support, and of course 1/2 of my assets went to her.  The medical issues were an indirect result of the associated stress I went through.  In the last two years I've finished with alimony and child support and invested it ALL in myself and business (I've accumulated more wealth in 2 years than I had after 25 years of marriage).  Realize when you sign a marriage certificate you make the state a party to your marriage and give them jurisdiction over it (which includes you, your children, assets, money, etc.).  Marriage is the WORST business decision you can make and not just because cupcake spends all your money but because when you sign that marriage certificate you are bending over and giving the state complete and total control over your life.  Don't sign it... don't sign it and don't get caught in the common law marriage net either.  Chalk up my post to an "angry divorced guy" if you like, but remember there's millons of us out here who've been ass raped the same way... trust me, you don't want to end up one of us.

Fri, 12/27/2013 - 13:07 | 4279281 MachoMan
MachoMan's picture

You realize there are pre and post marriage contracts that could have eliminated a significant portion of your issues, right?  I'm also incredibly suspicious of child support and alimony payments that put you into bankruptcy...  if all the professionals looking at your case couldn't present to the court that the proposed payment amounts would bankrupt you, then something went terribly wrong.  The child support chart is simply a function of your income levels...  however, alimony is a different bag...  which tends to be the result of a high wage earner spouse marrying a spouse without the ability to earn a living and then letting that spouse sponge for long periods of time. 

After 25 years of marriage (and paying for all her hearts' desires), you're going to have a difficult time convincing anyone that you should be afforded sympathy.  My suggestion for your next marriage is to get personal counseling, fix your issues, which will probably allow you to find a different type of woman.  At the very least, being a bit more assertive might help.  If you treat your marriage like the most important investment you make, then things tend to get prioritized correctly...  I'm guessing that buying sweet pea her hearts' desire was just plugging a hole that grew deeper each day.  Sometimes life's lessons cost a lot to learn, which is why it's better to learn from others' mistakes.  Do you think the people with successful marriages just end up that way by chance?  Luck of the draw?

PS, the state has jurisdiction over your personal affairs regardless of whether you enter into a marriage...  you think unwed parents get a free pass on child custody, support, and wellfare issues?  You think your finances won't come into question (analysis) to determine those obligations?  Further, do you think any woman worth her salt (not a doormat) is going to stay with you outside of marriage?  I've got a bridge to sell you... 

Fri, 12/27/2013 - 13:42 | 4279454 Hayabusa
Hayabusa's picture

Prenuptual contracts get "cracked" all the time... pre and post marital contracts signed... LOL.  Apparently you've never had a friend whose premarital contract got taken apart in court... a wife who abused alcohol, drugs, was diagnosed with depression, etc. - you don't know the half of it, yet you give half-assed advice... maybe more like 1/4 assed advice. You said, "My suggestion for your next marriage is to get personal counseling, fix your issues, which will probably allow you to find a different type of woman.  At the very least, being a bit more assertive might help."... you missed the point altogether and I repeated it more than once, i.e., don't get married.  I've met guys like you who believe they married the right one and believed the rest of us out here just made poor choices... you are at the very least egocentric, idealistic and naive and on top of it all simply don't pay attention - counseling?  LOL!  I've been through counseling and it was UNPRODUCTIVE to say the least.  I guess you missed the part where I said I'm VERY happy single, and my life is going better than ever financially and otherwise.  Please pay attention to the posts and refrain from injecting your own biases regarding marriage and women.  The difference between you and me, I pay attention and have realized life w/o a wife is a happy life... keep kissing your wife's ass buddy and once again, PAY ATTENTION to poster content - I wanted no sympathy from anyone and only pointed out life without a wife is better than with one and I don't want another one EVER... I'm no masochist and I'm not a religious zealot as I suspect you are.  Clearly you've convinced yourself you need a woman to be happy - good luck to you and your dependency on your wife and one day when you forget to fluf cupcake's pillow and she decides to "punish" you via divorce, the prenups get cracked, etc., and you acquire some wisdom (expensive wisdom) then post and perhaps people will listen to you.

Fri, 12/27/2013 - 14:48 | 4279676 MachoMan
MachoMan's picture

If your prenup gets "cracked," then you've likely got a prima facie case against the attorney that drafted it.  Either way, you win.  Considering I draft them for people and am generally aware of the goings on of the rest of the community, I'd say your figures and anecdotes are complete nonsense regarding marital contracts.  Sounds to me like you're trying to justify your planning failures.  The biggest impediment to marital contracts is that when you anticipate divorce on the front end of a marriage, then you'll probably end up divorced.

As far as my views on marriage, I don't believe there is a "right one" or a "soul mate."  I think this is a terrible fallacy...  rather, you just find one and together you work towards something greater than you had alone.  If you prioritize it as the most important thing in your lives, then things tend to work out that way... 

As far as being single being enjoyable, I would hope so...  if it isn't, then you're doing something wrong...  likewise, if marriage isn't enjoyable, then you're doing something wrong.  If your work isn't particularly enjoyable, then you'd sure as hell be best advised to have an enjoyable family life, whether it's alone or with a few others.  Needless to say, if you need another person to be happy, then you probably have plenty of personal stuff to work on...  likewise, if you find work more enjoyable than your family, might also have some issues to work on...

You act like you just found life outside marriage was enjoyable, when did you get married, 10?  Do you have no interests other than work?

I'm guessing that your ex didn't work or understand the value of a dollar?  Do you think this might have affected the way you treated her?  What did she say she felt was wrong during the counseling session(s)?  Is it your theory that she's just crazy and you're not at all culpable for anything?  She got showered with money and amenities, what else could she want, right?  In my experience, whenever I believe someone else to be crazy and this ensures that I take no culpability in an act affecting us both, then I pause to ponder further.

Counseling didn't work...  When did you go to counseling?  Before your marriage?  During, when things were good?  Or after the shit hit the fan?  Was it before or after you each had enough contempt built up that you couldn't possibly come back?  Did you get ordered to counseling?  Did you get dragged to counseling by her?  Do you think that might have affected how you participated?  It was probably even a damn woman counselor, right?  Took your wife's side and everything!  Was your counselor a licensed professional, e.g. lcsw, lpc, etc., or an armchair counselor, e.g. pastor?

If you really want to be single, then that's great, be single...  not a damn thing wrong with it.  But please don't pretend like marriage, in general, is something certain to fail or that it's something no one should bother with because your marriage failed...  there are plenty of us who know differently.  Further, don't pretend that parties to a marriage can't take legal steps to protect their assets.  Some of us choose to be married because it's generally more fulfilling (not necessarily better at all times) than being single and it just fits us better...  different strokes for different folks... 

PS, I'm an atheist

Sat, 12/28/2013 - 01:10 | 4281101 sluggo
sluggo's picture

Hayabusa said

""Please pay attention to the posts and refrain from injecting your own biases regarding marriage and women.  The difference between you and me, I pay attention and have realized life w/o a wife is a happy life...""

Are you not "...injecting your own biases regarding marriage and women...." by assuming you are superior because you "...have realized life w/o a wife is a happy life..."?

Fuck off.  You chose the wrong woman.  Just because you made a bad choice, don't "inject your own biases" on the rest of us.  I have been happily married for 23 years, have two awesome boys in college (Mech Eng and Construction Mgmt) at Va Tech, and the relationship/marriage has been a blessing for both of us.  She tames my wild side, and I convince her that she worries too much.  We're both frugal as hell (CPAs) and I couldn't even imagine NOT being married to her.

You made a bad choice.  Your fault dumbass.  Some of us truly get to know our potential spouses prior to marrying them, and don't make stupid decisions.

YOU fucked up.  Grow up, asshole.


Fri, 12/27/2013 - 23:47 | 4280983 suicidalpsychologist
suicidalpsychologist's picture

thats because you were dumb and not a real man.

Fri, 12/27/2013 - 12:31 | 4279190 Bearwagon
Bearwagon's picture

Marriage is an unwanted intrusion of the state or the church into one of your most intimate private affairs. One should act accordingly ...

Fri, 12/27/2013 - 13:22 | 4279347 MachoMan
MachoMan's picture

Only when things go bad...  which is no different than if things went bad between you and your "non-married partner" over a contract you entered yourselves, outside of marriage, e.g. joint ownership of the family home. 

The state really doesn't give a shit until the parties have to settle their disputes in court.  However, if you want to get a divorce, then you'll need to beg the state to give you one, presuming you haven't resolved the matter previously via private contract and no court intervention is required to effectuate the contract.  Further, the level of intrusiveness of a divorce isn't the care of the state, rather it's based upon how much your spouse wants to break it off in your ass...  you could have a divorce that literally takes 5 minutes in court, or you could have one that takes 5 years...  essentially, it's up to the parties as to how much money they want to waste fighitng each other.  The only people who benefit from the process are usually the lawyers (and even they would rather be doing something else; many attorneys refuse to do family law because it often times ends up nothing short of a circus).  Don't act like the court gives a shit about your private affairs outside of your spouse complaining about a particular issue...  remember, we have an adversarial legal system. 

Fri, 12/27/2013 - 12:17 | 4279151 Emergency Ward
Emergency Ward's picture

"It's not for lack of bread, like the Grateful Dead.  Darlin' --

Debt, debt, debt, debt,
Debt, debt, debt, Flow it, show it, long as I can grow it, my debt.

A home for the Banker Fleas, a hive for the FedGov bees,
A nest for worms, there ain't no words for the beauty, the splendor, the wonder of my:

Debt, debt, debt, debt,
Flow it, grow it, long as I can grow it, my debt

I want it long, straight, curly, fuzzy, snaggy, shaggy, ratty, matty,
Oily, greasy, fleecy, in default, under water, overdue and risin'

Oh say can you see, rise if you can,
And my debt's too short, why don't my momma love me?

Long as Gov can grow it, my Debt!  DEBT!......"

Fri, 12/27/2013 - 12:26 | 4279180 Bearwagon
Bearwagon's picture

Bullshit, eh?! Money never ever does any work. Period. So the athor mainly says, that we all should "work" for our money, though knowing that we are exploited, just to earn the "chance" to be able to exploit others for our own benefit some day, did I get that right? Fuck you, I lived in those days, too, and everyone who tries to advise younger people to just "live frugal", like it made sense back then, is a damned liar or hasn't noticed the last few years! That doesn't work anymore!

Fri, 12/27/2013 - 14:22 | 4279589 FredFlintstone
FredFlintstone's picture

Living frugal doesn't work anymore? It has worked for me. I have 4 children. Some are more frugal than the others and they are the ones who seem to thrive. There are people who prove you wrong each and every day. Then there are the helpless souls who prove you right, I guess.

Mon, 12/30/2013 - 22:51 | 4287250 MeelionDollerBogus
MeelionDollerBogus's picture

considering the zh standard seems to be that 200k is "middle class" and 50k is "poor" annual income and my definition is that a living cost of $15 a day is decent, where do you fit in that range?
On my income there is zero chance I could support children. I can support meals for myself every day and a month perhaps to spare in canned food. After that I have zero debt and zero savings aside from my metals. I worked hard for that & the sacrifice is to ensure I can still get food when I need it most.

If I had even one child either I would starve or the child would starve.

Fri, 12/27/2013 - 12:35 | 4279200 flyingpigg
flyingpigg's picture

Spending less than you earn is good advice but the rest is old school fiat crap.

If the advice would be to put part of your earnings into assets I would agree.

Fri, 12/27/2013 - 12:59 | 4279260 Kreditanstalt
Kreditanstalt's picture

Before you can be "frugal" with your capital, you have to have that INCOME.

What's "income"?

Fri, 12/27/2013 - 13:10 | 4279304 Prisoners_dilemna
Prisoners_dilemna's picture

Everything brought in...


Payment from a public entity that no one has a god given right to.


Depends if you ask a libertarian or an IRS againt right?

Pete Hendrickson and Irwin Schiff got it right but the system said they got it wrong.

Fri, 12/27/2013 - 13:10 | 4279288 Prisoners_dilemna
Prisoners_dilemna's picture

I love this post. Not only do the ideas proffered help one to maintain their integrity, but it has the added benefit of "starving the beast".

Gary North wrote an article 5 or 6 years ago. His take on success was slightly different. He compared the work habits of CEOs and crack addicts. The three habits he identified were round the clock work, Laser like focus on getting the job done, and third was...... ???It's been a while???


Anyway I think a combination of the 2 will lead to success.

There is also the Malcolm Gladwell idea from Outliars. Bill Gates story was particularly instructive.

Fri, 12/27/2013 - 13:28 | 4279387 the grateful un...
the grateful unemployed's picture

lobbying the Federal government for a fat contract, faking disability, selling derivatives designed to default and other criminal activities.


I don't get it, what are the first examples of criminal activities?

Fri, 12/27/2013 - 14:51 | 4279692 SweetDoug
SweetDoug's picture





And when all of that still doesn't work out for you, what do you have then?





Fri, 12/27/2013 - 18:32 | 4280332 dizzyfingers
dizzyfingers's picture

Still fugal after all these years... I still think twice about spending every dollar.

Fri, 12/27/2013 - 19:52 | 4280478 RMolineaux
RMolineaux's picture

Compliments to Hugh-Smith for an excellent piece.  It reminded me of the times I delivered Western Union telegrams walking many blocks and claiming carfare, taking extra toilet paper home from public facilities, etc.   But there is one nagging question:  What if everyone did it -- we would have a ferocious recession.   But I don't think there is any real danger of that.  

Fri, 12/27/2013 - 23:48 | 4280978 suicidalpsychologist
suicidalpsychologist's picture

well it was easier after two world wars and many dead men to find job opportunities. Now the planet is overcrowded and there are less and less jobs for more and more people. It will not end well. comparing that period and nowadays is like comparing oranges and apples. You cant work hard etc if there are too many people and not enoug jobs, even if you want to. Also it's a lot more stressful in our current situation cause you have to kill , step on other people way more as there s more competition than right after the two worlds wars and lack of workforce.

Mon, 12/30/2013 - 22:46 | 4287242 MeelionDollerBogus
MeelionDollerBogus's picture

Sad to say but CHS is out of touch with reality. These days if you can work 60+ hours a wek you are either an exec who won't be working to the bone or a serf who won't get the purchasing power of that 60+ hours as week in wage OR in goods. The health you lose from over-stress & undersleep can't be bought back at any price. You'll be gray at 40, angina at 45, maybe dead at 60. You'll earn the equivalent of $13/hour tops because you'll be on salary so the more hours you work do NOT translate into more wages.

His era & situation were unique. Unrepeatable for 90% of the population.

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