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Ponder Points

A Ponder Point is a significant, outstanding, or effective idea, argument or suggestion that needs to be weighed in the mind with thoroughness and care.

Tuesday, September 27, 2005

Bling Bling or Freedom

The Link of the Week (http://www.word-works.com/simple.htm) this week leads you to a page by Judy and Clay Woods that discusses the concept of Voluntary Simplicity. In their view voluntary simplicity and frugality are two different things. According to the Woods, "Voluntary simplicity is about freedom. It’s about owning your own life. Frugality is living with less of what money can buy. Voluntary simplicity is wanting less."

The Woods go on to say that 25 years ago they made a discovery that changed their life. They came to realize the time is worth more than money. This is what they have to say on the subject:

"This revelation has allowed us to be content in our work or to change that work when it no longer satisfies. It has permitted us to spend less time acquiring things and more time acquiring experiences, insights, and relationships. It has encouraged us to lend a helping hand in our community, whenever the need arises, because we can make the time to do it. It has given us freedom and control of our lives.
For some reason, it seems to us that many people have failed to grasp this simple truth. They trudge off to work every morning to put in their time at jobs they despise so they can buy things. Have you noticed? The more a person hates his or her job, the more money he or she spends on toys, time-shares, new cars, the latest trendy clothes, jewelry, etc. And the more one spends, the more one needs to hang on to that job, no matter what."


Consumer debt is at an all time high according to Kim Edwards, a Ph.D. student in finance at LSU. In her paper at http://www.stretcher.com/stories/960415c.htm, she cites the following statistics:
- Consumer debt has soared 39 percent in the last five years and now exceeds $1 trillion.
- Personal bankruptcies rose by 6 percent to 832,415 by mid-1995 from the prior-year period.
- Consumer loans comprised 45 percent of bank lending in 1994, up from around 33 percent 10 years ago.
- Nearly 4.25 percent of credit card loans were written off as losses late last year, up from 3.8 percent a year earlier.
- Credit card issuers send a record 2.4 million card offers to consumer in 1994, more than double the mailings sent in 1990.
- About 376 million Visas and MasterCards were in circulation as of last fall, up 80 percent from five years earlier.
- The average household now has four credit cards with balances of around $4,800, up from two cards and $2,340 in balances five years ago.
- Consumers owe $360 billion on their cards, double the 1990 level.

I myself made the choice to leave a well paying job with a major oil company and pursue a way of life that allows me to spend more time with my family and makes it possible for me to try my hand at some endeavors that I have always wanted to try. To do this we have had to keep our overhead extremely low. We moved to a part of the country where the cost of living is substantially lower. We maintain very little debt and what debt we do have is very short term. We drive used cars that are bought for cash instead of making monthly payments and bought a fixer upper house that is still in the process of being fixed up. Basically we made the decision to swap the bling bling and the debt that comes with it for more freedom. It has been three and a half years now and we have no regrets.

There is a lot of information available on Voluntary Simplicity on the net and in books. Kim Edwards ends her paper with:

"The reasons for VS are as numerous as the ways to approach it. For some, this movement is financially motivated, and yet for others, it is motivated by the desire to get out of the rat race of the corporate world. Whatever the reason behind the VS movement, there is a cohesion and a support structure among its practitioners."

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