Quit Paying Rent…and Start Investing Your Money

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Posted by The Savvy Retiree on June 27, 2016 in Rightsizing, Tiny Houses

Bill Bonner writing about tiny houses

Thirty years ago, I took a backhoe and began digging a hole in the side of a hill. I was going to build a house with a revolutionary new design. Nothing like it had ever been built before, as far as I knew.

As far as I know, now, nothing like it was ever built again.

The idea was to create an interior space that was heated and cooled, in Maryland, by the earth. Most ‘solar heated’ houses are either too boxy and oppressive looking…or too sophisticated and expensive. This was different. It was so simple I would build it with only the help of my 13-year-old son. We would spend less than $30,000. On the outside, it would be barely visible, nestled into a wooded hillside. On the inside, it would be light, airy, and animated, with five different levels of living space.

The design was innovative. The typical earth-sheltered house is constructed of heavy concrete – which gives a house the feeling of a prison or an insane asylum. A few are made of old tires. Covered with plaster, these “earthships” can be very attractive and functional, but building them isn’t cheap.

We decided to use a new technique. We would build out of “ferro-cement.” We would weave together different thicknesses of re-bar and reinforcement wire. Then, like a swimming pool, we would blow cement onto the frame, leaving the front, like the open visor of a football helmet, available for a south-facing glass wall. It would be a piece of cake.

At least, that was the plan. Every weekend we labored on it, for three years, doing almost all the work ourselves. When the time came to blow on the cement (it is shot on, through something like a firehose), the contractor took no chances. He required us to sign a waiver: whatever happened, it wouldn’t be his fault.

But eventually, it was completed. And we moved in.

“You think you’ve got it rough,” wrote another son, then 7. He had been urged by his teacher to write to U.S. soldiers in Kosovo. He began his letter by pointing to his own problems.

“We have to live in this weird house, with bugs and snakes.”

He did not appreciate the engineering marvel. It did not impress him that there were no heating or cooling costs. He was indifferent to the fact that we could grow vegetables in the living room, all year round.

The bottom level was the kitchen/dining room…with a wood stove in the center. The next level was the entry…and the bathroom. From there, a soaring glass wall rose 18 feet, at an angle so as to let the winter sun realize its full heating potential. Moveable staircases, (with old, hand-split tobacco sticks for balusters) led to a small mezzanine study…and then up to a bedroom. Open to the light, the main bedroom gained its privacy from a demi-wall which hid it from the people down below. Finally, there was a large room on the top floor, with sleeping nooks, like caves, for the children. Adding to the cave-like quality of the top floor was a mud-plaster than we applied to the inside of the ferro-cement shell.

Our family moved to Europe soon after the house was built, so we never got to fully enjoy it. Instead, it was rented out to a young woman, who called it her “Hobbit House.” She paid $500 a month for nearly 20 years. We included “utilities” because there were none, except trifling amounts of electricity.

Except for the bugs and snakes – greatly exaggerated in the mind of a 7-year-old (and his mother) – the place was a delight to live in. We planted a flower garden in front, so that we were looking out over flowers and trees. And we ran wisteria vines onto wires stretch across the glass face, to block the hot sun in the summertime. In spring, the wisteria blooms lustily…with beautiful blue flowers and an intoxicating perfume.

Most of the time, it needs no heat or cooling of any kind. In the dead of winter, we keep a small fire going in the woodstove. And in the hot, humid summer, we find it more agreeable when we run a dehumidifier. But most of the time, it is comfortable with no effort or expense on our part.

It is also remarkably quiet. A hurricane passed over us once. But inside, with the windows closed, we barely heard a thing.

Our renter calculated that she saved about $500 a month by living in the “Hobbit House.” If that were so…and she regularly put the money into the stock market…from roughly 1994 to 2014, she would have today about $380,000.

That is, of course, exactly the same amount we would have if we had taken her monthly payment and done the same thing.

Or, we could look at it this way: If we had just stayed put, in that house, and simply put $1,000 a month in the stock market…today, we’d be living rent free, mortgage free…with about $760,000 in stocks.

Worth putting up with a few bugs, no?

Image: ©iStock.com/Kichigin