One of the more plaintive and persuasive comments to date on NRD came from reader “Dan III”, responding to my post a while ago on asset allocation in Obama’s America. In so many words, Dan III suggested that a post more responsive to the average American’s circumstances would be more useful than the one I had written.
More than 90% of the comments I’ve moderated on NRD have been very welcome and I think about all of them – thank you, readers. Since Dan III’s comment, I’ve been thinking about what advice I’d give to Rhodies starting from, or working from, or returning to a lower asset base. Sometimes those will be people starting out, and other times people starting over. Please realize that this post applies to a wide range of people, although it will be framed as advice for the “Young Rhodie”.
Some of this advice will be conventional wisdom, and some unconventional. What was good advice until the post-1945 era generally remains valid. What worked well in the receding age of postwar American abundance is generally of diminishing usefulness as we look ahead. Some of the rules that worked well until recently are, I think, changing pretty quickly because without ordered liberty and the rule of law, the Socialist Regime is creating a new playing field where old behaviors will actually be counterproductive.
Also, be advised that this general analysis is generally rooted in the Kunstler/Greer/Orlov/Martenson/Smith outlook of peak oil, relocalization, and resiliency.
Here goes, in hopefully a somewhat hopefully rational and organized approach:
Location, Location, Location: if you are young or starting over, you may have considerable flexibility in choosing where to live. Choose wisely! Locations you think could be short term can be stickier than you would think. Don’t move some place you wouldn’t be okay with living for the short time that turns into a long time. Consider issues of security, resources, demography, water, food, transportation, cost structure, tax climate, and proximity to like-minded people. I attended graduate school in a very, very blue state that is very expensive and even more insolvent. I made a really contrarian choice compared to my classmates, and didn’t stay in that state or move to a similarly blue, similarly expensive state after graduation. Instead, we moved to my wife’s multi-generational home state and focused on raising our family. There has been a tradeoff between short-term access to professional opportunities and long-term quality of life, and it’s a tradeoff that I’d be happy to make all over again. I’m also not several hundred thousand dollars underwater on a jumbo mortgage.
Location matters. A lot. If you have the freedom to choose your location, make the most of it.
Consider, from a tax nerd perspective, that the income tax code profoundly subsidizes living in lower-cost places, because income tax brackets aren’t indexed for cost of living. If you earn like an “average” or “mildly above average” person in a cheap/Red state, you will be taxed favorably and live really actually rather well – and much better than you would in the Blue/expensive state paying higher taxes. (For more on this, read anything written by Joel Kotkin.)
Choose Your Spouse Wisely and Reasonably Promptly. We live in a word of seemingly near-infinite choice, including choice of husband or wife (or, if one is quite postmodern, same-gendered person). In the short term, choice can appear fun. Like Bond Girls appear fun. Until you realize that you have to talk to them from time to time and “Oh, James!” is not actually that interesting of a conversation topic.
Over the long term, dabbling among seemingly inexhaustible choices has a spiritual cost and also a significant opportunity cost in terms of misplaced energy and lost time. I suggest finding a community of like-minded and like-valued people (e.g., a church), and being rather open-minded about allowing serendipity to take its course from a relatively high-quality short list from which almost all of the people on the list would be reasonable outcomes. Marrying someone sensible that shares your values really reduces the friction of life over the long term.
Avoid Reflexive Resort to Education. Education today in America is a pretty prime example of an overpriced racket, with inflated prices driven by state intervention. Don’t go to college until you’re ready, and don’t attend aimlessly. By all means do take some liberal arts classes, but realize that in an age of libraries and the Internet, a lot of that is stuff you can learn on your own if you want to. Consider learning the things in college that are usually harder to teach yourself, like the sciences, engineering (but of the practical kind – like civil or mechanical, and not so much nano-hyper-costly-electrical-parts-from-coastal-China engineering), and accounting. Whatever you do, don’t graduate from college without getting a practical skill set that you can have some hope of reliably monetizing!
Relatedly, whatever else you do, don’t seek graduate education simply because the job market is bad or you can’t figure out what else to do. There is a big cost to this grad-school-by-default strategy in time and money and opportunity cost (see, e.g., this excellent series of essays on law school in recent years). If you do go to graduate school, it should be done as cheaply as possible in a field that is very, very likely to immediately and reliably monetize. In today’s Potemkin Economy, that sort of formerly reasonable hurdle may indicate that graduate school is very, very rarely a good idea (outside short-duration accounting and engineering programs, or lower-cost medical and dental programs).
Be Very Suspicious of Debt. This topic has been covered in depth so well elsewhere that I don’t need to and won’t dwell on it here. Suffice to say, though, that it seems to be a behavioral feature of youth to overestimate one’s future income, and underestimate the real-world burden of even comparatively small amounts of student loan and/or mortgage payments. When someone is offering you debt financing, they are usually making good money doing it. The Regime can print money to pay debt, but ordinary people can’t. Be suspicious of debt.
Don’t Ramp Up Your Standard of Living Too Fast. Until perhaps 2008 and the current years under the Regime, it was usually rather common for one’s income to grow rather strongly in one’s 20s and early 30s. As Ben Stein and others have noted, this trend comes to a pretty sharp leveling off sooner than you’d think. Use your increasing income to reduce debt and build savings. A Socialist America will be a poorer nation, and as a productive American, you will be poorer than you’d otherwise be, too. It’s important to plan accordingly, even though the Media Directorate and the CorpGov complex will try to propagandize you otherwise.
Avoid Excessive Specialization. When the economy was not subject to as much unpleasant volatility as it has been since the Nasdaq Crash in 2000-01, generally reliable advice was to be the human equivalent of Adam Smith’s pin factory and become better and better at an ever-narrower economic niche. This can still work out – if it works out. But when it doesn’t, there are big problems. Consider the person whose area or industry is hammered by unpredictable government regulation, or wild commodity price swings, or the bursting of a bubble, or a disruptive technology like the Internet. At best, “creative destruction” boosts returns to financial capital, but it leaves a heck of a lot of stranded human capital behind. At worst, huge and increasing economic volatility just crushes all sorts of capital, both financial and human, and yes, that would include your human capital.
The wise response to a likely future of sharp economic volatility and Regime/Fed caused bubble inflation-and-bursting is intentionally increasing one’s economic versatility and resiliency. At work, this means seeking opportunities to learn new and complementary skills (rather than deepening the same skill set) and opportunities to meet lots of new people – constantly seeking more high-quality relationships rather than a smaller number of very deep, specialized relationships.
Be Wary of Corp/Mil/Gov Promises. Large corporations have a demonstrated pattern of treating young employees rather well, in return for total subordination of everything else in the life of the young employee as they chase the brass ring. A winnowing to find future top executives is largely finished by the time a cohort is in its late 30s. By your early 40s, if you’re not a clear CEO-in-waiting, you become more and more superfluous to the organization and your future is not bright.
It is dangerous to think you yourself will beat this general state of affairs. Believing so runs a large risk of finding oneself laid off in a strange city as a mid-level-manager, having lived in a series of anonymous McMansions married to someone you no longer know that well and raised kids who resent your not having prioritized them. A wiser course might be to use the organization to gain contacts and skills while you are young, and then seek to open your own enterprise or shift to an employer that will allow you to remain in the geography of your own choosing – where you can realize a long term return on your investment in Tribe.
Along similar lines, recognize that the Government won’t have the money to keep any of its promises in the future, so choosing to de-skill oneself in a job that is dependent on a smooth flow of funds to the Regime over the next 30-40 years isn’t likely to be a very wise choice. The Military is funded by the Government, so it’s basically the same proposition. Joining for the half-pay pension after you give them 20 years of your life you’re not going to get back when they outright default or pay off in not-so-worthwhile inflated dollars just isn’t fair to yourself. About the Military, also consider that you’re signing up to take orders from the Drone King, in the service of a Socialist Regime that doesn’t like America or the Constitution. That could -maybe- be a good choice in some limited circumstances, but do your own due diligence aggressively, please.
Those are the general points I want to offer now. For more detailed applications, please read this excellent essay from a few years ago by Dimitry Orlov, which provides very specific case studies of people at different ages.
I hope any Young Rhodies reading this, or people who feel like they’re starting anew like a Young Rhodie would, or who have the ability to teach, lead, and influence Young Rhodies will find this helpful. The Rhodie Remnant needs all of its people, and particularly its young people. The Regime is powerful, and it’s going to be a long struggle. To win, we need to protect, build, and conserve our human capital, and staying out of avoidable pitfalls that hurt the Rhodie and help the Regime is a really important part of that.
This is a cautiously hopeful John deWitt signing off for the American Resistance. To all the American Rhodies out there, God Bless, and good night.