Lessons From The World's "Poorest" President

 

The president of Uruguay, Jose Mujica, has been dubbed "the world's poorest president" because he eschews living in the presidential palace in favor of living on his wife's modest little farm where he helps work the land.  He also donates nearly 90% of his presidential salary to charity so his take-home pay is in line with the average Uruguayan.  He's in his late 70's and he argues that he has always lived well by living simply.

I don't agree with all of his political views but I very much agree with his personal fiscal philosophy:

"I'm called 'the poorest president', but I don't feel poor. Poor people are those who only work to try to keep an expensive lifestyle, and always want more and more. This is a matter of freedom. If you don't have many possessions then you don't need to work all your life like a slave to sustain them, and therefore you have more time for yourself."

I'm not advocating constant leisure.  We all have to work to sustain ourselves. God gave Adam the injunction "by the sweat of thy brow shalt thou eat thy bread".  Work is wonderful.  What I'm concerned about is that we're losing our lives to the pretense of prosperity.  American's spend more and more time earning and less and less time living.  The voracious monster of debt and obligation we create by buying too much house, too much car, and lavish luxuries, demands constant care and feeding.  The result is that family meals are missed, bed-time stories are skipped, and quiet contemplation is curtailed.  Our ability to take early retirement was a surprise.  We hadn't planned for it, but when the opportunity presented itself we were able to take advantage of it because we have enjoyed a lifetime of provident living.  Both Linda and I learned frugality from our families, but we didn't let a good job and a high income lull us away from the principles of provident living.  I'll just site a few examples:

• Store Food - As soon as we got engaged (September of 1980) we decided to redirect the money we had been spending on dates to buying and canning fruit which was in season that fall.  We spent many wonderful evenings together, after we'd finished our studies, at her parent's sink peeling peaches and making apple sauce.  That bottled fruit got us through the lean months ahead, but more importantly it set the tone of frugality and providence that blessed us through our  subsequent life together and with our children.  You can't eat a bank account the first priority in saving is saving up food so you can feed yourself through any ups and downs.

• Buy Used Cars / Pay Cash - We have always bought our cars with cash.  That has meant that, with one exception, our cars have been used.  A car is a useful tool that gives us remarkable freedom, but why should it also become a fashion statement that enslaves us to debt?  By the way, the best strategy I've found for buying a used car is to get one that has high miles for it's age because those high-miles depreciate it quickly so you get a great deal and yet most of them will have been driven on the freeway which causes minimal wear and tear.  Using that philosophy I bought a Honda Civic once for $2,200 with 85,000 miles on it.  I used it for my commute for years and then passed it on to my son.  Before it finally died we put 258,000 miles on it.  Yes there were some repairs but you pay for maintenance and repairs on new cars as well.  We got over 170,000 miles out of a $2,200 car.

• Half the House You Can Afford -After I was promoted to Manager level and our income was vastly improved we found ourselves needing to move from our home in Flint Michigan closer to Detroit where my job had moved.  Before we shopped for homes we heard from our lender what they would be willing to lend us given my income and credit (i.e. how much we were "qualified" to borrow).  We ended up choosing an old farm home on a couple of acres in Holly Michigan that cost us about half what we were "qualified" for.  We took out a 15 year loan on the home and then began making extra principal payments. Whenever I'd get a raise or a bonus we'd pay it toward the house.  The objective was to get out of debt ASAP.  We paid off that house within 8 years.  I can't begin to express the sense of freedom and relief that came from being completely debt free.

Get a great education, work hard and be productive, but avoid a lifestyle of excess.  Enough is as good as a feast.