There is no question in my mind that in the near future many Americans will be forced to move into smaller homes. This is going to happen despite the fact that energy prices have come down slightly and we are experiencing temporary relief. Many of us in the northern climates will also be relocating to the warmer climates. The energy prices are going to go up again and will continue to rise every year. This is going to make it virtually impossible for the lower income and retired Americans to stay in the colder climates. Let's take a typical retired couple with a paid up mortgage and a combine retirement income of $1500.00 a month. There are many in this bracket in our area of New England. Let's say that they burn 1000 gallons of heating oil in a year. The way oil prices have been the past year this can amount to anywhere from $2, 000.00 to $4,000.00 a year. If you then add that to their property and fire tax bill, that takes the yearly total up to $10,000.00. Now if their pensions only come to $15,000.00 a year, that only leaves them $5000.00 to pay their income taxes, state and federal, buy groceries, pay doctors bills, drive their automobile, and all the other little incidentals in life.
Now if some of you are gasping in disbelief over the above figures, believe it, because New England is loaded with people in that income bracket and even lower incomes, ands it getting worse! Furthermore, many of the cities and towns in our area are grossly mismanaged and are taxing everything in site. So where are we going with this scenario? It's simple, the poor and the elderly that are lucky enough to own a home that they used to be able to afford are going to have to sell it, or lose it. So I predict that there will be a lot of selling home in the north and moving south where you can at least starve to death without freezing to death first. The crime rates will go up dramatically too.
The folks with the pensions will leave first because they have that "portable income" so to speak, and hopefully the cash from the sale of their home they were forced to sell up north. I see this happening with some of my friends already. Now if they play it smart, this is their chance to start over right. By right, I mean that they can take their seed money and build a small energy efficient home. Air conditioning is a major expense in the south, but if you have 25% of the cubic feet than a larger house, and it is well insulated and designed you can cut the air-conditioning costs by 75% easily. If you have Light Emitting Diode light bulbs, they run cold for one thing, and they also save 95% of your lighting bill. Solar hot water heating in the south will save at least 80%. The same goes for your refrigerator and other appliance. Stoves, Dryers and back up water heaters should be gas. Hanging up clothes never killed anyone either, and saves a lot of energy. So what I am really saying is that if you want to survive financially in the future one of the best ways to do it is to start lining a greener life style, if you will. There is no better time than right now for you to start investigating the alternate life styles that will enable you to survive than the present. Be sure to find a town with low taxes that hasn't been taken over by the "Empire Builders" that bring with them the higher taxes caused by bloated town payrolls with their bloated pension and medical plans that the locals are expected to support. The chickens will be coming home to roost on these guys soon now! We are going to talk a lot more about all of this in the future.
Walt
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