I was reading an article the other day that while not a brilliant, was a good reminder of some economic situations that are leading us to a more disconnected and volatile world, both financially and socially. Essentially, the article was looking at voting behaviour differences between renters and owners, with owners voting more conservatively than the renters. They positioned this as some kind of surprise, but...
Isn't it obvious?
If you have skin in the game, you are more likely to be cautious and protect your skin from bumps, scrapes, bruises and cuts. If not though, then it is much easier to justify supporting what gives you the most, out of someone else's pocket. It is not about need or want, it is about the cost of getting a handout is lower if not the one paying directly for it - or feeling like paying directly for it.
For me though, it is a reminder that there is a difference in personal behaviour between owners and renters, as well as a difference in how each perceives the same situation. For a simple example, there is the "drive it like it's rented" attitude to cars, where people will drive a hire car harder than if it was their own car - especially if they took the insurance on it too. Human nature tends to say that when we have paid for some privilege, we are more likely to abuse that privilege. Thinking Fast and Slow is full of examples. But, when we own that privilege and the subsequent costs of abuse, we are more likely not to abuse it as much.
Owners pay consequences. Renters move out.
There are obviously lots of reasons that there are so many renters these days, but I am simply looking at the differences in the mentality between the two. Some believe that renting gives them more freedom, so are happy to pay the premium for the flexibility. Some owners believe that owning gives them more security, so are happy to take on the responsibility. Ultimately though, we are all looking for certainty in what we do, regardless of which we choose. A renter might like the certainty that they can move in a short time frame. An owner can have the certainty that their property will hold some value.
Nothing is certain of course.
But, while owners might vote more conservatively, that doesn't mean they are all conservative, because they are probably also more likely to be investors. That means that they are open to a certain kind of financial risk - some more than others. But renters are less likely to be investors percentage wise, which is part of the reason they are renting, because they can't afford to own. Not all are in it for the flexibility, many are renting out of necessity. And those who are financially struggling are of course going to vote in ways that promise to help them financially cope better than they are, right?
Many want to be saved.
That isn't a judgement on renters per se, but the fact is that the way we have set up society today has created a situation where we are more reliant on things other than ourselves to take care of us. We don't grow or hunt our own food, we don't build our own houses, we don't do anything for our own.
Your Own.
What do we really own?
I would posit that we don't own much of our thinking even, which is why so many of us believe that some government or another will be able to save us from whatever ailments we have. We have been convinced that we can't look after ourselves, and that we need third parties to do everything for us, even though the more we do this in modern times, the worse our standard of living becomes.
Disown responsibility, and pay the premiums.
The more we rely on third parties, the higher our living costs climb, because each layer in the supply chain is going to take profit. For another simple example, a person who can do their own plumbing, bricklaying, electricity and roofing, can build an identical house for cheaper than someone who needs contractors. The more we have to hire skills, the more we pay.
Does that make us more free?
Only if we have the money to pay.
And I think that is where we end up in a catch-22 situation, as while an owner might be more tied into something, it also gives them options to invest and possibly grow through compounding. A renter has to be far more willing to not spend in order to invest, and that is more unlikely - with a renter mindset. An investor mindset is looking to build the "stack" of value, while a renter mindset is looking to pay for freedom. Of course, everyone wants the benefits of investments, they want the returns, but there is a cost to getting those returns and those costs tend to take time. It isn't possible to just "move" when one wants - the market determines a lot.
The "cost of living" crisis that is happening all over the world has many catalysts that make the problem worse, but I believe one of the driving forces is a culture of renter mentality. We want to pay for convenience rather than doing things for ourselves, and now, we have created a marketplace where we can't even walk to the corner restaurant to pick up our order, we will pay to have it delivered to the door. At some point, we will pay for the delivery driver to spoon-feed it to us - or stick it into the blender connected to the feeding tube down our throat.
The idea of "You will own nothing and be happy" is a load of bullshit in a world where everything has a price attached to it. It is a meme created to influence people to become increasingly reliant and transfer their wealth to those who provide services that will compete for our own skills and abilities. At some point, we will have nothing left to trade, and we won't even own our legs.
We will have nothing left to stand on.
Taraz
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