I haven't rented a place in Finland since 2008, which was when I bought my first apartment here with a past girlfriend. We bought for 126K, but spent 140K all up on it for small improvements and to furnish it - as we had very furniture little ourselves and it needed some appliances. We broke up a couple years later and it was valued at 145K, so after already lessening the loan, I paid my ex 5K and took over the entire mortgage.
A couple years later, my now wife moved in with me and we spent a couple thousand redoing the floors and repainting a little, which I did myself. Two years after that, we sold the apartment for 170K, which gave us the complete deposit and then some on a larger, but much cheaper (92K) apartment in an outer-suburb, which needed a full renovation, including large-scale work to the entire building. This made the place a lot more expensive than the purchase price, but we sold it for 175K last year, which gave us the minimum deposit for the house we are in now, plus some extra to add into the renovation kitty, which we burned through a long time ago.
At each stage of the last 13 years of home ownership in Finland, owning was cheaper per month than renting something of a similar size and type. And because I was able to make some smartish design decisions and do a lot of the renovation grunt work myself, I was able to build sweat equity into each of the properties and have both a place to live, a store of value and come out ahead when selling, which gave means for the next purchase.
Property isn't always a good investment, but so far, It has meant that every time I have sold, I have been able to get about 25% of my salary out of the apartment. For example, the first place I held for 6 years had a profit of about 1.5x my yearly salary at the time, which is a pretty good result, since at the time I wasn't able to save much of my salary at all. It was the same with the second place with my wife, which was vital considering complications after the birth of our daughter meant that our cash savings were completely wiped out and the first three years we were living hand to mouth, often with salaries gone for medical expenses before any could reach the mouth.
Having that collateral in the apartment was necessary for being able to secure our home loan and give us some buffer for the renovation work. Since we moved to the house Easter 2020, we have done a lot of work and sunk a lot of loan and capital into it, but hopefully most of it will hold its value with very little updating if we do ever decide to sell, but we are planning on being here a while anyway.
The reason I started thinking about this is I noticed that the way I visualize returns on things is relative to my current salary, rather than a disconnected figure floating in space. I think this is because I have a better understanding of my financial situation through the perspective of my IRL income, so relating other revenue streams to it makes sense for me. Since I know that I am able to survive off my current income now, it would mean I would need a 100% equivalent to "live off crypto", and that would have to be relatively steady through bulls and bears. However, if I look at it as a supplement like a payrise or a bonus, I am able to get an understanding of what that means to me in the real world.
For a hypothetical example, for me to get a 10% yearly bonus, I would need to calculate what I get paid in about 5 weeks of work. If that is 4000 dollars (800 a week), I would need to earn about 75 dollars a week consistently, or 11 dollars a day. If I wanted to have a 20% payrise/bonus, I would need to earn 2x that amount.
Now obviously, this is going to depend on how much I earn, but for someone who for example in the US who earns the minimum wage of $7.25 (hasn't changed in 11 years), they would earn about 290 dollars a week, or 15,000 dollars a year. A 10% payrise for them is 1500 dollars a year or, 28 dollars a week, or 4 dollars a day. This might not seem like a huge amount, but it is significant. Apply this to somewhere like India where a typical salary is half that, and 2 dollars a day is a significant boost to living standards.
However, none of this can be charity based, it has to come through investment in order to be both sustainable and somewhat healthy, meaning people have financial freedom. This means that it is up to individuals to find ways to create the additional revenue streams that can support their lives, which is going to leave disparities of result, because people are going to be investing different amounts. However, one of the good things about crypto is that people gain mostly relative to their inputs, at least from the passive side of the equation.
I am not saying visualizing it in this way will work for everyone, but I do think holding a strong understanding of situations and conditions and then building some kind of story around things helps build clarity. Using this, it is then easier to get a sense of what is needed to be accomplished and how, rather than just playing it all day by day, in the hope it leads somewhere good in the long-term view.
For me, it has also helped diversification into several revenue areas, including posting, curating, trading, pooling and holding. I am a holder by nature, but I have been able to affect my conditioning by changing the narrative and framework, helping to develop a different mindset.
Now, so far, this isn't where this post was meant to end up at all, but I think it is a useful post anyway, at least for me. A lot of our habits are blind to us and exploring them can help identify opportunities that we have missed, while we go about our days on autopilot. Stepping away and getting perspective gives us a chance to see the bigger picture and consider if our daily grind is the right grind to get us to where we want to be.
When it comes to money, we often look at the total amount we need in order to be able to retire, or something along those lines. This sum can be very large. However, if we break it into smaller chunks and instead look at what we need to get daily, or weekly, we have more chance of making small process and investment changes that help get us there.
If my plan was to save for a house as a renter, I would imagine that I would still be saving, as even if renting was the same cost as owning, having access to that money monthly would have likely eroded some of it before I had a chance to put it away. Sure, there are many people that will say "but you could have invested it into Bitcoin" and the like - but most of those people aren't millionaires or billionaires - because they didn't invest either.
Human behavior is predictable and most of us don't have the discipline with money we would like, but if we can affect our personal narrative, we are able to change our direction. It takes time, but it is possible to make large scale changes in relatively short periods, if you consider the length of a life.
I know quite a few people from all around the world who have fundamentally changed their financial prospects through crypto over the last few years in ways that I think they probably thought wouldn't have been possible earlier. They didn't get some kind of lumpsum win, they build daily incremental growth into their habits and because they invested to become owners instead of renters, that growth can continue to provide various kinds of revenue streams well into their future too.
There is a risk in ownership of course, which is why a lot of people never make a leap into working for themselves, even though they believe they can do it better than how it is currently being done. In hindsight, perhaps they could have done it better, but hindsight doesn't get paid, foresight does.
Looking forward, I think I will write the post "this was meant to be" later instead.
Taraz
[ Gen1: Hive ]