With the cost of living increasing daily, and wages falling behind steadily, how does a person live? The answer is simple....you can live on 1/10th the money you now make.

How does one cut their income by 90% and still survive? You must learn the "time value of money" function.

Money, as well all know, buys stuff. The problem is that stuff is expensive, especially new stuff.

For example, a book on the New York Times best seller list will cost around $25. But if you wait two years for the book to turn up in a used book store, it will cost you $2.50. Exactly 1/10th the original price two years later. You pay an extra $22.50 to read the book while it is new.

A new car loses thousands of dollars in value the minute you drive it off the lot. If you buy a 1988 car today, it will cost 1/10th of the cost of the new car today.

A first run movie costs $7.50, plus the popcorn...for 4 people this is a total of $40. Wait until the movie is for rent at the local video store, and the movie can be seen for $4. Make your own popcorn.

New clothes cost 10 times as much as used clothes. Who knows the difference after the first time they're washed?

The lesson is obvious...you don't pay for the stuff so much as you pay to have it right now when it is new. The longer you wait, the cheaper things get.

Instead of living in the year 2008, try living in 1998. You'll be amazed at how much you can save by waiting ten years.

The farther back in time you live, the more you will save, up to the point where old stuff becomes historic or collectable.

Just think if you'd saved all the original stuff you once owned. You could be living off selling the stuff today on eBay.

The problem is we are always constantly getting rid of our old stuff to buy new stuff. And paying a premium price for the newness of the stuff.

Does it really matter if you are just now reading 1998 copies of Newsweek? You can do this for free in any doctor's office.

As long as there are people willing to spend a lot of extra money to buy new stuff, there will always be a lot of older stuff around for sale at great discounts. You can furnish your home from yard sales. You can buy really cheap appliances and tools at yard sales. Televisions, even.

The major element of the cost of living is housing. You pay a premium for a house on a foundation. In you don't mind your home being mobile (especially in a tornado) you can get a basic place to live for under $45,000. If you get a really old mobile home (aka "trailer") you could cut that cost down to $4,500. And you might even get to live next to some of Bill Clinton's ex-girl friends.

Medical care is also an expensive part of the cost of living. Hey, who can afford health insurance, anyway? We're all going to die, anyway. Why prolong the process and bankrupt your children.

Remember, it isn't the cost, but the value that counts.

  Copyright 1998-2008 by Hugh Holub