Wanting and Needing

Ben Stein sounds a familiar theme.

People who can keep their lives simple are so far ahead of the game it's ridiculous: a steady job or a good business; saving money regularly starting at an early age; great self-discipline about health.

Both to be rich and to have a simple life is a prescription for happiness. For many of us, making money is easy versus keeping our lives uncluttered.

Make a list of your monthly obligations. How many of them do you really need? How many of them are freeing you and how many are enslaving you? Generally speaking, with the exception of a home and a vacation house, if it's eating money and not paying out, you have to question if you really need it. Do you need that time share? Do you need those three cars? Do you need a $20,000 TV? (If you do, please tell me what's on that makes it worth paying that kind of money for.) Illiquid assets that you rarely use enslave you unless you have so much money that their cost is incidental.

If you have to go into hock to buy that third car or vacation home, stop! Each dollar of debt borrows from your future, postponing the day when you will be free to retire. But I disagree with Ben Stein: assets purchased without debt also can enslave you. A second home has to be maintained (sure, you can hire a property manager, but even he has to be monitored). More importantly, you feel guilty if you don’t spend your vacation there; after your tenth visit to Aspen (or Tahoe or Telluride) you may yearn for Yucatan.

Annika Mengisen writes “all that matters is that you're living the life, not necessarily owning it,” hence the boom in the fractional ownership model that has expanded far beyond its vacation-home roots.

Says Piers Brown, founder of the asset-sharing Web portal FractionalLife.com, “The biggest driving force behind this new marketplace is the lack of time people have in the face of demanding careers and fast-paced living standards.” "Fractional owners don't pretend that they are owners," says Michael Silverstein, author of Trading Up. "They are pleased that they don't have to deal with the hassles of maintenance, improvement and fluctuating value. They like to use the house or the boat as if it were a costume that they have rented for a special event."

In 21st century America, what does it really mean to “own” something? Nearly every asset I have is subject to use restrictions, from the color I paint my house to the speed I drive my car to how I dispose of my rechargeable batteries. Realizing that we are in the broadest sense renters, not owners, and knowing the difference between what we want and what we need is the beginning of wisdom. (And no, I’m not wise yet.) © 2007 Stephen Yuen