Never Retire - Your Home Appreciated in Value by $500,000, What Do You Do?
And a note on paywalls
I’m working on a Medium article that addresses an intensely interesting topic Ben Le Fort brought up on LinkedIn and Twitter—
I don’t want to influence your thoughts and responses with what Ben said he would like to do (if his wife agrees) or what I would do (which connects directly to the idea of Never Retire) if I was in a similar situation.
However, I will spoil the most extreme response.
A guy on LinkedIn suggested Ben could take out a home equity loan and invest that money.
Am I alone in thinking this is outrageous?
A couple years ago I was having coffee with a friend who was contemplating paying off his mortgage.
He asked me for advice. I didn’t give him any.
However, the other person we were talking to came with the same take out a loan and invest that money idea.
Again, am I alone in thinking this is outrageous?
Home equity loans might be one of the biggest perils of home ownership.
It has got to be pretty damn tempting, particularly when you live and own in a market with skyrocketing prices, to look at your on-paper profit and leverage it.
I know of someone (a relative) who used a home equity loan to start a business (a restaurant that failed within two years) and bail his father-in-law out of gambling debt.
I know of a household (friends of a friend) who took out a home equity loan to pay off consumer debt. However, at the same, they purchased two new cars. I don’t know for certain, but I’m confident they financed at least one of the two new cars.
So they’re paying off debt with new debt as they replace some of the old debt with some new debt.
Blows my mind.
And I take crap for deciding to rent a below market rate apartment for the rest of my life on relatively modest earnings.
Anyhow, I’d love your thoughts on this. What would you do? I might include your responses in the aforementioned, forthcoming Medium article. You read and interact with the newsletter and maybe you pop up in a Medium article. What a country.
Which leads me to a thought on paywalls.
I sometimes send paid subscriber posts for this newsletter to paid and free subscribers. When I do this, free subscribers can only read to a certain point before they’re asked to consider subscribing to the paid version of the newsletter.
Like a lot of things about the online content business in the 21st Century, paywalls make me uneasy.
It used to be that content providers—platforms and authors—got paid through advertising. Over the past few years, the advertising model has completely shifted to a subscription model.
While writers on platforms such as Medium get compensated based on engagement (i.e., time spent reading, views, etc.), we generate a significant, if not a majority of our income because people purchase subscriptions.
At Medium, I get a portion of your $5/month subscription fee, if you subscribe after reading my work.
With this newsletter, I get almost all of your $5/month or $50/year subscription fee when you subscribe directly to the newsletter.
It took me some time to come around to the idea that I have to (a) promote subscriptions on Medium and (b) use paywalls and other subscription solicitations here. I resisted by not instantly doing either of these things. However, it soon became clear I had no choice if I want to continue making a living doing this.
I like to be clear and straightforward about this type of stuff.
When you subscribe to receive my work, via this newsletter in particular, it is as much a show of support as it is anything else. Sort of like tipping a bartender or server or, maybe more aptly, tipping a content creator as you watch their video online.
I do my best to deliver additional value to paid subscribers by—
providing previews of my Medium content
going deeper in the weeds for the newsletter than I do on Medium
offering content, such as our working in retirement series, you won’t get—at least not to the same extent—on Medium
Overall, I am able to produce more content between the two platforms because of the direct subscriber support I receive on the two platforms.
I wanted to take a second to clarify this, given how frustrating paywalls can be. I don’t use them to game people. I use them because the subscription model requires a delineation between free and paid.
I do my best to draw the distinction between free and paid on the basis of you choosing to help support my work as a freelance writer and me providing additional value in return.
As always, I appreciate it.
Rocco
On your borrowing topic , HELOCs ( home equity lines of credit) are traditionally at a higher interest rate with sharper terms. There’s always unusual circumstances, but I absolutely don’t see the benefit here. Creating debt to create wealth is risky every day. Ask any gambler.
I understand paywalls. Out on Medium we all read loads of different articles on different topics. I subscribed to this because I wanted to know more than a passing article could provide. Furthermore if you wrote at the subscription level on Medium, many would see one article here or there but the content thread and contextual depth would be lost on them. I believe that a subscription reinforces the value-added features that deeper writing can provide. I understand it and applaud it. Everyone has a choice and I choose to subscribe. People who don’t subscribe and criticize you for it are just bored and cranky.