Buying a Home Debt Free: Financial Privilege

One theme I've noticed across CP/QF blogs is a tone-deafness around financial privilege.  Every family has different levels of wealth and income.  Families that have higher levels of assets and income can give their children financial benefits that put the kids into a better starting position than people with fewer assets.  My concern is that many CP/QF voices extol the virtues of hard work and saving without ever tallying up the large amount of wealth that is transferred from one generation to the next.   Without that accounting, people can be overly judgmental about how poorer families "just don't work hard enough" - and I have problems with that attitude.

Steven Maxwell posted a two-part testimonial written by a young man who built his own house when he was engaged at age 19.  I'm glad  that he was able to do that - but the main reason he was able to do so was that he received a lot of direct and indirect transfer of assets from his family and friends.  I'm going to pull out the sections that discuss input from other people and do a rough estimate on the amount of asset transfer that occurred. 

I grew up on a dairy farm. My siblings and I helped on the farm a lot, and Dad paid us by giving us portions from the sales of cows or by giving us calves. I used some of this money to buy beef cattle and thus got more funds. One of my brothers and I also had a lawn mowing business, and I tried never to spend money. I lived at home, used my parents’ vehicles, and didn’t buy myself hip clothing, coffee, or gadgets. I had thousands of dollars in savings by the time I got engaged.

• Depending on how the market is doing, a dairy bull calf runs between $50.00 and $150.00.  
• Beef steers do great on left-over dairy cattle feed so the costs of raising the beef steers was pretty negligible for the kid. 
• A grown cow eats around 30 pounds of hay a day; the steer would start out lower and end up higher because the amount of hay eaten is roughly dependent on body mass.  Assuming the steer needs ~30 pounds of hay a day for 5 months out of the year that grass forage isn't available for the two years it takes to mature him, that's 9,000 pounds of hay.  Round bales of hay vary a lot in weight - but I'll give a generous estimate of 1,000 pounds of hay per bale - so he'd need to buy 9 round bales per steer per year.  The price of hay moves around a lot, but $100.00 a bale is a good average.  
• That's $900.000 over two years in feed.
• I doubt the brothers had to buy their own lawn mower for the business to start with.  A walk-behind gas lawn mower runs between $100-$300 dollars while a riding lawn mower runs between $1,000-$5,000.
• Living at home and using his parents' vehicles means that his parents were willing and able to pay for his food, cleaning supplies, health insurance and automotive insurance plus the amount that utilities increased from him living at home.  (I'm assuming he was purchasing his own clothing and work consumables.)  This amount varies a lot by family and geographic location - but that's probably between $500 - $1500 per month of expenses for his parents.

When I got engaged, it was obvious that we’d need a place to live, and it seemed most sensible to build a house. My grandfather owned a number of pieces of farm land, and he offered to give me the land to build a house on. My grandfather got power put in to the property and set up a submersible pump in the well. He also dug a trench with his backhoe to bury the pipes and main wires to the house.

I've decided I would like his grandfather to be my honorary fairy grandfather - because I would really like having a grandfather that can give that amount of assets to a grand kid!

• If Grandpa was handing him a standard 180 acre Midwestern farm, that's around $1.5 million dollars in assets.  More likely, Grandpa was giving him a lot that was "split" off of an active farm.  Agricultural land runs at between $4,000-$7,000 per acre.  
• The cost of bringing a power line onto a plot of land varies quite a bit from utility to utility - but that's between $1,000 - $6,000.
• The cost of a submersible well pump is between $150 -$300 plus labor.
• Backhoe rental for one day: $300-$500 plus labor.

Dad and Grandpa dug a basement with tractors, and then I rented forms for basement walls from the concrete company so we could set them up ourselves and save hiring labor. We put old scrap metal in the forms instead of buying rebar. The company I bought the cement from also sold me a used concrete septic tank! My dad negotiated a good deal on lumber from a building center. I bought whole pallet loads of OSB and agreed not to return any boards from the loads they delivered. For framing the walls, I bought used boards from a man who was tearing down some old buildings. The boards were rough cut and only had four or five usable feet but they were still solid. We nailed these 4’ 2”x 4”s together to make 12’ 4”x 6” studs which were spaced every two feet.

• Cost of bulldozer rental: $500 dollars per day plus labor.
• Rebar costs ~$0.75 a foot.

Good ideas:

• Using scrap metal instead of rebar if they've got it laying around.
• Cutting a deal on lumber and OSB.

Possibly a good idea:

• Saving labor costs by placing basement wall forms - but there's a trade-off of lost wages that we don't have enough information to determine if it was a good idea.
• Re-purposing used lumber to make studs IF the boards were glued as well as nailed AND the author lost no wage earning time to doing this - or counted it as a hobby. 

Don't buy used septic tanks.  It's not worth it to risk polluting your well when a new concrete septic tank costs between $600 - $1,000.  

I got a used water heater from a neighbor, which is still serving us 10 years later without trouble. I bought windows and a used door from another person. My grandpa procured some interior doors that the company he worked for was getting rid of. Some friends of my wife’s family gave us their used (but working!) washer and dryer. I also got a used fridge and stove. Instead of cabinets, I made shelves from some plywood crates I tore apart but eventually I replaced these with normal cabinets.

• I'm assuming that the word "got" means "bought" - so he probably spent around $50.00 each on the water heater, fridge and stove.   
• The used washing machine and dryer is another $100 dollars saved.  
• A cheap interior door retails for $35-$40 dollars so let's give the doors that Grandpa scored a value of $30.00 a piece.

I traded a calf to a carpenter from our church for a couple days of help, and he loaned me a book on general contracting, which was very helpful. We didn’t have high speed internet then, and I don’t recall googling how to do anything. We did all the plumbing ourselves and the wiring too.

Dude, you massively unpaid your carpenter friend if you traded him a $150.00 calf for two days of work.  That's less than $10.00 per hour if he worked for 16 hours across those two days - which is in the lowest 10% of carpenter's hourly wages in the US.   A fair trade would have been two calves for a weekend's work - or a feeder steer for a week's work.

If the general contracting book was helpful, he should have hired an electrician and a plumber.  There are a lot of projects in a house that can be completed by relatively inexperienced people without health and safety issues; electricity and plumbing are NOT in that category. 

On the other hand, if "we" is short-hand for "Dad and Grandfather who have kept a dairy farm running for x years", they were probably okay.

The week before I headed to my wedding, some friends from a few hours away drove up and helped finish mudding and painting the drywall on the main floor. The second story had no inside walls framed yet and no insulation in the roof so we lived on the first floor for a while. When I was gone on my honeymoon, my family laid some flooring and finished getting things livable. The house was only covered with house wrap, but a couple years later I put on siding.

That's a lot of labor costs saved by friends and family. 

I grew up in an older suburb of a medium sized Midwestern town.  There's no way a person could get away with having only house wrap on the outside of a house for years in a more population dense area.  People do not take kindly to having an eyesore like that dragging down property values.  Likewise, I've enjoyed mentally following all the same things that Amos' family has done at my parents' house.  We'd have had the cops called when there were cows, when someone started running excavation equipment out back and especially we started building an entire house my parent's 1/4th an acre of land. 

Why does this matter?  Most CP/QF families don't have the amount of assets available to a multi-generation dairy farm family.  Most CP/QF families don't have fathers who worked as electrical engineers.  Most CP/QF families are raising large families on (ideally) the income of the father alone - but the anti-intellectualism of CP/QF greatly limits the potential income of the men. 

Amos and his family did nothing wrong or anything immoral - but they are not the average CP/QF adherent.