These days, it seems like pretty much everything, everywhere, all the time has become ”an investment.”
Your house is no longer "the place you live" — which historically has been what it was — it is now an investment. And there are lots of people who look at your house when you're trying to sell it thinking of it as an investment. They don't really think of it as somewhere they're going to live… that's purely coincidental, and if you could get a better rate of return from simply owning your house but sleeping in their car... well, they probably would!
Having and running a business is no longer about providing a product or a service for the hope of making a profit and creating a base of happy customers, it's an investment. And there are people out there eyeing your business through the lens of perception not of what it makes but of investing in it and of what rate of return they can get.
When I first got into crypto about a dozen years ago, the scene was primarily about offering an alternative payment system, and banking the unbanked, and borderless worldwide finance that allowed people to transact without borders and government/bank interference. What is crypto today? It's mostly an investment. The whole idea of crypto actually being something you use to make a profit that's pretty much been forgotten... crypto is no longer the vehicle, it is the product itself.
Maybe I'm just old-fashioned but I find this whole trend a little bit disturbing. If we have to look at everything we do — from getting dressed in the morning, to living somewhere, to eating, to working — in terms of rate of return rather than simpler things like personal enjoyment and relaxation what does that suggest life is really becoming?
Don't get me wrong, I'm not some minimalist or nihilist who's trying to promote a vow of poverty or trying to live without money. That's not my point here. My point is that we have seemingly become almost obsessed monetizing every conceivable aspect of our lives to the point where we are virtually no little more than living breathing billboards for all the products and services that surround us.
I suppose the idea of private equity — that is, individuals or conglomerations of individuals whose sole purpose is not to actually produce or contribute anything but simply to invest — has always been a part of the economy. It just seems like in recent years they are rapidly on the road to becoming the not only the dominant but perhaps the only aspect of the economy.
A couple of months back I was reading a news report about one of the last bastions of affordable housing in the United States: the Mobile Home Park.
While — at least at a superficial level — mobile home parks may get a bit of a bad rap and have a negative connotation associated with them they are nonetheless just about the only way somebody below median income has at least has a chance to own their own home.
Except even that is changing. Private Equity Investment Funds are buying out large numbers of individual or family owned mobile home parks and even touring them with investors pointing out how they can easily take these things (which are relatively inexpensive to acquire) and charge much higher rents for the land and bump up their rates of return to 11-15% because the unfortunate people who live in the manufactured homes are essentially not financially able to move so they have no choice but simply to pay the higher lease rates or become homeless.
Closer to home — because we are in the process of downsizing and wanting to move to a smaller less expensive home — we're experiencing this directly as a result of talking to Realtor friends who have been pointing out that a lot of the smaller affordable dwellings in our region are being bought up by private equity firms, fixed up and gentrified and then either resold as "luxury homes," or rented out for ridiculously high rents that virtually nobody can afford.
Long gone are the days when it was considered that an individual should spend about 1/3 of their income on housing… these days many people are spending as much as 50% or more of their income on housing.
I'm not sure where this is all going to bring us to in the long run, but I have a feeling it's not going to be a particularly good place, mostly because income/wage growth cannot keep up with the rates of return demanded by the Private Equity Investment Funds.
All I wanted was just a place to live that doesn't cost an arm and a leg!
Thanks for coming to visit, and do leave a comment if you feel so inclined!
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