(Excerpted from Chapter 8: The Grubstake: Stickin’ it to the Matrix)
The goal of all of the above is to first get out of debt and then to start saving money, for this is the grubstake you will need to get free from the urbanized prison you live in which is a wholly-owned cash cow for the matrix.
Remember that little things add up. And lots of little things can add up surprisingly fast. If at any point along the way while saving that grubstake, you still have debt, pay it off immediately. Then stay out of debt for the rest of your life.
At some point you will cease to give a shit about your all-important “credit rating” – one of the central Illuminati fear tools to keeping its slaves in line. This disgusting financial parasite branch of the matrix is lorded over by three spooky private companies cozy with the national security apparatus, who keep a healthy dossier on every American.
At some liberating point, your “credit rating” will not matter, because credit is a bad thing that makes you a debtor and you will want nothing more to do with it.
Another very important old adage (amazing how many of these anachronisms turn out to be true) to remember is that it’s not how much money you make, it’s how much money you save that counts.
There are many financial downsides to having a “job” that are not often considered. First, there’s the expense of getting to and from your workplace, for which you are not compensated and which has become increasingly expensive as gas prices skyrocket.
You’ll also have to buy clothing for that job, sometimes even – God forbid – an expensive monkey suit which mimics the ridiculous power-tripping matrix.
You’ll also need to eat something mid-shift and for most matrix slaves, company food is no longer free. Nowadays carpenter hires are even told to “bring your own tools”. It’s ridiculous and degrading how working people are treated in this country.
Get in the habit of packing your own lunch from home; otherwise, you’ll squander your precious grubstake at some overpriced chain restaurant or diabetes-laden fast-food joint.
Make your own coffee and breakfast too, so you don’t end up veering into some cartel-owned gas station for a high-priced muffin.
There are also payroll deductions for income tax, Social Security and Medicare. These take a huge bite out of your paycheck and reduce your hourly pay quite dramatically.
My wife and I strive to remain just below the threshold for which a couple is required to pay federal income tax. We are legal war resisters. The threshold this year was around $19,000. We made a little over $18,000. Perfect!
Since we don’t have paychecks, we don’t have deductions. I’ve worked “real jobs” so sporadically over the years that any time I did get a “real job” I would always request a W-4 form from my new employer.
This little known IRS form asks two questions: (1 did you make enough money last year to owe federal taxes? (2 do you expect to make enough money this year to owe federal taxes?
If you can answer “yes” to both questions (more importantly the first, since the second is hypothetical and anyone can and should answer “yes” to it), you can sign this form, have your employer sign and they will submit it to the IRS. Once this is done you will not have federal income tax withheld from your paycheck.
A big reason why owner-occupied housing is such a great investment is that after you’ve lived there for two years you can sell it without owing any capital gains tax.
If you use this strategy – as we have for years – you can maintain an income just below the federal tax threshold, but still bring in those BIG chunks of nontaxable income each time you sell that house you’ve lived in rent-free for two years or more.
Yes, this strategy is predicated on moving, but I can tell you that we’ve enjoyed our opportunities to see the country and the world by living in different places, and also by traveling somewhere nice in between owning each place.
I can also tell you that the place we live now, which we paid cash for less than a year ago, is the coolest place we’ve ever lived. So despite certain inconveniences, we’re both really glad we kept moving until we found this place.
We’re also glad we were patient, working our way up to this totally private 42 acres at the end of the road with a new cabin and some good outbuildings and fences.
Too many people go for that dream home too early in life. As a result they take on a massive mortgage payment which – in a down housing market like we are experiencing now in which selling a house is difficult – becomes a giant albatross around their necks.
Start with a fixer upper or three and work your way up to that dream place. Borrow on the first, pay it off, sell it, and pay cash from then on. Again, if you live like no one lives now, you can live like no one lives later.
Once you’ve got it engrained in you that a growing savings account is your grubstake – your key to unlocking the matrix cell you’ve been living in – you will begin to spend less, save more and set your sites on the entirely possible goal of emancipation.
When you have saved enough for a big down payment on a house, you have attained your initial grubstake. Better yet if you can buy that first house for cash. But unless you were born to money, chances are you will have to finance that first house.
When you do, set it up so that you can pay it off as soon as possible – at the most, five years. If you can’t do it in five years, I would say you can’t afford the house.
Keep renting and save some more money. If you finance any longer than that you are back in the debt cycle for too long a term to ever make a clean break.
Make sure you have a clause in the contract for deed that states that you can pay off the contract early and without penalty. Banks would rather you didn’t do this, since they make their money on interest payments. Make a conscious attempt to do just that. We had a five-year loan on our first place and paid it off in less than one year.
Again, look for cheap rundown property with good bones to buy. Do the required cosmetic improvements, spend elbow grease instead of capital, and plan on moving in a couple years, once you are exempt from paying capital gains on the sale.
In the meantime, pay down that mortgage as fast as you can. Remember, if you pay it off completely, every penny of the selling price of that house goes into your pocket. Your grubstake just got a whole lot bigger. And you may be able to pay cash for the next house.
Lather, rinse and repeat until you are both financially set and have found that dream place you want to live for the rest of your life.
Incidentally, I do realize that all of this moving would more difficult with children. But that doesn’t mean it’s not possible. I know people with children who have done it. And all that moving around has made their kids some of the happiest and smartest I know. Besides, when you do move, you don’t necessarily have to move far.
Ironically and karmically, once you start down this road of investing in, fixing up and selling distressed real estate, it will be the banksters who will begin paying your ticket out of the darkness of their matrix.
Dean Henderson is the author of four books: Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror Network, The Grateful Unrich: Revolution in 50 Countries, Das Kartell der Federal Reserve & Stickin’ it to the Matrix. You can subscribe free to his weekly Left Hook column @ www.deanhenderson.wordpress.com