One of the interesting things about a financial crisis is how people respond in the aftermath.
The Global Financial Crisis had its roots in the US housing and mortgage market.
Fraudulent behaviour from lenders and some very optimistic and ambitious borrowing from homebuyers, led to untold foreclosures and financial disaster for individual, corporate and government finances.
In response, a small but growing trend has emerged in the US – the tiny house.
The crisis forced many people to re-evaluate what they needed in life and what they wanted from it, and those who’ve come to form the tiny house movement decided they wanted less debt and more freedom.
And with a house no bigger than a parking space, some people have found they’ve been able to save and invest more, or just work less because their living costs have plummeted.
Most of the tiny houses are less than 46 square meters, but some enterprising folk have taken the trend further and (smaller) and built their abodes on wheels to be even more nimble.
You’re probably thinking caravan, but many of the moveable versions are built with high quality materials and are fully insulated with double glazed windows – most look like tiny ski chalets.
The wheels also help get around zoning restrictions on smaller houses and they can easily travel from their own land to a friend’s backyard or a jurisdiction that is receptive to the movement.
It would be wrong to assume it’s a movement driven by poverty or hillbillies, surveys of tiny home owners have shown nearly 90% have university educations and over 60% have no debt.
Financial freedom is a major factor with people haunted by the experiences of the financial crisis and never wanting to be tied to a mortgage again.
The interesting thing is the small house wasn’t always such an oddity in the US.
Today the average US house size is 221 square meters, yet back in 1950 it was 91 square meters.
That’s a lot of wasted space if you’d rather be doing other things with your money.
Peter Mancell is a director of Mancell Financial Group and FYG Planners AFSL/ACL 224543, www.mfg.com.au This information is general in nature and readers should seek professional advice specific to their circumstances.
