Lessons from a Man Living on $5,000 a Year

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Can a person live in the US on only $5,000 a year? According to this NBC News article and this Youtube video, Dan Price has been doing it for 20 years. I enjoy these kinds of interviews as they reinforce the fact that we all make choices every day, it’s just that most of them are the “default” choice. I like being presented with people who make different “opt-out” decisions, even if they are extreme. The article uses terms like “intentional poor” and “voluntary poverty”. Why not just “conscious simplicity”? I enjoyed this quote:

I don’t believe in houses or mortgages. Who in their right mind would spend their lifetime paying for a building they never get to spend time in because they are always working?

Lessons and takeaways from Dan Price’s $5,000 a year lifestyle:

  • Lifestyle-based income. His rare lifestyle partially funds itself as the “wilderness zine” described in the article is simply a print journal of his own thoughts and activities (remember those things before blogs?). Sponsors also provide things like tents and clothing in exchange for mentions in his journal. A brief search locates his website: Moonlight Chronicles. (It annoys me when articles don’t just tell you these things.)
  • Rent. He managed to find a place that only costs him $100 for entire year. I gather that in exchange he also serves as a caretaker for the 2-acre undeveloped plot of rural land in Northeast Oregon. Deals like this are never advertised; nobody lived there and he asked the owners directly. He rebuilt all the fences and helps maintain the property.

  • Shelter and transportation. He dug/built his own “hobbit hole” (a 8 ft. diameter room with 4 ft. ceilings) with $75 in bought materials and the rest recycled/scavenged. Check out the 360° panoramic photo and photo slideshow (also see captions). The video shows that he also made himself a work studio, bathhouse, and garage for his recumbent bicycle (free via sponsorship for a cross-country ride).
  • Electricity? The article is somewhat vague here. He has no refrigerator, but I see a power strip and electric hot plate in his hobbit hole. The article doesn’t say where he gets electricity from or how much he pays for it. It is possible that he rigged up some sort of photovoltaic solar panel + battery system, but you’d think the article would have mentioned it if that was the case.
  • Water and bathing. He has no washer or dryer, so he does laundry in a nearby river. I read elsewhere that his bathhouse is basically a sauna and he washes off in the river with biodegradable soap. I guess he just buries his poop, camping-style? No water bill, no sewer bill, no hot water heater.
  • Technology. He owns a Macbook, iPad, iPhone, and pays $53 a month for his cell phone plan (13% of annual budget). I guess his internet connection is via iPhone or other free sources.
  • Health insurance. Not surprisingly with such a tiny budget, he has no health insurance. Like most people without insurance, he still gets emergency care when needed without upfront payment (as required by law). He negotiated a payment plan with the hospital for a previous $3,000 kidney stone bill.
  • Hawaii in the winter. I couldn’t find any details about this besides the idyllic idea of “surfing in Hawaii every winter”. Where does he stay? A plane ticket of $500 would comprise 10% of his annual budget. I doubt he does credit card travel bonuses. 😉

After reading the many comments, I saw that lots of people are getting hung up on this part:

Then he learned about what he calls “the simple life.” Price read Payne Hollow, a 1974 book about author Harlan Hubbard’s rejection of modernity and his primitive home on the shore of the Ohio River. Price’s marriage dissolved soon after, and the whole family moved to Oregon, where he grew up. Price opted to move alone into a tiny cabin in the woods, then a flophouse, then a teepee, and finally into an underground “Hobbit hole” on a horse pasture near a river, where he still lives.

They assume that this means he’s a deadbeat dad, but that is all you can do – assume. I don’t know if he is or not. The point is not to make this guy a moral role model, but instead to point out specific ways that he chose an non-mainstream alternative. There are plenty of deadbeat dads out there, many of whom spend a lot more than $5k a year. Why waste your time judging him on that possibility. Instead, focus on the stuff than can expand, improve, and provide perspective on your own life choices.

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  1. He is only able to do this because of the services provided by the massive civilization he’s run away from. This does not work if everybody does it.

    In fact, he’d probably be dead if everyone did this.

    There would be no cell service, no planes to Hawaii, no electric hot plate, electricity or hypothetical PV panels, no recumbent bike and no hospital for his emergencies. Everybody would be too busy getting by in their subsistence lives.

    In that light I think he’s more of a curio than an object lesson in the choices people face in their lives.

  2. Funny he mentions Hawaii: one of my plans is too fly there free with my miles and then set a tent on campus grounds ($3 per night, includes cold shower and bathroom) a neighborhood grocery provides food. Total cost of a 7 day vacation in Kawaii: a couple hundred bucks

  3. Sounds cool and obviously doable for some. The key issue is comfort. What’s life without comfort?

  4. And we all realize the his model is not sustainable for everyone because he is getting freebies by being the single (or at least one of very few) benefactors of a corporate sponsorship, right? 🙂

  5. It’s fair to say this guy is dreamy scumbag. Living a pure lifestyle of simplicity at the expense of sacrificing your family is joke. (I didn’t see an extra room for the kids on weekends, maybe i’m wrong).

    And like most hippies they want everything for free and to be ignorant of where it comes from i.e.: not owning land but it’s ok for someone else to and provide for you.

    This guy is morally bankrupt. Not a model.

    • Okay Republican mind frame. Go back to working your 40hour slave job and pretend you are not preconditioned and programmed to play the money game for the rest of your life


  6. This Life On Purpose says

    Sounds pretty extreme at first, but it wasn’t too long ago that people lived off the land and raised entire families on very little. Farming families would grow their own food, make their own clothing and provide their own entertainment. You don’t need much to be happy. It can be done!

  7. I have been reading “The Man Who Quit Money”. This man(Daniel Suelo) lives without money, and refuses to accept money from others. This lifestyle is more about his philosophy however.

  8. Well, he may or may not be a deadbeat dad, but he is a moocher off the rest of us — “he still gets emergency care when needed without upfront payment.” Who pays for that? We all do, via higher insurance premiums and higher hospital bills. And as he gets older, and since he obviously does not do much in terms of preventative medical care, he will continue to be a healthcare freeloader. Gee, if only there was a way he could be mandated to get health insurance (with subsidies to help him pay his premiums).

  9. As long as he’s happy. I hope he doesn’t get shut down by building codes.

  10. Ken: Exactly. It strikes me odd the party of the personal rensponsability wants deadbeats receive their healthcare from the rest of us via emergency rooma. Also ADA is as market friendly as you can conceivably get w/o running into market failures the healthcare is prone too.

  11. I have read about this man about a year ago. Although it is an extreme I liked a few ideas myself and these could be a great example for others. I do not think he was poor because of the situation, hoe chose this lifestyle himself. I wouldn’t do it myself, because his lifestyle seems to me like having no ambitions.

  12. I would point out that the wife has a place in decisions regarding the kids too. It may be that she thinks his lifestyle is too extreme or crazy to expose their kids to and so doesn’t allow contact.

    What surprises me is how much less he has for his life than Jacob of ERE who gets by on only $7,000.

  13. I am surprised so many people have such a strong negative feeling toward the guy…

    I mean, there are many more people who are worst offenders than him in terms of freeloading. The fact he actually negotiated a payment plan for a past medical bill already makes better than many abusers of our medical systems. Besides, he isn’t receiving welfare benefits (as far as we know)…

    Not that I support this guy or this style of living. We all now that in the modern society, everyone is to some degree dependent on others. He is definitely a net taker and not a contributor. However, on a relative scale, I believe he has only taken very little from the society…

    • You can’t save the planet and the environment when you go home and turn on the electricity which is connected to the nuclear power plant. Get back to the horse and the land.
      Anyone that has issues with this man’s lifestyle is either jealous, or so hung up on the capitalist money game.
      Seriously it amazes me how disgusting Americans are toward each other. Such a divided country.

  14. @acoward – I never really get the argument “not everyone can do this”. Why is that an argument against doing something? We don’t all have to be the same. What is more reliable is that most people will just choose the default life.

    @curtis – I think his getting sponsorships is quite smart of him. Why not? Again, his uniqueness is paying for itself. I don’t see a rush of people being like him.

    @Alexis – Well, $2k is 40% more money than $5k and would cover things like running water. Jacob’s $7k spend assumes he already owns the RV he lives in I believe, just paying for the RV park hookup fees. Otherwise, Jacob also takes cold showers and probably eats similarly (little meat, lots of grains, legumes, and veggies).

    Price stated that he does not take any welfare or other direct government benefits.

    What I meant to get across is that if people don’t have health insurance, they still have events and many people don’t ever pay their bills. At least this guy got on a payment plan. As a society, we have decided that ERs can’t turn away someone with a kidney stone or heart attack because they don’t have insurance or a credit card with a high enough limit. A for-profit urgent care center would.

    I think it’s better to try and provide affordable health insurance to everyone than to just stick with the status quo where you’re already paying for other people’s care via emergency rooms. By that, I don’t necessarily mean ACA but I would like to make everyone contribute something upfront.

  15. I don’t understand this. There are plenty people who live in America for $0 a year – the homeless people. Are we going to shoot a documentary about them and admire their lifestyle?

    You might argue that the homeless may actually prefer live some other way, and this man is by choice (and quite proud of his feat).

    But the fact doesn’t change that you want to live for less, you end up sacrificing some serious modern lifestyle that majority of modern folks take for granted.

  16. Yeah, I guess that’s what I find so interesting. I was also thinking of homeless people. I bet you could give $5,000 to a homeless person and they wouldn’t end up in circumstances near as good as this guy’s. People don’t realize how much money it costs to be poor.
    If I were this guy, I’d much rather have worked long enough to buy the land rather than owing money and labor for it and still not owning it. I think that’s where the ‘deliberate poverty’ aspect comes into it rather than just living on the cheap. I think in the religious world vows of poverty have more to do with throwing yourself on the mercy of the universe in order to learn humility or something than eating lentils.

  17. @Billy Zhao – I think that’s exactly it – which sacrifices are you willing to make? If you sacrifice most of them, a single person could live on $10,000 a year. It’s not all that appealing, but surfing every day for 1/4 of the year is the dream for some people. He’s not squatting or sleeping in a park, he’s got his own legit piece of land that he pays rent for.

    If you sacrifice nothing and want the big house + 3 cars + travel + dining out, then you have to make a lot more money to spend and still save a big chunk of it. That’s not necessarily a bad thing either, just takes a lot more money.

  18. @Jonathan My point is that there is no real lesson to be learned. He’s found a niche that very few other people can fill. If more people did, the uniqueness of his position evaporates along with the attendant sponsorships – he can pull it off because of the novelty. What’s worse when more than a few people do this in any proximity to each other, it’s called a homeless problem. At higher numbers of people there is nobody to maintain any of it.

  19. I would have loved having a fort like that when I was 11 years old. Not so much nowadays.

  20. Billy Zhao says

    We have a few underline assumptions that we almost never questioned before. First one is that mankind if progressing somehow (from ancient time to present time), and continue progressing thank to expansion of knowledge, science, and technology. After all, I do see that a majority of human population are able to not worry about hunger the first time in history. And record number of human throughout the world are moving into a middle class lifestyle.

    With extreme poverty, instability, high mortality in the rear-view mirror, most of these people will think this man to be completely nuts. Also, if we work harder, just to make more money, by itself is an action of increased productivity, and in turn benefits the society as a whole, regardless of whether you are happy or not.

    Of course since Americans have lived in peace and prosperity for so long, most people are questioning whether the value of modernity is all that useful. They tend to see all the nihilistic aspects of modern world and find all these achievements and material reward to be completely meaningless.

    Of course I wouldn’t reject them (maybe me included) like how many parents would. After all, one of such person turned out to be Steve Jobs, who evidently became one of the biggest benefactor of modern life.

  21. I wonder what his retirement plan is?

  22. Re: I wonder what his retirement plan is?

    Well considering his lifestyle SS or SSI will be more than enough. And I can bet my IRA that Social Security in one form or another will last as long as the Nation.

  23. I’d rather work.

  24. The real success story is the the land owner. This guy has a farm hand….that pays him. Now THAT’s smart.

  25. @Robert, now you’re talking! Would really bite if the land owner sold and said, sorry buddy, hobbit hole days are over… That’s why I would want to own the land. I’m all for living simply tho…

  26. Johnathan these people would call Thoreau a maniac as well, good luck convincing them.

    For those who are interested you can read Walden here. http://xroads.virginia.edu/~hyper/walden/toc.html

  27. Justin Springhart says

    Yeah, idk I’m 23 and I’ve been living on my own since I left the navy a few years ago. I am a farm hand and only live off an average of $5k a year and I do not get government assistance nor do I get food stamps, or any other help. I grow my own food and have enough to take care of my dogs and everything else I need. I own a car, and i am able to stay warm in the winter. Never really thought twice about it, grew up making $75k at 18 years old working construction but after the navy I just didn’t see the need. Now I just make what I need.

  28. I too dont understand the argument that its bad cause not everybody can do this. Can everybody be CEO of a major corporation? How about dishing them for doing that if everybody cant do it?

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