Unassisted Living on the Cheap

At some point, you will probably be forced by circumstances, mediated by your kids, to move out of your home. You will then become visibly dependent on others. Of course, we are all dependent on each other, which is why we are rich. The modern division of labor has made us rich. But there is something about being visibly dependent that we resist. Such dependence is too much like becoming children again. It’s unbecoming . . . except for children.

I don’t think I would care. Give me a computer, a book, a yellow highlighter, and the Internet, and I won’t care who cooks my meals. Yet maybe I would care. It would depend on my mobility outside the facility. A friend of mine who has early Alzheimer’s has been put into a facility that locks him in. He calls it a prison. It really is. But, as he declines, this is necessary. That merciless disease will make him an infant again. Miracle drugs will make tens of millions of Americans the healthiest Alzheimer’s patients in history.


Last year, my parents, in their late 80s, moved into a retirement facility. It’s an unassisted care facility. They have their own apartment.

The facility has a risk-reducing clause: If at any time either of them requires assisted care, the facility has another wing. So, if you are a resident of the unassisted care wing, you have priority in the assisted care wing. This makes good marketing sense.

My parents like the place. My father is happy with the food. My mother is happy to be in the city. Until a year ago, they drove several times a week for 45 minutes each way from their 10-acre place in the country into town. The gasoline expenses today would be 30% higher than they were a year ago. The risk on the road is less. The highway is a killer. Logging trucks are always hitting cars — a one-sided exercise in the laws of inertia. My parents are also closer to the emergency hospital, which my father has had to be taken to several times because of falls over the last few months. (My mother suspects that a prescription drug weakened his legs. She quit giving it to him, and he quit falling.)

The key to their present comfortable circumstances is their health. They don’t get sick very often. Neither of them is overweight. My mother is a disciple of the legendary Francis Pottenger, M.D. She took me to his clinic in 1948, where he helped restore my health in 18 months through diet and exercise. She has tried to structure their meals around Pottenger’s high protein, low sugar, no processed grains diet. Over the years, this seems to have paid off. They both have outlived both of their parents, all of whom died in their early 80s. The diet has worked for me. I am in good health. I can still wear my 1975/82 three-piece suits — at least most of the time. (It is not vanity that keeps me on my low-calorie, no grains diet; it is parsimony. I last bought four cheap, L.A. garment-district suits in 1994, and I do not plan to buy any more. For the record, I have bought all but three of my suits since 1965 from Al Weiss Men’s Clothing.)

For those of us who don’t think Medicare will still be with us in our old age, diet and lifestyle decisions today are ethically mandatory. I don’t expect Medicare to go belly-up in one fell swoop. It will go out the way its highest-cost patients do: on life support, drooling. So, the care we can expect will be ever less efficient. My goal is to stay out of the health care delivery system, as I have generally stayed out of it, for the remainder of my life. I want to go belly-up in one fell swoop. So do you.

My parents say that their physicians keep looking at their watches. There is a 15-minute limit. They spoke about this with a friend of theirs in California. “Our limit is 12 minutes,” she said.

If you are under Medicare, think of the system as a physician who is ten years older than you are. Imagine what your level of care will be like when you’re 75. You want a professional with a stethoscope. You’ll get one on a catheter.


Fact of life: scarce resources are allocated either by money or by time. If you are not in a position to pay the monetary price of some item, you will pay with time. The health care delivery system speeds up the conveyor belt for people who don’t have a feeding tube into their bank accounts.

The emotional commitment of care-givers is higher in an incubator room for newborns than it is in an Alzheimer’s ward. People invest emotionally in the results of their work. If the results are guaranteed to be thwarted by a disease like Alzheimer’s, the care-giver is unlikely to make an emotional commitment to the victims. The victims cannot offer thanks, and their relatives would probably prefer to see a victim die, especially if they are paying for care. The family’s earthly inheritance is being depleted by the victim.

So, the closer you get to the day of reckoning, the less committed the health care delivery system is likely to be with respect to your future. This is not the case if you are paying full ticket for the care delivered. When you walk in the door as a full-price patient, nobody groans. You bring with you the preferred sweetener: money. But if you are covered by Medicare, and if the care-giver takes Medicare patients, you are a liability. By law, he must charge Medicare.

I have mentioned this strategy before, but it’s worth repeating. Try to locate a physician in a small town. Preferably, he will be young. He has lots of debts to pay. He is accepting new patients. If his waiting room is empty, you will not be on a conveyor belt. In other words, in the trade-off between time and money, you’re not costing him much in money. His time is less valuable. In a city where his waiting room is filled with Medicare patients, you will be on the conveyor belt. Time is money. Time spent is money lost. He will keep looking at his watch.


If you live in a home large enough for children, and if the home is in a neighborhood suitable for new families, you should move. The house can be rented. The rental money may be more than the cost of the following strategy.

A used mobile home is clean living space. Like a used car, the depreciation factor has hurt the original buyer. You are buying a bargain.

If you live in a city that has zoned out additional mobile home parks, then the rent may be high, but it won’t be as high as the land rental component of your home. If there is a mobile home park in the county, just across the city’s line, it will be cheaper. Zoning will not have restricted the development of parks there.

You should even consider developing a small, middle-class park while you are still mentally and physically able. For an entrepreneur, a middle-class park is a great way to make money and live rent-free (or close to it) in semi-retirement. Frankly, for a person with any sales and management skills, the rental income from a mobile home park is much higher than rental income from a single-family home that costs the same.

I think of people living in a median priced home in California: $485,000. That would buy or build a nice mobile home facility in most places in the U.S. It would generate a lot of rental income.

There are three ways to sell. If you have not yet taken your one-time tax-exempt home sale, take it now. Then buy rentable housing in your new area, which presumably offers cheaper housing. Either pay cash or buy very smart. If you have taken the exemption, move out of your home. Rent it for a year. This establishes it as a rental property at the market price when you moved out. Now you can sell it, tax-deferred, and use the money to buy replacement rental properties in your new area. Third, exchange it. See 1031 of the IRS Code for details. Talk with your accountant. If he is unfamiliar with 1031, find a new accountant.

Let’s say you just want cheap living space. You can buy a used single-wide mobile home for $10 a square foot, either at a mobile home sales facility or at an auction for repossessed units. You will have 1,200 square feet of living space: three bedrooms, living room, kitchen, 2 baths. This is more space than you get in all but the nicest retirement facilities.

A double-wide home at 1,500+ square feet is not much more if you buy at an auction for repossessed units. Your competitors will be mostly mobile home retailers, who will not pay more than 50 cents on the retail dollar.

Your main problem will be finding a park that is still accepting homes. The owners of mobile home parks make big money — 30% per annum — on buying the homes of owners who lose their jobs and are forced to move, or homes of recently deceased owners whose families don’t want to fool around with the deceased’s mobile home. They pay bottom dollar and then rent out the units. This is one of the most profitable small businesses in America. Hardly anyone spots this opportunity, especially in small towns. Then there is a zoning change, and rents jump 20%. The existing park owners love zoning.

Another strategy to buy a nice home cheap is to send regular letters to residents of mobile home parks and offer to buy their homes. Offer a $500 finder’s fee if someone tips you off to a unit that becomes available, and you buy it. If an old person must be moved into an assisted care facility, this is an ideal situation for you as a buyer.

If you figure $300 a month park rent plus an investment of under $30,000 for a nice used mobile home, you can buy clean living space cheaper than your home will rent for. Plus, on a mobile home over eight years old, most of the depreciation has gone out of it. You or your heirs will be able to sell it for close to what you pay. You retain ownership of your neighborhood home (rented), plus you don’t lose too much on rent.

If you move into a retirement center, you will pay four times as much for the space. Someone cooks for you. That is very expensive food. If you can still cook and care for yourself, a mobile home makes more sense.

There is a social stigma associated with mobile home parks. There is no stigma associated with retirement facilities. Yet nobody looks forward to living in a retirement facility. Moving in is usually as last resort. That’s why they charge you as if it were a resort.


Am I exaggerating? Not really. Call around for tour ships. See what a two-week cruise costs with a discount package. You will find that it’s not much more expensive than living in a non-assisted care facility. The food is better, the service is terrific, there are things to do, new people to meet, and you can enjoy true leisure.

There are downsides. Your cabin is small. You don’t establish long-term friendships. You must go to a new ship every two weeks. But maybe not. Sequential tourists are now becoming common on cruise ships. These people provide steady income in the off-season. They are easy money for the cruise ship companies. You can negotiate deals.

You can rent cheap cabins or fancy ones. There is no stigma to a small one. Who else knows? And people landside think you’re in fat city, which in fact you are. They don’t call it “The Love Bloat” for nothing. All you can eat: steak, chops, all sorts of choices. Just stay away from the slot machines.

I had heard about this strategy 20 years ago, but it did not register mentally. It was a Wall Street Journal center column story about some dissipated wealthy man who had lived for decades on cruise ships. He would gain too much weight and then have to go to a fat farm to take it off. Then he would go back to the ships.

In a recent issue of the daily Early to Rise e-letter, I read about an article by journalist Korky Vann (not a cruise ship name, surely), who reported the following:

Hate the idea of living out your life in an assisted-living facility? How about spending your golden years sailing the high seas and visiting exotic ports of call instead? If the idea sounds farfetched, check again.

A geriatrician at Northwestern University says full-time cruise-ship living is a feasible and cost-effective alternative to assisted-living facilities, and she’s got the research to back up her claims.

Dr. Lee Lindquist, an instructor at Northwestern’s Feinberg School of Medicine, compared the costs (over a 20-year life expectancy) of moving to an assisted-living facility, a nursing home and a cruise ship, including the expense of treating acute illnesses, Medicare reimbursement and other factors.

She found that the net cost of cruise-ship living was only about $2,000 more than the alternatives ($230,000 versus $228,000) and offered a higher quality of service.

“Cruise ships offer such a range of amenities — such as three meals a day, often with escorts to meals if needed, room service, entertainment, accessible halls and cabins, housekeeping and laundry services and physicians on board — that they could actually be considered a floating assisted-living facility,” says Lindquist, who published the results of her study in the November 2004 issues of the Journal of the American Geriatric Society.

Lindquist was inspired to undertake the research after taking a cruise with her parents. She noticed a large number of senior travelers with walkers, canes and wheelchairs who were enjoying the activities, amenities and social stimulation of cruise life.

After returning home, she started asking her patients about assisted-living facilities vs. cruise-ship living. When many expressed concern about the cost, Lindquist decided to take a closer look. The surprising cost comparisons inspired many of her senior subjects to seriously consider cruise-ship living. Retiring baby boomers were particularly enthusiastic about the concept.

The plan would work best, says Lindquist, for seniors who need a minimal amount of care.

She envisions a cruise community of seniors integrated with regular passengers, rather than a “floating nursing home” carrying only older adults.

“Seniors who enjoy travel, have good or excellent cognitive function but require some assistance with activities of daily living are the ideal candidates for cruise-ship care. Just as with assisted living, if residents became acutely ill or got to the point that they needed a higher level of care, they would have to leave,” says Lindquist.

“Until then, they could select a cabin to inhabit as home during prolonged cruising, while other passengers would arrive and disembark as usual. The change in other passengers would provide seniors more stimulation and interactions with new people.”

That socialization, says Lindquist, is key to the concept.

“Depression in nursing-home residents is estimated to affect as much as 25 percent of residents,” says Lindquist. “Would you rather spend your days sitting in a lobby watching the same people go by or be on permanent vacation?”

While Lindquist’s idea hasn’t had widespread application, some seniors are already practicing a variation of cruise-ship retirement.

Industry experts say a number of older adults, nicknamed “serial cruisers,” schedule as many as 20 to 30 cruises a year.

And a Florida woman, 86-year old Bea Muller, has been a permanent resident on the QE2 for close to five years.

Muller’s husband died while the couple was on a world cruise in 2000. Rather than move to a retirement home, Bea sold her home and possessions and booked herself onto the ship for a year.

She’s been renewing her yearly reservation since, and reportedly spends her days happily dining, dancing and socializing with new acquaintances. Her novel decision has earned coverage on CBS’s “60 Minutes” and in numerous newspapers.

Lindquist says seniors interested in cruise living should start out with a short cruise and gradually extend their time onboard to see if the lifestyle works for them. Feedback from those who’ve tried it, she says, has been overwhelmingly positive.

“On a cruise ship, you’re treated like a customer, pampered and indulged,” says Lindquist. “In an assisted-living situation, you’re a patient. Anyone who’s observed both situations can tell you, there’s a big difference between the two.”

I am not recommending this lifestyle for a lifetime. It might be nice for six months or a year, to get the travel bug out of your system.

Frankly, I would go nuts on a cruise ship. I know this for a fact. I used to be a speaker on cruises run by Howard Ruff in the late 1970s. I wore my Al Weiss three-piece suits on board ship. No one else did for some reason — the Caribbean in July, possibly. It was not my lifestyle.

I am only trying to illustrate a point: the high cost of unassisted care retirement centers. If you do not need assisted care, there are alternatives to an expensive facility.


There are those over-55 communities, cogently described 37 years ago by my friend Al Bell: “The elephant burial grounds for the white middle class.” One major disadvantage: The homes are aging, just like their owners. Future retirees will want to live in whatever homes are considered contemporary. Yours won’t be.

If you like to hit a white ball into a hole, and you can do this below par, fine. That, too, is not my lifestyle. But move to an area like Bella Vista, Arkansas, where the house appreciation will cheer up your heirs.

If you wait until true old age, then a retirement facility is OK. Leave the details to others. Enjoy being a pure consumer.

Here, I have in mind people approaching retirement who have two decades or more of active, independent living ahead of them, and who want to conserve their capital or even add to it. A residence strategy that involves renting your mortgage-free home and finding less expensive living space to rent is wise. Your heirs will appreciate your foresight.

April 9, 2005

Gary North [send him mail] is the author of Mises on Money. Visit

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