Yesterday, I went to a “slow food” restaurant. They basically serve sandwiches and risottos, but made with wholesome grain and low-fat ingredients. In essence, it’s all food that doesn’t burden the digestion but still satiates. I was waiting for my order (mozzarella sandwich with pesto sauce) when a sheet of newspaper caught my attention to the point where i snapped a picture of it with my smartphone.
Don’t worry, I’ll translate it for you straight away. What this tiny snippet of an article states is the following:
“The average cost of living in Bosnia and Herzegovina is among the most expensive ones in Europe when compared to the average salary. Within 10 years, from 2007 to 2017, the average salary rose from 645 BAM (322€) to 853 BAM (427€), while the cost of living in the same timeframe went up from 527 BAM (263€) to 1.800 BAM (900€).”
Note that this is for a family of four (mom, dad and two kids), which is about the average number of kids a family should have to keep the country above replacement birthrate. So, two parents working full time still can’t afford to cover the cost of living for the entire family. What a great country we live in.
The not-so-obvious truth
In essence, the article says that the cost of living went up by some 260% while salaries only increased by 30%! Of course, this isn’t the kind of thing that one sees splattered all over news, though it arguably should be. Instead, we in Bosnia and Herzegovina get nationalist politics and petty squabbles between well-established politicians, some of which have been in the public eye for 20 years or more, doing nothing productive for the country.
In any case, my point is that something similar is happening all across the world, though probably not as drastic. The money you’re holding is losing value due to inflation, which is extremely punishing to those who wish to save. If the inflation in your country is 5% yearly, the $100 you held on 31 December 2016 becomes $95 on 31 December 2017. It’s lost value, and with it a part of your purchasing power is gone for good and nobody told you about this.
The tricky little beast
The trick with inflation is that it has a delayed effect, which is great for those who make these financial decisions. By having the price increase over 10 or 20 years, the politicians that pocketed the difference can play innocent and wash their hands, “What? We opened two new factories during our mandate!”
So, the inflation is a galloping beast that wreaks havoc on your wallet, thoroughly stomping it into the ground. How do you fight it? Essentially, you should understand that your physical energy is limited but also replenishes on a daily basis. This physical energy can be rented for cash in any number of ways.
Uh-oh, scary word incoming
As the cost of living increases, your supply of physical energy remains the same. Even if you wanted to, you would be physically unable to work 5% longer than you did without serious health consequences further down the line. But, you can work more efficiently and you can have other people working for you. This is how capitalism functions.
By aiming to get the lowest price possible, you can eventually find someone to offload a part of your work to, essentially becoming an employer that simply oversees things without participating in work. This is where your journey to freedom begins and this is how you will (hopefully) live a life of leisure some day. The idea is that your employees get work experience and business wisdom from you, along with some cash for the work done. If that’s not fair, I don’t know what is.
Get earning right now
By first finding a way to cash in on your physical energy (in my case it’s writing), you will start to accumulate job experience and business wisdom. These four (physical energy, cash, job experience and business wisdom) are your major assets that you need to safeguard against idiots. If you want to do, buy, work or speak out, do it, but beware of the idiots that will engage you in wasteful behaviors.
If someone tells you you’re doing something wrong, ignore him. If someone tells you you’re doing something wrong and shows you a better way, kiss his feet and hug him like your long-lost brother. I’m serious, these people will bring you so much joy in your life, so keep them safe in your heart for as long as you can.
Kicking back
As you start straining to make cash, you will also yearn for a quality time off. This is also a major point where you have to invest, such as buying a nice chair or a new bed. So, by spending physical energy, you make cash which you then spend on ways to recover your lost physical energy. Sounds futile? As long you’re accumulating work experience, you’re ahead and if you can save some cash on the side, that’s even better.
Whatever your pastime is, remember that it has to contribute to your major passion and/or goals. If you’re playing video games in your spare time, that’s alright, just make sure you’re playing the ones with great stories and powerful narratives that inspire, not mobile-tier cash sinks like Clash Royale or Hearthstone.
If you like what you just read, chip in at patreon.com/SgtBrutalisk
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