How to be a Millionaire?
I was thinking I bought my first pint of beer too many years to remember. I paid 1/11d in old money, about 10p into days money. Today in my local I paid £3.20 a pint.
This represents a 3200% increase.
I bought my first house for £6000, since moved on. But I noticed the house that I once owned was on the market for £200k.
This represents a 3333% increase
I bought my first new car for the princely sum of £800. A similar car with a much higher specification and economy [30mpg to 55mpg] I can now buy this car for £9500
This represents a 1187% increase
So with a combination of interest, inflation and time we can all become millionaires.
But a pint of beer is still a pint of beer. A house is still a house and a car is still a car.
If we are working, or retired then money [or its value] compared to what it was years ago it is hard to make a comparison with:
1] Am I better off now than I was 10, 20 or even 30 years ago?
2] Am I better off [or worse off] then people within my own society?
3] Am I better off [or worse off] then other countries?
There is a universal standard that can be used worldwide. I call it McDonald currency.
How does it work?
A] How many minutes do I have to work to buy a standard McDonald burger.
B] Divide the number of minutes you have worked to buy this burger.
This gives a direct comparison, between countries, societies and individuals. The only constant wherever you live is 24 hours a day and 60 minutes in an hour.
This figure can be used for many things; for examples.
How many McDonald burgers are needed to buy;
Monthly rent/mortgage. Monthly utility bill, down to cost of 10 litres of petrol.
One could instead of using the McDonald burger, you could use, how many minutes you have to worked to buy a litre of petrol, then carry out the same calculations.
What would be interested to learn, many people drop by on this site from throughout the world, to see how different countries compare?
Comments
Inflation means that money does lose value over time. (it also doesnt help that money is a confidence game - it is worth whatever people are confident of it being worth...)
£10 today is not the same as £10.00 is 10 years time (though if the confodence in the currency incerases... it could be worth more, but that is unlikely.)
A better was to judge IMO is can you live off yor wealth. Can you afford to eat, live omewhere and how comfortably can you do that.
If you live at a time and a place where amount of the currency is a tenth of another situaion, but you are able to live off it easier, that is the wealthier option (unless you are into currency trading or trying to move etc).
I know that in the past I have moved from a higher paying job into a lower paying job and at the same time had more comfortable living conditions - and this wasnt due to the loss of value of currency over time.
"For too long, we have been a passively tolerant society, saying to our citizens 'as long as you obey the law, we will leave you alone'" - David Cameron, UK Prime Minister. 13 May 2015.
You may have misjudged what I was trying to say.
I was trying to show two things;
A] How inflation can effect what you think of as wealth. [Money is not wealth] You may have a larger bank balance, but you can still only buy the same stuff. Inflation is a silent thief that removes value from [monitory] savings. Unless you are fortunate enough that your saving/wages increase to keep up or better inflation.
B] Trying to introduce a common value to lifestyles. Time is that common value and to try to use this theme to compare, many things. For instance;
How you has an individual have changed over the years.
How countries compare, or societies within those countries compare. [Top of the social ladder compared with the bottom] This comparison is useful to see how equitable society is within a country, not to mention the level of corruption/efficiency.
Too true, but within a country there is in fact two wages, 1] there is the wage you earn, [yours to spend as you will] and 2] a social wage, benefits you get from living in that society [what you have indirectly paid for in taxes] roads, hospitals, schools a whole multitude of services that as a citizen of a country we probably don’t notice and take for granted.
Yes, I could move to a country were the cost of living is low [compared to the UK] my standard of living would be far better then the local citizens. But I would miss the infrastructure that I use in the UK. Nice to visit for a month or so in a decent hotel and have a look at the sites, but permanently?
There are many people who migrated to the UK from the Commonwealth in the 50’s and 60’s who have dreamt of returning when they have retired. Only to find that the dream for them can turn into a nightmare, their home country as changed to what they remember, and they have become accustomed to the UK.