Tuesday, January 21, 2014

L.A.M. on Money

When I was a college student, I could live on less than $300 a month but once I started working, that number has quadrupled and the more I earn the more I tend to spend.

Looking back, I think I have fallen prey to some very good marketing and self rationalization. Working long hours with very little free time has led me to justify certain kinds of spending which I normally wouldn't do.

For example I find myself taking taxis much more often especially when the nearest train or bus stop is too far or if the journey takes longer than half an hour by public transport. I justify this by claiming that my time is money.

My food budget has also increased. I spend more on " comfort food". A stressful day, a late night, getting paid, all become some excuse to eat at a restaurant. If I have to queue in the hot sun for a cheap plate of economical rice, I might as well pay ten times more to eat at a restaurant.

When I get a new pair of glasses, I can't buy a $50 pair. I use my glasses for work. It has to be a 1000% more expensive Armani one to keep up with that corporate image.

On hindsight, I'm beginning to realize that the more I earn, the more I spend, either out of self rationalization or to keep up with the Joneses and the more I spend the more I have to earn to maintain the lifestyle.

Looking at people higher up the corporate ladder than I am, I realize that at some stage that prestigious country club membership stops becoming a want and starts becoming a need. A condo with a pool becomes a necessity. A car becomes a good investment. Annual trips to Europe become that much needed break you need and flying by economy class becomes beneath you.

The bitter truth is that there are many things you have right now that you don't need. That people can live on less. But the bitterer truth is that we need people to want more, to be more consumerist, to buy homes they cannot afford so that they will be motivated to keep working in a job they don't like. If people stop buying birkin bags or stop building palaces for the rich in the desert or stop spending a few grand on a bottle of wine, the economy collapses. Companies that sells luxury goods start seeing their profitability drop. Shareholders start seeing the value of their holdings decline. Employees get retrenched, suppliers lose business, more people get retrenched. Everything goes downhill.

I guess the moral of the story here is that the wise man is the one who stops keeping up with the Joneses. But the wisest man is the one who is not only not envious of the Joneses but also grateful to the Joneses for keeping up with the Trumps who tries to keep up with Hiltons because in doing so they keep everyone in stable employment.


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