HOW DOES YOUR WEALTH COMPARE TO YOUR GRANDPARENTS’?

HOW DOES YOUR WEALTH COMPARE TO YOUR GRANDPARENTS'?

I recently discussed how our grandparents or the generation before us probably didn’t make as much money as we do now, but they also had fewer needs because they were largely self-sufficient. They grew their own food, built parts or all of their houses, sewed their clothes, and so on.

Because of this self-sufficiency, they could save a significant portion of their income and, if they took out a loan for a house, they could pay it off in less than ten years.

Today, there’s a big gap between the value you produce at your job and what you can buy. For example, in my village, people still grow their own corn as a staple of their diet. They need a piece of land to grow the corn, which they either own or rent for the season. They then plant, supervise, harvest, and dry the corn. Eventually, they pluck it so they can store it for the year and feed themselves and their animals. They eat corn tortillas for all three daily meals, and their chickens and pigs eat corn too. So, it seems logical to grow your own corn. However, dried and plucked corn is worth only $0.12 a pound.

An unskilled worker earns $8 a day and could buy 66 pounds of corn for each day worked. Assuming his family of five eats 5 pounds of corn daily, and his animals eat another 6 pounds (enough to feed a decent number of chickens and a few pigs), he would still have a surplus of 55 pounds of corn for every day worked.

Growing your own corn doesn’t require daily work, but it is time-consuming and risky due to potential crop failures from pests or natural disasters. Working as an unskilled laborer to get the 4,000 pounds of corn needed annually would require just over two months of work. The remaining ten months could be spent earning money for other expenses, which are minimal in my village. Most people build simple houses with their own hands and only pay for electricity if they are connected to it, $2 for water rates, and the rest to enhance their diet a bit, buy phone credit, and other consumer goods that weren’t needed a generation ago.

This brings me to my point. Today, one hour of your labor buys much more than it used to. Your grandparents had to spend several hours each month gathering, chopping, storing, and drying firewood to cook and heat their homes. Today, you can work for a couple of hours and have enough to pay your electric bill.

Yet, according to The Telegraph, people born in the 60s and 70s will be worse off than their parents when they retire unless they receive a big inheritance. The study shows that these people earned more than their parents when they started their careers, so how do they end up worse off?

At the age of 30, people born in the 1970s were paid three-quarters more than those born in the 1940s at the same stage in their lives. But the younger generation saved about £60 a week less.

How is that possible? We make more and save less. Something is wrong here. First, you could blame our laziness. We work fewer hours than our grandparents did (in France, the workweek has been reduced to 35 hours, with a minimum of 5 weeks of holidays), and yet when we get home, we want to crash on the couch and eat overpriced convenience food. We want bigger houses even though we have fewer children. We want the latest gadgets and new clothes every season, whereas they used to make a new outfit every five years.

Sure, if we never evolved, we would still be living in caves, and some items have become necessities. Who would want to spend 20 hours a week hand-washing clothes and dishes when a machine can do it in a fraction of the time? Who can do without a computer when so many jobs and opportunities are found online? When you can fly across the ocean for a few hundred dollars, why not enjoy it? Who cares if your grandparents never left the country?

But if you look closely, there are things you don’t need. Things that are of such poor quality they’ll break on the first use. Junk food with so many chemicals that your health bill will skyrocket in your 50s if you keep eating it. The yearly car replacement…

If you want the financial stability your grandparents had in their retirement, try looking at the lifestyle they lived and realize how easy we have it these days. There’s no excuse not to put a good chunk of your income into retirement and investment accounts.

Are you better off than your grandparents? Why or why not?