Working the shovel

    Today you just do, after it is done you start thinking about the consequences. When the consequences arrive, people start to look around, who should they blame for their mistakes or just on who should I vent my anger. It’s amazing how the reality we are living in is being led by this “motto” in almost every facet of our life.

    Governments are run this way, we are piling up debt for future generations because that’s in the future, it can wait for a few more years.

    Businesses are run this way. Rather than giving a deserved raise to your capable employee who put in years at your company, you fire him because he is asking for too much. Later on, the business hires a mediocre employee who takes a lesser pay. If you want to get a raise in the modern cooperate world, you have to go work for the competition or else you will never see another raise.

    People live paycheck to paycheck with debt pilling up, without having any sense what they can afford or should really buy.

    All this trickles down into the family life as well. People have no plan of how they will raise their kids. Do they have the right person to start a family? Nothing is given in life, but you can be prepared for the worst case scenario. Take your time to know your partner before you start a family with them.

    What is the difference between life of our grandparents, our parents and now

    After the two Word wars in Europe and the great depression in the USA, the world went into rebuild mode. It were tough times as in – there were not many resources available, you had to get by with what you had available. People could buy land, build their houses, industries started to slowly blossom again. I have many debates with my grandparents(post WW2 era), their point is you have to work no matter what you do, today no one wants to work, youth of today is lazy.

    The classic rant of the elder people: “When I was your age, I had a kid and was building a house, we were broke, not like you today.”

    They have a point, what they don’t tell you is how my grandfather for example could live rent-free in the city by just working around the house he stayed in, he cut grass, worked the field. Imagine a person could get those opportunities today, I bet many young people would be more “hardworking.”

    Today’s reality doesn’t translate well into the post-war era of our grandparents. Their era was harsh as in not having many opportunities, but still you could build something if you put in the work, even in lower paying jobs. The rebuilt era was that of our grandparents. Our parents reaped the benefits of the rebuild, and had lots of freedoms that the previous era didn’t have. Jobs were available, you had many more opportunities and fewer responsibilities. Many people blame the “boomer” era for the state we are in now. They had all the benefits of the rebuilt their parents started, and didn’t advance it.

    One could say the “boomer” generation didn’t plant many seeds for the future, they just ate the crop of the previous generation.

    This generation has more money than the previous

    So here we are, no crop from the previous generation and the seeds for planting our own got very expensive. The house your grandparents built on two working class wages? You can forget about that, it’s hardly possible with two above average wages without going into a 30-year debt.

    Let’s look at this great graph that shows us how much more purchasing power we actually have compared to 40 years ago. The title explains it all.

    Purchasing power

    The dollar of today buys you as much as it did back in 1970. Yes, you bring home a much higher income, but people forget inflation. Inflation was raising exponentially through the years, what didn’t raise through the years is individual purchasing power.

    A basic explanation of that would be, you could buy as many sacks of potatoes with your paycheck today as with the paycheck in 1970. We are talking about regular employees. Now you can understand why it’s so lucrative to work for the government, or climbing the corporate ladder.

    The last 10-year average inflation rate in the USA is around 2.47 %. I will use another example. You bring home 1.000 $ per month, that’s 12.000 $ a year. That means you need an average raise of 300 $ to break even! People forget without you earning extra money, getting a raise, you are in the hole for 300 $ yearly. Now that’s only the average, let’s say recession comes and inflation rates go to 5%. That means you require an extra 600 $ yearly to break even.

    Playing catch up

    Our generation is just playing catch up, the problem is we might never get there. The debt snowball is large, and it’s not slowing down. We are doing everything but facing the issues – our children will probably face major consequences. They might never buy a house, because it will be unreachable, and that is just the tip of the iceberg. More on my future predictions in this post.

    In short, as the band Alcazar says in their famous song:

    This is the world we live in
    And these are the hands we’re given
    Use them and let’s start trying
    To make it a place worth living in

    You got a huge pile of shit, if everyone picks up a shovel and start shoveling, there will be less shit to shovel. You shouldn’t be afraid of people seeing you working the shovel, if you don’t, who will? God knows who will join you with their shovel.

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