Sunday, April 5, 2009

a cost-benefit analysis of sleepless nights given the current fiscal climate

i owe myself some credit.

I read recently that one of the biggest fears today is the fear that we will not be able to maintain the same standard of living as we have in the past. The fear of a global depression.

This, to the surprise of many, need not be the end of the world. The loss of money is not the loss of life. If you’re an investor who comes to realize you’ve lost your family’s wealth, don’t go and off yourself. It won’t get the money back. And you’ve likely suffered great changes in standard of living and survived quite nicely.

There once was a time in most people’s lives where they need not earn a penny to support themselves. All financial needs were attended to. And then the cold reality of life came to bear: leaving home, leaving school, and getting a job. Not necessarily in that order.

This change is embraced by many, because they see independence from family as a great thing. Sacrificing the comforts of home for a sense of self determination. In my case, my standard of living changed to smaller quarters, less free time, and greater stress. How was it for you?

Maintaining a standard of living indeed.

Standard of living is subjective. I cannot imagine willingly allowing my hard-won independence to be ripped from my grasp by 7lbs. 8oz. of screaming, writhing, defecating flesh.

I’m mystified as to how so many choose to sacrifice their current standard of living for a sense of immortality that comes with knowing your genetic material has been duplicated and is now off to make its way in the world. Yet millions of people do this. Arguably, procreation is what we were put on this earth to do. Most would assert that the addition of the bundle of joy has improved their quality of life by reframing it.

The birth of a child comes with a dramatic change in lifestyle, not only monetarily but in freedom of movement and sense of self direction.

It’s a choice to no longer live for oneself.

People make bad decisions every day. They choose convenience over wealth. They are blind to their own ability to change their actions and optimize their monetary efficiency.

Consider this: There is a white label bank machine one minute away – in the convenience store. Your bank machine is about 3 and a half minutes away. If you use the white label machine, you may spend as much as $2.50 go get your money out, plus a potential $1.50 charge from your own bank for withdrawing from another service provider. If you were willing to walk the extra 5 minute round trip, you could save $4 - the equivalent of $48/hr.

I’ve colleagues who surely earn less than $96,000/year, but I am sure they would not make the walk. Yet they will walk the same or greater distance for a cup of Starbucks coffee.

Yes, I have a fear that I won’t be able to maintain my current standard of living. I shudder to think of losing my job. But we have survived economic struggles in the past. When our income tumbled to half of our original income, we made it through. Really, during the time we made changes and tightened things up. If we had to sell our home, we still would have gotten the $ we put in back. Had we been paying our rent since we’ve moved into our house, we’d have spent $150,000 and had nothing to show for it. Losing our home would indeed suck. But we’d still be further ahead than we were in 2001. If we had to sell our things, they’re just things. We aren’t the sum total of our possessions.

I have no desire to move into a single room and eat tinned beans. But were it to happen, it would be survivable. I have done it before. It was not awful. It was life. In fact, since it’s in the realm of the known, it’s really nothing to fear.

Now winning several million dollars. That would be outside of the realm of my experience. Maybe that’s what we should all fear instead.

No comments:

Post a Comment