4 Money Lessons That Changed My Life

I’ve always thought it’s weird that we don’t really learn about money at school.

I mean, it’s something that we deal with all our lives.  And for some reason, it gets left up to chance.

Everyone starts with zero knowledge.  And we simply learn as we go.  Unless of course, you have an Uncle like Scrooge McDuck to teach you about money.

There’s a lot I’ve learned about money over the years from reading and experience.  But here’s the 4 things that have made the biggest difference to my life, and helped me reach financial independence.

 

Lesson One – Understand Compound Interest

There’s countless blog posts on the internet dedicated to this topic.  I even wrote a little one myself.

As amazing as it is, most of the population is still blind to it.  Because if you’re even half good with money, and understand compounding, it’s almost impossible not to become a millionaire over the course of your life.

Here’s why…

Investing just $500 a month and earning a 7% return, you’ll have around $1.2 million in 40 years time.  (I used this compound interest calculator – have a play around and see for yourself).

You can get as complicated as you like with the numbers, but the lesson doesn’t change.  And imagine what the numbers look like when you save a large portion of your pay, and even increase that over time.

Start saving and investing as soon as possible and your future self will be eternally grateful!

I remember staring at the book page for I don’t know how long, the first time I realised the power of compound interest.  It seemed too good to be true.

Almost instantly, spending became far less attractive to me, and investing became nothing short of fascinating.

The way money multiplies over time just blew my mind, and still does to this day.

 

Lesson Two – Wealth Is Often an Illusion

This is another biggie that we’ve discussed before.  And something that still trips us up from time to time.

Because someone has an expensive car, takes luxury holidays or has a fancy house, doesn’t really mean anything.

In truth, all it takes is a decent income and signing up for loans and credit cards.  Nothing more.

Now more than ever, many are trying to project the image of wealth – sometimes subtly, and other times not so subtly!  Either to impress others, or just make themselves feel good.

Bottom line:  Looks can be deceiving.  Most people that look rich probably aren’t.

For example, because we’re home most of the time, our neighbours probably think we’re living on the dole.  Especially given the car in our driveway is now probably worth less than a new smartphone!

Changing the association our brains have with things that are expensive, and that person being wealthy, is difficult.  But it’s important.

How it really sunk in for me, was by reading The Millionaire Next Door, by Thomas Stanley & William Danko.  I read it a couple of times actually.

This was my key takeaway.  Basically, we get two choices with our money…

We can spend it trying to look rich.  Or we can invest it to actually become rich.

 

Lesson Three – Your Spending Dictates Your Freedom in Life

Most people you know who spend freely, are probably anything but free.  Their spending and debt effectively controls them.

The simple fact is, the less you spend, the less you need to save and invest, in order to become financially independent and retire early.

So generally, lower spending and a higher savings rate, equals more freedom, sooner.  And lower stress levels to go with it.

High spenders are generally more stressed, because they need to keep generating a large income just to stay afloat.

They have less ability to take a break from the workforce in the short term.  And they need to work longer to save enough to retire in the long term.

Also, in my experience, they tend to be more worried about having ‘enough’, even though in some cases they’re quite wealthy already.

Basically, we need to start saving as soon as possible.  It’s not about how much you make – it’s how much you keep that matters.

After all, there’s no amount of income that you can’t spend – as countless celebrities and sports stars going bankrupt shows us.

During our journey, it became obvious that if we could just live on much less than our peers, we could gain our freedom in a very short amount of time.

And that’s what happened.  Which is why I’m sitting here, a couple of months before my 30th birthday, writing to you on a lovely sunny Perth afternoon, instead of being stuck at work!

It wasn’t a given though.  Our old plan was for a more materialistic life than we have today.  But this leads into the next lesson…

 

Lesson Four – A Happy Life Doesn’t Require A Lot Of Money

OK, so this is more of a life lesson than a financial one.  But it’s incredibly important nonetheless.

In my opinion, this is the factor that has the biggest impact on our finances and more importantly, our happiness in life.

By failing to recognise, or admit this truth, we end up chasing our tails and blowing our bank accounts, looking for short term highs, thinking we can find lasting happiness in consumption, status or luxury.

I genuinely believe, if you only take away this lesson, you’ll be fine with money for the rest of your life.

If it’s possible to be happy with very little, then why not get back to basics?

You’ll be financially independent much faster.  Then you can decide, from your position of freedom, whether it’s worth scaling up the spending for a little more luxury.

Otherwise…

If you get into the habit of spending a lot, you’ll probably find it hard to wind back.  We simply become accustomed to our lifestyle, no matter how luxurious it becomes.

But it works the other way.  If you start making positive life changes, spending less and saving more, you’ll quickly become accustomed to that too.

Essentially, higher spending won’t make you any happier over the long term.  Just like lower spending won’t make you less happy.  In fact, we’ve found the opposite to be true.

This is known as hedonic adaptation.

In simple terms, humans adjust to large lifestyle changes or events relatively quickly.  And we end up roughly just as happy as we were before – whether the changes were positive or negative.

 

Lesson Four Continued – Our Experience

As we became more focused on early retirement, we decided to really optimise our spending.

Then as time went on and our expenses dropped, we noticed that we were just as happy as before.

It seemed surprising, but now that I know more about happiness, it makes perfect sense.

We simply substituted things.  More local holidays, instead of international.  More walking and bike riding, less driving around.

And drastically reduced things that were less meaningful.  Like eating at restaurants and buying new clothes.  You get the idea.

But now that we have our lives back, it’s given us more life satisfaction than higher spending ever did!

Initially, the plan was to spend less in the short term, so we could retire and then spend more later once our wealth had grown.  And maybe we’ll feel like that in time.  But we’re very happy with our lives right now, so there’s simply no need.

I could think of a hundred ways for us to spend more money, but almost none of them will increase our long term happiness.  They’re mostly short term pleasures that fade over time.

Because – and we’re back to the key lesson here – happiness is possible on very little.

And a part of that is living in Australia.  We’re extremely lucky to have the living standards we do in this country.

All we need to do is look how people live around the globe.  Even just 50 years ago, people couldn’t have imagined how fancy our lives are today.  That’s not very long ago really, and life has changed so much.

The improvement is so small and so incremental, that we don’t see it happening, but like compound interest, it’s relentless.

I think on some level, we know this lesson to be true.  But it’s just a case of whether we come to truly believe it or not.

Consider the many billions of dollars every year that are spent on marketing to convince us we need to buy “X” to improve our lives and make us happier – so we part with our cash!

 

Conclusion

These are probably my biggest takeaways from the last 10 years of learning about money and life.

They might seem pretty basic, but I think they’re important, and each has helped me get to where I am today.

These lessons seem lost on the majority of the population.  And that’s a shame.

If you know someone who needs a good kick up the backside when it comes to money (or a gentle nudge), then share this post (or the blog) with them.

At the end of the day, sometimes the hardest part is accepting these truths and then taking action.  Deciding to do something different from others isn’t easy, but it’s necessary.

If we follow the masses, we’ll get the same results.  Since you’re reading this blog, that’s clearly not what you want.

By harnessing these lessons, we can learn to live happily on less than half our incomes.  Then we simply invest the rest to take advantage of compounding, and gain our freedom in only around a decade.

What are your biggest lessons around money and finance?  Let me know in the comments…

 

*The book mentioned in this post has an affiliate link.  If you decide to buy from Book Depository this blog will earn a small commission.

32 comments

  1. One of the more memorable lessons I’ve learned is that “if you take care of the pennies, the pounds take care of themselves.”
    Back when my wife and I were saving to buy a house we’d cut back where we could – take lunch into work rather than buying it. Don’t buy a coffee every day. Buy no-name brands at the supermarket.
    All these things saved comparitively small amounts here and there, but we found that after a few years we’d managed to save a lot more money. It always amazes me that people will happily spend $5 a day on coffee and $10 a day on lunch, and then complain they can’t save anything. When I point out that the coffee and lunch they’re buying actually costs them something like $3,500 a year, some are surprised but then don’t do anything about it, complaining “Oh, it’s too hard to make my own lunch every day!” It’s not, of course. You just have to get into the habit.
    Anyway – great article. I’ve been reading your posts for a while now and you’ve given me great food for thought. My wife and I are now in a position to consider early retirement (we’re both 47, looking to stop working when I hit 50) and your articles have come at just the right time!

    1. Thanks Nick – great comment. Happy to hear you’re getting value from my scribbles.

      Fantastic position you’ve got yourself in, well done for that!

      Couldn’t agree with you more – it just never seems to sink in that those small amounts add up to mountains of money over the long term. I’ll have to do a better job of pointing that out! But then again, like you said there’s always an excuse to go with it, even after they realise the true cost.

      Habits are so powerful – it makes saving effortless. Have a blog post coming soon for that topic 🙂

  2. Thanks Dave.
    For someone so young, you certainly have a great handle on this topic. Well done! I sorry if sounds patronising but it is heartfelt. I particularly like your comment about Wealth being an illusion. I feel that I can comfortably pass this on to my 13yo son for his thoughts and questions. Thank you.
    On a related issue, I am interested in knowing how you handle the inevitable and all too familiar question “What do you do?” My wife and I have struggled with this question for a decade because you can easily ostracise yourself in social gatherings by saying I am “retired”. Not that we need social approval because we are contrarian by nature. However, it is difficult to develop rapport with our peers once you say that word because that is apparently the domain of 60+ year old which we are not. I jokingly suggest to my wife that we should masquerade as rocket scientists. She is not amused!
    By the way, we cannot say long-term investors because then you are immediately branded a “day-trader”. Interesting!
    I know this question is a little off topic but I would be interested in your views or even as a topic of a separate post.

    1. Cheers Steve. Not at all, that’s much appreciated 🙂

      Wow that’s great, hopefully he finds it interesting. I aim to make this stuff readable for just about everyone – finance and investing isn’t really as complicated as it’s made out to be!

      Haha that’s a tough question you’re asking, how do we handle the social aspect? Well, I’m not the most socially aware person out there, so I tend not to worry too much about it. It’s probably a bit easier now that my partner is doing part time work and I’m doing some writing stuff, so before that it was a bit harder. Sometimes I just blankly said ‘I’m not working at the moment’ and they can think what they like about that. Other times we said ‘retired’ but that opens a whole can of worms as you probably know!

      Sometimes I feel like purposely opening up that can of worms to spread the word about FI and see how people react. But given my age they would probably think I’m either full of shit or just an obnoxious young bloke who inherited some money or bet on some mining stocks/crypto. Haha!

      And other than that we rattle off the stuff we get up to during the day which is non work related. It amazes me that people can imagine their lives being so boring without work. That’s quite sad actually. It seems they’ve been committing their whole lives to this work stuff that they have diluted their other interests and hobbies to effectively nothing. It’s either work or holidays and that’s it.

      I’m more than happy to explain to people how healthier low cost living, saving and investing all work together, and how there is actually another way to life than non stop work and spend, but mostly they seem uninterested so I don’t bother. I don’t find much to talk about with some people to be honest – our beliefs and outlook is just so different. But that’s ok, I’d rather keep a few good friends who share similar interests and get along well with, than force relationships with a dozen people who have different values.

      It’s definitely a tricky topic Steve and it’s something that we all have to learn and adjust to as we go. I certainly don’t have all the answers, but I hope this makes some sense to you!

    1. Thanks David. Yeah I should probably get onto that – half of that is me being slack and half is because I don’t use social media much myself. Where’s the love for good old copy and paste? 😉

  3. This is one of your best articles yet mate! I’ve also wondered why we don’t learn more about money in schools. I wish I’d know about investing a decade earlier, I probably wouldn’t have wasted my twenties so badly 😛

    1. Cheers Luke, I appreciate that!

      Haha, the main thing is you’re on top of your money now – and you’ve got many decades to benefit from it.

  4. A couple of quotes spring to mind when I read this article. Not sure of their original source, but they go something like: 1) “There are two types of people in the world: those who earn interest and those who pay it”, and 2) “If you follow the herd, you end up going through sh!t”.

    The best advice is always mind-blowingly simple!

    1. Good ones Chris – I hadn’t heard the second one before lol! I think the first one may be Albert Einstein.

      Absolutely, but that’s part of the problem – people think it’s too simple and there must be some trick to it!

      1. There is one quote about interest attributed to Einstein that I know of and it was about interest being the 8th wonder of the world. The 9th is the internet, so let me see what I can find…

        Yep, Einstein it is: “Those who understand interest earn it, those who don’t, pay it.” (source: quora.com — actual link is three miles long)

  5. Hi Dave! Great post! I was just wondering, in regards to the compound interest section, I’m still learning about how this all works. I have 2 x main LIC’s in Argo and AFIC and am adding to them in $5k parcels. At the moment I am down quite a bit on capital because I think I have bought them at too high a price and now the market is down overall. Should I be worrying about this capital or not really? I’m trying to build the portfolio up so that it makes an income stream for me later on in life but it seems I bought just before the market took a downturn and am down quite a bit on capital for both LIC’s at the moment! Any feedback would be much appreciated!

    1. Sadly LICs are pretty crap for long-term capital growth. You can see this by searching their share price history. That doesn’t mean you should buy or sell, just that personally I’ve learned to go for a different vehicle. I have some in Cadence, will sell later on though, not now.

      1. Interesting comment, although it’s wrong. You’re essentially saying that the Aussie market is crap for long term growth. Over the ultra long term the market’s total return has been 8-10% per annum – half from dividends, half from growth. Sounds like you’re simply looking at an extremely short 5 year timeframe. Look at 10, 15, 20 years (more meaningful periods) and you’ll see the return is very attractive. Here’s Milton’s total returns for example – https://wcsecure.weblink.com.au/pdf/MLT/02043980.pdf
        Same story, over 8% over the long term – half dividends, half growth. Then there’s franking. Over the shorter term anything can happen with the price of course. But in any case, around here we focus mostly on the growing income stream – capital growth is a more of a side show.

        1. Hi – thanks for reply. I didn’t talk about ‘the market’ but rather LICs. If you google ‘Argo ASX’ for example, you’ll see that Argo’s price has doubled in about 20 years. Sure, not bad, but nothing to rave about.
          Meanwhile Apple or Amazon or closer to home CSL have all shot up several times over, even despite hiccups along the way.
          LICs may offer some stability – they’re like a nice term deposit. The problem is that some, though not all, have such high fees that the share price is pretty dull. Compare that to some ETFs out there with very low fees or some growing companies that have re-invested profits and ultimately given a better overall return on investment.

          1. You may be misunderstanding what this blog focuses on. If you look back, I’ve covered many times the strategy for financial independence that I think is the most reliable and effective way for the average Aussie to get there. In case you missed it, you might want to check out these posts…

            https://www.strongmoneyaustralia.com/the-relentless-progress-of-a-dividend-investor/ https://www.strongmoneyaustralia.com/international-shares-aussie-investors/ https://www.strongmoneyaustralia.com/invest-for-dividend-growth/ https://www.strongmoneyaustralia.com/dividend-investing-aussie-early-retirees/

            Now to your comments…

            Yes but those older LICs are a proxy for the market since they have very similar returns, dividends, and holdings to an Aussie index fund, so it’s perfectly valid to discuss them and the market interchangeably in my view.

            Comparing market returns (or LICs) against lottery ticket type stocks which have gone up many thousands of percent isn’t helpful to anyone. First off, nobody knows which companies will have CSL or Amazon like returns in the future. If you do then great, just buy these and you’ll be fine. But if that’s the case, start a fund and you’ll eventually become one of the richest people in the world. Second, you’d need to buy a basket of those stocks otherwise it’s incredibly risky to just buy one or two and rely on that for your financial independence and retirement income. And third, the Aussie market/LICs will always have lower growth than the high flying stocks because the dividends received is 4-6% per annum, so with that kind of income a high growth rate isn’t going to happen, nor is it necessary.

            You’ll always find higher dividend payers have lower growth and lower dividend payers have higher growth. To expect otherwise is unrealistic. For our goals, high price growth isn’t necessary. We simply save a large percentage of our pay, buy a basket of diversified shares (LIC or ETF) and as those dividends grow and we buy more shares, our level of investment cashflow will exceed our expenses. This is because a strong savings rate is the number one factor in retiring early. After that we want a nice passive income stream, and we’ve chosen to get that from dividends. That’s the strategy in a nutshell. Capital growth is not a focus at all.

            The LICs covered around here (so far) all have very low fees – the same as the Vanguard index fund ETF – so I’m not sure that’s a fair shot either. Many others do have high fees though that’s true.

            If you’d rather invest in high growth companies, that’s great, but offers no guarantee or likelihood of higher future returns. Around here we like to keep it simple and focus on the growing income stream from a diversified basket of companies – using LICs or an index fund to achieve that. Strong and reliable cashflow is the goal, not price growth.

            Keep in mind most of the companies in the Aussie index and the old LICs (which are almost the same), are still reinvesting in their businesses, which still leads to higher profits and dividends over time. Because the index/old LICs pay out their earnings as dividends, it doesn’t mean there’s no reinvestment, it just happens within the underlying businesses.

            Sounds like we’re having the growth vs income argument, which just goes round in circles. For me (and I’d guess most of my readers) – I’m quite content on buying shares for the growing income stream, versus capital growth, for many reasons outlined in those blog posts above. You don’t have to agree with it, just outlining the rationale.

            So perhaps what you’re really getting at is that it would be better to invest in specific individual companies that are likely to deliver high growth, or overseas where dividend payouts are lower. Those topics are mostly outside the scope of this blog and not something I’m recommending for the average Aussie trying to retire early. But either way, taking more of a growth focus, results are far from guaranteed. Take a look at this article comparing the total returns of the old LICs and Berkshire Hathaway (a hardcore re-invester that pays no dividends). https://cuffelinks.com.au/lics-vs-berkshire-imputation/ Far from a terrible result for the boring, growthless LICs. Hope that helps explain my thinking David.

    2. Thanks Chris.

      We’re down a boatload in the last couple months, but it doesn’t worry me in the slightest. The dividends are either unchanged or have been increased, so that’s good enough for me. So no, you shouldn’t be worrying about the capital movements. Your goal is a growing income stream, and everything is on track with that. Company earnings and dividends are doing just fine which is the main thing.

      Because we’re buying more shares over time, we should hope for lower prices. It means you get to build your portfolio at lower prices and higher dividend yields. This means your dollars stretch further and your $5k buys much more shares than it did 2 months ago!

      That’s a wonderful thing in my view, so you should be happy about it. Or at least start training yourself to think that way. Your favourite LICs are on sale and so are the businesses they own. Hopefully you’re happily scooping up more shares at the moment to take advantage of it. Eventually the market will continue its steady march upwards, but in the meantime we can continue to buy shares and collect the juicy income stream 🙂

  6. Sometimes I find it easier to just go along with the idea that I’m poor to justify why I’m not spending money on the things my colleagues are. Until last year, I was supporting my partner and myself on my income (he was finishing his degree) and we still had enough to save, but it was easier to just say “oh no, we can’t afford to come to that” rather than explain that my version of a happy life doesn’t involve spending $60 on a meal out. Now that he’s started working, I’m going to have to come up with a new lie…

    1. Haha thanks for the comment Mrs FAM. That’s actually not a bad strategy, shame you can’t use it anymore!

  7. Great article dude.

    I learned these lessons a little late in life and as such may still have to ‘see out’ the full working life.

    However I have definitely dialled back my spending and also shifted my brain from the ‘find my passion’ mindset to the ‘develop my passion’ mindset. Specifically I looked at my job and started making decisions about prioritising wellbeing and reward over financial reimbursement. As such I find myself in a job now that is very personally rewarding. The possibility of being in the workforce for an extended period of time is actually a nice thought, not one I am trying to escape from.

    I think this relates to your point about being happy doesn’t require a lot of money. For a long time I worked to earn money which I then hoped would buy me happiness. I now try to work to be happy and the money is about meeting my basic costs.

    Look, this could all shift, and I might have to accept jobs in the future that don’t bring me the same happiness, but it has been very useful to have the experience I have to realise you can approach things with a different mindset.

    I enjoy reading your stuff. Keep up the good work.

    1. Fantastic stuff Gareth, thanks for sharing.

      Sounds like you’re much more satisfied with life after having that mindset shift. At the end of the day, I think the most enjoyable life will always include some type of work or personal projects that deliver some sense of satisfaction and meaning. If you’ve found that in the regular workforce, that’s excellent – saving and investing will just provide you with a nice backup plan and more freedom if you choose it (or need it).

      Thanks for reading and all the best!

  8. Hi Dave – this one reads almost exactly like MMM himself…

    I’ve often pondered what if everyone did what you do? I know MMM covered it, but my thoughts are a little less optimistic, I have to say. I think the cost of everything would skyrocket over time. History (and this country) suggests that the more money the general populace has, the more everything else costs. If every single person in this country had a million dollars, I guarantee a loaf of bread would cost far more than what it is now.

    While it’s true that you don’t need too much money to be happy (I think the happiest people in this country are people like yourself), if most people did what you suggested, the amount of wealth among the general population would be enormous. It would make life for people like yourself living the way you do, much tougher. The future underclass would be the unfortunate people that don’t get an inheritance. Kinda like the bad old days, prior to the industrial revolution.

    1. Thanks Chris, that’s quite a compliment.

      I have to say, I agree with mustache on this one. I don’t think it would create inflation (it could create the opposite). The reason is, if a population grows very wealthy through saving and simple investing, like the scenario we’re outlining, that doesn’t really add to demand in the economy. And it’s strong demand in the economy is what tends to push prices up. Given people like us live pretty simply and aren’t heavy spenders, it’s pretty unlikely we’d create high inflation as a group.

      You’re assuming that everyone with a million dollars is going to shoot that million bucks straight back into the economy by spending it. But if they just kept it, how would that create inflation? There’s no pressure on the price of anything if one just kept the money.

      I’m not sure I follow that my life would be harder if other people started wasting less money? I guess you’re assuming the price of everything would go up a lot. Don’t forget that even if it did, we’re buying all that stuff from companies. And it’s those companies we own which are paying us the dividends to live off. Therefore, it’s likely company profits would be going up and we’d be getting higher dividends as a result and basically keep up with inflation.

      Great thought provoking discussion to have 🙂

  9. Hey Dave,

    Your welcome about the MMM comparison, mate.

    It certainly is quite thought provoking. While it’s true that you would own shares in the company, I can’t help but think inflation would go crazy. Money is just credit and the more credit people have the price of everything just goes up. Property is a prime example – easy access to credit means prices go up, harder access to credit, and the price goes down. The reason is because companies will charge what the market can bear. If everyone had a million dollars, people could afford to pay more than a couple of bucks for a loaf of bread and the baker knows it. That’s why rich countries are expensive. It’s also why “artisan” products work well in rich suburbs – everybody has lots of money.

    The answer is not to make everybody rich. For every person not willing to part with their money, there is somebody that will. I work in a certain industry that makes things that people need. (Very cryptic I know – Lol)! We are a multi-national company. Our products cost more here than other countries. Some of it is because of higher wages, but higher wages means people here have more money and are able to pay more for our products as a result. All multi nationals do it for rich nations. Just my opinion, of course.

    1. Yes, but in that scenario of property, the credit is being spent – it is additional money entering the system. In our made up scenario of wealthy early retirees, that wealth would not be spent, probably only a small fraction of it, and it is not additional money in the system. It only works that way if people are willingly spending the money on things they don’t need.

      If you give everyone a million dollars today, then of course that will lead to high inflation. Because it’s additional money entering the system, plus almost all of that money will be spent, since that’s what most people do. But what we’re talking about is almost the opposite of that. High wealth achieved thru saving and quite limited spending, with no new money entering the system.

      There’s no doubt that more money often leads to higher spending for most people and that means demand for expensive goods. But in this case, it’s not correct to say that basic things would become expensive, because there will be the same amount of demand for the same goods. That doesn’t push prices up, because most of the wealth is left untouched as opposed to spent the way it is now.

      I think that’s where we’re disagreeing. The people in our scenario – if they’re following a lifestyle and philosophy like myself and MMM – would have little interest in spending their wealth on more consumption. And in all likelihood if prices went up for no good reason, these people would look to reduce their consumption if possible (as they should) or find ways around it. I think much more is within our control than we realise, so my fantasy society would simply roll with the punches and find other solutions and everything will be just fine lol 🙂

      (Not to mention that the RBA has an inflation target of 2-3% and will do everything in its power combined with the govt to see that basic living costs don’t go thru the roof, or poverty and starvation would skyrocket and society would effectively crumble. Dunno about you, but that’s not something I’m going to bother worrying about.)

  10. Good points Dave and you could be right. Being an optimist is more fun anyway!

    I suppose I’m just thinking long term – a 100 years or more from now, as everyone being rich and inflation growing 2-3% a year, after such a long time, life on this planet would naturally be much more expensive than now. We all know that a loaf of bread costs much more today than 100 years ago. As for property, if you were selling and you knew your neighbour had a minimum million bucks and everyone else in the country did, I reckon you’d adjust your price expectations accordingly.

    I think what I’ve done in my mind though, is I’ve placed you – as you are today – in a world a couple of centuries from now – of course it would be tough! That’s why I believe if most people accumulated money now, over time, and passed it on to the next generation, the poor people a couple of hundred years from now would simply be the people that didn’t have rich families/parents. It scarily reminds me of days gone past where you born rich or poor, with no real chance of improving your situation. All academic, though. Interesting discussion for sure.

    1. Haha that’s a long time to be retired. Maybe I’ll still be blogging about it then as longevity continues to grow and people will live forever lol 😉

      Definitely true everything will cost more because of inflation. The great thing is, despite everything being more expensive, our living standards have continued to increase because of technology, innovation, global trade and increased productivity, creating higher profits for businesses and higher wages for employees. I don’t see that trend dropping off anytime soon, and poverty is reducing in the worst parts of the world too.

      I guess another point is that because of technology, innovation and the endeavours of the human race, things tend to get cheaper over time, which we’ve seen with the basic cost of living reducing as a portion of the average wage. I covered this in my post about the cost of living here https://www.strongmoneyaustralia.com/real-cost-of-living-inconvenient-truth/ – so despite the massive increase in the cost of everything over the last 100 years, those costs relative to our wealth and wages have actually shrunk, and we’ve just decided to spend the extra on more fancy shit! Basically, we’re still much better off despite inflation.

      Fascinating rabbit hole to go down, thanks for bringing it up Christopher 🙂

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