Wealth and the Theory of Relativity

wealth-relativityOn a recent trip through Myanmar, we had a number of opportunities to visit the local hill tribes and experience a different side of the country. The ‘real’ Myanmar, as people love to say. Twice we ended up doing just that, and together they likely form the highlight of the entire four month trip through SE Asia. Not just the three weeks we were in Myanmar.

I can’t even begin to tell you how warm and welcoming these people were to us. One proud mother looked like she might cry as she showed us photos of her daughter. At the first village, we were invited into four separate houses and drank in total probably two liters of green tea each, and ate in total likely three pineapples each. No joke. Turning down the offer was simply not an option, and my mouth was actually bleeding by the end of the day. It felt awful.

Setting foot in these villages was like stepping into a Tolkien novel. Terraced rice paddies on the outskirts, people working the land closer to town. Cows, goats and chickens wandering freely, hobbits running about frolicking. Everyone seemed as happy and content as can be.

Well, maybe they were children playing. Not hobbits frolicking.

Vancouver, Canada, the city where I spent the past twenty five years living my life, is in stark contrast to the villages of rural Myanmar in many ways, of course. There are many places in the world I could have chosen for comparison’s sake, but the fair city is undoubtedly the place I am most familiar with, and there is another reason for its choosing that will soon become apparent!

Obviously the materials and methods chosen for building structures in Vancouver are very different, there is a far greater network of roads and other amenities, the weather and environment are very different, etc, etc, etc. The list of superficial differences between Vancouver and rural Myanmar would surely be as long as my arm if I were to go over even half of them.

But if we can look beyond the surface for a minute here, the list would probably not be nearly as long as you might be thinking: people are mostly happy in Vancouver too, I think (well, that is a debate that ought to be the topic of another post). In both places people eat and drink well, they have jobs, they have shelter over their heads when they sleep at night (actually, the percentage is probably higher in rural Myanmar for that one). People in both places play games and sports with one another, they have plenty of friends and family, and they admire and enjoy the beautiful surroundings that they live in.

In short, the majority of people living in both places seem to have fulfilling lives that they live.

A Great Contrast in Economics

As it turns out, according to the World Bank, twenty six percent of people living in Myanmar are currently living below the poverty line. Which they now define as ‘surviving on no more than $1.25 per day’. I have no doubt that most of the people we saw in those villages make up a significant slice of that statistic.

And now for the starkest contrast of all: it was recently deemed by the Economist that Vancouver is now the most expensive city to live in in North America. Even more so than NYC or LA. In case you live in Vancouver and haven’t bothered to look at how much money you chew through on a daily basis, I have done the work for you using my old self as an example. And the answer is about $150 per day.

Back when I was living in Vancouver, assuming people living in rural Myanmar spend most of what they earn, I was spending money at a rate 120 times greater than the people we saw living seemingly happily in the villages of rural Myanmar.

That seems insane to me now, looking back on it all.

Wealth is not an Absolute

When people talk about being ‘wealthy’, they are inevitably considering only half of the equation: how much money they have. Or perhaps how much they earn. Or have the potential to earn. Money ‘in’, whichever way you want to think about it.

The problem is, money ‘in’ is completely irrelevant, useless information if you are ignoring the other half of the equation: money ‘out’.

The millionaire investment banker who burns her money away driving her Ferrari between the stock exchange and her New York penthouse, is no wealthier than the Burmese farmer who breaks even walking his donkey and cart full of pineapples from the field to the market in town once a week.

Why? Because wealth is not an absolute. It makes no difference that you earn six figures, if you have little to nothing to show for it at the end of the year.

Wealth is a Relativity

Wealth is in fact a function of two numbers: money ‘in’ minus money ‘out’ (it would be a nice excuse if it was as complicated as E = mc², but unfortunately it is much simpler than that). Wealth is what you have left after you’re done spending some portion of what you earned. It is money ‘out’, relative to money ‘in’.

Since leaving the city for the country, I have made way less money. But I have also spent way less money. So in the end it has made no difference to my wealth. But I will let you in on a little secret here: my plan is to eventually make as much money as I was when I was living in the city. In effect, I will be two to four times as rich, if and when that day ever comes!

Towards the tail end of our trip through Myanmar, we met a really awesome, older Canadian couple on one of the islands in Thailand. They live in a house in southern Saskatchewan that they paid $15,000 for. Like, recently. Not in the 1960s. He told me their hot water tank broke five years ago, and they just got it fixed this past summer. Can you believe it?

Ever hopped onto mls.ca and taken a look at what houses go for in Nova Scotia?

Here is a fun thought: every single person reading this post right now, absolutely has the ability to quit their job tomorrow, and never work another day in their life. For real. It just means things would have to be done drastically different from now on. Like finding a happy little village in the mountains of Myanmar to go spend the rest of your days in (you would need to come up with around $20,000 over the next 45 years to do that, in case you were wondering :).

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One Response to Wealth and the Theory of Relativity

  1. Kenneth says:

    Gary, I lived and worked in Vientiane, Laos during the Vietnam war era. I understand what you are saying here. I had two employees at my house, a gardener/guard and a housekeeper/cook. $25 per month apiece was their salary. Servants quarters out back, and their savings rate was probably 80 to 90 percent of their take home pay.

    I once read someone that said “all expenses are optional”. It seemed absurd at first reading this, but the more I thought about it, the truer it rang. I mean, one could build a lean to shed in the woods, and live off the land. Hunt, fish, grow a garden, etc.Most of us want all the stuff – the house, car, cable tv, cell phones, being served at restaurants, etc. The price we have to pay? Being wage slaves in little cubicles with no hope for escape, because, if we are lucky, the money coming in is about equal to the money going out.

    Being mindful is the answer. I don’t want to be a wage slave any more, so I am spending much less and saving much more. 610 days until I retire.

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