Reflection on Money

Just a forewarning, I'm pretty buzzed from wine and just reflecting a bit.

I just got back from a trip to Mexico. My wife grew up in a tiny town in Mexico, a solid hour+ away from the nearest large city. Both her parents are from there and she's still got family down there. We went down to visit her grandpa and others, it was a nice trip but it blew my mind how the COL was so different and how people struggle to make do with living. Hot water is a luxury there, same with other things I take for granted. There's rarely nice cars around, and those who own nice stuff are normally associated with illegal dealings. There's very few legitimate ways to make true money down there (it's not like many expats would be there like the nomad workers in Cabo and what not). Very few graduate from high school, even fewer from college.I tipped this kid (child labor is so common there nobody bats an eye) the equivalent of ~$40 USD (so 800 pesos) and his face was so shocked. A lot of families live off of that per month down there. It really hit me that moment that I spend that to get 2 extra drinks at a dinner. That's the bottle of wine I'm drinking and I sometimes don't think about spending that money. But that's enough to get people out of a rut.

Right now I'm sitting in my apartment, it's on the 10th floor down in OC and I'm on an RH sofa (granted it was outlet but still). I'm not saying I should live in poverty and donate my money to try to add my tiny drop in a bucket to help the world, but it's pretty crazy. I live well below my means by American standards, but so far ahead of the world. My wife sometimes feels weird about how we live (despite being a low percentage of our earnings) and now I get it.She joined a really awesome startup and her equity has 10x'd in value, so hopefully they IPO and we're sitting on over half a million on top of our salaries. My company also has shot up in value. I've got ideas for my own side projects. Maybe I should give that more to help others. There's lots of jobs in tech that can be done remote by near shore people and maybe I could teach them how to do it. There's plenty of consulting companies in Mexico and Brazil who do that. I just feel kinda weird about how different people live life. I'm not suggesting worldwide socialism, but I think it never hit me how big the divide was between haves and have nots.

Also we live far below our base salaries. Equity is nice to have if it pans out, but if it doesn't then onto the next venture and it shouldn't affect us.

 

My sister lives in OC too and used to design for RH.

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
 

Oh that’s pretty cool. I love their stuff so much. I’ve got a few things from them.

If you’re ever down in the area PM me. I’m in Irvine right now. I work from home so I’m usually flexible for lunch or drinks or whatever.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

Ok cool - yeah definitely

"If you always put limits on everything you do, physical or anything else, it will spread into your work and into your life. There are no limits. There are only plateaus, and you must not stay there, you must go beyond them." - Bruce Lee
 

Seconded to you and Isaiah - I work out of Newport; would love to grab drinks with the two of you and chat.

“Bestow pardon for many things; seek pardon for none.”
 
Most Helpful

malta, we're kindred spirits, I often feel vacation guilt when I go to 3rd world countries, but here's how I try to reconcile it. obviously not perfect, and I welcome rebuttals/edits to this line of thinking

  1. make every effort to eat, drink, shop, and stay local, avoiding big chains
  2. avoid super touristy areas provided there's not a large sacrifice in safety
  3. tip heavily, but in secret so you don't attract unwanted attention
  4. search out local charities that you can support. something as simple as leaving all of your shoes behind or like me, leaving a surfboard behind for the locals can go a long way
  5. bring gifts for the staff. books, toys (a soccer ball is always a good choice), etc., in addition to some tips go a long way. ask your wife if you're going to latam again, but los 4 acuerdos, anything by pablo neruda, mario benedetti, gabriel garcia marquez, or borges could be good options, dependent upon local levels of literacy.
  6. support companies like patagonia that hire workers in areas like that and are strident in ensuring good working conditions
  7. always remember that happiness depends upon expectations and perspective, it does not reside in the absolute, always remember this. just because they have less than you in material terms, they may have more than their parents had and have a generally happy life. it could also be equally possible that they look at your life, with the pollution, rat race, materialism, and artificiality of southern california and feel sorry for YOU (probably not the young ones though).
  8. surrender. surrender to the fact that there is significantly more outside of your control than within. you cannot change the world. you can do everything I said on a trip to nicaragua but then find out that ortega's goons extorted 50% of the take from the resort and shot the owner in the street to prove a point. there will always be savagery in the world, and you must surrender to that fact. the way I try to look at it is like this. if we're truly a globally interconnected society and interdependent upon one another for various reasons, what you put out in the world matters. kinda like a ripple that comes from dropping a pebble in the water. you have no control where that ripple goes, but you can control what you put out into the world. so are you putting out positive things and trying to leave the world a better place? or, are you like the people I saw in the last 3rd world country I visited that litter, yell at wait staff, are incredibly impatient, and just want to live like a king because this is their annual vacation from a job they hate
  9. don't fall into lifestyle traps. this should be easy for your wife, but money changes people and can change your personality. this can be mostly avoided by where you live and who your neighbors are. if you live FAR below your means and your neighbors are of more modest means (again without sacrificing safety), you will have a greater sense of connection and community to those at a different station in life and you will feel less pressure to level up your lifestyle, keeping you more grounded. I mentioned this in the mortgage thread, just because you can afford something doesn't mean you should. many of my happiest clients are those with homes far below what they could afford but have strong social ties to a very diverse group of people (not just the country club types). the phrase about friends "you are the average of the 5 friends you spend the most time with" applies to where you live as well. if you continue to live below your means, just be sure you're also being charitable with your time and dollars. again, you can't change the world, but you can tend to the garden you can see and ensure you're putting out positive ripples in the world
  10. remember where you and she came from. be the one that raises his hand to mentor young people, offer to reach out to the community during company projects (hell, I'd recommend initiating some!), and always always always be as respectful as I believe you to be. nothing wrong with someone being successful, there's a huge problem however if you're a dick

on your 3rd world computer programming idea, I guarantee there's a charity that already does that, get approval from your company to go work remote from those places, even if just for a month and be a volunteer 

you're a good man malta, and hopefully if covid is still chill in the fall I'll be in the OC myself

 

Really appreciate the thought out response here and interesting that you often feel the same (about several topics it seems). Firstly, I'd love to meet up! Let me know whenever you're down here and I'd love to get a drink/ lunch/ coffee.

I really love this list too, I think the big one for me to learn is #8 (the first half) on your list. It's something I have to learn to let go of things (more as a life philosophy part of growing up in general, outside of just vacations). It often feels like not enough to just be respectful and gracious of everything and leave generous tips. But your other points also help with that realization (especially the "they might feel sorry for me" one, I've often heard my in laws just not understand why I work quite a bit and try to study/ learn and not watch TV or enjoy moments of doing nothing).

My work is full remote.. I should go do that sometime soon. Just get an AirBnB and volunteer after hours, that's a great idea. Thanks! Hopefully we can meet in the near future!

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

RE #4 and #6 on your list: One thing I like to do is pack as little as possible and I wind up needing to buy clothes, toiletries, what have you when I'm travelling. This isn't just for going down to Mexico or the Carribbean but even just some college town with a quaint downtown store. Wound up doing it by accident, but once I realized the hidden benefit it was providing I just made it my SOP.

For the providing remote opportunities in near shore markets; a ton of F500 companies are already doing that. Albeit not for the same altruistic motivations, but that gigantic swath of techs working on contract for Microsoft in Costa Rica for instance couldn't care less since they're living like kings as far as they're concerned.  It's a good exercise though in how not all profit is financial. Social profit and educational profit can be significantly more valuable.

The poster formerly known as theAudiophile. Just turned up to 11, like the stereo.
 

That's pretty smart, I hate packing and it's just easier to buy stuff out there.

Yeah, I've managed a team in India and another in Brazil before, so I'm aware it exists. But even within countries, I wonder if there's opportunity to help at the less wealthy areas (like Mexico City and Guadalajara are where most of the high paying legal jobs are).

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

[Malta] this isn't really related to your topic but do you have frontend (specifically React) capabilities? I'm working on a startup, have found a full stack developer to work on the project with me, we are looking for a third cofounder with frontend (React) capabilities to help get the project up and running quickly (probably within a couple of weeks as what we will be building is pretty simple). Feel free to shoot me a message if you're open to discussing a bit.

 

I agree with you but I've never thought that the solution is charity and not even tourism for that matter. I'll start with tourism. First, let's be real, tourism is disgusting. You are married so maybe you are an exception but 99% of well-off men who go to a low COL country also do it because the women are cheap. Very cheap prostitutes, and women that will let themselves be courted by the relatively wealthy foreign man who maybe can take them out of their misery... only to fuck them for one night and then disappear back to New York. That is the reality of tourism so the only thing tourism achieves is taking advantage of young foreign women to fulfill some European conquistador fetish. We get it, you wish this was the 16th century. 

As for why charity doesn't work well, it doesn't work for the same reason government doesn't work. 'Free money' will never lead to long-term wealth. Just handing people money is an awful way to promote an economy. Maybe after a disaster when you know that the money will with a 99% probability used to feed and house those affected charity is okay. But even in charities that provide basic help like food it turns out to be completely useless because you hand a 5 year old kid some food only for it to be stolen by the local gangs so really your 'charity' only goes to improve the profit margins of cartels, gangs and military rebel groups now that they can count on your money to feed their troops.

I feel like if you actually want to help people you should go there and start a business. Places are poorer not because the people work less hard. Places are poorer because no one is taking advantage of the economic machines present. You can have a mining town with a lot of wealth being extracted but all around it people are poor? Why? Because the profits of the mine are being siphoned off to a Swiss bank account and then invested into some tech start-up in California. Instead if that money went into founding businesses in the local community wealth could slowly build over time in the same way wealth was built over time in Europe. So if you want to help go back to that small town. Use your big finance brain to find some wealth-stream that is not properly being taken advantage of. If you want to be charitable then take a loss for the first few years. Instead of hiring foreigners invest into training some locals and having a 100% local team. If you want to be more charitable then have a system where you slowly lose equity over time so that your employees earn it proportionally year over year. In 20 years you now have a team of 50 workers, yes, but also business-savy owner-operators who can now use that wealth to build their own companies and take risks on their own. 

Another idea would be to open a bank. And I mean a real bank that will actually do due dilligence on all of their clients. If one guy wants to open a bar you will actually do a business case on how likely that bar is to be profitable. And you will pay, out of your own pocket, for full time consultants that will help these guys build a functional business model. If the guy who wants to open the bar has a shitty idea then the consultants will tell him what a better location would be or maybe a better way to use the money. If you want to truly be charitable then the interest rate can be 0% but at least you'll be building something. Tipping a kid 40 $ solves nothing. Those 40 $ will likely be stolen by an abusive older brother and then spent on prostitutes, or even abusive parents. But teach that kid how to build his business and now you actually changed something in the world.

 

Not sure I agree that just handing people money doesn't work. Look up GiveDirectly, this is exactly what they do, and they have research and data to backup the fact that it works.

 

Although I come from a middle-class family, I have been able to see both sides of the spectrum of wealth and it is almost impossible to understand how others live, poor people don't really understand how rich some people are and those who were born rich can't understand what being poor is. Both groups will always underestimate how rich/poor the other one is.

You don't have to leave your country to find people waking up every day with something broken in their house that they can't afford to fix (worst I have seen was a house with a broken roof they couldn't fix) or wondering if they can afford the next grocery shop, although ofc the poorest person in Namibia is 100x times poorer than the one in the US.

What you say is very true and I completely understand your wife's mentality, if you are not used to certain "luxuries" you will think that they are a waste of money (something as common as an iPhone is unthinkable for many families, and I personally won't buy one or even normal clothes over $60).

Be grateful for what you have.

 

Well, Mexico lacks, just like most other countries in the world, the possibility to leverage capital and benefit from its multiplying effects that allow you to be wealthy. I can assure you, you don't need to go to Mexico to see that problem. Most of the fly over states in your own country have the same issue. There are always going to be ''hot'' places where all the capital concentrates at the detriment of everything else. That's how the world works: winner takes almost everything.

Never discuss with idiots, first they drag you at their level, then they beat you with experience.
 

That’s another thing that did surprise me, when I was asking my father in law about home prices and mortgages he was explaining that very few people ever get loans on anything. Just save up for generations and hopefully your grandkids can buy a house if nobody squanders the money. Most people own small shops and can’t expand because of limited leverage. I knew there was less capital influx, but didn’t realize it was a dry well

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

Yep. That is exactly my point. There are plenty of places which in theory have an environment for capital to thrive, often safer than many of the current hot spots. However, once capital likes a place, it's hard to get it to move elsewhere. See NYC. It goes there because everyone is there because it was the place to be... 40 years ago. Once the infrastructure and the people are there, you need a place that offers insane leverage options, like China, to get it to move, partially. Otherwise forget it. Despite the fact that many other places would be just fine. 

Never discuss with idiots, first they drag you at their level, then they beat you with experience.
 

There's an interesting purely academic ethical consideration your post reminds me of, OP...

Scenario 1: You're in a park and 10 feet away from you is a small child face down in a small puddle. You are the only person around and you can easily help the child. I would say you have an obligation to help the child. Scenario 2: Same situation, but there's a person who can help that's 5 feet closer than you are to the child. Are you somehow less obligated in this scenario simply because the other person is closer? I would argue your obligation doesn't change regardless of your geographic distance. If you can help, then you can help. 5 feet or 5,000 miles is irrelevant if you can reasonably help others.

Somewhat adjacent to what you're talking about, but couldn't help but think of this ethical dilemma and my JV interpretation of it. 

Good on you for the self-awareness. +1 SB      

 

I like that, I’ll remember this take. Thanks. Especially with the age of the internet, proximity is less relevant.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
 

The topic of money is my favorite because I can think about it forever. I am trying to become financially literate. I recently took out a mortgage from moneyexpert to get some housing. And since then I've been carefully spending money. Specifically, only for necessary expenses. And I'm thinking about investing somewhere.

 

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