Tuesday, March 20, 2007

A Question of Finances

Just curious, which do you prefer? Earning P40,000.00 a month but everyone else in the company is earning P60,000.00 a month or earning P20,000.00 a month but everyone else is earning P10,000.00 a month? (I prefer the former, by the way.)

It was something that was brought up in The Happiness Hypothesis by Jonathan Haidt and tickled me.

Moving on, the part of my monthly expenses that hurts the most due to the current exchange rate are my hobbies. Food, no matter where you go or what country you live in, will always be affordable (assuming of course 1) you're earning the average wage for the country you're staying in, 2) you're only feeding yourself, 3) average food, not fine dining, 4) there's no disaster or shortage that would cause inflation). Luxury goods, however, don't really scale well.

Take for example the minimum wage in the US -- around $7.00 an hour. For those who don't want to do the math, that's roughly P350.00 an hour. Unfortunately in the Philippines, $7.00 is the minimum wage for the day. That averages around to $140.00 a month. A middle-class employee will probably earn somewhere between $200.00 to $300.00 a month. That's why few people here are lining up to acquire PS3's or even Nintendo Wii's -- it's simply out of our price range.

Food, shelter, clothing -- we can afford that. An average "value meal" from McDonalds scales down to $1.00 to $2.00. You can purchase a generic shirt for $2.00 but of course designer clothes cost the same (if not more when you take into account licensing and/or shipping).

My hobbies are relatively expensive. Brand new books, even when they're cheaper compared to foreign countries, is still costing me around $8.00. That's what, my salary for the day? RPG books are even more expensive, costing around $40.00 by the time they get here. Those are already big fractions of my monthly income.

In the US, working minimum wage for a month will get you $1120.00. Assuming 75% of that goes to living expenses, you still have $280.00 to spend on luxury goods. That's easily more than my monthly wage.

Thankfully the price difference usually affects only luxury goods. But man does not live on bread alone...

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