Tag Archives: money

Money matters

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I remember in Junior High school when I could buy a bag of potato chips for 25 cents. Then there was a jump in price, with a smaller bag being sold for 35 cents. That was a big jump and it took a while before paying more for less became the norm.

There are distinct times in my life when I recall these kinds of jumps. Like when it was crazy to see gas be over 50 cents a litre, then the price jumped above 70 cents and when it dipped back down it never went below 55 cents again. Give us gas at 71.9 cents a litre for 2 months and suddenly we are quite happy to see 55.9, like it’s a bargain price. Now I’m checking my tank to see how much gas I have when the price is under $1.65, because that’s too good of a price to pass up.

I get that prices need to go up, but what I don’t understand is how this is happening while simultaneously banks, oil companies, and grocery chains are recording record profits. It’s literally a case of gouging the consumer and blaming inflation.

Rants aside, I’m up at Whistler with my family, my mom is visiting and has never been up here. We are staying in a wonderful hotel, a surprise gift from a friend, and my kids can’t get over the way people spend their money. Here, room service for 2 would be a fancy meal for all 5 of us… and no we didn’t order any, we just looked at the menu.

A day of skiing for our family, with 2 parents and 2 adult kids would be $1,200, and if the kids were under 19, $1,100, and under 12 would be $900. Most families are here for 3-4 days of skiing. Many have flights to pay for, and hotels here are not cheap!

But for some people, spending $15,000 to $25,000 for a vacation is… normal. For others that’s a significant portion of their yearly salary and out of the question.

It’s funny, you always hear, ‘money can’t buy happiness,’ and while I agree with that, there is something affluence does buy, it buys a sense of freedom. Money matters because when you have a lot of it, you don’t have to think as much about your spending. You want something? Buy it. You need something done quickly? Pay someone to do it for you? However, when you don’t have the freedom to buy whatever you want, when the cost is prohibitive, money really matters.

Prices have jumped significantly since Covid. There are more people struggling to make ends meet. There are more people choosing not to go out for dinner because the cost is just too excessive for a family. There are people who used to ski at Whistler who have been priced out of that option. There are many more people who don’t make a purchase without thinking of the cost. They don’t have the freedom to spend without thinking of the consequences of a purchase.

That’s what affluence buys, it buys free buying power that doesn’t feel nearly as free for less affluent people. Monet matters less as you get more. I’m not sure what the sweet spot is, where the transition happens, and I’m not sure I ever will. I just know I’m at one of those price jump times where I’m going to need to adjust to the price jumps wherever I look… I’m just not sure I’ll be adjusting to these new price ‘lows’ any time soon. It’s a time where money matters for a lot of us.

Broken models

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Here are two things that are broken and need fixing. Neither of them have an easy fix. Neither of them will be fixed any time soon. I don’t pretend to have answers. I don’t know who has answers or if they can be solved in my lifetime?

1. The shareholder model of ownership. When companies act on behalf of shareholders they do not act on behalf of customers or employees. The shareholder only cares about profit and gains, and those come at the expense of workers and end-users.

2. Religious zealots. Every religion has good people of faith who live good lives and are sincerely wonderful people. But that doesn’t make all religions equal. Some religions allow for the truly faithful, those following the faith devoutly, to do bad things in the name of God. That’s a broken system. It has removed the purpose of the faith away from the benefit of humanity.

Both systems are entrenched in tradition. Both models create bad incentives that do not serve the public good. Both of these will outlive me. Again, I don’t have answers. I just know that the models are broken.

We aren’t getting rid of shareholders, we aren’t getting rid of religion. How do we reduce the bad incentives? How do you tell a shareholder that their returns should be lower so that employees are better paid, or consumers should get a more affordable price at their expense? How do you tell a person willing to martyr themselves for the glory of God, and their righteous place in heaven, that they should be kind to everyone regardless of faith while they are here on earth?

Again, I don’t know? What I do know is that greed and blind faith are evil, broken parts of systems that need to change. Because everyone suffers in a world where these broken models continue.

Digital currency

In five to ten years a crisp, mint condition 50 or 100 dollar bill from the ‘late 1900’s’ will be a collector’s item. No one will be paying for anything with paper bills or coins. No one. It’s not just that we will be using credit cards and bank cards instead of cash, there won’t be any form of money that won’t be digital.

The Canadian and American dollar, and currencies from all over the world, will be digital cryptocurrencies. They won’t be like Bitcoin where every account address is public. When you pay, no one will be able to look into your account, but the money will be verified as real at the point of transaction. You will be able to instantly change currencies from one country’s currency to another, without a bank. You will also be able switch to another cryptocurrency or Visa, or MasterCard, or some form of smart contract IOU, that is staked against something you own (at a pre-determined interest rate).

Paper money will be nothing more than collectables like Magic the Gathering or Pokémon cards that are no longer printed.

It might seem crazy to think this will happen as soon as 5 years from now, but North America won’t be first. There are countries with incredible inflation that need to print larger and larger bills, making smaller bills useless. In countries like this, the cost of printing the money is hardly worth the effort. Imagine having to carry around seven to ten $50,000 bills to buy a loaf of bread! These economies will move to digital first.

But then the transition will grow exponentially. Within 10 years every nation will have a digital currency and paper money will be a thing of the past. Have any mint condition bills and coins? Keep them, they will be worth a lot more than face value for your grandchildren.