We are richer than we think

The topic of this article is closely related to the book More from Less by Andrew McAffee that I reviewed here some months ago, if you want to understand how we got to this point I recommend you to read the review and if you feel like you would enjoy the book, read it.

For a long time, every time I heard about people’s wages not increasing and therefore purchasing power decreasing I felt like something was off in that statement. We cannot compare what $1000 gets you today to what the same amount of money got you 10 years ago. The main reason for this feeling is that over the years I had access to more for less in many areas, for example, entertainment, knowledge, travelling or electronics (I also know this is not applicable to everything, a clear example of this is the housing crisis we are in right now). I want to talk about this because it is something we don’t appreciate enough and it should be celebrating.

The area in which we have improved the most is probably entertainment, if you asked anyone 20 years ago that they would be able to have all the music they wanted at any time anywhere for $5 a month, that person would think that you were crazy. In the past, if you wanted to listen to one album you had to spend at least $10, just imagine if you had to pay $1 for every song you listen on Spotify. Something similar happens with Netflix, we used to rent movies or watch what the TV networks wanted us to see, but it is not as great as Spotify because the main TV shows and movies are now spread into several streaming services (but if you really wanted and your morals allowed it, you could watch them illegally). In the videogame industry, the change was bigger and we can even play triple-A games for free when some years ago we used to pay $60 for them.

Learning has never been so accessible, there is an infinite number of courses, books, videos, articles or webpages to learn about just any topic you happen to be interested in or need to learn. With just the free content you could master anything if you are self-disciplined enough, but you can also pay for guided, full-packaged courses for a much lower price than in the past and with much better content. There is so much available knowledge out there than you could even feel frustrated for not taking full advantage of it. A great example of this is Lambda School, in one of my first articles, I explain how they are revolutionising the coding learning industry, they are teaching people skills to get a $50.000 job for with no upfront cost.

But not everything is about the transformation of physical to digital as the previous examples depict. In the past, we used to buy many devices to do what our phones do, in the book More from Less, this is exemplified with an ad from the store RadioShack, where 13 out of the 15 devices on the front cover had been replaced by our phones. Not only that, but great phones are getting cheaper every day, nowadays you can get a great phone for less than $200 that will last you easily four years.

Another great aspect of the democratization of knowledge thanks to the internet is that we don’t need to throw our devices when they stop working because it is easy to fix them following a simple video and sometimes buying some inexpensive parts from the internet. I changed the windows regulator of my father’s car for 10€, at the repair shop it would have cost over 300€ and it was as easy as buying it from the internet, removing a screw and replacing it. The world right now rewards those who just try.

The last industry I want to talk about is tourism, it has never been cheaper to go anywhere, and once you are there you can easily find food and hotels that fit your budget. The negative part of this is that some cities have lost their authenticity as they try to please tourists, there are still authentic places in the world, but who knows for how long. This year, for example, I went to Bucharest with a friend for three days and the whole trip was around 100€, plane, food, Airbnb and Ubers.

This is an unstoppable trend, economies of scale, business model and technology innovation are the main drivers for it, they are making everything we apparently care about cheaper and with better quality. Seeing this trend and others I just can be hopeful for what it is to come. We should appreciate all this and try to take advantage of it, especially the education part, because people can learn about essential things not being taught in schools like personal finance, which is one of the better time investments you could ever make.