What Developing Nations Can Teach Us About Personal Finance
Published on - July 27th, 2007 (by J.D. Roth) This guest post from Terry M. contains strong language.
Most readers of this blog are from the United States, Canada, or the United Kingdom. We have an extraordinarily high standard of living compared to most of the world, and I feel there are a lot of lessons to be learned from how people live in developing countries.
I have traveled a bit, mainly in Latin America, southeast Asia, and India. In most of these regions, the middle class earns $500-$1000 per month, and this is considered quite a good income. At world standards, income of $1/day brings you above extreme poverty. $2/day puts you above poverty level. Something to think about.
Driving in India
I spent a month working in Bangalore, India, last year, and it has had a tremendous impact on how I view the way I live. At the time I had been driving my SUV eight miles each way to work, alone. In Bangalore, there is a system of buses, and the employers all operate buses to go from the main residential districts to the offices. Every day in Bangalore I took the bus to and from work, for free. In Bangalore most people take the bus to work. 
Public transportation is good, and you can also get a ride on auto-rickshaw very cheap, maybe around $1-$2 to anywhere in the city. Some people have cars, but even more people have motorbikes, a nearly forgotten mode of transport in developed countries.
A motorbike costs about 1/10th the price of a car, and costs maybe 1/5th as much to operate. Say all you want about how the cost of living is cheaper in India than in developed nations, but gasoline costs about 2x what it does in the U.S. and any imported car costs 2x as much as the US due to the 100% import tax. So how do Indians get away spending so much less on transportation than we do? When I went to Bangalore I realized immediately that my American lifestyle of driving to work in my SUV alone every day was a total waste, an enormous waste, an enormous inefficiency I cannot begin to describe.
Living in Mexico
For three years I have been dating a Mexican girl. She lives in the country’s third-largest city, which is a two-and-a-half hour drive from the U.S. border. She has a Master’s degree in psychology, and earns $600 a month. This is a solid middle-class living. She lives well, easily pays all of the bills, and when she comes here to visit me is able to spend more money at the luxury malls in the U.S. than I can even though I earn almost 20x more than she does. In Mexico, imported name-brand clothes from the U.S. are much more expensive than in the states, and carry much more social significance.
What’s the secret? Probably the biggest is that she lives with her parents. This is a common theme throughout almost every country on the planet. In most of the world it is not normal for single people to live on their own. People will live with their extended families and save a hell of a lot of money on living expenses. Free housing? Sounds good to me. Housing is cheaper in many parts of the world than in the U.S., but not by that much; I pay $700 a month for rent here in the US, but in in most major world cities it still costs several hundred dollars. Not nearly enough of a difference to make up for the 10x-20x salary differential. Those in developing nations are just a hell of a lot smarter than we are about how they spend money.
One can also look to the “undocumented immigrants” in the US. The third-biggest component of the Mexican economy (behind oil and tourism) is money sent home from Mexicans living abroad. They do the work that we refuse to do, in many cases earning less than minimum wage, but yet live so frugally they have enough money to send home to make an enormous impact on a major world economy. While you are drowning in debt up to your ears paying off your mortgage, the guys who did the actual work to create your house have no debt and their income so far exceeds their spending they are able to save big time and send money back home. How do Mexicans spend so much less on living in our country than we do? I’d love to see statistics on this, but I bet the average Mexican immigrant spends a hell of a lot less money living in the U.S. than we do.
Coming from Laos
My best friend in college was from Laos, one of the poorest, most corrupt, and most fucked-up countries on the planet. His family were refugees who came to the U.S. during the problems that country was having in the mid-to-late 1970s. His parents speak no English, and literally have less than an eighth grade education, and never earned more than minimum wage. But between the two of them, they worked three, or four, maybe even five, full-time jobs, including positions none of us would ever do, such as forklift operator.
They easily paid off a house in the U.S., and put three kids through college and achieving the American Dream many times over what I will ever achieve. Out of all my friends, my Laotian friend is the most spoiled, and his parents always got him the latest and greatest gadgets, 
and I was shocked when he told me they sent him $100K cash as a down payment for a condo in downtown Chicago.
I’ve never been to Laos but I’ve been to other southeast Asian countries which neighbored Laos. In any of them you can have a hearty meal at a restaurant for less than $1. So why are we spending hundreds of dollars a month on grocery bills spending all sorts of dollars on our fancy organic name brand food, when we can eat well and eat more for so much less. I’ve priced food in many developing nations, and for basic ingredients the prices are approximately the same worldwide. How we Americans manage to spend more than a hundred dollars on food per month I will never understand — yet I do it every month!!
Happy in Colombia
My favorite country to visit in the world is Colombia. It has the most beautiful and most awesome natural beauty I have ever seen anywhere on this planet, and has the truly nicest, most generous, and most kind-hearted people in the world. When I retire I want to live in central Colombia and live on the coffee plantations, whose mountain scenery is so crazy gorgeous it cannot even begin to be expressed in words.
Colombia is a very poor country, and has been torn apart by violent civil war for the past four decades. There are more internally displaced persons here than any other country in the world, except for the Democratic Republic of Congo. Bogota is a major world city yet in the vast suburban slums just outside the capital, many people are starving to death (literally), and lack running water and functional sewage systems.
While we can afford the latest iPhone and various other luxuries, a mere four hour plane ride away from the richest country on the planet, some people cannot even afford to feed themselves. Yet the people of Colombia are happy. They place extraordinary emphasis on family and friends, and are not defined by the size of the house they live in or the gadgets they have.
The average Colombian I have met seems a lot more happy and content than the average American I have met whose life is consumed by go-go-corporate-takeover lifestyle. I don’t know about you, but I spend one-third of my life sleeping, and I can vouch that it is more enjoyable when I know people care for me, than when my only concern is the latest rat-race of the week, bucking for the latest promotion. When you walk down the street anywhere in Colombia, people will smile at you, you can strike up conversation with any stranger, and they project happiness. I think the Colombians are on to something.
Spending in the U.S.
What the hell is wrong with us??
Here we are living in the most prosperous parts of the world, earning $50K-$100K per year, which is truly a fortune by world standards (literally more than the “average earthling” will earn in a lifetime), yet we are up to our ears in debt, and can barely make ends meet, and seem to be generally unhappy. We complain about fililng our car with $3/gallon gas, but the truth of the matter is that 90% of the world cannot afford to buy a gallon of gas let alone even dream of affording the car in the first place.
Meanwhile, our counterparts in developing nations are living the high life, saving money, and helping others out on 5% or 10% of our salary. Are we the most spoiled people who have ever walked the planet? Are we living unsustainably beyond normal world means? Or is our economy built on an enormous house of cards? I’m very interested to hear other’s opinions about the dichotomies which exist in the world economy between the rich and the poor. I’m particularly interested in how people in rich countries have been influenced by the economics and lifestyles of developing nations.
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I’m in the same boat as kick_push. I’m 34 and live at home. Both my parents immigrated here from Jamaica. To them it’s perfectly natural for kids to live at home as long as they want. They are constantly puzzled by their american-born friends who insist on kicking their kids out of the house at 18.
Lik kick_push mentioned, people like us do get looked at funny when we say we still live at home. However those looks disappear when they realize I’m debt-free, saving money, have a great relationship with my parents, and happy. While I don’t pay rent, I give my folks some money each month and pay one of the bills. I don’t own a car, but my parents let me use their when I need it, which is rarely because I take public transportation everywhere.
I’m very thankful to have the parents I do and their mindset on family and sharing resources. Most of my friends who are first-generation American (like me) notice this difference all the time.
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[...] at finances, like I am, you should subscribe to it right away. In one of his recent guest post – What Developing Nations Can Teach Us about Personal Finance -, the author Terry M has written about his experience of traveling in Bangalore as compared to US. [...]
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I’m sorry you’re getting so many reactionary comments from readers. I just wanted to put my two cents in here, and say I know exactly what you mean. I’m a US citizen, living in the US right now but I grew up in Hong Kong and the Philippines and I can definitely agree with your ideas. I think people are taking it as an attack on Americans, when in fact its not, it’s insightful comments on a lifestyle. Realize that. One thing people need to understand is that articles like these are NOT meant to make people feel BAD for their privileges, expenses, etc, but to encourage them to simply see other perspectives and be inspired to make small but significant changes they can in their lifestyle, if they can.
I agree, in America we are never going to be able to reach the super low costs of living in some other countries. For example, everything here costs about twice as much as in Hong Kong, and four times what it costs in the Philippines. It has to do with the transport of imported goods and the higher labor costs. Now, what I think is important to realize is that we can learn from certain money-saving habits of other cultures. For example, sharing when eating out (i.e. eating communally or family-style) rather than getting one dish per person, cooking food at home instead of always going out is another trend I see in developing countries, trying to carpool or commute by bike if possible, etc.
I don’t think it was the purpose of the article to attack American people for having more money but to encourage people to think about better ways to manage their finances. No offense, but people here often get WAY to offended by mentioning what it’s like in other countries. Get your head out of your ostrich hole and realize you could learn a thing or two.
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I keep reading the comments and the re-reading the post, trying to figure why some people find this post so offensive. Can’t a guy say there are good things about other countries without it being an insult to the USA? Sure the US has lower infant mortality (on average), don’t you think they are working on that in other countries? There are 40 countries in the world with lower rates than the USA, we could learn from them as well (see http://en.wikipedia.org/wiki/List_of_countries_by_infant_mortality_rate_(2005) ). You can be patriotic and still learn from a little comparative analysis.
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The theory that illegal immigrants do the jobs that “Americans won’t do” is an absolute lie. My father who is at least 3rd generation American worked as a janitor for 20 plus years. He is of European decent. My mother (also of European decent) worked in a school cafetera for over 20 years as well and most of their co-workers were as American as they are.
Also, one of the reasons some illegal immigrants do so well with money is that some of them don’t pay taxes. In addition, some get free health insurance (I don’t) and some even collect welfare (I don’t get that either). It is completely unfair to compare the supposed “frugality” of someone like that with someone who pays taxes and doesn’t get any freebies. And yet, as you mentioned, designer labels are very important to certain cultures.
There is nothing inherently better about people from 3rd world countries. They don’t have money, so they don’t spend money. Doesn’t take a rocket scientist to figure that out. That’s why your comment “What the hell is wrong with us??” is a bit offensive.
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Ben, the post is offensive to some people, but not necessarily for the reason you might think. It had more to do with having a system of standards than what the standards are. If you notice, all (most) of the comments who disagree, don’t disagree with the content, necessarily; they disagree with the way Terry set up the point of view.
Every new standard people come into contact with naturally puts people on the defensive.
For instance, my reaction was, you know, they have rich people in those countries, too; and you know what? They probably live like Americans!
That has nothing to do with your content, just the standards. It’s the framing of the argument, really.
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So basically I need to give up my car, move into a trailer with my parents and 10 other relatives, and work 3 dead-end jobs. Then I’ll be sufficiently poor to be finally happy? Money may not buy happiness directly, but it buys security and freedom, and those things make me very happy. Living in poverty would NOT make me happy, does that really make me spoiled?
I was under the impression that the common vision here was to “Get Rich”. What’s the point of living so frugally now unless you plan to live well later? This makes it sound like we should live like paupers just on principle. I’m quite happy to eat eggs for dinner and drive a smaller car and all kind of other poor-type things NOW because it allows me to save over 1/3rd of my income for later – at which point I intend to buy the house I want, the car I want, and the other stuff I want because I’ll be able to afford it. I guess that makes me spoiled, but so is everyone else working toward wealth. It’s not like you can take it with you.
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The writer says that his experiences have had “a tremendous impact on how I view the way I live” – view being the key word. He weakens his credibility because he doesn’t tell us how his realizations have spurred him to action (or, at least, how he hopes they will). Is he still driving around in his SUV, paying $700 in rent, shopping at the designer mall, and throwing away expired groceries when he could be eating rice? Does he just feel more guilty about it now?
Rita’s above point is also important. Sure, we can glean new ways to live frugally from our observations of the forced frugality of the poor, but we shouldn’t pretend that the they would reject a winning lottery ticket because they know some secret that we don’t about the key to happiness.
Say I live with my family for an extra ten years, sock away all that saved money, retire at 45, and buy a coffee plantation. How is that more honorable than if I live alone, buy a cup of coffee everyday, and retire at 65? One problem with this article is that its core is global poverty, but it’s skirting the issue of charitable giving.
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Some interesting anecdotes, but I don’t really see how this applies to personal finance. I could post a story about “some guy I know” in other countries who lives a debt-ridden, awful existence. It means nothing.
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“There is nothing inherently better about people from 3rd world countries. They don’t have money, so they don’t spend money”.
Many of you seem to think that everyone is poor in developing countries (that´s the term, please don’t use 3rd world, it’s derogatory, old-fashioned and horrible. Guess you don’t call black people niggers, do you?).
I may not have two cars, live in NYC and spend nights in Vegas, I may not have an annual wage of 60 thousand dollars, but I have an apartment, a car, watch the same shows you watch, go to the movies, read, date, go to restaurants, travel once a year and, most importantly, I don’t have any debt. For what I have read about you guys, guess not many of you can utter this last sentence. So, who is richer?
Sorry for the “3rd world” English.
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>: ¡Payaso!
Well, everything is related. I like the article because it shows some developing countries with their different aspects. Just promoting tourism, investment and even the idea of retire in one of them, mean also contribution to their development. Good post and thank you.
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Just a few observations:
When gas hit USD2.50/gal my wife suggested I should ride the bus to downtown St. Louis. Sure. So I checked the bus schedules because I’d tried it 3 years ago and ended up losing 1 hr. sleep every night. Reading the bus schedules explained why–it added 1 hr. each way to my commute. And I am not going to sell my house in the suburbs where my family has lived for 26 years and knows ALL the neighbors on our street so we can live in a dangerous neighborhood closer to work. When gas hits USD10, I’ll get another job.
10 years ago a friend from Chihuahua visited and was shocked (also hurt) to learn that White Castle paid USD4.10/HOUR, not per day. Until I pointed out that I was paying ~USD 900/month for my house. His is paid for because housing loans in Chihuahua were ~20% so he built when he had enough money to buy some cement block. I also believe his parents gave him their back yard to build on, and that there weren’t many building code inspections. I drove a mile to the grocery store and 17 miles to work. Within a block of his house, there were 2 grocery stores, a fruit store and a butcher shop and he could walk 1.5 miles to work if he wanted. So things were, indeed, different. Not necessarily better. Just different. Last spring he brought his family to visit, and I discovered that he and his wife argue about spending USD150 on the latest Nintendo gadget for their kids just like other north american couples do. BTW, he is an engineer at a maquila and makes a good wage.
One curiosity about the original post is whether the author could afford retirement to a beautiful coffee plantation in the mountains if he had spent his working years in Colombia. I do enjoy travel to Mexico, Guatemala, India and European countries to enjoy the food and see how other people do things, but I wouldn’t lightly trade reliable drinking water for cholera (Veracruz, 1992) or dirt streets, la lluvia lagunera, and plastic bags blowing around (Torreon/La Goma/Popular, 2001). I’m an American and not ashamed of it. I _do_ live in the best country in the world. And I’m still wondering why Barbara Streisand, Alec Baldwin, et al. didn’t keep their promise and leave after that presidential election that got their shorts in such a wad.
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I see the post as looking at what lessons you can apply to your life from others to make you happy. As for biking to work, I’ve been doing it for a little over a year (I live about an hour from Omaha). Granted, it is much flatter here but his excuse for not biking is he is not in shape. If nothing else you should start biking before or after work until you could bike a (granted somewhat tough) mile. For me biking started out as a solution to parking but the other benefits have been HUGE! I am calmer, happier, and healthier. It is much more relaxing to bike to and from work – which works about 9 months out of the year here, than to battle traffic.
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I agree with the overarching sentiment (at least, I believe it’s the overarching sentiment) that more is not necessarily more, and to be happy one does not have to buy into the consumerist, materialist culture.
However, the method of the author’s argument is flawed. Regarding public transportation, for instance. The design of America’s living spaces–the suburbs–is virtually unique throughout the world and completely unsuited for facilitating fast, cheap public transportation. Even if you consider gas being less in America, the cost of operating public transit systems that serve suburbians is prohibitive to most cities. In this case you need to address not the frugality habits of individuals, but how public policy itself is shaped. Does the government subsidize public transit? Do we take off the massive gas subsidies to encourage public transit’s use? Does the government aggressively monitor new home and community construction to make sure it facilitates efficient movement between spaces? It is one thing to argue for more public transit and motorbikes; it’s quite another thing when you’re the guy who’s waiting two hours for a bus that may or may not come or trying to navigate that scooter down six-lane highways. Countries are constructed differently and thus some things are easier and some are harder.
Or take the food issue. As someone else noted, for one, fresh food is cheaper and easier to obtain in other areas of the world, and two, those meals people are buying on salaries of $2/week are not nutritionally balanced. They’ll consist largely of starches–rice, root vegetables, fufu, depending on where you live. There may be vegetables if the adults have a place to grow them (not likely in the overcrowded slums that plague many cities in the country the author idealizes) and time to tend to them outside the jobs they’re working to survive. Meat is rare.
It is not so much the “nobility of the poor” that people are still able to be happy in these situations. It’s that these situations are all they know, and everyone else around them is in the same situation. It’s pretty well-documented that any man’s contentment with his living situation is determined not so much by his quality of life in relation to those who live a continent away, but by how his living situation compares to those around them. If you took those Columbians and placed them in the middle of an upscale suburb but maintained their current living situation, they would certainly not be as happy once their affiliated themselves with the immediate neighborhood and did not continue to compare their success with that of their old Columbian neighbors.
This article is well-intentioned but smacks of white Western tourist and Rich Man’s Guilt.
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god, not another one of these we are so spoiled and unhappy posts compared to LDCs and UDCs. i’ve worked, traveled, and lived in nearly 80 countries and civilization is a darn nice thing. if you want a simple life, then do so, but stop whining about how poor people are compared to you and that is why we should think twice about how we live. it’s rather silly. if people make $1/day, it’s because it doesn’t cost much to live; whereas, in developed countries it cost more to live. shocking! i agree with Emily, it is the Western tourist and Rich Man’s Guilt that leads people to throw a dollar here and a dollar there around in foreign countries without understanding the consequences of “it’s only a dollar” mentality–that is, giving $1 in a country with people earning average of $1200/yr is like giving $30 to a person in a country averaging $30,000/yr. Now would you really dismiss $1 if you knew it was actually worth $30? I don’t think so.
it must be nice to say how happy columbians are coming from a rich country, and having the choice of “retiring” in columbia. i’m sure if you were raised in the same class in columbia, you wouldn’t be saying the same thing.
i’m sure life is so much better, happier, and simpler in all these countries to such a degree that people in these countries have the utmost desire to remain there for the rest of their lives if they had the choice. i’m sure there is no reason why people in these happier countries risk life, limb and life savings to get out of these countries by the droves.
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“Materialism will inevitably produce the kind of society where people know the price of everything, but the value of nothing; where people have a great deal to live on, but very little to live for…”
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Speaking of helping others. J.D. please tell all your readers about the members project. For each Am Ex member who votes am ex will give $1 to a winning charity up to $5 mil. Right now only 40k people have voted though. I wrote up some details about it and my favorite project at:
http://armchairfiduciary.blogspot.com/2007/07/american-express-cardholder-hurry-up.html
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Where’s the strong language? I didn’t see any. You aren’t talking about using the word “hell”, are you? Don’t make me laugh!
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THANK YOU to Rita, Steve, Tim and everyone else who is debunking this guilt-ridden, politically correct, oh-so-en-vogue America-bashing post.
BTW — Brazilian guy — sorry, but Brazil isn’t exactly a model of how an economy should function (that’s a major understatement). Please don’t criticize Americans in that regard, or for our race relations here.
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I just have to say, great post. Thank you.
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Its a very well-written post reflecting your opinion. No lifestyle can be good or bad, if some Americans are happy with branded items and latest gadgets then let them enjoy that, if some are unhappy, then they need to re-evaluate their life. It just depends on a person’s perspective. In developing countries family acts as the support system, when people are deprived of many things, human relations assume great significance. Every country has its pros and cons. Agreed that there are alot of problems in developing countries, many people leave but many more remain too. Its never wise to generalize. This remains a great post which just reflects your observations.
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I live in Australia and I feel lucky just to wake up every day in a country where I’m not dodging bullets or disease or starvation. I don’t think anyone wants to live in poverty, but maybe we just need to look at the source of our happiness. My youngest son’s friends whinge about their latest $1000 X Box (yes that’s about how much they cost here – with all the trimmings) so I think that a sense of perspective is what’s wanting.
I wouldn’t give up living in this country (which also happens to have the best cricket team in the world) for anything, but it makes me appreciate it all the more when I see how others live – has anyone been to Cambodia lately? There is a sense of joy and sincere appreciation when they receive the most basic of gifts. I saw this post not as a matter of who’s best and who has what, I saw it more as a “let’s appreciate what we’ve got and mabybe help out those who are less materialisticly fortunate”. (By the way, I’m not so callous as to think that there aren’t homeless and destitute people in Australia – but I also know that there are volunteers in organisations that are available to help them, there are caring counselors at the end of a phone and there is a welfare system that is set up to make sure no one has to starve). There are also heaps of jobs available for anyone who wants to work.
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If everyone in Mexico is so happy and content, then why do they sneak across the border into our country, rather than us sneaking across the border into their country, and why do the ones who sneak across send money back to Mexico, rather than just enjoying the fruits of their labour for themselves??
Also, the gov’t has recently increased the number of LVN and RN positions available for work Visas, so pretty soon nursing and medical care at $8 an hour are going to be some of those jobs “that Americans don’t want to do”.
jerkoff
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Re the Nursing and medical care comment:
That’ll be right in line after all the customer service and computer programming jobs that Americans don’t want to do. At my company,where I am in a large IT department, probably 1/2-23rds of our IT staff are either Indians (from India) that my company has sponsored to come to the US or Indians sitting in Bangalore but on our software development staff. Oh yes — and in the meantime every year our company needs to do staff reductions in the hundreds to get rid of redundant (e.g., higher paid) Americans in the same job position.
Yes, I feel the job security now.
DB
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I’m trying to understand. Are there not enought nurses or IT people in our country? (USA) What’s really going on here? I should think we’d have plenty of people here that (with education) could do those jobs. Is our education system falling short? And why would an American want to incur huge debt to get educated in these fields, only to earn $8.00 an hour. Somebody give me a clue as to what the goal of the United States is for its citizens…I’m feeling a little lost here…
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It’s really saddening to see how many people in these comments took offense to the original post and thought it was meant as an attack against Americans, or a “first world guilt trip”, or some such nonsense.
There are plenty of ways of living, and the American one is not necessarily the best. It’s one option, with advantages and disadvantages. It’s easy to think the grass is greener on the other side of the fence, which is why the original post saw a lot of the advantages of lifestyles in other countries, without looking much at the disadvantages. Similarly, many people (including Americans) see only the advantages of the American lifestyle, without seeing the downsides.
I’m a proud Canadian, and I honestly believe that I live in the best country in the world. I think people in other countries have the right to hold the same belief about their countries as well.
What I find amazing, though, is how unwilling many Americans are to honestly look at the downsides to the “American dream” lifestyle.
Truly, money doesn’t buy happiness, which is why poor people in many countries can be perfectly happy with their lot in life, and many rich Americans (and rich people elsewhere) can be miserable. Having deep friendships and bonds with family goes a lot further to creating happiness than a high net worth ever could.
Phew… too many thoughts for a comment…
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No, there is nothing wrong with our education system. it comes down to economics. the companies don’t want to pay $20 an hour for a nurse to change bedpans (that’s what corporate thinks), so they bring someone over on Visa for $10. It’s called paying below market wage because they don’t care whether their employees get rich or not. Jobs that are profit centers (sales) are taken care of; cost centers, like IT and medical services, are pruned. Same as fast food and crop picking.
However, that’s not really the point of this article. The point is that judgements of whether the way someone lives in Mexico is superior to the way someone lives in the US are not of value. The ‘facts’, the differences might be of value because they might consist of something that we haven’t considered – so just present the ‘facts’ and let us decide which we want to do.
I’m also pretty sure that there’s a Taj Mahal in India, so i’m not sure that it’s particularly accurate to suggest that Indians, or anyone else from any other country, are more ‘comfortable’ in their poverty than anyone in the US is. We can see what they build when they get some extra money.
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Thanks for the insight beanspants1. Sorry I got a little off topic.
Sorry I used the term “3rd world”. No, I do say words that are derogatory to a race of people. Certainly not. I was not aware of the new terminology of developing nation.
George I’m not sure that I understood your comment “how unwilling many Americans are to honestly look at the downsides to the “American dream” lifestyle.” You might be stereotyping Americans a little. We are not all money grubbing fools.
I wholeheartedly agree with your statement “Having deep friendships and bonds with family goes a lot further to creating happiness than a high net worth ever could.” I would add that I don’t think it is necessary to choose one or the other. There are people that are relatively wealthy that have fantastic relationships. It’s all about balance and I would say that in most cases it requires very hard work but it’s do-able to have both. Having extra money is nice-you can take your family on a vacation now and then or just go places without having to worry about where the money is coming from. You can also give more when you have money. I feel it is almost my duty to have extra money because I won’t squander it on silly things-I will use it to help someone.
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[...] over at Get Rich Slowly has a controversial post titled What Developing Nations Can Teach Us About Personal Finance. J.D. has generated quite a discussion on this topic. I see that there are some who accept that our [...]
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I’ve lived with, worked with, and taught the children of illegal immigrants. beanpants1 generalizes that ALL Mexicans want to come here. Only the most desperate want to come here. For those, the possibility of death is not a deterrent. Those with a middle class or better existence stay put.
I took a job in a factory, which maybe beanpants1 has done, where illegals worked despite me being college educated. Many of the illegals would ask me why I would do it with my education and being a citizen. This tells me that in their experience, Americans usually DON’T do those jobs, especially if they have education.
I spoke with HR. They tried hiring locals, but they only last a week or two. I was skeptical until I worked with locals. Sure enough, they lasted just a week or two. But the illegals stuck it out the whole season.
I won’t say that people from other countries are superior to us. This is a great country. I won’t say that we are superior to them, because I saw firsthand that we can’t hack it. What I WILL say is that we THINK we are superior to everybody.
Just wait until the baby boomers start retiring. We’ll see if immigrants are not welcome.
In case you think I just fell off the turnip truck, check the web for Shaine Mata. I know.
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Having lived in a few different countries, both developing & developed, I can safely say that each country has its positives & negatives. There’s something to learn in each country and there’s something that could be learnt by that country.
I don’t think the point of this post was to suggest that Columbia and Mexico were somehow absolutely better than the US which appears to be how some have taken it.
But there are certainly positives from those countries to learn from if people are open-minded and humble enough to receive it.
There are certain undeniable problems with the US and other developed countries. Escalating consumer debt, a far greater ‘footprint’ in terms of use of energy and natural resources, the list could go on.
We would be far better facing up the problem and to the reality that we may actually have things to learn from developing countries (as they do vice versa) than to get angry and make comments verging on bigotry & xenophobia.
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People in developing countries are happy and poor? I dont think so; westerners travelling to third world countries come in contact with a very small part of the population. Trust me..the majority is unhappy that thier relatives died since they could not afford medical care, they are unhappy because thier children wont get to go to proper school. Of course they wont express it to a guy who came all the way from the U.S. of A !!! It would’nt be proper and would’nt do any good. So they smile for the american anyways…
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Well — I think the “American Dream” has morphed (mutated?) over the years.
In the 50s, families were all excited to get a newfangled thing called a television, and they were probably excited and content to have one car in the driveway. Mom stayed at home, and “Home” was that smallish house that today everybody wants to tear down to build a McMansion. When I think of the “American Dream”, I still think of the 50s ideal, not the present ideal.
The present ideal — well, somewhere along the way it seemed to be that we couldn’t make our houses big enough, or own too many cars, or too many other gizmos. I’m reminded of a poster that was in a lot of dorms when I was in college during the late ’80s that showed a row of expensive cars in the garage and had words to the effect of “Signs of Conspicuous Consumption”. Conspicuous consumption seems to have usurped the American dream.
At one time (like, during my grandmother’s youth), it was a lot more common for extended American families to live at home, and people didn’t have the same expectations for acquiring more. I’m sure we weren’t perfect then, but there are a lot of things about the way America used to be that I miss. I find our culture increasingly cold and unforgiving. I don’t really think it’s due to consumerism — I think it’s due to our cult of the individual, which of course includes the license to consume but it’s really much more about demanding that everybody give the individual space to be whoever they want (although the individual feels perfectly justified to trash anybody they disapprove of).
Now, of course — it’s easy to talk about happy Columbians and the like. You’ll also find a goodly number of people who really want nothing more than to adopt the American model of “Consume or Die”.
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“Trust me..the majority is unhappy that thier relatives died since they could not afford medical care, they are unhappy because thier children wont get to go to proper school.”
I think there is a solid minority in the USA that is unhappy because they can’t afford medical care or send their children to a proper school.
People who don’t know about wine can probably describe to you two varieties: white and red. Somebody who knows about wine can probably describe the intricacies and variations between 200 kinds of wine.
People who don’t know about the world might be able to describe two varieties: developing countries and developed countries. Somebody knowledgeable about the world could probably describe the intricacies and variations between 200 countries.
My point: there are a LOT of countries in the world, and a LOT of variation both between and within all of those countries. It’s impossible to come up with generic statements that apply to the “majority” of people in a large part of the world.
There are plenty of happy people in the world that don’t have access to American-style schools or American-style health care. That doesn’t mean they’re unhappy about it, and it doesn’t mean that they think it’d be desirable.
In any event, there are quite a few countries in the world that have better education and health care systems than that of the USA. Some of them would be considered “third world” countries by many Americans.
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“They do the work that we refuse to do, in many cases earning less than minimum wage”
What you really mean is, they do the work that we refuse to *for the extremely low wage that is offered, so instead of raising that wage, as is normal practice in any other business, employers opt to actually break the law and hire a slave class of foreign nationals who will work at that wage despite the rampant abuse and horrid working conditions because its marginally better than what they would have to face in their third world nation because they think people won’t pay 30 cents more for their lettuce*.
Common mistake.
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also, “third world” is not an insult. it means ‘developing’, as in the economy of that country is still developing.
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1. Americans like to buy stuff.
2. Americans like cheap stuff.
3. Americans don’t like to work for little money because they need to buy stuff.
4. Americans are happy to pay a third world country to make their stuff for them.
5. Americans need a bigger house to store all their stuff.
6. Americans need big cars and one family needs at least 2 cars (more stuff).
7. Americans need their oil to run their large SUVs and power all their stuff.
8. Americans are either lazy or too busy working to buy stuff so they don’t eat properly.
9. Americans eat junky processed food and get fat.
10. Americans are fat
11. Americans spend more money on health care.
12. Americans don’t think about waste.
13. Americans are big green house gas contributors.
Note: generalizations are on purpose.
Solutions are in that list. Just reverse each item.
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The take-away point in this post is “Live within your means” and that applies to any country and any world. Though at times you do feel in author’s tone as if he’s asking you to live frugally. But I think what he’s trying to say is that if people earning less can live without debts then why can’t people earning more. The key word here is “affordability”. Think before you buy and buy, whether on credit or cash, only if you’ve the ability to pay for it today (except for big things like a house).
I don’t see what’s wrong in living in a mansion if one can afford one. Or buying nice organic food: I don’t wish to and I can afford not to subject my body to harmful pesticides. When it comes to driving an SUV against cycling or using public transportation, it’s a different issue. Being an eco-friendly person, I think we should all try to use as little of personal transportation as possible.
When people say that they’re happy living in 100/200 sq ft boxes, I don’t think that they’re trying to say that everyone should give up his/her 2-3 bedroom house and do the same. The point I glean from it is that if you can’t afford to buy a 2-3 bedroom house then buy a smaller one. You’ll be happier that way rather than buy the house and submerge in debt.
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I really enjoyed this.
I travelled over southeast asia for 6 weeks last year. In cambodia, everyone is worse off than we are. Yet I didn’t see a single beggar there!
thanks!
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1. Lower cost of living. You could live in a very comfortable middle class with around $900 here in the Philippines – and that’s already in the city. $500 or even less would let you live comfortably in the provinces.
2. Conversion. The purchasing power of the USD goes a long way in developing countries.
3. There are always spenders and savers.
Comparing US lifestyle and spending behavior to developing countries might just be comparing the same spending behavior but on different spending ranges.
PHP 30,000 or $600/mo full-time salary is considered to be a very competitive middle-level management already (only multinationals can afford to pay that much). They have the choice between renting an upscale 1-bedroom condo in the city at PHP 25,000 or $550/mo or live with their parents (default choice).
Most people (“the masses”) don’t earn more than $400/mo. These are people with families so they make do with what they earn, spend with their credit cards, go to pawnshops, leech off family and friends, “invest” in lotto tickets, or try to win a million cash prize on a game show. Yet it’s quite common to have a nanny AND a housemaid.
So they’re really still just spenders (80% or ALL of their salary) but on a lower spending range than Americans.
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Dennis,
1. Americans like to buy stuff. and other people don’t?
2. Americans like cheap stuff. and other people don’t?
3. Americans don’t like to work for little money because they need to buy stuff. and other people don’t?
4. Americans are happy to pay a third world country to make their stuff for them. and other people don’t?
5. Americans need a bigger house to store all their stuff. and other people don’t?
6. Americans need big cars and one family needs at least 2 cars (more stuff). and other people don’t?
7. Americans need their oil to run their large SUVs and power all their stuff. and other people don’t?
8. Americans are either lazy or too busy working to buy stuff so they don’t eat properly. and other people don’t?
9. Americans eat junky processed food and get fat. and other people don’t?
10. Americans are fat. and other people aren’t?
11. Americans spend more money on health care. and other people don’t?
12. Americans don’t think about waste. and other people do?
13. Americans are big green house gas contributors. and other people aren’t?
George said, “In any event, there are quite a few countries in the world that have better education and health care systems than that of the USA. Some of them would be considered “third world” countries by many Americans.” which ones would these be?
anyways, u.s. has faults as do many other countries. so what? really, if life is so bad, then fix it. there are plenty of people that risk everything to fix their lives. if you are an unhappy american, then do something about it. you do have a choice to do so.
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Tim, I’m not going to respond to each and every “and other people don’t?” comment, other than to make the general point that no, not everybody in the world thinks and acts like Americans do.
George said, “In any event, there are quite a few countries in the world that have better education and health care systems than that of the USA. Some of them would be considered “third world” countries by many Americans.” which ones would these be?
Canada. Sweden. Japan. France. Cuba.
Of course, it’s hard to quantitatively measure complex things like health care and education and come up with definitive rankings, but many people would agree that the above countries have better (or at least more widely available) health care and education systems than the USA.
Cuba, in particular, would be considered “third world” by many Americans.
My intent is not to point out that the USA has faults, or that other countries are somehow “better”. My point is that it’s useful to learn about the world before coming to the conclusion that your country is the “best” place or way to live.
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What I see in the angry comments seems to be the defining debate maneuver of our era: set your own standards and values as the baseline of “reasonable” and define everything different from them accordingly, as “unreasonable.” It begs the question.
For example, one person wrote, “This article…ignores the fact that millions of Americans are living in conditions of poverty [b]y U.S. Standards. That is what is important!”
What is important is that the real message gets across: standards of luxury have no basis in reality. Those standards are artificial, and therefore, changeable.
Live on less; invest the difference.
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[...] a house maid ($2/day) to take care of laundry, cleaning the house, and tending to the children. We spend too like the Westerners but we manage to keep the costs [...]
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[...] Full article [...]
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Wow, such knee-jerk hostility to the idea that there is something to be learned from other countries!
I didn’t get any sense of ‘look at the stupid, greedy Americans’ from this post – more a sense of ‘here are some things I learned from people of other cultures that you may not have considered as applicable to your lifestyle which very well might be’.
Anyone who has lived outside of their own culture for an extended period – barring the kind of ex-pats who sneer at and spend every penny avoiding any contact with the local population, of course – knows that there is always something to be learned from how other cultures handle certain things and vice versa.
The sharing of accommodation with one’s own family or with roomates has to be one of the biggest lessons westerners can learn from. The idea that everyone should live away from their family and alone (or as a couple) by x-age has to be responsible for more debt, more misery, more people being tied to awful, soul-sucking jobs they dare not leave, than anything else.
The reality in these days of high rents and high housing costs is that most young people cannot earn enough to live alone, live the lifestyles they think they’re entitled to and save toward a mortgage. Yet, people who sensibly choose to share with their folks and reamin financially solvent seem to get the mother lode of scorn poured upon them while those who are up to their eyeballs in unsecured debt and working every hour available to maintain the illusion of ‘independence’ (you’re not independent from anyone if you’re deep in debt – you’re a slave to your creditors and your employer) are considered ‘mature’? Get away. Maturity is knowing what you can afford and swallowing your pride to avoid financial trouble, not ploughing ahead regardless and coming up a few years later on the verge of bankruptcy.
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[...] Rich Slowly – What Developing Nations Can Teach Us About Personal Finance. (link contains some strong language). This guest post by Terry M. gives examples of the personal [...]
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As for the superiority of Canadian health care: Is that why it takes 1.5 years to get an MRI in Canada? There is a growing industry in Washington state where Canadian visitors go to get an MRI 2 weeks after setting the appointment.
Or what about a doctor who treats a virus with an antibiotic in the absence of diagnostic tests and without investigating the origin of the problem? A former Viet Nam medic/physician assistant in Seattle seemed better qualified than the physician who treated me in Victoria.
More widely available, yes, but probably not better.
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Steve: nobody said that the Canadian health care system was perfect. It certainly has areas where things could be improved.
Waiting times for certain services is one area where there certainly could be improvement, but I really doubt that better training for physicians is something that needs improvement. Your experience with a single doctor in Victoria certainly isn’t reflective of the training or ability of Canadian doctors as a whole. In any event, a doctor that “seems” better qualified may not, in reality, be better qualified or better able to prescribe an appropriate treatment.
One thing I can say for Canadian health care – it gives me great peace of mind to know that if I need primary medical care, I can get it without worrying AT ALL about whether I’ll be able to afford it, whether my insurance will cover it, or any such nonsense.
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Canadian health care certainly isn’t perfect, and neither is American, French, British and so on. And it’s fair to say that wherever you live, the richer you are the more care options you have. I don’t understand why these discussions turn almost into a patriotism contest, at the end of the day we’re all stuck with the systems where we live.
The advantage to me personally of Canuck health care (and I’ve lived with US, Canadian & Irish systems) is that it’s always there and it’s completely separate from your employment. For all the American rhetoric about standing on your own two feet I think we’ve all met people who can’t consider starting a business, taking time off or working for that small company because they’re scared to give up their coverage at Big Corp. We don’t want to be in that position. I’ve sat in on directors meetings at a prior employer in the US where consistently 75% of the discussion was what to do about HMO increases the next year – not competitiveness, productivity, marketing, business development.
And c’mon, there are individually crappy doctors everywhere. Certainly there’s one MD in New York I could name that I wouldn’t send a cat to, and a doc up the road here in Toronto who we won’t be visiting again.
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