Recently, I shared some thoughts about how our grandparents or previous generations probably earned less money than we do now but also had fewer needs because they were highly self-sufficient. They grew their own food, built parts or all of their houses, sewed their clothes, and more.
Because of this self-sufficiency, they could save a significant portion of their income. If they took out a loan for a house, they managed to pay it off in less than ten years.
Today, there’s an imbalance between the value we create at our jobs and what we can afford to buy. Take my village, for example. People still grow their own corn for their basic diet. They own or rent a piece of land, plant the corn, watch over it, harvest it, dry it, and then store it for the year. They use it to feed themselves and their animals. They eat corn tortillas at every meal, and their chickens and pigs eat corn too. However, dried and plucked corn is only worth $0.12 a pound.
An unskilled worker earns $8 a day and can buy 66 pounds of corn daily. If a family of five consumes 5 pounds of corn daily, and their animals eat another 6 pounds, that’s plenty for everyone, even leaving a surplus of 55 pounds of corn for each day worked.
Growing your own corn doesn’t require daily work, but it is time-consuming, and there are risks like pests or natural disasters that could wipe out the crop. An unskilled worker would only need to work a little over two months to earn the 4,000 pounds of corn required for a year. The rest of the year can be spent earning money for other expenses, which are minimal in my village. Most people build simple houses themselves and only have to pay for electricity (if they use it) and about $2 for water. The remaining expenses are for enhancing their diet, buying phone credit, and other consumer goods that weren’t needed a generation ago.
My point is that nowadays, one hour of labor buys much more than it used to. Our grandparents spent several hours each month gathering, chopping, storing, and drying firewood for cooking and heating. Today, a couple of hours of work can cover your electric bill.
Yet, according to The Telegraph, people born in the ’60s and ’70s might be worse off than their parents upon retirement, unless they receive a significant inheritance. This study shows that these folks earned more at the beginning of their careers compared to their parents. So, how do they end up worse?
By the age of 30, people from the 1970s earned 75% more than those born in the 1940s did at the same age. Despite this, the younger generation saved about £60 less per week.
How is that possible? We earn more but save less. Something doesn’t add up. Some might blame our laziness. We work fewer hours than our grandparents did (in France, the workweek is now 35 hours with a minimum of five weeks of holidays), yet when we get home, we just want to relax on the couch and eat expensive convenience food. We want bigger houses despite having fewer children. We crave the latest gadgets and seasonal wardrobes, whereas our grandparents would make new clothes every few years.
Sure, society has evolved, and some items have become necessities. Few people would want to spend 20 hours a week hand-washing clothes and dishes when machines can do it in a fraction of the time. A computer has become essential for many jobs and opportunities, and affordable air travel tempts us to explore the world, unlike our stay-at-home grandparents.
However, there are many unnecessary things in modern life. Items that break on first use, junk food filled with chemicals that could lead to high health bills, and the habit of replacing cars annually.
If you want to achieve the financial stability your grandparents enjoyed in their retirement, consider adopting aspects of their lifestyle. Given how easier life is today, there’s no excuse not to put a good portion of your income into retirement and investment accounts.
Are you better off than your grandparents? Why or why not?
