What is your personal inflation rate? A minimalist approach to investing

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Almost everything depreciates over time... And I guess you may find that the things that don't depreciate - art - are so rare in your purchases that they are practically non-existent.

Items depreciate because:

  1. a) Fifteen days of avocado sandwich and fifteen years of patio pavers... Both will no longer be niam niam.
  2. b) It is forgotten. New technologies and new products in "Senukai" squeeze and displace any old people in your collection.

The world economy is growing even in times of crisis, so everything is only produced more, and prices rarely fall due to crowding out - more often, instead of cheap goods, we get more money.

Well, we “get”… Only the numbers are bigger. This is inflation.

Inflation is an important part of your everyday life... Even if you don't invest.

I have a feeling you don't want your accomplishments to be worthless. That's ours like sloths, nature. So then it makes sense:

Everything you create today should ideally hold its value tomorrow and for the rest of your life. Bonus points if it will also benefit grandchildren, distant future generations.

Maybe doing "everything" is difficult, but as a principle of travel, it's quite good. After all, we should build our lives like building the foundations of a castle, don't you think? After all, the life of a successful person is not successful because he was lucky once... Instead, they already had good foundations - genes, family, country (these are difficult to change), food, workplace, tools, friends, addictions, attitude (these are easier to change). .

If you create something that will hold value for a long time - a skill, an impression, a work of art or technology - you will be able to build on this foundation in the future. Like the Sagrada Familia - it will take a long time to build, but this not-yet-completed church already looks impressive.

But what do you think, should you limit your actions?

The things we accumulate are also part of our achievements. A well-built home, for example, is a very valuable asset. Quality shoes are a good asset. Even high-quality tableware is a good asset.

Accordingly, things that carry only a small amount of use or break quickly, so they will not be used yet, accumulate like mold in the warehouse. These items cost EUR (after all, you have to spend more and more for a bigger and bigger balcony, warehouse or apartment...) and attention (orderly people have more power for a reason…). Quality items are like a foundation, and low-quality - cross-sections.

So that begs the question…

…What is the rate of inflation of your THINGS?

Let's say you bought a new phone. Samsung A8, 2018. Its price in Lithuania on July 25, 2018 is approx 371.44 euros. Although some sellers raise or lower the price, the exact price is not the point here. The point is that…

…You bought a phone. It's fun!

Fact: Every thing has to pay back its price. Then we say "it was worth it" and consider it worthwhile.

This value can be redeemed by things through their functional use for work, entertainment (don't underestimate the importance of rest), creating opportunities (if you didn't have a phone, you wouldn't have seen something and…). How exactly things redeem their value is also irrelevant here.

So: Did you include inflation in the price of this item?

In 2017, the annual inflation in Lithuania was 3.9%. The European Union aims to maintain inflation at 2%, oh since 1999, the average annual inflation in the EU was 1.71%. So let's say that 2% is a fairly likely rate of depreciation of your currency over a longer period of time.

…Can you spot something unexpected?

It is not enough for a purchase to be "worth the money paid". The purchase must also overcome inflation.

So... Your purchases must be more useful than what you paid for them. At least 2 percent more useful.

And here, as an example, you can think of a very simple purchase: a car, bicycle, scooter or other means of transportation. They don't just need gas or extra donuts, they also need repairs and other maintenance.

Will you be able to earn or enjoy the purchase price PLUS inflation with a new phone? Only you can answer here.

This is not something new. But it is quite healthy to think about it.

Especially when we buy so much these days. These costs add up to sums that can be seriously eroded by inflation. And you could have used those amounts for better investments, similar to what Mr. and Mrs. Balticmustache... (I have a mustache too, but so do they rich!)

But pala. One more thing.

…And what is your PERSONAL rate of inflation?

However, life is not all about things. You will not live on phones, rabbits and truffles. There is also your most important currency:


(Time is not a currency, because everyone has the same amount of it, so it cannot be exchanged and used in some way. You can use your attention instead.)

What return are you getting for your attention currency?

If you feel that you are receiving attention from others - maybe not bad. If you get money because you paid good attention to the work and did it well - maybe not bad. If you focus on the wonderful 1TP6SummerBeFacebook, or whatever you don't want, and it became more pleasant for you - maybe not bad.

…I, for one, am grateful that you are reading these words. Because you could spend your attention on other things. But apparently I provide enough benefits for you to stay… Isn't it good for both of us?

Now, well, your attention paid off - you felt richer, smarter, calmer, smarter, otherwise better. And did it also beat 2% inflation and give you back more than you gave?

Yes, indeed… It is difficult to make every grain of attention return with profit.

But, as I mentioned, it's worth thinking about and trying.

What is your inflation rate?

With love,

PS What about aging? Yes, but you have to admit - you can't stop aging. You can only use two exercises, look back and see what you have achieved through it.