Do you know that the same $100 bill has absolutely different value in different countries?
Hey, Russian, you are so smart! It’s time to promote you from Captain Obvious to General Obvious.
No, I am being serious right now. Recently I had a conversation with my young brother, he
lives in Moscow, Russia, and he told me about some purchases he had made. He’d bought a blue jeans for $100 and a pair of shoes for $150. I almost screamed at him, “Are you kidding me?! $250 just for two things?!” But I kept myself quiet.
For the whole day I was thinking about his purchases and couldn’t understand why would someone spend $250 just on two regular things. But at some point it hit me, I used to be exactly the same when we lived in Russia. I could easily spend $100 on jeans or $75-100 on a pair os nice shoes. And it wasn’t because I was a big spender. It was because of the different value of $100. Let me explain what I mean.
$100 In Russia
In Mother Russia I was working as a product manager for a big carrier and was making good money. My monthly income was $3,333 before or $2,900 after taxes (I miss this flat 13% income tax). But there was a problem, it was really hard to buy a quality made product for a reasonable amount on money.
If you want to buy a decent pair of shoes, lets say ECCO, you have to spend from $100 and more just for one pair of these “beauties
Absolutely the same situation with almost everything; you will have to pay about $140 for a regular blue jeans, like a pair of Levi’s 501 Original in Russia would cost you about $140
Living in Russia you have only three options:
- Pay more than $100 for every cloth you want to buy
- Pay less and get shitty quality *
- Buy online from the States or Europe
$100 In The States
But if you are in the States and lazy enough you will pay $45 for the same blue jeans or $50-60 for the same pair of shoes.**
It is really interesting for me, living in Russia and making less than we make now, I could spend $100-200 without thinking or feeling any form of hesitation. Of course, we could say “Hey, this price is not cheap”, but that was it. Because we didn’t have any options to compare with we used to think it’s kind off OK. It was our “level zero”, our normal reality.
Now, when Mrs FR and I make much-much more than we used to make, the picture is completely changed. We can’t afford spending $100 on a blue jeans or pair of shoes. And it’s not because we don’t have this extra $100 but because our “level zero” has changed, our normal reality has changed as well.
In addition to that we’ve got new options to compare with, we’ve learned what we can do with this extra $100 and what it could become in 10, 20 and 30 years.
Another reason being we have other options: we have an option to buy better for less money, we have an option to save and invest. At the worst we can buy 20 tasty avocado toasts for the same $100
Now I can’t spend more than $20 without thinking twice or three times about the purchase. And sometimes it drives my lovely wife BANANAS.
What’s your comfort limit? Will you think twice about $10 purchase or $20? Where’s your limit?
* Frankly speaking, even paying $100+ there is no guaranty that you will get a good quietly thing. You can get a shitty product for $200+
** But still, $45 just for blue jeans? You can call me cheap, my wife actually does, but I pay no more than $25 for it.