"Wall Street Tumbles," "Time Bomb," and "Bear Market" are just a few of the headlines flashing across my screen this morning. There are many reasons for falling stock prices, and yes, this time, it is different. Every bear market is different, and I always smile at those who think otherwise; if bear markets were all the same, we would take action at the first sign of trouble. The problem is that what triggers a bear market differs, so people are caught somewhat off guard. This market is different because, as a society, we haven't experienced inflation for a very long time.
I'm not going to spend time talking about inflation other than to give the briefest of definitions. "Inflation is too much money chasing too few goods;" the likes of which every breadwinner knows something about, I'll explain.
My dad's favorite saying, "When not in use, turn off the juice," would echo down the hall in my youth when I'd leave the light on in a room that a person no longer occupied. I always thought it was because he was an electrician, and something was worrying about leaving the light on with no one around to watch for sparks. But, of course, it turns out you have to pay for electricity. Who knew?
"Why does Dad like the burnt ones?" My innocent son asks my wife when I snatch a cookie off the top of the "discard" pile. The discard pile is the "non-perfect" cookies that will either be eaten by me or thrown away because no one else in the family will have them. Of course, my family doesn't do this out of spite or malice; however, like my father, I recognize a specific economic chain of events leading from how tough it is to earn a dollar. Indeed, every wasted item is part of my life that I traded, in both time and energy, to receive the funds in the first place. Thankfully it is now dollars compared to the few pennies I received when our young family was starting.
Another time my somewhat now older child Christopher was helping me make homemade spaghetti sauce in the kitchen. “How much does it cost us to make each jar,” he asked, knowing we could purchase a similar item at the store for just a few dollars. So we decided to figure it out. First, we tried to list the cost of the tomato plants and the water over the summer to help the plants grow. Next, we added a rough estimate of the cost of fertilizer, and finally, Christopher couldn't think of any more added costs that we needed to consider.
I had failed cost accounting in college; however, I looked at him and asked what he was forgetting. What were we doing at this very moment? It took some coxing; however, he finally recognized that time had value. We made highly rough estimates of the time it took to weed, care for, and pick the tomatoes. Likewise, it took time to prep, blanch, peel, and cook the stew. And while we didn't need to be precisely present at all times, the process didn't allow for much neglect either. The resulting cost per jar was $38.00. Not exactly a bargain; however, for me as a parent, there are other benefits to consider, which we won't explore here, but like most parents, investing that time with my son made the cost worthwhile.
Inflation is cumulative, and like waste, it will eat away more significant and larger chunks of the individual who is trading their life's energy [1] for the currency used in our society to pay for such items. And while it is silly to be so strict that you never enjoy anything (I eat plenty of perfect cookies), it is also essential to be mindful that there is a tradeoff in life.
"Where did this big bottle of pomegranate juice come from?" I ask no one in particular. "I bought it on my last trip and it tasted nasty. So, before I throw it away I thought I'd see if you liked it." Linda says. I take a drink directly from the bottle, "yum," I say—sweet nectar of the gods.
Written October 9, 2022
References:
[1] "Your Money or your Life (Nine Magical steps to create a new road map)," unfortunately, I have been unable to locate the exact reference. I had kept a copy of the books Epilogue in my notes but neglected to keep the reference material. After searching Amazon I believe this is a revised copy: Amazon.com: Your Money or Your Life: 9 Steps to Transforming Your Relationship with Money and Achieving Financial Independence: Fully Revised and Updated for 2018 eBook : Robin, Vicki, Dominguez, Joe, Mustache, Mr. Money: Kindle Store