Cinnamon patrol

The necessities of life

Everyone's idea of the necessities of life are different. Presumably because we're all different. I mean, apart from the biological necessities of life (air, water, food, etc.) there are some pretty diverse opinions on what you need to survive.

Me? Well, I need David (duh), a spacious apartment, white bread-based items, regular sleep, very high speed Internet access, the ability to travel, books to read, a tv to watch, and knitting materials.

(Oh, and the promise of Guinness, chocolate, and yummy goat's cheese.)

Julie has an interesting post on her blog about knitting and thrift, and how knitting is not generally a cheap hobby. Which is all true: knitting is not cheap.

But I'd much rather have knitting than a fancy phone or iGadget or swish car. My priorities mean that while I kind of need a cellphone and car, and my iPod nano is nice, I don't spend loads of money on them, because they are less of a priority.

Which is fine. Even my knitting has some financial constraints, and I am slowly but surely making it my business to discover viable alternatives for many lovely but expensive brand-name yarns.

And if push came to shove and we had no money, I'd put food & lodging ahead of knitting. It pains me to say it, but I would. Because when it comes to the crunch, you have to be realistic and prioritise.


So I get fairly peeved when I hear people - and this is not just in Ireland, it's everywhere - saying how "poor" they are, in their fancy new designer clothes, with all their gadgets. You aren't poor, you just spent your cash on stuff and ran out before you got everything that you wanted.

And while I'm all for social welfare initiatives, I sometimes wonder at what some recipients are spending their cash on. I don't agree with someone spending their benefit on a state-of-the-art tv, or cigarettes, or loads of booze, then saying it's difficult to feed and clothe their family.

It doesn't help that kids are all into getting stuff. For example, do ten-year-olds really need cellphones? And if they do, do they need the latest ones? Wouldn't they be better off with old Nokias, which are far sturdier, and cheaper to replace when they get lost/dropped or whatever?

Everyone seems so caught up in a whirl of consumption that the goalposts on the necessities of life have been dramatically shifted. It isn't about the real necessities, it's about what used to be luxuries.

And so, the lesson in brief: if it isn't water, food, shelter, medical care or love - it probably isn't a necessity of life. And the more the person protests, the less essential it probably is!

(Apart from yarn, that is an addiction. Really.)

Labels: Economics for the masses, Laura, money

I received my first Irish pay packet today. That makes it sound like it was easy - like the pay clerk (Bruce?) came round and dropped it off at my desk so I could nip out to the TAB for a quick flutter on the pokies. In reality, it was far more complicated

1. I fill out a time sheet, and get the client to sign it.
   
2. I fax it to my recruitment agent.
3. My recruitment agent adds his margin, and bills the client.
4. My recruitment agent pays the accounting firm who manage my umbrella company (Yes, I have an umbrella company! As an independent contractor I need to operate a limited liability company. A great service here are companies who will make you a director / shareholder of an existing umbrella company and look after your taxes for you. There are no entry or exit fees, just a monthly fee for the service).
5. I compile a list of my expenses and send it to the accountant.
6. The accountant works out my take home pay based on my expenses, his fee and the various taxes and tax credits.
   
7. Then he pays me.
8. Then I whip off to the TAB for a quick flutter on the pokies.
   

You can see why I was excited.

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Also another thought: Republic of Ireland = ROI = Return on Investment. Coincidence?

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Working for a financial services company, I now find myself in the thick of all things money.

Being part of the EU, Ireland can't set it's own cash rate and must accept the rate set by the European Central Bank (flash backs of stage 3 macro-economics here!). That explains why, even though the economy is booming and property prices sky-rocketing, mortgage rates (fixed and floating) are all under 5%*. It also explains why inflation is at around 5%**! This is compared with my mortgage at home where I now read the floating rate is a whopping 9.95%. 9.95%!!! That is bad.

So in Ireland, everyone is busy investing there money rather than paying off their mortgage, as you can relatively easily beat the 5% + inflation by saving.

Speaking of saving, people actually do it here! There was a savings scheme initiated by the government some time back where the government would contribute 1 euro for every 4 euro*** you put in, up to a certain limit. Right now, all these plans are expiring and people are busy being advised to keep saving at the same right now that they are used to it. I think this scheme was wilding popular, and pretty much every man and his dog took it out. Can you imagine everyone you know back home walking about with at $20,000 sitting in savings. Seems weird doesn't it? I mean... the 42" plasma...

Also, and if you didn't realise, the corporate tax rate here is 12%! That's why Ireland is the EMEA (Europe, Middle East + Africa) headquarters for companies like Google, Microsoft, Dell, eBay... and the list goes on.

I'm not sure what point I am trying to make, but I find it very interesting to compare. I've never lived somewhere else before, so I've never had the motivation to really find out how things work. I certainly don't care about things like relative rates of saving when I visit a country on holiday.

* Does that need an explanation? The usual way to combat an overheating economy, is to whack up the cash rate. This means it's more expensive to borrow money, so things cool off. But Ireland, can't do that, so...
** Prices keep going up. And that's inflation.
*** The plural or euro, is, apparently, euro.

Labels: david, money