Posted by themoneygrower | Posted in Grow Me the Money - Anecdotes and Analogies | Posted on 24-08-2011
Tags: geographic arbitrage, goa, goan, purchasing power
A few years ago my mum returned from a holiday to Goa, India. She goes there quite a lot. So does my dad, but usually not together. My mum speaks the local language, Konkani.
Anyway, she was telling me of a young and upcoming chef (late twenties/ early thirties) whom she met whilst she whiled away the glowing orange sunsets in a beachside restaurant overlooking the shimmering Indian Ocean. (I’m feeling poetic today, bear with me.)
Towards the end of her holiday, she uttered some friendly platitude about ‘same time, same place, next year’ and he told her he wouldn’t be there because he was emigrating to Northern Ireland. He was thrilled because he had been offered a dream job in Northern Ireland, paperwork pending.
Apparently, the deal was that he would plan the Goan-themed menu for the new restaurant and when it was up and running, he would chef six days a week.
He was thrilled at his package: bed, half board and £100 a week.
Considering he earned Rs200 a DAY = £2.65 approx, he was looking forward to his princely wage of £100/ week. He was nothing short of ecstactic about his six-fold salary increase. Who wouldn’t be?
Now, you can see where this is going can’t you? Yeah, he was going to have his bed and half board included but it obviously wasn’t the big bucks he thought he was going to get: £100 a week is a small fortune in India, £100 a week in Northern Ireland…….isn’t.
If this chap was planning on living extremely frugally for a couple of years and sending money back to Goa, then maybe the short term pain may be worth what he could buy with those savings back in Goa. According to my mum, he wasn’t – he seemed to think this job would be his making.
This unfortunate fellow obviously bunked off school the day they did the lesson entitled, ‘the importance of purchasing power’.
I do wonder what became of him.
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Haha!! I have this same problem, in reverse, with my family that still lives in Kathmandu. Here’s how our conversations go:
They suggest something like:
1) “Why don’t you fly to Kathmandu next month?” or
2) “Why are you just stopping with 2 kids? You should have at least 6!” or
3) “Why don’t you send your kids to boarding school?”
Whomever they’re talking to replies: “Oh that costs too much.”
They reply: “But you earn in DOLLARS!!”
We reply: “Um, yes, but we spend in dollars too.”
They: “Whatever. You earn in dollars. You obviously have more than enough money!”
Absolutely Paula! A lovely illustration of the pitfalls of geographic arbitrage. B-).
Thanks for posting.
TMG