Transcription
So, you probably heard inflation is finally back under control. So, why does buying groceries still feel like getting robbed? And here's the weird part. Inflation has actually come down. So, clearly, there's something I'm missing. So, what is it?
A while back, I remember reading that inflation was finally slowing. Some economists were even calling it a return to normal. Now, for a moment there, I thought maybe things were finally about to get easier. And maybe I won't feel the urge to shove the receipt in my pocket and pretend I haven't just spent that much. But then I went shopping, and it turns out that nothing has changed. The receipt was still too expensive, and the bags still looked too small for what I just paid. And I remember just standing there thinking, what the hell is going on here?
And that's when I realized I've been asking the wrong question all along. It's not, why is inflation still high? The real question is, why don't prices come back down? It turns out that inflation only explains part of the story. The rest has something to do with what we economists call sticky prices, but also with something much less obvious. The way companies have learned to price things. The way we are slowly adapting to pay more. And the countless small decisions we make every day without even thinking about them.
And at some point, I realized that I was doing exactly what everyone else was doing. Saying things like, well, that's just the way things are. Now, I don't know about you, but I'm tired of that. I'm tired of feeling like my life gets more expensive every year because of decisions I have absolutely no control over. I can't control the economy, but maybe I can stop feeling like the victim of it. And maybe that starts by understanding what's really going on.
Oh, and by the way, if any of this resonates with you, consider subscribing. More videos like this are coming. All right, before we go any further, we have to talk about inflation. I know, talking about inflation usually feels like the fastest way to kill a conversation. But, bear with me. I promise this won't turn into um economics lecture. We just need to clear up one really common misunderstanding. I think that most of us think we know what inflation is. Honestly, I thought I did, too. We tend to think inflation as just another word for things getting more expensive, right? But, that's actually not what it means. You see, inflation, it isn't the price itself. It's the rate at which prices are increasing. So, if inflation falls from 10% to 2%, prices don't suddenly come back. They just keep rising, just more slowly.
And for most people, that's a real problem. When prices keep rising, even more slowly, your paycheck doesn't automatically keep up. You feel it every time you buy groceries or, you know, fill up your car or pay another bill. But, not everyone experiences inflation the same way. If you are rich enough or wealthy enough, the price of milk could double or even triple tomorrow, and it probably won't change your life. You would still buy the same groceries, drive the same car, go to the same restaurants.
Now, if that feels a bit unfair, it is. But, here's the interesting part. Being affected by inflation, it isn't some law of nature. It's mostly a reflection of where your income comes from. And we're going to come back to that a little later in the video. Now, that explains part of the story, but it doesn't explain why prices almost never seem to come back down. We economists actually have a name for this, sticky prices. It's a It's a strange-sounding term, but it's actually a very fitting one. Companies tend to raise prices quickly and lower them slower, if they even lower them at all. And once people get used to paying more, there's really not much more incentive to bring prices back down.
And that kind of made me wonder, maybe companies haven't just gotten better at making things, maybe they've gotten really good at figuring out exactly how much we're willing to pay. Speaking as a consultant, I've actually sat in pricing meetings, and you would be surprised how little time is spent asking, "Can people afford this?" The question is usually much simpler, "Will people still buy it at this price?" That's a very different question.
Now, this isn't really about expensive coffee, it's about why $6 has started to feel normal. Most of us are stretched thin already. You know, housing, groceries, energy bills that seem to change every month, large companies have more data and more pricing power than any one person could ever have. That's just reality, right? But here's the part that really bothered me. You see, markets don't exist without buyers, you know, like you and me. One person deciding not to buy something changes almost nothing. Millions of people making that same small decision, well, that changes quite a lot. Every purchase is kind of like a signal, whether we realize it or not. It says, "This price is acceptable." Now, companies can suggest almost any number, but they can only keep charging it if enough people keep saying yes.
Now, I don't really see that as criticism. It's just how markets work. But then I start to see this pattern everywhere. Like my own laptop is a good example. I edit most of my videos on a MacBook Pro from 2021. And Apple has released several newer models since then. Faster, more efficient, better on paper in almost every way. But for what I actually do, which is editing, writing, and running this channel, the difference is pretty much unnoticeable. My laptop still does everything I need it to do. And even if the new one is twice as fast, it's not going to help me make twice as many videos. And the same goes for my iPhone. A faster iPhone doesn't make phone calls any faster, right?
Now, at some point, the technology started improving much faster than our actual lives did. My laptop isn't holding me back. If anything, it's the marketing around newer models that makes older ones feel like it should be obsolete. Once enough people believe that, another upgrade cycle becomes normal. Another higher price becomes something that we just accept.
But this is where things got very strange because it wasn't just laptops. It was everything else, too. When I was a kid, ordering something wasn't really a thing you did casually. You would call a company on the phone and read out what you wanted. Or you would fill out a form from a catalog and stick it in an envelope and mail it. And then you would have to wait weeks, sometimes even months. Today, I can sort of order something from Amazon and have it on my doorstep the next day. And I've noticed myself doing something that makes absolutely no sense. Sometimes, I find something cheaper somewhere else, and I still order from the more expensive shop just because they deliver faster. Not because I needed faster, but because well, I can.
And it's the same thing with music. Like many of you, I pay a monthly fee to Spotify and in exchange I get access to virtually all the music that has ever existed, right? But here's a question I don't think we ask enough. Do I actually need access to everything? Because back in the day, you had your own CD collection. Those albums were yours. You could play them whenever you wanted for as long as you wanted. You went to a music store to hear the new release from your favorite artist and today you just pay for Spotify instead. And the moment you stop paying, your entire music library disappears.
Now, movies and shows were the same thing. It started with Netflix, then you needed HBO Max and Apple TV and I remember I used to love this show called Westworld. It was on HBO Max and then they sold the rights to another company and I no longer had access to something I thought, well, I kind of owned in a sense. So, I had to pay someone else just to watch it again.
Now, at some point you stop noticing that you're paying for the same thing five different ways. What I started doing recently is starting to buy movies and shows I actually love. I don't need access to every Disney movie ever made or every HBO series or every Netflix original. And by the way, I own a digital copy of Westworld now. It is mine even if I cancel every streaming subscription I have tomorrow. Because eventually every service starts chasing exclusives, right? Eventually your favorite movies disappear from the library you spent years building and you don't get a say in it.
Now, I actually kind of miss the old way. Back in the day, we used to tape movies off the TV. We would have to pause it when ads came on, and sometimes I would run to the bathroom and miss 2 minutes. And sometimes the tape would run out mid-scene. It was kind of clunky, but that tape was mine in a way none of all of this streaming nonsense is now. And this is the part that sort of gets me, you know? Convenience doesn't feel like a purchase, it feels like a right.
Companies are constantly testing what people will accept. Will people pay more for faster delivery? Apparently, yes. And they will pay to have the ads removed, too. But will they pay for early access or priority boarding, a slightly nicer version of the same basic thing? Again, often, yes. Nobody really says it out loud, but somewhere good enough turned into not good enough. It just happened.
And I also noticed something similar at home. My wife is really into Vinted lately. It's basically this app. It's It's like the European version of Poshmark, a place where people buy and sell second-hands. And she's always scrolling through it looking for bargains. Now, the thing is, my wife, she can afford to buy new clothes, okay? She's not doing this out of necessity. She just looked at the price of a new item next to a nearly identical one at Vinted and realized that the difference made very little sense to her. Nobody made her do this. It's a very small choice, but it sort of pulls her out of the same cycle that the rest of us are stuck in.
Now, here's another example. A few weeks ago, our washing machine threw out this error code and just stopped working. Now, normally, I would have just ordered a new one and have someone haul out the old one, right? But this time, for whatever reason, I got a bit stubborn. I wanted to understand how this thing actually works. Because I had this sneaky suspicion that this error code, it wasn't telling me that the machine was dead. It was probably just a small thing that needed fixing.
So, I spent an entire evening watching YouTube videos until I thought, "Yeah, I can fix this." So, I flipped it on its side, which was quite heavy actually, and I grabbed a screwdriver and I opened it up. Fully convinced I was going to find one of my wife's, you know, bras or something clogging the drain pipe. Turns out it was my own microfiber cloth for my, you know, glasses. So, I pulled it out and the machine runs perfectly now. And I don't know why, but fixing it felt way better than clicking buy now on a new one, you know?
Now, I'm not saying everyone should start repairing their own washing machine. I certainly don't fix everything myself, but it made me sort of realize how little of my life works like that anymore, you know? Because these days almost every problem has the same solution. Replace it. Click a button. Wait for delivery. Throw the old one away.
Now, maybe I'm completely wrong about this, but I have this suspicion that we humans are meant to solve problems, to figure things out, to fix things. And when everything becomes so easy to replace, I wonder if we lose something, too. And it sort of reminds me of my dad. My dad could fix anything. Watching him growing up, I generally thought that he was MacGyver. If you're too young to know who that is, just imagine the guy who could fix anything with whatever happens to lie around.
Now, I remember when my G.I. Joe action figures broke, there was this little rubber band inside of them that dries out and snaps after a few years. He would fix them. He would just replace that rubber band every single time. Now, I still have those GI Joes. Now, sadly, I don't play with them anymore. I just don't think I have the imagination for that these days, but but every once in a while, I still fix them the same way he used to. I replace that little rubber band. And when I do that, it sort of feels like he's in the room with me again.
Now, maybe that's what we've really lost, you know, it's not the ability to buy things, but the instinct to fix something before replacing it. So, for a long time, I thought I knew the answer. If prices keep going up, I would just have to earn more, right? And I remember a few years ago, I was saving up for my first iPhone. It was the iPhone 4, and I remember it took me months. And when I finally bought it, it felt like this huge achievement. And today, if I need to buy a new phone, I usually just order one online, which maybe sounds like freedom, ways it is, but it sort of moves the goal posts, you know?
The iPhone 4, it cost around $500 if I remember correctly, and people thought Apple had lost their minds charging that much for a phone. Today, that's roughly the price of a budget phone, because it turns out simply earning more doesn't really solve the problem. As our income grows, our expectations grow with it. You know, it's the robot vacuum, the electric car, the AirPods your friend has, the newest iPhone because Apple says it's the best one yet. And if I'm honest, very few of those things actually made my life any better, you know?
I remember one of my marketing professors at college used to say this thing that I would never forget. Companies can't make us need things. They can only make us feel like we need them, and there is a huge difference there. Nobody actually needs the newest iPhone. Nobody actually needs a robot vacuum. But when everyone around you upgrades, staying where you are starts to feel like falling behind.
Now, earlier this year, and I've mentioned this story several times in my videos, I bought the best 35 mm lens money can buy for my camera. And it cost roughly four times more than the one that I already owned. Now, when I compared the footage side by side, I could barely tell the difference. And as far as I know, not a single subscriber noticed it, either. And that made me wonder, how many of the things we buy are solving problems that don't really exist. You know what I mean?
But the biggest change for me, it wasn't spending less. It was changing how I earned money. Every year at work, there was this salary review. And I never liked those conversations. Like trying to justify why I deserve a little more. Negotiating over a few extra dollars. Waiting for someone else to decide what my time is worth. It always felt like chasing a carrot on a stick. And these days, I don't really think about it anymore. If I want to earn more, I don't spend my energy trying to negotiate a bigger paycheck. I spend that energy building something outside my 9-5. This YouTube channel. It, you know, it started as a hobby. Today, it's a business. And that completely changed how I think about money. For the first time, I wasn't waiting for someone else to decide what I was worth. If I want to earn more money, I don't ask for permission. I create more values. I make more videos, or I make better videos. I learn new skills. I find better ways to serve the people watching them. This year, I'll probably earn around 10 times more from this channel than I did last year. And it's not to brag, and it's not to say that I was lucky, but I have actually built something, and because of that, inflation, it doesn't need to feel nearly as scary anymore, you know? Not because, you know, groceries got cheaper, but because my income is no longer tied to a fixed salary.
Now, one thing that I mentioned before is that I don't really like the idea of filling this channel with sponsored videos. Now, I'm sure I could make more money that way, but it just doesn't sit right with me because this is my business, you know? I get to decide how I earn my money. So, I sell books, I sell courses, or I try to create more value for people supporting me on Patreon. The point is, I have options, and that's a different kind of freedom.
And I think that's the lesson I've slowly been trying to learn throughout all of this, not just with money, but I think with life in general. The goal isn't simply to earn more. It's to build a life where you are less dependent on things you can't control. Because, you know, a paycheck can only grow so fast, but your skills, your creativity, the things that you build, they just don't have the same limits. And maybe that's the real answer I was looking for all along. Not waiting for prices to come back down, not hoping for a bigger raise, but slowly building an economy of my own.
When I started making this video, I thought I was trying to answer a very simple question. Why does everything still feel so expensive? But, somewhere along the way, I realized that I had been asking the wrong question. The problem isn't just that prices have gone up. It's that somewhere along the way, a lot of us, including me, by the way, started believing there wasn't much we could do about it. We look at, you know, the grocery bill, we shake our heads, and we tell ourselves, well, I guess that's just the way things are. And I'm just sick and tired of thinking like that.
I can't control inflation, I can't tell companies what to charge, and I certainly can't control the economy, but I can control how I respond to it. I can be more intentional about what I buy, I can repair more things instead of replacing them. I can build skills instead of depending on convenience, and I can build income that isn't entirely tied to someone else deciding what I'm worth. None of those things will make groceries cheaper tomorrow, but they do make me feel a little less powerless. And maybe that's what I've been looking for all along. Not a way to beat inflation, but a way to become a little less dependent on it.
Now, I don't have this all figured out. I still catch myself wanting the newer things sometimes. I still make purchases that I probably don't need, but now I notice these things, and I think that's where the change starts, you know, not with big decisions, but with hundreds of small ones. Because in the end of the day, I can't change the economy that I live in, but I can start building my own.
As always, thank you for listening. Do me a favor and tap that like button to show your support. Subscribe if you're interested in more content like this. Until next time, stay hungry, relentless, and strong in your journey of escaping wage slavery. Bye.