With the "energy crisis" affecting nearly all of us globally(whether it should or not), it was interesting to note that Finland is predicted to become electricity self-sufficient within the next two years. At the moment, ongoing testing at the new Olkiluoto Nuclear Power Plant which should be at full capacity by Christmas is happening, which due to a number of factors, is almost fourteen years behind schedule.
This should provide about 14% of the countries electricity needs, but interestingly, wind power generation has also ramped up in recent years and will meet about 12% of the country's needs. On top of this, there are also plans to further connect the Finnish and Swedish supplies in the north by 2025, which will benefit both sides.
However, little of this is going to help the immediate price rises that are to come, where for example in my region, there is a 300-400% increase in the electricity costs and further rises expected. This means that we are going to have to think through how and when we use electricity and once we have installed some insulation into the basement, we will hopefully make the winter more comfortable, with less energy inputs. Still, I feel it is going to be a "lean winter" for us and many.
I was reading that in the US, almost 20% of the population are behind on their utility bills and are seeking for ways to make ends meet, which inevitably, is turning to credit cards. Funny that. In fact, it has seen the monthly debt expansion move from an average of 2.5 billion in the decade prior, to 20 billion in 2022 - that is an 800% increase.
How many globally are going to follow suit?
Over the last few years with all of the government handouts to some people, credit card debt fell significantly as people paid off their cards and used the incoming streams to buy, rather than on credit alone. However, what this did was set up a process of consumer spending and once living large is habitual, belt-tightening is magnitudes harder and, I suspect many are going to struggle to scale back.
I wonder how many iPhone 14s are going to sell.
Considering that in Australia for example, the larger model iPhone 14 is going to be about 8% of the price of a new Toyota Yaris, it really shouldn't have too many buyers at a time like this, yet - it will. Tech gadgets are no longer luxuries, they are considered necessities and the psychological pressure to continually upgrade to the latest model, supported and encouraged through advertising and perceived peer judgement is strong, especially for the younger generations - the generations who are simultaneously "quiet quitting" and using "Buy Now Pay Later" services to satisfy their consumer desires.
Financial control is no longer a thing in much of the younger generations, which isn't necessarily their fault, as the older generations have conditioned them to be avid consumers, feeding the profit generation models of the businesses that offer nothing for something.
Facebook is free!
No it is not, you idiot. If these "free" platforms were actually free, they wouldn't be the unicorn companies they are, it is just that the cost to use is an indirect cost through advertising and data models. But, worse than that, much of the value they generate is derived through quite useless consumption, that adds very little sustainable value for consumers.
It doesn't matter what level of Candy Crush you get to, you can't sell it.
Yet now that times have "changed" (inevitably) from periods of low interest rates and incoming government handouts, many people are finding themselves somewhat financially stranded, with few options to build generative wealth, because that has to be done before the bad times arrive. Waiting until they hit is going to mean that there are going to be increasing costs that will erode investment potential, so it is largely too late for most people and then, they will fall into the credit trap to make ends meet.
This means that when things recover, they are going to be stranded again, lagging behind the prepared, because they are going to have to service their debt, leaving them with less investment potential again, missing the early mover boat, again. And by the time many of us are able to get into the game, we are just compounding the gains by the early movers and it won't be too long until the next downward shift arrives, eroding our investment and leaving us in the same predicament, scrambling to make ends meet.
For those who were prepared though, they have benefited from years of early investment and passive incomes, so when those hard times arrive, they have stocks of resources to meet the needs and expand their investments as the valuations of what they used to hold but sold, drop again to a point they are willing to get back in.
Unfortunately for me, I am in between these points, not prepared enough, but not totally prepared and with the cost of renovations still affecting our potential, not with enough reserves to cover *everything easily, and not enough to buy the dip. However, also not in severe debt to service and with income streams from jobs that means that we will be able to survive and possibly even invest a little at the bottoms.
But, those bottoms to buy are also bottoms to sell and someone is selling there because they find themselves in a position where they have no other option in order to make their financial ends meet. However, for at least some of those people, I wonder what they would find if they were to look back at their consumer habits over the last five years and whether, they would do anything differently.
In some ways, a starving person might look back at the food they once had an opportunity to eat, but didn't as a loss, but food doesn't travel across time well. When it comes to money (economic value) however, that can be used to transport and generate wealth over time, so those who eat and store" their wealth well, will have incoming streams in the future, so they are far less likely to go financially hungry.
But, we are all encouraged to consume and we are prone to being influenced to do so, at every level of who we are. This means that in order to be financially healthy, we also have to be financially controlled, just like how we have to watch what we eat and do, if we want to be physically healthy.
The coming winter is going to bite hard into our budget, but I do still feel that we will be able to at least hold our ground without losing too much, even if we can't invest more. But, come the upturn, I want to be ready to jump, ready to take advantage of the future, so my family will never have to worry about things like the price of electricity again.
Taraz
[ Gen1: Hive ]
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