Wednesday, May 27, 2009


We watch the news from Silicon Valley and are surprised at the recent increase in unemployment and bankruptcies and the severe drop in housing. Housing prices in San Francisco, a city that had hoped to be immune from this deep recession, have dipped 41% in the past year leaving homebuyers with an average loss of $304,000. Many who bought houses in the last few years owe $300,000 or more than they can sell their houses for today.

In a recent discussion with an affluent resident of Hawaii about his trip to Southeast Asia, he marveled at how people in the country he visited were able to live on wages of $6 a day. When asked how happy the people there were he responded that in spite of their low wages they seemed surprisingly happy. It was hard for him to understand their happiness considering their monetary situation.

We went to high school in Southeast Asia and have long held the belief that happiness there is due to their different set of values; wealth and ownership are just not as highly rated. But I couldn’t resist pointing out that the $6 a day worker in South East Asia with $0 savings and no debts has a higher net worth than many highly paid workers in Silicon Valley today that bought their houses at the wrong time.

Assume the Silicon Valley worker has savings of $150,000 and a house worth $300,000 less than owed. The worker in Asia with no debt, no savings, earning $6 a day has a net worth $150,000 greater than the well paid Silicon Valley worker. It is astounding to us how quickly the wealth of so many seems to have evaporated. A little more than a year ago, we were concerned with how trivial $100,000 had become in California. Now workers, still with good jobs, are walking from their home loans because they are $100,000 underwater.


larry said...

money and things never bring happiness. once life's essentials (food, clothing and shelter) are paid for money has little effect on what people call happiness.

many studies have shown, in fact, that after a certain income level money has no effect on happiness, in fact it quite often has the opposite effect because the person making large sums of money and running up large bills is constantly anxious about losing it all.

Anonymous said...

How does one meet you two?What about meeting in Borders and talk about your amazing blog?

Keahi Pelayo said...

Hmmm? Would I rather live in Asia or the USA? Not even close.