Relationship Purchasing Parity: Why We Pay Too Much

OVERCHARGING USA

As I walk down the aisle, I notice the price of eggs. Sticker shocker. I continue and see the cost of milk. I want to skip chocolate milk mix. Forget cheese. It makes me want to skip out on bread too. What’s the point of a sandwich with no cheese? I returned with half the bags I did last year but the price I paid was the same. My daughter runs up and greets me. She’s excited she went online to shop. She wants to save money. Now I’m looking at a $600 wish list from China.

When did a $5 shirt become $45?

PURCHASING PRICE PARITY

I have a brother who loves the Dominican Republic. He lives there as much as he can. He plans to marry a wife there and raise a family. He’s very resourceful. He’s what we call a digital nomad. He can work anywhere there is an internet connection.

Apparently, if he works online making $3,500 a month it’s sufficient to completely provide for a family. He plans to have a wife and two children. He believes in traditional family but believes its unsustainable for the average person in the United States.

He might not be wrong.

In the United States, despite my best efforts to reduce costs there’s no way to live under $7,500 per month (after taxes) in a middle-class neighborhood here in Houston. My mother commented about Florida. A retirement state. Apparently, there’s nothing available for under $1,500 a month for a one bedroom. A close friend of mine pays $3,000 per month for a four-bedroom townhouse down the street. California? Forget about it. There’s a homeless epidemic of full-time employees over there according to my sisters. They moved after undying loyalty to the west coast. They told me it’s just impossible to live there for anything reasonable.

Everywhere you go, the cost of living is on the rise.

It than occurred to me…how do countries sell the identical Kit-Kat bar for a third of the cost?

I’m not talking overseas sourced labor oppression. I’m talking about goods made in the USA. Goods that are exported and sold in other countries. Goods exempt from US Tariffs. They’re still sold lower.

How is it that others are paying less? I found out. It’s called Purchasing Power Parity — a concept where US Corporations price set based on earnings of a local demographic.

Apparently, since our earnings are more, we should just pay more. Shocking.

How Purchasing Power Parity Works:

Manufacturer — “The cost of production per item is $1.00 from start to finish Sir. The tax per item here in the states is twenty five percent or $0.25. Shipping by weight is roughly $3.50 per pound. Our items are 45 grams. We ship 10,000 units per minimum shipment which means our minimum load cost wholesale plus twenty percent profit needs to be…$5.70 per unit. These are our costs plus profit for our shirts.”

Manufacturer Distribution Reaction — “Okay. As a distributor we have a turnover of about 1,000 units a month. Which means it will take about a year to sell all your shirts. I want all my money back the first month. I’ll sell the shirt in America for $57.00 retail because they pay that price. They’re pickier so it takes longer. I must sell super high to have any impact over there. The product moves at the same pace if it’s cheap or expensive. Good thing Americans just pay higher price and don’t really learn any skills to resolve their pricing issues. If I sell in Mexico, the price needs to be like $7.50. They won’t pay a high price. In South Africa, I can get away with probably like $12.00 but the advantage is I can move the whole batch in a month– because your style is hip over there. Let me think about distribution. I’ll let you know when we are ready place the order.”

What Economics Without Tariffs Do:

· It allows companies to set purchasing power parity domestically. When we allow companies to independently determine market prices without restrictions it permits excessive charges in areas with high earning wages.

· It gives distributors control over markets. Under the guise of marketing, carrying costs, employees and a host of other costs (which are relevant) distributors increase price to consumers. While labor often represents up to seventy five percent of an employer’s expenses (based on my personal experience) there are multiple factors which affect the price of labor. The percentage can remain the same at a lower level with proper controls.

· It lets foreign countries acquire items at lower prices. When local government permits unrestricted free trade, between competing economies foreign governments with price controls, it enables foreign companies to offer the same product for less.

Three Ways To Address Purchase Power Parity (Use Them)

· Discuss Moving With Your Spouse. We often insist on staying put. This is totally contrary to the historical American psyche of our forefathers. Historical Americans pushed the western frontier, sought to acquire additional territories overseas (Puerto Rico, Philippines, American Soma, et cetera) and early Americans spoke more than one language. Without the discussion of ethics on how they went about it (as some of it was very controversial) the key principal of moving somewhere else is very American. Men consider moving.

· Learn Digital Skills. There are many ways to work outside of a traditional office. In my international best-selling and award winning book, “I Made It Then I Didn’t”, I discussed multiple ways I earned throughout thirty-three different countries. You do not have to be in a country anymore to procure income there. Expand your skill set. Learn how to earn through tele-conference means, video conference, and online document / service creation.

· Learn Different Languages. In my experience, in other parts of the world parents do not tend to believe one language results in large scale success. Americans have taken for granted one language (English) is enough to succeed at scale. The post-cold-war era is ending. We are entering a multi-polar world where other languages are a necessity to be successful. At minimum learn Spanish. Consider learning the language of a market which shows strong characteristics for your desired financial obligation. You don’t have to go broke having a traditional one income family.

IN CLOSING

Sign up for free to listen free of charge to my chapter in “Many Paths To Profit”. You can pick up a copy of my international best-selling and award winning book, “I Made It Then I Didn’t” as well for a deeper insight on some of the psychology I use to take me through difficult circumstances.

The concept I teach in this article is free. Some of my personal stories are not free of charge as everything costs something. I use the techniques I discuss in this article. The purpose of reading this is to help modern men learn that you can still be the sole breadwinner today without being rich.

If you think traditional one income marriage isn’t sufficient anymore, it’s critical you read this. It’s easy to despair over the traditional structure. In an environment which doesn’t pay you enough I get this conclusion. There are other locations in the world which make this possible. You must search, adapt and travel. The early hominids who refused to search, adapt and travel to other environments died off. Don’t be the species of man who dies off. Embrace the concept of evolution. Evolve.

To Your Knowledge Success!

Sources

1) The life of Christopher Knight Lopez a Professional Hustler turned International Best Seller and Published Author of “I Made It Then I Didn’t”.

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Not a form of investment advice. Please consult a professional registered to give you advice about your individual circumstance. This article is for educational purposes and entertainment purposes only. Please do not email the author about advice on investing or strategies on making investments.

About Christopher: Christopher Knight Lopez is a Professional Hustler turned International Best Seller, Award Winner of the December 2024 prestigious International Impact Book Awards — a premier award program dedicated to celebrating and recognizing the exceptional work of authors around the globe and Published Author of “I Made It Then I Didn’t”. He is also a Co-Author with Kevin “The Shark” Harrington “Many Paths To Profit”. See more at www.christopherklopez.com.