Puzzling prices, retirement, and fast fashion
Hiyo from Bangkok!
I am taking full advantage of the time-zone difference to write this up on Wednesday morning and send it out on "Tuesday". :-P
Prices of The Economist subscriptions
The other day, I was thinking about subscribing to The Economist. Here is what I saw when I visited their website.
$85 for 12 weeks of digital subscription? Strange, I remember that the subscription was 12 weeks for $12 so I changed the country setting to the United States. Voilà! It is indeed $12 for 12 weeks.
Two interesting points.
First, the subscription is more expensive in Thailand (using the digital only subscription as a baseline). Considering that the two products are almost identical, why are the prices in Thailand (GDP per capita 6,593.82 USD in 2017), a developing country, higher than the prices in the United States (GDP per capita 59,531.66 USD)?
Here are possible explanations.
People who read The Economist in Thailand are willing to pay more. Not too far-fetched. The Economist readers in Thailand tend to be well-educated and have a high income. In contrast, The Economist readers in the United States distributed more across different financial backgrounds.
More competition in the United States. There might be more new sources in the United States. If the price is too high, US readers can get information from somewhere else (even for free). Hence, they need to keep the price low to be more price-competitive.
Differences in local operational cost. It is more costly for The Economist to operate in Thailand. This might include a customer support team, local offices, etc. I don't quite buy this explanation. The marginal cost of digital goods is quite low.
The printing cost in Thailand might be higher. To make the overall offered subscriptions seem reasonable, they distribute the printing cost to the digital version. Imagine if the printing cost is $160 and the digital plan is $1. Wouldn't that seem ridiculous?
Second, the plan price differences in Thailand are higher than those in the United States. In the US, all three plans cost the same. In Thailand, the print only plan and the digital-only plan costs the same but the print + digital plan costs extra. In China, the differences are bigger. The print only plan costs as much as 3.5x the costs of the digital plan and the print + digital plans cost a little more.
Perhaps, readers in the US and the UK (also features the same price for all plans) prefer digital copies anyway while print copies are preferred in other countries.
All of these explanations are just my layman's attempt. If any of you know the real cause of price differences, I would love to know!
Save more for retirement?
Save 15% of your income and have a happy retirement. This rule os thumb might need to be changed soon. According to an article from the World Economic Forum, millennials might need to save 40% of their paycheck to retire at 65.
One factor is the predicted decline of investment return from the stock market from 10% to around 3-5% on average. Taking inflation into account, we see the return rate drop to 1-3%. Your 401(k) or Roth IRA might not be as a safe bet as you think.
Plus, we are all living longer. Instead of aiming to retire at 65, it might make more sense to keep working. As long as you don't get sick it is possible to work until you are in your 80s.
Before you hit a panic button, there are many paths to secured retirement (e.g., increasing your income while avoiding lifestyle inflation). We would just need to plan our finances cautiously.
Fast Fashion
Here is one funny video with a serious message on the environmental impact of the fashion industry.
If you don't have 20 minutes to watch the video, I recommend trying this Chrome Video Speed Controller extension. It has saved me tons of time.
Happy early Thanksgiving! Until next Tuesday. :)