Wednesday, September 21, 2016

Compare Your Income to the Average Global Income: Global Wealth and Gratitude

At my day job, we often refer to the concept of 'perspective shift' in pointing to that moment when someone gets it. It's the moment the light bulb comes on, and they are able to see the problem or concern from a new angle. Troubled coworkers, are often referenced as needing a 'perspective shift' in order to come on board with the team. It has become so ubiquitous, I heard the phrase used the other day as its own verb. One of the reasons that I think it's such a powerful visual tool, is it isn't indicating that there is anything wrong with the person or the team. Each individual has everything they need already- the knowledge, the passion, etc., it's just how they view the world around them, that needs to shift ever so slightly.

If you think hard enough, you may be able to find a way that your perspective has shifted on a belief or value of yours over the past few months. Maybe it has been reconsidering a political perspective or how you view a relationship with a family member. So what does a perspective shift have to do with frugal finances? Quite a lot, actually.

If you have really taken the road to frugality- it's taken a perspective shift. If you are committed to living large while spending small you likely needed to make some changes. It may mean driving your car less, and using your bike or walking to get you to and from. It may mean opening that retirement account and starting a budget. You may have made financial goals for 2016. Or perhaps a combination of several of these.

A few days ago, I was in the need of a perspective shift. Working in social work, I am often reminded to be grateful for what I have. On this particular day though, I was feeling a bit down regarding some of the recent high ticket expenses that have come our way, like needing a new roof. Ouch- talk about a big ticket purchase. These items have caused us to readjust our some of our plans to do further projects around the house. Needless to say, I had lost some perspective and was disappointed.

That's when Mr. FR heard a podcast talking about global income levels and asked me about it.  Something he said shocked and stuck with me. The average US household, is in the highest percentage of the global income. Not being a person to take this at face value- I did some research, and found this wonderful calculator by the Pew Research Center on global income levels, which indicated that many of us in the developed world are in the top 7% of global income.

The calculator takes your household income and it compares it to levels of income- not just in the Western, developed world, but globally. The study looks at homes in poverty, low income, middle income and high income. In looking at global income, the Pew Research Center indicates
"...people who are middle income, globally speaking, live on $10.01-20 a day, which translates to an annual income of $14,600 to $29,200 for a family of four."

Let that sink in for a minute. Globally, any income levels over $30,000 a year is considered high income, compared with the rest of the population. The Pew research study breaks down the other categories here: "The poor live on $2 or less daily, low income on $2.01-10, upper-middle income on $20.01-50, and high income on more than $50." What that means is that for most of us, earning over $30,000 a year, puts us globally in the high income category- and in the top 7%.

It is all too easy in our society to adjust to the world as we see it. A world where we take for granted the many luxuries we have. Where living in a safe community, with electricity, and being able to easily afford the food and clothing we need puts us in the upper income levels internationally. It can be easy to view other people around you and think about the items that they have, or the concentration of wealth for other people. It is easier to forget how privileged you are to have been born with, what may look to the rest of the world, as that silver spoon in your own mouth. It may be time for a perspective shift, not to feel guilty for what you have, but to have a new appreciation for the life you lead.

Give the calculator a try for yourself by clicking here. Leave a comment about what you think of the calculator or if you have had any shifts in your thinking about finances recently.
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