Christmas time...

When it comes to Christmas, I…

Firstly, keep a cool head and don’t indulge in pre-Christmas spending spree. In the consumerist world Christmas means an opportunity to lash out money for gifts. The gift-giving craze is an excellent way to make up for too little time spent with the nearest and dearest over the passing year.

Secondly, I’m not fond pre-Christmas rush. Psychologists in unison list Christmas among ten most stressful events in human lives. Manifold stressful situations, although in their nature dissimilar to one another, have one common feature, namely they put an individual under pressure. The less pressure, the lower the bar raised, the more peaceful your Christmas will be. Sometimes disasters strike out of the blue. Yesterday the kitchen tap in my house simply disintegrated. Before I rushed to the garage to switch off the water valve, there was a huge dirty puddle behind the sink and the oven. Cleaning it up, taking a trip to the DIY shop to buy a new tap and installing it meant four hours unexpectedly wiped out off the weekend. The timing could not have been more imperfect.

Thirdly, I take the opportunity to slow down. Unlike many people I hardly ever take any day off during the Christmas Tide as affairs at work almost come to a standstill. I prefer to take holidays in hectic periods (never during school holidays) than when I can loaf about for most of some seven hours spent in the office. This year the “ticking-over phase” will commence on Christmas Eve. Tomorrow I am about to keep late hours at a client’s, on Tuesday the subsequent job will have to be done. In 2015 business will begin to spin at full steam in February, since after Epiphany everyone will be waiting for winter school holidays, in 2015 scheduled for last two weeks of January. More on slowing down and rethinking some stuff next week…

Fourthly, I’m particularly sensitive to hypocrisy. I loathe when somebody who hates me guts temporarily is nice to me just because Christmas is coming, if I know they will not change their attitude towards me when Yule is gone.

Because of the yesterday’s breakdown, I am slightly short of time, I had to choose either to write a longer note, or to take a lonely evening walk and contemplate Christmas decorations in NI (I spotted surprisingly few Christmas lightings both in- and outdoors). I chose the latter, much healthier way of spending spare time. Predictably, weather for Christmas will be anything, but winter-like. Forecasters foresee temperatures well above zero and blustery autumnal gloom. Snow and frost were last witnessed in Warsaw during Christmas in abundance in 2002. In 2003 there was some little snow and little frost and since then there was either melting snow during thaw (2009, 2010, 2012) or frost, yet without lying snow (2007). The weather pattern of Christmas thaw makes me even more fed up with kitschy Christmas adverts showing winter scenery…

I wish you all, your families and friends a peaceful and joyful Christmas. May these shortest days in the year purposefully lit up by colourful lights abound in rejoice and serenity and be the time you recharge batteries for the next weeks.

Me – the odd one…

I haven’t planned to mark the second anniversary of submerging into corporate world, neither here, nor at work, but it somehow coincided with the first… kind of crisis. It’s not a pure burnout, nor anything akin. I’m still highly motivated, my work gives me a lot of pleasure and satisfaction and still offers a lot of challenges. It’s about people I’m surrounded by.

Overwhelming majority of my colleagues are staid, several years older people who’ve set up families – are married and most have offspring. For many months I hadn’t minded it. I would get along with them and still do so, unlike many of my friends from university who couldn’t imagine working with people not of their age. I hadn’t mind it, but with time it sank in to me I’m a different breed. It’s not just boiling down to the fact I’m 25 and most of them are in their 30’s, but this age difference is a why and wherefore I don’t fit in.

I was aware of some sort of generation gap long before, but I first realised the depth of gulf between us early last month when one of my colleagues returned from maternity leave. Our team went down to our canteen for a coffee and to have a chat. The conversation, predictably, revolved around early stages of parenthood, I sat with all the young and slightly older parents and silently gobbled an ice-cream (eating cold Big Milk once a week superbly fends off germs from throat in the winter, recommended second breakfast) and for the first time I felt actually alienated. I felt like standing up and walking away, but for sake of civility I listened to them with feigned interest in things which won’t be familiar to me for a while.

From that very moment I inadvertently looked for ways to escape their company in moments when we were not focused strictly on work-related stuff. I have workmates below 30s at different departments, so I decided to spend most of my lunch / coffee breaks with them, much to my fellow colleagues chagrin (I don’t understand why they find it so aberrant I seek company of my peers).

Since then some of their habits I used to perceive as minor shortcomings, began to wind me up. The ‘dirty mug pride’ is at the top of their list. Whenever I see them coming to our desk where we have a kettle, coffee jar and milk with mugs or cups not washed after coffee sipped on the previous day it makes me want to puke and I have to hold back not to snatch it and shatter it on their held-up-high heads. At the end of the day before I leave, no matter how much I hurry and no matter how exhausted I am, I have to go to the kitchen and wash my mug. My parents taught me at home that whenever I use any dish, after I finish I should wash and keep it clean, for sake of hygiene. I don’t feel comfortable with dirt, they do.

This somehow contradicts with how toffee-nosed they are. When talking about holiday voyages, they claim they don’t accept accommodation below four-star standard. Everything below this substandard and they deserve something more. The same goes about business trips. I don’t mind staying in an economy-class two-star hotel. I only need a clean bed linen, a clean bathroom, a closet spacious enough for my suits and shirts and a decent breakfast. Why the hell my colleagues think they deserve a better standard? Are they made of higher-quality clay?

This is all a matter of klasa – you have it or not, you won’t learn it, nor acquire it. Good taste and good manners can be easily recognised – whenever they are rehearsed, they are unnatural. You might finish a good university, get a prestigious job, grow into wealth, learn foreign languages, but if you lack klasa, your image will always lack that missing piece. It all comes out in a way you treat people, how you mark your social status, how you use foreign languages, your reliability and attitude to work, etc. A well-mannered person will never treat anyone with superiority, will not raise their voice, keep cool head, be self-confident (this reflect their lack of inferiority complex), never show off their wealth, will learn foreign languages continuously and improve their command, instead of confining to just getting by in communication. Klasa is about modesty and proper balance between self-confidence and self-effacement.

When I observe them, dwell on their mindset, a picture of a typical lemming emerges in my mind. And the word ‘lemming’ does not just refer to voting for Platforma.

By the way, once I can say I am proud of this government. It has fought over 300 billion zlotys for Poland from the EU budget for years 2014-2020. This money will have a great contribution to helping Poland catching up with western economies. I call it an immense success, much greater than the same amount negotiated by Kazimierz Marcinkiewicz government in late 2005, as conditions are much tougher than then. When everyone was focusing on cutbacks, getting that much money is a success. The other story is that the budget might be voted down by the European parliament, many members of which are reluctant to such ‘profligacy’, so the joy might be premature, but the very fact such amount of EU funds is at stake is a reason give credit to our government. Of course the main opposition party, whose leader quite recently declared keeping fingers crossed for Polish negotiating team, but on Friday silver-mouthed PiS deputy Mariusz Błaszczak announced 300 billion are a bare minimum… How much would his principal attain for Poland during late-night informal negotiations without an interpreter?

Coming back to the main thread of the post – I’ve just realised my colleagues are a by-product of culture of consumerism, or triumph of ‘having’ over ‘being’. Living beyond means to show off their status is typical for Poland’s fledging middle class. The focal point of their wealth is usually a mortgage, symbol of dream of state-of-the-art dwelling fulfilled. Not planning to take a mortgage is it least dubious. In my parents’ generation having so much money implied right away you must have come into the possession of it illicitly. For much younger people it rather invokes a question “what’s wrong with you?” What’s wrong with you that you don’t want to have your own flat right away? And I simply don’t feel like taking such burden on my back if I don’t have to (if I was renting a flat, I’d surely have a different view), for many reasons.

Firstly, property prices, despite recent considerable drop, are still steep and given their relation to disposable income, the imbalance of supply and demand, curbed mortgage lending, macroeconomic situation, dwindling consumer confidence and demographic trends, are very unlikely to go up in two or three years; the worst scenario is that they level off.

Secondly, being free of debts gives you a huge comfort – future is not full of insecurity over job stability, health, source of income.

Thirdly, it’s about pure maths. Assuming I take out a 25-years, 250,000 PLN mortgage at interest rate of 6% (=0.5% monthly) and pay it off in monthly annuities, the monthly instalment is 1,610.75 PLN, out of which around 1,250 PLN goes for interest payment, so in the first month my debt is reduced by 360.75 PLN. It means after a year of repayment my outstanding debt is less than 4,500 lower than at repayment phase inception! I could also set aside some money and from most of them prepay the loan (some rainy-day liquidity cushion must stand by). I could safely assume after a year my outstanding debt would go down by 15,000 PLN. In a year of saving and living with parents (and putting up with them) I can set aside a whole lot more and my savings earn interest on top of that.

Fourthly, there are bargains on property market and in case of urgent sale a vendor decreases asking price and can accept an even higher discount in return for cash received immediately. If you want to hunt a bargain, there will be no time to arrange a mortgage. Oh, I would’ve forgotten, the very procedure of fixing a mortgage is also expensive – upfront and other fees usually consume an equivalent of a square metre of a flat at best.

Being thrifty is not a virtue in consumerist world. None of my colleagues does what my parents were doing from the day of my birth until I was finished high school – they were setting aside small sums of money for a separate bank book, then on time deposits. For what they’d put aside and interest earned I could buy a brand-new city car, but a single zloty from that money has not been spent until now and it still works. Then I’d put aside money as a student and inherited some more money. Savings began to rise quickly as I got a full-time job. Should I be ashamed I have accumulated something instead of throwing it about? Should I, as some suggest, paint the town red each weekend and thus decrease balance of my bank account by at least a few hundred zlotys each month?

Some people say after the stint of two years at one employer, there is a need for a change. But in the respects above, transfer to another bank would mean doing the same thing with the same sort of people, so there’s no point in changing… Unless for pay-related reasons… But this is not the case now…

Got it off my chest! What a relief!

Out of sheer envy

In the United States being well-off is a reason to be proud, in Poland if you’re well-off, you’re dodgy. In the United States to be a successful politician one has to get ahead in personal life and be resourceful (in a positive way), in Poland you can become a prime minister without having a bank account, which incidentally guarantees transparency (in developed countries). “If you succeed in running your own business and pursuing your own goals you are likely to be able to run a country effectively” – this rule doesn’t necessarily have many advocates in Poland, but let’s brush aside politics (I’ll go on at that topic later on) and get down to earth, where ordinary Poles live.

I know I’m an immature observer, but I’ve been looking at Poles’ attitude towards money and wealth for some time and came to a conclusion this attitude is probably the biggest collective oddity in my country. The Polish nation had to live through forty five years of socialist economy, in which people theoretically were meant to be equal. It goes without saying that that system had two major pathologies: blue collar workers earned as much or more as university graduates and the people were divided into equal and more equal. The system fell apart mostly for economic reasons and the shift to free-market economy was quite abrupt. Masses slid into poverty, individuals could strike it rich within weeks. Under the new system, one’s material status depended much more on achievements (which were to a considerable extent conditioned on one’s parentage, family’s material and social status and genes that determined drive, intelligence, readiness for sacrifices and hard work). Today when I see myself at the bottom of the ladder of my professional career I strongly feel my own success hinges in 80% upon my own commitment, other factors seem less important. My life is in my hands, but still many people prefer to shift responsibility for their lives into someone else’s hands. It’s generally an easy option, because you can blame someone else for your failures. I can’t blame PRL for providing its citizens with social security on a satisfactory level (actually I’m even kind of grateful to the lame Polish state of that time, because it enabled my parents who came from very poor families to study for free and break away from poverty), but I blame the socialist system for teaching people to be passive and instilling in them the “I deserve” stance towards life. But generations pass and things are slowly changing…

Ask an American how they are and they’ll tell you “great”. A Pole would treat such question as an invitation to start a big whinge, including “I earn too little” as a main grudge borne against the world. Poles are a nation of grumblers (alright, this is partly a stereotype).

When six years ago my parents decided to buy a house it was a bigger problem for them how to explain to family and friends they had managed to set aside a considerable amount of money than to how to actually finance the house. To many people, setting aside as much as an equivalent of four middle-class cars at that time was out of reach. Coming into such amount of money, not really big, must have involved moonlighting, bribery, etc.

According to a popular belief being in possession of a significant amount of money means you must have come into it an not fully legal and honest way. Maybe this stems partly from the early 1990’s when some businessmen would earn fortunes quickly and to many people it seemed if they had worked hard for years didn’t reach as much as someone else within a few months, there must have been an element of crime in it. In fact some of the fortunes were not amassed legally, some were raised legally but immorally, this has surely taken its toll on Polish society, leaving many who couldn’t benefit from capitalism disgruntled.

A simple way to have a lot of money is to (not necessarily scrimp and) save, not spend what you earn foolishly, seeking out wise and profitable investments. Some investments, such as land in good location, start-up companies can be profitable with a bit of luck and often with a considerable dose of risk. But hey, nothing ventured – nothing gained.

In Poland if you succeed people are more likely to envy you than to be happy that you’re getting ahead. Often they pretend to be happy that you’re doing well but deep down they’re green from envy. “Don’t stand out, keep a low profile” is a catch-phrase in Poland, though its importance in social life is on the wane. The worst thing in it all is that quite often seeing someone else pulling off doesn’t motivate to strive to reach a higher lever, but rather prompt to think how to pull a successful one down.

Envy holds strong in Poland. Polish tax office receive thousands of denunciations from “affable” neighbours, friends, colleagues, all pleased to inform fellow taxpayers live beyond their means. Around 50% of the denunciations are legitimate and help Polish state raise money from dishonest taxpayers, but remaining round about 50% are groundless accusations arising from envy that someone else prospers, not the senders.

In politics there also two fringes which rose from the same anti-communist movement. But some had more accomplishment before 1989 and fared better in independent Poland, some didn’t have so many merits, didn’t go down in history and feel envy. Now it’s time to make up for it and rewrite the history, if necessary, also out of sheer envy.

Times are changing, people are changing. My generation is no longer ashamed of having money, I have money, given my age surprisingly much, some put aside by my parents, some inherited after my grandfather, some earned, all not spent foolishly, but wisely invested. I’m proud I managed to amass it and make it work effectively. I heard accusations that I came to some of these money in an obscure way, since those are profits from playing the stock market. But stock market is for people, one has to know how to handle it to reap profits. Besides, my capital gains tax on stock market transactions for 2010 will probably hit four digits so I’ll be pleased to share my wealth with fellow taxpayers. May other Poles fare even better than me, their happiness will be my happiness.

Polish mileage cult and other motoring curiosities

No, I didn’t forget to take the camera, the batteries were down and it takes 16 hours to recharge them so I used a crappy camera of my Nokia 3110 Classic.

Now try to guess how old the car whose odometer is shown on the picture above is. Those who read PES carefully and regularly will surely have no problems giving the correct answer.

Now you’ll ask: “How come?”. Normally such a mileage is typical for a two-year-old car. The prescription is simple: do not use a car when it’s not necessary. Firstly – cut down on short journeys – if your destination is less than 3 kilometres / 2 miles away, there’s absolutely no use taking a car, unless there’s a serious justification, such as: something heavy to carry, driving an ailing person to a doctor, doing big, weekly shopping, etc. Secondly – use alternative means of transport – for healthy people bike is an alternative, as long as the distance is below around 20 kilometres, weather is permitting and a cyclist doesn’t have to dress up. Public transport, whenever cheap and reliable makes a good solution. I can see no point in getting around the centre of Warsaw in any other way, mostly given the shortage and cost of parking space there. So the low-mileage car has been used for mid-distance journeys three of four times a week and as I counted it’s had nine long (at least 300 kilometres to a destination and back) trips.

Poles as a nation have a peculiar approach to cars, which are still the symbol and benchmark of social status. Few people buy new cars, the most often quoted for it are financial and utilitarian. The first group includes: high price, depreciation in value of 30% in the first year, high costs of insurance and servicing. A key argument from the second group of reasons is that there’s no point in buying a new car if the roads are bad, an old car can be repaired by any mechanic in any road-side garage and generally if something bad happens it won’t be a pity.

Poles buy used cars, but change them very often. Changing cars is like climbing a ladder of social status – a Pole starts with an 18-year-old Fiat Uno (a model example to the right), a few months later changes it for a 16-year-old Ford Fiesta, after two years buys a 12-year-old Volkswagen Golf and after next three years sells it and purchases a 9-year-old Opel Vectra. The next step is swapping an almost new Vectra for a brand-make German car, such as BMW, Audi or Mercedes, no matter how old and rickety it is – the make matters! It’s very difficult to find Poles, who, in spite of their low income decide to buy a new car once in ten years or more and replace it with a next new one once maintaining the old one is no longer cost-effective. Just compare how well-maintained first-owner cars are and how those which change hands three or four times look.

It goes without saying that if few new cars are sold in Poland and Poles want to buy used cars, the demand much surpasses domestic supply and so we have import used cars from our Western neighbours, who no longer want to drive those clapped-out bangers and sell them for a song to our home-grown car traders. As a result Poland has become a scrap-yard of Western Europe, an average car in my country is 12-year-old…

An average Pole, although cash-strapped, is a picky buyer. What determines technical condition of a vehicle is a mileage. This measurement is actually very imprecise. Compare two cars which covered 30,000 kilometres – one used in town only (traffic jams, etc.), the other driven on motorways. How an owner of a car maintains it and uses it also matters. We all know all vehicles brought to Poland from Germany are first-owner, non-accident cars used by well-off, over-cautious German grandpas who used it once a week to drive to a Church, kept it in a garage and polished its bodywork from dawn to dusk, therefore mileage after twelve years is 100,000 kilometres or less. If the mileage is too high it means a car’s wear and tear disqualifies it as roadworthy, so a natural reaction of a car trader who deals in high-mileage, but well-maintained car is to roll back the odometer. It might be quite natural, as they’re just trying to earn a livelihood by trading in cars, but it looks more absurd when they come into a low-mileage car in showroom condition, whose owner for some reasons wants to dispose of it. Low mileage is dubious, so to make the car more credible traders tamper with the odometer to increase the mileage. After some research I carried out I can tell you the optimum mileage (for a Polish buyer) is between 15,000 and 20,000 kilometres per year…

Changing odometer’s readout is illegal – some of you would argue. Actually not, you can correct the readout to show the mileage you want to see as often as you want and do it legally. It becomes a crime when you do sell a car and do not inform a buyer what the actual mileage is. Every company which provides services of correcting odometers’ readout has on its website a disclaimer or reservation that correction is legal as long as a new owner of a car is informed about the actual mileage.

But isn’t rolling back the odometer a kind of self-delusion? Odometer should truly and fairly show the distance a car has covered…

And don’t ask about buying the 42,243-kilometres car. First-owner, non-accident, low-mileage cars and rarely for sale!

The newer ways of stigmatising

Browsing through the forum for the dissatisfied with the quality of the telecom services, I stumbled upon a comment from a man dividing his friends into callable and not callable… “I mark the people who have their numbers in Play with a star, so that I know who I shouldn’t call if I don’t want to go bankrupt”.

The fourth operator, as it was entering the market in 2007 was granted quite favourable decisions on MTR from the regulator. The discrepancy in inter-operator settlements was justified by the fact Play would have to build its own infrastructure from scratch and by the undeniable truth its offer would boost the competition on the market of mobile services.

The first argument could be disproved – not every entity starting up can get the special terms for conducting the business (apart from tax relieves, etc.), if somebody decides to take the chance and puts a lot of money into a dicey undertaking, they must analyse the competitors’ potential and costs of underselling to convince the clients of the competitor to vote with their feet. The most effective way of drawing new customers is bringing down the prices – so the onset of its activity was marked with the cheap rates and simple pre-paid and post-paid plans, meant to signify its advantage over the “big three”. The bigger price war was sparked off by Play in March 2009, as the operator marked its second birthday with a new pre-paid offer. The new service is not rendered below the costs, but the home truth is that the revenues of the operator come mostly from inflated termination rates. The other operators have thus reason to detest Play. Not only for the sake that more and more of the aware clients ditch them and take their numbers away to Play, causing the operators’ yields to drop. Those are not the termination rates, that’s the crippling price war, in case of three settled mobile providers hitting their balance sheets, in case of the fourth one not letting it break even. From the theory of economics we should know in the long run the price war doesn’t have to be advantageous, even for the customers. The initiator of the fight might be unable to carry the burden of dumping prices and go bust, the other firms on the market may follow suit, so the situation that only the stronger businesses won’t pull out of the market is likely to take place. Moreover, this may lead to a monopolisation of a market. In Poland Play successfully broke the oligopoly set up by “big three” to keep up a fictional competition.

The second argument is backed up by the welfare of the customers. On the market with the barriers to entry the external regulation is often essential to ensure the consumer protection. Play did manage to change the mobile telecom market in Poland. It still has the lead in the stats concerning number transfers and the number of new clients. The price to pay for the rest who stayed with the older operators comes out on their bills or accounts whenever they decide to call a Play user. The rates range currently from 0,72 to 0,80 zloty. In many networks the basic flat rate is currently 0,29 zloty. When looking at termination rates one could see a certain disparity. If the TR for all old operators is 0,1677 zloty and for Play 0,4047 zloty, how big should the rate for calls to Play be? A short calculation tells us it should be 0,70 zloty, so the operators get the extra margin for calls to Play. Many people, conscious of it, were put off by the exorbitant costs of chats with the Play-using fellows.

When taking a decision to transfer my number to Play I deliberately chose to fork out 50 zloty at the time and retain the prefix 608 belonging to another operator. Aside from avoiding the chaos of notifying everyone about the new number I could also avoid comments like “I’ll be paying more for calls to you”. I told those of my friends whose calls to me tend to last more than a quarter, but it never became to them an obstacle to call me if they wanted to talk. I sometimes offered calling back and they took up on it, as the costs of the same call was for me three times lower than for my interlocutor.

The crucial factor for me is the huge amount of perks, special offers, minutes and messages for free, bonuses I get from Play, thanks to which I can spend around twenty five zloty monthly on my phone, instead of over sixty a year ago with the previous operator. I sometimes mind the fact someone pays over the odds, but its their decision to flounder in the clutches of an operator which rips them off. But if you really are so petty to divide your friends into cheap-to-call and expensive-to-call you’re a penny-pitcher! If you don’t feel like paying, ask to call back, you’ll save on your phone bill, but first you’ll have to overcome the embarrassment…