Game in the Brain

Cost of Living in poorer countries are lower, but there are significant trade offs. First consider what makes up Productivity:

Productivity is the Value of the work done. Increases in Productivity creates a multiplier that affects that value. People are more productive because they get more work done: which means they could be increase the quality of their time use or they are able to multi-task.

In making the average person productive there are a lot of things that work indirectly or in the background.

Financial Independent. What it means to be Financial Independent is that you have no one else to answer to but yourself. Because many people of poorer nations have to share and pool resources; sharing housing and living costs, they are less financially indepent. If you can’t afford your own home and cost of living, you pool and share. There are other costs to pooling and sharing, and these are in the form of obligations and accommodating the needs of others.
There is nothing wrong with all these, but in a strategic sense, these all are barriers for one to make the best economic and long term decision for an individual. If a person is to be more productive, he/she has to be able to exchange these obligations/distractions for cash or some more equitable opportunity cost. The freedom money gives us to swap and exchange costs for those we can afford to pay vs those that we have to pay is what it really means to be financially independent.

Living in the Philippines, if the infrastructure were to arise. Raising my commuting costs from $1 to $5, but lowering my one-way commute per day to 1hour only, instead of 3-4hours a day. But better traspo infra lowers my housing costs to 1/2 to 1/4. Just the creation of the transport hubs create so many jobs, services of all sorts will be peddled and sold here. All those to make life more convenient and productive.

Another Realization: What does this all mean to Investors. In a market that keeps seeks to correct itself constantly, we want to know where we put our money where it is more productive. Putting our money in productive assets is always key, but only the individual experts know how productive an asset is and the market really learns only after how valuable or effective its investment was. Knowing where productivity can be achieved is knowing where to put your money.