Friday, June 13, 2008

Losing Money Every Moment

I have a little 401(k) from where I worked before I came to NPH. Like everyone else's in the last year, it hasn't done so hot. But, I have the advantage that I won't be using it for over thirty more years. So I can afford to let it sit and hopefully someday that compound interest magic that is so heavily touted will kick in.

"Inflacion llega al 5% en tres meses"
"Inflation reaches 5% in three months"

Here in Nicaragua, when you put your money in the bank, or keep it in your hand, or watch your salary on paper, it's buying power does something different. It goes down. And not just a little.

Granted Nicaragua isn't experiencing those soaring interest rates of 36,000% that it experienced during the war with the US during the 1980's. But they shouldn't be, Nicaragua isn't a war torn ravaged country, at the moment, and they've worked hard not to be.

So every month we watch prices of food, gasoline, rebar, concrete, all the same items citizens of the US are worried about tick up in price too, but at a rate about 4% faster annually than in the US (using the rate that the cordoba has fallen against the dollar).

As you can imagine, it's hitting us a little hard on the construction. Between that and the minimum wage hike of 20% in February by the government, it's not easy.

We've talked through several changes in the house plan that wouldn't affect functionality with the contractor who built the last four. But even with these changes, his hope is to not have to charge us any more on the next group than he did on the last. And unfortunately he's not the only contractor telling us so.

But we're not giving up. We're simplifying. Being creative. As the Nicaraguan people have done for a long long time.

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