As Americans, investing money is a given. At LEAST in a bank where it’s safe and gains a tiny bit of interest but many Americans invest in stocks and mutual funds as well. I certainly grew up investing this way and that’s why I was horrified when I discovered over the course of this past year how Moldovans invest their money.
The background to this is that the use of banks was much more prevalent under the Soviets. Even villagers, from my understanding, kept their money in a basic bank account. From what I’ve seen myself and understand about Moldovan villagers, they were very good savers also. Some of them had their life savings ready to support them and their families in retirement – I’ve heard villagers tell me their families had the equivalent of as much as 40,000 American dollars saved just from accumulating in a bank account since they were 19 years old.
Then the Soviet Union fell. And overnight, all the rubles that they had in the bank disappeared. I don’t know the ins and outs of how the mathematics of currency work, so I don’t know if someone actually took the money or if it was reduced to being worthless due to the economic collapse. All the Moldovans will tell me is that it was completely gone. And the majority of people found themselves without jobs, without much education, and without a penny to their name.
Naturally, I think in light of this it’s a little more understandable why the Moldovans don’t put their money in banks. They see their money as a physical thing that they have to hold on to and giving it away to a bank offers them no guarantee that they will be able to physically get it back again. Consider also that with the level of corruption in Moldova (which is not as bad as some countries but is still present and significantly more pronounced than in America), a smart Moldovan knows that there are times in life when they might get totally screwed and there is literally nowhere for them to go. In America if the bank wouldn’t give you your money back you could escalate and complain and sue and do all sorts of things to get justice and your money back. In Moldova, sometimes, shit happens and there’s no one who will help you and you just have to accept that you got screwed. Knowing this, I’m not sure I’d put my money in the banks either.
So what DO they do with their money? Many of them live month to month, which isn’t as bad here as in America because they have gardens and animals that can provide them with the basic food necessities of life. In addition, the Moldovans don’t have quite as many unexpected expenses as Americans do – they don’t drive cars and they do all their house repairs themselves. This means that really their only unexpected expenses tend to be medical and half the time they just use home remedies and call it good.
But with so many family members working abroad, naturally there are times when a big chunk of cash rolls in. In the depression-era United States they would probably hide that cash all over their houses rather than putting it in the bank. Moldovans do you one better. They buy things with it.
The most common use of family funds is building new houses. That’s why my current host family has 3 houses on their compound plus a 4th one being built across town. They do all the construction work themselves so they only pay for the materials. And they do it in stages. Maybe this year they have the money to lay down the foundation and that’s it. And then maybe no one gets work so the foundation stays unfinished for 3 years before they get enough money to put some walls up. It can take 10 years to build a house in Moldova. When I asked my host dad why they build so many houses, he said it was for their children. They want their kids to have a place to live and something they could sell if they needed to. Not a terrible idea except that no one sells houses here. Probably a quarter of all the houses in my village are standing unoccupied because they were built by some family a long time ago and their son decided to stay in Chisinau, or died, or moved to America. It seems like a horrible waste of land, resources, and money, but the Moldovans see a house or a new tile job on their current house as a better place to tie up their money than in a bank account.
As a consequence, though, as you may have guessed, they don’t really get a retirement. Most of them do retire in their 60’s (the life expectancy average here is about 65) and then try to live off the pension they get from the state which, like in America, is too little to actually live off of, even in Moldova. It’s about 60 bucks a month.
And so it goes. This is another great example of how Americans think in the face of cultural differences. At first I was horrified and demanded to know how anyone could be so stupid as to not put their money in a bank and instead build a 6th house for their children who don’t even want it. But after hearing about it and thinking about it more, I’m not sure you could expect them to really do anything differently.
Noapte Buna!
