For some reason, past few months (or years), I’ve been thinking and hearing a lot about and around money. Cryptocurrencies, stock market, taxation, inflation, deflation and what not! Definitely working from home (or rather not going out in the world) has been a huge factor, but a lot of credit goes to recent stocks/crypto trends.
Disclaimer: Some points (if not all) might be heavily influenced by a recent read named The Psychology Of Money.
Whatever people values or believes in is money
The more I think about money, the more I start to believe whatever people believes in is money, because the use of money is to get an item or service in return. So, anything that people value can be traded for an item or service. Be it trust, values, knowledge, gold, government approved currencies, plastic coins, Tazos, online trading card, game items or time.
Now if you have read bitcoin white-paper or some other articles, you might argue that money also needs to be scarce, non-perishable, easy to store and some other things. That’s definitely true, but if you had the only gem in the world, and no one values it as much as you do, you’re going to have a hard time trading it.
Hence, no matter how unique you are or want to be, your “monetary worth” depends on how people value you or your thing.
Savings can be created by spending less. You can spend less if you desire less. And you will desire less if you care less about what others think of you.Morgan Housel, The Psychology of Money: Timeless lessons on wealth, greed, and happiness
So, maybe we need to care less about what others think of us but keep track of what people care about (no matter how stupid that may sound). Easy, right?
We started using money so we can do what we like
Maybe few millenniums back, a homo sapiens would be crying that he would rather farm then go for hunting. And based on common trusted items (likely stones or pebbles), he started trading his crops for meat, and eventually everyone started utilising their capabilities and traded items or services based on this common contract (currency).
This is exactly how economy would have bloomed, everyone doing what one is good at. But now we do jobs that pay well instead of doing what we are good at. The tool has became a goal to many. It’s really interesting how I need to remind myself that my life purpose is not chasing money every few days.
You can not solve something without creating newer problems
I’m not sure how many of you were following bitcoin in 2012 or 2014. One of the selling points at that time was: how cheap it was to do transactions, and how traditional banking systems were looting us with 2% transaction charge. Fast forward to 2021, charge for any transaction on bitcoin is approximately $15. So, unless your transaction is greater than $750, you’re paying more than 2%.
Please note that I’m not saying cryptocurrency is bad or evil, or shouldn’t exist. Blockchain has a lot of use cases, and if anything it will make the financial systems more robust across the globe. I just find it fascinating, how things (especially marketing) has changed now.
Nothing is safe: you can still lose it in a single moment
This may sound very pessimistic but no matter the choice of asset or investment, you can very well lose it in a moment.
- Property: fraud, missing deed, natural calamity, political reasons, new constructions
- Currency notes: can be stolen, lost, washed away with your clothes
- Cryptocurrency: lost private key, stolen, robbery, scams, lose its value due to social, political or geopolitical reasons
And even if you do figure out something that lasts long, can you give the same guarantee about your life?