Before we deep dive into understanding money, it’s important to first understand the physical world around us. We understand the basics of time and energy, but how does it relate to money? I’m not a quantum physicist or Einstein and chances are, neither are you. So let’s use the K.I.S.S. approach and keep it simple silly. A movie that best portrays this conceptual framework is In Time starring Justin Timberlake. I refer to this movie affectionately as Just-in Time, pun intended as a memory tool. Although not revolutionary, I was moved by the concept of time being used as a currency and representing life itself. The wealth (time) was naturally concentrated upward toward the elite making them nearly immortal. With their bottomless fountain of youth, they enjoy a life of unrushed privilege and excess to the terminus of boredom or unfulfilled reckless abandon. Conversely, the poor were depicted on the brink of life and death every day. Each second was a valuable resource and they worked multiple jobs just to survive another day. If they were ever to hit zero, the consequence was death. Of course, this system inherently spawns a sinister element of human nature that will take lives in order to prolong their own. This movie is not so much different than real life. But the difference is that we can go less than zero. In doing so, we succumb to becoming slaves of the fiat system.
Time is money. We’ve all heard the saying before. The current times demand an additional component to that old adage, energy. Time and Energy is money. At least, it should be. The current system, known as the fiat system, takes our time and energy that we perform (hopefully a task that is useful for society) and pays us in a standardized unit of measure. The unit of measure, also known as the world reserve currency, is the U.S. dollar and can be exchanged for goods and services. This system allows individuals to collectively produce more by specializing in tasks required for survival. If you had to hunt and gather 16 hours everyday, it doesn’t leave much time for much else. However, if you assigned separate roles such as hunter or gatherer to each person, the persons in these roles will naturally become more efficient and adept at their job by learning how to do more with less energy through experience. So now, what took 16 hours can be done in 8 hours and the other 8 hours become discretionary time that can be spent freely to do anything of your choosing, ooga booga.
The U.S. dollar represents stored time and energy. You can work now to store this time and energy to use later when you need food or shelter during the winter. Without getting uber political or historical, the gist is that the system currently in place permits the federal government to infinitely increase the money supply by approving bills to spend more money. This much we know, but what domino-effect will this have generations down the road when you are no longer there to remind your family about the atrocities of the fiat system and the centralization of ultimate power. Control the money, control the world. As a matter of fact, many of these fears were written by our founding fathers and if they were alive today, they would once again fight for our liberties and freedom. The darkest times will produce the brightest minds. One consequence of the “money printer” is something you hear all over the news: inflation, oil prices, consumer price index at all-time-highs, on and on ad nauseam. Regardless of what what anyones says about money, I think we can all agree that we all need it and we all want it. I’m not saying money’s the most important thing in the world but it rates reasonably close to your kids and pets. From an early age, we are told to save, save, save. Save for retirement, save for college, save for your first house, save for a new car. Then we’re supposed to somehow build this wealth thing and create this fortune that we can pass on to future generations. Or save enough to live off the interest so we don’t have to work anymore and have a cushion for the big financial crisis on the horizon that everyone’s talking about. But what happens if I told you that your life’s savings is being eroded away by two forces? One visible and one invisible. You guessed it, taxes and inflation.
You’re in the middle of an Uncle Samwich. It’s his signature wrestling move where he traps you in a headlock and while punching your face, expertly uses inertia to propel his body through the air horizontally and rams your contorted backside into the mat. All while you are losing consciousness in The Rock-sized biceps that are anesthetizing your senses and numbing the trauma that has befallen you. Only the smartest and most cunning among us know to avoid challenging this undefeated World Reserve Champion. Did I lose you? It’s ok. I was attempting to inject mental images through my keyboard so those with extrasensory perception can visualize the metaphor. In other words, if you’re working and are receiving a w-2, you are paying the most taxes and your money is losing value by the second. As my dad likes to say when I did my first taxes as a yuppie, “You are Uncle Sam’s wet dream.” Back to the key point, 25-50% of your hard earned time and energy are going to Uncle Sam, aka the government, aka the IRS, aka the federal debt collection agency. They are literally stealing time from your life and giving it to a group of people who you are told to trust by law or risk getting cancelled in ways worse than death. To make matters worse, when the money supply expands from all the backdoor private deals, the people start to notice something going on. However, sneaky Uncle Sam knows what to do and decides to use a bribe called a stimulus and gives everyone in the country a little pocket cash. In the same way they can garnish wages, they magically direct deposited this bribe to millions of banking accounts across the country. But technically, the money went to big banks and they are free to do whatever they want with your money. They are only obligated to pay when you decide to cash out. Everything else is fair game. By force-feeding this money into the streets, this payment has effectively decreased the value of all the dollars in your retirement portfolio. Visibly, let’s say you are $800 or so richer. Invisibly, at a consumer perceived inflation rate of 20% against a $1,000,000 retirement portfolio the purchasing power of your dollar just dropped 20% to the equivalent of $800,000. You are $200,000 poorer in this example. That’s why I consider this hush money and after receiving your dopamine hit, you stay quiet and wait for more. Let’s say you decide to go out and spend your new money. However, you notice that the ladies are complaining that their nail salon trip suddenly costs 10% more, an extra dollar keeps getting added to the menu prices at all of your favorite restaurants, things that were once complimentary now have a price. What is happening here? It’s inflation. The consumer price index (CPI) is a manipulated number to measure inflation. To get a more accurate reading, take the CPI and multiply it by 3 or 4 and I can guarantee you the margin of error here is significantly less than the CPI’s. This is what I call the (C)onsumer (P)erceived (I)nflation. This is what raises all of our cost of livings expenses across the board. The money you would otherwise save and spend, is now going to fewer products and services. For these reasons and others, the fiat standard is failing us. It is failing to store our time and energy, our wealth, stealing it from our children and the legacy you are spending your life building. This sounds like all doom and gloom but what can we do about it? The truth is that an elegant piece of written code expressed through mathematical law presented itself as an alternative answer. An alternative money system that is better, safer, and will transcend the time & energy dilemma. You may have heard of it, it’s called Bitcoin.
This is where we should take the first step, where we should build the foundation of wealth, and where the world will turn when the fiat standard collapses under the weight of its own debt. In the first time in humanity’s history, we finally have a unit of measure that can store our time and energy in a way that can be sent to anyone, anywhere in the world almost instantly (no more ACH processing). It is a network that is secured by an unchangeable code. It can never be seized by a central authority (unless you give them control of the private keys), nor be inflated away (you can’t create more than 21 million bitcoin). We’ll go into more of these concepts in a different post, but this is what we call a technological singularity. Wikipedia defines this as “a hypothetical point in time at which technological growth becomes uncontrollable and irreversible.” If you’re still with me, I can tell you now that it’s not too late and never will be. However, those that decide to make the transition now will have a distinct economic advantage over those who transition later. Bitcoin is like discovering a brand new island with 21 million beachfront properties boasting the most beautiful waves and weather year round. Today, each property would cost you $36,914.91 at the time of this writing. Consider that you’re only the first 4% of people, in the entire history of the world, that has heard of this place, this deal, this offer. What happens when the remaining 96% hear about it and scramble for these properties all at once? Let your imagination run wild because by then, you’ll already be part of the new rich. Stay tuned, I will show you the only financial strategy you should use and how to get there while paying homage to Warren Buffet’s Rule #1: Never lose money. And Rule #2: Never forget Rule #1. Cheers.