A loss of legacy

in LeoFinance •  28 days ago 

One of the issues that is increasingly impacting our world is the massive wealth disparity between the rich and the poor that like it or not, is one of the major catalysts of conflict now face, as economics impacts us all. we aren't really good with large numbers but for a little perspective, the average salary in the US is around 70,000 dollars and there are a lot of people well under that.

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Jeff Bezos is worth about 140 billion dollars which sounds like a lot, but is hard to get a grasp on as it is so far out of our experience, it becomes absurd. However, Amazon was founded in 1994 which means that on average, Bezos has earned $104 million for every 5 day working week or, 20 million a day. What this means is that based on the average salary (again, there are many people below this average by a long, long way), if a person was to earn 70,000 on average for their entire 40-year career, they would earn 2.8 million in a lifetime. This then translates into Bezos earning the pre-tax earnings of 7 average lifetimes, every day.

It is quite nonsensical - but it isn't his fault, this is the way the system is designed and once one has enough value, it keeps generating more and, he has built this wealth up by building demand, demand that comes from us. The system is very broken, and we are definitely part of the problem as consumers. We should demand differently and that isn't through protesting, it is through where we put our money.

I was thinking a little about this yesterday after I swapped a faulty fitness watch for a new one and how short the lifespan is for the watch. In the past, watches were legacy items that got passed down through generations and held sentimental value, but now, are consumables that will be replaced whenever a new one has a better feature, likely on a bi-yearly release cadence, like other electronic consumables. If I look around the house at what I would want my daughter to inherit, other than the house (which is valuable), there isn't much that would go the distance - except for a quality watch that I was given as a gift. Much of what we buy is throwaway these days, so do we really own it, or is it more a rental?

The system is designed to favor those who do the best at collecting, are able to store wealth and pass it onward down generations. Once the process is in play, it gains a kind of autonomy in the gathering process plus, it continually raises the barriers of entry behind itself to stop competition from those trying to follow. While there are always exceptions, if 100 children were educated in the best schools and 100 were educated in the worst, do you think the earning outcomes of the future would differ on average between the groups? The children themselves have very little choice in their schooling.

This is indicative of the reasons why income gaps are growing rapidly between the top and the rest, with even the middle income ranges getting pushed out of the markets and further backwards. There is more income difference between the top 0.1% and the bottom of the 1%, than there is from the bottom of the 1% and the bottom of all income earners. That bottom 1% aren't poor, but they are likely still living with mortgages - still part of the debt cycle that drives more value above their own heads.

I was trying to explain this to some colleagues yesterday as we talked about wealth distribution and while they think that the system can be fixed, I believe that it is so broken and so out of balance that the only solution is wholesale replacement. But, it will never come about by demanding from those who benefit from the system to change it, as there is no economic incentive for them to do so and the social benefits do not affect them as they do not need socialize with the other 99.9%.

What I said to my colleagues was that if you want to change the system, you have to support the change of the system and while this process takes time, what needs to happen is that small steps of support toward the replacement of the system with one that is owned and operated by the masses is needed. You know, "buy Bitcoin" - get involved in crypto and blockchain, join Hive and start participating and learning. This is about the way we consume long-term and by slowly moving where we spend our attention and wealth will affect the financial flow of the entire economy.

The rule of thumb is to save 10% of pre-tax salary, but doing that actually generates more value for the institution that holds it than the one who saves it, and then there is the inflation rate that devalues the currency, which is driven by that same institution that loans out that saving in order to earn interest on it - which creates the inflation through injecting more money (that doesn't exist through marginal reserve lending) into the marketplace. Saving is a fools game, investment is where the money is made.

But, investing into what is the question and if one is investing into non-generative, non-value storage consumables, that is going to drive value to those same institutions that do invest into what makes money, the consumables that have demand. Consumption is the driving force of any economy as it is this that affects supply and because of it, what we demand matters. When we as consumers start investing into ourselves through economies and products that distribute wider back to ourselves, we effectively create a new economy that not only smooths out the insanely high peaks and raises the troughs, but can be far less likely to be hijacked and taken over by a minuscule slice of the population.

The more participants willing to invest a small portion of their current wealth into this system will drive demand on it and add opportunity for more wealth generation within that same system. The more this happens, the greater the stability becomes and the faster the destabilization of the current economic practice happens. At some point, "staying in" the old economy is going to mean seeing value free-fall. This means that the economic mass will shift as demand shifts and, supply and value will become increasingly distributed through the new model, a model that has a greater spread of distribution.

Will it work this way, will cryptocurrencies and blockchains like Hive be able to attract the flow of wealth from an old and highly broken system and distribute more evenly across the global population? Will people get to the point that we will choose a better society over the extremely and increasingly slim chance of economic success in that broken system? Who knows, but perhaps if there was something of value I could leave my daughter, I think an improved economy that provides more opportunity and less violence, would be worth more than any watch.

I would rather take the risk of personal loss now, than the near-certainty that the future our children inherit will be one dictated by a crushing debt cycle that will inevitably lead to even more suffering. But, it isn't the actions of one that will make the difference, it will only be accomplished if those who want a better life experience for themselves and children opt-in and actively support change. Isn't that most of us?

Taraz
[ Gen1: Hive ]

Posted Using LeoFinance

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Wow, I never saw it this way.

When I look at my life, I have bought 3 watches in last 3 years, one fitness band. My father has one new watch and an old one, which was given to him by my grand father.

I never noticed how much money I spent on things that need to be replaced a couple of years later.

I am quite fond of gadgets. Especially laptops, ipads, iphones....but from the last year, I have decided to buy less of these and put more in savings.

I thought maybe I was getting mature, but I was making some wise decisions to put my money in things that would grow a little bit instead of depreciating in the future.

And this change came because I read a couple of personal finance books.

What I learned from those is what you shared in your today's post. Putting money in things that will grow, even if it grows 1% instead of spending all my money on things that will depreciate and have to be rebought an year or so later.

Thanks a lot.

What I learned from those is what you shared in your today's post. Putting money in things that will grow, even if it grows 1% instead of spending all my money on things that will depreciate and have to be rebought an year or so later.

This is what everyone should be doing with a significant portion of what they can. The draw of depreciating consumer value is strong, because there is so much effort put into pushing them into our lives. I don't think we have to go too extreme, but small changes often and it will have a big effect.

once one has enough value, it keeps generating more

For a moment there, I thought you were going to segue to a discussion about Hive Power. ;-)

…we talked about wealth distribution and while they think that the system can be fixed, I believe that it is so broken and so out of balance that the only solution is wholesale replacement.

One way or another, there’s a reset coming. The longer it’s put off, the greater the pressure.

I could have, but I shill Hive a lot :D

It is going to break hard when it does.

Saving 10% of gross income seems like a good way to end up in elderly poverty or work until you drop these days, especially with interest at 1% or less. I think as a minimum, saving 25% is a safer bet. For most people that probably means saving a good 50% of their take-home pay, but the good news is that includes things like principle on a mortgage, private work retirement schemes that aren't funded by the government (do you really think those public ones won't be pillaged by the civil service?) and things like good earnings from investments.

Yep, saving is very, very rarely going to workout well, but people are happy to get anything....

What I said to my colleagues was that if you want to change the system, you have to support the change of the system and while this process takes time, what needs to happen is that small steps of support toward the replacement of the system with one that is owned and operated by the masses is needed.

It sorta boils down to "Be the change you want to see." Most people today don't want to see the change, they are still laboring inside the system that currently exists.

I have a macro worry. What if Mr. Bezos (or anybody in the 1% categoy) decides to 'take one for the team' and commits half his net worth to buying and manipulating crypto? It could lead to a LOT of short term money moving around, and possibly short circuit the long term change.

I hope that WE can leave a sliver of hope to my nieces and nephews, and even more important to their children. I honestly believe we can.

It sorta boils down to "Be the change you want to see."

Yes it does and it is "be" not "say" the change.

It could lead to a LOT of short term money moving around, and possibly short circuit the long term change.

Yes it could be terrible - until it keeps forking. At some point it will be, look after your community members or they will leave and set up shop somewhere else, taking everyone with them. The fork to Hive is incative of the potential future.

In the Netherlands when you decease the State gets a big part of your heritage. This way excessive wealth is not possible unless you put all your assets in a foundation etc etc. and no one can own large land areas etc

In the Netherlands when you decease the State gets a big part of your heritage.

I don't think this is such a great thing either :D

My father was a small business owner who started with nothing but a dream and hard work. He lived by the rule, a penny saved is a penny earned. If he couldn’t pay cash for something, he wouldn’t buy it, he refused to pay interest on it. The only debt he carried was his house mortgage and even that was paid off well before it’s it’s due date by paying extra each month. He hated paying the interest.
Some said he was cheap, I thought he was smart.
With just a high school education my dad , became a millionaire and left each of his 7 children a nice chunk of change, as well as a business that still provides us all with income every year.
Another of his often used phrases.
In God we trust, others pay
CASH

Some said he was cheap, I thought he was smart.

I think that the idea of "being cheap" is one of those social conditioning rules that keeps us spending more than we have. People don't want to look cheap, so they spend outside their means.

Your dad did well - most in the world don't have parents like that.

That was it in a nutshell, live within your means, always plan for a rainy day.
He knew that as small business owner, slow times were sure to come, so make sure you have a little cash set aside.
He was a good teacher, although mom would call him out sometimes for sounding like a broken record. But the points were well taken, even my own kids quote "pop" sometimes.
My dad was an honest and fair person, those qualities run through our family now, thanks to dad.
Have a wonderful day!!

Make hay when the sun shines, make sure you have a dry place to store it.

It is midsummer here this weekend, so 5 days off in a row :)

This is a very valuable lesson. Interest on consumer goods is a frivolous expense.

It's ridiculous how some credit card companies, literally steal from the consumer. and if you are part of the working poor, forget it, the interest rates alone will keep you in debt forever.

Yeah, I'm not against credit cards entirely, I use mine a lot. Although, I've never paid interest on the thing. The problem is they are confusing and difficult to use properly (from a financial sense), but they hand em out like candy.

be careful of the candy, read the fine print, it's easy to sign the receipt but difficult sometimes to pay the bill.
They will always betray you, don't get trapped into that debt world

I remember getting one with a 20k limit in Canada when I was a university student.

They function a little differently in Korea. My limit is like 3k and I have to pay off the balance every month or agree to pay interest.

Candy! Can I have some?

Might sound crazy considering, but we are living in a time that is the greatest opportunity for society to completely change the paradigm. And you are right, in order for us to accomplish that we must all take personal accountability of our role in making our world what we want it to be. True values must take precedence over frivolent consumerism driven by marketing and egocentric programming. Basically, give me liberty or give me Lambo, our choice!
Thanks for your insights and all your efforts.
Always on point!
Peace

Might sound crazy considering, but we are living in a time that is the greatest opportunity for society to completely change the paradigm.

Depends who you say it to :)

Basically, give me liberty or give me Lambo, our choice!

The catch cry for many in crypto is Lambo! and they don't even see the irony.

The consumerism is strong with a lot of people but it’s because a lot of them try to keep up with the Jones’ instead of trying to do their own thing. I know that’s definitely the case in America. Lots of people have to have the latest and greatest stuff. There’s no need for it.

Same thing with housing. It’s so expensive but people are always trying to get a bigger one, get one in the best location close to something. We don’t need most of that.

I refuse to buy a lot of these planned-obsolescence devices. I’ve had 2 iPhones in my life, this being the second one. I refuse to buy that Fitbit or Apple Watch. Not just for the negative health consequences of having a constant source of EMF in addition to our phones, circulating around us but because they aren’t really necessary. Looking for step count? Toss an old fashioned pedometer in your pocket for radiation free counting! I had wanted a garmin GPS watch for trail running but it’s expensive and do I really need it? No.

The best way we can affect change is to do it with our wallets. Stop buying their junk and the companies will be desperate and actually do things that benefit us. If we collectively stopped buying iPhones until they were waterproof, guess what happens? The technology for that phone to become waterproof is all of a sudden rolled out that same month.

The consumerism is strong with a lot of people but it’s because a lot of them try to keep up with the Jones’ instead of trying to do their own thing.

I think a lot of this is engineered into us, conditioning to outdo each other - no matter the debt it incurs.

Same thing with housing. It’s so expensive but people are always trying to get a bigger one, get one in the best location close to something. We don’t need most of that.

Yep. We did go bigger, but we didn't go more expensive with ours - we decided on putting in sweat equity instead.

Stop buying their junk and the companies will be desperate and actually do things that benefit us

This is what they will have to do eventually, especially when "bailouts" are approved by the consumer, not the government..

The technology for that phone to become waterproof is all of a sudden rolled out that same month.

We have seen this with Covid, suddenly all the companies can do a lot more for their customers than previously.

Oh man "sweat equity", now you are really investing. @thebigsweed and I have remodeled two homes, one with a huge addition that took us over three years to complete. Then we built our farm house from the ground up, while still working and living in New Jersey, that was in 1987, now retired and living on the farm, we have finally finished this project.
So worth the investment of your own time, all of our homes have made us a good deal of money.
You just have to be patient...slow and steady my friend.

It is pretty much the only way to add value to "beat" a mortgage. A lot of people want new without recognizing that they can't really add any value to it, meaning that the gains they make over time will be eaten away as all new houses have gained similarly and most likely, by the time they sell, it needs remodeling again.

You just have to be patient...slow and steady my friend.

We are getting a lot of major things done in the beginning phases and then it will be a bit at a time for the rest. The changes we are making are things like heating system and windows which will be suitable for a few decades at least - but are very expensive outlays.

This is a very valuable post. Great ideas and vision explained in the simplest language possible. You are right. I have commented several times in different social media that the issue of celebrities, for instance, who people create (like Frankenstein's monsters) and then complain about, is easily fixable by stopping supporting/promoting them.
The same applies with companies/products we may consider abusive, dishonest, or inconsequential.
I think that crypto and blockchain can make a difference in the way the economy works, but people need to be more aware of their power as consumers.

I think that crypto and blockchain can make a difference in the way the economy works, but people need to be more aware of their power as consumers.

People like to play the victim as it makes them feel better about themselves, even as they suffer. Anything but take responsibility....

I started to think about old watches. I think it would actually be nicer to have one of that, even if it is way behind modern technology. My vintage preference might make me think like this.

Indeed the consumers are somehow to blame. I put it all on the education system. Which is where the children's mentality is formed. Education can help minds make better decisions because the right education makes you think, while the wrong one tells you what to think.

I put it all on the education system. Which is where the children's mentality is formed

I see the education system as a centralized viewpoint to support the status quo - education however, that is the parents and community.

I think now parents have more pressure on themselves than ever to educate their child, especially that the education system is what it is

I think the pressure often comes from people trusting in the system that is designed to create employees in an environment of reducing employment opportunity for those kinds of skills developed.

Well you just said the problem: trusting the system in the first place, never questioning it at all. That's a big mistake to make.

I didn't even know that people replace their gadgets every couple of years until recently. My family and basically everyone I know uses tech until it breaks or passes it on to someone else who will use it till it breaks. My average lifespan for a phone is maybe 5 years. Current one is 3y and works ok for now. Same with a lot of other things, clothes, utensils, etc, use it, pass it on or repurpose it. The average monthly salary here and neighboring countries is 200-400 euros. A lot of tech is imported so the price is relatively higher for us compared to other expenses. My wacom bamboo tablet is 8y and as far as I know it should last many more years.

There was a famous example with boots, a poor person can only afford cheap boots that will last one season, while another person can afford more expensive boots that will last 10 years and likely more. The expensive boots will save money in the long run.

Being able to stock up on stuff when it's on discount is a huge advantage. It's also a lot about the mentality, avoiding buying things unnecessarily. Zero waste movement at least has been gaining traction which is encouraging :)

My average lifespan for a phone is maybe 5 years.

Mine is around 4-5 too, if I can push it out that far. My last one was 4.5 and this one I hope will last a while too.

The expensive boots will save money in the long run.

In English there is a saying "to be well heeled"which means to have money.
Good boots are expensive to buy, but they can also be reheeled. Cheap shoes don't get fixed.

As I see it cooperation and devolution, ending central anything is the only option to end this insanity we have now. When you mention that to people though their first reaction always seems to be a shrug of the shoulders and a "but a new tyrant will rise and nothing will change" But they fail to see that can not happen with a decentralized world, with no central power.

No leaders required where none are required.

Just my opinion is all.

But they fail to see that can not happen with a decentralized world, with no central power.

No cetnral power and high economic mobility for all. Currently, only the richest and corporations have borderless money, well - crypto holders too. Once there is the value there, they have to ask us permission.

Agreed.

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You should see someone about that.

That's the exact response that is expected from a narcissistic douchebag, that reinforces your self-inflicted symptoms from the causes you consciously create yourself. That's why you spend all your time on here talking to yourself and repeating the same crap over and over again. You love the sound of your own voice so much, that I wouldn't be surprised if you started uploading recordings of yourself, talking to yourself.

Have fun jerking yourself off in the mirror, while wearing those stupid sunglasses.