Abundantly scarce and crediting debt

Past birth though, we do tend to get the sense that we can be active in shaping the world, though there is mounting evidence that suggests that we might have even less effect, as genetics plays a very strong role in influencing outcomes. Then there is the question of free will and whether we are free to make our decisions at all.

I was thinking about this a little this morning as I looked over my crypto holdings and how meager looking they appear in comparison to the heady days of 2017/18 when the markets were up significantly. It is quite a fall considering on token count, I hold a fair bit more now than then, but the total value is a quarter of what it was. But at the end of the day, it is what it is and if that run comes, it should be worth something more than what it was back then. Will it be worth enough?

The hourly "salary" has sucked enormously if looking at it from that perspective, but I don't think that is the way to look at it. Yes, there are the social and personal values and benefits of writing and interacting to be considered, but from a purely financial approach, investments have to consider the future value of what is evaluated - in this case, the various tokens. The work put in is a necessary requirement, the means to some kind of outcome in the same way that a service business has to create supply chains, develop products and find a market before they are able to turn any kind of revenue.

This all takes time and therefore, patience, work ethic and the resources and capabilities to be able to perform and survive while the time is being taken. The hardest part isn't the time, it is all the other allowances that need to be made to be able to have that time for value to build. Some people are far luckier than others in this regard, for example, people who inherit the space to be able to invest themselves and these allowances compound over time.

For example, a person who pays their way through university, pays rent and covers their living expenses by working a low salary job, is likely to be at an economic disadvantage to someone who is able to have their education and living during that time sponsored by their parents. Like my daughter, no one chooses their parents, the local economic conditions or how they are raised - yet, it will have a profound effect on the outcomes of their life, for the entirety of their life.

There are pros and cons to both life circumstances - I was the first kind of person, many of my friends the second. There seems to be a difference in attitude surrounding financial risk-taking, which I assume is down to a variation in mindset, likely that I am approaching from a scarcity position, and they, while not quite abundance, feel they have a safety net.

Last night I was thinking about how often I have felt that there is any kind of safety net to catch me at a fall and I was drawing blanks. My family tends to live in a more isolated ecosystem where we do not rely on each other and there is definitely no financial inheritance to speak of that would have given me the sense that I could take a few risks and be okay in failure. This has meant making calculated decisions that have erred on the side of caution far more than exposed myself to even slight risk.

The problem of the non-risk-taker is that the world is designed to extract wealth from anyone who doesn't generate more wealth with their resources. There are many mechanisms for this to occur, inflation being one, the continual drive for consumer spending at any cost another. Risk exposure gives the potential for loss, but it also gives the possibility to beat the rising living cost curve, which means if there is the disposable income available to risk, one is able to beat the curve without threatening living standards.

However, this means that for someone who doesn't have that disposable income to risk, the generation is going to have to come from a resource where the the opportunity comes at the cost of losing some kind of economic quality of life position, making the impact far heavier and therefore, the barrier to taking the risk much higher. Having a scarcity mindset doesn't just make someone more likely to save in what is a losing battle against inflation, it also makes those savings less available for wealth generation due to the fear of loss, the fear of losing the work that it took to gather the savings and, all that was gone without during that time.

Fear of losing the effort is a big hurdle in my opinion, as it is soul crushing to spend time and effort trying to build, only to have it come to much less than expected. Where previously the work was done and the wealth collected, with the the problem being an unwillingness to use the wealth to generate additional value - I think that we are entering a stage where people are taking the process a step back and many are unwilling to do the work at all, yet still have designs on satisfying their consumer desires.

It could be that we all have a scarcity mindset of some degree, it is just how it presents that is the issue. In the past, the first post war generations collected money that they felt they could use to collect things, but they didn't collect many things. The newest generations are happy collecting things, but are less interested in building the skills and resources to keep generating value -which is part of the reason that the debt cycle keeps worsening - as we are living beyond our means, which is spending more than we own - but there is always a line of credit available to us.

It is a funny play with words in my opinion, as there are two sides to my bank card - the "debit" and the "credit" accounts. Credit means that the bank has "faith" that I will pay it back - Debt means that the bank has an obligation to pay the bill for me - as I have credited them.

I think that this is worth thinking about as when we as consumers use the line of credit open to us, we almost invariably use it to buy depreciating items, but the line of credit we open to the bank by depositing our funds in them, are invariably spent on value generating assets and mechanisms, including them using our funds to open multiple lines of credit to their customers and attract interest earnings on the debt accrued. Essentially, we are funding the debt cycle in both directions.

What I have noted for the most part is that when we use credit cards, we usually buy things that are outside of our normal reach, luxury of some kind. What is interesting to note is that if I told a friend that I put 1000€ on a credit card for a holiday, they would understand it completely. Yet, if I said to the same friend that I put 1000€ on a credit card to buy Bitcoin, they would think me absolutely insane. It is a interesting conflict as people seem to emotionally treat credit as disposable income, while it is anything but, as there is a cost incurred to take the debt and then, this expensive money is happily spent on something that likely has no chance of a positive ROI. I don't recommend using credit cards to invest with - but definitely don't use them to consume valueless with either.

Our emotions play a very big role in how we understand money and the decisions we make and I believe that a lot of how we feel about what is otherwise non-intuitive, is developed in those formative years and the continued conditions of our lives. What this means is that while we can't choose our parents or change many of the circumstances in which we live, perhaps a change in our attitude and emotional response to the influences on our life by changing the narrative is enough to kickstart us along a new path in life.

We may never find the mental position of abundance, but perhaps we can escape some of the negativity of scarcity and make something worthwhile in the process.

Taraz [ Gen1: Hive ]

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