Investing to avoid the hole
I only progress when I am broke or in the hole. @leprechaun
Perhaps this is the way we generally work as humans, we act when we have need, essentially, when we have obligations, when we are indebted.*
I have seen this in terms of coping with stress often. Pretty much everyone believes that they are good at handling stress when not experiencing stress and when they do experience stress, they believe it is warranted because of their current conditions. Most realize that their ability to cope with conditions is based on their personal processes, but while not under stress, most assume that their processes are good, since they aren't stressed. Once indebted to stress however, most people will look to change their processes, which is made more difficult by the concurrent experience of stress - when in the hole.
This is probably the same for most people when it comes to financial considerations also, which is why people can increase their earnings, but not necessarily the amount that they save, if they save any. They extend their quality of material life, but if the earnings change, to maintain lifestyle becomes debt obligation. Once there is the stress of debt, a person will look to save money - where they probably would have been better off saving money when there was more money available, before they were in the hole.
As said, this could be in our human nature as while we can imagine the future, we aren't actually very good at planning for it, especially where there are complex and compounding factors in play, but we can improve our processes to potentially, never end up in the hole. When it comes to stress, it is not just about being able to cope under stress, it is about being able to have the processes that can firstly avoid getting into those situations (generally building knowledge and active skills), then identifying when stress is approaching (which gives a chance to adjust to mitigate impact) and lastly, to have the mental fortitude to cope under what is unavoidable conditions.
This development of process in preparation for stressful times is essentially putting "money in the bank" that can be called upon in times of need, it is personal resource growth - stacking skills.
Financially, some will do the same thing, where we put that money in the bank (in some way) rather than expand the lifestyle or, only expand a little, rather to the boundary of economic potential, instead of continually riding the edge of lifestyle maximization in an attempt to be prepared for the future. Not everyone is keen on this, but with most of the world economically indebted, perhaps more should at least start doing the prep work.
Related to this, I was commenting on curation returns, which many see as insignificant, especially for the small accounts. But, it isn't insignificant if one believes that the future price of HIVE is significantly higher, which is not outside the realms of possibility.
For example,
In the hypothetical world of 10 dollar Hive, 100 voting Hive would bring an additional 120-160 dollars a year in curation earnings. That might not be much in most places, but at the same time, that initial 100 HIVE is worth 15 dollars today and, it will earn all the way up to that 10 dollar future - this means that say, 5 years from now, it would be around 200 HIVE and earn 300 dollars a year. In some places, that is a couple months salary. At that 10 price, 1000 Hive could earn around 1500 dollars worth a year - which is in most rich countries, a week or two salary. That means that at a week salary, there is a 2% "pay rise", which at least covers the inflation rate in most places and would be considered a decent end of year bonus.
The pay rise and bonus idea is important in my opinion, as a lot of people will take on extra responsibilities at work in order to increase their salary, but do not necessarily consider other ways this could happen - for example, through a second job like stacking shelves at the local supermarket. A person who earns 50,000 a year would be able to get a 5000 increase in income through doing a shift or two a week flipping burgers - that is a 10% increase in income, that could be used for example to invest directly. Do that for a couple years and retirement age income changes significantly.
The curation return on what would be relatively insignificant amounts for many people today, might be considerable later. For example, 150 dollars buys 1000 HIVE, that with that 10 dollar price hike would return one week's salary a year for the rest of life, with potential for additional income growth. There is risk involved of course, but that same 150 dollars today buys a pair of sneakers - which is "risk-free" as one knows that the value of the sneakers will depreciate to zero. Some people have dozens of pairs of sneakers, while having no generative investment potential - but they look great in those fancy kicks.
When it comes to getting results, process matters, but we don't necessarily spend much time building our processes, while we are still wanting the results. We don't want to be stressed, we don't want to be financially indebted, we don't want to be in the hole - but when times are good, we don't do what it takes to stay out of the hole. While there are no guarantee that the development of process to avoid or mitigate future risk will pay off (ROI), it has a far better chance than heading into the hole before starting to act.
Perhaps one of the problems with preparing for the future is that not only is it far less fun for most people as it limits immediate availability, it is a constant reminder that the hole is ever-present, that life is uncertain and things can go wrong - jobs can be lost, illness strike, accidents happen - preparing for these events means acknowledging that they can happen to all of us, which is not a comfortable psychological position.
Expanding our lifestyle out to the edge of our economic availability means we do not have to question what we are going to do with the leftovers, we do not have to open ourselves up to the risk of loss through bad investment decisions, we do not have to face that what we have worked toward might amount to nothing, we do not have to make decisions for the future at all, just decide on what we are going to buy today, under the assumption that next month we will be able to make another purchase again. Chances are though, that we will end up in the financial hole at some point and perhaps part of the problem is that those that do, haven't invested into developed their coping mechanisms to deal with the financial stress either - meaning they are indebted on at least two fronts, which translates into a much deeper hole.
Investment mindset isn't just about learning to open up financially to risk, it is about preparing for loss, approaching uncertainty and building the processes needed to increase the potential for things going well and surviving when they don't. Upside gives us the feeling that we are doing well, that our processes are working, but nothing is all upside. It is possible that the largest and most important gains are made when losses are on the table - as it is from that hole that we are likely the most aware that we have to do something differently. Whether we do or don't is up to us.
Taraz [ Gen1: Hive ]
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