I was chatting with some of the guys from work today and changed the name of our Teams group to "Crypto Zillionaires" as a bit of a joke. It has been a lot more interesting at work over the last few months however though, as while we have normally had good conversations about all kinds of things, these guys are starting to see and understand the connections I have been talking to them about for a couple years already.
In some ways, it is kind of like lifting the veil on reality, to discover that reality was never what it claimed to be. Although, this might just be another veil below and like an onion, we aren't at the truth yet.
They asked if I have any Ethereum and my go to answer is "a bit" which they think means a lot but, it really does just mean a bit. I bought some back in the day to purchase a couple assets, including Gods unchained cards and a couple tokens with Eth only pairings. One of those tokens is now worth 80 dollars - and I had bought 0.5 of Eth worth - which makes it a 90% loss on todays values.
One of the guys was asking if I had been reading any of the WallStreetBets posts and the craziness of the #lossporn that is going on, where people are posting pictures of their values plummeting. As I said to him, I don't get involved in the drama and hype of these things, as I find it affects my decision-making too heavily and since there is an emphasis on the negative, it makes me more risk averse.
Caution is of course good, but I have spent so much of my life being cautious, that I had failed to build anything of value for the future. It is an interesting mental conflict, as people treat investing cautiously as it comes with risk, with spending as the cautious move, as it is the better to have the bird in the hand, than two in the bush. the problem is of course, that the risk aversion of investing long, means risk exposure in the future if there are no future assets held.
For example, a house which might not be a good yield investment, can work as a store of value that can be used in various ways later, for example, as collateral on the purchase of another asset or a lump sum return sold when required. We were talking about the differences in house pricing in Finland and one was saying that he was reading an article about a person who was struggling to rent in Helsinki, but wouldn't move out of the city as they love the lifestyle. This in my opinion is a very risky approach to life, as it will likely eventuate in the person being completely reliant on others, whether it be the taxpayer-funded government, or friends and family.
Owning a house may be a low-yield, no-yield or negative-yield investment, but at retirement with 15-20 years left to live, it will go a long way to provide a higher quality of financial life. Yes, investing in appreciating assets will likely out-return, but that is a risk also. Ideally, a person could take a diversified approach, but many don't. Also, many overextend one way or another, where they have no low-risk stores like housing that will likely maintain value, or, they spend too much on housing, thinking it is valuable. We all need somewhere to live, but what is the value of Helsinki living?
How much is experience worth, when the experience is perhaps having a few more gigs within walking distance, a few more shopping opportunities, a few more people and a big city attitude? I am not against this kind of decision, but do people really evaluate what the cost is, or are they aught up in the hype? I have plenty of friends in Helsinki and they seem to believe that it is far better than where I am, in a city a fifth the size, but do they realize that the cost of their current lifestyle might make it impossible for them to ever build an asset portfolio?
Again, I think that people do not evaluate risk well, especially future risks. Instead, we are loss averse in the moment and take the "everything will be okay" in the future approach, without considering what it takes for everything to actually be okay. Is it better to live hand to mouth in Helsinki, or live well in the suburbs, whilst being able to put resources away to extend the possibility to maintain lifestyle?
While a lot of people think that the largest change in our lives are when we are young, it is actually when we are retiring, as it is a massive change from moving from career to nothing, especially considering that our habits have become accustomed to conditions for decades. If on top of this, our retirement will trigger a move to a pension that no longer can maintain our accustomed lifestyle, this makes the change even greater and unlikely for the better. It is far easier to extend consumption than to tighten belts.
But, lifestyle itself is heavily influenced by culture and our surroundings, which is why I try to stay away from the hype and drama of social media, as it drives an unnatural view of the world. Even if we have the understanding that Instagram "influencers" on tropical beaches in bikinis are being bankrolled by their working-class parents, it still influences our own desires - it sill nudges us to make emotional decisions that are likely to favor the short view, over the long.
What is interesting in this, is that the people who are spending now, are bankrolling in the invested, favoring the heavily invested who actually have very little need for more money themselves. Convincing people to buy now and not worry about future resources, is a narrative driven by marketing, not people actually thinking about their own well-being or lifestyle at all, they are being controlled.
I heavily limit my exposure to marketing, because I know that I am susceptible to the messaging, even though I have a pretty good understanding of the tricks played, as I minored in marketing at university and am interested in how incentives can manipulate human behavior. 2lifestyle" is definitely one of those manipulators in the messaging, where people are encouraged to live a better life, even if they have to go into debt or forego opportunity to do so. While it drives sales, the reduction in future lifestyle can be extreme, when there is no preparation for maintenance.
One of the things that people have to remember is that no company cares about our well-being, unless it drives their profits. Most companies make profits at the expense of our well-being, so it is probably a good rule of thumb to trust none of them. However, the other thing to remember is that the markets only care about participants and once a person can no longer influence the markets, they are forgotten. The building industry doesn't build assisted living housing for the elderly because they care about their well being, they do it because it makes them money - improved living in old age is a lucky side effect. But, in order to get into one of those apartments, means having the resources to do so, as the normal pension won't be enough.
Going back to the drama and hype of investing itself, since I know I am susceptible to it, I limit my exposure in order to stay out of the FUD and FOMO the best I can. Yes, this can cost me a fair bit in yield at times, but it also means that my approach is a little more balanced, rather than emotional swings about whether I should buy, sell or hold.
One of the guys is having "crypto dreams" where he wakes up in the middle of the night due to fears of Bitcoin dropping, or the excitement of a pump. This is natural, as he has surrounded himself with charts and articles in the last few months, even though it might not be healthy. He will likely find a balance though, as he will recognize that the emotional swings are taking a negative toll on his daily state. But, living for lifestyle seems to be more upside, as one can always divert attention away from the negative, but this too will balance, albeit, later in life where there is likely to be a slow decline, that may drop off a cliff at retirement.
At that point, does #lossporn become the norm, old people complaining to each other about their illnesses, failing body, and lack of government pension? They would also mention their ungrateful kids, but with having kids on the decline due to lifestyle decisions, they probably won't have any to complain about them not visiting.
I don't know what is a good way to live for everyone on earth, but I do see that living financially in the moment without considering the future, is much like taking a lifestyle loan now, having to pay it back at some point, with no clear way of having the resources at that time to do so. It is very risky taking the position of lifestyle now, reliant on others later as when that time comes, the conditions are likely to have changed a lot and like the past, are probably not going to favor the unprepared and uninvested.
People seem more and more willing to throw caution to the wind, thinking that what they are buying has value that they can use later. I know people who have taken loans to go on holidays for the experience, but it seems that on return, the experience becomes one of negotiating repayments and the only value is their memory of the past escape, one that put a veil over reality and made it look pretty for a week or two.
We all make our decisions, even when they are influenced by others. I think that the best thing a person can do, is surround themselves with the informational raw materials that support them to build the kind of life they want, not the finished products that can be bought on credit.
Taraz
[ Gen1: Hive ]
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A welfare state promotes a lot of irresponsibility. Either underinvesting, because "the public will take care of me" or going all-in on moonshots for the same reason.
I've kind of come full circle on money. I never really cared for it, then when I had kids and my time horizon started stretching, I started taking it more seriously, which is when I discovered bitcoin.
Now I only care for money because it lets me buy crypto.
This one is a hard wake up call, because being cautious seems to always pay off. It does for a very long time and I have always been even proud of my caution. It took a pandemic, a crumbling economy, huge uncertainty, and indeed having cautiously generated some savings over the years to realize that savings are not safe. That I sit on fake money and don't really know on what to hold.
Starting on investing is a difficult thing, a mental conflict as you put it. To wonder how not to loose now on an ill bet, yet your loss if guaranteed if you do nothing. I struggle of finding information, fighting against the scams, the stock market scam, the crypto scam, the fiat money scam. The more I see, the more they all sum up into numbers on my screen.
Maybe I'm too pessimistic, yet even that feels utopic. It would be a great trade to drive a company's profit in exchange of my well-being. Yet the trades are on the illusion of well-being. The insurance is a paper trade for "peace of mind", the holidays are a escape, the loans for homes, where the buyer takes all the risk for a home that does not always act as an asset, keep making life more expensive.
It is a challenge at the moment, as there are bubbles everywhere and what might not be a bubble (crypto) is far from certain whether it will survive. However, I think that with increasing risk in traditional areas, crypto is getting more certain of success as people look to diversify, even into the "crazy"
I think the only way forward is to invest into ownership. Yes, real estate and the like qualifies, but I think people should start small - discover if they own their account on social media first and if not, find a place they can. two billion Facebook users do that, the world changes dramatically as 2 billion people start to learn.
You should be pessimistic, as this is definitely not the norm. We have set up a world where the good should act for free, while the harmful can act for profit. The big earners in the world should never be those who cause us, or our conditions harm - especially once identified and there are other options.
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I think lifestyle has replaced living over the course of the last 25 years. People no longer look at what it takes to live, to have a life, they think having a lifestyle is more important than the everyday living experience.
It is kind of like a gambler, who only remembers the wins. People are working for highlights, perhaps in order to post them to social media or compete with those who do - while the rest of their life keeps degrading.
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With the advent of services like AirBnB and VRBO, why not keep the house in the city and rent it out. Then move to the country and whenever you want to go to the city just don't book any guests for that period of time. If I had a ton of money that is what I would eventually do. I love living in the country, so I wouldn't trade that, but it would be cool to have a small home in Nashville, close to Broadway and all of the other attractions. If Helsinki is a real draw for a lot of people, it could work.
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It is very expensive in Helsinki. A colleague just bought a 40 m2 (430 ft) apartment that required full renovation, ground floor and a long walk from the center of the city - for the same price I have a house and owned land. The thing is, at some point he is likely to meet a nice lady and then, it is too small for them, especially if they decide to have a kid. Lifestyle.
With a lot of money, it doesn't matter, but the people who are living there for lifestyle are often young people who don't realize the future cost. When I say "young" - I mean under 40 - which isn't young at all.
Younger than me!
My brother was here this weekend. We had a good time doing nothing special besides talking and being together. Failing body is evident. Old men need to pee often. We did some traveling around and worked hard at getting our sequences synched. :) Oh, and his youngest, who followed his example of getting his degree in his early 30s started work Monday after receiving said degree. No complaint.
It is just exactly time for him to make his 'retirement' decision for the year. February is the month for annual bonuses and the pension reset. After talking to him about it a lot this weekend I'd guess it's probably 60-40 that he'll work another year. At this point money has very little to do with his decision...
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My body failed me at 16 and has never recovered, so I am not really looking for ward to the quickening of the age decline on top.
Do you get the feeling that money should always have little to do with the decision to retire? I am hoping to "retire" from necessary work one day and extend the work that I love doing until I die doing it. Dreams :)
Hope you have made it through the worst of it mate...
yeah, money should have very little to do with it.
His is even more so. He is completely vested in his penison plan so all he'll get added annually from here on is the interest. So there is no particular monetary reason to stay longer.
The CEO would like to work out an arrangement where he just works half time...
We were actually probably comedic with our pee schedules. In a certain old folks sort of way.....
This is why having something like Hive on hand at retirement is such a great thing. When you have time to post more and better stuff, you can at least partially make up the shortfall.
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At this point, I at least plan on this being a part of my retirement plan - each day building something together that I think might help many, many more in the future.
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This remark makes me shiver all the way down my spine, looking at how governments are spending money hand over fist with this pandemic right now, how will people cope when taxes are placed everywhere on everything to clear the debt they make right now?
Never open cards in clothing/furniture/accessory stores, save and pay when you can afford the item. Stay away from debt except when it is a home or means of transport to/from place of employment.
Each has to make their own life decisions, nice thought provoking content once again, save and try make money work for you, don't lose you head over it, it's not worth it!
@tipu curate
Think about all the things that would have got funded, but won't now. Will there be a retraction of exploration of cures, new energy solutions - it looks like the status quo is set to be extended.
I sometimes get trapped in my scarcity mindset, but I am slowly breaking the cycle.
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Upvoted 👌 (Mana: 36/48) Liquid rewards.
It is sad when people let themselves feel helpless. I love a line from a war movie "We Were Soldiers" in which the Colonel is training officers and tells them, "There is always one more thing you can do." Always. We are never helpless. !BEER
I don't remember the line from the movie, but I try to kind of "meditate" in this way, when doing some tasks - just a little bit more past where I had decided to stop, one more task. Though it often takes effort to do that little extra, I tend to feel better for it. When it comes to being trapped in existence, there is always something that can be done, even if it isn't ideal.
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Well written. Despite the huge size - I read it.
I agree that emotional calmness costs at least no less than money :)
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My content is a bit of an investment, but perhaps it helps calm the mind sometimes too :)
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STOPCheck out the last post from @hivebuzz:
I don't think life is a finished product til you die XD
Sometimes it looks to me like the thinking part doesn't actually happen. Or it's lost in the YOLO, I'm not sure.
Are we getting old in our old age thinking like this? XD
Our aversity towards loss has been proven scientifically for years. It is hard to go against our biological wiring, but it is not impossible. I think that crypto is a great thing. I also think that thinking all the time about the possibilities of it going high or low can be excruciating for the mental health. A balanced mindset is always the best thing to have long term.
Thanks for the post, it really spoke to me. I really enjoyed the part where you described that you live in a city 5th the size of Helsinki, because just half a year ago I moved out of one of the biggest cities in my country and decided to live in a smaller one at least for a while. It costs me almost half the previous price to live here (rentals, food and all other necessities).
It's very sad for me to see how many people are actually giving it into the hype, doing everything that's against their benefit—either now or in the future. Alas, not everyone can be saved I guess.
Thanks again!