29 Cut to the Chase Lessons About Money You Can Use Right Away

Summary

The article provides a comprehensive overview of financial wisdom, emphasizing the importance of understanding money to enhance lifestyle and secure long-term wealth.

Abstract

The article titled "29 Cut-to-the-Chase Lessons About Money You Can Use Right Away" presents a distilled compilation of financial insights that challenge conventional wisdom and encourage readers to think critically about their monetary decisions. It highlights the nuanced performance of stock markets and the exceptional growth of Bitcoin, advocates for passion-driven work coupled with patience, and debunks the myth of a steady 2% inflation rate. The text underscores the impact of asset price inflation, the benefits of financial risk education, and the unpredictable nature of global financial markets due to unprecedented levels of debt and money creation. It criticizes the reliability of economists, stresses the importance of self-awareness in financial dealings, and points to a potential overhaul of the global financial system. The article also touches on the significance of content creation, the generational shift in attitudes towards money and possessions, and the superiority of experiences over material goods. It advises on the necessity of investing over mere saving, distinguishes between gambling and informed investing, and suggests that even small, strategic investments in assets like Bitcoin can yield significant returns. The author concludes with a call to carefully manage investment portfolios and prioritize time over wealth, akin to the fictional character Peter Pan's infinite riches.

Opinions

Stock market index funds' performance is impressive in dollar terms but less so when compared to gold or the Federal Reserve's Balance Sheet.
Bitcoin's growth is unparalleled, outperforming traditional financial assets over the past decade.
Pursuing work you love can lead to financial success, but it requires persistence beyond five years.
The concept of a steady 2% inflation rate is questioned, with emphasis on the increasing prices of assets like property, which have a greater impact on wealth.
Those owning assets benefit from the creation of new money, which inflates asset prices, such as in the S&P 500.
Financial markets may return to rationality, potentially leading to significant losses for the unprepared and greedy.
Understanding financial risk is crucial, as poor real estate investments can be particularly detrimental.
Current financial conditions are unprecedented, characterized by zero or negative interest rates and negative-yielding

A summary of my research to date. Follow me down the rabbit hole.

Do you understand how money works?

If you knew, you'd work fewer hours in your lifetime.

The time you save can be put to better use. Because time is far more important to you than money.

Let’s cut to the chase about money.

Stock market index funds have had amazing performance — if you measure them in dollars. If you measure their performance in gold or the growth of the Federal Reserve’s Balance Sheet, then a different reality emerges.

Bitcoin’s year-on-year growth makes it the best performing financial asset of the last decade, and possibly, in history. Read that again, especially if you’re a skeptic.

You can make money doing the work you love. You just have to be able to stick around for 5+ years to get above the threshold of effort, experience, and learning. Many people quit before they reach their monetization moment.

2% inflation is an illusion. Prices of everyday items going up (the Consumer Price Index or CPI) are important. But what about the prices of the things we work our entire life for, like property? Price increases on assets hurt you harder than price increases on everyday items.

Those who have the assets get richer when governments create money out of thin air. Free money flows into assets thus, raising prices (See S&P 500).

When financial markets become rational again, the music stops. Those who didn’t pay attention to where the exits are, and got greedy, get wiped out.

It pays to study financial risk. What can go wrong with investing in different types of assets? Making a bad investment in real estate can set you back years. Real estate is a big heavy Oompa Loompa that is hard to turn around quickly when you need to. Getting into an investment is easy. Getting out of an investment is the hard part.

Global financial markets are upside down. Zero-interest rates. Negative interest rates. Negative yielding debt.

The current financial times are an experiment. We’ve never been here before. We’ve never had so much debt. We’ve never created so much money out of thin air.

Economists get it wrong like clockwork. If you follow the opinion of economists, you’ll probably end up broke.

Understanding your mindset will tell you how you’re going to react financially. You’ll learn what will happen when your investments skyrocket. You will learn what happens when your investments go to zero. Study yourself.

“Today we face a new Bretton Woods ‘moment.’” Perhaps the most profound statement to be made in decades. This quote came from Kristalina Georgieva, the Managing Director of the IMF (International Monetary Fund). She’s explaining that the world needs a new system of money.

“If you want to find the secrets of the universe, think in terms of energy, frequency, and vibration,” Nikola Tesla once said. Think of money as financial energy. Think of how you treat people as the frequency. Think about what you get out of life as the vibration. Vibration, frequency, and energy combine to change your perception of reality. When it happens, you’ll never think of money in the same way again.

Ethereum came after Bitcoin. Study it to understand what Web 3.0 is, so you’re not left behind in the centralized Web 2.0 experiment.

Becoming a content creator is an excellent way to make a lot of money. Everything is content.

“The median person has lost 90% of their purchasing power” if you measure it in property prices, according to Bloomberg data.

A good night’s sleep is worth a helluva lot of money.

Money buys you family time. Family is what you really have. The family feels better than money. Your family would rather have you than have a lot of money. Go on, look at the evidence for yourself. Your family is desperate to see you even more. Make their little dream come true. They’ll say nice things at your funeral when you do.

Think about money in generational terms. Each generation has a different view of money. Older generations valued stuff. In-between generations are falling in love with minimalism and the FIRE (Financially Independent, Retire Early) movement. Younger generations are starting to see stuff as the problem.

Experiences always feel better than stuff. You don’t need to have money to have experiences. I spoke to my friend who is a new mother. She told me that now they’re down to one income, they’ve changed how they view money. They’ve traded restaurants, buying new clothes, and showing up to party’s in Audis — for walks along the beach, trips to the local playground, and time in the backyard. All of these new activities are free. Experiences can be free. It’s the people you’re with that add all the value, not money.

Saving money can’t get you out of the rat race. You have to learn to invest, says financial expert Pomp. Saving keeps you poor. Investing helps you grow your money.

There is a fine line between gambling and investing. Most people accidentally gamble. A basic financial education helps prevent you from gambling.

Doing research is the difference between smart investing and dumb investing.

Debt motivation is the worst motivation. When you think of debt, imagine the stress. Then you’ll do whatever you can to have low debt, or maybe even no debt.

Don’t buy stuff until you’ve earned enough money to pay for it. It’s the old-school way to manage your money.

Carefully invest 75% of what you earn and retire at 30 years old. Carefully invest 50% of what you make and rest after 40 years old. Carefully invest 30% of what you get and retire at 50 years old. Carefully invest less than 30% and you probably won’t ever retire.

1% of all the money you had in 2020, invested in Bitcoin, would have increased your net worth by 20%. You don’t need to invest lots of money or take huge risks to grow your money.

What is the biggest decision you need to make? It is to know the percentage of money to allocate to each type of asset in your investment portfolio. The percentages will change over your lifetime.

Having time is better than having a lot of money. That’s why Peter Pan is a billionaire richer than Elon.

This article is for informational purposes only, it should not be considered Financial or Legal Advice. Consult a financial professional before making any major financial decisions.