Everyday Economics For People, Introduction and Table of Contents.

“You need money to make money.” To a large extent, this is true, and many books have been written about how to make even more money when you have money already. Sadly, not everyone has money. However, what each person does have is time and a body, and they can use those to earn money, and then they will have the money they need to make money without earning it, the details of which are beyond the scope of this book.

Unfortunately, until you save money, you only have your body and your time. This book is about hastening your path to early retirement and relative luxury by being strategic with your body and your time: when you train, when you borrow, and when and how you spend in order to increase your ability to save money without changing what stuff you buy or how many hours you work.

The first section is largely about the psychology of becoming wealthy, with practical, easy-to-follow steps that will transform your finances from debt accumulation to wealth accumulation as quickly as you start following them.

The second section is largely about contextual economic factors which are larger than you, an individual. I will attempt to summarize micro and macro economics, in humanly appealing fashion. Then, I will proceed to describe ways that you, an individual with very little capital to your name, can still nonetheless take advantage of the rise and fall of prices and production to improve your standard of living and rate of becoming wealthy!

Section I: Building Wealth Through Financial Habits

Chapter 1: Credit and Interest Chapter 2: Rent and Ownership Chapter 3: Budgeting & Reducing Expenses Chapter 4: Bargain Shopping Chapter 5: Optimizing How You Allocate Your Productive Time Section I Conclusion

Section II: Taking Advantage of Factors Bigger Than Oneself

Chapter 6: Crash Course In Microeconomics Chapter 7: Crash Couse in Macroeconomics Chapter 8: Why Businesses Sometimes Sell At A Loss Chapter 9: You, The Savvy Consumer Chapter 10: You, The Savvy Producer

Section I: The Psychology of Becoming Wealthy

This section is about how you, a human with human biases and tendencies, can arrange your mental defaults to protect yourself against making financial mistakes when you are tired or stressed. If you don’t have a lot of money (yet) — and I assume that is the case if this writing caught your interest — then I also assume that you are quite often tired or stressed or both, so it is very important to protect yourself from these vulnerabilities. Even somebody with an extremely high income can potentially lose all of their money if they are not properly protecting themselves.

The bottom line is this: the modern capitalist machine has been finely tuned to maximize the amount of profit it can extract from the population. It achieves this with a variety of psychological traps and snares that take advantage of typical human weaknesses. However, it operates on such a large scale that averages are all that matter to it, which creates opportunities for you as an individual to be written off as an acceptable loss, an outlier. In order merely to avoid being drained of all your wealth, you will learn to defend against all the lines of attack that the capitalists have devised to separate you from the value of your labor. To become wealthy yourself, you will need to go on the offensive and become familiar with lines of attack that they have left vulnerable for you to exploit against them. In most cases, their “attacks” rely on mathematical sleight of hand. Once I’ve shown you how the tricks work, the magic will begin to lose its power over you, and then you will begin to command it yourself.

The advice that I give in evading these attacks is based on the understanding that humans have limited decision-making brain power each day. Computers have no problem performing computations of great complexity for every single decision they ever make. If a computer went to the grocery store, it would happily solve a convex optimization problem involving variables for each of the thousands of available products. In contrast, we mere mortals cannot carry out such calculus in our daily lives, no matter how talented we are at mathematics. Rather, we perform most of our mental calculations through a combination of shortcuts called “heuristics” and impulses.

For example, during checkout at the grocery store, a person will likely have the impulse to purchase one of the candies on display. Some people have mental heuristics that tell them, “Treat yourself; you deserve it!” and they buy the candy without thinking about finances. Other people have heuristics that say, “Get the cheapest one,” and so they indulge their impulse buying the “cheapest” of the highly-marked-up candy items available, again without thinking about finances. Other people have mental heuristics that say, “Don’t waste money on frivolous things,” and resist the impulse, yet again without thinking about finances.

Notice, none of these three has invested any thought at all into their finances, because honestly, how much can you really think about the financial ramifications of a $1 purchase? And yet, there are ramifications. Each time you indulge an impulse, it comes back stronger the next time you’re in the same situation, so that decision to treat yourself once has a bias toward becoming a habit, which could result in a few dollars a week, depending on how often you shop. A few dollars a week is a few hundred dollars a year, and a few thousand dollars over 10 years. But, none of this is likely to occur to you as you glance at the $0.59 pack of gum at the end of grocery shopping after a long day at work. You can’t think about finances all the time, so you need protective mental heuristics.

The chapters in Section I are about developing the right mental heuristics and decision-making systems to put you on the path toward automatically becoming wealthy.

Section II: Taking Advantage Of Factors Bigger Than Yourself

Contrary to popular thought in some areas of the country, it is actually impossible for a person to become wealthy all by themselves. The creation of wealth requires transactions, which inherently require at least two people. Typically, in our society, one must successfully make many transactions to survive a week. One must bundle many thousands or millions of transactions together to become wealthy. For instance, one transaction to hire somebody to perform thousands of transactions for you could generate a lot of profit per minute you spent doing it. Many such efficient transactions, each reliant on the production and demand of others, will help you to become wealthy with a relatively small number of minutes.

Due to the interdependent nature of economic function, you, an individual and your fortunes, are in large part beholden to the wider economic circumstances in which you exist. Section I focused on how you should behave as an individual, irrespective of the conditions present in the wider economy. Section II will explore how you can optimize your behaviors in the context of whatever economic conditions you are facing at a given point in time, and how you can identify and predict and adjust to those conditions.

Naturally, this section will begin with a basic description of the main forces that influence economic conditions in which we find ourselves, at the micro and macro levels. From there, it will proceed to describe at a personal level how a person is influenced by those macro conditions, and therefore the optimal ways in which a person can respond to minimize their losses within the system and maximize the surplus of their labor.

This series does not address the ways in which a person might attempt to modify the economic conditions for themselves and for others. I have, in fact, written a series on what policies I believe would improve social conditions generally, which you can find published here. I am currently exploring the realm of democratic activism, and when I have some experience and hopefully a measure of success, I will expand the series to include specific recommendations for achieving those policies at a broad social scale. However, this particular series is just about living in and reacting to the opportunities presented by the world we live in, not realizing the world we imagine could be.