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The money I saved as a child would buy one picogram of gold today

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Re: The money I saved as a child would buy one picogram of gold today

#301

Post by maximus-decimus »

Taek wrote: post #12
Certhas wrote: post #8

Earlier quoted context omitted.

As a childhood lesson you don't need crazy inflation for this to hold true though. Anything that takes more than a few of months to save up to just doesn't make sense as a kid. Your disposable income goes up by factors of ten every few years. You have 2$ to spend at 5, 20$ at 10, 200$ at 15. Then it slows down but you might still get to 2000$ at 25. Saving as a kid really never seemed worth it to me.

It's about the lesson more than anything else. I really want my kids to learn how to save and be well practiced at it, even though the utility function doesn't make a ton of sense.

Did they really learn the right lesson if they come out of it with the conclusion saving is useless?

Re: The money I saved as a child would buy one picogram of gold today

#302

Post by maximus-decimus »

innagadadavida wrote: post #5

Are there any kids book that explain these money concepts to elementary school kids? I feel one the big failings of the school system is that these are not taught early on and instead a lot of time is spent teaching things that kids will never use in their lives.

You need to understand exponentials to really get it. Where I live, they only teach it in advanced math classes in 11th grade, so elementary school seems ambitious.

Re: The money I saved as a child would buy one picogram of gold today

#303

Post by UncleMeat »

anonporridge wrote: post #180
UncleMeat wrote: post #166

Earlier quoted context omitted.

The mathematical certainty of the issuance of BTC won't really mean much if nobody wants to trade it for goods. BTC's volatility is not just volatility w.r.t. USD.

The value of anything as a medium of exchange and store of value always depends entirely on whether or not a critical mass of people want to use it as such. Once you establish that a thing satisfies all the properties of money, or close enough, then the only question is network effect. Even if minor theoretical improvements could be made, it has to be 10-100x better to overcome runaway network effect. Sea shells and…

"BTC will eventually crush dollars" and "BTC is not volatile because 1BTC = 1BTC" are very different claims. Even a bitcoin maximalist should recognize that the value of BTC when trading for good and services has swung dramatically over time. Maybe that will happen less over time but the volatility of BTC w.r.t. USD is an important thing to consider and discuss when talking about its use as currency.

Re: The money I saved as a child would buy one picogram of gold today

#304

Post by pixl97 »

capableweb wrote: post #149
epgui wrote: post #33

Earlier quoted context omitted.

I don’t understand why so many people “save money” but then just keep cash under a mattress or in a savings or checking account. If you want to win at life, you “save money” by purchasing non-cash assets like stocks.

> If you want to win at life, you “save money” by purchasing non-cash assets like stocks. "Win at life" == "save money" == "owning stocks" ??? Winning at life is about everything that is not about money. Winning at life is being able to be happy no matter how much or how little money you have. Sure, up until one point, more money can help you get happier, but if you don't have the baseline happiness, you will never b…

If you think life is hard with money, try it without.

Re: The money I saved as a child would buy one picogram of gold today

#305

Post by anonporridge »

shadowgovt wrote: post #297
anonporridge wrote: post #180

Earlier quoted context omitted.

The value of anything as a medium of exchange and store of value always depends entirely on whether or not a critical mass of people want to use it as such. Once you establish that a thing satisfies all the properties of money, or close enough, then the only question is network effect. Even if minor theoretical improvements could be made, it has to be 10-100x better to overcome runaway network effect. Sea shells and…

> an analog foundation defended by guns and tight cliques of trusted human gangs Question: when one exchanges Bitcoin for a real-world good or service, what enforces the good or service be provided? And on the flip-side of that question: if one provides a good or service before Bitcoin payment clears, what guarantees payment?

Look to dark net markets for answers. They have to solve this problem in one of the most adversarial and dangerous environments possible, with zero legal recourses to mediate disputes.

The key thing they do is include a third party in the transaction, usually the market itself, who mediates disputes along with a reputation system for sellers. They mostly do it in a centralized way, where the market holds your payment until the buyer confirms or the seller can prove they held up their end. This is a problem because the market can and often does exit scam, so some do this in a decentralized way with 2 of 3 multisig transactions, where if the buyer and seller have no dispute, they can release the money, but if they do, a third party arbitrator can come in and mediate.

Also, higher layer payment protocols like the lightning network effectively clear instantly and trustlessly, with no need to wait for any block to be mined, and are great for minor value transactions.

Finally, replace bitcoin with gold in your question, and ask why that worked for thousands of years.

Re: The money I saved as a child would buy one picogram of gold today

#306

Post by anonporridge »

UncleMeat wrote: post #303
anonporridge wrote: post #180

Earlier quoted context omitted.

The value of anything as a medium of exchange and store of value always depends entirely on whether or not a critical mass of people want to use it as such. Once you establish that a thing satisfies all the properties of money, or close enough, then the only question is network effect. Even if minor theoretical improvements could be made, it has to be 10-100x better to overcome runaway network effect. Sea shells and…

"BTC will eventually crush dollars" and "BTC is not volatile because 1BTC = 1BTC" are very different claims. Even a bitcoin maximalist should recognize that the value of BTC when trading for good and services has swung dramatically over time. Maybe that will happen less over time but the volatility of BTC w.r.t. USD is an important thing to consider and discuss when talking about its use as currency.

Of course. That's why at the moment I only use it for very long term savings and speculation on the future state of civilization.

You need to hold a bit of your local fiat because that's still the most important thing to have for immediate term purchases. Have enough of that and a fiat based income steam such that you don't have to worry about the short term fluctuations of the market price.

Re: The money I saved as a child would buy one picogram of gold today

#307

Post by moonchrome »

NoLinkToMe wrote: post #173
moonchrome wrote: post #94

Earlier quoted context omitted.

>Saving as a kid really never seemed worth it to me. Also saving during 20s for this reason - if you're just starting out in a career and expecting your income to rise rapidly the money you save on interest is going to be irrelevant.

It's pretty universal as a kid, as someone in their 20s? Much less so. Sure, if you're getting a degree in CS and will land a 150k a year job soon, saving anything significant from your $14 an hour parttime job as a student makes little sense. But I was making $50k in my late twenties and was not going to jump in income significantly, I saved quite a bit and was able to buy a house and later stocks which have appreci…

That's great - but did this saving involve sacrificing on experiences you've had ? Setting yourself up for retirement at age 20 sounds like a miserly life.

It's generalizing of course, but I've noticed this in friends I grew up with. They had avoid debt mentality, saved a bunch of money compared to their income, etc. The money they saved up didn't really enable anything significant, and they had to miss out on a bunch of stuff to make the budget.

Now we're in our mid 30s they have a bit of money stashed up, still single, still trying to figure out what they want in life. I've paid off the debt I've racked up in 20s, make considerably more than them (in no small part thanks to the more risk taking behavior) and the experiences I've had helped me move forward in life.

You only get to go through youth once, even if you have millions in 40s-50s it won't make you young again. You'll be making money your entire life.

Re: The money I saved as a child would buy one picogram of gold today

#308

Post by shadowgovt »

anonporridge wrote: post #305
shadowgovt wrote: post #297

Earlier quoted context omitted.

> an analog foundation defended by guns and tight cliques of trusted human gangs Question: when one exchanges Bitcoin for a real-world good or service, what enforces the good or service be provided? And on the flip-side of that question: if one provides a good or service before Bitcoin payment clears, what guarantees payment?

Look to dark net markets for answers. They have to solve this problem in one of the most adversarial and dangerous environments possible, with zero legal recourses to mediate disputes. The key thing they do is include a third party in the transaction, usually the market itself, who mediates disputes along with a reputation system for sellers. They mostly do it in a centralized way, where the market holds your payment…

> replace bitcoin with gold in your question, and ask why that worked for thousands of years

Guns (well, swords and truncheons before that) and tight cliques of trusted human gangs, mostly. And I think I'd argue the dark net markets work the same way: holding reputation as currency, they provide an incentive for the users not to cheat, but if they cheat, there's no recourse except "Well, guess I'd better find another market." And that's if we discount the few but notable instances of them using actual violence to enforce their norms... Ulbricht of Silk Road got arrested for attempting to put an actual bounty on someone's head.

The blockchain system provides a simple way to very publicly and reliably declare the exchange of meaningful numbers between two pseudonymous identities. Everything else about the market that blockchain exists in is the same grabasstical process that humans have used for exchange of resources throughout all of history.

Re: The money I saved as a child would buy one picogram of gold today

#309

Post by logifail »

kache_ wrote: post #298
kbenson wrote: post #284

Earlier quoted context omitted.

Ah, like slices of slices of mortgages. :/

There are degrees to it. Slices of all mortgages are less risky than a single mortgage. Slices of all tech stocks are less risky than individual tech stocks. Slices of all American stocks is less risky than slices of one industry in America. And slices of all equities trades across the world is less risky than slices of America Bet on humanity :)

> Slices of all mortgages are less risky than a single mortgage

If you've not watched The Big Short (2015)[0], it's a really excellent film.

[0] https://www.imdb.com/title/tt1596363/

Re: The money I saved as a child would buy one picogram of gold today

#310

Post by CamelCaseName »

01100011 wrote: post #256
CamelCaseName wrote: post #207

Earlier quoted context omitted.

Where would you suggest? I recently purchased a subscription to The Economist and have been listening to the top stories on a daily basis. That said, it seems to be more politics than economics.

Where would I suggest for you to get a real education in economics or where would I suggest you go to become another armchair economist like me? :) Personally I'd stick with Boglehead type advice and focus on your career(assuming you're in tech). My day job is the only thing that's ever consistently generated wealth for me. I am in a special situation having to make up for lost time being out of the market and being…

Haha, well, my undergrad was actually Economics and I assure you I am still an armchair economist!

Reading the annual notes / investment updates by certain more prolific managers can be useful, but they all have their own bias and honestly its not particularly insightful from an economics perspectives. (More finance than economics)

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