Understanding 'money'?

Jain Anderson wrote:Moving into use is electronic 'money' (electrical accounting really). The convenience is even less burdensome than carrying a wallet with cash and change. Its also easier to 'exchange' – world wide! - by simply providing account numbers. Unfortunately, that account is subject to the whims of electricity as well as surveillance by 'authority' who oversees, approves and can REMOVE parts or all of the account without the account holder's permission.  

So is the 'burden' of having and HOLDING ones assets personally greater than the 'convenience' of electronic accounting? Only each person, or participants in an exchange, can decide.

I wholeheartedly disagree.

When you use cash there is an exchange taking place that is not easy to see, but always happens. To get something, I have to give up something! That is immediate feedback to our brain, and we have a recognition of what happened. It is Negative, Immediate and Certain. That is we immediately see we have less money, and there is no question, we no longer have what we did because we chose to spend it.

With Debit cards, there is less of acknowledgement of that. We pass them our debit card, and they pass it back, and there is a vague understanding that we have less money than what we had, but how much? When will it go through? Will our paycheck be deposited before we have no cash? So that is Negative, not so Immediate, and Uncertain.

With Credit Cards it is even worse. We hand them a credit card, and money gets taken off, but its debt, so we can keep right on using it. There is no physical loss for us, its just accrued debt...no big deal, we can always pay it off later...so we buy more stuff because there is nothing negative about the experience, it is in the future, and what the hey, we can always pay it back whenever.

One of the main reasons I use cash is because of this reason. Bankers call this "having skin in the game". It is my money, and I am giving it up, and I immediately know it. There is incredible power in knowing that.

There is nothing wrong with knowing human faults, and devising ways to circumvent them within yourself.

Travis Johnson wrote:
With Debit cards, there is less of acknowledgement of that. We pass them our debit card, and they pass it back, and there is a vague understanding that we have less money than what we had, but how much? When will it go through? Will our paycheck be deposited before we have no cash? So that is Negative, not so Immediate, and Uncertain.

With Credit Cards it is even worse. We hand them a credit card, and money gets taken off, but its debt, so we can keep right on using it. There is no physical loss for us, its just accrued debt...no big deal, we can always pay it off later...so we buy more stuff because there is nothing negative about the experience, it is in the future, and what the hey, we can always pay it back whenever.

One of the main reasons I use cash is because of this reason. Bankers call this "having skin in the game". It is my money, and I am giving it up, and I immediately know it. There is incredible power in knowing that.

There is nothing wrong with knowing human faults, and devising ways to circumvent them within yourself.

And that my friend is exactly why casinos use chips rather than money.  It makes handing it over a game, rather than losing money.  I read a really great book once that explained the amount of thought that went into using chips rather than cash in casinos, and make no mistake, the people that came up with the idea understood the psychology behind it very well.  It was a fascinating read, but the name escapes me right now.

Trace Oswald wrote:And that my friend is exactly why casinos use chips rather than money.  It makes handing it over a game, rather than losing money.  I read a really great book once that explained the amount of thought that went into using chips rather than cash in casinos, and make no mistake, the people that came up with the idea understood the psychology behind it very well.  It was a fascinating read, but the name escapes me right now.

They say one of the most researched areas of our lives is the modern grocery store. They situate everything for the most advantageous profit for the store, and not the consumer.

Sadly, or not so sadly, I am no longer allowed in our local grocery store chain because I called them out on a deceptive practice that resulted in me losing $2.80. Apparently their CEO was not inclined to take my suggestion.

"Have your CEO keep my $2.80 cents. If he bends over, I am sure he can figure out where I think he should put it. In that way he can make change the next time he sneezes. I hope it is in pennies."

Jain

>fiat... by decree

I don't think that's on target exactly. Money is a medium of exchange that operates by (and _must_ have) extremely widespread, almost unanimous, common agreement. I think this link "Stone Money" may explain it far better than I could. It is an invisible tool we created that works miracles; there is nothing extant or even imagined which can do what it does.

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&cad=rja&uact=8&ved=2ahUKEwj7xbnhytDiAhUB3lQKHbaBBP8QFjAAegQIAxAB&url=https%3A%2F%2Fwww.npr.org%2Fsections%2Fmoney%2F2011%2F02%2F15%2F131934618%2Fthe-island-of-stone-money&usg=AOvVaw38kHRMbGYR1Vedq5hZRL0M

Although it may be managed by a very small group of people, it depends entirely on the trust and confidence of all, and the quick, easy interaction between it makes possible between all parties is extremely valuable to all. Which is why revelations of corruption and incompetence in the financial industry and extremely disruptive behavior from out top politicians can become so dangerous to this society. Which depends on the existence of "good" (dependable) money.



Regards,
Rufus

Back in the 1800's in Maine, wooden shingles could legally be exchanged as currency.

There were also wooden nickels. They had a saying, not to take wooden nickels. But now they are rare enough that I will trade you a nice metal one for every original wooden one you can come up with.

Jain Anderson wrote:
There's a saying that goes like this - in order to have a change you must make a change. I can't help but wonder if the 'financial poverty' they find themselves in is debt based or simply reflects choices that didn't work well for them? Certainly there circumstances of illness, physical incapability and plain rotten luck!  

There is also the circumstance of not understanding how it works. Not everyone is educated in the ways of money -- some, for example, are unaware that money can be saved; they think spending it is the only thing that can be done with it, as if it is perishable.

What gets me is the ones who dare to step out into the entrepreneurial world, only to step right into a trap. There are scams that market themselves as "home based business opportunities;" they have a legitimate product, marketing materials, a business model... and in order to access all this, you have to pay a fee. Then they hit you up for ever higher fees for "upgrades." I have heard of people spending thousands on these supposed "business opportunities," only to end up making nothing, because it was a scam from the start. And why do they spend so much? Because they are desperate -- and because they don't understand entrepreneurship. One such scheme offered a higher tier membership where you "double" your commission, or a still higher one where you "triple" it. Now, if you're like me, and you can do basic arithmetic, you would make note of those as something to keep in mind for later, when you start seeing returns. After all, we know that 0 x 2 = 0, and 0 x 3 = 0, so as long as my returns are 0, there is no good reason to pay to double or triple them. Not so, a lot of the victims of this scam. They "upgraded" right away, and also bought every other supposed marketing tool offered. In their financial desperation, they wanted to rake in big returns right away; instead, they were out thousands of dollars. They didn't understand that entrepreneurship doesn't work that way. Bill Gates did not immediately build Microsoft; he started out building a few computers at a time, and slowly, gradually, grew his operation larger by investing his returns back into it.

One more thing: if any alleged opportunity makes a point of explaining to you exactly how it isn't a pyramid scheme -- it's a pyramid scheme!

I've had many people tell me that they are in their own business, but then I find out that they'd like to sign me up, so it's a multi-level. So they are really a cog in someone else's wheel.

Invariably, they have fallen for projections. I know that, because I always tell them that if they can show me that they are making $1,000 a month, I'm interested. Although they expect to get there soon, most are in the hole or earning some minor amount. Most are unwilling to divulge the amount of money they brought in last month. A huge red flag for me.

Another red flag is if we've just met and they tell me they are looking for partners. If I'm ever approached about a serious partnership, I assumed it would have something to do with demolition or house moving or some other field where I have experience. A random offer to become a partner, in a business I know nothing about, just doesn't sound like a way to make money. It sounds like a way to give someone investment money that will never come back.

Dale, you are spot on regarding that...

I have yet to see many partnerships even work...even real ones.

Typically what happens is, at some point one partner feels they are doing more than the other, whether it is with physical work or money, and then problems arise. It can even be with how they spend their money, and so they need more money and see their partner as taking more than what they should, when really it is just greed, or a personal financial crisis.

The point is, if a person cannot afford to go into the business for themselves, and that they need a partner to do so...they should just plain not get into the business.

One relative constantly comes up with business ideas that require hundreds of thousands, or even millions of dollars to get going.

So I remind him that I got into the business of cutting trees for under $1,000 and anyone can get into the business of recycling buildings, for less than $500 worth of tools. You'd still have to have some clue about what to do, but you could drop me off in any city on this planet, and I could demolish something large or small, with $500 worth of tools. Almost all of it with less than $100 worth of tools.

One thing I do whenever work gets slack, is run an ad for demolishing chimneys. Anywhere where houses are being renovated, there will be a need for this. I've found that I can charge $400 per day. You'll need a little hammer, a big hammer and a good quality mask. That's it, you could take the bus to the job. They have a ladder. Roughly $100 investment, and you're in a business that can easily support some type of lifestyle.

So, I find it amazing that some people can't think of how they could even survive financially, unless there is some major investment poured in at the beginning.