Building Wealth By Defining Value
The way we value people has changed a lot, and very quickly.
Not 100 years ago, the most respected people were the oldest, if only because they’d lasted the longest. But then something happened...
Living got easier. Medicine got better, work got less physically challenging, and quality of life improved significantly.
Now, rather than valuing people by age, we value them by how much money they make.
It’s not even how productive you are, although that does play a part. But even someone who’s productive all day, every day and doesn’t see a penny in profit for it is supposedly doing something wrong.
These days, if you’re not making money, your value is nil.
“Value” is a nebulous concept on any level.
For instance, even if you’re making money, what gives that money value?
The answer is a whopping nothing except that the people in power have said these bits of cheap metal and cloth are worth something. It’s necessary to keep our economy working, sure, but it’s also essentially meaningless.
Luke Burgess explained this same concept with gold a while back. As he says:
Following the Agricultural Revolution, more of the basic human conditions were met. And as people's needs became more refined, there was a need for a standard physical medium of exchange, common to all communities, that could be utilized in a broad trade market. That's where metals like gold began to step in.
It didn't happen overnight, but gold eventually became a natural option to use as a store of labor — a standard physical medium of exchange due to its rarity, portability, ability to resist corrosion, and ease at which the metal can be identified by everyone. Thus, gold became money.
Gold has a few intrinsic values: its unique color, its resistance to tarnish, and its conductivity, for example.
It’s rare, which makes it a novelty. This novelty, plus the fact that it could be used for a long time without tarnish or rust, made it “valuable” as a form of money.
Now, it’s become one way to measure the value of a person as well.
The Evils of Efficiency
I was listening to a podcast earlier today that pointed out a major downside to our constant push for efficiency: it makes it harder for people to gain any value at all.
We all want more efficiency in our lives. We want our commutes to run smoother, our devices to work quicker, and even our fellow workers to get things done without any fuss.
So we make things more efficient, easier to use, and faster than anything before.
And then when we’ve created the perfect machine, people start losing jobs.
It’s happening right now: You may have noticed all the media stories about robo-advisors replacing traditional investment bankers and brokers.
If not, you’ve surely seen the automated ordering machines replacing cashiers in fast-food restaurants. Whether they actually function well is not the point; machines are replacing people as quickly as they can, all for the sake of efficiency.
This trend has been called the Fourth Industrial Revolution, and some say it will be the biggest yet.
The other three happened when we developed steam power, electricity, and digital technologies. This one will be marked by connectivity, robotics, and even the development of artificial intelligence.
Whether or not robots actually take over all our jobs — and I believe wholeheartedly that there are just some jobs a robot will never be able to do properly — the question remains: how do we value people in this new world?
Moreover, how do you create value for yourself if the traditional “get a job, make money” route is no longer viable?
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Learn to Earn
Investing is one obvious answer. For the most part, picking the right investment can leave you building wealth without lifting a finger.
And here’s the real secret the “valuable” people don’t want you to know: anyone and everyone can build value this way.
It’s not half as complicated as they make it look. Half of the billionaires on the market today are selective about where their money goes; the other half got there through sheer dumb luck.
In reality, you don’t have to do either. You just have to make smart moves to make the big money.
A balanced portfolio can offer long-term gains no matter what kind of market volatility you’re facing.
It’s even better if that portfolio includes stocks that offer dividends. These you can either collect right away to add to your immediate value, or re-invest for more value later on.
And, of course, there’s always gold.
More than likely, the world will never stop valuing this soft, shining metal. It’s settled itself securely into the hearts and minds of human beings as something precious, something unique, and something ultimately worthy of attention.
You can buy it as bullion in the form of coins, bars, or jewelry. Physical gold offers a little more reassurance that what you’ve got is something real, something that won't suddenly lose its value overnight.
Or you can invest in stocks, usually miners of gold, or even ETFs that follow the price or agreed-upon monetary value of gold.
This may seem a little riskier, but the gains can be much bigger than simply waiting for the price of gold to rise and selling your coins online.
Remember, there are always ways to build wealth without having to work yourself to the bone.
It’s all just a matter of knowing where to look and where the real value lies.
Until next time,
Energy and Capital
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