Necessary Lies Intro: Money and People are Assets

A couple of months ago (while in a pandemic), I wrote a post describing how there seems to be an over-emphasis on children being taught (unfortunately in many cases, not necessarily LEARNING) about what I called the “Core Four”. The four pillars of what should be a sound and intellectual mind, become more like stilts that can, in many situations, hinder the development of young people. But there is a much larger system at play with how the function of schools has been changing recently. Let’s delve a bit deeper as to how the economics of human growth works.

Babies make terrible workers.

Babies are characterized by not being able to do anything. Not only that, but they cant sustain themselves for a long time. When one has a child, it apparent right away that babies cost money.

A lot of money.

There is a resource, though, that many people do not usually actively think about. It is usually subconsciously thought about, but the reality is that only thinking about something subconsciously is extremely limited and not very helpful. Fallacies grow rampant as the most sound argument that causes your mind the least amount of unrest becomes accepted, and then your mind can move on.

That resource, is time. It is a resource that many have cited as being the most finite. This is because one can always get more money, food, or relationships. Time is always operating forward.

There is a certain principle that exists now that humans have invented currency, and that is that having $100 today is not the same of having $100 a year from now.

At first this may be confusing. If you had a $100 bill today, and you held onto it (saving), then when you spent it a year later, it would correspond to $100 worth of goods. But there is still a cost to saving money this way. One that may be quite clear is inflation. One theory of why prices increase is that as the population and economy expands, there needs to be more money in circulation to keep things moving. This means one dollar has less power as it did a year ago, so the price of goods usually are raised as a result to compensate. There are more theories to how inflation works, but this is by far the best explanation of how it works in the modern day.

So the idea, is that there are two directions any individual can be going towards financially at anytime. They are either spending money, or they are saving money. I just painted a pretty grim picture about saving money, but I rather sneakily threw in an example of a saver who was stuffing money under their mattress (the most basic form of saving is simply not spending). Saving money also includes using that money to help someone who is spending more than what they make. This is largely seen as investing. When one invests $100 in [LARGE FACELESS CORPORATION, INC.], they do not usually do so out of the goodness of their heart, expecting nothing in return. Investors have a profit motive. The reason why people invest in businesses is because there is some sort of value being added. But this takes time.

The social contract behind this may go like this, if written as a funny dialogue.

Tweetbookstergram Tok: Please give us money for this app we mad that will make us money if we have all these features on it.

Joey McWorkerman: Hmm, I’ll give you some of that money now, and when it launches give me a share of what you make, say 1%?

Joey takes a risk here, hoping that his $1,000 investment now, eventually grows up to be something more than $1,000 in the future. The faster he gets paid back, the better. Joey wants to give a little, get a lot, while the CEO of Tweebookstergram Tok wants a lot without giving away too much. And suddenly, a market has formed where there are many ways to save your money. This lets people who want to save productively choose how they want by investing in an asset. A stock price is just a price tag for X% of the company.

People, as an asset

There are different interpretations of an asset, and it can have either a positive or negative connotation. This is usually if the investment into that asset, was a good decision or not. Is what you put in, a good trade-off for what you got out? A market price, after all, is a snapshot of the value at a specific point in time. How will that entity perform in the future? Will things get better, or worse? Can you use what happened in the past to try to predict what will happen in the future? The answer is tricky, and it’s a moving target.

It is fallible to say that simply throwing money at a bad idea will turn it into a good one. It depends on a couple of financial data points that are a bit more sophisticated than a relatively short blog post. It really boils down to if you would rather give your money to the Apple-types, or the Sears-types.

Are human beings the same way? Well, they are certainly investments, and there are many investors involved in that make a trade off in the present, for a higher quality person (than a baby) tomorrow.

This is an intro to a multi-part series I plan on posting more frequently. Let me know your thoughts! One of the harder parts of these posts is keeping brevity while calling back on previous posts. Although this serves as an intro, I hope to continue these ideas into the next one.

As always, leave a comment with your thoughts! Consider sharing if you think it worthy to do so!