If you perform the 7 Occult Money Rituals, you may have picked up the idea that “you lose what you don’t spend,” or something along those lines, as I have in the past. Allow me to elaborate.
This is one of the simplest but most fundamental ideas in finance. Let’s say you have a chunk of money you want to put somewhere. Right now, it’s in cash (whatever your currency may be), probably in a bank account. Let’s say it’s a checking account, why not. What happens to your money when you leave it in the bank?
Nothing. Absolutely nothing. It just sits there. One of the most important ideas you need to wrap your head around is that your money should be working for you, 24/7. Doing nothing doesn’t sound like much work, now does it?
But we’re talking about the bank! Where else am I supposed to put my money? Isn’t that what banks are for? Well, kind of, but when you put your money in the bank, it doesn’t do anything. There are places you can park your money where it will do things.
In the investments industry, generally speaking, there are two major benchmarks that are used when considering investment opportunities. There is the “risk-free” option and then the S&P500 Index, a collection of stocks, which is considered risky but relatively reliable and a stable long-term investment.
The “risk-free” option would be bonds. We could get ultra technical here, but for the sake of this post I’ll keep it simple and straightforward. You can buy bonds from governments and from corporations. Bonds are just loans or debts. When you buy a bond, you are lending money to some entity. US government bonds are considered “risk-free,” cause if the US government collapses and doesn’t pay you back, you probably have bigger problems than your portfolio.
So, then, why would you stuff your money into the bank and have it do nothing when you could buy bonds instead and earn a “risk-free” return? Which sounds better - making 0 money, or making a bit of money? Waaaaah, but then I have to talk to someone and set up a brokerage account so I can invest and basically make money for free, waaaaaaaaaahhhhhhh.
The other benchmark is the S&P. It depends on what data you use and kind of how you calculate it, but historically the S&P returns like 7-10%ish, on average. This number is a bit weird because if you look at a historical chart (I use tradingview, free and easy) or historical annual returns, sometimes it does a lot better, and every 10ish years it dips like 50% and then goes back to where it was within a few years.
The reason this is the benchmark is because it is reasonably solid. If you invest in the S&P, you are exposed to many many companies in the US economy, which are themselves influenced by the overall global economy (many probably do business directly with Asian, European, African, the bit around Australia and Indonesia, and Latin American businesses, so they all are connected by the business life-substance that is money). So I guess if the world economy explodes your investment won’t do too well, but if prosperity continues to increase, as it has for hundreds and thousands of years, then you will be along for that ride.
Some day I may go over some simple ideas and perhaps even mathematical methods for figuring out how much you want in bonds and how much in stocks. This is not financial advice, don’t sue me. For now, though, back to the shilling I am renowned for.
Here we’re getting a bit more Ritual 3 vibes. If you ever talk to one of the money-haters (and there are certainly a lot of them), you’ll probably hear a couple variations of exactly the same asinine “argument.” Oh, you want to BRRRR your way to a fucking massive portfolio over the next 30+ years? You’re what’s wrong with society! You’re the one keeping people from affording homes! You’re a slumlord who makes people live in shitholes. I can’t believe you’re exploiting people’s basic needs for shelter to make a profit. You disgust me.
Those are pretty much quotes, by the way. Jeez, I’m feeling kind of hungry. Now wait just a darn minute, you’re telling me I have to buy food? Are you fucking kidding me! Those selfish, evil farmers, exploiting my basic needs to make a profit! Down with the agricultural institution! Eat the farmers! R E V O L U T I O N ! ! !
While that caricature is amusing, it doesn’t entirely show why exactly those ideas are quite stupid and ignorant. I have dedicated several years of my life to understanding how the global economic/financial machine actually works, so I could elaborate on, and perhaps I will some time, but for now, I’ll just say that I am pleased that I was able to rent apartments during college so I didn’t have to either buy a property, build a house, or live with my parents. That was a service I desired, which was provided by someone else, and was able to access with money.
But it’s like, not fair. Yeah bucko, the world’s not fair. “Fair” is the f-word in negotiation for a reason. There ain’t shit you’re actually saying, it’s just emotional mind games. People stew in their money-hatred so much that they develop these fantasies which are so far removed from reality, largely because their hatred blinds them and prevents them from acquiring information about the actual real world.
You want a glorious revolution? Ok, well then I want to be in charge of all the weapons. And by that, I mean I want nothing to do with you. Stay away from me. I’m going bond shopping. Lame, perhaps, but much less lame than what you’re doing, which is stewing in your little hate bubble while you lose money to inflation because you are not invested in the economy (and thereby benefiting from the collective productive output of billions of people) like me.
You know what’s funny? The moon cycles worked out such that I’ve had a week off from the rituals (2 and 6, that is, the ones that really go round and round), and it’s crossed my mind that I could do something else with my morning ritual time, like develop my energy body. I’m still in there figuring stuff out, but I may not even really “need” to do these rituals anymore. But honestly, I do them because I want to. I like how they make me feel, and I like what life is like while the energies are fresh, active, and lively. It’s sometimes easy to take them for granted or not really notice them much, but just a week without summoning the energy has let me notice this more clearly.
Did I address the point though? If you don’t spend it, you lose it. If you blow all your cash on monstrously marked-up booze at the bar or clothes or gadgets or vehicles or whatever, I suppose you didn’t really “lose” that money, it just became clothes or booze or whatever. If you didn’t spend it, you’d still have cash.
So let’s say you hold this cash, stuff it in the bank. Time passes, let’s say a year. You have exactly the same amount of cash. Nothing has happened. You’ve saved your money. What if you had bought the S&P? Maybe it went up, maybe it went down, either way, something happened. Statistically speaking, over the long-term, this investment is likely to go up at a reasonably predictable rate. Too spooked for the S&P? If you bought some lame bonds you’d still have made some money. By spending your money on investments, you allow time to increase your wealth. By “saving money” and holding excessive amounts of cash, time does not increase that cash, and probably actually decreases it because of inflation.
Back when I took my first formal intro to (corporate) finance class, one of the very first ideas in the book was “more money is better than less money.” Perhaps obvious, but worth returning to. In life, we all make decisions. We are presented with choices which have different potentials for financial growth. I personally do not wish to devote my entire life to money or its acquisition, although such matters are quite interesting, but that does not negate the fact that money is somehow, in some way or another, attached to every decision we make in life.
Yeah, you have to put some time in. You have to learn things, meet people, and complete various tasks. You manage to complete the task of getting groceries into your residence most every week, so I imagine you can complete the task of reading an article or watching some youtube videos about finance (I do that all the time and have arguably learned as much if not more from finance/economics youtube as I have from university classes). Just be sure you’re listening to people who know what they’re talking about, not scammers click-baiting you so they can make some ad revenue. It’s like 15 minutes of your time. I know, I know, maybe not always quite as amusing as your memes of choice, but personally I find them quite entertaining and engaging in a different way, which brings some nice diversity to my experience.
I think I’ll close this one with some unsolicited advice. If you haven’t already, make a general game-plan for how you are going to reach that summit of financial freedom. However you make money now or will in the future, know where you are aiming to go. If you get stuck on the first road-block of “How do I get the money to invest?” and devolve into the money-hate-bubble, snap yourself out of it. People figure this out. If you are going to choose to hate me instead of getting your life together, then yes, I am the source of all your money problems. I am the one who enslaves the poor and keeps their chains clean, free of rust, and functional. I am the cause of your misfortune. I am the creator of your reality. Hate me? Good, good, feed it to me, GIVE ME MORE