Let's Talk Money

Salutations from the Washington DC outskirts.

It’s an exciting day for el Analects as content will be rolling out on the Instagram page on a regular basis.

It’ll be a smorgasbord of thoughts, tweets, quotes and ideas easy to share and fun to read.

Now on to today’s topic.

Something to read:

Humans went from hunting & gathering to a corrupt form of capitalism where debt and interest rates drive “The Machine” forward.

And this past year has introduced more people than ever to the stock market leading to unexpected returns and bubbles ready to pop.

But let’s touch on one [key] idea today: The difference between investing and speculation; through this analogy below:

The alternative to speculation and riding on bubbles, is investing.

• A stock speculator is like somebody who notices the weather is warming up in March, and that the trend continues and even accelerates April and May. By August they have sold their winter coats and boots and are fiercely accumulating bikinis and flip-flops, shouting to everyone that you ain’t seen nothing yet, this trend is just getting started!

• An investor is somebody more seasoned. They have been through this all year after year, decade after decade, and thus they know what comes after summer. Therefore, the investor selects a portfolio of clothes that serve a purpose. Some of these garments deliver warmth in winter, others are great for the beach, and all of them with a timeless style and durability.

• To put it another way: an investment is something that delivers value to you (and preferably does some good in the world as well), and produces products, services and eventual dividends that would make it worth holding for a lifetime even if you were never allowed to sell it.

Something to watch:

This ingenious analogy above was not crafted by me, but by Pete Adeney aka Mr. Money Mustache.

His internet fame comes from his cult following based around FIRE (Financial Independence, Retire Early) a financial movement defined by frugality and extreme savings and investment.

Hint: It’s not as hard as you think.

A song to listen to:

Listen to this track and many others on The Playlist by Modern Analects

A quote to think about:

Lifestyle Inflation: Something you understand when it’s too late. Coming in the form of brand-name shoes and purses from France.

Instagram’s algorithm rewards this behavior and we’ve all been guilty.

Hell — think about where your stimulus money went.

BONUS:

Take six minutes to rewire your brain on the relationship between wealth and status.