https://youtubetranscript.com/?v=BDTh_FamHTQ
Hello there. A topic that’s been coming up quite a bit lately that I’ve heard all over the place is about money and what money is, how we can best understand it and this gives us a sense for how to interact with it and what to do about it. So that’s what I’d like to talk about today. A better conception of money. When we’re thinking about money and I have a video on economy and my conception of economy which I think is very important to understand, what we’re talking about is efficient trade and that’s all money allows for is efficient trade. Anything you can do with money you can do with barter except for the time component and the time component is really important obviously but that’s why we have money. So if you get rid of money you just have a barter system and all the same problems because barter enables everything money enables pretty much. It just does so less efficiently. I was talking to Nick a while back on the Bridges of Meaning server and Nick only comes on every once in a while he makes knives. Wonderful guy. Very smart and he was curious as to why you know money had spread out the way it had so I gave him very generously my definition and I said money is a representation of the value of potential in the future. Now all of those words are deliberate. The value in the future is based on this potential that hasn’t yet manifested as judged by your past actions. So you’ve done some work you get paid after you do the work typically you should pay for stuff after you get it typically you don’t have to it’s not a big deal in a business but it might be a big deal if you’re working and that is how that works and then I was a little confused about money standards in terms of paper currency and Nick pointed out to me that money is not supposed to point to material value and I was like well that kind of makes sense if my definition is right because it’s future potential so why would you want it tied to here and now material that doesn’t make any sense so I gave him my definition and he said the first form of currency was probably abalone which is worth nothing it has no intrinsic value it has no material value but it’s pretty and I was like well yeah that makes sense then that that makes a lot of sense and he said that’s why we came off the gold and silver standard and that sort of blew my mind because I was like wait a minute hmm gold and silver were fairly useless until electronics came around and then when electronics came around they weren’t just pretty you needed them for circuit boards and they fixed the price of gold around that time very low which was interesting so the price of gold stopped fluctuating and the dollar started fluctuating so this is an interesting way to do it what ultimately happens is you can see why someone like Elon Musk has lots of money why does Elon Musk have more money than Bill Gates Bill Gates has sold a lot of products over a lot of years and Elon Musk comes out of nowhere lots of money but what he’s doing is he is selling you the future he’s selling you the potential of a future with electric cars with faster underground transportation with global always available high-speed internet that’s Starlink and a future where we go to Mars he’s selling you all those things those are all in the future he’s not gonna realize them probably and look electric cars are silly you just do the math and you kind of figure out there’s not enough batteries we can’t make enough batteries batteries aren’t good enough anyway and there’s not enough electricity the current electric grid to give even half the people a car can’t handle it and we don’t have the power generation so it doesn’t really matter we can’t generate that much power and we don’t have the power carrying capacity to carry enough power to charge all these cars so in some ways he’s selling a dream that can’t be realized or at least not with the current technology so it’s a future dream and dream where we will have enough electric grid resources pipes to carry the power and power generated to feed all the electric cars that we want and the cars will come become more efficient or the power grid will become big enough to service us either way but Elon Musk can’t make that happen by himself but he is enabling it by pointing the way so he’s pointing at something in the future a potential in the distance ahead of us and that’s why he has so much money because he’s very wealthy in a very short amount of time ultimately and it really doesn’t match any material way of thinking about money his cars are terribly expensive even the cheap ones are terribly expensive or above the cost of a car and you know they’re not they’re not anywhere near as as utilitarian as it may seem right they do get pretty good mileage but it’s not nearly as high as reported and if you have a problem with them you’re kind of screwed they’re hard to fix they’re expensive to fix they’re even dangerous to fix because of the the voltages involved and they could light on fire and have so that’s not a it’s not an idle threat it’s probably not going to happen but it’s good to know so they’re not they’re not like super cheap cars and they’re not a billion of them so it’s hard to imagine how he’s amassed all this money but mostly you know it’s investment money and people are betting on him to do things that move the future even if he doesn’t move the future in the things he does he’s moving the ball forward for everyone else thinking about the future and building infrastructure and understanding these problems and solving them because he can’t solve them all by himself obviously had a little problem launching rockets recently didn’t account for the space weather so you know no one can do that right but they can lead the way and everybody that comes after him will have been inspired by him at least in theory and so he’ll get all the attribution this happens a lot right it happens with Edison who Edison you know did all this wonderful thing with electricity no Tesla did all that Edison invented the light bulb for sure electric motor Nikola Tesla power power transmission long distance Nikola Tesla making it practical because DC power wasn’t practical you’d have to have a DC power plant every two blocks a big one to to do electricity the way the way they ended up doing it with AC which is much more efficient so there’s all these ways in which Edison gets all the credit for a bunch of stuff that he didn’t do directly but he enabled it like he definitely enabled it like he built the infrastructure Tesla came to America to work for Edison right Tesla wouldn’t have been Tesla without Edison there’s no question about that but Elon Musk is gonna be the the next Edison like character because he’s gonna wave enabled the future we haven’t had too many future advancements ultimately since Edison and Tesla on the scene and before that there was the telegraph and the steam engine but since then it’s kind of been tepid a nuclear plant is a giant steam engine you put hot rocks and water run a steam engine big steam engines granted but steam engines so you can see the the core technological advancement of electric cars is huge in potential not in actuality so just think about money in this way it enables efficient bartering and trade by allowing you to pass value future potential value between people in the present and then do what you want with it now it’s important to understand that there’s a difference between income and wealth and the important difference is cash flow and you can always have more money by spending less money irrespective of how much you make and there’s a book by Robert Kiyosaki rich dad poor dad I kind of recommend that book it’s a good book for understanding money so if you want to understand how to manage money and handle money that would be a good book to try there are other books obviously but understand the difference between cash flow just how much you have coming in that’s not just your income but it is also your income and wealth which is how much total value you could convert to cash and how long that takes that gets into the sort of time value money component that’s important because if you don’t have financial literacy you don’t understand what money represents and why and how that works you’re likely to lose all your money no matter how much they give you 80% of lottery winners are bankrupt within five years just saying so giving people money doesn’t really solve problems it can create them in fact so that’s a little quick overview on money I wanted to try a sort of shorter video and see if people like it so if you like it let me know love the shorter stuff want longer stuff whatever it is and if you’ve got topics you want to know about please leave me a comment and as always I want to thank you for your time and attention