The Meaning of Money (Reverse-Engineered)

04-30-18 
After a hard night of training Brazilian Jiu Jitsu in the Chelsea District of New York City, I experienced a black mirror. I was riding the E train home when a thought came to mind: "What is the meaning of money?" As the train sputtered through tirelessly--amidst the clinks and clanks of railing lain on preordained tracks, I mused. For much of my life I was paper-chasing for the idea of eventual freedom. Freedom from the rat race and continuity.  Due to this, my humanity at certain points, became horribly maligned. The lack of sleep and petty reproach for myself soon became my own self-contained hamster wheel.  I was not doing enough - not working hard, sleeping on schedule, or maximizing my time. My results were not good enough. I terrorized my relationships.

I had traded one bubble for another--I swapped the disdain of corporate life for entrepreneurial ineptness. Maybe it was from me weaning out of this drug called money after years of idolizing it. I had attained a degree in finance as a means to an end after all. Both paths I tested were forks in the road like Bitcoin's arch-nemesis Bitcoin Cash. They both required sweat equity, and I was beginning to fail at both of them. Like a Roman Catholic priest I was lashing myself with corporal mortification. While I was mentally processing my thoughts during the zen vibrational ride home, I practiced gratefulness.

I had swapped the idea that time was finite, with the idea that time is value. I practiced gratefulness for my parents in allowing me to pursue my dreams and live with them at the start of 2018. I owned my own decision for leaving my comfortable loft in Downtown Kansas City for a shared space in Queens, NY, and loved that decision. I was grateful for having the opportunity to be happy and fulfilled, while making money at the same time. I meditated on these thoughts, breathed deeply, and loosed all the variables out of my control. I slowed time down, and learned to trade time for relational value. If my parents asked me for a favor that required my time, I became grateful at the opportunity to give them value and increase my relationships. The bear trap that money was dangled in became looser. I was on a mission to disconnect the negative notional values of money so that I could maximize my productivity.

My mission: to reverse-engineer money stoically and automationally. Daniel Kahneman, reknowned behavioral economist, would agree that tying emotions to money bodes disastrously. He mentions that most people utilize System 1 portions of their brains when making important decisions. Conversely, the people who were most successful in life utilized System 2 portions of their brains. Shortly, S1 is the path of least resistance. Most people want the lowest hanging fruit with the least efforts, regardless of its truthfulness. Meanwhile, the most successful people take their time to learn their crafts or research their theses before executing on important decisions.1

In the markets, many novice investors let emotions encroach their portfolios. They decide to invest in a stock without researching because someone on TV says it was a good stock. These people hold stocks when markets turn, at which prices drastically lower. They hold too long because they don't want to lose money and are frozen in fear. The same people sell at a loss when their patience runs out and prices don't move quickly enough.

In game theory, either someone loses at the expense of the other opponent, or they both collude together to receive the same gains. In some cases, it is laissez-faire with both inadvertently doing the same thing.

Example 1: Buyer 1 of stock $TWTR times the markets alongside Buyer 2 and each receives the same gains.
Example 2: Buyer 1 of stock $F sells at $25 and gains $15 while Buyer 2 holds and receives a capital loss of $10 when the stock goes down in price to $15.
Example 3: Buyer 1 of crypto $QASH and Buyer 2 both hold and don't do anything. They both receive a capital gain or loss of the same amount.
Example 4: Buyer 2 of crypto $NAS sells at a profit, and dumps millions of coins in the markets. Buyer 1 receives a huge capital loss of 5000 sats net result.

After the great financial crash of 2008, a developer or developers under the pseudonym Satoshi Nakamoto, quietly drafted the first token project "Bitcoin" or $BTC. BTC was designed to become the most transparent and secure ledger system for financial transactions. It had a fixed max quantity of tokens available without worry of artificial inflation from big governments. They wanted to decentralize money away from central banks. Doing so siphoned power away from big governments and into everyday laymen. This caused a new token project: Ethereum to emerge. After $ETH was born, it catalyzed more innovative token projects to spawn. Now there are other blockchain technologies that threaten to disrupt supply chain, real estate, financing, household cleaning, banking, and more.  The Crypto market has since grown from $2 billion in 2013 to $150 billion today, with some parabolic highs in excess of $350 Billion in 2017.

There are 4 types of Crypto people in this world: 
1. The greedy person who only cares about themselves
2. The person who wants to disrupt and change the world
3. The person who is in Blockchain for the technology only
4. A mix of all 3

Currently, because of how the modern world is designed, Crypto is notionally backed by the almighty dollar. Mostly everyone pays all of their bills in cash or credit card. As a result, people are beholden to the current fiat banking system of interest rates, credit card debt, and time value of money. The majority of people are scared of the negative attributes of what the lack of money can do, while also idolizing it as a pathway to freedom simultaneously. Crypto brings the power back to the commoner by allowing them to bypass all 3rd parties and transfer commerce back to them--or at least in theory.

I initially got into crypto near the end of 2016 because it was exciting and potentially life changing. I panic sold when the market went belly up by the end of 2016. Then it sky-rocketed at the start of 2017 after which I ended up kicking myself. Throughout that time, I went through many market cycles and experienced many defeats and small victories in the process. I was determined to take myself out of the cycle of debt and fear that living in fiat brought me.

In 1943 Abraham Maslow published a paper called "A Theory of Human Motivation." In it, he states that there are 5 hierarchy of needs: Physiological, Safety, Love/Belonging, Esteem, and Self Actualization. Each of these were ordered and were needs that must be met first before moving up the pyramid of life.2

At the base, physiological was the most primitive yet required basic need. Physiological stands for shelter, food, and physical safety. Every human being on earth requires nourishment and a stable home to stay safe from the natural hazards of the world. Without it, one cannot actually feel safe. The homeless people in the world are prone to natural disasters, physical harm from wind chills, and heat crackling their feet. Examples of these are a stable physical house, hot food on the plate everyday, ample water; heat; and transportation.

After physiological needs are met, safety is next. Mentioned before, safety from physical, economical, and emotional trauma must be met in order for a prime life. Everyone, especially children, must have these feelings met in order to grow with confidence and move to the next stages of life. Examples of these are health insurance, martial arts training, and financial know-how.

Social belonging is the next step up in the pyramid after safety. This is because everyone has a human need or want to feel loved and belonged. Without it, children will grow into adults without proper social behaviors and be ostracized from society. According to Maslow, this is one reason why some children often stay in fractioned homes to feel some semblance of belonging and love.

Esteem is the fourth category of the pyramid. This is a feeling of importance and ego. Everyone wants to feel important and respected. They want to have self-confidence that comes from mastering each of the prior pyramid blocks. Maslow mentions a high and low version of esteem. The low version is when someone seeks fame or fortune in order for people to respect them and bolster their ego. The high version is when someone has internal self-respect from mastering their craft, and does not show-boat their accomplishments. This person only seeks to better themselves and their own internal dialogue.

Lastly, the highest pyramid block is self-actualization. This is when someone has mastered the other building blocks of needs, and finally knows what he or she wants from this world. After knowing her why, she decides to focus solely on that endeavor to become the greatest that she can be. For some it might be to become the greatest parent in the world, while for others it is to become the most successful businessman that she can be.

Maslow added a bonus category, and listed self-transcendence as the 6th and final block. This is akin to altruism where one has mastered all of his basic needs in life, and focuses his energy on helping others achieve them. This is the highest need because it transcends self and explores how to help others. This means giving time and money to provide value for others who need a helping hand to accomplish their own personal visions and virtue.

So what point am I trying to make here? Throughout this month of April, I found out that I had an emotional bias towards money, and I wanted to uproot it. I reverse engineered back to why I had this bias and how I needed to change it. The first thing I did was reframe the idea that time was a finite resource which I needed to maximize--to being something of value that I can give to others. I practiced gratefulness and meditation to slow down my negative perceptions of time, and mentally slowed the internal clock. That is, instead of ticking time away in my mind--thinking of how much of it I was wasting on non-productive/income producing activities, I reframed it. I now had a lot of time that I can give value to others with.

Practicing gratefulness allowed me to appreciate the basic needs that I had met, and allowed me to become more zen with who I was while striving for greatness. Doing so caused me to trivialize the notional value of money, which caused me to become less emotionally attached. I got to a point where I asked myself, "how can I use this resource to multiply it, and serve others with it?" Instead of hoarding money in fear, I reframed it to "how can I invest and multiply it?" Instead of being constrained with the idea of time being a small window, I slowed myself down and analyzed each investment and resource I had to take advantage of the System 2 partition of my brain. With this framework materializing, now I had to plan my steps and take advantage of my strengths to get to the next steps of self-actualization. One of my strengths was flowing with the good and bad parts of life, and riding the waves. With that in mind, I let loose one of the main harbingers of emotional stress: a belief that I had to have a strategy and stick with it 100%. I also let loose the variable of hedging the idea that maybe this entrepreneurial dream won't come to pass, and that I might have to get a job. I expunged that by giving myself this fiscal year of 2018 to go all out in entrepreneurship before ever thinking of cycling back on that hamster wheel. I took that fork in the road and went with it. In my next blog post, I will talk more about my strategies and all updates on my current income streams. Don't forget to subscribe to my newsletter to keep in touch!

Sources: 
1. Kahneman, Daniel. Thinking, Fast and Slow. Farrar, Straus and Giroux, 2015.
2. “Maslow's Hierarchy of Needs.” Edited by N/A Wikimedia, Wikipedia, Wikimedia Foundation, 30 Apr. 2018, en.wikipedia.org/wiki/Maslow%27s_hierarchy_of_needs#Safety_needs.


The Meaning of Money (Reverse-Engineered) The Meaning of Money (Reverse-Engineered) Reviewed by Dividend Raptor on 9:33 AM Rating: 5

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