Getting away from the daily grind

In 2003, professional boxer and heavyweight champion, Mike Tyson, declared bankruptcy with a debt of $30 million, despite earning over $300 million throughout his career. This raises the question of the significance of money, as our actions and motivations are often driven by a desire to acquire it, but our ability to manage it seems to be the great issue. Americans currently have the highest credit card debt in history, which reveals an invisible burden that is carried by the country's most vulnerable people.

Consider your own attitude towards money and how money exists in your life. What is money to you? Does it seem to leave your life once you have acquired it? Has it ever placed you in a vulnerable position, which led you closer to a get-rich-quick scheme or a guru telling you that you can get rich if you buy their course? The speaker's channel aims to tackle these topics, but they realize that our perceptions of money are sometimes more crucial than our ability to generate it, especially when our brains are wired in such a way that prevents us from being financially sensible.

The speaker believes that understanding what money represents is essential to understanding the significance of money. Money is commonly defined as a medium of exchange, an instrument that facilitates the sale, purchase, or trade of goods between parties, but a better way of looking at it is an expression of value. People hand over a certain amount of money to purchase something because they perceive its value to be equivalent to the amount of money they handed over. Understanding that money is simply value is the best way to understand that money is not necessarily evil, nor does it make a person evil. Money simply opens options and broadens horizons, and the choices people make with that money have everything to do with their own moral dispositions.

The speaker suggests that money will come into your life, and it will leave. This is a relationship that is often expressed by your income and expenses, or your production versus your consumption. For the most part, money will enter your life because you have produced some form of value, and it will leave when you have consumed something. We can look at the net worth of an individual as a metric for determining their relationship between consumption and production. However, for most of us, the biggest issue lies in our consumption. The likelihood is that both the consumption and production aspects of the relationship need improving, but the biggest issue often lies in our consumption. The CareerBuilder study found that 78% of American workers were living paycheck to paycheck, and of the workers who made $100,000 or more a year, one in ten of them were living paycheck to paycheck.

It is highly recommended to maintain an emergency fund as one of the most common practices in personal finance. This fund is a specific amount of savings that one holds onto in case of an emergency. The fund typically holds three to six months’ worth of expenses. The idea of living below one’s means is important. It is imperative to live a lifestyle that can be afforded, as living beyond one’s means will result in placing oneself on a financial edge. The ostrich effect is one of the many cognitive biases that can impact one’s financial position. Hyperbolic discounting is another cognitive bias where people tend to favor short-term rewards over greater rewards in the future. Social proof, where people tend to think and act as others around them think and act, can also impact one’s financial decisions. Keeping up with the Joneses is a phrase that summarizes the problem of consumption. It means trying to emulate or not be outdone by one’s neighbors. People may buy a new Porsche or renovate their homes, in an attempt to impress or keep up with others, due to some form of social pressure.

It is essential to understand that we are all vulnerable to social approval, and we care about what other people think of us. However, the problem arises when we measure our self-worth by how many people like what we post. The governor of the Bank of Canada stated that for most Canadians, debt is a fact of life, at least at some point. This does not mean that purchasing an expensive piece of clothing, jewelry, or sports car is a bad thing, nor does it mean that consuming is a bad thing. The aim of this article is to create awareness about oneself as a consumer. The question is whether we care more about appearing as though we have money or actually having money. The real rat race is not about working a nine-to-five job but living life on the edge that it means chasing the next thing, whether a paycheck or a material possession. Budgeting and keeping track of expenses have proven time and time again to work and draw one out of this rat race.

While channels like Graham Stefan or Dave Ramsey are great for learning how to work on one’s consumption side of the equation, there is one thing they should speak more about: how to make money. It is easier to reduce expenses in the amount that one consumes than to increase one’s income. Giving advice that works for most people when speaking to a mass audience is typically the best choice. Entire communities are built around focusing on frugality, such as the fire community. This movement adopts the strategy of living extremely frugally, saving and investing as early as possible, with the intentions of retiring as early as possible. Minimalists also share a similar view to the fire community, but it is more deep-rooted in philosophical positions about the world and materialism at large.

Promoting strategies that fall in the spectrum of living frugally, saving a lot of money, and investing in the long run works for a wider range of people with varying degrees of income. However, it is important to note that Graham Stefan and Dave Ramsey do not rely on cutting coupons or living an incredibly frugal lifestyle to make a hundred to two hundred thousand dollars a month from YouTube or have an estimated net worth of 55 million dollars. These people are utilizing a means of production at mass scale. In the video “The Untold Truth About Money,” it is discussed that money is equivalent to one’s perceived value in the market. The most impactful way of increasing one’s value is by finding a problem in the market, creating a solution for that problem, and utilizing it to create wealth.

In order to summarize, it is crucial for consumers to become aware of their own consumption habits. This can be achieved by journaling what they purchase and why, and then setting a budget to manage and control their consumption. Once this awareness is established, the focus shifts towards maximizing the value that can be brought to society through work, business ventures, or other means of production. This framework has proven beneficial for many individuals with a vested interest in making money.

It is important to note that this approach extends beyond the simple purchase of sushi or other commodities. It has the potential to produce substantial benefits. The ultimate goal is to move beyond consumption and towards creating value for society.

Moreover, this framework can lead to significant financial gains. In one example, an individual was able to earn $170,454 by focusing on this approach. This highlights the potential benefits of this framework for individuals who are looking to increase their earnings.