Saving and preserving wealth should not be an easy or automatic process. You shouldn't be able to put your money in the bank and count on it holding its value indefinitely. Because that's not how the physical universe works. Real matter degrades over time. Real goods and services cannot be stored without cost or loss. Real wealth cannot be stockpiled without risk.
Can a dairy farmer store milk indefinitely without cost or loss? Can a builder of houses leave a house unattended and unoccupied for long periods of time without cost or loss? Can a physical laborer store his/her labor and sell it when market conditions are favorable? Obviously not. So why should money have that power?
Creating a form of money that can be stored indefinitely without loss is like introducing a foreign substance from outer space to our planet which isn't subject to the same physical laws as all other earthly substances. It is a violation of the laws of nature.
So when you have managed to get your hands on wealth in excess of your immediate consumption needs, you SHOULD need to think/work/take risk in order to preserve it. Because no one who makes a living by producing real goods and services can stockpile their valuables without loss and/or risk. And the consequences of designing a form of money that has that power are more harmful than most people can possibly imagine.
So, here's what I do with my excess wealth. Even though I used to work in the financial markets, I have not invested in a stock, bond, or other financial instrument in well over a decade. Instead, I have identified three categories of physical merchandise that I have taken the time to become knowledgeable about, and I have accumulated large quantities of all of them. For me, those categories are vintage musical instruments, vintage belt buckles and made-in-England Doc Martens.
Yeah, it's kind of a random mix, but there are a few unifying threads that tie them together. First, I personally enjoy all three categories. So the effort that is required to buy/sell/maintain my merchandise is enjoyable to me. Second, all three have limited supply and are not being produced anymore. Yes, Martin makes new guitars every day, but there will never be another prewar Martin added to the world’s existing supply. Same for vintage belt buckles and made-in-England Doc Martens. (As of the mid-2000s, Doc Martens are manufactured in Asia.) Third, all three categories can be stored for long periods of time without significant physical degradation.
But even so, each category requires different kinds of maintenance and care, and each is subject to different kinds of risk. For example, vintage guitars can’t be stored in extremely dry conditions or they can break/crack. Similarly, leather shoes cannot be stored in very humid conditions for long periods of time. And by choosing to stockpile these items, I am accepting the burden of having to monitor and address these issues. If I don’t do so, my nest egg could be destroyed.
All three categories involve risks and expenses. I pay for storage. I pay for insurance. I assume risk every time I buy an old guitar that may have structural or cosmetic issues that affect its value. And that's the way it SHOULD be. I shouldn't be able to store my wealth without thought, effort or risk. Because that's simply not the way our universe works. And if you believe money should give its holders magical powers that don't apply to anything else in the physical universe, you are operating under some deeply irrational beliefs that don't correspond to the laws of nature.
So, if money wasn't available to you as a store of value, how would you choose to store your wealth?
This is something I think about often and I choose to invest in my personal skill sets as well as add physical tools to my arsenal to increase my longevity. These "investments" set me and my work apart from others in the field to increase the value of my time and work....I'm still waiting on the pay off of this 20+year investment, but I know that these risks are independent of financial systems, if the world totally falls apart, my tools and skill will still be of great value....
Hi Josh! Do you think saving money as money or buying virtual monetary products like stocks or bonds is immoral? Shouldn't we rather try to reform the monetary system instead of putting the burden on single decision of individuals? I indeed feel it is a kind of moral failure to not spend the money you earn through work, because then systemically other individuals won't be able to sell THEIR work to me and there will necessarily be unemployment. At the same time, I think the problem should really be solved on a larger level. What do you think?