User:Sergey Gavryushenko/sandbox

What is Money today
What is money today?

Money is a promise, only a promise, by a Government to provide in the future some labor and/or goods: -	available within that Government control (territory) -	at any time and place per money-holder decision -	to exchange the money for available labor and goods -	and exchange at an unknown rate which will be valid at that time The promise: "you can easily exchange these money for goods and services when you want it, some goods and workers to take money will be there, but exchange rate is not set"

To keep the promise any government has to be able to keep the “order” as in, to keep reproducing this status: if "you" work today then "you" have to work tomorrow; if "you" gained savings not to work - it will disrupt our promise and our economy "you" is in general of course, personally you might get rich enough not to work, however in general, if 95% of population works - then about 95% have to keep working tomorrow.

This is what money today is - a promise to keep order, and even if the USA dollar gets printed more and more it still will be in value until the order is kept. And this is why “world money” is a problem: what order and who keeps it (world money a different topic).

It might sounds like enslaving its own population and, therefore, makes us want to take a deeper look, though, there is nothing more to look for in it.

About 95% of people live from pay-check to pay-check, the most they accumulate for in their life-time is their house or apartment per family with 2 children. Those two children will split it and have to start paying for their living space, which will be smaller. If parents do not pass the house but use it for retirement – children have only a fraction passed to them and start almost “from scratch”.

Some might say “money is means of investment” It can be true for about 2% of people only, because to invest: -	you need to be able to lose that amount, and say “whatever happens to this amount, my lifestyle will not change, because it does not depend on that money, I do not need those money to pay bill, by living place, get education, etc.” -	That amount has to be significant for you, ROI has to provide at least 10% of your living costs, otherwise it’s just a penny- game -	The above (interest) tells us that if your living spending is 100,000 per year, you need to be able to “invest”, or let go, about 130,000 at 8% return on investment: 130,000 * 8% = 10,400 (about 10% of 100,000). We take 8% because it’s over average long-term market return and it matches the rate of money being printed (meaning – value of your money will not go down, at least will be saved). How many people do you know who can invest such amount? To let go for long years about 130,000 while you make 100,000 a year? Please, understand, it is not to “borrow for investment” (you cannot lose borrowed amount without changing your lifestyle), it is not the house you might own and can sell – it will change your life for sure. How many of such people you do know?

Money today is not: -	The goods or treasure / savings it used to be – because it’s being printed with ease and in huge quantities. -	Not a “fair” value of exchange for goods. In times of gold, when almost everybody could make or knew how much effort it takes to make food and housing, when the only complex thing was making swords, people knew value of goods and the value of gold was fixed (for long time). You would not exchange a grown chicken for money that allowed to buy only a gallon of milk, or a half-mile ride for the chicken – you knew how much effort each took. Today we exchange goods we do not know the values of – in most cases prices are defined by many layers of retailers. Result – we pay $5 for thing that costs 0.05 to produce, and $4.95 we pay for “service” of delivery, which we have no idea about. -	A “fair” exchange between countries.

Advice: do not save; consume, give money to your family and friends to help them with current needs in food, living, medical, education, but do not try to save – it’s an old and long gun, do not save money. For about 98% of people money cannot be used even for investment. Therefore, 98% of population should not be worried about inflation – they do not have money to inflate. Therefore, 98% of population should not attempt to save money – they will be inflated (lose value at least 6%/year because money are “printed” at 8% per year on average, and population growth is under 2%). Yet Some people yet can on savings only due to old rules that are no more valid, such as: - In the USA we used to have: you put out for your retirement $1 and the company you worked for gives additional $1 into that amount – you could accumulate like that because it’s double your money instantly, but this rule has been removed or reduced in majority of companies (not valid any more). - Corporations used to set some money for your retirement if you work over 3 or 5 years for them – pension are also “gun” (not valid accumulation source). Even medical insurances that used to be free became “pay for”. These examples are only to say: when someone discusses with you and say they “saved” or “invested” implying you should do the same – beware to analyze their former and your current work conditions. Most likely you have a tougher one.