Why having a high net worth is a destructive thing to do.

In my previous post, I explained a few things about my views surrounding money.. now I’m going to do a stream-of-consciousness on people with a high (>$10 million) net worth.

Please note this is based on my current understanding of the reality model I’m experiencing, which may be flawed.

We have a fixed amount of capitol in the system. We add too it sometimes, but not very much nor very fast, because whenever we add a lot, a bunch of people not in possession of all the facts think it means the capitol is worth less, instead of realizing that it’s because we’re actually generating wealth out of thin air all the time – new ideas, new intellectual property, new ways of getting things done – and new children who will grow up to create and build more wealth. Because we’re becoming more wealthy in real-world things, we need to print more money to match, or things are gonna break.

Because we have a fixed amount of capitol, it’s important to *keep it moving*. If it stops in one computer register (i.e. some billionare’s bank account or a stock in the market), it’s no longer a available resource in the system for facilitating getting things done. People can’t pay wages with money they don’t have. In addition, the value of money sitting in a bank account beyond a person’s conceivable personal needs is *negative*, because the reduced amount of money floating around ‘live’, migrating, making transactions happen will result in less of those transactions occuring and those transactions often generate value. (Think of the inventor who doesn’t have enough money for a lab vs. the one who does). Holding onto money beyond your personal needs *reduces it’s value* by a real-world, food-and-drink-and-housing-and-entertainment definition of value.

4 Responses to “Why having a high net worth is a destructive thing to do.”

  1. ClintJCL Says:

    You don’t think any money is wasted in excessive commerce that wouldn’t have to happen?

    I’d rather buy a reusable water bottle once, then keep the money I’d otherwise spend, than keep spending money on new water bottles just so that other people can receive some money.

    I actually think the fact that everyone spends all their money all the time makes it more worthless – things cost not what they cost to make, but what spend-crazy people are willing to spend on it.

  2. James Says:

    That isn’t really how money works, though. Generally, in terms of printing new money, we do it faster that what is necessary to keep up with wealth creation. The buying power of the dollar has been consistently diminishing for a long time. While that is horrible for working and middle class people trying to save money, it’s a great way to stop the money from not moving. When a rich person leaves their money in a savings account, it is losing it’s value. The bank will often put that money to use, but what is more effective and what the wealthy do with a large amount of their wealth is to specifically invest it. The only way to protect yourself from inflation is to grow your money faster than it loses it’s value. While it may seem negative for them to do this, it is essential for many different aspects of the economy, and they only profit by using their money to help other people make money. Not only do many businesses need private venture capital to get off the ground (which banks wouldn’t give them, they would offer them credit at a high interest rate) but a variety of businesses actually run almost entirely on private loans. Specific forms of real estate investment, small used car lots, and the list goes on and on.

    Basically, even when the rich have shitloads of money that they’ll never actually spend, if it’s not under their mattress it’s probably still being actively used in the economy in some way

  3. sheer_panic Says:

    I think we’re actually creating wealth far faster than we’re printing money, but that we *believe* we’re printing money faster than we’re creating wealth. This is why I’m pushing for a real honest audit of the system via a bucketized currency that will enable us to find out.

  4. Steve Seman Says:

    I don’t think that money is under their mattress. It is invested in stocks, CD’s, businesses, and other investments. Even if it is just money in their bank, the bank uses that cash to offer loans and mortgages. When actual cash is available to banks, they don’t need the FED to print more fiat currency and loan it to the banks, with interest. Jon, I have a feeling that you need to really understand how all this works and why it is very, very, bad. I agree with you that money should be based on something. It used to be based on gold and silver. I agree it would be better to base it on available resources. I think you need to understand the system we have and come up with a viable replacement…

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