We are in the time in which we get to (perhaps must) both make sense and use money wisely. Many of us have been doing our work in learning to hold paradox and find the higher truth it points toward. Now, we get to practice.
The either/or reality is not working to create the world we dream to see.
It’s time to step into the both/and paradox, in which we have learned to use money as the servant it can be to fuel an economy of integrity.
We can create and experience True Wealth, when we get into right relationship with money. Until then, our money stories will operate in the shadows and continue to perpetuate more of what we know we do not want and keep us from creating that which we do want.
I am writing this to gather my thoughts, and not as a final discourse. It’s messy, and mostly unedited. Take it as you will. First written, August 30th, 2020. Will note dates of future updates, when needed.
If you’d like a deeper look at the life experiences that have contributed to these perspectives, you can read about my path from scarcity to self-actualized money choices here.
We are in the midst of a moment of great change around money here in the United States, and perhaps globally. Five years from now, our collective relationship to money will likely be very different than it is now. This is my attempt to get ahead of it and understand that shift based on my own past experiences to clear up any residual money dysmorphia guiding my life and choices, or yours.
My best synthesis happens when I share as I’m in process, rather than waiting until the final conclusion is drawn.
Reflection is helpful to my process, so if you are also on this journey of attempting to make sense of money, and what we can learn from the past and foretell about the future, and how we should invest wisely on this basis going forward, please do use the comments here to share your cogitations or drawn conclusions.
So here’s what I have my eyes and ears on, as I make sense of money today:
Money & Our Relationship to Debt
When I first began to consider the possibility of bankruptcy, and the ethics around it, I came across Debt: the First 5,000 Years, David Graeber. My takeaway was that debt is an important part of our current economy, and that even default on debt was ethically acceptable and even a necessary part of the current system, so long as I was releasing debt held by public institutions and not private people I had made promises to pay back. I concluded that the investments I had made in myself with that debt would be paid back many times over if I released the business models I had taken on that were based in false pursuit, found the truth of who I was, and brought heart into business. I needed to go through an ego death, face the shame of not knowing how to care for the money I earned and release the debt I had blindly acquired in the process, to create systems for managing money and relating to people that allowed me to keep money in its rightful place — as fuel, not compass.
Bottom line: debt is a key part of our current monetary system, and a resource to be used wisely and with our eyes wide open. I teach on how to use debt wisely here.
Money as Servant, Not Master
Abraham Lincoln had the right idea, though he died before he could see it realized. Perhaps we will be able to live into this vision.
“The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government’s greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity. Democracy will rise superior to the money power.” — Abraham Lincoln
The Future of Capitalism
The industrial economy has shifted to an information and intangibles economy, and we don’t know the full impact of it yet, but we can make some predictions about the future, based on the past.
Understanding new business models will be a key to sustained wealth generation — and re-generation — in the future. Understanding and capitalizing on intellectual property will be the heart of the new economy.
The current greatest cost to the new economy seems to be the scary reality of the financial services industry — a $65T industry — that directed are choices around money, and makes its money as intermediaries, creating liquidity out of air, skimming off the top, and very likely killing off the middle class in the process.
It’s a painful reality to face without many good answers so long as we collectively remain ignorant of our power, investing in assets with no real value, and maintaining power outside of ourselves while bemoaning the growth of wealth inequality.
McGarvey lays out a future possible reality in which the government doesn’t bail out the big banks in the next big market crash, but instead debt-money disappears altogether, the Federal Reserve no longer owns the printing of money, and Abraham Lincoln’s vision of money as government’s greatest creative opportunity becomes reality.
His vision includes us owning our own data (as opposed to it being owned by big corporations who exploit our data for their benefit alone), and even being able to use our data to pay our taxes.
And while McGarvey doesn’t say it outright, it’s very possible that the future may include the end of the current Federal Reserve Note as we know it, and the creation of a new United States Dollar altogether.
Speaking of a New Unites States Dollar — is a Global Cashless Reality What Comes First?
There’s some strong indications I’m tracking that cash is on its way out, the Federal Reserve Note will be replaced with United States Money, and that money will be digital.
There’s so much to say about this that I don’t have the time to write about at this moment, but here are a few of the indicators of the ways in which the mainstream media is preparing us now …
NYTimes reports on the Cashless Future: https://www.nytimes.com/2020/07/06/business/cashless-transactions.html
Balance.com Reporting on the Pros and Cons of a Cashless Future: https://www.thebalance.com/pros-and-cons-of-moving-to-a-cashless-society-4160702
The U.S. Senate has begun hearings on the digitization of money.
China’s digital yuan, called DC/EP is very close to ready, and there are indications that it’s all part of a plan for China to replace the USDollar with the yuan as the world’s reserve currency.
If we are moving toward a cashless future, what does that mean for how we work with money now? How should we be storing value, and preparing to exchange well in this cashless future?
And, Then, There’s Cryptocurrency and Decentralized Finance … or Defi
The digital yuan and a central bank controlled digital currency in the US would still be centralized currencies, in contrast to cryptocurrency, like Bitcoin, Ethereum and the rest of the magic tokens that as of today have a current market capitalization of $364Billion+ across 6,619 listed coins.
And that doesn’t include the new world of Decentralized Finance, or Defi. With around $8B of Total Value Locked (TVL), it means that of the $364B being held in market cap across crypto, approximately $8B of that is “staked” in liquidity pools that pay interest for the ability to lend that value through the decentralized markets.
This is all extremely complex, currently. And I’m just learning to work with it myself. I do believe that it will eventually replace much of our current banking systems for lending, borrowing and facilitating financial transactions. That makes it valuable to learn now and to be at the forefront of this wave. I’ll continue studying and reporting as I learn by doing, making mistakes and sharing lessons along the way.
As of this writing, August 30th, 2020, I am learning to stake my crypto so it can be loaned out, and I can earn interest on my holdings. In the process of my learning, I lost 4 ETH (valued at approx. $1600 — now would be up to $2500 based on $YFIs increase in value since) attempting to buy $YFI, when I ended up on a Uniswap url that was not the real Uniswap, and my tokens were sent to a thief, rather than back to my wallet, post-transaction. This is sometimes how we learn.
More on staking and Defi when I’ve figured it out enough to teach it.
Is the Magic of Compounding Interest Still Relevant?
A friend of mine recently asked the question — what’s a money lesson you wish you had learned ten years ago.
I liked many of the answers, but those who responded with the power of compounding interest may want to look deeper, as we may be going into a negative interest rate environment in the not so distant future.
Compounding interest may be part of what’s perpetuating the wealth inequality, and I don’t really think we can rely on it any longer to protect us economically. Instead, I’m pretty sure we need to start finding ways to circulate money, and not hoard it. We have models from the past that have long operated quietly, which we can learn from.
Learn to Share the Wealth, Not Hoard It
As we being to master money, it’s very easy to get caught in the old traps of separation, power and control dynamics. It can feel safer. And, yet, the reality of wealth inequality is not safe, for anyone.
Money can be used to keep us separate, or it can be used to bring us together.
There are models that show us how to share, we just need to learn them and see where our own conditioning is getting in the way.
I’m reading Everything for Everyone: The Radical Tradition That is Shaping the Next Economy and learning how to structure the expansion of my company in alignment with the principles of the sharing economy.
I believe this is critical for all of us who are starting and growing companies, and seeking models that will allow us to shift from the traditional “create wealth for a few on the backs of the many” model that is perpetuated by our current economy, and choose into the next economy that will share the wealth with all those who contribute to the growth.
Why It May Seem So Hard to Make Good Long-Term Money Decisions Now
Money is more difficult to understand than ever. Even Warren Buffet, the greatest investor of our time, seems confused. And, George Soros, is reportedly out of the stock market altogether.
More than ever, it seems clear to me that when we don’t understand it, money decisions are driven either by blindness or emotions, rather than grounded value.
After studying all of the metrics regarding the current (extremely low) velocity of money, irrational stock market investing by inexperienced investors who are almost surely getting ripped off by high frequency traders skimming profits behind the scenes, with stock values not tied to any actual company values, ridiculous P/E ratios and the inner knowing I have that the market will crash (we just don’t know when), my sister and I decided to take our mom’s money out of the market, and put it into cash, for now.
Yes, we’re missing the gains that are still happening in the stock market, but given our mom’s dependence on what she does have, we decided we could afford to miss gains, but we couldn’t afford the losses that would come when the crash happens.
Our relationship to money can show us the way, if we look and are willing to see where money holds the projections of our fears, hopes and desires, as well as the opportunity to shift the power and control dynamics that have gotten us here. Understand the mechanics of money, work with it wisely, and allow it to become the servant to your heart, rather than the master of your mind.
Make every investment or spending decision by asking yourself the question: would I rather have what this money will buy me, or the shrinking value of that cash in the bank?
These are the investments I think are safest, right now.
Stay sovereign, and let’s get united. ❤
* We Create the Economy Challenge — to step into your right role as a creator of the economy.
* Personal Resource Map — to guide you to give your loved ones what they will need when you can’t be there. Applicable to all adults who don’t want to leave a mess for their friends and family.
* 20-Point LIFT Assessment — take an honest look at the legal, insurance, financial and tax systems that you need supporting you, and where there may be holes in your foundation, so you can fill them.
Ali Katz is the founder of New Law Business Model (3x on the Inc. 5000), Eyes Wide Open Life and Family Wealth Planning Institute. She graduated from Georgetown Law, Summa Cum Laude, as a John M. Olin Law & Economics Fellow in 1999, under her former name, Alexis Martin Neely, and is licensed to practice law in California (Bar License# : 212365)
Perspectives informed by, among others:
Lynne Twist, author of the Soul of Money, excerpted here describing Buckminster Fuller’s impact on her work. Lynne’s writings around sufficiency deeply informed my own desire to understand what is Enough for me, so I can give back from the excess, and are the foundation of the work of the Enough Course and the Money Map to Freedom.
Charles Eisenstein, author of Sacred Economics and the More Beautiful World Our Hearts Know is Possible.
Daniel Schmachtenberger, one of the greatest sense makers of our time, you can hear Daniel on Rebel Wisdom here.
Tim Denning, who seems to be tracking much of what I am. The stock market is a ponzi scheme. If you have any money, it’s about to lose (a lot) of value.
R. Buckminster Fuller (July 12, 1895 — July 1, 1983), Allan Watts (January 6, 1915–November 16, 1973 — the day before my birth) and Barbara Marx Hubbard (December 22, 1929 — April 10, 2019), some of the greatest elders of our time.