- Introduction: Why are we here? What am I even doing?
- Where we came from
- What is money?
- Where did it go wrong?
- What this means to me
- How we fix it
- Optimism for humanity
- How to retire
Introduction: Why are we here? What am I even doing?
As I was growing up, attending school, trying to get good grades, and preparing myself for “the real world,” I often felt bewildered and wondered what the point of it all was. Am I really supposed to get a desk job and work 40+ hours per week for 3,000 weeks (if I’m lucky) and then die?
My father taught me from a young age the importance of hard work. I spent ten years working with my dad every weekend, landscaping in nearly every weather condition imaginable. It was grueling, back-breaking work, and there were times I picked up so many sticks I would see them in my dreams that night.
But I saw firsthand the appreciation our customers expressed when they had a lovely landscaped home to share with their friends and family. I took immense satisfaction from starting the day facing the overgrowth to ending the day evaluating a meticulously sculpted landscape.
Work can be meaningful, I thought, especially if you like the customer and enjoy the job. Meaningful work doesn’t necessarily mean fun work, though.
My mother worked in healthcare my whole life and loved helping real people medically. She saw the transformative power quality of care can have on a family, probably almost daily. However, the bureaucracy and administrative work took a toll on her. It was the kind of work that seemed only partially fulfilling. And she is one of the lucky ones!
You hear stories and see people all the time who do not like their jobs or align with their apparent function in society. Family, friends, and mentors likely advised them to find stable jobs and function within those roles until they had enough money saved up in the bank to retire.
And yet, for so many people, retirement doesn’t seem to get any closer, no matter how hard they work or their personal sacrifices. Let alone retirement, most young people seem concerned about being able to afford a home and start a family.
We work 8 hours a day to enjoy 5 hours in the evening.
We work 5 days a week to enjoy 2 days on the weekend.
We work 48 weeks a year to enjoy 4 weeks of PTO.
We work 45 years to enjoy 10 years in retirement.
It seems wrong. And it’s not the life I want to live if I can help myself. But what else is there? I had to search deeper.
My grandfather taught me the importance of family from a young age. From as young as I can remember, I always felt tremendous excitement every Christmas when my family in New Hampshire took vacation time off work and traveled to see my mother’s family in New Jersey. It was usually one of my favorite weeks of the year. But why?
My grandfather, Pop Pop, as I called him, would bring the family together and tell stories from his younger days, and each one was filled with laughter and love. His eyes would squint, his face would wrinkle, and he’d burst into a contagious laugh that everyone around him couldn't help but smile and laugh too. We didn’t know these people, but he made the experiences feel as real to us as they were to him. Making other people happy made Pop Pop happy. He lived to love.
From a young age, I learned that while work can give us purpose, it is not the only source. When I look past the humdrum of busyness and labor, what has stuck with me for years as the most energizing and deeply fulfilling experience is laughing and loving with friends and family. When I last saw my Pop Pop in rehab, all that mattered to him was his family and the memories he was able to create by being a loving father and active member of his community.
Am I really going to work a 9-5 for the rest of my life?
Is working and paying rent all that life has to offer?
After ten thousand years of progress, is this really the pinnacle of the human experience?
There has to be more. So I searched for more. And I found it.
I found a deeply enriching optimism for humanity, and it starts with service.
To understand why we work, I’d like to provide some perspective. Join me as we deconstruct the universe and come to appreciate how we arrived here.
Where we came from
In case you haven’t heard, the universe is unfathomably large, and yet the only evidence of life is here on Earth. Despite our relentless search across the cosmos, Earth remains the sole sanctuary of life that we know. This fact alone invites us to marvel at the series of extraordinary events that enabled life to flourish here against astronomical odds.
Consider the fragile chain of occurrences that led to our existence:
- the formation of Earth itself in a habitable zone where temperatures allowed liquid water
- the collision with a Mars-sized body that resulted in our moon, stabilizing our planet's climate
- the shielding provided by Jupiter, guarding Earth from potential catastrophic asteroid impacts
- the emergence of life from simple organic compounds through a series of chemical reactions that have yet to be fully replicated or understood
- the leap from inanimate chemicals to the first single-cell organisms
- these cells evolving complex structures such as the nucleus, enabling genetic material to be stored and transmitted to future generations
The list goes on. This development of cellular reproduction set the foundation for all complex life. Each step of the way made our existence increasingly likely yet staggeringly improbable.
Fast-forward to the very first humans who lived in tribes, much like other animals of their time—terrorized by predators and forever in pursuit of prey. There was no medicine or sanitation, and in the famous words of Thomas Hobbes, pre-agriculture hunter-gatherer societies lived lives that were “solitary, poor, nasty, brutish, and short.”
However, unlike other creatures, humans possess a unique ability among all other known forms of life: the capacity to bend our environment to our ambitions. Early humans who were weary of battling the elements built shelters. These shelters provided safety, which in turn allowed for the accumulation of food and water resources. With safety and sustenance secured, leisure time became possible, and it was leisure that birthed culture.
You scale this innovation across thousands of human tribes worldwide, and you witness the formation of little pockets of society. Our ancestors toiled away their lives, sacrificing their time to build technologies and share knowledge, ensuring the next generation would have it better. Humans have always recognized their suffering and worked tirelessly to alleviate it for others—a true labor of love.
Today, we stand on the shoulders of these giants. Through billions of years of evolution, humanity has arrived at a point where our nature allows us to transcend basic survival. Our journey has escalated our civilization to a global community of eight billion individuals, where each step in science and technology, each act of mutual support and collaboration, is a step towards a future where the potential of life can be fully realized—a future where more beings can live, love, and appreciate the miracle of existence.
As the universe remains vast and mysterious, with Earth as its only known cradle of life, the very act of being conscious, of matter becoming aware of itself, seems to defy all known laws of physics. It justifies taking a step back to appreciate not only the billions of years of empty evolution that preceded the development of life but also the tens of thousands of years of human innovation that have allowed us to thrive. With continued growth and prosperity, we can provide opportunities for more people to experience and contribute to this remarkable journey.
Looking at our modern society, realizing the amount of progress that has compounded is almost unbelievable. We had the problem of cold, so we invented warmth. We had the problem of darkness, so we invented light. We had the problem of starving, so we invented agriculture. We had the problem of moving, so we invented transportation. We had the problem of communicating long distances, so we invented the Internet. We now have a problem indexing the internet, so we are building artificial intelligence in the form of models and transformers.
Even without acknowledging the innovations in healthcare, education, or countless other industries, it is clear that our ancestors invented so much infrastructure to make human coordination at a global scale possible.
As Noah Smith wrote in The elemental foe, GDP is a proxy for humanity’s success in fighting the unflagging foe that is poverty. GDP is much more than just a line on a chart, but understanding its directionality is critically important for appreciating our trajectory and acknowledging where we came from.
But with new technologies come new problems. Of course, our new problems are better than our old problems, but it’s critical to recognize one of the most important problems of our time:
We broke the money.
What is money?
Along the way to civilization, humans developed currency to track social credits and debts. We issue currency to reward people for the value that they create. It’s society’s way of saying; we appreciate what you did with your labor; we now owe you something; here is some currency for you in return. You can use that currency to get something back from society in the future.
Throughout history, humans have utilized various materials as currency, adapting to environmental and societal needs. Common examples include
- cowrie shells, used globally for their durability and portability
- salt, valued for its food preservation qualities
- tea bricks in Asia, which doubled as a consumable item
- tobacco in colonial America, used even for tax payments
- animal pelts in colder regions for their necessity in making warm clothing
- precious metals like gold and silver have been universally prized for their scarcity and intrinsic value
All these forms of currency share the common traits of having intrinsic or assigned value, being accepted within their communities, and facilitating trade, emphasizing the flexibility and innovation of human economic systems across different cultures and epochs.
Money is the best currency because you can spend it on anything. Surely, we are animals, and we exist on a planet in the middle of space, filled with nothingness. So, instead of spending years of our lives building infrastructure from nothing, we choose to spend money to acquire it. We effectively trade money for our time back. Ultimately, the money we spend is someone else’s income, their time commitment, and a new opportunity for them to spend on increasing their standard of living, ad infinitum.
We spend money on shelter to survive the elements. We spend money on food and water to stay nourished. We spend money to heat and cool our homes to survive temperature extremes. We can spend whatever is left over at our discretion.
That may look like more food, a larger shelter, perhaps entertainment, maybe experiences. It could be buying insurance to offset your precious assets from future disasters. It may mean bringing new humans into this world, who will depend on you and your money until they can contribute to society.
Note that the lack of money makes things very difficult. You can certainly build a shelter for yourself for cheap, but you’ll trade hundreds of hours of your life. You can hunt and gather sustenance in the wild for free, but you'll also trade countless hours of your life.
How we live our lives will look different for everyone, which is perfectly okay. One thing is certain: there will come a time when we die. All excess money at this point lives on, either used by your family, donated to causes of your choosing, or appropriated by governments to (hopefully) give back to its people.
Some people realize the finiteness of it all and believe there is no point in making money since the result of a life concluded is taking none of it to our graves.
But they miss the obvious reality that your money gets recycled into society. Other people inevitably are beneficiaries of the work you did to earn that money. The first law of thermodynamics is a formulation of energy conservation law: energy cannot be created nor destroyed, only transferred. In the case of money, it is created when there is human demand. The more humans, the more potential for value creation. The economic energy held by your monetary instruments is ultimately demanded by someone, somewhere, sometime.
Where did it go wrong?
There are some excellent podcasts that delve into what went wrong; you might find them more informative than this brief summary can offer. I have added links to the end of this section.
Today, all major world currencies are fiat currencies, meaning they are government-issued currency not backed by a commodity like gold. Among these, the US Dollar (USD) stands out as one of the strongest, supported by the US economy, the largest in the world. The US government needs to spend money to safeguard its citizens, which often involves expanding the money supply or taking on debt. The Federal Reserve manipulates tools such as the federal funds rate to stimulate the economy during downturns and pull back during prosperous times.
The US government aims for its currency to have a 2% inflation rate annually. This target is seen as “optimal” for economic growth. However, inflation has varied, and since 2020, cumulative inflation has exceeded 24%, which suggests an annual compound inflation rate of about 6%, significantly higher than the target.
Even with just a 2% inflation rate, the purchasing power of the dollar diminishes over time. In five years, the same currency would effectively be worth over 10% less due to an increase in the total money supply. After ten years, the value of the same amount of money falls by about 18.3%. Over fifty years, it would lose a whopping 63.6% of its original value.
Many people build their savings with USD in traditional bank accounts, which rarely yield returns above 2%. While their account balances grow nominally, they don’t feel wealthier because their purchasing power declines. As a result, despite increasing nominal prices, assets like real estate—which retain value against a depreciating currency—appear to become increasingly expensive.
The true pricing of most goods and services looks like this over time:
This gap between nominal wealth and real purchasing power stems from what some might consider monetary manipulation. As the government issues more currency through various means, the value of money individuals hold is effectively diluted. This erosion of economic participation can feel like wealth is being quietly siphoned away. This dynamic fuels pessimism about the future, explaining why many feel that securing a comfortable retirement requires over 40 years of career effort.
What this means to me
Reflecting on the life around me, I feel privileged to have been born healthy and able-bodied. I've worked diligently to maintain my health as I age, supported by the education and social skills imparted by my parents and teachers, who taught me how to leverage resources effectively.
Not everyone shares these advantages, and I view my life as a profound gift. This perspective prompts a pivotal question: "What do I want to do with my temporary gift of life?"
While young and full of energy, I am driven to make a meaningful contribution to society. I am deeply aware of the many benefits I received growing up, transforming from a dependent child to an independent adult. I am committed to ensuring that society's investment in me yields a positive return.
I used the Internet to learn about available jobs and used labor prices (via compensation) to determine which careers capture the most economic energy—those jobs society needs the most but are constrained by the resources and technology available. While the highest-earning jobs tend to be the most demanded by society, many require intensive education or expensive equipment. Using the Internet, other jobs can be learned and completed from home. We each get the opportunity to learn what is out there, find something we can enjoy, and commit to it.
While young, I want to work hard to accrue economic energy that I can use to realize future liabilities like raising a family, having various life experiences, and trading my time back to one day retire completely.
I am here to tell you that there is a way to pursue our dreams without working until we die, and the path to it has already been extensively documented.
Please allow me to share my top-level thoughts:
How we fix it
First, we need to create an economic surplus in our lives by spending less than we make. My father always called this “living beneath our means.” Do absolutely whatever it takes to create a meaningful surplus. That could mean cutting expenses, working multiple jobs, or pursuing education to gain the qualifications for a higher-earning job. We want to create excess to save for later because, as we discovered earlier, the goal is not to work forever.
As mentioned earlier, the most obvious thing is to stack the currency I receive in a bank account and watch the number go up over time. It feels simple and risk-free since the USD is known as the strongest currency in the world.
But think about it. If the best-case scenario is losing half of our savings over 50 years, saving our money in the form of an inflationary currency is a very bad idea. If we are to build careers over decades and anticipate saving money for even longer, we need durable places to store it, not in the form of a currency engineered to be worth less over time.
Optimism for humanity
I learned about the Internet and its educational content to increase my earning ability.
I learned about gold and its store-of-value properties as a finite resource.
I learned about equities and their value-capture properties as enterprises that produce goods and services people buy.
I learned about index funds and their ability to make it trivially easy to own every publicly traded company in the world, proportioned and rebalanced automatically.
I learned about debt and that you can lend out money you don’t need today for someone else to use today and provide you with interest in return tomorrow.
I learned about real estate and how it appreciates in value while producing cash flow, contributing to public goods via taxes, and creating employment opportunities for local communities.
I learned about Bitcoin, a new technology that natively puts gold’s store-of-value properties on the Internet without the burdensome costs of storing and moving it.
With all these technologies and more at our disposal, it becomes clear that it is much easier to preserve our economic energy than it seems. You don’t have to worry about inflation because your assets are durable and will likely outpace it. And as we noted earlier, as society becomes more efficient at creating goods and services, their costs decrease, raising purchasing power for all who consume them.
I yearn for a world where everyone bets on humanity. A world where everyone seeks to contribute to society, level themselves up, be helpful, and spread love.
Imagine a world where people are financially literate enough to understand how to protect their hard-earned purchasing power and then use that power to self-actualize their dreams.
Everyone can be the master of their calendars.
We can find purpose in working for others and even greater purpose in working for ourselves.
We only work when we want to on projects we feel especially passionate about.
By being prudent in reducing and removing financial stresses, we take back our time and put our lives into our own hands.
We can spend that precious time with other human beings. Sharing stories, making new ones, laughing, loving, and deeply experiencing our one shot at this life.
How to retire
Retirement is when your passive income matches or exceeds your passive spending. You can reach this balance by decreasing your expenses or increasing your passive income. The best way to build passive income is to work hard, capture economic energy, and compound your gains.
When we are empowered to use the tools available to us, we find that we can save up for retirement earlier than possible in other generations of humans.
We find that our labor is immensely valuable, and we can be diligent about how we spend our time, especially in our youth.
We find that we can own productive assets and receive income passively through price appreciation, dividends, and yield.
We become less attached to working for others as we approach this equilibrium.
We find that we can invest more in ourselves, our families, and our communities.
We can leverage our able-bodied gifts to bring up everyone, especially the less fortunate among us.
Although I am currently in the phase of life where I am building up that wealth engine, I aspire to live my ideal life every day. I fill my weekends and evenings with quality time with others. I fill my weekdays with high-value work to, over time, allow me to step back from needing to work a full 40 hours per week.
Perhaps one day, I can afford my basic needs with only 30 work hours per week. Then 20, 10, …
Over time, I aim to spend less time working for strangers and more time working to bring up the people I love and appreciate.
I aspire to create and use wealth to elevate people and communities.
I aspire to create and use wealth to dedicate my time to laughing, loving, and experiencing this life.
Because there will come a time when I die, and all my economic energy flows back into society. All that will be left of me is my memory. And when all the people who knew me die, there will be nothing left but my durable contributions to society, just like my millions of ancestors who came before me.