I was reading a relatively inane article on what rich people do differently with their money, but it did bring to mind something that aligns with what I have been thinking and talking about lately in terms of complications and complexities.

At least for most of us, we likely have somewhat of a difficult relationship with money, because our experiences have been one of love and hate. We love to have money, but we hate to lose money, spending it on the things we must, or don't want to have, whilst missing out on getting more of what we want to have. We likely have some level of scarcity mindset surrounding money, where we rarely have enough, or could always do with a bit more.

Most, want a bit more luxury in their lives.

With luxury being more options.

Firstly, from the article the "millionaire" categorized the way people think about money into three general levels and behaviors, poor, middle and rich.

1. Poor see money as a way to pay bills and manage debt
2. Middle see money as a way to build credit for larger spends
3. Rich see money as a way to make more money

I think that probably, most of us here reading have an understanding of this, even though our daily behaviors might fall into one of the first two categories. However, for many in crypto, crypto is the investment vehicle that gets used to make more crypto. This means that for a lot of us, there is a "rich" mindset employed in the crypto economies.

But, as I was reading, it also came to mind how people have different preferences in terms of complicated and complex systems, which will now also include simple systems. Essentially, humans want to simplify and cut corners. We do this in our thinking, and we do this in what we create. We want to continually make our lives easier. However, doing this can actually make our lives harder in some ways also.

If we look at the generalized systems of those three categories above, we can say that the first one is quite simple, where we make money, we spend money. It is a clear process of inputs and outputs. However, we also know that the economy in practice isn't quite as clear-cut as that, as there are other complications, like debt, tax, and a whole lot of unexpected events that will disrupt our basic money flows. Because of the variables, it is difficult to manage money at just the simple level, as it is very easy to be disrupted and then fall into complication.

So, the second category is for people who are more comfortable dealing with the complication, where they are able to see that their money can be used to manage more complicated parts of the process, like debt management. This means that there are a lot more steps involved that are quite clear, where saving money gives access to lines of credit, that can be spent on larger purchases like a house, car, holiday. It is more complicated, as it has many more steps involved, but with careful process management, it is possible to increase footprints, and have more luxury, more options than the value of the money held.

However, once we get into the third category, there are still plenty of complicated processes and steps, but there is also more complexity. In order to make money, it requires combining multiple parts of the economy, with many being dynamic and changing, as they play off against each other, as well as being driven by sentiment of the market, which is a complex system in and of itself, as it is human demand based.

Now, this has very little to do with intelligence, as a lot of very intelligent people, are comfortable with complication, but not complexity. To be comfortable with complexity requires being comfortable with living in fear, as uncertainty always brings fear to the human mind. But, being able to manage our fear reactions is possible, and those who can do this are likely have more of an investment mindset, where there are uncertainties, and the potential for loss. An investment mindset is one that is willing to take risks and these bring in the complexities of human emotions.

I figure, that all of us start off in the first category, as it is where it is simple to understand. Money at that stage is in the moment, where we earn it now by doing tasks, and then spend it now on what we want now. In the second category, we are looking more at what we want in the future though, like our own home, so the earning now gets put into savings now, for a future purchase. The third category brings in future earnings, meaning that the earning now is invested to empower that earning further in the future.

For an example of the third, earning one HIVE now means that it can earn 10% on curation for the next year, as well as the potential for the price of that HIVE to increase before selling. The cost of earning a HIVE today, is lowered if that HIVE is sold for much more in the future. Or put another way, the value of the earning today, is higher in the future. This is not the case of earning and selling immediately. However, to invest into that future means to introduce complexities around future price, as well as emotional complexities around fear of loss and also not getting what we can get in our hands now.

At least for me, looking at some of my own behaviors through the lens of simple, complicated and complex systems, means that I am better able to identify what I am doing and whether it is suitable for what I want to accomplish. If I want to have more options in my life that require money, I have to not only make more money, but also consider how I am going to manage that money along the way. Living hand to mouth is far easier, but at least for most people, we don't earn enough to live hand to mouth and have all we want, and even if we can today, what happens if the income streams stop tomorrow.

Essentially, I think considering what we want and what it takes to get there, means that most of us will have to accept that in order to get what we want, we are going to have to be willing to get more uncomfortable. For instance, my wife likes dealing in complication, but hates complexity, and as a result, she has close to zero investment behavior, and what she does have, is likely driven by me. However, I am good with complexity, but dislike complication, so I tend to neglect the many steps required to maintain that middle level. And of course, both of us are comfortable with the simple relationship of trading money for what we want.

A little too comfortable.

Exploring these concepts has helped me and I hope it will help you too. I am probably going to keep building upon this in my own ways, connecting various complexities into a framework that makes them complicated, but adds clarity, so hopefully at some point, what is difficult for me to do now, is simple in the future. This in itself is an investment mindset, as it brings the space for more options. A luxury.

Taraz
[ Gen1: Hive ]