Money and Wealth Read online

  MONEY AND WEALTH

  A Lifetime of Learning, Book 2

  Mark Andre Alexander

  Auburn, CA

  © Copyright 2013, 2018 by Mark Andre Alexander

  Published by Mark Andre Alexander

  P.O. Box 5286, Auburn, CA 95604-5286

  Second Edition

  Library of Congress Cataloging-in-Publication Data

  Alexander, Mark Andre, 1956-

  Money and wealth: a lifetime of learning / by Mark Andre Alexander

  p. cm. — (A Lifetime of Learning, Book 2)

  ISBN 978-1-937597-14-6

  An Amazon.Com Kindle eBook

  Cover design by Melinda De Ross

  Photos and illustrations are created by the author, in the public domain, or licensed from Photos.com™, PhotoDisc®, Thinkstock.com, and Nova Development Corporation.

  Version 2_2

  Formatted for iPad and other tablets.

  Thanks to my readers: Bree, Scott, Frank, and Christine. Also, thanks to BubbleCow.Com for their great book editing services at a reasonable price.

  Go to MarkAndreAlexander.Com to access a free 36-day course on Creating Your Life.

  MONEY AND WEALTH

  A Lifetime of Learning, Book 2

  Make clear distinctions

  and examine all things well.

  The Golden Verses of Pythagoras

  For Bree and HK,

  and those who Quest

  About This Series

  How many times have we said it to ourselves?

  If I only knew then what I know now?

  This series of little books, titled A Lifetime of Learning, gives my personal, and admittedly idiosyncratic, discoveries over the years. I wish I had these gems in my teens. Discoveries, I now find, most adults still seem to have missed.

  Of course, I may not have acted on that knowledge, but still it would have been nice to know.

  In many cases, knowing then what I know now would have saved me time, money, and heartache; would have enriched me, and given me greater personal freedom.

  This second book, on Money and Wealth, extracts what I have learned about what it means to have more real wealth and less debt.

  Along the way, I’ve found fascinating answers to key questions:

  What is the difference between money and wealth?

  Why do people so easily end up living a life in debt?

  How can I be aware of con artists picking my pocket?

  The publishing imprint I have chosen, The School of Pythagoras, points to the quest for the fundamental nature of Truth.

  This series is dedicated to those of you on that quest.

  TABLE OF CONTENTS

  Introduction

  Chapter 1: What Is Wealth?

  Chapter 2: Trade

  Chapter 3: Jobs

  Chapter 4: Government

  Chapter 5: Taxes

  Chapter 6: Money

  Chapter 7: Paper Currency

  Chapter 8: Banking

  Chapter 9: Inflation

  Chapter 10: A History of U.S. Money

  Chapter 11: Credit and Debt

  Chapter 12: Investments

  The “Wealth and Money” Checklist

  Recommended Reading

  Appendix: Excerpts from Original Works

  About the Author

  Introduction

  Live within your means, never be in debt...

  when you get in debt you become a slave.

  Therefore I say to you never involve yourself in debt,

  and become no man’s surety.

  Andrew Jackson to his ward, 1833

  If you learn one thing only from this little book, then let it be this:

  Debt is slavery.

  Look at the people around you.

  • Many owe money to others.

  • A few have money owed to them by others; they never need to owe money to others.

  Who is in a better position?

  Which person would you rather be—the person who owes money, or the person who never needs to owe money?

  Do you want to be the person with DEBTS

  (student loans, credit card payments,

  mortgages, car payments)?

  Or do you want to be the person with ASSETS

  (investments, savings,

  extra cash on hand)?

  Perhaps not all debt is bad. In special cases, a temporary debt can provide value that exceeds the debt. But most people these days live in a state of perpetual debt.

  And few realize that others actively try to put people in that state by convincing them that buying now and paying later is a natural part of life.

  Charles Lamb, an English essayist, wrote in 1823, “The human species, according to the best theory I can form of it, is composed of two distinct races, the men who borrow, and the men who lend.”

  The Chinese, one of the oldest civilizations on Earth, have many sayings about debt, including:

  • A good debt is not as good as no debt.

  • One who restrains his appetites avoids debt.

  • Free from debt is free from care.

  After thousands of years of history, could the Chinese be onto something?

  Around 600 B.C. a Greek writer named Aesop wrote fables to teach children moral lessons. One story is called The Ant and the Grasshopper.

  In a field one summer’s day, Grasshopper was hopping about, chirping and singing to his heart’s content. Ant passed by carrying an ear of corn that she was taking to the nest.

  “Why not come and chat with me,” said Grasshopper, “instead of working so hard?”

  “I am helping to store food for the winter,” said Ant, “and I recommend you do the same.”

  “Why bother about winter?” said Grasshopper. “We have plenty of food right now.”

  But Ant went on her way and continued working. When winter came Grasshopper had no food and he began dying of hunger. Ant, however, had plenty of corn and grain.

  Grasshopper learned a harsh lesson:

  It is best to prepare now for harder times.

  What the story does not reveal is how Grasshopper had spent the summer maxing out his credit cards in clothing stores and shopping malls, ordering video games online, and buying a new car with six years of payments.

  And when he went to college, he took out over $100,000 in student loans for his major in a specialized, non-technical field. And the job he landed paid so little he had to live with his parents instead of buying a home and starting a family.

  So when winter came, he had nothing to fall back on. And he had creditors at his door threatening him constantly.

  We’ll talk about credit cards later on. But for now it’s just enough to admit:

  There are people in the world

  who benefit from your desire

  to have things now and pay later.

  These people may, just may, be willing to convince you that debt is always a good thing.

  But there’s an old adage, TANSTAAFL (There Ain’t No Such Thing As A Free Lunch). Anyone who tries to convince you that something is free is not being honest with you.

  Someone always pays, and often you pay in ways you don’t see.

  How This Little Book Can Help

  Most people do not understand economics, money, wealth, credit, debt, inflation, currency, and circulation.

  As a result, they are targeted by con artists. Not just con artists in your neighborhood, but con artists on Wall Street and in government (at all levels).

  And often these con artists don’t realize they are con artists. They think they are doing the right thing.

  You probably already know that money gives you more freedom to choose. After studying this little book, you will know how to pr
otect yourself more effectively against the con artists who take advantage of your ignorance and pick your pockets.

  This little book simplifies difficult concepts, and it provides practical guidance.

  Now for a glimpse into what follows:

  Chapter 1: What Is Wealth? explains how wealth and money are not the same thing, and that you can even have wealth without money.

  Chapter 2: Trade shows how honorable people, with wealth and the freedom to choose, naturally create free trade.

  Chapter 3: Jobs explores how honorable people with wealth and skills naturally create jobs when they are free to choose how to work together.

  Chapter 4: Government points to the first legitimate role of any government and suggests what roles government should not adopt in a free society.

  Chapter 5: Taxes distinguishes between productive and destructive taxation.

  Chapter 6: Money defines the four characteristics of true money and explains the nature of counterfeiting.

  Chapter 7: Paper Currency draws a clear line between real money and what symbolically represents real money.

  Chapter 8: Banking reveals the origin of institutional lending, and how it can build the wealth of a community.

  Chapter 9: Inflation offers a real definition of inflation (hint: it’s not “rising prices”), and how con artists actively perpetuate a misunderstanding of what inflation is and how it works.

  Chapter 10: A History of U.S. Money shatters some common illusions about the nature of money, coin, paper currency, and banking.

  Chapter 11: Credit and Debt offers you a look at how people profit from enslaving you through perpetual debt.

  Chapter 12: Investments suggests how you can start protecting your assets and increasing real wealth.

  Several chapters end with a special Deep Dive section. Where the main text explores topics in an easy-to-understand way, the Deep Dive gets into more complex, challenging, and even controversial topics.

  For some, it may be best to read the main text first throughout the book, and then later come back to the Deep Dive sections.

  At the end of the book is a Money and Wealth checklist and a recommended reading list. You will also find appendixes that offer details for the more scholarly readers.

  The key understandings in this book, faithfully applied, do deliver results. You have to experience the results yourself to realize fully the value of this new way of looking at money and wealth.

  As we saw in the first book of this series, Creating Your Life (A Lifetime of Learning, Book 1), your mind can create blind spots to the truth. When it does, the truth can look crazy and create some anxiety.

  Be aware that your mind may rebel against some ideas presented here. The mind creates anxiety when faced with an idea that conflicts with its picture of the world.

  Your mind may want to label and categorize these new ideas so that you can dismiss them and avoid anxiety. For example, a mind can avoid looking at a truth when it can label the person expressing that truth as a political progressive, liberal, or conservative.

  But truths are truths.

  Be thoughtful; do not immediately discount any idea that creates anxiety or makes you feel you must dismiss it as ridiculous or not worth examining.

  Accepting new truths is not always easy.

  But it is worthwhile.

  If you experience some inner conflict or anxiety, take time with the new ideas. Examine your assumptions. Evaluate why you have them. Be open to new, challenging points of view.

  You may discover that you have cherished opinions that you automatically accepted from others. You may want to critically examine those opinions.

  When facing an inner anxiety arising from the conflict of ideas, you invite the possibility of enlightened discovery.

  So let’s begin this marvelous adventure.

  Chapter 1

  What Is Wealth?

  It’s not money that makes life better, it’s wealth.

  You don’t have to have a lot of money;

  you want wealth.

  Richard Maybury, Early Warning Report, June/July 2008

  What is wealth?

  If you answered “Money,”

  Bzzzt! Wrong.

  Thanks for playing.

  Money as it exists today can be a sign of wealth. It can be used to measure or trade wealth.

  But money is not wealth. Knowing the difference can make all the difference in how you choose to make a living. And how you choose to view people with wealth and those who want your wealth.

  Later, we will talk about what real money is. First, let’s look at wealth...

  Here’s a clue:

  If governments could create wealth,

  they would have no need for taxes.

  Wealth is goods and services—food, clothing, homes, tools, auto repair, plumbing services, literature and the arts, entertainment, personal and professional skills—just about everything that makes life better is wealth.

  Money makes trading wealth easier. I can use money to specify the value of my professional skills and physical work in relation to the products you are selling.

  A monetary value can be placed on goods and services; therefore, money is one method of measuring your wealth.

  Money can also predict your ability to acquire wealth. If you have a wage or salary, you have an idea about what kinds of, and how much, wealth is available to you.

  But money itself is not wealth.

  Let’s break it down...

  Imagine three small islands, each with a village of about 100 people:

  • Gold Island

  • Silver Island

  • Iron Island

  The people on Gold Island are, by nature, good and ethical people who trust each other. They appear good and are good inside. They all have to work hard just to survive day to day.

  They live by a high standard of ethics.

  The people on Iron Island are just the opposite. They are bandits and pirates: dishonest, ruthless, manipulative, selfish, and dangerous. They appear bad and are bad on the inside.

  In other words, they are openly bad, and do not care who knows it. They form thieving bands that believe in “honor among thieves,” mostly. They do not want to work hard to survive. They enjoy taking from others who do have to work hard.

  The people on Silver Island are a mix. They are inherently both good and bad, and everything in between. Some of them can appear good but be bad on the inside. Some of them are good on both the outside and inside in some situations, but not in other situations. They can work hard to survive but cut ethical corners when the opportunity arises.

  Let’s first focus on the people of Gold Island.

  Each day in order to survive, each person on Gold Island has to catch one fish, get one coconut, and drink two gallons of water. It takes twelve hours of work each day on average for each person to get the food to survive.

  Everyone barely manages to live.

  One day, one man, let’s call him Tor, gets an idea. Tor labors extra hard to get an extra fish, an extra coconut, and extra water. He now has enough for a free day.

  He spends that day inventing a fishing pole. He practices with the fishing pole until he develops the ability (the skill) to use it. The next day he catches ten fish.

  This man, this inventor—using his imagination and creativity, and sacrificing for his vision—just created wealth. Specifically, labor-saving wealth.

  Labor-saving wealth is created out of two things:

  1. A valuable labor-saving idea

  2. The work necessary to manifest that idea

  Wealth is created out of

  imagination and work.

  Labor-saving wealth often saves people time,

  freeing them from mere survival.

  Wealth has inherent value to you or others.

  Notice that money is not necessary to create wealth. If you have good ideas or good skills, you can create wealth out of your work, or out of the work of others.

 
On Gold Island, both the fish and the ability to catch fish are actual wealth.

  Because our inventor, Tor, can now catch ten fish in the time it used to take to catch one fish, he has more free time. (Fishing used to take four hours; it’s hard to catch a fish in the ocean with your hands.)

  He and his wife Sophia can now go several days without having to fish (if they salt the fish).

  In fact, Sophia doesn’t have to fish or get coconuts anymore. Tor is skilled at getting coconuts (two hours on average to get one). His wife is strong, and willing to walk the six hours, round trip, to get enough water for them both.

  Meanwhile, in his free time, Tor is fixing the roof and building an additional room, since Sophia is newly pregnant.

  One day Sophia has a good idea. She’s been thinking of ways to get coconuts more quickly. Throwing rocks at coconuts works sometimes when they are overly ripe. But often, coconuts grow higher than her husband can throw. And the ones that are ripe will not always drop when hit by a hand-thrown rock.

  Sophia dreams up the idea of a slingshot.

  Working together in their spare time, they create the slingshot. They both practice until they have the skill to knock down ten coconuts in the time it once took to knock down one.

  Tor and Sophia now have even more wealth, more time to do other things.

  Wealth is one of the most important things anyone can create.

  Wealth frees people from drudgery.

  Wealth grants time to do other work,

  or time to play.

  Wealth is essentially good.

  In other words,

  Wealth grants freedom.

  There are other kinds of wealth.

  Ver is a great storyteller. He can gather the community together around a bonfire and begin telling tales of old.

  Tales of monsters and heroes, and stories of great passions, both hateful and loving.

  Ver has the extraordinary ability to voice many characters. He can act out the parts. Villagers from miles away will come to hear his stories.

  Ver enriches everyone’s life with sorrows and tears, and laughter and joy, and all the passions his characters experience.