The so-called "I don't invest" means that all in invests in fiat currency

I often hear the phrase, "I don't invest at all."

I have said something similar myself, not only saying it, but also with a strong prejudice, thinking that investment is speculation, and it is unearned gain without creating value, and I disdain to do that. That was my boyhood.

To this day, as if I had exchanged identities, when I heard a friend's "no investment theory", I would share another view in turn. Some people think that I have changed and become vulgar. Yes, I've changed, and I've come to understand how fiat money and the financial system can hold down petty citizens.

First, define your investment clearly: save your surplus in a suitable form . The so-called surplus is the idle assets other than the basic needs of clothing, food, housing and transportation . "Basic necessities" vary from person to person. Some people think that a private car is a necessities, and some people take a bus to go out and calculate the cost first. Anyway, "surplus" is an idle asset other than daily needs.

Try to rewind the time line back to the Stone Age. It is good that humans can hunt and pick the food they need every day. It is about survival, and there is no surplus and no investment. When it comes to agriculture, accumulating grains to prevent hunger means "storing idle assets in the form of grains". After the advent of money, farmers stored the gold obtained from the sale of the grain they planted, that is, "idle assets are stored in the form of precious metals".

Many of my dedicated and happy friends will say that because they focus on creating value in their own industry, they do not spend any time investing. I appreciate and try to practice this professional attitude, but the only way to not make any investment is to not own any idle assets, because as long as there is surplus, there is investment. Note that it is not "need to invest", but "invested" already. You would say, "I have a small amount of surplus, but I have no investment." But that's not possible, there is always a way in which idle assets exist. If you were a farmer in ancient times it was grain, and thousands of years ago it was probably grain. Gold, by now, that is legal tender, legal tender.

Give a specific example. Your monthly salary is 10,000 Hong Kong dollars, and your basic living needs are 9,000. The remaining 1,000 Hong Kong dollars will continue to be deposited in the bank. Then, instead of not investing, you have invested 1,000 yuan in Hong Kong dollar deposits. When I was young, it was the first time I realized that I was investing. It was when I started to use a multi-currency account to support foreign currencies such as US dollars and Japanese yen. Then one day I realized that even though there were very few idle assets, even if I had not given an order, The system has helped me make the choice not to invest in foreign currency, all in Hong Kong dollars. Sunshine and support Hong Kong, you just don't realize it.

Breaking through the blind spot, and by extension, we can understand that whether it is Hong Kong dollars, foreign currencies, bonds, gold, stocks, funds, real estate, and cryptocurrencies, although there are differences in the areas of risk, return, and threshold, they are all investments. . You can choose not to invest in cryptocurrencies or other "high-risk" assets, but as long as you have the spare, even a dollar, you are investing.

Many people are all in legal currency without knowing it, because they understand legal currency as an inevitable, stable and eternal existence, but unfortunately that is far from the truth . Let’s talk about the first point first, assuming that our daily life must be paid in Hong Kong dollars (in fact, even this is debatable, but we will not start it yet), but don’t forget, we are talking about investment here, and investment is about idle assets, not about idle assets. For daily consumption, in the modern financial system, it is very simple to convert between asset forms. Investing in fiat currency is by no means inevitable, and it is not an exaggeration to say that it is lazy.

As for stability, is the previous < all stability in the world is relative > and < coin price instability is the biggest problem of Bitcoin? Talking about the theory of value relativity > has already been discussed, so I won't repeat it. Even putting aside the consideration that stability is a relative concept, is asset stability good? Obviously, the best investment is in assets that will appreciate, not stable ones.

In the end, the eternity of fiat currency is probably just the understanding of the summer bugs. How far is it forever? The Hong Kong dollar has only a history of more than 100 years, and it has been pegged to the US dollar for less than 40 years. In our lifetime, we are likely to witness the decoupling or even disappearance of the Hong Kong dollar from the US dollar. Not to mention the renminbi, which has a shorter history than the Hong Kong dollar. What about Taiwan dollars? Not long ago, it was called NTD, New Taiwan Dollar, New Taiwan Dollar, which was exchanged at (old) Taiwan Dollar 40,000:1 in 1949. Even the strongest dollar on the surface is only a few hundred years old, and the status of the world's reserves is constantly under attack.

It is a rational attitude to stay on the sidelines with Bitcoin’s 12-year history. You don’t have to believe in cryptocurrency, but if you think that fiat currency is an eternal existence and an inevitable choice, it’s just a beautiful misunderstanding, trapped in the government’s imposition on you fiat currency framework without knowing it.

* Originally published on 2021.04.20 Apple Daily column #decentralizehk

I have been following blockchain and cryptocurrencies for a long time, writing full-time, regularly publishing the #decentralizehk series every Wednesday, and sharing other occasions from time to time. My articles are all open and aimed at spreading knowledge and helping the general public achieve freedom of the press , financial freedom , and democratic freedom .

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