STOP BEING POOR
If you have a negative net worth, how can you have a positive outlook?
Now that I have your attention, it turns out this image was faked:
https://nypost.com/2021/05/04/paris-hilton-infamous-stop-being-poor-t-shirt-is-fake/
I always thought this was real. The joke fooled me.
So let us dive in to the psychology of poverty in the modern world!
Are you worth more than $1?
About a decade ago I listened to a book that was very popular among the economic intelligentsia:
Thomas Piketty’s Capital in the 21st Century
The basic idea in a sentence: returns to capital always outstrip wages which leads to inequality & people get very angry.
If you want the few-minute summary, here it is:
Piketty & Heads on Pikes
Whether or not Thomas is right does not matter. As a Frenchman, he is steeped in a deep lineage of revolt & revulsion. The French know how to slay their Rich. They used to make it a national sport.
What Thomas Piketty achieved was simple: he made ANGRY
As I listened to this book describe my financial situation & explain how I would be stuck there forever, I went MAD.
There was this blood-curdling rage arising in me that I was paying interest on credit card loans which was flowing to the shareholders of the banks. I felt what the revolutionaries of the past must have felt: RAGE AT THE RICH
The central problem was simple: I had not checked my balances in far too long. Student overdrafts, credit cards from Supermarkets, and a few failed startup projects had put me tens of thousands of dollars into the red.
Being in the Red made me see Red
Everything felt worse. It was like a ball and chain around my neck. I knew I could default but the shame of bankruptcy ruptured my sense of normalcy.
I did not file. I worked.
I began the quest that all modern men must engage with:
Accumulate Enough Capital to Spin the Wheel of Life
Anyone who says money does not make you happy usually inherited or stole it. The real secret is this: creating capital that cycles you through life is a great ride.
If you build a business, invest in a startup, buy the right stock, or make a single magical deal, your entire life structure changes.
At that point, people wake up and work on your capital. That capital throws off money & you are free.
So what makes this game so hard?
The vast majority of people cannot work. They are:
👶 Too young
👴 Too old
🤒 Too sick
😴 Too tired
🤬 Too angry
😪 Too damaged
😔 Too burdened
🤕 Too injured
To those who do work, very few produce meaningful profits with their work because they work on things that do not work:
🚀 Very few companies grow for 10 years.
🏴☠️ Most companies’ margins shrink each decade.
⚖️ Almost no one generates tax receipts that are 100x what they draw down.
The High Earners vs. The High Returners
The top 10% of Britons (in earning terms) are covering more than half of the bill. The High Earners have no choice because it is scooped out of their Pay As You Earn (PAYE) and so they are structurally bound to fund the system.
The high returners are the folks who control capital. They are in a constant dance with the tax man because capturing capital gains is so complex.
Accountants are the modern wizards, when you earn revenue in a dozen countries, file notes in even more, incorporate in a few domiciles, and spread the flows to a variety of systems, money can disappear.
Earning Equity
Nearly all new wealth is stored in PDFs. It is thrown around in email inboxes and exchanged for dollars on a daily basis.
This is the private startup equity market. You are NOT invited.
1,000,000 people are dividing up $1,000,000,000,000
You are only allowed to join them if you join a startup.
This is the number 1 equity management platform: Carta.com
So what is to be done? To me, the answer is simple: pay people shares
It is so simple conceptually & so complicated financially.
Across the world, I cannot think of a better way to improve it.
Silicon Valley was built on compensation innovation which created the conditions for technology innovation