Concept: Renewable Wealth

Renewable Wealth

One mistake a lot of people make that I notice is the trade off between time and money. There are 24 hours in a day. People are born with wealth and develop wealth as it's discovered. But the concept of renewable wealth can best be illustrated by the phrase "sustainability". If we think of a productive asset such as a farm which has chickens which lay eggs then we know that this kind of wealth is renewable. The chickens are born, grow old, and die. The chickens lay eggs which can be sold to pay for more chickens which then can produce more eggs in a self perpetuating cycle.

I use the chicken example also to connect it to cryptocurrency which is something this community can better relate to. When you mine or stake or generate a cryptocurrency which you know is in demand then you are now in a similar position of the person who has the poultry farm. You have to keep your machines running to generate (mine) the Bitcoins over time but it's essentially very similar to having chickens which lay golden eggs only in this case these are more like digital gold.

There is no guarantee that whatever your productive assets are producing will be in demand forever. The challenge is in owning the productive assets which you think will produce something people will continue to want over very long periods of time. What if people can begin growing eggs in a lab without chickens like they do with the lab grown meat? What if these processes become cheaper and cheaper? This is why diversification begins to make sense. How long will cryptocurrency last in demand? I think millennials care about crypto from the current statistics but will it last 50 years from now or 100?