What would be considered real wealth?

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TheRedHare
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What would be considered real wealth?

Post by TheRedHare » Mon Jun 26, 2017 12:20 am

I was reading one of Jacob's posts "The wealthy shall inherit the Earth" and after reading the last paragraph, I wondered how I would be able to obtain this "real wealth" that he talks about. Here is the paragraph I'm referring to:

"What I can suggest is to move North (whenever you move, no hurry yet). Learn about growing food (this might just save your life or at least make it more decent, this is vital because top soil does not migrate; it has to be created in place, hence intensive gardening skills will come to dominate industrial farming). Learn to be frugal again—it’s better to learn it because you want to than because you need to, so start now. Accumulate real wealth like skills, connections/social cohesion, and resources. The best resources are tangible assets. I’m not thinking real estate, at least not in the McMansion sense or even the middle class housing sense, but perhaps part ownership in a productive entity you control. A forest, good soil, or a small company (presumably if you had a controlling share in a large company, you are rich enough not to worry about this). This is real wealth (unlike the paper networth people of this age are so bent on pursuing) and this, I believe, is what will “inherit” the Earth in terms of which cultures will survive."

I'm guessing I need to move up north towards New England, or Canada, and buy some land. What sort of businesses would be considered a "productive entity" a smithy? or some kind of a farm?

ThisDinosaur
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Re: What would be considered real wealth?

Post by ThisDinosaur » Mon Jun 26, 2017 7:50 am

Phosphorus is life's bottleneck. If you can get ownership in a phosphorus mine for a good price, its a productive resource that can only become more rare/valuable with time. Anything that is currently abundant, but will become rare will put you on the right side of an inelastic supply/demand curve. Other limited, consumable resources include Lithium (for batteries), petroleum, and coal.

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Re: What would be considered real wealth?

Post by jacob » Mon Jun 26, 2017 8:03 am

Short answer is that real(*) wealth (of my preferred kind) is anything that isn't paper or information based. A productive entity is something that creates a living which means that it has to have more "revenue" than a hobby. I would be surprised if one could make a living off of blacksmithing (seems more like a hobby) and even small-scale farming would be difficult (revenue is small).

(*) Not to go into a philosophical discussion, but "real" means something you can put in my hand.

Examples of businesses that produce [enough] real wealth: bakery, auto-mechanic, plumber, electrician, funeral home, supermarket, dentist, family doctor, drug store, liquor store, bank, law-firm, restaurant, hair salon. Everything I listed is present on the next street over from where I live and by the looks of it covers 99% of what people need over a lifetime. There are no smithies (although there's a welding supply shop 1M from here) and no farms although there are several attempts at backyard gardening here and there.

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Re: What would be considered real wealth?

Post by sky » Mon Jun 26, 2017 10:09 am

Currency is based on paper. Real wealth is ownership of useful things (cattle, lentils) and of skills to create useful things.

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Re: What would be considered real wealth?

Post by fingeek » Mon Jun 26, 2017 11:45 am

On possessions and money: https://www.youtube.com/watch?v=EeyrftKCP50

I'd suggest that real wealth is Freedom[1]. Chunking one level lower: (1) Being healthy so you are able to (become able to) do what you want and (2) Be adaptable so you can (learn to) do what you want.

[1] Though I probably would say that, as Freedom is what I've ultimately optimised for for my entire life.

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Re: What would be considered real wealth?

Post by IlliniDave » Mon Jun 26, 2017 3:37 pm

To me real wealth means to have at a least a little more than enough to live contentedly. The reality is that right now, that which exists on paper (electronically, really) is valuable and useful, even essential. It won't do much good after the Zombie apocalypse or whatever, but I don't think we survive any huge economic upheaval and morph into happy hobbits in the Shire. So my default answer there is acquire remote land and guns as a hedge against the breakdown of society/the economy (and learn the rudiments of growing food, hunting/fishing, and foraging).

That's not exactly what jacob is talking about, obviously. Based on his response he seems to be equating possession of the wherewithal to keep a steady inflow from a local community, which is fine, but for some of us it is basically too late for that.

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Riggerjack
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Re: What would be considered real wealth?

Post by Riggerjack » Tue Jun 27, 2017 7:47 am

Well, with the internet, a smithy can be a profitable business, but that requires a lot of infrastructure and the disposable wealth a healthy economy brings.

If Jacob's were the criteria, I would aim for a natural resource business or businesses. A share of a fishing boat, sawmill or farm. Something that both produces resources that are useful regardless of the economy, and plugs you into the local economy/community.

If you aren't planning for TEOTWAWKI, then really, you can make money at anything, if you put the effort into it. Bespoke coffins? Jewelry made by bugs? Jewelry made from bugs? Custom toilet paper holders, whatever. The internet brings markets to suppliers.

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Re: What would be considered real wealth?

Post by George the original one » Tue Jun 27, 2017 1:48 pm

There's also the consideration of being adaptable. Jacob usually meets this requirement with having more than one stream of income, but an ability to shift with the market forces is also useful.

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Re: What would be considered real wealth?

Post by 7Wannabe5 » Tue Jun 27, 2017 5:58 pm

I recently encouraged my BF to take some of his money out of the stock market to buy 11 wooded acres with deeded access to a Great Lake because I need some place to park my decrepit camper. Win-win except he got too grouchy with me again so I might have to bail.

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Re: What would be considered real wealth?

Post by Farm_or » Wed Jun 28, 2017 6:47 am

Wealth or the accumulation of tangibles in its most basic form is creating something out of "nothing". You supply the "nothing".

Learning and creating, adapting and repeat. Producing a service or good that is needed more than wanted.

The closer you are to the need spectrum, the more competition you will realize. This is where the creativity really benefits?

ThisDinosaur
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Re: What would be considered real wealth?

Post by ThisDinosaur » Wed Jun 28, 2017 8:39 am

+1 Farm_or.
Wealth is stored labor. Either your labor or someone else's. The wealthiest people are those who traded a small amount of their labor for a large amount of other people's. (i.e., Bill Gates traded some hours learning about transistors and programming for all the work-hours his customers spent on his products.)

We are agreeing that *real* wealth in this context means not currency and not paper financial products. Any definition of wealth has to involve a definition of value, for the owner or for someone the owner will trade with. Food/housing/physiological security has value because once those are taken care of indefinitely, you have freedom of time. Because you aren't laboring to meet basic needs. Anything beyond the first two Maslow rungs can be considered a luxury, and you can decide thoughtfully what that luxury is worth to you in work-hours.

I'd also point out that all of the businesses Jacob mentioned can fit into one of the Maslow levels. If you owned all those businesses in a mini-mall, plus the backyard garden, you'd be set for approximately all economic conditions.

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Re: What would be considered real wealth?

Post by jacob » Wed Jun 28, 2017 8:51 am

ThisDinosaur wrote:
Wed Jun 28, 2017 8:39 am
I'd also point out that all of the businesses Jacob mentioned can fit into one of the Maslow levels. If you owned all those businesses in a mini-mall, plus the backyard garden, you'd be set for approximately all economic conditions.
Bingo!

And because of that all of them have local demand and can trade with each other in goods and services on a semi-frequent basis. They're all local businesses that take local money and mostly spend it locally. Some of them have been around for decades. Of the ones I listed I consider banks and restaurants to be the least robust. There were also a few I didn't bother to list: One we found out is very likely a herbalife front(?!) and then there are a couple of derelict clothing stores. I also forgot to mention the coin laundry.

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Re: What would be considered real wealth?

Post by 7Wannabe5 » Wed Jun 28, 2017 4:11 pm

I believe in the local business model, or in more general terms, following the permaculture principal that places production in most appropriate zone based on recurrence of need. However, this doesn't take into account the dependencies modern local businesses, even those that are truly Mom and Pop and not franchise unit, have on regional and global distributors and suppliers.

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TheRedHare
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Re: What would be considered real wealth?

Post by TheRedHare » Wed Jun 28, 2017 11:04 pm

I know an older man from the town I grew up in. He owns nearly half the small city near by. He's the one that convinced me to study accounting, but I honestly hated accounting even though I was half decent at it lol. I should probably ask him for some words of wisdom.

I'm thinking maybe it would be smart to invest money in a small businesses around the area...I know it very well. Although the city and near by towns are kinda touristy, so getting a business that the locals go to would be best, no?

@jacob I'm assuming it would be better to own a business or businesses within a smaller community as there might be less competition, if you can beat other existing businesses, and maybe more cohesion with other local shops?

EDIT: Also, when it comes to owning a small business or several, I'm assuming you would be hiring management to run it for you? But as most small businesses go, you'd probably be doing most of the work yourself unless you have the money/cashflow to have workers run it for you.

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