ERE in Non-Monetary System

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7Wannabe5
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ERE in Non-Monetary System

Post by 7Wannabe5 » Wed Mar 15, 2017 6:50 am

Trying to somehow integrate my spreadsheets into my systems diagram has perhaps turned me into a hamster stuck on a reinventing-the-wheel wheel, but...


I own myself. Myself is a productive asset for me. I may appreciate or depreciate, at the margin as an asset depending on maintenance/improvement decisions and practices. Eventually I will depreciate to worm-food.

I can lease Myself out to others in exchange for money ($) in units of 7WB5 X Hours. I must spend some of my 7WB5-Hours maintaining Myself. I can spend some of my 7WB5-Hours improving myself and/or improving and maintaining other assets I currently hold or to which I currently have access.

In simple model of ERE, if I lease Myself to other(s) for $X per year and I spend $X/10 per year on maintenance of Myself and Y (7WB5-Hours) on maintenance of Myself, then after leasing Myself out for 10 years, I will have accumulated enough $ to maintain Myself for 90 years assuming continued practice and maintained value of input of Y (7WB5-Hours) towards maintenance of Myself (and non-avoidable eventual complete depreciation of Myself) and constant maintained value of unit $ on market.

Obviously, Bare Maintenance of Myself or Savings is an overly simplistic decision fork for Flow of Cash $ from Flow of My Life Energy towards Lease to Other(s.) Four asset classes that could be integrated in the stead of Savings would be Productive Appreciating, Non-Productive Appreciating, Productive Depreciating, and Non-Productive Depreciating. Making decisions in alignment with directing Flow of Cash $ towards Productive Appreciating Assets will obviously most likely optimize efficient maximization of Total Value Assets Held.

Anyways, if you get to this point and then you start trying to integrate the Z(7WB5-Hours) spent hauling wood-chips to a vacant lot in order to build up soil in which to plant asparagus, you might start wondering about how much (what ratio) of Life Energy Hours you would have to cause to flow towards the creation of Productive Appreciating Assets and/or other Asset Classes in order to achieve ERE in a non-monetary system (one in which there was no possibility of getting a job.) Would the math still work out just about the same?

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Dragline
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Re: ERE in Non-Monetary System

Post by Dragline » Wed Mar 15, 2017 10:35 am

Well, to the extent you have any future orientation, you'll naturally try to store wealth, even if its just food for the winter. You will mimic what others are doing and they may mimic you, too.

And presto-chango! You have reinvented a form of money and can now exchange it for other goods.

7Wannabe5
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Re: ERE in Non-Monetary System

Post by 7Wannabe5 » Wed Mar 15, 2017 4:56 pm

@Dragline: I am interested in the question of when, or under what circumstances, a monetary system naturally pops out of a social economy, but that's not really what I am trying to get at here.

Here are two articles that you could kind of morph together towards what I am trying to figure out.

http://financialuproar.com/2014/08/21/d ... ve-assets/

http://newsroom.unl.edu/announce/beef/3616/20970


If you purchase 10 shares of stock in a company, you hope that will be a productive, appreciating asset for some time. If you take a cutting from a raspberry and plant it, you hope that will be a productive, appreciating asset for some time. I guess what I am wondering about is whether in a situation where all you are investing is sweat towards equity, and you invest the same ratio of sweat towards future vs. present as in a financial equity investment scenario, would the SWR which is reflective of the growth rate tend towards being the same, higher or lower?

The reason why this occurs to me is that I currently pretty much freely choose which job/business/project I am going to work at on a daily basis. If I teach, I am paid in cash. If I work at my book business, I invest a small amount of cash and a moderate amount of sweat towards accumulating inventory, which rolls into cash. If I work on my perma-culture project, I invest a small amount of cash and a moderate amount of sweat towards accumulating perennial plantings which roll into crops. If I study robotics, I invest a very small amount of cash and a moderate amount of sweat towards accumulating knowledge/skill set which I could roll into robots and/or cash. So, what I am wondering about is whether it would make any difference whether I only worked for cash 5 days/week as a teacher and then rolled 80% of my earnings into investment in the stock market OR I only worked 1 day/week for cash to cover current expenses, and then invested 4 days/week of sweat into my other businesses and projects.

IOW, where I would likely find myself in terms of wealth/FI in 5 years given the Work 40 Hours at Job/Invest 80% cash earnings in stock market is kind of a known, but where I would find myself in terms of wealth/FI in 5 years if I put 80% of my work-hours towards business/project/studies (inclusive of constant re-investment of cash flow towards more inventory and/or more plants/tools and/or more knowledge/skills) is not known, but could be basis for experiment.

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Riggerjack
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Re: ERE in Non-Monetary System

Post by Riggerjack » Wed Mar 15, 2017 7:30 pm

The question you pose is similar to X•Y•Z= A•BC÷D.

Without defining your variables. Now, the variables are pretty hard to define, so I don't blame you. My point is that there isn't enough information to work through the game theory problem you propose.

My pragmatic side says do what you want, and leave room to adapt for when that isn't what you want anymore. And also:
I can lease Myself out to others in exchange for money ($) in units of 7WB5 X Hours. I must spend some of my 7WB5-Hours maintaining Myself. I can spend some of my 7WB5-Hours improving myself and/or improving and maintaining other assets I currently hold or to which I currently have access.

In simple model of ERE, if I lease Myself to other(s) for $X per year and I spend $X/10 per year on maintenance of Myself and Y (7WB5-Hours) on maintenance of Myself, then after leasing Myself out for 10 years, I will have accumulated enough $ to maintain Myself for 90 years assuming continued practice and maintained value of input of Y (7WB5-Hours) towards maintenance of Myself (and non-avoidable eventual complete depreciation of Myself) and constant maintained value of unit $ on market.

Obviously, Bare Maintenance of Myself or Savings is an overly simplistic decision fork for Flow of Cash $ from Flow of My Life Energy towards Lease to Other(s.) Four asset classes that could be integrated in the stead of Savings would be Productive Appreciating, Non-Productive Appreciating, Productive Depreciating, and Non-Productive Depreciating. Making decisions in alignment with directing Flow of Cash $ towards Productive Appreciating Assets will obviously most likely optimize efficient maximization of Total Value Assets Held.
Is simply breaking one unknown into many subsets of unknowns, with none getting you closer to defining any of the above.

You have worked out a sweet deal for yourself, you have many options to choose from, in how to get by, and improve. But, you have been doing each for years, and they each have a point of diminishing returns. I suggest you have probably nearly optimized each.

If you find you need a new direction, I would recommend studying passive investments. It's an area that takes time, and as much resources as you choose to throw at it. And you can learn without using any money. The information doesn't deprecate.

Robotics, on the other hand, is far less likely to pay off. You won't have the resume to get a full time gig at it, you don't have any tasks repetitive enough to make personal use, and don't have the shop resource to freelance in it. If you just like the idea of control systems, try Behavior – The Control Of Perception, by Will Powers. Here's a review: https://slatestarcodex.com/2017/03/06/b ... erception/
Still, it won't add financial robustness, but it is a fun sidetrip into the working of the mind.

7Wannabe5
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Re: ERE in Non-Monetary System

Post by 7Wannabe5 » Thu Mar 16, 2017 5:01 am

@Riggerjack: I think you are generally correct in what you are suggesting in terms of my situation and motivations, but off a bit in the details.
Now, the variables are pretty hard to define, so I don't blame you. My point is that there isn't enough information to work through the game theory problem you propose.
I did not express my thoughts very clearly. What I am suggesting is a set of ERE experiments where everything remains constant except the choice of investment. Then what would pop out of the set of experiments would be the Return on Investment for each of the choices. For instance:

EXPERIMENT A: Invest 40 hours of life-energy every week for 5 years frying burgers for W2 income. Live in your grandmother's basement eating discard burgers and invest 80% of your pay in Lotto Tickets.

EXPERIMENT B: Invest 40 hours of life-energy every week for 5 years working your way up the ladder at an accounting firm for W2 income. Share small apartment and eat peasant vegan homemade and invest 80% of your pay in Index Fund.

EXPERIMENT C: Invest 40 hours of life-energy every week for 5 years in permaculture project. Somehow subsist on site of project. Re-invest any cash yielded from sale of crops in project.

EXPERIMENT D: Invest 40 hours of life-energy every week for 5 years in custom jigsaw puzzle business. Maintain yourself on 20% of profits and re-invest 80% of profits into business.

It doesn't really matter how complex you make the work/investment cycle proposed as long as you have the input pre-determined as 40 hours life-energy per week over 5 years and 80% of the output cycling back into the system. The tricky part would be figuring out some objective way to measure final results at the end of 5 years.
You have worked out a sweet deal for yourself, you have many options to choose from, in how to get by, and improve. But, you have been doing each for years, and they each have a point of diminishing returns. I suggest you have probably nearly optimized each.
I have optimized my book business and teaching job. I have not yet optimized my permaculture project, but I can't afford to throw all my energy in that direction unless I hurry-up-quick and come up with a cash crop or some sort of grant to teach children about the life-cycle of pumpkins. My sister built an animatronic drumming bear, so I think I could build a robot to perform some repetitive tasks on my micro-farm, but I might be wrong. I do believe that ecology and technology are going to be the important concepts of the future, so I want to move myself forward on both fronts. Learning more about passive investments or finance in general is on my ToDo list, but it just hasn't popped to the top quite yet. However, I am determined to at least maximize my Roth this year. Thanks for the book recommendation. It looks very interesting, and I added it to my list.

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