Real Versus Abstract Wealth
A Reality Check, and a Rationale for Trading Volatility whilst also Invested
Dear Readers,
I thought I might engage in a more philosophical topic this week, and one that I often touch on in my posts on Twitter. The idea being to explore it a bit more fully for those that might be interested. Though it deals with a few ideas, I do not think this need be divorced from our real world activities of trading and investing in Crypto. Indeed, in clarifying these ideas, my aim is to make those activities more conducive to the actual building of material wealth.
If critical thinking is about anything, it is first about the drawing of distinctions, to distinguish ideas that might otherwise be con-fused together. One such distinction, crucial in the field of investing and trading in my opinion, is the difference between real and abstract wealth. As I wrote in The Money Illusion:
As money exerts an inordinately powerful influence over us today [especially amid speculative markets], it’s incumbent on us to better understand it that we might better position ourselves. In approaching it more critically, we can turn what is so often that master/ slave relationship on its head. Much is about perception, and for astute perception we need perspective, and for perspective we need distance. It’s this ‘distancing’ that allows us to see through some of our perceptions that would otherwise be illusory. Without this distancing, we can find ourselves easily disorientated, with no external points of reference as in a labyrinth, or, in today’s equivalent, down the topsy-turvy shrunken world of a rabbit hole. A self-determined life [if freedom ever meant anything] must largely consist in extricating ourselves [yes, the responsibility is ours] from such illusions, and then having that power of money, for a power it is, restored to its proper function as a means to our own ends.
This article will look to explore that distinction between real and abstract wealth in what will be more than just a theoretical exercise, seeking more practically to describe how real wealth is to be actualized, or enjoyed, in contrast to holding it in mere abstract terms.
Personally, I think this is a timely discussion to have in the digital world, for all too often we become so accustomed to abstractions, and so immersed and enamored with them, that we can end up over-valuing those abstractions at the cost of under-valuing the actual world within which we are actually immersed. Note that in highlighting the idea of over-valuation, this article is not dealing with absolutes, which only serve as distractions in my opinion. Rather, we’re dealing with the relativity of various values here, and the degree in which they relate, optimally or ideally, to their particular object. I discussed this idea of value more fully here in Re-Evaluating Value.
First, I’ll discuss money as an abstraction, then go on to examine the optimal relation of money to real wealth/ assets, and finally look at how this could apply practically to our Crypto investments. All of this is of course is a perspective, which is all we have.
Money as an Abstraction
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