Fasten seat belts, or the mental equivalent. Today I read something that convinced me to put personal finance (the inspiration for this blog) in perspective. They’ve finally proved that the universe is weird. As if you didn’t know that, but these folks have proved it. The universe is weird, and yet within that we have to make sense of money – supposedly in some logical fashion. The ride will take us through seemingly disparate regions, but they are all part of our reality, imagined or real.
Part of today’s news feed on my other busy blog, PretendingNotToPanic.com
, there was a very geeky bit of physics news. Researchers at Delft University proved Bell’s Theorem. Here’s a quote from my commentary about their news (reformatted to hopefully improve clarity) ;
“As if Relativity wasn’t weird enough, and as if quantum mechanics (and its reliance on probabilities) wasn’t weird enough, Bell’s Theorem suggests there’s something more fundamental than space and time. Space and time may be consequences of reality. Just like realizing that:
- things are made of molecules;
- which we then learned were made of atoms;
- which we then learned were made of protons, neutrons, and electrons;
- which we then learned were accompanied by bosons, leptons, etc.;
- which we then learned were made of three kinds of quarks;
- which we are now hypothesizing are made of strings;
- – space and time may be like those molecules, composed of something which we are only now beginning to recognize the existence of.
As even the researchers at Delft stated when they recently proved Bell’s Theorem;
“The universe is conclusively weird.” – Delft University
Skipping the details, because otherwise this one post would become a series of books (which isn’t a bad idea, but this post is intended to take up a lot less time than that), it suggests that the space-time continuum played with in science fiction is also an illusion. The concept of reality as an illusion will resonate with some Buddhists, Hindus, Shamans, and others. Spirituality and physics meet again, something that is happening more frequently (with members of each camp claiming, “I told you so.”)
I follow physics because I am curious and considered a career in high-energy particle physics. In retrospect, that may have been a better choice considering the effective abandonment of America’s space program. I also follow physics because pure research enables the innovations that more conservative minds and policies can’t imagine and won’t fund.
Those innovations are opportunities for investing. The potential can be enormous (ask early investors in $MSFT – which I was). The risk can be enormous (ask early investors in Kaypro, Osborne, dozens of failures for each success.) If you want more details, buy my infrequently purchased book, Dream. Invest. Live.
As great as those potentials can be, personal finance is dominated by the need for a person to make more than they spend, and using the excess to invest.
My personal finance was dominated by decades of success and frugal living; then dominated by years of what more than one friend has called a “perfect storm of bad luck“; followed by my persistent, though fatigued, patience and perseverance.
Finance is just another label for resources, and in the mainstream economy, the main resource is money. How I manage my money is largely determined and dictated by procuring the essentials of life: food and shelter. To live within the modern world there are additional essentials like health care (sometimes just for appearance’s sake because it is unseemly to be unhealthy), and insurance (which comes in many varieties but which are as likely to support the system and maybe the individual.) The essentials are expenses exchanged for money gained from income. Passive income is awesome. Passive income is one of the primary reasons to invest because it costs the least amount of time which is the most precious and personal resource. Few people can access passive income and must rely on active income from jobs.
In today’s society, essential expenses are largely determined by external influences: competition for resources, interest rates, corporate and governmental policies, societal expectations. The great majority of my expenses are housing (including a government-enabled mortgage, property taxes, and insurance), food (because I must eat to live), transportation (because most of us don’t live in self-sustaining villages), communications (because we’re in the Information Age and my business is primarily information), and insurance (my second largest expense after housing and largely dictated by government policy. Oh yes, and income taxes, because I live in the United States and, now that I’m no longer rich, I have to pay higher taxes.
In today’s society, essential income is largely determined by my luck at being born a white male in America, my education which was paid for without going into debt (which is why I got a degree in Engineering instead of Physics), my efforts, all of which must occur within the bounds established by laws, regulations, and ethics.
Income and expenses then encourage me to be very aware of politics, societal shifts, non-governmental advocacies, and global trends.
Global trends have never been easier to track. Economic interconnections aren’t limited by borders. Prosperity in one country flows money into less-prosperous regions shifting power and assets, so a slowdown in China or an excess in Saudi Arabia, mean changes in San Jose housing prices and unemployment in North Dakota. Politician’s aggressive policies chase millions of people thousands of miles into countries that can’t or won’t welcome them, and put the average refugee into refugee camps for an average of 17 years.
Global influences have never been as powerful. Deforestation in the Amazon induces a drought in Sao Paulo creating an exodus from a city of 11 million people. Oceans may only be rising by millimeters a year, but each millimeter displaces thousands because the planet is populated by billions.
The influence of the Information Age means we’re more aware of the problems and possible solutions. The influence of the Information Age’s attendant technologies means new solutions are being created that have inspired, enabled, and communicated improvements in health, energy, education, and sustainability.
One of the signs of maturity, both personal and cultural (Charles M. Johnston), is the progression from taking care of the self, to the family, to friends, community, region, nation, species, planet (and…?).
Considerations of personal finance are essential in today’s society; but the conventional wisdom behind many of its aphorisms are based on a world that had closer borders. Now, what’s happening beyond the personal matters.
- Whether my income exceeds my expenses matters.
- Whether my community is sustainable matters.
- Whether our society is becoming more just matters.
- Whether our civilization improves or degrades our planet matters.
- Whether our sciences connect us to fundamental truths matters.
If, as some scientific and spiritual researchers have pointed out, we are all connected – and that “we” may include all life and matter in the universe; then, it may not be a surprise that I am as equally fascinated by what’s happening in my neighborhood, what’s happening in politics, what’s happening in the plane’s climate, and what’s happening at the borders of science and spirituality. If you ever wonder why this blog is so eclectic and diverse, it is because for me it is all connected.
There’s a Zen quote; “Before enlightenment, chopping wood and carrying water. After enlightenment, chopping wood and carrying water.” In the modern world I take it as, “Pay bills. Wash the dishes. Learn. Repeat.” (An interesting take on a book title. Hmm.)
The nature of reality may be that space and time are consequences of reality. Others have suggested that life and consciousness may also be consequences of some underlying fabric that we mis-interpret. With all of this to consider, is there any reason to wonder why I consider physics and spirituality more fascinating than sports and sit-coms; and that personal finance is simultaneously vital and inconsequential?
Now, it is time to conclude this post and then go wash some dishes. I’ll pay the bills after my clients pay their invoices.