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Aji Fundamental Knowledge

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  1. The Fundamental Human Concerns and Their Existential, Strategic and Competitive Utility
    15 Topics
  2. The Fundamental Business Concerns and Their Financial, Strategic and Competitive Importance In IR#4
    25 Topics
  3. The Fundamental Marriage Concerns
    17 Topics
Section 3, Topic 12

MC #10 – Building Income and Accumulating Wealth [4 pages]

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So that spouses can act more effectively, strategically and competitively to take care of their fundamental concern for Building Income and Accumulating Wealth, we need to make some important and uncommon distinctions about income, currency, money, riches and wealth.

“Income”

is the recurrent benefit we seek from our work and usually takes the form of currency, which ambitious spouses must never confuse with “real money” if they are to fulfill their ambitions.

“Currency”

is a substitute for money invented by most cultures to make their marketplaces and economies more efficient

Ambitious spouses must never confuse real “money”, which is a human phenomenon described below, and currency, which is a human artifact used to substitute for money.

When no currency exists to enable transactions with people who have nothing we want in return, we have to engage in “barter”, which requires us to find people who have something we want before we can transact with them, and is much, much more costly than using currency.

The moment currency is introduced, the cost of making transactions for goods and services everyone requires drops very quickly.

“Money”

is help people want badly enough to give something in return for it, including currency, if that is what we seek.

Offers, practices, narratives, strategies, goods and services offered in the marketplace, or in communities of married couples,

… that help people take care of their concerns

… and that are valuable enough to compel other people to give something in return, such as compensation or help in the future,

are “real money”.

“Riches”

are a big pile of money, or currency, which is also called “wealth” in the discourses of economics and finance.

“Wealth”

is refined knowledge and practices for taking care of human concerns in the discourse of philosophy, and requires riches.

People who are “rich” but not wealthy can afford toys and distractions but don’t know the deeply rewarding and satisfying philosophical distinctions, concerns and practices required to “live a good life”, as most people have seen.

No family has sufficient financial power to take care of its concerns alone, even the richest ones.  Every family needs help!  Every one.

Just imagine taking your family somewhere alone and having to survive with no help from others.  It doesn’t matter whether you pick a tropical island or a spread in the nicest environment you can imagine.  You won’t survive without help from others who can provide the goods and services that you lack the energy and/or knowledge to produce.

That we are insufficient to take care of our individual and family concerns alone means we must transact with others who are also insufficient to take care of all their concerns, which is why we all need money to transact with each other for help. 

A transaction requires two parties to make an exchange. 

When one side of a possible transaction lacks something to make the exchange happen, the other side might want to accept money (currency) as a substitute so they can buy what they really need elsewhere. 

Money enables transactions necessary for our survival and the fulfillment of our ambitions to happen easily.

We need money to avoid suffering, failure and death.  We need it to survive, be free and live a good life. 

Having money isn’t an option for spouses in a meaningful or ambitious marriage.  It’s essential.

People or spouses who say they don’t care about money are fooling themselves and don’t understand the fundamental concern that money is for us. 

This is why building our incomes and accumulating wealth is a fundamental concern for marriage.  It provides power for transacting within our communities that is fundamental to taking care of our concerns and fulfilling our ambitions.

Therefore, one of every spouse’s obligations is to know how much money the couple needs to earn, save and invest in order to be able to afford the goods and services everyone requires to take satisfactory care of their most fundamental human concerns.

In today’s rapidly changing marketplace, which is also the most highly competitive global marketplace in human history, the income needed to pay for essential goods and services after people stop working, given prices and life expectancies, and the income people think they need, don’t equate.

That is, if spouses don’t think through their financial obligations effectively, strategically and competitively enough, and just go to work casually without a rigorous financial ambition, they are guaranteed to find themselves broke, or out of money during their old age, and forced into poverty.

If we use today’s prices and historical, average returns from the stock market, couples require $3m – $10m in capital-at-work, or in their investments,

… in order to generate $120k – $400k of income during old age,

… which is the real amounts required to buy the goods and services people need in order to live a good life.

Because of inflation, which averages 3% annually, couples who are retiring in:

14 years, or who are about 46 years old,

… need to increase these amounts by 50% to $4.5m – $15m of capital-at-work in their investments

… to produce $180k – $600k of annual income

… in order to afford the same goods and services

24 years, or who are about 36 years old,

… need to increase these amounts by 100% to $6m – $20m of capital-at-work in their investments

… to produce $240k – $800k of annual income

… in order to afford the same goods and services

To produce these amounts in 40 years, while also living a good life, requires ambitious couples to produce top 1% annual incomes between $400k and $4m, which is quite a challenge!

*  The reason this may be something of a shock to spouses hearing it for the first time is because the baby boomers were so arrogant, immature and entitled for 40 years, they did not bother to update how much money they really needed the entire time.

So now, when ambitious spouses are beginning to realize that 99% of baby boomers who do not have pensions are going to be forced to live in poverty just when they are most frail and in need of help, updating the amounts to account for 40 years of inflation can be quite a jolt.