Why invest?

In my first blog entry I have shown you the basics of any form of cost of needs. Needs can be satisfied in form of a service or product. Products need to be produced. Services need to be provided. But what is missing here?

Money

What is money? Money is basically something, that you need, when you want to reward someone for his/her cost of work / time / material etc. You need to reward someone, because deep inside no one wants to work for anyone else for free. The human brain works like that. Human history has shown that it is better to mistrust other humans. You only need the people to believe that this money is worth something. This trust is established by the crowd of other believers and/or by the government of the juris direction you are dealing in. The government sets up a law that everyone must accept this money as a reward. That is called capitalism.

Where does money come from?

Capitalism

If you believe that this system is a little bit stupid, you are probably right. Animals don’t deal with money and help each other within the same race to survive. They are smart. Many humans don’t do that, we have a basic mistrust against each other. We need such a structure. In the capitalistic system anyone can survive without trusting anything, but the system itself. That means the less trustful or helpful a human is, the more this human depends on capitalism or money to survive. But there is a very good point about capitalism. The more some entity helps people and the more reliable it is, the more goods and services will exist by this entity to make human life better. The measurement of how good that is, is the flow of money coming into that entity by humans valuing the product or service with money. Let this sink in:

Some undefined set up entity (~company) needs to be helpful to humans from scratch, but normal "unhelpful" humans will be rewarded for their cost of work with money, because otherwise they would not do anything officially. Things outside of this monetary methodology cannot be evaluated by the system and therefore do not exist.

Gibberish, right? So as long as the “unhelpful” human works for an entity he/she has the official status “helpful”. By accepting that monetary system, survival and the development of evaluated products and services is quite safe. Evaluation comes with payments of money, that everybody can collect by working for an entity. Any other system, that has been tried out in the past, is not mistrust-safe (communism, slavery, etc.), because the autonomous evaluation is missing.

What is investment?

The answer is simple. When you invest, you can be part of the entity described. Investing means giving money to someone or something so you can be part such an entity that creates value. You can keep a share of that money flowing into it, allowing yourself to be outside of that part of capitalism where you work for an entity as a “helpful” person, that is owned by someone else. And by the way, if you say, “I am working for myself”, it just means that you both own the entity and still have to work for it.

There are these two options in capitalism:

• Work for an entity (company), even your own
• Be / Be part of the entity (company), let others work for you

Special part of the second option that all countries have, whether capitalism is established or not:

• Be the government, collect tax, everyone works for you. (The government is a special kind of company)

Concluding all that, supposing you live in a capitalistic country, now I have a question for you:

Why not invest?

The system is established, wether you like it or not. You are part of it. Also in communistic states there is mistrust between humans and some kind of money flowing around. I can even argue, there is no option not to invest. If you are not investing, someone else who collects your money from an entity that provides goods and services to you will invest that money into new money generating entities.