From consumption to wealth creation - my journey to financial freedom
Jan 24, 2024
Until a few years ago, I only looked at money superficially in the context of consumption and obligations. Although I came into contact with money at an early age, I lacked the necessary education and understanding. On my 14th birthday, a family friend gave me the book "Rich Dad, Poor Dad", which describes the different views on money of two father figures. One emphasizes academic success, security and living within one's means, the other financial knowledge and wealth accumulation. I wasn't particularly interested in the book at first, but during my "Bitcoin journey" I began to understand the content.
My main aim is to point out how essential it is to take financial responsibility for yourself. Anyone who has ever calculated their pension knows that you can't rely on it. Nevertheless, we often don't think about it until it's too late.
The financial misfortunes of some people and especially the experiences of women around me had a strong impact on me. As is generally known, women have historically and are currently at a financial disadvantage. In Germany alone, the first woman was only able to open her own bank account in 1962, around 13 years after the paragraph was enshrined in the Basic Law. Even today, women in Germany earn on average 18 percent less per hour than men. When I was involved with Bitcoin for a while, I was able to make connections for the first time between topics that were once unrelated for me.
For example, that our current money promotes systemically unethical behavior. People are excluded from the global financial system partly because of their gender or background. Those closest to the money increase also benefit the most from it, while average citizens suffer through the loss of their purchasing power, as credit creation destroys purchasing power. Let's assume that there are 1000 monetary units in an economy. I have 100 units of a currency and the government increases the money supply by 1000 units. Now my units are worth about half of what they were before the increase. This is exactly what happens in the fiat economy. The money we use (fiat money) is continuously inflated and devalued by the central banks. When the money supply increases, individual monetary units lose value. I never thought about the link between weak money and excessive consumption. Today I understand that when money is not worth saving, you tend to spend it on things you don't necessarily need. Bitcoin is different. Due to Bitcoin's scarcity, its purchasing power will increase in the long term as adoption increases. This dynamic has changed my approach to spending. Since I've been holding Bitcoin, I think twice about things I want to buy to see if I really need them.
Bitcoin is a store of value, insurance, mathematics, physics, language, cryptography, law, philosophy, ethics and more. This complexity allowed me to make connections between previously seemingly unrelated topics. While Bitcoin was introduced to the world in 2009, it is the result of decades of work and centuries of thought and theorizing.
"For I knew of myself that I knew nothing at all, to say the least, but of them I knew that I would find them knowing many beautiful things." - Plato: Apology of Socrates
Socrates' insight inspired me to question existing knowledge. Originally, I avoided topics on wealth accumulation due to comfort and social conditioning. There was never much talk about money in my family and I was told from an early age that I would definitely do "something creative" later on. As no one explained economic relationships to me or emphasized their importance, I didn't concern myself with them. After my rather creative studies, I completed an internship in the venture capital sector in order to venture into a subject that I had turned into an indomitable giant in my mind. It was there that I realized that modern investing often has more to do with politics, marketing and investment pressure than with innovation itself. I started writing about financial topics shortly afterwards and got involved with Bitcoin.
At the beginning of my journey, I would have said that to be money, it must be accepted by those who are paid with it. In truth, according to economist Adam Smith, who is considered one of the founders of classical economics, money should have the characteristics of a good store of value, divisibility, transportability, acceptability, scarcity and durability.
You don't have to be an economist to understand that fiat money only fulfills a few of these functions. According to Ludwig von Mises, who was an Austrian economist of the 20th century, money should function as a unit of account, a store of value and a medium of exchange. Fiat currencies such as the euro, the dollar or the British pound may be accepted means of exchange and units of account, but they are not a good store of value. In the medium to long term, this also has a negative impact on their function as a medium of exchange and unit of account. The reason for this is that a currency that loses value over time is a poor unit of account and may no longer be accepted by market players as a medium of exchange. Bitcoin allowed me to be my own bank and strive for financial independence. I recognized the inefficiencies of the current monetary system and the importance of financial responsibility. Bitcoin became for me more than the opportunity for modern savings; it symbolizes a social paradigm shift. The #EndSARS campaign in Nigeria, where Bitcoin was used to circumvent censorship, showed me the social potential of Bitcoin. The scarcity of Bitcoin could create financial independence with increasing adoption and lead to a narrowing of the financial gender gap.
I realized that I could convert the fiat money I currently had left over from my salary and received on special occasions into Bitcoin and protect it in the long term. I also began to see Bitcoin as a tool for women empowerment. If women owned Bitcoin, mothers would be (financially) rewarded instead of penalized for having children or running a household. If I am unable to work in the future because of my family, I (my Bitcoin) will continue to benefit from every person who converts their productivity, the fruits of their labor and their savings into Bitcoin. As adoption increases, the value of Bitcoin, a scarce commodity, increases due to the limited supply. Bitcoin serves as an untouchable store of value for all those who want to store their economic output in it. In a world where mostly people win when others lose, Bitcoin is a revolution where if you hold Bitcoin and profit, I profit. And vice versa.
There are no central actors who can arbitrarily manipulate the network or the limited number of Bitcoin. I've never let go of the control over my money and the digital scarcity that makes Bitcoin incomparable as a store of value. As a result, I am more optimistic about the future, the possibility of having a family and the opportunity to shape my own financial future. I also learned to love volatility, as it is the foundation of natural beauty and the foundation of successes after failures. When you think of the year, it's hard to imagine it without the 4 seasons that make the beauty of the previous and upcoming months possible. In addition, with Bitcoin, the number of new Bitcoin gained changes every 4 years and has an influence on the value of the existing Bitcoin. In my learning process, I have not only gained an understanding of money, but also the peace and time to deal with the issues in my life that are really important to me.
Theresa Rehlingen-Prinz is a German communications consultant in the field of business and a freelance journalist for the financial magazine Zaster. As a member of Les Femmes Orange, she is also committed to women's financial freedom through Bitcoin.
Disclaimer: The views and information expressed in guest posts should not be interpreted as financial advice. It is important to note that Coinfinity does not necessarily hold the same positions and views as those expressed in the content provided here.
