One of my uncles tried to kill himself last year after betting his retirement and life savings on a bad stock tip. With $200,000 to his name, he could’ve spent the rest of his life in relative comfort. But he wanted a little more financial stability and freedom.
Instead, his decision left him penniless.
Now he’s an ardent Trump supporter who blames his bad luck on minorities and immigrants. He hates Joe Biden, and whiles away the hours posting QAnon-style conspiracy theories on Facebook.
It’s a sad story, not so different from the ones you see about guys in Silicon Valley with thousands of bitcoins trapped on their encrypted hard drives. Honestly, it must agonize someone to come that close to riches. It agonizes me just to read about it. I’m not alone here. We all seem to be harboring a secret obsession with wealth lately.
It doesn’t take a genius to figure out why.
Things are pretty bad…
We all dream of escape.
Lately it feels like the only way to survive the future is to become a billionaire with an escape pod. The economy has gone haywire. White supremacist terrorism is on the rise. Immune-resistant viruses are popping up all around the world. Working hard until you can retire and dabbling in the stock market a little? That’s the old dream.
The new one is remote cabins in the mountains with solar panels and wind mills, sheds filled with tools, and extra rooms to set up home schools and do-it-yourself emergency clinics.
My in-laws lucked into such a place. It’s a country house with a dozen acres of arable land. They invited us down to “shelter” with them.
We considered it.
Their long term plan is to get off the grid, as much as humanly possible. Like more and more Americans, their trust in the system has degraded over the last couple of years. You can’t really blame them. Look around. This is what a growing number of Americans fantasize about:
The old financial system is broken.
Our elders are fresh out of sage advice.
Until recently, my husband’s great-grandma was a spry old woman who still tried to give everyone money advice. One time, she pulled me aside and asked me about my pension. “You’re a teacher like I was,” she said. “You must have a good plan. Just be careful with your money.”
“I don’t have a pension,” I said.
She insisted I was wrong. “Everyone has one.”
She’d never heard of a 401K. I had to explain it to her. When I did, she let out a loud sigh of disappointment. See, my in-laws come from a different world, one where you could make it through life with a reliable job and a boss that gave you a pension and a great healthcare plan. They tell stories about job interviews that lasted ten minutes, which led to employment for thirty or forty years. They all paid off their houses a decade ago.
They had disposable income to invest, and time to learn how. That’s a fairy tale for most Americans now.
Almost nobody trusts their full-time job anymore. Gigs and side hustles have become the norm. Health insurance is a luxury. Everyone dreams about achieving super wealth, just so they don’t have to keep killing themselves with work and stressing about the future.
The desire for wealth used to be driven by greed.
Now it’s driven by fear.
Desperation makes you vulnerable to scams.
We keep reading about the importance of learning how money works. We’re told to invest. The truth is brutal.
The average American can barely afford rent. They don’t have enough in their bank accounts to cover a basic emergency. Some people I know are literally a flat tire away from bankruptcy.
The pandemic has deepened inequality on every front. It pushed millions of Americans into poverty and food insecurity. Even when the economy begins to recover and people go back to work, they’ll owe thousands of dollars in back rent and mortgage. They’ll have high-interest loans to pay, along with bigger credit card bills, on top of pre-existing student debt.
Financially, they’re doomed.
The last thing these people are equipped to do is play games with cryptocurrencies and meme stocks.
And yet, they’re doing it.
I’m worried about these people. I’m worried that our collective financial desperation is going to create a lot more angry, disillusioned victims of a morally vacuous economy. It’s going to feed directly into the conspiracy theory pool, and create more rage at the ballot box.
Few can afford to invest in the stock market.
The meme stock game was fun, but it’s already coming to an end. Hedge fund managers and their lobbyists aren’t going to sit around and let paupers make fools of them in front of the entire world.
They’re going to close down every possible entry point into the stock market now. That’s how they want it.
This was bound to happen.
The stock market has become so detached from logic and reality, nobody with money to lose will come anywhere near it unless they have a brilliant scheme. The same goes for assets like bitcoin. The reason for our reluctance is stupidly simple. Nobody’s going to gamble with their money when their rate of return can’t beat the interest they’re paying on debt.
In this economy, anyone who comes into extra money isn’t going to invest it. They’re going to pay off loans. They’re going to buy food. They’re going to put it away, so they can afford living expenses the next time they’re laid off, or their hours are cut. If they’re lucky enough to have a mortgage, they’re going to pay that down while they still can.
At least, they should.
The current economy is full of delusion.
Our increasing financial desperation makes us desperate, and that desperation makes us delusional.
Everywhere you look now, there’s someone trying to get you to invest in some kind of asset. There’s a simple reason for that.
They want you to share their delusion.
These people don’t think of themselves as con artists. In the usual way, they aren’t. They don’t really know what they’re doing when they tout their investment strategies and whip everyone into a frenzy. They just know one simple, intuitive truth. The more people who buy into their crazy fantasies, the better off they are.
That’s how every asset works. It only has value in the form of perception. Everyone has to believe a digital currency will only increase in worth. It’s not that different from religion.
Don’t wind up like my uncle.
I’m no financial wizard, but I do have enough money to buy a couple of bitcoins if I wanted. I’m not doing that. My family has enough heartbreaking stories about someone who tried to get rich through investing, and instead lost everything.
There aren’t many paths to fortune left. Those who try tend to lose the little bit of wealth they had in the first place.
This article can’t make you rich, but maybe it can keep you from making a stupid mistake and ending up like my uncle, poor and broken because some investment guru took advantage of your desperation.
The wealthy have engineered a system in which it’s almost impossible to enjoy any financial security without taking absurd risks.
We need a better way.