Interesting discussion. My parents empowered me to self-direct/utilize a measured amount of money at various points in my life. In the beginning as a pre-teen, it was an allowance in exchange for completion of a weekly set of chores (e.g. taking out the garbage, washing dishes, cleaning the bathroom, etc.), which I could then use for whatever I wanted; typically a mix of candy, sports cards and movie tickets. If I burned through my bankroll and really wanted something else, I would have to wait until the next paycheck, so to speak, my parents (almost) always held that line.
Not much later in life, as a thirteen year old adolescent, my parents offered me a $10,000 loan to begin a website reselling business. I didn't manage my own servers, since I didn't have the quite the level of initial capital or experience required to do so, and instead rented space from a larger host from which I would resell their products under my own brand, acting as an intermediary for customer service and site setup, with some basic design services offered at a premium. That went pretty well for several years, but ultimately, competition in the space in the late 90's came in heavy, margins were compressed and unless I was willing to step up operations and manage my own hardware, profitability had been squeezed out of the operation. Nevertheless, the experience netted some minor aggregate profits (which to a teenager in high school felt anything but!), and taught me some skills with regard to the importance of customer communication and cash flow management.
More recently, as I started actively investing in capital markets, the "financial abstraction" that the Ted presenter touches on, gives me a phrase for something I have definitely experience and continue to wrestle with. In learning how to trade stocks, the money in my brokerage account was always a step or two out of reach from immediate spend (liquidity). I didn't see it in my regular bank statements and most of it was locked in one investment or another. This abstraction made risk taking easier, as the money wasn't money I considered readily available, and in turn pretty much ear-marked as "money that's ok to lose". Unfortunately, that was a big mistake in perceptive judgement, and caused me to learn the hard/expensive way, that despite being a couple of degrees of separation removed from my day to day use, the money in those investments was indeed very real and very quickly gone when I didn't respect that fact. Fast forward again to the age of cryptocurrency, for which I got in fairly early, and the level of financial abstraction took an even greater degree of separation. The numbers moved violently, with speed and tremendous height, both up and down. Fortunately for me, I benefitted largely as an early adopter, but I suffered some big swings along the way and could have done much better had I more judiciously honed my discipline.
All of this is to say that financial abstraction tends to make for less discerning/rational asset management (which seems to be what the above Ted talk was gettin' at), and while money will always have some abstraction to it, part of what has been making me a better money manager over the decades I've been working to improve, has been to take the numbers more seriously, recognize what they represent and try not to be too aloof, for in doing that, my discipline suffers greatly and my potential for real loss skyrockets.
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-------------------- ┼ ··∙ long live the shroomery ∙·· ┼ ...╬π╥ ╥π╬...
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