The conversation went something like this:
“Dad! LOOK! I just earned 40,000 flier-points, and advanced to Level 8. REALLY, I can’t believe it. I’ve been trying to get to this level for weeks.
Well, that’s great, son! That was quite a time commitment, but it sounds like the pay-off might have been worth it. Just what is it you can get with those 40,000 points?
WOW, Dad, that’s the best part! I’m now halfway to being able to upgrade my battle cruiser to an FTL drive, and will really make it rich!”
If you happen to have children (or still enjoy playing hard like one yourself), this sounds a bit familiar, doesn’t it?
VALUE AND WEALTH
Primary concepts such as value and wealth have formed the cornerstone of economics from the earliest days of human civilization. However, we tend to use these terms rather loosely in general discussion. For example, we speak of “value” much more subjectively these days than ever before in our history.
For something to have value, it must hold in itself its own worth. That is, intrinsic value, apart from any subjective consideration that any individual might place upon it. The boy in the conversation above placed a very high premium on the coveted “flier-points,” which cost him several weeks of concentrated playing. He recognized that value both in what they cost him (time/labor), and what they were worth (half the cost of an FTL drive). Consider, however, that outside of the virtual universe in which the boy was engaged, fighting in an intergalactic war, there is zero-value that can be applied to the earned points. But you already knew that, didn’t you? Even the boy playing the game might be able, when pressed sufficiently, to admit to knowing it. Yet, the game goes on.
Ah, but he is a boy, and will learn in his time. True value, which builds actual wealth, is not achievable by the accumulation of virtual tokens; regardless of the measure of subjective worth one applies. Though we have understanding of these foundational principles, perhaps we too often find ourselves playing the same games, with equal enthusiasm as our children. Wouldn’t you agree?
It is not, however, that playing video games and apps are simply a waste of time. There is much interactive learning going on in the playing, as well as that much-needed mental diversion at times. It is only when we bring the concepts of virtual wealth and zero-substance value back with us into the real world that we have a problem. And most certainly, we do have a problem. We have been trained from our youth to take our places as active consumers. We freely invest our wealth in things, which have no true or lasting value, believing that in so doing, our wealth is somehow increasing by the things we buy. Sadly, by our actions, we are also reinforcing this economic world-view in our children.
How then, do we break through this tendency to compound valueless wealth? Perhaps even more importantly, how can we deliver our children from perpetuating the same mistakes? If we concentrate on building up our children, we will, in the process build up ourselves. In order to make a true difference in their lives, our example must come in line with our teaching.
SUBJECTIVE VS ACTUAL VALUE
Regardless of their ages, when teaching our children about things that matter, like value and wealth, we must clearly distinguish between the subjective and the actual. Using simple everyday examples, any age can begin to understand and grow to value these principles.
For example, take one of the Pokemon trading cards that have recently had resurgence in popularity and place it on the table along with a one-dollar bill. Ask your children which one is worth the most. Let’s assume that at least one is into collecting the cards. It is likely the card will be chosen.
Next, ask why the card was chosen over the dollar. His answer will be that he wanted it for his collection. Then ask, “Was it worth more than the dollar was worth?” He will likely respond. “It was to me.” This is an example of simple subjective valuation. His choice was made solely on the value basis of his personal desire to have the card, regardless of its actual value.
Next, ask if he would have chosen a five-dollar bill over the card. If he responds, “Yes,” this is an example of his subjective valuation being overcome by the objective value of a five-dollar bill. However, if he responds, “No,” that is a clear example you have your work cut out for you.
Finally, place on the table a small silver coin next to a stack of ten, one-dollar bills. Ask which is worth more. If they choose the bills, explain that it would take more than ten more dollar bills to be equal to the one silver coin. Also explain that the coin’s worth is durable and has more buying power than paper dollar bills.
TEACHING OUR CHILDREN
These are very simple object lessons to build upon, with the goal of shifting both your and your children’s understanding of value and wealth. From here you can go on to incorporate opportunities to raise awareness of how fun and challenging the collecting of coin series can be. Integrating this into your children‘s allowances or rewards policies, perhaps letting them choose in advance the next coin they wish to purchase once they have saved up enough to purchase it.
The generation you and I are raising today will be facing increasingly stronger challenges, testing and trying them on every level of moral and ethical belief and behavior. Their understanding of and firm commitment to sound principles such as those of true value and actual, durable wealth will help prepare them for the battle.
BOLD Precious Metals was incorporated on the sound economic principles of true value and actual wealth. Whereas paper money, printed at will, and having no guarantee as legal tender, has no intrinsic value; gold, silver and other precious metals do have value in themselves. We believe that a significant portion of one’s portfolio should be built on intrinsic value and BOLD stands ready to deliver those precious metals to you as the best prices possible.