Now I'm no expert on the economy or money matters in general. I'm just the regular guy that worked for a living, paid into the system and managed to get by. Never joined a union, never made any demands on my employer, just moved on if I didn't like the way I was treated or wanted a raise. I had learned as a child that the world doesn't revolve around me, I'm just a little cog in a much larger machine. I figured it out rather quickly, you are worth just about what others believe you are worth, to them. That's just the long and short of that. I've never invested in the market. The reality being I just never had that much disposable income that I wanted to gamble with that. I've always found something better to do with it.
Today I'm hearing about the market taking a dive and all the money being lost. Well potential money being lost that is. It would only be real money if you sold your stocks, bonds or cashed in that mutual fund. It's all money "on paper." It's money you could have, maybe if someone else were to buy it from you. As I said I'm no expert on any of that and it is all pretty strange if you really think about it. Take Elon Musk as an example, the richest man on the planet. How much actual cash do you think he has? I can tell you one thing, it isn't anywhere near 386.5 billion dollars. If he sold everything he owned or had an interest in he should realize that 386.5 billion, that's the speculation, it's not guaranteed though. Gates, Bezos, Soros and all the others are the same way. It was estimated Elvis Presley made anywhere between 100 million to a billion dollars. When he died his estate was valued at 5 million. He was cash poor, relatively speaking.
I read where gold has reached another all time high. Gold is that "safety" net investors are told to run to, along with other precious metals. That's always been a strange thing to me, the value of gold. I just don't understand the fascination with collecting that medal. I know I can trade it for the things I really want or need and that is the true value of that but still, it's a strange thing. Some native American Indians used pieces of a clam shell, called it wampum, and it was as good as gold to them. Salt, cocoa beans and other spices have been used in the same way. When Nixon decided to remove the United States from the gold standard the value of gold began to fluctuate in relation to the market.
In short, it became worth whatever you were willing to pay for it. Kinda like the model Starbucks uses when pricing their coffee. Gold will always be worth something but you can't be certain. How much will it worth twenty years from now? The truth is, it really isn't how much it is worth, the cost of it, but what will it buy. An ounce of gold is currently valued at $3038.00 and that is down $75.00 from just a few days ago. But that is just from one source, check around and will quickly see that isn't a fixed price at all. And then value that ounce of gold against foreign currency and your buying power increases, you have more "money" but you can buy less. Yeah, does any of that really make sense.
Are you really losing money if you don't have that money in the first place? That is the perceived reality isn't it? If I have a field full of corn valued at 10,000 dollars, do I have 10,000 dollars? No, not unless I sell that corn, a big storm could come by and wipe it all out overnight. Hopefully I bought insurance against that. I'm a master carpenter and my "worth" is 45.00 an hour. I don't get that unless I have a job though, it's my worth but it is the service that holds the actual value. In 1971 gold was fixed at $35.00 an ounce. Yes, thirty five dollars an ounce. But it's buying power wasn't strong enough so Nixon took us off the gold standard, the rest of the world followed. What that meant was that $35.00 could now be revalued at any price people were willing to pay for it. There is no standard! It's all speculative, all the time. You might have money, you might not.
The bottom line is this. What matters is how much money you potentially have. All that money that is "on paper" and "on the books" doesn't really exist at all. It is "money" others are willing to take in exchange for whatever product or service they are selling. The potential value of your assets. How much is that worth? Whatever someone else is willing to pay is the answer. When others aren't willing to pay, the value decreases significantly. And in the end what could you possibly get? Some gold! Okay, now I have this gold what am I going to do with it? Make a ring, an electrical contactor or a necklace. No, I'm going to convince you that you should buy it from me at an inflated price. It's gone from 35 to over three thousand an ounce over the last fifty years. Strange thing is, it won't buy near as much at 3000 an ounce as it did at 35. Like I said, I'm no economist.