so there is this phrase out there living memory So if you were to ask almost all people living today what would they say about the past what have their experiences been what have their lives been like and in living memory the wealth that people are accustomed to is changing And it's
changing in real time And it's very different than it was before And very few people are taking these data points and extrapolating them out into the future and adjusting their lives accordingly When pioneers marched west into the Rockies of the United States they took wagon trains And today there are places where you can go and you can see the tracks of the
wagons that are etched into the rock because the wagons followed one after another And so the people that came subsequently didn't have to cut through the bush and and find the path to get to where they were going They just needed to follow the people in front of them But in the in the rest of the world in other situations when conditions change following the wagon in front of
you turns into something more akin to lemmings marching off of a cliff And what has happened in the world today is that the the land ahead of us has collapsed but we're still marching in the same direction following the people that went before us and we're going to march right off a cliff if we do that And one of the many ways this is true is in terms of wealth Now I've spoken
before about some other topics some that that fit this pattern Some of them are work some of them are relationships but today we're going to talk about wealth And I only have three slides Here are some things to think about In the long-term history there was a much closer
association with this idea that you reap what you sow The world worked in a way that was much closer to justice as seen from God's eyes So I know that word has been co-opted today but I mean divine justice It's sometimes called cosmic justice but I think that that unnecessarily oludes the source So God's justice God's
prosperity You reap what you sow The people that work the hardest and smartest were the best off And I I've made a presentation on economic justice And I'm trying to remember what it was called Something about unjust system Maybe money in an unjust system Anyway you can search for that at upwardthought.org But historically what
happened was the value of all things was anchored in terms of the value that could be produced by an able-bodied man on a piece of land that he farmed with his own hands That is close enough to rhyming that someone should write a children's song about it But anyway this all started in Eden when the
Lord pronounced that Adam would earn his bread by the sweat of his brow This is God's denomination of value It's all anchored by the food that a man can produce an able-bodied man on land with his own hands Subsistence farming And so when it comes to assets when it comes to wages when it comes to
consumables all of these things were connected to the cost and benefit of subsistence farming And with that anchor everything that emerged had a certain quality to it Whether we're talking about the opportunities that existed the pitfalls that existed it was all bounded by and anchored by and denominated in subsistence
farming And I I don't want to delve too deeply into that but you could write a whole book on it Now in the distant past we went through something called the industrial revolution And while changes that might seem relatively dramatic occurred throughout history away from subsistence farming by and large it was just sort of the
heartbeat that never went away And that all changed with the industrial revolution because for the first time a significant percentage of the population did something for a living other than farming And farming itself changed because suddenly there was the rise of these machines and the machines could be used
in ways that humans could not to produce much more than humans could The closest thing that anybody had developed before that was the use of horses And just to give you an idea something like half of old farms existed only to produce the food needed for the horses that worked that
farm And you think about what it would cost you in gasoline to run a tractor on the same amount of land and how much do you have to work to get the money to buy that gas or diesel if it happens to be a diesel tractor right and so things started shifting even further away from the idea of God's
prosperity which is you reap what you sow into Babylonian prosperity which is something very different Now again it's beyond the scope of the presentation to fully lay out what that means but essentially it becomes what you can get instead of what you produce Do you see the difference i'll explain it a little a
little later Okay but the overarching quality of this shift with the industrial revolution the effect was that wages began to grow faster than assets and assets grew faster than consumables And so essentially the the production limits of subsisting
subsistence farming kept a cap on how much assets and wages and consumables could all be There's only so much you can extract from each acre of land when you're working it by hand You introduce machines and suddenly that changes again in ways that go far beyond this presentation But what happens is that
wages grow faster than assets and assets grow faster than consumables The price I'm talking about price in all of these things Okay So then something else happened after World War II Suddenly assets started growing faster than wages and wages still grew faster than
consumables So consumables the food you eat the clothes you wear the car you drive once that was invented any entertainment all of these things have become cheaper and cheaper and cheaper relative to wages But with World War II this
inversion happened where assets started growing faster than wages And so the people that got rich weren't the ones who were earning the most They were the ones who were were acquiring assets which appreciated quickly faster than wages See with each of these shifts
intelligent people will focus the I should say the most intelligent people will focus their production which tends to be greater on different things and there are cascading effects throughout society when they do so It should not be that hard to think about how this looks and recognized how this has looked even
without going through numerous examples When the focus is on you farming your land and having your family there and producing pretty much everything that you need that looks much different than when your what you're trying to optimize is working for someone else or charging people money for your
time whether that's a boss or a customer It's a completely different society that comes out of that And you can look and see it Prior to the industrial revolution the world was a completely different place And everyone's lives were fundamentally family occurrences on your own land You shift that around to
wages and suddenly a an enormous quadrant of your life is aimed at selling your time and your labor to people who are not your family And your life naturally goes off the homestead right your focus your attention your time everything away from your
family Now that was very radical in a relative sense between those that the the before and after of that shift But imagine what those people imagine what someone from 1910 from a farm in Indiana would how they would see today's modern life and and how the family has changed again and how different things are Okay with this shift away from wages
and into assets stocks bonds homes things that you can buy now at a certain price and sell later for a much higher price So I'll give you a crazy example that's very specific about this I offered someone a job when I had a
company here in Montana and because there are so few people here these were all imports from other other places Almost always when I when I went to Target to hire it was someone from out of the state And with each of these there were several of these examples It happened several times With each occurrence if the person had moved to Montana when I
offered them a job they would have made more money on selling their house after a few years than they would have in the wages that they made because home prices have inflated here so much Right now that's an extreme example but assets for a long time now they've grown faster than wages So if you look at what people are making per hour since
World War II until now and then you overlay that with the cost of houses you're going to see or the stock market you're going to see an enormous difference because assets have grown so much faster Okay that's the setup for my point which is the following Are you ready we're living through another shift
The shift before was from God's prosperity and justice You reap what you sow to Babylon's prosperity You get what you gain The current shift is into poverty And this relationship is that consumables grow faster than assets and assets grow faster than wages
And I invite you I know this is a lot to to upload to your head to study this slide and think through it if these are things that you believe are relevant because you could expand on this for a very long time I'm not going to take the time to do that I think very few people would be interested in it This is an enormous shift though and it really should have your attention
because so many things come out of this If you are say under 40 your children are not going to have the life that you had If you're an adult under 40 if you're a child today you will not have the life your your parents had and your kids will not have the life that you
have Everything we're standing on in terms of prosperity in the modern world is an illusion It's fake It doesn't mean it's fake in terms of if you have money in your pocket you can go buy real things But it's an overstretch from reality and it's going to be taken back and it's going to come with a vengeance And it's happening in real time Many many young people today will
never own a car Many many young people today will never own a home And if they do own a car it's going to be a much lower quality car than what their parents were used to And if they do own a home it's going to be a much smaller and crummier house than what their parents were used to It'll probably not even be as nice as an apartment is today And the this is
not speculation You can go and see these tiny houses being built They're not called tiny houses I don't mean the things called tiny houses but there are entire housing developments being built that are smaller than an apartment Each of the homes is smaller than that And the quality of these houses is garbage Anyway I've made a video on that too You can go and and search the headlines you'll find
it So up until very recently your wealth getting back to what that means So so you could probably put together the the picture here When everyone's doing subsistence farming your wealth is do you have as much land as you can farm and do you efficiently farm it that's your wealth You might even get to the point
where you can hire other people to help you farm it Okay How well do you manage that then that transitioned into how much do you make per hour and then that transitioned into what assets do you own wealthy elderly people today almost all earned their money by buying a house
when the house was cheaper and by buying stocks through time Their prosperity is actually just inflation It's not value creation It's not you know IBM's not making some revolutionary thing today that's changing the world versus 20 years ago right it's all just the government prints money The money goes into stocks and houses If anything companies today are
less valuable in what they produce than they were 20 years ago And homes are definitely lower quality than they were 20 years ago Either because the house is aged and things are breaking and not as nice or because the newer homes are just garbage because of inflation No one can no one can afford copper pipes anymore right it's all plastic and so on
So this is changing and it's not the case that that young people today are going to get rich through buying a house Now here's a a tweet you can read I can't remember I made this presentation quite a while ago and I don't remember who this Freedberg person is but they they're an important person 60%
of middle class households net worth is in their home only 10% is in owning the S&P 500 index funds whatever in their retirement accounts So end quote Almost all of modern prosperity almost all of modern wealth as far as a per capita sense is in housing your primary
residence skipping down in the quote "We've stored our net worth in a house And in order to keep the economy and the social structure stable we've created policies that allow the continuation of the growth in the value of houses so people feel that their net worth is incrementing." Right jumping back in the quote to a part I didn't read yet We've
increased the cost of housing and created a destructive housing bubble that reduced people's exposure to participation in productive value creation like the ownership of businesses See when quote when you start a business what you get paid for is solving problems And as you solve more at least with a startup as you solve more and more problems the company gets more valuable It's called d-risking
So when you buy a house you're not doing that All you're doing is getting on your surfboard and riding the wave of inflation You're not creating any value In fact you're taking money out of the system that could be used for value creation And it's also risky because obviously most businesses fail But houses do not produce income but they do produce overhead
They are only profitable when you can sell them for much more than you bought them for not just a little Because every single year you're paying property tax which has gone up by 29% or something crazy like that every year in the recent years you're paying mortgage insurance which has gone up by a lot You're paying utilities which go up by a lot And you're paying maintenance which has gone up by a lot
And so it's this race case where the perpetuation of this system guarantees that it will fail And it's not a sudden thing It's happening in real time We're we're we're moving closer and closer to that with every day because you will live if you're not old and you don't die young I'm telling
you right now you are going to live to see houses costing more than they can ever pay We are racing to that point and there isn't really any way to escape it as an individual Society forget it But even as an individual I made a video called Riding the Tiger It's very important
You can make the most of it but you're still going to be just the cleanest dirty shirt You cannot escape this Okay there are massive things you could do to mitigate it Most importantly don't get a giant house in a place with high property tax but there's only so far you can go with all of this because it's not like there's some community with local governments who aren't
tyrannical Anywhere you go local government will be that way So what does future wealth look like if you want to optimize you need to know what's coming You can't make good decisions if you don't know the future Or to the extent that you know the future you are you have greater
power to make good decisions doesn't have to be a sure thing but the more you know the better off you will be If you if you make the right decisions because you can know the future without making good decisions about it Those are independent but you get the point Here's the dominating question of future wealth It's not how much can you
gain from reselling your stuff It's how much of what you consume do you or could you produce how much of what you need can you make if you don't see this as an absolutely dramatic shift then you're not paying attention Now maybe you don't
believe me but I'm telling you this is happening in real time Let me give you I'll start at the bottom Let me give you an example of this My family is is from Maryland my my parents and so I have siblings that still live in the area One of my brothers has experienced a doubling in his utility bill over the last little while I don't remember if it
was exactly one year two years double And it was already high So guess where I get my heat from i go and chop down trees And that's not completely disconnected from anything that could make it more expensive but it's much less likely to grow as
quickly as uh on the grid utilities Now we use electricity We we we don't live off the grid And I have a furnace I just don't use it very much right but I live in a place that's not overrun yet by crazy people who make bad decisions to jack up the prices of utilities as quickly as they do in Maryland Suicidal decisions I'd
say So relative to my brother now I don't know I'm trying to remember exactly what he spends a month on his utilities but that's a multiplier So he spends a multiple more than I do And so even if we earn the same amount of money through work I am more wealthy than he is because it costs me less The
overhead of my house is less when it comes to utilities This is just a dimension There's a there's a bigger picture but it's an example since we're already talking about housing Do you live in a home already because if you don't with every passing day the odds that you can get into one go down in general If you live in one is
it paid off just a few years ago guys like Dave Ramsey were out there saying it's insane I'm sorry He has always advocated for paying off your house but everyone else said "You're insane to do that Why would you do that just pay your mortgage and put all your extra money in the stock market." Lots of people said that Now suddenly more and more often the people that paid off their house look
like geniuses because they can cancel their homeowners and they're saving massive money by doing that Another question how much of your home do you have the skills to maintain now it's funny to see people move out into the boonies and they think that they can just oh if they need a roof repair they can call three contractors and have them out the next day to give
them an estimate It doesn't work like that I We had a repair to make out here that that I was working two jobs making very good money at the time and I didn't want to spend the time doing it myself So I called five different contractors Zero called me back After harassing them I finally got one to call me back But honestly actually he just answered the phone And honestly I think
it was by accident He was probably expecting a call from someone else And so I cornered him and he ballparked me this estimate that was absolutely absurd It was like two months of my pay making lots of money to do something that would take me two days to do kind of thing Take me two days to do not an expert Okay So people are just uh not aware of what
that what that means If if my dishwasher breaks I have to fix it I can't call somebody to do that There are no repair people that come here Okay So the question is what's what's happening through time is that this is bleeding out into the suburbs and even the cities because the cost of getting skilled repair people out or any kind of
uh trades person is getting so high that suddenly it makes a lot more economic sense for you to do it yourself on more and more things And so one facet of new wealth is how much what what are your skills and capabilities in maintaining your own home or your own goods you know if you have a tiller and it's not
running what are you going to do if you can't take it to a shop and I'm maybe the shop's not available but I mean what if it costs as much to get it repaired at the shop as it would to buy a new one and and you can't afford a new one because they're so expensive now and on and on and on What is your skill set what about clothing so for a long time including on
this channel I've advocated for and I believe that this was on the specifically at least you'll find this on the ride the tiger video For an increasing number of things including clothing it will never be as inexpensive as it is right now There's a limit as to how much food you can store up but depending on your age and what
kind of storage space you have the odds are high and of course how much money you have the odds are high that one of the best investments you can make is buying all the shoes you're going to need until the day you die or all the t-shirts you're going to need until the day you die As silly as that seems if
you think about inflation and how dirt cheap our clothing is still today it might be twice as much as it was two years ago but you're not thinking about the human component of what it takes to make shoes and clothes let alone tariffs and all kinds of crazy supply chain issues You know if you can pick up a pair of shoes for 10 bucks on Amazon and they
fit you well and they're high quality why wouldn't you buy 10 pairs of them and this is again there's another dimension hidden in that We're not talking about Air Jordans although if that's your thing you'll you'll also save tons of money stocking up on them Why wouldn't you do it you know do you give away clothes when your kids get through them or do you save them for the next kids do you save them for the your
kids' kids especially for for children little little kids toddlers babies It's not like that's going to go out of style Who cares plus who cares it's going to save you so much money Now maybe you don't have the space for that and that's that's a different issue Maybe you don't have the money for that You're going to have less money for it later right it's these are things to
think about And now we get to food Now we get to food Do you live on land that you can farm almost everyone the answer is no You live in a suburb You live in a townhouse And maybe your HOA doesn't even allow you to have a little garden But but farming a little food can make a huge difference But for most
people the equipment the knowledge the infrastructure what do I mean by that you know have you have you taken the rocks out of the field have you built up the soil do you know which seeds work have you experimented with things do you know how to keep seeds from year to year do you have the system set up to preserve the food to store it all of these things are so far
beyond any normal person that in all likelihood your access point is just going to be storing long-term food storage Wheat sugar stuff like that So beans rice noodles all those things can last for decades Again you're subject to the
space that you have and the money that you have But what investment could you make that's going to have a 400% return guaranteed or whatever it ends up being you know uh I bought back to clothing I bought the cheapest pair of work boots I could find I've been I I rationed my combat boots when I was in the army for 10 years And uh I'm I let's see I got out
in 2010 I believe 2011 something like that And now it's 2025 I have one pair left but they're not broken in And so I needed a a softer leather boot so I could keep farming because my other pair died So I went to Walmart and I got the cheapest work boot that I could find and it was $60 And I was kind of surprised it was that high I haven't purchased boots in a long time but
whatever Well that was four to six months ago and I checked yesterday they're $100 now So what kind of return on investment would it have been if I bought 10 pairs of those boots now $600 is a lot of money but if you think about it and and who wants to store 10 pairs of boots but if you think about it purely in the
sense of an investment how much money would I have saved just by doing that and and here we are four to six months What's it going to be like four to six years or 10 years from now or 15 years from now and so you might think someone's crazy for having 10 pairs of boots But that will be the new wealth because things are degrading They're not
going to get better and they're not coming back And so the difference will be with those people who have who are able to sustain prior benefits for longer into the future Prior standards of living for longer into the future And primary among this is going to be the essentials Food clothing shelter
fuel I didn't talk about biodeiesel That's probably just beyond the pale But you can actually make your own diesel fuel There's a lot of overhead but you can do it Anyway I hope this is helpful The the you could take this this is a fractal lesson like so many other things You could take it as deeply as you'd like But the point is that we're living through a dramatic change in the economy of the world And