I either heard somewhere or imagined it that slow money is faster than fast money. It is along the same lines as the advice that they only get rich quick scheme that works is selling a get rich quick scheme.
My recent activity in life has been working to protect and build family assets. It isn’t easy work. The world doesn’t make money on slow money. Banks want you to borrow, they want you to build up credit card debit, our fiduciary system is backed by debt. It is why things went so wrong in 2008.
Just think about this for a second. There are trillions of dollars of unsecured credit card debt rolling over every month. People are being charged extra high interest rates for carrying that debt and it feels like banks don’t even care about credit score when giving someone a credit card.
Now what happens with that debt. Once you use a credit card to purchase something that money enters the system as real money even if a person only ever pays the minimum balance and carries that debt into death with no estate to ever pay it off. That money is now in the banking system, and what do banks do with it? They lend it out.
That isn’t the end of it. After that money is lent out as part of a personal, auto, home, or business loan the money from whomever the borrower paid is then lent out by another bank and so on and so forth, and with 0% reserve rules banks can theoretically lend out the same money infinite times. Our financial system is essentially the paradox of the infinite hotel.
That is what happened in 2008. The worst guests in the hotel all got kicked out at once and because everyone else’s room assignment depended on them the entire system started to come unraveled and likely would have without government interference.
Coming back to slow money vs fast money it is the idea of you could have $1M today or a penny today and double the amount you received the previous day for the entire month. At the end of 30 days you’d have over $5M. The chances of 5Xing $1M in a month safely is close to impossible.
The power of slow money, compounding interest, and flywheels isn’t always recognized. It is slow, it is quiet, but given the right length of time slow money ends up being faster than fast money.
David Huzzard Writes 