Hellooooo legends!
In case we don't know each other, my name is Rudi.
This is the first edition after the pilot.
So we start from the very beginning.
Money.
What it is, where it comes from, and why I had it wrong for 20 years.
Here's what you will find today:
This is me last week, just in case you missed me
🪴 How my idea of money changed 3 times
Everybody has their own idea of what money is.
Most of us never chose it.
We picked it up from family, school and people around us.
Mine has changed 3 times already:
Me at 10: money is a bad thing everybody wants
Where I grew up, money was not something you talked about.
Wanting it was a bit shameful.
Nobody sat me down to explain what it is or how it works.
So I developed my own idea:
Money is what you use to pay for stuff.
You get it by working.
If you have a lot of it, you are a bad person.
That was it.
Me at 20: money is a scoreboard
Then a friend gave me a book about blockchain.
Because of it, I ended up working in crypto.
That’s where I met a lot of people who counted their lives in numbers.
Numbers up, you are winning.
Numbers down, you are losing.
I thought that was how I should live too.
So I started wanting more, but I didn’t have proper knowledge.
And made all the rookie mistakes.
I got scammed.
I bought the top.
I panic-sold the bottom.
Did quite some damage.
But it was a helpful experience.
Me at 30: money is a tool
Six years inside the money machine changed my mind again.
When money was a scoreboard, I only wanted a bigger number.
But a number in an app does nothing on its own.
A tool is something you use to get something else.
A hammer is useless if you don't know what you want to build.
Money works the same way.
It's a tool that gives you 2 things:
Time: every euro you keep is time you don't have to work for.
Options: with money, you can say no to bad situations (job, deals…).
I stopped asking "how much more can I make?"
And started with "what do I want it for?"
What helped me with it was understanding why money was born first.
I did the research, so you don’t have to.
🏛️ The history of money in 2 minutes
Money history, simplified
Money changed shape many times during history:
5,000 years ago, Mesopotamia (today's Iraq): people wrote debts on clay tablets, like "Rudi owes you 10 bags of barley". Money started as a record of who owes who.
Before coins: people also used things everybody wanted as money, like shells, salt, cattle and barley. Everybody valued them, so everybody accepted them.
2,600 years ago, Lydia (today's Turkey): some of the first coins. The king stamped small pieces of gold and silver. The stamp showed the metal was real and how much it was worth. So you didn't need to trust the stranger. You trusted the king.
Ancient Rome: the emperors needed more money to pay their soldiers and their bills. So they put less and less silver in each coin, and made more coins. The coins looked the same, but each one was worth less. So sellers asked for more coins for the same things.
About 1,000 years ago, China: the government printed the first official paper money. Heavy coins were hard for traders to carry, so paper was a better alternative.
1600s, London: people left their gold with goldsmiths to keep it safe and got a paper receipt. Soon people paid each other with the receipts instead of the gold. The goldsmiths saw that people never came back for all their gold at the same time. So they gave out more receipts than the gold they had.
1944 to 1971: after World War II, the big currencies were tied to the US dollar, and the dollar was tied to gold. In 1971, President Nixon stopped this and said it was temporary (…it's still temporary). Since then, money is not backed by gold. It has value because the government says so and everybody accepts it. This is called fiat money.
Today: most money is digital. 97 out of every 100 pounds people hold are numbers in bank accounts (Bank of England, 2014). When a bank gives you a loan, it doesn't hand you someone else's savings. It types the number into your account. That's brand new money in the system.
2009: after the 2008 crisis, when governments had to rescue the banks, someone called Satoshi Nakamoto created Bitcoin. It was born as “alternative” money that works without the bank as the middleman.
The idea has always been the same:
Money is a promise that everybody agrees to accept
But what are the characteristics of “good” money?
📖 7 traits of “good” money
Every kind of money has 3 jobs:
Pay: you swap it for things.
Count: you use it to compare prices.
Keep: you save it for later.
Some types of money do this better than others.
You can judge money on 7 key traits (see below).
This is how gold, fiat money (euro, dollar, pound…) and crypto compare:
A comparison with key differences
None of them is perfect:
Gold is scarce and lasts forever. But you can't pay for a coffee with it.
Fiat is the easiest to use every day. But the central bank can make more, so it loses value.
Crypto is easy to send and store. But its price can move a lot.1
They are good at different jobs.
Quick break before we continue…
If money is a topic you want to deep dive into, don’t forget to subscribe:
(you get all the learnings from a guy that spent 6+ years working in crypto and made all the mistakes first-hand):
Back to business.
There is something I wish I had figured out sooner about money.
⚖️ The key lesson I wish I had
If I could send one sentence back to 20-year-old me, it would be this:
Money is important, but it's not the main thing
I like it so much that I have it printed on my debit card.
Most people are in one of 2 groups:
"Money doesn't matter" → said by people who already have enough.
"Money is everything" → said by people who don't have enough.
I think the truth is in the middle.
Money is important, because not having it gives you fewer options.
You can't wait for a better price.
You take the first job offer because rent is due.
You pay more to borrow it.
But money isn’t the main thing.
I met many wealthy people during my work.
After 6 years, I noticed that they split into 2 groups:
The ones who use it as a tool. If you ask them what they want, they say time and freedom.
The ones who use it as a scoreboard. They keep chasing more of it to keep impressing people. Some end up broke because of this.
Same amount of money, but different lives.
The difference is not how much they have.
It's what they use it for.
What I value now, instead of:
A Rolex → saying no to a job you hate
A nice car → sleeping without worrying about rent
Status → time with the people you like
A big house → moving to a new country when you want
Looking successful → helping someone financially
I still haven't met a person who only chases money and is truly happy.
📚 Where I'd start learning (6 resources)
Nobody taught me anything about money.
Later, I understood why.
Nobody gets anything out of it:
School: money isn't a subject, and most of the people working in schools aren’t qualified to teach it.
Banks: they pay you a little to keep your money, and they charge you a lot to lend you money. They earn more when you don't ask questions.
The Finance Bro: he makes money complicated on purpose. That's because if it sounds hard, you pay him to explain it.
This is why I started learning on my own.
From books, videos, resources and a lot of mistakes.
These are 6 good resources I'd recommend to start:
Books:2
Money: The True Story of a Made-Up Thing, by Jacob Goldstein. Written by a former host of the Planet Money podcast. Easy to read, funny, and it covers everything in this email, up to Bitcoin. Get it here.
The Psychology of Money, by Morgan Housel. Short stories about why people do strange things with money. No maths, just behaviour. Easy to read one chapter at a time. Get it here.
Economix, by Michael Goodwin. A comic book about how the economy works and how money is connected to it. The easiest way to learn economics without falling asleep. Get it here.
Videos:
How the Economic Machine Works, by Ray Dalio (31 min). An animated explainer of how money, loans and interest move the economy. The best 31 minutes on this topic that you can find for free. Watch it here
The History of Money, by The Open University. 10 short animations, from stones and whale teeth to modern banking. Watch it here
The Ascent of Money, by Niall Ferguson. A documentary on how money shaped the world. It's the longest of the three, for a chill, educational Sunday. Watch it here
You don't need all 6.
But if you check them all, you will know more than most people.
❌ Breaking 6 toxic money beliefs
If this feels like you, keep reading
When I was growing up, I had some money beliefs.
I later realised many were toxic and not true.
If you still have them, this newsletter will try to change them:
"I tried investing and lost money, so it's not for me"
→ Most people lose at first. I got scammed, bought the top, and panic-sold the bottom. The first losses are the price of the lessons. Quitting is what makes them a waste."If I do nothing, I can't lose money"
→ Doing nothing is a choice, but it's not the best one. If your bank pays you 1% and prices go up 3%, you lose 2% a year while you sleep."Money is complicated, and I feel stupid asking"
→ It's made complicated on purpose. It's not your fault. If someone can't explain it, that's on them. And that's exactly why this newsletter exists: simplify money."I will pay somebody to tell me what to do with my money"
→ Nobody cares about your money as much as you do. Not your bank, not your school, not your boss. And even if they do, it’s good to know it well enough to have a conversation with them."When I will earn more money, I will fix all the problems"
→ Earning more doesn't fix any money problems. If spending grows with the salary, you stay in the same place. Just with a nicer car."Wanting money is greedy"
→ Wanting money is normal. How you get it decides if it's greedy.
I’m planning to talk about each of them in future editions.
(including all the tips, resources and tools to transform each of them)
Now tell me one thing.
Do you (or did you) have the same beliefs about money? 🤔
Reply here; I will read every message.
That's it for today.
Thanks for reading ❤️
See you in the next edition 👋
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Disclaimer: The Money Leverage is for education and entertainment only. Nothing in this newsletter is financial, investment, tax or legal advice. Rudi Fermo is not a licensed financial advisor. Any decisions you make with your money are your own. Consider speaking with a qualified professional before investing.
1 I make a split between Bitcoin and Crypto. I put crypto to simplify, but for me, Bitcoin is one thing; crypto is another, and they vary a lot, also on the characteristics. They serve a different purpose. I will talk more about this in future editions.
2 Some book links are affiliate links.