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>“The strong rise in financial assets resulted in an increase in inequality in 2021,”
[Credit Suisse Report](https://www.credit-suisse.com/about-us/en/reports-research/global-wealth-report.html)

Ultra High Net Worth (UHNW) individuals are those with assets worth about 50 million US dollars, and it is quite incredible to consider the change over the last few years. The number of UHNW people grew by 46,000 in 2021.


![image.png](https://files.peakd.com/file/peakd-hive/tarazkp/23vsUmPnxSmG6nGnuRAPUuVvsq6WkHpJ7VNwj58TmaraN8AnMpicTPMHwD5uJ9PQvdAi5.png)


>“This is 46,000 more than the 218,200 recorded at the end of 2020, which in turn was 43,400 higher than in 2019. These increases are more than double the increases recorded in any other year this century,” the report said. “Taken together, it means that the number of adults with wealth above USD 50 million expanded by more than 50% during a two-year period.” [source](https://news.yahoo.com/ultra-high-net-worth-individuals-013145160.html)

*If anyone needs proof of the wealth gap widening, this is it.* This is the fastest transfer of wealth from poor to rich in the history of the world of finance. 

However, it is also evidence as to why it is increasing and indicates what to do about it. The reason that this kind of gains are possible is because of where that wealth is positioned, which is in value generating asset classes. Because they have invested their wealth into rising assets, they are going to benefit from the increases directly. It is obvious to see in the values of properties, but it also comes through in other ways.

For instance, over the last two years while billions of people were forced into lockdowns with many losing their incomes, the governments took on *insane* amounts of debt *on our behalf* to hand it out to cover the shortfalls, to us. But, make no mistake, this was not in our financial best interest, because those handouts had "usual suspect" directions, which meant that it was destined to be spent at obvious points. For example, when everyone is locked in their home, appliance sales skyrocketed, as did other "at home" services, including shopping and work products. Because people felt "locked in", they upgraded their homes as they couldn't travel, they bought gym equipment and apps, they called for takeout. 

Yet, what *most people* didn't do, was invest these handouts into the products and services that they were using. They were consumers only. However, those who were previously or early investors at the start of the pandemic, were able to have the compounding effects of the masses pushed like cattle into the run at a slaughterhouse. Billions of people self-led down the sales funnel, into consumer buckets - including housing, which also skyrocketed on the FOMO. 

While people loved the "free" money, what the vast majority didn't recognize is what it meant for investors and their wealth. Essentially, it was taking debt from the future that the average person will incur at a later date, giving it to that average person now and then, directing that average person where they could spend it, which was in the companies that the average investor had their wealth. This is why the wealth generated in the last two years for some is so extreme, because it isn't coming just from current earnings, it is also driven by an enormous amount of *future earnings.* 

It is a transfer of wealth into the pockets of the largest investors, from money in wallets that we haven't even earned yet. This is debt that was *imposed* upon the average person, regardless of whether they wanted to take it or not and, it is the single largest reason for the increasing speed of growth of the wealth gap in the last couple years.

*It is insanity.*

Yet, because everyone loves something for free and there was no way to actually change the fiscal policies anyway, it was accepted. The only decision that people really could make with the handouts, was where they would spend it, but that was narrowed and, with many struggling, there weren't many options, with investing into generative asset classes far from mind for those who needed generative assets investments the most. 

And, while we can't go back in time and invest what we have already frivolously spent, what we can do is recognize the patterns for future risk and opportunity. Debt is bad in most ways for us, and possibly more so when the governments are taking it on our behalf, choosing how they spend our future wealth potential. We can also see how important investing into wealth generative asset classes is for us, both individually and collectively, because *if we don't,* the wealth will continue to concentrate in an ever increasing peak stretching at the top, and a base fall at the bottom. 

While money itself might be largely meaningless, because we have all agreed that it is how we interact and trade with each other, distribution of monetary wealth matters. Because it holds purchasing power but is *product and service agnostic,* it can also be used to buy *anything* at a price, including the sway over the economy itself through the decisions-making process. Essentially, if we want economic power, "saving" is *never going to help,* because that is continually going to be eroded by the decisions of governments, which are incentivized to increase debt and transfer it into the pockets of the wealthy, making the problem even worse. 

What has to happen is generative investment, but that has to be in assets that are going to be resistant to government interaction and still be in demand. Hype investments on short period of time trends can return high value, but they are *always* going to regress back toward the mean, with the higher it going, the further it will fall. 

We have seen this with Bitcoin for example, where it has outperformed everything, if bought at the start of the pandemic and even if bought near the highs, is about even with most of the other big gainers in that timeframe and their subsequent losses. The difference is in regard to those others though, is that there is still a strong future for Bitcoin, despite not having much of a product to service to offer. The others are business models and they will go through business and industry trend cycles and eventually, *everything fails.*

What technically doesn't fail though, is the economy itself, even though we talk about it failing. The economy is like nature in this respect, where we can think we are "killing the planet" but in actual fact, that is impossible, as the planet holds life, but has no life itself. We can nuke it all and kill everything upon it and the planet will continue to exist in some form. 

The economy is the same. It doesn't matter what the currency of trade is, as long as we are trading, we will find a way, thereby creating an economy. Shells, dollars, Bitcoin - the economy doesn't care, because it is only a representation of our trade interaction. But, for us as individuals to have a healthy position in any economy, we have to be able to create value and, use that value to improve our lives. 

However, if there are large inequalities, even if we hold a lot of value, eventually the gap will lead to a degradation of quality in our lives, as we will still be interacting with those who are suffering in some way. This immense growth in wealth inequality is not indicative of some working harder than others alone, it is also because once the processes to use the economy as it stands to generate wealth is in place, it will do what it does and generate wealth for those using it. However, if we aren't on average doing this, the economic power will increasingly pool in the hands of the few, which we are seeing now. 

While I wouldn't recommend anyone to go 100% into crypto at this time, one of the value propositions of crypto is distribution of wealth and the potential to opt-out of unequal or unfair economies. It isn't just about being able to move from one place to another with wealth intact, it is being able to move from one economic system to another, monetizing one over another, as defined through our interaction with each other. 

This is an incredibly important trait of crypto, which is why the decentralization of the protocols are so critical, so that no single individual or entity can make decisions. But, just like we have seen with the start of Hive, if something does go "wrong", there is the potential for the invested community to make decisions in their best interest *as a group,* outside of the whims and rules of the governance structure in place. 

>These are economies of opt in and opt out by choice. 

And, as we saw in that process, someone who has UHNW and was able to commandeer the governance, we left powerless and worse off for it, because what they bought with their wealth, was valuable because of the community and *most* of that community couldn't be purchased.

Freedom of economy isn't the freedom to spend where we choose, it is the freedom to participate in the economic structures we choose. If we feel that we are better off not participating, we can opt-out. What this does is creates an equilibrium of results based on cultural interaction, finding a better balance between the top wealthiest and the bottom poorest, otherwise the economy will collapse, as the poorest will choose to opt-out, meaning that the value of the richest will become near valueless.

Currently in crypto, there is a large amount of wealth inequality, because of the participation rate and the large differences between when people joined. However, with every bull and bear, the distribution gets better and, there are an increasing number of alternative economies with which to participate, with the ability to choose many. As more people start investing *and generating* wealth along blockchains, the business and investment vehicles start to grow and stabilize like the legacy economy, with the core difference that everyone involved, *chooses to be involved* and can choose not to be involved with any particular economy, at any time. 

This is a fundamental value of decentralized economies as we are building them, but we aren't really going to see the full effects, benefits or meanings, until it scales, which due to the differences from the legacy we all know, is going to be challenging and take time. 

What we can take away from the last two years though is, governments are not going to work in our financial best interest and by extension, if we want to have economic power, we have to own generative assets. In crypto, we can own a piece of the economy itself, including the governance structure and while still imperfect, we are heading in the right direction - which is diametrically opposed to the legacy economy. While the current system is gathering more wealth in fewer hands, the decentralized economy is spreading more wealth to more.

The difference in outcomes may not be obvious to many yet - but all will learn in time.

Taraz
[ Gen1: Hive ]



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