Time Preference Above All

The most important perspective to have, not only in finance but also in life, is a reasonable understanding of time preference. Life is a series of choices. Everything you do has an opportunity cost or another choice you could have made. Putting things into scale as it relates to your life is the idea that every choice you make in the “now” impacts the future version of you that will feel the impact of your choice in this moment. A low time preference means you prioritize the future when compared to today. A high time preference means you prioritize today compared to the future.

Some examples where time preference matters in your life:

• Choosing to eat junk food today, tomorrow, and next week leads you down a path where, unless you change that habit, it will make you the future version of you unhealthy.

• Committing to run a marathon in 20 weeks means the training sessions today, tomorrow, and the following weeks will enable you to show up on race day prepared.

• Writing one page a day for the book idea you have mulled over will enable you to present a finished copy over the coming year.

Nearly anything you do today has a future ramification for the person you will become.

Beyond pursuing specific goals or ideas, there are certain “infinite” games that you can play for your whole life and never reach completion. These infinite games are where the magic of life emerges.

• You don’t reach maximum fitness; you simply keep living a healthy lifestyle.

• You don’t suddenly stop being a parent or loving partner; you simply keep building these relationships.

• You don’t learn everything; you simply keep learning.

The infinite games of family, health, and knowledge are three areas that you can find fulfillment in throughout your life, primarily in the fact that they are infinite.

Chasing goals and pursuing infinite areas of life both take your daily action and choices and reflect them into the future down the road. These are all low time preference activities because you are planning for the infinite.

Time preference is everything.

Everything you do in the present impacts your future life.

In a society that currently preaches and advocates the “get rich quick,” the “cheat to succeed,” or the “gamble to win” mentality, opting into a time perspective that is future-facing is the sustainable decision.

If you commit to getting 1% better at something every day, you will be 37.8 times better at the end of 1 year. This is a journey you will not realize when your time perspective is in the days. Your daily actions will be marginally different when compared. However, when you expand your perspective to be the months and the full year, you will see the true growth. This sort of thinking applies everywhere and with anything you aim to do in your life. The “overnight success” is a myth. Nothing happens overnight. There may be a sudden movement that makes things seem like there was an “overnight explosion,” but more often than not, there were months, if not years, of buildup before something or someone finally reached their ascension point.

Time preference above all else. Plan for the future you want to live.

The above all relates to your life, and I will argue that studying bitcoin helps you unlock these perspectives related to time preference in all areas of your life because bitcoin rewards people with low time preferences. The longer you hold bitcoin, the better off you are. Buy, hold, and wait, and history shows you are a winner.

Last week, I wrote about gold and the performance gold has had this year. In the financial market, one year is just one snapshot in time that fails to tell the full story. When you zoom out, here are the comparisons of gold and bitcoin:

Gold is the flat line compared to bitcoin

Gold wins, bitcoin wins more

The lower your time perspective is, the more you win with bitcoin.

This trend will only continue the more you realize that bitcoin is designed to go up forever. It is designed to go up forever because fiat currency is designed to go down forever. Bitcoin has a strict scarcity cap of 21 million coins, and fiat currency has an uncapped supply of infinity. In a world where supply dictates value, when demand increases and you cannot change the denominator (the supply), there is only one outcome:

Higher.

We are on the dawn of bitcoin not only becoming the chosen store of value for the world, but also the chosen medium of exchange around the world. I believe both will happen in my lifetime and believe both are possible in the next 25 years.

Your time preference matters.

If you plan for the present day only, you can miss bitcoin chasing riskier and less sustainable ideas and investments.

If you plan for the future, there is one asymmetric bet with sustainable power beyond all else.

If you plan for the future, bitcoin has the characteristics to be passed along generationally and change the path of your lineage.

If you plan for the future and take steps in the present day to realize that future, you will win.

Stacks SATs.

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The views and opinions expressed here are for entertainment purposes only and should, in no way, be interpreted as financial or investment advice. Always conduct your own research when making an investment or trading decision, as each such move involves risk. Nothing contained in this e-mail/article constitutes, or shall be construed as, an offering of financial instruments, investment advice, or recommendations of an investment strategy.