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Refocusing personal finance on income rather than spending

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Key Insights

All current personal finance tools are based on a faulty foundation of knowledge around money (Keynesian economics), and this has placed the focus entirely on consumption and spending rather than the far more important areas of production and income.  Recent discussions around "passive income" and the FIRE movement (Financially Independent Retired Early) show an increasing awareness that prevailing notions of work, personal finance, and retirement are fundamentally flawed.  A different approach based on an understanding of Austrian Economics and everything it implies can radically improve the lives of everyone, not just the wealthy.


Streams is a personal finance app that shifts the focus from managing expenses to building and maintaining streams of income, both active and passive.  Over time through saving, people "stack" passive streams to gradually overtake their active streams.  Financial freedom increases as the ratio of passive income to cover expenses increases.

Research Notes

  • Streams can be both income and expenses, and for income they can be passive, active, or some combination.  The "gig economy", "side projects", and other recent trends in segmented income mean that tracking the hours of effort involved is part of evaluating a stream.

  • An income stream can be a regular sale of growth assets, like the "4% Rule". 

  • Streams should be rounded to the nearest $100 or $1,000 to avoid giving a false sense of precision that is not representative of reality.   This will initially seem out of reach for people who live paycheck-to-paycheck, because they are under the false impression that their cash matches their purchasing power and financial wisdom is watching every dollar.  In reality, financial wisdom is living with a much larger margin (at least 20%) of savings, refocusing on producing more income, and recognizing that any small efforts at the expense level are wiped out completely by the government manipulation of money.

  • For personal finance, simplistic measures like rates of return do not sufficiently capture the nature of different income streams.  Instead, there need to be a series of measures that together provide a greater ability to compare.  For example, individual streams should show:

    • Degree of government dislocation

    • Variability

    • Sustainability

    • Ownership Security

    • Tax Claims

    • Miscellaneous

  • ​Affiliate commissions could be very large for affiliates selling investment stream opportunities to users, but they will need to have new measures like those above to provide the what personal investors need to make informed decisions.

  • Net Worth and Net Annual Cash should be tracked with federal and state tax implications built in.  There are "claims" on assets and income that reduce their overall value, and not showing those overstates the financial picture.

    • For each stream, Net Annual Cash is:

      • income minus federal income tax and state income tax

      • proceeds from % sale of assets minus federal capital gains tax and state capital gains tax

  • For personal expenses, what if you created a new type of accounting called "Stretch Accounting" which is something between Cash and Accrual?  Essentially, you stretch an annual or semi-annual payment over the appropriate months in order to get a more accurate "monthly" accounting.  It isn't true accrual though, and everything else is cash basis.

  • One of the challenges is the amount of savings required to generate passive income of any meaning.  This might require a larger shift in thinking - being excited that your passive income is now covering your monthly Starbucks as a first step.  Maybe tracking your "Freedom Score" or "Resilience Score" as a % of your expenses covered by passive streams and watching it increase over time from 0% to something larger.

  • Tracking income and expenses in something like Gold Grams (GG) or Bitcoin (BTC) in addition to USD can offer a greater understanding of purchasing power and how finances can be overstated without accounting for the inflation in fiat currencies.

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