Will We Become a Cashless Society? – Episode 165

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[00:01] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your hosts, bestselling author, Kim D.H. Butler and No BS Money Guy, Todd Strobel. Hey everybody, welcome to another edition of the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, we have my co-host and bestselling financial author, Kim Butler, and we like to, whenever possible, include topics that you have sent in to us. So we actually have one of our financial advisors who has sent in an article about the coming abolition of cash. Now this comes from an online newspaper called the World Watch, and we will try to cite its sources whenever possible.

[00:57] I don’t know much about this itself. But the thing I think that stands out to me right away is that India just recently announced the demonetization of the thousand dollar and five hundred rupee notes. This would be the equivalent of a twenty dollar and a ten dollar bill. It’s the largest notes that’s in effect. So what they’ve done is they’ve demonetized them, taken 80 percent of them out of circulation. And for those that are in circulation, if you own one and try to spend it, there is a 90 percent tax on it. So Kim, maybe you can kind of take your opinion from there. Well, it is very interesting because last week I was at Abundance 360, which is Peter Diamandis’s event, and I actually sat next to somebody from India and many people

[02:01] in India speak English and he did quite nicely. And we had a conversation about this and I was only peripherally aware of the issue. But he said it was really an amazing thing that happened in their country. And like all things, you could interpret amazing as good or as amazing as bad. He did describe what you just said, and that’s that it would be like our ten and twenty dollar bills got taken away. And what he said that absolutely necessitated was a massive amount of people having to open up bank accounts that had previously not had bank accounts. So the term for this group of people, and we use it in the United States as well, is the unbanked and the underbanked. So unbanked is sort of obvious, means you don’t have a bank account.

[02:56] But the underbanked are people that maybe have a simple checking account, but they don’t use anything else. No debit cards, no credit cards. In other words, they don’t take advantage of the services that a bank provides. So this is interesting in that we could all agree that there’s some good to that. Like, hey, you know, ten and twenty dollar bills are a hassle anyway. Wouldn’t it be great if we could just be in a cashless society, et cetera? And being one of those people that is inevitably short of literal cash, I can’t just even I’m shocked myself how many times I end up in a situation where I would love to have a five dollar bill to give as a tip or my kids bug me all the time because when we when they were younger, we used to go buy ice cream

[03:40] and all I would have was a hundred dollar bill because that was ATM money. And I would have one kind of tucked away in my wallet. So I’ll have to admit, I’m one of those people that think sometimes, gosh, cashless would be so nice because I wouldn’t have to deal with having cash when I want to have it and not having it and like I said, you know, wanting to tip somebody or buy something smaller, what have you. But the challenge in this area is that if we go to a cashless society, as India is trying to go to, is that then the government has a lot more control and a lot more information about what we spend and we’re literally voting with our dollars and so when we do that, they are a lot more aware when those dollars are trackable.

[04:30] So it’s an interesting discussion, pros and cons to a lot of things, but I want to bring to bear a perspective that Peter Diamandis shares with us from the event and in other places, but I want to just pause for a minute, Todd, did I answer the question or shed enough light on the situation? Yes, I think you started us down the conversation in that there’s some positive and some negative things. I want to point out one other thing that I’d like for you to comment on. This article was originally written in Australia and the comment that the gentleman, the author’s name is Kohler, K-O-H-L-E-R, he said, there are 300 million, $100 notes in circulation in Australia, more than any other note, but they are rarely seen.

[05:22] ATMs only spit out 50s and 20s, so who’s got all the hundreds? And his answer is crooks and tax avoiders. Yeah, which is another reason that’s often touted as the benefits of going to a cashless society, the gentleman from India that I mentioned sitting next to his name was Rav, he believed that going that way was often driven by the desire to get rid of the black market, so you could, I think, potentially put all that in the same category, the crooks, the tax evaders, black market buyers and sellers, et cetera. And I’ll admit, I don’t know exactly how I feel about all of it, but I can absolutely see both sides to the story. What I’d like to do now is share Peter Diamandis’ perspective because it’s an educated and researched one.

[06:22] And I think more than just my own opinion, although I’ll admit I’ve readily adopted it and demonetization is one of the six Ds that Diamandis talks about all the time. We’ve shared it in the past and he has a very specific approach to helping us realize the good and the positive things that are going to come from areas in technological improvements and demonetization is one of them. So whether you take demonetization to mean a cashless society or the use of Bitcoin or more things handled on the block chain, which I want to come back to that in a minute, the progress is marching forward. And Peter believes that the absolute good that will come from this progress will overcome the problems that will also arise from the progress

[07:25] and that there is going to be a lot of good in demonetizing things and whatever problems do occur will be able to be offset and drastically overcome and made better by all the good that comes from it. I want to just bring up what the block chain is because I’m very excited about the block chain’s potential to not only potentially at some point to contribute to cashless society, but more importantly to contribute to the ability for disinterested, unknown parties to do business together. So let’s say you and I don’t know each other and we want to do business together and we want to have a platform whereby we can transact this business and have it be transparent and have it be trustworthy and have it be verifiable and have it be legal

[08:21] and have it be date stamped and have it hold up in courts, you know, all the good things that you would think about wanting if you handled business with somebody. That’s what the block chain is going to enable. And we’re still a good two to five years away for this becoming any part of our normal public discourse. But there are companies, there are charities, there are people that are working on the block chain. And Bitcoin, as an example, is kept track of on the block chain. The block chain is the underlying structure for keeping track of bitcoins. And Bitcoin may or may not succeed and I’m not making comments about whether it’s a good investment or not. That’s not my goal here. My goal here is to open people’s knowledge to this area of the block chain

[09:12] and all the good that it can do, linking back to this idea of a cashless society. And so if you haven’t heard about the block chain and you want to dig in and do a little bit of research, I would encourage you to do that because I think it’s going to transform the way, for example, we vote in our society, the way transactions are kept, the way escrow companies handle business, the way that business is handled between business owners, the way that individuals can do business back and forth and like I said, have that trust and that transparency and that open environment where two parties can come together and get results and get things done because of what the block chain provides. I guess my fear on the flip side of it

[10:01] is the whole big brother aspect of it, of that which is transparent to the parties involved is also transparent to a government that we have worked so hard to pride ourselves on having some type of a private life that is slowly dissolving. I mean, I was just counting cameras on the way home from work the other day. And I mean, cameras mail you a ticket in the mail based on your license plate if you run a red light. Yep. And I’ll say to you what Peter Diamandis says to us and I’ve heard Elon Musk say to his teams and the response is, yes, that is a problem. And so that’s a problem that we’re going to have to figure out. We as a society, as technological entrepreneurs, as even government entities,

[11:01] we’re going to have to figure that out. But I know for a fact that the leaders in these spaces are confident that we can figure it out and that there’s more good that will come from it than bad that will come from it. In fact, there’s so much more good that will come from it. It absolutely overshadows and overrides and outperforms all of the potential bad things. And I will absolutely go on record as saying I am not one for big brother having a lot of information and knowing a lot of things. However, there are, I believe, so many good things that will come from this knowledge being so transparent. And one of those good things is that the bad guys can no longer hide. So whether you consider the bad guys the government,

[11:53] if they have too much information or the bad guys are the gangsters or people that are doing a tax evasion or what have you, they are no longer going to be able to hide. When is this going to occur? I have no idea. But most of the things that are talked about amongst this group of entrepreneurs that I’ve been referring to are in the next two to five years. These are not 20 and 30 year things out there. And as we’re all well aware, our society is changing so drastically fast these days that we can envision a change happening in this area quickly. And so I want thinkers and I want business owners and entrepreneurs to be aware of these areas and to be openly thinking about them so that we’re not blind scientists

[12:42] but that we have a chance to figure out how can we take the good, how can we overcome the bad and make progress because of it? I guess I’d like to just read a little more of this article that defines, it’s this definition of bad. For example, if you were overweight and the government banned you from being able to purchase sugary drinks or high calorie food until your weight got back in line, would that be considered the bad? So that’s a really good question. And I think that that can be answered either way and not being a fan of said drinks, I have to admit I have some opinion on it. However, I would like to see something a little more in line with personal decision helping us avoid the not so good things for us.

[13:44] So as an example, one of my big moon shots, if you will, it’s a term that Peter Diamandis has used all the time to think about really big crazy goals is wouldn’t it be cool if we had some type of, like say a wearable, a shirt or maybe a bracelet where we could put in our own values. And then if we went to spend money on something that was not in alignment with said values, our own chosen values, not chosen by somebody else, but our own, this wearable would either shut down our wallet or put an alarm or I don’t know what it would do but it would alert us somehow that, hey, this isn’t in line with what you said was important to you. I think that would be a better way to help us quote avoid sugary drinks

[14:31] or whatever the subject is. So again, like all things, yes, there are problems with it. Yes, there are things we’ll have to overcome and yes, that is what business is all about. Well, the one positive thing that it does mention is think of what the physical cost is of creating even a penny. Absolutely, it’s insane. It’s like seven cents or something or maybe even more than that, I’m not sure. And I mean, we have something that has a limited lifespan. It can get wet, it can get destroyed, it can get burned up in a fire. And certainly there are things that can happen to digital money with hacking but the government’s cost of producing those dollars would be significantly reduced and I would have to think that’s an advantage.

[15:18] Any other opinions you have before you wanna wrap up? I mean, I don’t think this is an if, I think this is a when in my opinion that we move to an all digital economy. But I mean, like I said, to the very end, I’m going to want to fight to be able to spend my digital money on whatever I want. It’s the big brother aspect telling me what I have to spend my money on is the part where I’m most concerned about. Absolutely, I hear your concern without a doubt. So the thing that I’d like to leave us with is to be comfortable in a changing society. So some people are really good at dealing with change, others not so much and we’ve got change. It is coming down the road as fast as it can and it’s increasing faster.

[16:13] And so whatever you need to do as an individual and for your family members to be comfortable with change, to be okay living in a state of flux. And as our listeners know, my favorite way to deal with that is to find things to be grateful for and to see the good in things that are taking place. And though we may not always agree with them to trust that good’s gonna win and to trust that good will prevail and to trust that society as a whole will operate according to those standards and that there may be some fails, there may be some detours, but that society as a whole will help us pull through. And if we stick with that, then I know we can all get good results. I would like to think that each step along the way

[17:01] also creates additional opportunities for people like our listeners to maybe create businesses that have yet to even be thought of. And I think that’s where a lot of our listeners are gonna be. Absolutely, we’ll look forward to hearing about them. Awesome, well, this is No BS Money Guy, Todd Strobel for the Prosperity Podcast. Once again, special thanks to Kim Butler and we’ll talk to y’all again soon. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.