Money Basics
Fourteen guides on how money actually works, why the system is designed the way it is, and what that means for you.
You save what you can. You budget carefully. You don’t waste money on things you don’t need. And somehow, you’re still not getting ahead.
The gap between what you earn and what everything costs keeps widening. It’s not just you, and it’s not your fault.
Most Australians were never taught how money actually works. Not the official version. The real mechanics of how it is created, who benefits when more of it enters the system, and why the gap you feel is not a problem the system is trying to solve.
There are fourteen guides. They build on each other. Start at Guide 1.
What you will understand by the end of this hub
- Why the money in your account is worth less than when you earned it
- Why wages are always the last thing to catch up when prices rise
- Why the system penalises saving and rewards debt
- Why the escape routes, property, shares and super, are priced by the same problem you’re trying to escape
- Why the people who run the system have no incentive to fix it
- What money would need to look like to actually hold its value
The Money Basics Guides
These guides build on each other. Start at Guide 1.
Guides marked in grey are still in development.
Understanding the Problem
How Money Works
6.
How Money Is Created Today (The Bank Lending Model) →
The Personal Side Of All This
7.
Why Inflation Is Targeted (and Why Deflation Is Feared) →
8.
Why the System Rewards Debt (and Punishes Saving) →
9.
Who Benefits First When New Money Appears (and Why Wages Lag) →
10.
Do Assets Actually Keep Up? →
11.
Why Housing Stopped Being a Home →
Evaluating Money
12.
What Broken Money Costs Society →
13.
Why the System Does Not Fix Itself →
14.
What Makes Good Money (A Simple Checklist) →
What each guide covers
Guide 1 of 14
Why Your Money Buys Less Every Year
Everyday life feels more expensive even for people who budget well and save responsibly. This guide explains why wages lag behind living costs and how the dollar losing purchasing power affects everyone, not just people who spend carelessly.
Guide 2 of 14
What Causes Inflation (and Why Prices Never Come Back Down)
The official inflation number tracks a basket of goods. It does not track what happened to your dollar.
Guide 3 of 14
Money Is Stored Time and Effort
Every dollar you earn cost you time that cannot be recovered. This guide explains what happens to that stored time, why the numbers in your account do not tell the full story, and why doing everything right still leaves most people behind.
Guide 4 of 14
The Three Tests Your Money Fails
You use money every day. This guide shows the three tests it must pass, why the dollar clearly fails two of them, and why most people never notice.
Guide 5 of 14
The History of Money: Why It Keeps Breaking
Every form of money has needed a supply limit. Every supply limit has faced the same pressure. Here is the pattern underneath the history.
Guide 6 of 14
How Money Is Created Today (The Bank Lending Model)
Understand where new money comes from using a simple model that matches how modern banking actually works. You’ll stop thinking money is only ‘printed’ and see how lending creates most of the money in circulation today.
Guide 7 of 14
Why Inflation Is Targeted (and Why Deflation Is Feared)
Learn why central banks aim for low but positive inflation and why deflation is considered the greater risk. You’ll understand the trade-offs built into the system and why price stability does not mean zero inflation.
Guide 8 of 14
Why the System Rewards Debt (and Punishes Saving)
In a system where asset prices rise faster than wages, debt becomes tempting and saving cash loses ground. This guide explains how that happens and why it creates different outcomes for savers and borrowers.
Guide 9 of 14
Who Benefits First When New Money Appears (and Why Wages Lag)
Learn how new money flows through the economy and who gets access first. You’ll understand why asset prices can rise faster than wages and why those closest to new money often benefit most.
Guide 10 of 14
Do Assets Actually Keep Up?
If cash savings lose ground every year, the logical move is to put money somewhere else. Most Australians do exactly that, pouring money into property, shares, and super. This guide looks at what the data actually shows about whether those assets protect your purchasing power, and what it costs to find out they do not.
Guide 11 of 14
Why Housing Stopped Being a Home
A generation ago, a single income could buy a house in a capital city within a few years of saving. Today that is almost impossible, and no amount of government grants or schemes has changed the trajectory. This guide explains the mechanism behind that shift, why the policies designed to fix it cannot, and who ends up paying the price.
Guide 12 of 14
What Broken Money Costs Society
Rising costs and stagnant wages show up in the numbers, but the real cost runs deeper. Record low birth rates, deteriorating mental health, delayed retirement, and collapsing institutional trust are all downstream of the same mechanism. This guide connects the dots using Australian data.
Guide 13 of 14
Why the System Does Not Fix Itself
Every few years a new policy is announced to fix the cost of living, housing affordability, or wage growth. The problems keep getting worse. This guide explains why that keeps happening, and why the answer has nothing to do with which party is in power.
Guide 14 of 14
What Makes Good Money (A Simple Checklist)
Learn a simple framework for judging any form of money. You’ll understand why scarcity, trust, and verification matter and how those properties connect to why Bitcoin was created.
Words that keep coming up
You do not need to know every term before you start. These are the three that matter most at the beginning.
Inflation
The gradual loss of your dollar’s purchasing power. When inflation runs at a few percent per year, every dollar buys a little less, not because you spent it, but because the currency was diluted.
Real impact
Your $100K became $65K in 6 years: Your dollar lost 35% of its value since 2020. If you saved $100,000 over several years of work, that now buys what $65,000 bought in early 2020. The hours you worked didn’t change. The dollars stayed in your account. But what those dollars can buy fell by over a third in just 6 years.
Purchasing Power
What your money can actually buy. If prices rise faster than your wages, your purchasing power falls.
Real impact
Your dollar’s value shrank, not the house price: You saved $100,000 for a house deposit by 2020. In 2020 dollars, that bought 14% of a $700,000 house. Today, that same $100,000 buys just 8% of that same house – because your dollars lost 35% of their purchasing power, independent of any change in the house price itself.
Money Supply
The total amount of money in circulation. When money supply grows faster than goods and services, each dollar loses purchasing power because more dollars chase the same things.
Real impact
You worked 6 years but kept the value of 4: When money supply grows faster than the economy, each dollar you save buys less over time. If you saved $100,000 over six years of full-time work, inflation and monetary expansion could leave it buying what $65,000 once did. The hours you traded for that money don’t change. The purchasing power does.