 So let's continue on with our discussion on personal finance, economics, and sort of expand on one of the things we talked about in the previous video, which is one of the five most important things we've got to keep in mind, which is basically our time factor, our time scale that we have in mind when we're investing in something, right? Some could be investing our time or our energy, our money, our finances into whatever it is that we might be thinking of investing in, right? And to get an appreciation of how this works, what we have to keep in mind, let's throw this on a Cartesian cornice, let's throw this on a graph, Cartesian cornice, let's throw this on a graph and get a good visual of this, right? And in mathematics, that's what we end up doing when we're graphing something. We have different types of graphs, right? Let's bring that thing here, right? So one thing we do in mathematics to be able to understand different types of system, what we do is we put them on a graph, right? Because that gives us a visual. That gives us, when we graph something, we're able to take a look at a whole bunch of different variables in one shot, in one screen, right? So we get to see what the trend is for a certain type of system and what some of the more important factors, important variables might be in that system, right? So let's create a graph and get a visual of what it really means when we have to keep our time frame in mind whenever, you know, before we decide to invest in something, okay? Let's throw this on an X and Y axis. So let's draw this here, let's draw an Y axis, let's draw an X axis, right? And we're not going to go in negatives because we're going to assume whatever we're investing in is going to increase in value and we're not going back in time, right? And whenever we're investing in something, usually there's time involved, right? A fair few cases I can think about where time is not involved, but usually there's time involved. And just before we get into this, just have a full appreciation of how to read this graph. There's two things, two of the most important things we have to keep in mind. Before we start dealing with graphs, before we start looking at graphs and try to get an appreciation of what they're telling us, okay? The first thing is we have to take into consideration what the labels, what the titles of the axes are. Basically what that means is what are we comparing? What is the system that we're looking at, right? For us, what we're going to do is we're going to put time on the X axis, right? And we're going to put value worth on the Y axis, okay? So I'm just going to call this value. So the first thing we have to do when we're looking at a graph is take a look at the axes and get a full appreciation of what the axes represent. For us, the X axis is time and the Y axis is value, right? The second thing you have to really have a good appreciation for before looking at graphs is what's the scale factor on the X axis and what's the scale factor on the Y axis? Like we put time here, but I didn't say, you know, if we're looking at days, weeks, months, years, because that'll vary, right? If we're going from point A, from here to here, right? Then it really matters if we're talking about we're going from days, we're talking about days, weeks, months, years, centuries, right? And at this point, at this time, whatever we've invested in might have a certain value, a certain worth, right? So let's say if it was worth this much, then our point would be here, right? This is when we invested in whatever it is that we decided to invest in it at a certain worth at a certain time, right? Let's assume we invested in something at a certain time and it's worth went up to here, right, at this time. So I'm going to try to put this in the right place. That's a very simple visual that we can have, right? That's a good starting point anyway. So let's assume we invested in something at a certain time at a certain worth and down the road we sold that thing and it was worth this much and we made whatever the gain is here, right? Like if our scale factor is linear, right? If this represents a hundred dollars, right, this amount, then this would be another hundred, that's 200, 300, 380 bucks, right? So if this was a hundred dollars here, we bought something at a hundred dollars, we sold it here at $380, we made $280 profit, that's not bad, that's pretty good, depending on the time frame, right? If this was a hundred years, it's not that great, right? We talked a little bit about this when we're talking about the mathematics of economics, right? If you have a certain rate of growth, right, at a certain percent, if you're growing, if you're not growing at all, a hundred dollars here is a hundred dollars here and there's inflation and inflation at different percentages will end you at different locations, that means a hundred dollars at this time, a hundred years from now would be equivalent to $380 and stuff like this, we talked a fair bit about this, what that means, right? So hopefully this isn't centuries if you invest a hundred dollars of some kind of currency, fiat currency and you got back at $380 because that's not very much if you take the rate of inflation into consideration, right? Now this type of situation in mathematics is called a discrete type of function, discrete type of movement, right? Because we invested a certain time and the value of that thing was this much at this time, right? It's called discrete because if we wanted to figure out what the value of this was somewhere in between this time and this time, we wouldn't know what it was because this thing's jumping from this amount to this amount from here to here, right? So if we looked at the time in the middle we wouldn't know to go here or here, right? We could guess, estimate it, right? We could say it's the average, right? If it's the average then what we're talking about is sort of a linear growth, right? We're talking about a line, right? The value of this thing, if we're going to estimate what this is, we could do calculations and figure out exactly what this is all the way along here, right? So we basically extrapolated a line, a linear function from a discrete function and a line, a linear function is continuous because we know what the worth of this thing will be at any time along this movement from this point to this point, right? Simple as that, right? If we wanted to figure out what this is we'd figure out the value, right? We talked a little bit about this graphs and functions, our polynomial functions in series 3a and 3b of the language of mathematics, right? And we did a little bit of finding the slope and stuff like this and you can figure out the slope, the growth rate and how this is expanding and stuff like this. There's a lot more to this, right? But basically this is one of the most simplest functions we have and it's called a linear function. We can call this a linear function f of x and that's y is equal to mx plus, oops, let's make this a little b, not a big b. Okay, y equals on x plus b and whenever you're talking about linear functions all you have to know really is your slope and your y-intercept, y-intercept is where you cross the y-axis to be able to understand the system, right? This is sort of one of the most simplest functions that we have, a linear function, right? Something increasing in value over time from this amount to this amount in a very predictive type of way, right? Now what if this wasn't a simple movement, simple rate like this? What if this thing fluctuated a little, which is really what happens in the real world? I mean in the real world very few things jump from here to here in one shot, right? In the real world we sort of have continuous growth, things growing slowly, right? Sometimes they're exponential, sometimes they jump up a lot, go like this, sometimes they go wavy like this, right? And that's more often than not. So let's assume the value of whatever you invested in didn't go from here to here in one job and didn't follow a linear function. What if it went like this? Stayed pretty close to the line but grew like this, right? Now the equation of this line is or this function is something else, it's a polynomial function, right? We talked about polynomial functions. It could do more dramatic, right? Let's do a little bit more dramatic one. Let's do this in red or let's do this in orange, green. We do this in green, let's do this in green because I'm going to do another layer on top of this. So let's assume this thing actually kicked up in price big time, went up, came down and then fluctuated, right? It could do anything. And if we're going to take this to the next level, then what we have to appreciate is that even this curve, right? Or this curve or this curve, right? They're not as smooth as this alone, right? These guys within here, the movement, let's assume who's going from this point to this point, right? If we come up and it's a little segment here going from here to here, let's assume, that means the value was here to here, right? Even that little movement there is not going to be straight discreet movement being the value being going from here to here, jumping from here to here, right? That's also continuous. There's also waves within there, right? Now, one of the things you're going to hear most common, one of the mantras of investing, especially investing in stocks and the markets and Wall Street, and also in other things as well, there's a saying that says you can't time the market, right? Don't try to time the market. And that's true and false. It's sort of, I don't know if the word is dichotomy, it's bipolar. You can think about it as true or false, depending on the time frame you have in mind, right? So the saying is don't time the market, but if you didn't time the market and your time frame that you wanted to be invested in was shorter than the amount of time required for investment to increase in value, right? Let's assume you wanted to play this system, play this game as well, right? Let's say the first person someone invested in at this time, at this time and they were getting good returns and the person that had invested in this gave you a recommendation that, hey, this is something I invested in and this is fantastic, you should invest in this as well, right? And you took a look at this chart, just let's assume it was from just this little segment, right? And you looked at that chart and went, wow, that's a great investment, maybe I should participate in this. And you decided to buy into the system up here and the value increased a little bit initially, but dropped down to here, right? And keep in mind drops in percentages are a lot heavier than increases, right? If you bought up here and the thing dropped down to here, let's say that was a half 50% drop, right? That would be a huge hit you took, right? For this person would still be in money, right? If you want to think about it like that. So there's a saying mantra says, you know, don't try to time the market, but that's only true if you really appreciate, really understand your timeline, your timeframe, right? If you're only going to be invested in the market for a certain period of time, only this much, then that really matters if you're investing in this time zone or this time zone, right? That's really important and that comes into play here when we're talking about the scale factor for time, right? Because if we consider this, let's assume we call this months, right? Months. So if we end up calling this thing, you know, now that we put a time factor of months on our scale, right? And the value here, we could put money, I guess, we could put dollars. Dollars, those are our units, right? So when it comes to the concept of trying to really wrap your head around your timeline, what you have to consider is the units, the period of time that you're deciding to invest in something, right? If we go one layer heavier than this, one layer deeper than this, you know, if we had another graph that we took this graph from, this data might have been coming from another dataset, right? Because if we're, for simplicity's sake, let's assume we're investing in the markets and in Wall Street, right? And something that is public where we can take a look at the chart and figure out how long the company's been around and what its growth rate is, right? If we're talking about months, that company has been around longer than months. It might have been around for years or decades, right? So we could, this dataset that we're looking at could be a subset of another dataset here, which is, again, time, and this would be value. The value would still be in dollars if we're talking about Wall Street, but the time frame might be in years, right? And the graph that we've taken this from might be a reflection, sort of same type of pattern as one of these motions, all right, these curves. So the graph, you know, we might be thinking about investing in this time period when it comes to years for this function, right? So, you know, this was the part we're looking at right now, but this thing might have been part of something bigger. Hopefully that's not too small, right? So basically, do we have another color? Should we do this in black still? Let's do this in blue because we're using the, oh, there's my blue, I put it on the bottle. So what we're looking at here might just be this part of this graph, right? If this was years, we could go beyond this. This could be another graph up here that we took it from, and this could be time again, and this would be value, and the graph might be something else that's growing. And this would have been, you know, let's assume it was this part of this graph. It was a smaller part. And this thing can expand, right? It doesn't have to be months that we're talking about this graph, right? Maybe we want, here, let's do this in pink, I guess. Let's take the pink one, all right? Or should we take the green one? Let's take the green one, let's be consistent with this. Let's take the green one. Let's assume we're going to take this part, right? That's what we want to look at. That's the time frame we want to invest in. And this might be just a few days if this is months, right? Or a few weeks, right? So we could take this, right? That data set and create a more micro, you know, zoom into it. And the movement from here to there, should we do this in green? No, let's do this in black stuff. The movement from there to there, from A to B, might be, you know, might be doing this itself, right? And what we could do is take this even further, take another section. And if this was days, our time frame was in days, right? The value would still be the same, the money would still be the same. And we could take that and look at the time frame in minutes, a little section here. Maybe the value from here just stayed stagnant, went up and down and came down, right? We could take this part of this, expand it, and start playing these fluctuations, right? Playing these time differences when we're investing in something, right? But this one would be going down in value, right? I hope that's not too messy, because this is really important. There are certain systems that we have, right? Where you can play every level here, right? Wall Street is one of them, right? There are very few things you can invest in where, you know, if this was in minutes, the lowest part here would be seconds or microseconds, right? There are very few things you can invest in, in the real world, where you're expecting to make profits, right? Or you're gambling. They involved seconds or minutes, days, maybe, right? That's a pretty short period of time to try to make a gain, right? If you're talking about months, that's more common. Years, more common, right? Decades, maybe less common, right? So there's different levels that you have to consider, different time frames that you have to consider. So that's what it really means to take into account the time frame that you're investing in, right? Keep your timeline in mind. If, you know, on average, and we talked, you know, we talked a little bit about this, a sort of plant that seeds, in a previous ASMR math video, we took a look at this and we talked about how the perception of time may vary with age, right? Because the younger you are, for example, a 15-year-old, one year for a 15-year-old is a huge percentage of the time, the experience they've had, right? One year for a 90-year-old may not seem that long because they've lived 90 years, right? So it's a smaller percentage of the experience they've had, right? So we talked a little bit about how the perception of time varies with age, and this is sort of the same concept, how the perception of time is varying depending on your units, on your x-axis, on the time frame you have in mind, right? And if we're talking about months, which is pretty common in years, if we're investing in something over a few months or over a few years, then hopefully we're okay with our investment, you know, increasing value from there to there, right? Maybe our business growing this much or the community growing, you know, this percentage or the amount of food we're able to produce in our farm this much, or the value monetary-wise of whatever it is that we've bought, maybe art, right? Art is one of the best places you could have invested, or anyone could have invested their money in over the last few decades and centuries, right? Art has increased in value exponentially, right? So whatever it is you're thinking about investing in, keep in mind your time frame you have in mind. If you keep that in mind, then it's really important to time the market, right? Because if your time frame is only this much, only in weeks, and you buy something here, and it decreases in value here, and you're not around to see it increase in value there, then that was a bad investment, right? Now, one other thing you should keep in mind is the different time frame that you have in mind to do your investment will decide what the game is that you're going to play, what the system is that you're going to participate in, right? That's really important to really appreciate the variables in play, right? Because in the same period that we might have in mind, let's say we're talking about months, right? We've invested in a few months, at month here, and after a few months our investment we're going to sell here, right? So if this was a hundred dollars, let's put some numbers here, if this was a hundred dollars and this was three hundred and eighty dollars, then we've made two hundred and eighty dollars profit. But if you're able to function at a short time period, if you have a more frequent trading, buying and selling desire, really that's what it comes out to. If you want to buy in and sell out more quickly, then if you bought here, sold here, you would have made again almost three hundred and eighty dollars in a short period of time and then watched the market drop to here and then decided to buy this again and then sell again up here, then you've made a lot more money than the person that just held for that period, right? That's really important to keep in mind as well because on that level, as soon as you appreciate that, then what you can do is jump from one system to another and if you start having a shorter period of time, shorter time frames in mind, what you can do is go into the micro level, smaller scale, and go into the days and start trading this thing in days, right? And that's what day traders do on Wall Street. All they're doing is, they're playing the fluctuations in price on a shorter time frame, right? So they really have to time the market. If they don't time the market, they lose everything. That's why it's one of the riskiest things you can do, extremely risky, right? Now, could those day traders go into minutes? For sure, because day traders trade in minutes, right? There are very few things in the real world that you're going to trade in minutes. That's why we're starting to talk about Wall Street, right? Stock talking about the stock market. So you can go into minutes and start trading minutes, start trading fluctuations, right? Because this thing is going to go, now, can a person trade in seconds? Maybe. Can a person trade in milliseconds? Not. And for the stock market, for Wall Street, there are trades being done in milliseconds, but there are programs that are doing that trading, right? It's automated, right? There are programs still doing trading in minutes, days, months, years, decades, I doubt it. Years, they're just basically stop gaps and what not placed in. There are certain simpler functions where they have sort of pointers, locations where they've decided to sell no matter what else the company is doing, right? Because their time frame is, you know, they have decided to buy in at a certain time and sell at a certain price, right? So you can decide the time frame you want to be in the market might jump between one variable to another variable, right? You might say you want to buy in at this time and you're willing to sell at this price, right? If that's the case, then you didn't have to hold on to this timeline to sell at that price. You could have bought at this time and sold at the price and stayed in the markets for a shorter period of time and been more liquid. So again, sort of emphasizes a point that you really have to keep your time frame that you want to stay in the markets in mind. Okay. Now, just before we move on from this topic, okay, from the time scale, your timeline that you have to keep in mind, as we mentioned, there's, you know, there's games being played at all levels, right? As human beings, us, we have a certain lifespan, right? So we're, you know, might be doing things, you know, most of us won't be trading in minutes. Some of us may be buying things and selling them the next day, right? Investing. Some of us may be investing days in a project to have returns in months or in years, right? You might spend a certain short periods of time in a relationship, right? That is investing, right? That's in minutes, you know, if you're investing in a relationship, you just give a few minutes to listen to a conversation and you're thinking in years, right? So the minutes you spend here give you returns in years here. Sometimes they give you returns right away in minutes, right? So keep that in mind. Whatever you're investing in doesn't have to be money. It could be anything, your time and energy, all right? The other thing we have to keep in mind is there are different systems at play here and there's different entities, different people involved in different levels of this trading game, of this economic system, of these visuals, right? As human beings, we're in years, we're in decades as well when it comes to family businesses and what not, our health, right? We're investing on a long term, right? That's why people do certain things, eat healthy, right? But when it comes to money, as human beings, we're usually invested in sometimes days, weeks, sometimes mainly months, usually years, very few invest in decades, right? But on the micro scale, human beings are involved at the beginning, but after that, it's basically AI. I don't want to say AI. I guess computers are just algorithms that take over, right? Because if we're going back to Wall Street, the majority of trades being done on Wall Street in the stock market is done by programs, done by algorithms. And there's a ton of companies, ton of, well, let's say there's a lot of money at play right now in our current economic system specifically related to Wall Street that is doing trades on the micro level, seconds, milliseconds, milliseconds, right? There's a lot of algorithms just buying and selling the troughs and the peaks, right? They're constantly buying and selling, right? And there's a lot of, or there's a lot of shifts taking place because the people behind these algorithms, the ones who can come up with the best algorithms, take into account more accurate variables where their algorithms are more precise based on the system that they're trading, the better algorithms end up making more profits and the quicker the transaction, the quicker the timeframe, right? The trades, they have an advantage over people who have a longer delay in their trades, right? So right now in our, in Wall Street in the stock market, what's going on? There are algorithms in play which are doing really rapid trading based on good code and based on their access to the trading houses. So if you take this into consideration, then as a human being as an individual without that physical advantage, without that monetary advantage, without the algorithms involved, proper code to be able to compete with people, with corporations that are trading on this level, you wouldn't be participating in the system here. You would be making a bad business decision to participate in the system. Now there's one little thing we'll throw in there because we will talk about this a lot more in the future, is that this concept where the small scale, small fluctuations that you can follow, that the same types of fluctuations, same types of patterns, because that's what this is, this is sort of pattern, same type of patterns occur on a larger scale as they do in a smaller scale, this is something called fractals and mathematics, right? And fractals are beautiful concept and their current nature. Ideal fractals, I'm not sure about their programs and stuff, I can generate that, right? There are minor differences in a real world, minor fluctuations between these things, but the patterns stay the same, right? Fluctuation here, this type of pattern guaranteed you'll be able to find here, here, here, here, here at some point, right? They do exist, right? So this is something in mathematics that comes up in a pure mathematical sense would be fractals and you can take that and there are a lot of people who have taken the concept of fractals on a mathematical sense and applied that to the real world and appears a lot of places, maybe in trading and business and investing or maybe in nature, right? But you know, that's basically sort of what I wanted to talk about. Mine is a few other things I left on the table here, right? Because this is sort of if you take all this into consideration, right? Your time frame that you want to invest in, this is really related to your risk tolerance, right? Are you, you know, which is something else that you really have to consider before investing anywhere, right? If you're investing here and you're getting out here, are you okay with this thing jumping around so much, right? What's your risk tolerance? Are you okay with investing here, let's say, and still pulling out here where you gain, you have gains and are you okay with losing a little bit here? Are you okay with that drop in price? Will your risk tolerance be able to handle that, right? And that's something you have to really consider and there are programs designed to have sort of stop-gap measures in Wall Street if we're talking about where they say no, if it reaches this level amount they sell, right? Because they've broken some technicals based on charts and stuff like this and we'll delve into that a little bit more or a lot more in the future when we're talking about what we focus on, specific systems, especially when it comes to Wall Street and investing in the markets because I've had some experience in that and that stuff can be found on a mathematical level, on an academic level because basically taking variables and talking about ratios, something we're talking about series four of the Language of Mathematics, right? So that's what you should keep in mind when it comes to your time frame, what it means to time the markets, right, and sort of relate it to fractals. Now what I want to do in the next little discussion is expand on what goes on here, right? On the micro level when it comes to something else really important that we have to keep in mind when it comes to personal finance, investing and the markets, which is basically what's going on here and a little bit higher this is creeping in into higher timelines, right? And that's basically computers and automation and programs and algorithms and software, technology, right? Because what's going on right now I've mentioned before and I'll continue to mention it and we're going to hit up each one separately but one of the main things in play right now when it comes to our current economic system, something that we all have to consider keep in mind when it comes to our personal finances, really this is extremely important and relates to jobs is basically the role of technology, the role of automation in our current economic system. And what we're going to do is we're going to use this as a jumping on point sort of stepping stone to kick us off into that discussion, okay? So in the next video we're going to take a look at basically computer programs, what technology, what algorithms, what the implications of algorithms are in our current economic system, okay?