It's common in traditional retirement planning communities like r/FIRE and r/financialindependence to view assets that do not produce cash flows as inherently worthless, or at best speculative (gambling). Buying assets like bitcoin is viewed as irresponsible or reckless because they don't produce cash flows. Big names like Warren Buffet and Jamie Dimon have echoed similar views in the past.

But what about these types of assets?

* Undeveloped land - no current income

* Early stage social networks - no cash flows

* Early stage intellectual property like patents, domain names, etc. - no cash flows

* Negative yielding cash equivalents held in Europe - negative cash flows

Why do any of these things seemingly still have value if they either don't currently produce cash flows, or maybe never will?

The answer is simple: **cash flows are one source of value, but not the only one.**

Here are other things that have investment value, though they may be harder to quantify since you won't be able to run a discounted cash flow analysis on them:

* Scarcity

* Optionality

* Convexity

* Control

* Network effects

* Insurance / downside protection

* Future monetization paths

If, as a rule, you always ignore any investment that does not produce cash flows, you will end up:

* Missing out on early-stage opportunities

* Overpaying for "yield"

* Mispricing tail hedges

* Underestimating regime shifts

What is DCF?

DCF (Discounted Cash Flow) is a way to estimate what something is worth today based on how much cash it will give you in the future.

Imagine I offer you an investment:

* It will pay you $100 one year from now

* You think a fair return for waiting and taking risk is 10%

To find what that $100 is worth today, you can run this simple calculation:

`Value Today = $100 / 1.10 = $91`

Why DCF Absolutism is a Category Error

DCF doesn’t value assets.

It values **contracts in stable worlds**.

If an asset’s primary value is optionality, DCF will price it at zero right up until it’s obvious. By then, it’s already expensive.

People continue to make this mistake when thinking about bitcoin.