Financial Freedom? Here's The Only Real Question
PREAMBLE: The only way to take control of your life, raise your standard of living and move beyond merely surviving is to create your own unique product or service that you offer to increasing numbers of people in exchange for the things of value that you desire. This simple formula applies to countries as well as people. A self-sufficient economy has its own products or services of value to export to the world. Similarly, a self-sufficient individual has something of value to exchange in the global marketplace. That thing of value is based on your natural talent, skill, or interest-in other words, your passion. NOTE: The following article was originally written for the citizens of the island nation of Saipan.
It therefore includes references of a nature unique to that nation's economic situation. When you think of what can help the you elevate yourself from your current economic situation, it's important not to lose sight of a few important ideas and truths about money, value, and economics. I. MONEY IS A MEANS OF EXCHANGE No one ever gives you money except in exchange for something of value. II.
EXCHANGE IS THE REAL ISSUE Don't let anyone mislead you. The only reason we focus on money is simply because the world has agreed that money is the basis of exchange that we're going to use. I have eggs. You have a cow. If you want what I have, and I want what you have, then we can exchange my eggs for your cow. But you may not want eggs. You may want something that I do not have. And I may not want a cow. I may want something you do not have, like a car. So we all agree that eggs are worth a certain amount of money, and that a car is worth a certain amount of money.
I can now sell my eggs for money, and get the money to buy a car. But all I really did was trade eggs for a car, using money as the means of exchange. So it's not the money that's driving the economic engine, it's the exchange. Now, then, there are four ways that one can engage in the process of exchange: 1. You can accept money but give nothing in return (rip-off) 2. you can accept money and give a partial or corrupted version of what was expected. (short-changing) 3. you can accept money and give exactly what was ordered. (fair exchange) 4. you can accept money and give more than was expected.
(exchange in abundance) By the way, Exchange Method four, (accepting money and giving more than expected) is the only way to ensure one's long-term survival and prosperity. But more on that in a future column. III. PRODUCTS ARE THE BASIS OF EXCHANGE "When a whole society demands a high standard of living and yet doesn’t concentrate on the personal production of exchangeable products, it is finished."—The Dynamics of Money So how does one engage in exchange with the world? Simple. You need a product. A PRODUCT can be defined as “a high quality service or article in the hands of the consumer in exchange for a valuable. It is something that can be exchanged with other activities in return for support.” IV. THE QUESTION IS… So the single, most important question to be asked of those who steer the course of nations, its citizens, investors, business owners, and potential Saipanpreneurs is: WHAT ARE WE PRODUCING? When someone suggests a solution to the economic situation, ask him, "Great idea, but what are we producing?" When someone suggests an idea for how to get loans and federal assistance, ask her, "Great, but what are we producing?" When someone suggests an idea for a business you can start, ask yourself, "What am I producing?" If there is no production, there is no money—no real, long term money.
A FLAWED PLAN I always tell my clients that any plan that relies too much on another person's whim, good will or largess for its success is inherently a flawed plan. It may provide a short-term stop-gap measure, but there is no dependable future or control built in. Selling someone the hope or possibility of doubling their money based on the internal programming of a slot machine is not exchanging something of value. It's essentially giving nothing in return. It's a rip-off. Sure, you can call it entertainment if you wish, but at the end of the day, you've not improved your lot in life, because you're not exchanging anything of real value that can grow, improve your reputation, bolster your self-esteem or raise your standard of living. Furthermore, since it is not based on anything over which you have any creative input or control, you cannot use it dependably to improve the welfare of the masses. It's not an industry into which any average person of entrepreneurial aspirations but meager means can venture. It’s a limited industry with power concentrated in the hands of the few.