Financial Freedom
Lesson 7: The world of business
1. The Basics of Business
2. Teamwork
3. Risking
4. The Big Picture
5. The Design of Things
6. Sales and Marketing
7. The Entrepreneurial Spirit
8. Opportunity Seeking
9. "Good" Debt
10. Billionaires: The Best Example?
1. The Basics of Business
Business — engaging in commercial dealings with other people, business entities, and institutions — is, ideally, based upon the most basic human values: trust, honesty, integrity, and responsibility. A person needs to develop these values within themselves, or they will be moved by other (negative) forces in the business world. There are countless laws governing business, from standards of pollution with toxic waste in our environment to corruption and fraud. The reason there are so many laws — and companies violate these laws and pay fines of billions of dollars — is that business in itself has no conscience, no morality, no inherent goodness.
Much of the business world operates on misleading advertising, deceit, greed, exploitation, monopolization, and the desire to make a buck at any cost. Businesses — even the largest multi-billion dollar corporations — excuse all of their wrongs, including illegal pollution, wrongful death, and political payoffs, as part of the cost of doing business. Realize, businesses — especially corporations — have no soul, no conscience, no values. That is up to the people who run those businesses.
What are the basic values that you bring to your interactions with others? Are those the same values that you choose to bring to the business world?
There are many ways to enter business. Some may work for you, others may not.
You can develop a business plan. Many people just do something they enjoy or are skilled at, something that interests them. And, as they do more of it, and find that they can make money at it, keep doing more of it. They don't really have a plan, and certainly not a formal business plan, but they go along and take their steps, one after the other. It is said that starting a business requires a formal business plan, but that isn't the way everyone does it.
You can find a niche or need and fill it. A niche is some area of the market that others are not meeting with their products or services. They may not be aware of it, may not be set up to deal with it, may not be interested in it, may not know how to focus on it, or may not want to. In any case, you may be aware of some niche market — some need that isn't being met in some larger industry or business — and realize how to meet the demand.
You can create the demand for a product or service. There are many new products and services that people never knew they "needed." They may or may not need it, still, but they may want it. Perhaps it is something that addresses a particular interest of people at a given time; it could be a fad or fashion; it could be something that they come to wonder how they ever did without. Even when the telephone was invented, no one could imagine why people everywhere would want to talk with each other all the time; today, young people "can't live" without text messaging. Who would have guessed?
You can cater to people's illusions. Unfortunately, this is one of the largest markets in our society. Alcoholic beverages, energy drinks, underwear, pornography, hair care, beauty products, casinos, and so on, are all multi-billion dollar businesses. And they all cater to people's illusions about themselves, what matters, and how to be something other than they are. Our society increasingly caters to illusions born of ego, because they can never be satisfied — because they aren't real needs. That creates repeat business and customers who are basically addicted to trying to satisfy illusory needs.
Finally, you could buy an existing business or franchise. Though this may appear to be an easier way to enter business, you have to be sure you get all your financial information right; otherwise your results may not meet your expectations. Remember, anyone who is trying to sell a business is going to cater to your illusions and hopes; and they may or may not be honest. Be aware, be realistic, be very conservative in your estimated revenues and profits, and do your homework.
Clearly, you bring with you your own values into business. As you know, it might be possible to become a billionaire by catering to people's illusions, by taking their money in exchange for something that does not really benefit them. But, is that something you would choose to do?
The "bottom line" in business is profit, how much money the business makes. That is what a business really cares about, especially one with investors or stockholders. But, there is a more fundamental "bottom line": what is the effect that the business has on people's lives? The best advice we can give is to make sure that you operate from your own highest values, and do that in business as well. It is not good enough to be hardworking, profit-driven, innovative, and "honest" in the alcoholic beverage business, gambling business, or pornography business — catering to all that is wrong in people, feeding their addictions. Rather you need to question what that business is in the first place. What are you actually doing in relation to people? You are the one who gets to ask that question.
2. Teamwork
When you are clear about operating in a way that is true to who you are — what you know to be right, good, and true for you — you can choose to act that way with others.
Business is an opportunity to multiply your productivity via the synergistic nature of teamwork. We each are good at — skilled, talented, trained, or educated at — some area of knowledge. Working with others, who bring different skills and perspective and knowledge, can increase our effectiveness.
What you come up against, in any group setting, is the fact that everyone has their own thoughts, feelings, desires, perceptions, awareness, purposes, and agenda. Those may or may not be in agreement, or able to be resolved. When they can be, people can work together to achieve common goals and a common purpose.
There is a reason why people come together, especially in business. Know what each person's agenda is, what they are seeking for themselves. Teams work best when they know what their objective is, when each person is allowed and encouraged to contribute and share their ideas, and when they seek what works best within the given constraints of time, energy, money, and other resources.
Teamwork isn't something we all learn in our education. More often, we are judged individually on what we know, and how well we can show we have been thoroughly programmed. We are seldom appreciated for how greatly we diverge from the common thinking, how much we challenge the status quo, or how often we disagree with authority. So, most of us learn to submit.
Business can be an opportunity to express who we are and what we really think, our own creative or original thinking. Or it can be just an extension of our formal education, in which we continue to think and act like everyone else, to gain approval and acceptance and, perhaps, job security. Few bosses like to have their thinking or actions questioned or challenged very often.
If you work for a business, other than your own, you may not find many opportunities to be as creative or inventive as you might hope. If you decide to start your own business, either by yourself or in partnership with others, you may face the challenge of having to truly think for yourself, for perhaps the first time. This is daunting to many people, and so they prefer to just fit in and perform a specified job function each day, and take their security from that.
There is a strange phenomenon that occurs when large teams work on a project: effectiveness goes way down. Necessary communication between team members becomes less workable the more people there are, and there is more of a tendency to go along with the herd. No one wants to risk questioning where everyone else is heading, or going in a different direction and getting trampled in a stampede.
Teamwork is okay, but doing everything by committee is very counterproductive. There needs to be responsibility assigned to individuals, and along with responsibility comes the power to make decisions. Otherwise, all you have is a group of largely unempowered individuals, rather than an effective team.
Individuality and teamwork are a curious mix. The more true you are to who you are, the more ways you may find to express your own thinking whether you are working as an individual or as part of a team, whether you are working for someone else's company or your own. It all comes down to how comfortable you are expressing your self, how much you value your own ideas, and how willing you are to do what it takes to make them happen in the "real world."
This is a skill to learn before you go off in business on your own.
3. Risking
Risking means acting on your opportunities when there is some degree of uncertainty, either in you, in the situation, or both. Risking is essential to growth in life. If you never risked anything you would never gain anything. There are no guarantees, and there is no absolute certainty in life.
Basically, everything involves risk. If you wait until everything in life is certain, safe, and "risk-free" before you act, you will never even cross the street. However, if you are heedless of all risk, you may never make it across. Risk must be considered, weighed, and balanced, reasonably, unemotionally.
Many people will not risk anything great (or small) in their lives. They will not risk losing the security of keeping things the same, in favor of pursuing their dreams. How many people have a great idea for business, but are afraid to do anything about it? They avoid all risk to minimize any possibility of loss. You may realize that this is a way of avoiding responsibility and growth in life.
The possibility of risk must not keep you from doing what you know to be right, what is true to your own self — in work, relationships, finances, business, or any other area of life. Do not habitually give in to feelings of fear and self-doubt, or past conditioning, that immobilize your self; learn to manage and work with risk.
You need to realize what is truly at risk, to effectively manage risk.
There are risks in your behavior ("personal risk"), and there are risks inherent in situations outside you ("situational risks"). It is important to realize what is truly at risk — in you or in your situation. Be aware of which risks relate to, or inhibit, your own self — and try to reduce them.
In terms of your self, there is little risk when something doesn't mean much to you, but great risk when it does. Risking means risking having new ideas, and risking acting on them. You can successfully risk in areas that matter most to you, in work, in love, in all areas in which you truly want something more.
Are you willing to risk in relation to the things that matter most to you?
Basically, you need to "risk" being true to your self and your higher purposes in life. Otherwise, you run the risk of going through life "safely" avoiding anything that would call upon more of your true self; you may not have any challenges, any opportunities for growth, or any real purpose for living.
Originating action in life/work from a place of power, not weakness, is the prerequisite to seeing the risk in any situation you face. Otherwise, you misinterpret the outer risk in terms of the risk or lack you feel in your own behavior. Also, risk must not be interpreted as some form of ego challenge.
Managing risk does not mean getting a charge out of taking risks, seeking a "high" from extreme emotional excitement or ego investment. Managing risk — not enjoying or encouraging risk — very simply means being true to your self, and making the most wise and workable decisions.
Realize, when you are run by or affected by everything outside you, your personal risk is maximum — you are not in charge. This is why you must reduce risk in your own behavior, before seeking to minimize the risks that may be inherent in an outside situation. Otherwise, it is increased.
Your personal risk is minimized when you learn to be in your power, in your center, and act from there. Then you can effectively deal with situational risk. Ask yourself: what is the opportunity in the risk?
The basic guideline for risk is not to risk what you cannot afford to lose. Clearly, the biggest risk in business is often the risk of the business failing; and, most new businesses do fail within a few years. You can minimize that risk by carefully evaluating whether there is a real need (or desire) for your product or service, how to market it properly in order to make potential customers aware of what you are offering, and how to make it easy for a potential customer to actually make a buying decision. Understand who your customers are, and what they need, provide a product or service with excellence, and treat your customers as you would like to be treated. That goes a long way towards minimizing the risk and maximizing the reward.
Realize, reward does not necessarily equal risk. You can have a high risk and have no reward (or, in fact, have a loss), or a low risk and a high reward. This is why the principles of finance and business we are discussing should only be considered the most general of guidelines; you have to decide for yourself what is right in your own, unique situation. Always.
4. The Big Picture
The big picture in business, today, is global. With the advent of the Internet (including eBay and craigslist), and the growth of China as an economic powerhouse, even the most local business in the US needs to consider how it fits into the larger picture. The business may not have customers or competitors in other countries (or states or towns), but businesses which seek out and market to the global community can far outdistance ones that do not. Even a lawnmower seller can get on the Internet and increase sales by a factor of ten.
Clearly, it is necessary to see the larger; all business enterprises are being affected on the local level, globally. Business in the US no longer occurs in isolation, free from the global economy. Nor does it dominate the world market as it may once have. The US economy is increasingly being driven by Asia, especially China. The days are long past, when the US could determine its own economic policy or economic future by essentially ignoring what was happening in the rest of the world.
Even the value of the US dollar is determined outside of the US, and has been dropping drastically in the new millennium in comparison to other world monetary values. It is also increasingly important to diversify risk, internationally. This relates to investment and business (which is an investment).
There are many levels from which to view any given situation or decision, especially in business. The larger or more complete the view, the more workable the context for making decisions, and the less the risk.
For example, in a few decades fossil fuels will be obsolete. Vehicles will no longer run on gasoline or diesel or even bio-fuel; they will most likely be electric. Oil, which is a valuable commodity today, will no longer be an energy source, probably by the year 2050. Yet, today, there is a lot of money being made in oil and other non-electric energy sources, products, and vehicles. In fact, the increasing demand for oil, and the limited supplies and production, ensure that the price of oil will continue to rise. It will rise a great deal, until there comes the time when there will be no market for it as a fuel, at all.
While it is possible to see the larger picture, and how things will be in the future, it is still necessary to approach business or investment today with a perspective that works today (and in the near future). Oil remains an excellent investment and business today, while it will become a very risky business in the future. What will become of the major oil companies?
Keeping this same perspective, it may be possible to see that "green" businesses are going to do very well in the future. That means, businesses which minimize pollution and chemical usage and the use of fossil fuels, and instead rely upon such things as solar energy. Again, there is a time frame involved. Businesses are way behind in investing in green technology, as long as current fuel prices and supplies remain at a workable level. But, change will come, dramatically.
You have to ask these questions:
- What is the problem?
- What is the opportunity?
- What is the risk?
- What is a creative and workable solution?
- What is the time frame?
When you can see the big picture, you can focus in on designing or implementing a workable solution, product, or service.
5. The Design of Things
The greatest asset of almost any business is its intellectual capital — its know how, knowledge base, information, and ability to generate and implement good ideas.
Do you have an idea, something that you think could make money? Maybe you don't need to figure out how to produce it yourself; it may be possible to protect your intellectual property, and find someone else, such as an established company, to produce it. But, you generally need to protect your idea, first.
You may wish to learn a little bit about patents, whether you are innovative or inventive, or not. Even if you don't come up with a patentable invention, your business may depend upon one that is already in effect; in which case you may be allowed to use the invention if you can license it. Otherwise, you may be prevented from using an invention granted to someone else. This is a general guideline, and we cannot get into specifics in this brief introduction. But, you need to know that a business idea cannot be patented; nor can any other idea. A patent needs to be a working apparatus, process, design, or plant, which is new and non-obvious to people skilled in that area. A patentable invention is often a primary asset of a high-technology business.
One thing to be aware of, is that high-tech innovation — as indicated by the patent process — is shifting from the US to Asia, particularly Korea, Japan, and, soon, China. Each year, China produces more PhD scientists and engineers than the total number in the US. It will not be long before most technological innovation in the world — and the rights to use it, even in the US — originates in Asia.
Even in the US, many PhD programs have filled with foreign students, especially in science and engineering, over the years. Many leave to return to their own countries after they finish their education here. And few Americans seem to have the discipline to complete these programs — or to compete in the global market.
Business demands creative design, decision making, and problem solving. The essence of business is openness to new and creative ideas, or the decision to pursue an idea that isn't new but which has proven workable. Of course, there is also a business approach which ignores the value or quality of a product or service, and substitutes advertising. As you know, consumers can be programmed to obsessively desire just about anything.
Everything you see around you, everything made by human beings, has been designed. Look at everything you see, every object, every shape, every color, every material, every texture, every functionality, and every instance of beauty. Everything you see has been through a design process, in which someone has made a decision as to what they felt was most suitable, workable, appropriate, creative, useful, beautiful, economical, or necessary.
Everything is by design. And design is all about decision making.
The basic question in design is: how could something be better? And, "better" can be very subjective. Today, "better" is most often interpreted as more desirable. For example, more people will want it, or they will want it more than what is presently available or popular.
You can see this fundamental design choice everywhere: in the crafting of movies and video games, in the new standard of kitchens — black granite counter tops and stainless steel appliances. How does everyone decide this is the design to have? How did we move into a place where an enormous slab of stone is the only desirable counter top?
Clearly, much design is driven by high-end demand. People who have more money than they know what to do with, demand custom everything. And, since there is more and more wealth at the top in our society, the demand for luxuries has become a seeming necessity. Products, services, and designs that once had very limited demand now have high demand. All because people want, and will pay for, what is desirable in our culture.
Design is also driven by fashion, what is fashionable today as opposed to yesterday. Name brands fall out of fashion, especially in clothing, just because they are name brands. People, especially young people, demand something new all the time. "New" gives them a feeling that they are alive now. This is why buying new things is the largest addiction of our materialistic society — it makes people feel as if they are living, or moving into the future, or moving out of the past. This is, largely, the illusion and false promise of " new and improved" material purchases.
So, how do you make money with design? You have a choice, to give people whatever they desire — and there is a ready market for that — or create something better in a real sense, and let demand for it grow, in an organic way. That is how things used to be done, in the past. Look at your own life, your own surroundings, and ask yourself how things could be better. Answer that question in a way that is true to you, and you may find that other people want the same thing. There is, admittedly, a lot more money in catering to people's egos, illusions, materialism, hedonism, addictions, and desires. But, you need to do what aligns with your own sense of what is right, good, and true for you and others.
6. Sales and Marketing
A sale is the meeting ground between what a business offers and what a buyer wants; ideally, if marketing is done well, the consumer is already informed and ready to purchase. This is why most of the things we buy do not involve any substantive negotiation. We know what we are getting, and simply agree to the price and terms.
There are two different approaches to sales and marketing: sell what you really have to sell, or sell the illusion you wish the prospective buyer to entertain. These days, many products and services are sold by selling illusions. Credit cards are sold with pop songs telling you how they will make you free, and allow greater freedom. They don't show a person sitting over their monthly statement worrying about how they are going to make the payment.
If you turn the sound down while you watch television commercials, you will find that it is very difficult to tell what they are actually selling. For example, you might see lots or women, looking sexy and seductive — and the product? Gel insoles for shoes. Or beer. Basically, products are sold by selling the illusion of what you will get by buying the product, which may have absolutely nothing at all to do with what is really being sold.
Unfortunately, illusions sell. Ego sells. Emotion sells. Sex sells. The Lie sells better than Truth.
It's a choice you make. Which brings us to the other approach: sell what you are really selling. Maybe it's not as exciting or sexy, but it's a lot more simple and honest. Instead of trying to think up ways to delude people, or make them desire something for all the wrong reasons, try telling them the truth.
The more honest you are in terms of being who you are, and telling the truth, the more direct and honest you can be in your business communications, sales, and marketing. What you are really selling isn't the product or the perception of the product, but your self.
You can be enthusiastic, committed, and genuine without having to compromise your values or your vision. Do you really want customers who have been hooked by some slogan or sexy ad, or do you want customers who see the quality of what they are getting, and who not only appreciate that for themselves but who will readily share that appreciation with others.
Your best salespersons are your customers, as business often grows via referrals. If they believe in your product or service, and promote it on its merits and real value, then others will, too. People like to share what really works for them. This is very different from the popular media programming in which the masses are largely deceived, and fall for the same deceptive advertising, over and over, such as the message that credit (which is actually debt) will free them when it will not.
There are already far too many things sold by businesses presenting them as the opposite of what they really are. In countless ads, alcohol is made to seem so cool and sexy, and such a source of happiness in people's lives, when in reality there are tens of millions of alcoholics in the US, and people's lives are being ruined by alcohol right now. Sure, there is money to be made in catering to people's illusions, by feeding them endless false programming messages, but isn't there a better way?
We think so, and would encourage you to consider that for yourself.
Marketing is finding out what people really need, what they really want, and how to present that to them. Sales is then simply about reaching the intended prospects and presenting a clear marketing message which supports a buying decision. It does not need to be more complicated or misleading than that.
7. The Entrepreneurial Spirit
If you reflect on your experience when you have done business with or purchased from a given store, corporation, supermarket, or institution, you will realize how different that experience may be. Two companies might even be in the same business and yet provide a totally different buying experience. For example, one may have superior customer service, choose the best quality products, and have a "feeling" that your interests are really uppermost. You get the feeling that there is someone standing behind their products or services, that they care.
That "feeling" or spirit behind a business, product, or service, is what an entrepreneur brings to the table. They believe in what they are doing, in giving the customer value, and in offering something that reflects positively on themselves. This isn't something you can quantify, but it is essential in a successful business. You can feel it, whether it may be called enthusiasm, commitment, excellence, or humility.
Starting a business requires this kind of entrepreneurial spirit, a willingness to step out and stand on your own and to offer something that totally reflects on who you are and what you believe in. It is more common for people to choose to be part of something that others have already created — whether business, investment, or real estate — than to create it for themselves. People find security in being part of something that is already proven and working. A new business is anything but that.
Entrepreneurship means creating and managing innovation.
Times are changing; knowledge in all fields is increasing at an exponential rate. Things are changing so fast in many fields that unless you innovate, you are risking being left behind. In fact, you may no longer have the option of avoiding or resisting innovation, or not knowing how to manage innovation.
Innovation comes from creative thinking and problem solving, when there is an atmosphere which favors risking something new and risking leaving something old behind. This is the opposite of conformity, fitting in, or doing what everybody else is doing. You cannot innovate when you are committed to the status quo.
Most people, including managers, are more comfortable managing the obvious and working with knowns, rather than stepping out into the unknown and non-obvious. This reliance upon what is tried and true must be balanced with an openness to what is untried and yet, perhaps, even more true or workable.
Innovation means venturing where others have feared to go, where there are no guarantees to rely upon, not even a record of past performance. It requires you to be awake and alive in the present moment, not ruled by or invested in the past, or old ways of doing things — not even relying on old strengths.
Yet, change which is sought just for the sake of change is not necessarily productive. What is necessary is creative intelligence applied in new, workable ways. The obvious tends to be ignored by the experts who "know better," but innovating often begins with the obvious.
The key is your own awareness of what is, your unique view or perception of reality. Consider the obvious; look at what the ordinary person sees from their perspective, what the average person in the field thinks. Use your common sense. And then, find the space to do something even more creative. What is being overlooked or taken from granted? What is the way "it has always been done," and why not do it differently?
If you aren't an innovator, you still have to learn to accommodate or manage change and innovation in your environment. You need to develop the same awareness of what works, or what might be better, as the innovator has; and allow yourself to develop a larger perspective.
What has served you in the past may not serve you in the future. This is the nature of growth and change. Greater opportunity lies in the unknown, the non-obvious, than in the commonly known and obvious.
Free your self of old ideas, old feelings, old desires, all of the things that present you with the same old options. Think with a "new mind." Let go of the self-limiting ego desire for approval, and be original. You really don't need to act like someone else, or do what someone else would do; just be you. Listen to your inner guidance and information — and follow up on it.
Realize, innovation cannot be found in conditioned reactions to the world; it is not a product of past programming but a present moment alignment with reality.
8. Opportunity Seeking
Basically, opportunity is everywhere, here, now. It is just a matter of learning to see it.
See potentials, needs, and trends. Practice creative thinking and problem solving, regularly, to learn to see things with a new and different perspective. Be observant; ask questions; and see what others have done, before. Be aware of the further opportunities.
If you are aware of how our society is changing, if you watch the trends and see what is promoted in much of the advertising, you see opportunities.
We prefer to define opportunity as a chance to do something right and good and true to you.
There are a lot of businesses that exploit people's weaknesses or problems, and, in our society, they make a lot of money. We simply cannot support that. We suggest finding an opportunity to help people in a real way. In our society, more people are becoming more overweight all the time. There are endless diet products and pills — generally advertised with sexy images — that promise to solve their problems. To one person, that may seem to be a good business to get into; there is certainly a lot of money being made by those who sell this false hope to millions of people. But, that is not necessarily a choice that one's conscience agrees with. Can you think of a way to help someone, other than to cater to their weakness? That is what it means to actually serve someone's higher good.
For example, people are pressed for time in our society, they have more things to do, and they need help dealing with them. A business opportunity might be: helping people to get organized. Another might be a delivery service, which delivers everything from pharmacy supplies to groceries. Another opportunity might be sewing, or custom tailoring. These are business ideas that are responsive to the changing needs of our society, which do not take advantage of people, but help them cope by providing a valuable service.
In our society there is an ever-increasing demand (and promotion of) — and billions of dollars to be made in — alcohol, underwear, sex, gambling, diet products, endless medications, beauty products, and so on. These generally represent false promises of well-being — fantasies, illusions, addictions, and ways that people are not really solving their problems. Many of the most popular products and services "enable" the wrong choices, thinking, and behavior.
Temptation is the pull to do something that is not aligned with true conscience. Temptation is generally disguised as some kind of great "opportunity," when it is actually the opposite.
The more you recognize what is right, good, and true — really get that, within you — the more likely you are to help others in a real way. It changes how you look at everything.
The first question to ask yourself, in any business context, is: what could be better? What could you do to actually help people — help them to be more healthy, fit, secure, wise, creative, or free? What service or product would truly help people, rather than cater to what is not serving them well in their lives?
Then, see what you can bring to that, in terms of your own talents, abilities, skills, knowledge, goals, interests, and creativity. What is aligned with your own purposes, sense of meaning or value, conscience and spiritual nature?
Only after you consider these areas is it worth asking: how can I make money at this?
Some businesses, investments, or markets are able to ride out changes better than others. Some are a lot of hot air, and little more — witness the "dotcom" debacle. Of course, even a hot air balloon goes up for a while; the idea is to realize it will come down and get out safely. As with any investment, timing is important: there may be a time to invest yourself in a business, and a time to get out.
9. "Good" Debt
Good debt is capital that is raised in order to fund a business venture or investment, which is expected to have far greater returns than the "cost" of the money borrowed. It is leveraging money you can raise, to multiply your return.
Even a good, solid business may need to borrow money at times. This is often the case when a business is in its early growth stage, when money is needed to produce the goods or services customers expect — if there is growing demand and insufficient capacity to meet that demand.
Leveraging money is a two-way sword. You can make a lot of money and you can lose a lot of money. This relates to financial investments in equities, real estate, commodities, hedge funds, and other financial instruments. Realize, those who work in finance as a career, who manage funds of billions of dollars of other people's money, have a very different view of risk. They often make a lot of money, but the risk is held entirely by the people who have given them their money.
So, for those who are using other people's money, debt is a wonderful thing; and they keep inventing new financial instruments all the time, to get people's money, to leverage it, and to make a lot of money — billions — for themselves. And, if a fund collapses, well, they don't lose a penny of their own money. They just go on to the next investment vehicle they can put together and get people to invest in.
It's different for the ordinary person or investor. Debt has a totally different meaning if it's your money; you could lose your own financial standing. So, it's nice to use other people's money to fund ventures, because you don't stand to lose much, personally. But, you still need a conscience, and a sense of personal responsibility. That is something that is seldom developed by those who do not even know how to deal with personal or consumer debt.
A fifth of college students wind up declaring bankruptcy. They borrow tens of thousands of dollars (or even hundreds of thousands) on student loans, lots of credit cards, and so on. They feel entitled to have all the things they can get on credit (debt); then, when it comes time to pay, they declare bankruptcy. It is kind of like, hey, I was just kidding; I wasn't interested in a real commitment, I didn't intend to be responsible, I shouldn't have to pay for everything I got, because other people don't. So they seek to wipe the slate clean.
What have you learned about debt, other than "it's all good," when you can get what they want on credit, without worrying about paying it back? Today, we see advertisements on television literally throwing money at college students, telling them they can get a check for tens of thousands of dollars within a week, to use any way they want. This breeds a sense of entitlement and irresponsibility for those who lack any financial sense at all.
"Good" debt is something entirely different from this. A business needs to borrow money in order to actually be productive, to grow, to expand. It isn't a way of avoiding responsibility, and it isn't a lack of integrity, it is just good business.
The idea is to understand — and learn — the difference between debt which eventually increases your net worth, and that which diminishes it, especially personal or consumer debt.
10. Billionaires: The Best Example?
There are now nearly a thousand billionaires around the world, and the number is rapidly growing. That may not seem like a lot, but, together, this small number of people has more wealth than many countries in this world — they have trillions of dollars. The 400 richest people in America (billionaires) have one-half the wealth in America — the same wealth as 57 million American families.
So, what does that have to do with you?
There is a popular fallacy that the world has limitless riches and natural resources, wealth is being created all the time, and so everyone is better off the more wealth is created. The theory is that rich people are not subtracting any wealth from the system at the expense of others, but merely producing more. And, that just isn't the case. There really is less to go around when all the money collects at the top of the pyramid. It is kind of like a "pyramid scheme." The fact is, the rich keep getting richer, and the poor poorer; the gap is growing.
Some of the wealthiest entities in our society do not really pay taxes. Multi-billion-dollar multi-national corporations can make billions of dollars, and pay little or no taxes. The richest people, and enormous wealth, remain hidden behind foundations and trusts and secret bank accounts, which are not open to public scrutiny. Then there are those whose wealth is not from legal business at all, who traffic in drugs, crime, prostitution, and so on. They don't get listed in the Forbes list of richest people in the world, but they make billions of dollars. That money is taken from ordinary people, and, needless to say, no taxes are paid on it. Of course, the money made by exploiting people and destroying lives is enormous, including the 155 billion dollars Americans spend on alcohol each year — to try to alleviate their suffering and unhappiness. The "war on terror" has already cost Americans nearly 2 trillion (that's $2,000,000,000,000) dollars, and caused untold suffering and death.
It is all good business, but is it all really "good"?
The accumulation of wealth (by the few) is not some kind of pure and noble good. Wealth is the extraction of resources from the world, including natural resources, people's labor and lives, the production of goods and services, profiting from position, authority, information, or inheritance. In its most fundamental form, wealth in this world has been created by exploitation, the destruction of the environment and people's lives. Even the United States was built upon genocide and slavery.
Those who rise to the top of the pyramid are not necessarily good or noble or benefactors of the masses. They are often only more cunning, ruthless, selfish, egotistical, and predatory than the rest. That does not make them better in any way. In the past, they were called "robber barons." The fact that there are more billionaires now than ever, and more each day, does not mean it is a good thing.
The financial system is not a system that has much place for goodness, conscience, compassion, or spirituality; it's all about making money. In your own life, you need a way of ensuring happiness and fulfillment — and well-being — beyond what money can buy. Because money just doesn't do that, no matter how much you may have. And, it simply does not make you a better person.
Some billionaires have learned the public relations trick of giving away some money to establish their reputation as caring, concerned, kind-hearted philanthropists; but it is really a lie. The more wealth people have, the less values, conscience, compassion, or spiritual goodness they generally have. They merely want to be remembered as something other than what they really were, or how they acted. It has become fashionable to set up charitable trusts and foundations, but most billionaires couldn't care less — they never question why they should have so much, and so many people should have so little. They feel that they deserve everything that is coming to them.
Be careful what you aspire to, because you might just get it. What does it profit a person to gain the world and lose their soul?
Fortunes are made, especially today, by entertaining people's illusions, by making they feel as if they are getting what they want out of life, while in reality their lives are a dysfunctional wreck, or one in the making. The entertainment industry, video games, pornography, alcohol and drugs, techno-toys, violence, wrestling, and endless addictions in our society, ensure that those who cater to our illusions have a never-ending market.
The world is not becoming a better place because there are more billionaires; their rise is proportional to a degradation of the environment, spirituality, and quality of life, for the rest of us. The rich are getting richer, and the poor are getting poorer, and the middle class is disappearing. And the overall quality of life is decreasing. Mexico, where most people live on less than two dollars a day, has the world's "richest man." It is like this all over the world, in Russia, Asia, Europe, the US, the Middle East. A small percentage of people have and control almost all of the money and wealth; the rest sturggle and suffer financially, and in all other aspects of their lives. It has always been that way. And that is not a definition of "good."
Ask yourself why there are rapidly growing numbers of billionaires, while billions of people in this world do not have adequate food, clean drinking water, health care, access to electricity or education, or housing. Business — the business of making money — has only one bottom line, profit, not conscience or goodness. That is your job.