What is your economic philosophy? How does it affect your financial aspirations? Would you do me — and yourself — a favour?
It won’t take you more than a few seconds and its potential payoff to your family could be astronomical. Here’s what I would like you to do...
Answer two questions:
1. Do you believe there is a limited amount of money in the world?
2. Do you think even the sky’s not the limit for personal enrichment, and that the caps to your income are determined by the quality of your ideas and your capacity to use drive and discipline to skyrocket you to success?
Both questions should be answered either ‘yes’ or ‘no’. Please make a note of your answers. I will return to them soon.
A finite world with limited resources
No discussion about wealth and money would be complete without at least a passing nod to the important subject of economics. A common definition of conventional economics is the study of the allocation of scarce resources.
Those scarce resources are called factors of production by economists (and the economics students who paid attention in class). Major factors of production are land, labour and capital.
For as long as humanity is confined to just one planet — a state that’s likely to persist for another century or two before we have the capacity to expand across our solar system and tap into the mining resources of the asteroid belt — land will be a limited resource for earth-bound businesses.
The labour harnessed by those businesses comprises people toiling on their own and also people operating machines. Sadly, a common complaint of Malaysian employers is the escalating difficulty in finding competent, qualified employees. Numerous business owners and senior executives blame the education system that seems inadequately geared toward nurturing creativity and English proficiency to meet high international standards and 21st century global supply chain requirements. Clearly, labour too, is limited. However, the rise of AI (Artificial Intelligence) suggests that in many industries, self-directed, self-learning machines will overcome that limitation over the next two to three decades.
As for capital, the accounting metric is money. As you probably know, every one of earth’s roughly 200 countries maintains a dynamic, growing estimate of its finite money supply in its own currency. Dynamic exchange rates exist for every national currency against our planet’s de facto global currency, the US$ or greenback. Therefore, it’s possible to estimate the US dollar value of all the monies in the world at any point of time. A recent estimate placed the amount of money at just over US$90 trillion (www.visualcapitalist.com/worlds-money-markets-one-visualization-2017/).
While staggeringly huge, it’s still a finite amount of money. Therefore, if you’ve answered ‘yes’ to my first question, you’d be technically correct in asserting there is indeed a limited amount of money in the world... for now.
Thinking your way to success
What about my second question?
Whether you’ve answered ‘yes’ or ‘no’ depends on your money mindset, which largely reflects your upbringing and your peer or reference group.
If you’ve answered ‘no’, meaning you believe there is a defined maximum income you can earn, chances are you’re right.
And if you’ve answered ‘yes’, meaning you believe your future income is potentially unlimited, again, chances are you’re also right!
In his interesting book How Rich People Think, author Steve Siebold writes extensively about the mental differences between two groups he calls ‘middle class’ and ‘world class’. He explains what he means by those descriptions:
“These terms reference the average person versus the world-class thinker. The idea is to compare the way most people think about money in contrast to the rich. The differences are as extreme as they are numerous.”
In my opinion, the key differentiators between people who plod and those who soar financially are imagination, creativity and tenacity.
Many of the world’s super-wealthy today started out with modest means or less. Most of their peers from those early years remained average all their lives, while these exceptional ones broke free, from their socially-forged chains of financial mediocrity, and soared.
What caused them to succeed?
Interestingly, a high IQ wasn’t the key differentiator. While being smart is better than being a dunce, the real distinction seems to be the person’s capacity to identify areas of need in others and then being able to provide solutions in exchange for money.
People have endless needs and wants. We all know this. What I don’t know is whether you’re willing to work at providing them with some solutions.
It costs nothing to dream and imagine. It costs little to think deeply and read extensively. Also it doesn’t matter how old you are; remember KFC’s Colonel Sanders! What matters is your ability to nurture within you the seeds of imagination, hope and service.
Siebold writes:
“...if money flows to ideas that solve problems, and ideas are limitless, money must be limitless. Once you understand the impact of this philosophy and integrate it into your consciousness, you are on your way to a life of economic prosperity most people only see in movies.”
Malaysia is a free country. Therefore, each of us is allowed to decide for ourselves whether we believe we inhabit a universe predominantly saturated with scarcity or one that’s astonishingly aflame with abundance.
Choose well.
© 2017 Rajen Devadason
Read his free articles at www.FreeCoolArticles.com. Connect on rajen@rajenDevadason.com, www.linkedin.com/in/rajendevadason, and Twitter @RajenDevadason