As Facebook has recently released its Initial Public Offering (IPO) of stock into the market, we have another “teachable moment” [as some would call it]. What makes this so relevant is the seeming ease at which many suggest that they are somehow entitled to the money of others. We’ve all heard the chants concerning “fair share”, “the rich”, “taking from the poor”, and the idea that anyone has “too much money”. It is not only ridiculous, but possibly sinister. Wealth is owned by the people who create it. Obviously, If you own a house, I’m in NO way entitled to it… or am I?? Your wealth is your own.
But what is WEALTH. Wealth is simply:
“Having something that others want“.
Note that having wealth is NOT “having alot of money”. Having alot of money means you are “Rich”. Money is a means of exchanging wealth. As an example, if you have $2,000,000 bucks, you’re temporarily rich, but that money will be depleted if you don’t have a means of making more. This is why we all talk about those people who won the lottery 4 years ago and are now living out of their cars and in debt up to their necks. If, on the other hand, you make furniture, cars, TV’s, food products, or any other product (or service) that people want, you will always be able to [by which I mean have the opportunity to] convert that product into money. Transversely, YOU CANNOT CONVERT MONEY INTO WEALTH because that takes as much effort as starting any other business. Therefore, your goal shouldn’t be to have “money”; but to have “wealth”. A $2,000,000 check is obviously great, but a $2,000,000 enterprise that produces something that others want is a far better proposition.
Money is great because money is versatile. If you were a bathtub moonshine-maker and you wanted some apple pies, you could make a deal with someone who bakes, So long as they want moonshine. You can exchange products and everyone gets what they want and everyone is happy. — It only gets tricky when the apple pie baker DOES NOT want your bathtub-made moonshine. No deal can be made unless…. da da da dumm, there is a common means of exchanging those products that allows both parties to get what they want, and that means is called MONEY (currency). Money translates the products (and/or skills) of individuals into a form that allows for the exchange of products when one party does not have anything another party wants. Money allows everyone to buy what they desire and get what they want.
The “100% Pie Graph” and Wealth
Creating wealth does NOT hurt anyone! Wealth creators generate ideas, products, and services that allow them to hire others and provide
their resources to anyone who will buy what they offer whether that is Microsoft, or a Traveling Maid. Let’s look at those examples; Microsoft hired people and generated software to power computers. You would be hard-pressed to find anyone harmed by the creation of that software. As far as the Traveling Maid goes, you’d be hard-pressed to likewise find anyone who was hurt by a Maid finding customers to provide her house-cleaning service for. Both entities serve to create wealth from nothing. They did NOT take the money of others, they seized an opportunity and created something for themselves!
Where people get confused is when they utilize the “pie graph” template they were taught in elementary school. In that pie graph, every dollar spent, is a dollar that can’t be spent on something else so as not to be more than 100%. This works fine when one is doing his own personal budget because they only make a finite amount of money (like a paycheck). Unfortunately, Wealth is NOT like your finite monthly budget, because there is no 100%. Wealth is infinite! There has NEVER been a time where humanity did not invent, innovate, create, or improve upon a product or service. Because of that FACT, wealth continues to expand. As another example, a child can spend the money and go buy a Mother’s Day card for his beloved Mommy; or he can make a Mothers Day card that she’ll love just the same (or moreso). In a sense, he has created wealth. He created a product (and therefore wealth) out of nothing. Back to our Facebook example, no one became poorer because Facebook became rich. No one lost a single dollar because Facebook made gobs and gobs of money and just like your house, no one is entitled to their money.
Here’s the Proof
At one point in America, there was only one individual that earned $100,000 per year. Then there was only one Millionaire (Elias Hasket Derby). Then only one Billionaire (John D. Rockefeller). If wealth was finite, how can worldwide wealth keep growing as it has? Because the entire pie grew! Despite the worsening economy, there are now about 129,000 Millionaires and nearly 110 Billionaires in the United States. They did not merely get rich by taking from others. Whether it be through pumping oil or by creating media empires, people wanted the products that they provided to the free market and people purchased their products freely.
People get rich, not because there isn’t enough money to go around but, but because there IS enough money to go around. Most of us have the opportunity to build a measure of wealth, and as we do, we should remind ourselves not to be jealous of those who have what we want. And we should understand that because others (with the exception of government) have more than we do, that they didn’t necessarily get their wealth by taking from you!