Charles Tips, Editor, Writer, Venture Entrep... (more)
2 upvotes by Bennett Nelson and Scott Cooper.
Capitalism will reward anyone who thinks and operates like a capitalist, regardless of the money they bring to their undertaking, and it will do so to a far greater extent than any other approach.
Break apart the word and what do you get? Capitalism is the use of your capital, which is to say assets, which is to say your
time--an unknown, each day lived being proof of nothing more than another day lived, so that capitalists always seek to maximize the use of their time
talents--capitalists depend on skills and insights for creating the value that leads to a return on investment.
STOP (because this is where most people stop). Selling your talent in chunks of time is part of the capitalist system, but doing so brands you a worker rather than a capitalist. Whether you work for a wage, a salary or a fee, you've got a max of 3000 units a year to sell IF you want to work yourself into an early grave.
What turns you from a worker into a capitalist:
resources--family and friends willing to lend a hand or offer know-how, unused space, libraries and other helpful organizations, books and classes that give know-how and so on.
tools--ownership of tools distinguishes capitalism, but you can start with borrowing or renting the ones you need.
money--money is what makes enterprises go--if you have none of your own you have to get it from somewhere or else "bootstrap," that is, take the additional risk of working entirely off your income. But you want other people's money--see below.
[Note: the use of one or more of these latter three assets without much of the first two distinguishes rentiers, that is, people who make their living simply by renting out what they own.]
Capitalism involves putting all five elements to work in unison and at risk to create something that will be more than the sum of its parts, that is, that will create new wealth. Eventually, a small share of that wealth becomes yours and yours alone.
Where most people seeking to "be their own boss" go wrong is by not thinking beyond spending or borrowing the money to become their own boss. They remain a worker, just for the worst boss imaginable... themselves. It's like getting on a treadmill that somewhat reliably drops quarters into your bucket as you run.
The entire art of capitalism is designing your treadmill so that it drops quarters in your bucket when others are running on it or even when no one is running on it. Now, you have a scheme that will maximize your return on the time, talent, resources, tools and money you put at risk.
OTHER PEOPLE'S MONEY. One of the many means for magnifying money within capitalism is to use other people's money. Let's say you know of widgets you can buy for a dollar and sell for two. You have enough money to buy 100, but you know where you can borrow another hundred dollars if you pay back 110 in a week or so. So now you buy 200 and make $400. Instead of clearing $100, you clear $290 (and everybody's happy with their part in the deal).
Now, you're not just thinking like a capitalist, you're being a capitalist. As you amass your own money, the number of creative ways to get a return on it increases, and the returns on money come 24/7/365 rather than in 3000 units a year. You are beginning to trade a life of drudgery--working for a buck--for a life of vigilance monitoring the productive use of your assets--having them work for you.
Think it's hard? Think again. Here's who woke me up:
Charles Tips' answer to Entrepreneurship: I want to become an entrepreneur, where do I start?
Break apart the word and what do you get? Capitalism is the use of your capital, which is to say assets, which is to say your
time--an unknown, each day lived being proof of nothing more than another day lived, so that capitalists always seek to maximize the use of their time
talents--capitalists depend on skills and insights for creating the value that leads to a return on investment.
STOP (because this is where most people stop). Selling your talent in chunks of time is part of the capitalist system, but doing so brands you a worker rather than a capitalist. Whether you work for a wage, a salary or a fee, you've got a max of 3000 units a year to sell IF you want to work yourself into an early grave.
What turns you from a worker into a capitalist:
resources--family and friends willing to lend a hand or offer know-how, unused space, libraries and other helpful organizations, books and classes that give know-how and so on.
tools--ownership of tools distinguishes capitalism, but you can start with borrowing or renting the ones you need.
money--money is what makes enterprises go--if you have none of your own you have to get it from somewhere or else "bootstrap," that is, take the additional risk of working entirely off your income. But you want other people's money--see below.
[Note: the use of one or more of these latter three assets without much of the first two distinguishes rentiers, that is, people who make their living simply by renting out what they own.]
Capitalism involves putting all five elements to work in unison and at risk to create something that will be more than the sum of its parts, that is, that will create new wealth. Eventually, a small share of that wealth becomes yours and yours alone.
Where most people seeking to "be their own boss" go wrong is by not thinking beyond spending or borrowing the money to become their own boss. They remain a worker, just for the worst boss imaginable... themselves. It's like getting on a treadmill that somewhat reliably drops quarters into your bucket as you run.
The entire art of capitalism is designing your treadmill so that it drops quarters in your bucket when others are running on it or even when no one is running on it. Now, you have a scheme that will maximize your return on the time, talent, resources, tools and money you put at risk.
OTHER PEOPLE'S MONEY. One of the many means for magnifying money within capitalism is to use other people's money. Let's say you know of widgets you can buy for a dollar and sell for two. You have enough money to buy 100, but you know where you can borrow another hundred dollars if you pay back 110 in a week or so. So now you buy 200 and make $400. Instead of clearing $100, you clear $290 (and everybody's happy with their part in the deal).
Now, you're not just thinking like a capitalist, you're being a capitalist. As you amass your own money, the number of creative ways to get a return on it increases, and the returns on money come 24/7/365 rather than in 3000 units a year. You are beginning to trade a life of drudgery--working for a buck--for a life of vigilance monitoring the productive use of your assets--having them work for you.
Think it's hard? Think again. Here's who woke me up:
Charles Tips' answer to Entrepreneurship: I want to become an entrepreneur, where do I start?
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