If $3 million a year seems high to some people, it will seem low to others. Three million? How do I get to be a billionaire, like Bill Gates?
So let's get Bill Gates out of the way right now. It's not a good idea to use famous rich people as examples, because the press only write about the very richest, and these tend to be outliers. Bill Gates is a smart, determined, and hardworking man, but you need more than that to make as much money as he has. You also need to be very lucky.
There is a large random factor in the success of any company. So the guys you end up reading about in the papers are the ones who are very smart, totally dedicated, and win the lottery. Certainly Bill is smart and dedicated, but Microsoft also happens to have been the beneficiary of one of the most spectacular blunders in the history of business: the licensing deal for DOS. No doubt Bill did everything he could to steer IBM into making that blunder, and he has done an excellent job of exploiting it, but if there had been one person with a brain on IBM's side, Microsoft's future would have been very different. Microsoft at that stage had little leverage over IBM. They were effectively a component supplier. If IBM had required an exclusive license, as they should have, Microsoft would still have signed the deal. It would still have meant a lot of money for them, and IBM could easily have gotten an operating system elsewhere.
Instead IBM ended up using all its power in the market to give Microsoft control of the PC standard. From that point, all Microsoft had to do was execute. They never had to bet the company on a bold decision. All they had to do was play hardball with licensees and copy more innovative products reasonably promptly.
If IBM hadn't made this mistake, Microsoft would still have been a successful company, but it could not have grown so big so fast. Bill Gates would be rich, but he'd be somewhere near the bottom of the Forbes 400 with the other guys his age.
There are a lot of ways to get rich, and this essay is about only one of them. This essay is about how to make money by creating wealth and getting paid for it. There are plenty of other ways to get money, including chance, speculation, marriage, inheritance, theft, extortion, fraud, monopoly, graft, lobbying, counterfeiting, and prospecting. Most of the greatest fortunes have probably involved several of these.
The advantage of creating wealth, as a way to get rich, is not just that it's more legitimate (many of the other methods are now illegal) but that it's more straightforward. You just have to do something people want.
Money Is Not Wealth
If you want to create wealth, it will help to understand what it is. Wealth is not the same thing as money. [3] Wealth is as old as human history. Far older, in fact; ants have wealth. Money is a comparatively recent invention.
Wealth is the fundamental thing. Wealth is stuff we want: food, clothes, houses, cars, gadgets, travel to interesting places, and so on. You can have wealth without having money. If you had a magic machine that could on command make you a car or cook you dinner or do your laundry, or do anything else you wanted, you wouldn't need money. Whereas if you were in the middle of Antarctica, where there is nothing to buy, it wouldn't matter how much money you had.
Wealth is what you want, not money. But if wealth is the important thing, why does everyone talk about making money? It is a kind of shorthand: money is a way of moving wealth, and in practice they are usually interchangeable. But they are not the same thing, and unless you plan to get rich by counterfeiting, talking about making money can make it harder to understand how to make money.
Money is a side effect of specialization. In a specialized society, most of the things you need, you can't make for yourself. If you want a potato or a pencil or a place to live, you have to get it from someone else.
How do you get the person who grows the potatoes to give you some? By giving him something he wants in return. But you can't get very far by trading things directly with the people who need them. If you make violins, and none of the local farmers wants one, how will you eat?
The solution societies find, as they get more specialized, is to make the trade into a two-step process. Instead of trading violins directly for potatoes, you trade violins for, say, silver, which you can then trade again for anything else you need. The intermediate stuff-- the medium of exchange-- can be anything that's rare and portable. Historically metals have been the most common, but recently we've been using a medium of exchange, called the dollar, that doesn't physically exist. It works as a medium of exchange, however, because its rarity is guaranteed by the U.S. Government.
The advantage of a medium of exchange is that it makes trade work. The disadvantage is that it tends to obscure what trade really means. People think that what a business does is make money. But money is just the intermediate stage-- just a shorthand-- for whatever people want. What most businesses really do is make wealth. They do something people want.
Saturday, October 30, 2010
How to Get Rich
If you wanted to get rich, how would you do it? I think your best bet would be to start or join a startup. That's been a reliable way to get rich for hundreds of years. The word "startup" dates from the 1960s, but what happens in one is very similar to the venture-backed trading voyages of the Middle Ages.
Startups usually involve technology, so much so that the phrase "high-tech startup" is almost redundant. A startup is a small company that takes on a hard technical problem.
Lots of people get rich knowing nothing more than that. You don't have to know physics to be a good pitcher. But I think it could give you an edge to understand the underlying principles. Why do startups have to be small? Will a startup inevitably stop being a startup as it grows larger? And why do they so often work on developing new technology? Why are there so many startups selling new drugs or computer software, and none selling corn oil or laundry detergent?
The Proposition
Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast.
Here is a brief sketch of the economic proposition. If you're a good hacker in your mid twenties, you can get a job paying about $80,000 per year. So on average such a hacker must be able to do at least $80,000 worth of work per year for the company just to break even. You could probably work twice as many hours as a corporate employee, and if you focus you can probably get three times as much done in an hour. [1] You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who would be your boss in a big company. Then there is one more multiple: how much smarter are you than your job description expects you to be? Suppose another multiple of three. Combine all these multipliers, and I'm claiming you could be 36 times more productive than you're expected to be in a random corporate job. [2] If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year.
Like all back-of-the-envelope calculations, this one has a lot of wiggle room. I wouldn't try to defend the actual numbers. But I stand by the structure of the calculation. I'm not claiming the multiplier is precisely 36, but it is certainly more than 10, and probably rarely as high as 100.
If $3 million a year seems high, remember that we're talking about the limit case: the case where you not only have zero leisure time but indeed work so hard that you endanger your health.
Startups are not magic. They don't change the laws of wealth creation. They just represent a point at the far end of the curve. There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars' worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years. You do tend to get a certain bulk discount if you buy the economy-size pain, but you can't evade the fundamental conservation law. If starting a startup were easy, everyone would do it.
Startups usually involve technology, so much so that the phrase "high-tech startup" is almost redundant. A startup is a small company that takes on a hard technical problem.
Lots of people get rich knowing nothing more than that. You don't have to know physics to be a good pitcher. But I think it could give you an edge to understand the underlying principles. Why do startups have to be small? Will a startup inevitably stop being a startup as it grows larger? And why do they so often work on developing new technology? Why are there so many startups selling new drugs or computer software, and none selling corn oil or laundry detergent?
The Proposition
Economically, you can think of a startup as a way to compress your whole working life into a few years. Instead of working at a low intensity for forty years, you work as hard as you possibly can for four. This pays especially well in technology, where you earn a premium for working fast.
Here is a brief sketch of the economic proposition. If you're a good hacker in your mid twenties, you can get a job paying about $80,000 per year. So on average such a hacker must be able to do at least $80,000 worth of work per year for the company just to break even. You could probably work twice as many hours as a corporate employee, and if you focus you can probably get three times as much done in an hour. [1] You should get another multiple of two, at least, by eliminating the drag of the pointy-haired middle manager who would be your boss in a big company. Then there is one more multiple: how much smarter are you than your job description expects you to be? Suppose another multiple of three. Combine all these multipliers, and I'm claiming you could be 36 times more productive than you're expected to be in a random corporate job. [2] If a fairly good hacker is worth $80,000 a year at a big company, then a smart hacker working very hard without any corporate bullshit to slow him down should be able to do work worth about $3 million a year.
Like all back-of-the-envelope calculations, this one has a lot of wiggle room. I wouldn't try to defend the actual numbers. But I stand by the structure of the calculation. I'm not claiming the multiplier is precisely 36, but it is certainly more than 10, and probably rarely as high as 100.
If $3 million a year seems high, remember that we're talking about the limit case: the case where you not only have zero leisure time but indeed work so hard that you endanger your health.
Startups are not magic. They don't change the laws of wealth creation. They just represent a point at the far end of the curve. There is a conservation law at work here: if you want to make a million dollars, you have to endure a million dollars' worth of pain. For example, one way to make a million dollars would be to work for the Post Office your whole life, and save every penny of your salary. Imagine the stress of working for the Post Office for fifty years. In a startup you compress all this stress into three or four years. You do tend to get a certain bulk discount if you buy the economy-size pain, but you can't evade the fundamental conservation law. If starting a startup were easy, everyone would do it.
Sunday, May 16, 2010
Refuse Poverty
Agree or refuse to remain poor. Been born from poor background is not enough for you to live in abject poverty. Your background must not keep you permanently on the ground of poverty. Know that no one is born poor, every one in life is born the same; from the king on the throne, the president in the president villa to the beggar on the street. Every one was conceived of woman for nine months and delivered the usual way. No one’s blood has poverty gene. What is different however is our circumstances of birth; the environment and the parentage.
The good news therefore is; you can work to change your circumstances and situation in life, no condition is permanent. I have seen those born into affluence, which mismanage the wealth and became poor and I have seen those born into little or nothing but with sheer determination, hard work and divine assistance change the course of their history. Poverty is not genetic, it is in the mind.
To change your course history, you must hate the status quo. Until you hate the present status the ‘new you’ will not emerge. If you love the way you are, the things you do, how you do them and the result you get you have automatically shut the door against improvement. To hate the status quo is to say “I am more than this”. Know that the enemy of best is good, if you keep thinking and saying this is good enough, then your best will not emerge. While you should be happy whit what you have, you must not be satisfied the way you are. Do something about your situation.
The good news therefore is; you can work to change your circumstances and situation in life, no condition is permanent. I have seen those born into affluence, which mismanage the wealth and became poor and I have seen those born into little or nothing but with sheer determination, hard work and divine assistance change the course of their history. Poverty is not genetic, it is in the mind.
To change your course history, you must hate the status quo. Until you hate the present status the ‘new you’ will not emerge. If you love the way you are, the things you do, how you do them and the result you get you have automatically shut the door against improvement. To hate the status quo is to say “I am more than this”. Know that the enemy of best is good, if you keep thinking and saying this is good enough, then your best will not emerge. While you should be happy whit what you have, you must not be satisfied the way you are. Do something about your situation.
Saturday, May 15, 2010
ENHANCING YOUR INCOME WITH LITTLE INVESTMENT
Introduction.
Our God is in the process of changing thing in this nation. Poverty is said to be hindrances to gospel but God has made provision for our daily living – suffering in poverty. Jesus promise of abundant life, food, cloth, health, car, house and more.
My thought towards you are good
Do not be anxious of what to eat.
Seek ye first the
God plan for you is that you be the Saviour of you nation but if you believe God wants you to be poor this report is not for you.
Gideon case:- God has giving you potential to succeed.
Least in the family:- number are in this nation.
A coward :- a brave soldier.
In the wine press:- in the palace.
Shelling wheat:- be in the battle and rule.
Whose fault? God or you:- let this thing be God sent angel
God does not do incomplete work, he has giving every creature a potential to survive.
STRATEGIES OF WEALTH CREATION.
1. Hardworking.
a. attendance and punctuality.
b. ready to work under strict supervision.
2. Endurance and perseverance.
Ø Constant on the look out for better job.
Ø Inciting other to intolerance.
Ø Bearing with companies critical time.
3. Plan with companies critical time:
Ø Honesty in money matters.
Ø Honesty in property matters.
Ø Keep company secretes.
4. Not too money conscious:
Ø In contentment pay packet.
Ø Constant on the look out.
5. Leadership qualities
Ø Team work, tolerance, love
Ø Relationship to customer.
Ø Rudeness to boss.
6. Seek God concerning you work – Right initiative.
Challenges of an employed personnel.
1. is your presence blessing in your place of work.
2. when you do well you can determine you wages.
3. when you are honest you, you can face you opponents
4. your ability will make you prosper more than your master.
5. The way you do work may lead to vicious cycle of unanswered prayer. for more check here
Sunday, May 2, 2010
YOUR WORK IS THE SIGNATURE OF YOUR LIFE.
Your work is your chief image maker. The work you do tells the world who you are. The work you do provides you your daily needs. The work you do also connect you with people that will lift you up.
The only way to carry out your God-giving assignment is through the work you do. People always said that living without working is dying without knowing. Love work for nothing works for a man that is not ready to work and nothing work until you work it out. Many people want good things of life but they hate hard work that require achieving this. This is the genesis of the crime wave you see all around these days.
God created man to work. Adam was created to the Garden of Eden to keep it and to tend it. Early in the morning, he would move out to work. So love work! You cannot fold you arms and expect things to happen, stretch your hands to work and make sure you add you signature to life. Something will be missed out of life if you fail to add your own quota to it and the only way to do so is through work.
Locate your work. No work is superior to the other. Find out on time which work excites and fascinating you. The kind of work you should do is the one that gives you joy and fulfillment. You cannot succeed in another man’s job; locate you own on time, and then acquire the needed skill for it.
The only way to carry out your God-giving assignment is through the work you do. People always said that living without working is dying without knowing. Love work for nothing works for a man that is not ready to work and nothing work until you work it out. Many people want good things of life but they hate hard work that require achieving this. This is the genesis of the crime wave you see all around these days.
God created man to work. Adam was created to the Garden of Eden to keep it and to tend it. Early in the morning, he would move out to work. So love work! You cannot fold you arms and expect things to happen, stretch your hands to work and make sure you add you signature to life. Something will be missed out of life if you fail to add your own quota to it and the only way to do so is through work.
Locate your work. No work is superior to the other. Find out on time which work excites and fascinating you. The kind of work you should do is the one that gives you joy and fulfillment. You cannot succeed in another man’s job; locate you own on time, and then acquire the needed skill for it.
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