Wednesday, September 5, 2012

What Is Wealth - And How Do We Get Some?

Wealth - when most people hear that word they think of a whole lotta "Benjamins" Money. Moolah. And that is pretty much the reason most people do not have wealth - they don't even know what it is!

First, understand that money is nothing more than a medium of exchange - a tool. It makes the transfer of wealth more convenient. If you want a dozen eggs and a gallon of milk, you don't have to carry around 3 pounds of butter to trade for it. And it makes things easier - not everyone who has the eggs  will want your butter. So money was devised to make transfer more convenient.  Money, then, is not wealth. It is a tool.

Wealth is STUFF. It is all those things that we need and want. It's the cars, homes, iPads, college degree - even the Ramen soup that kept you alive through college. STUFF is something real. It is the REASON we want money.

Consider - you are on a desert island where there is no food. You find a magic lamp and coax the Genie out. He gives you a choice - $1,000,000 or a supply of Big Macs. Now tell me - you are starving - which would you choose?

Money is worthless without STUFF to buy. But STUFF is always worth something. So, STUFF is wealth.

Now we can move on. If STUFF is wealth, then the people who have STUFF are wealthy. And the people who create STUFF are the ones who are creating wealth. When Steve Jobs created the iPad, he created a product millions wanted, and paid for. He created wealth (a LOT of it). And the people who paid $500 now have more wealth - something they can use to make life better.

What this means is that wealth can only be created by those who add something of value to the economy - products and services. They create a product, which brings them money. They hire people to produce, advertise and market those products, which increases the income of those people. And those people use that income to buy - STUFF.

If you want wealth, there is only one way to get it short of inheriting it or winning the lottery - you must cretate something of value, or invest in businesses that do. There is no other way.

And that is precisely the reality that proves the "trickle-down, supply side" theory of economics that liberals try to tell us does not work. In other words, the important factor in determining whether we should encourage trickle down, trickle up or trickle out lies in where does wealth begin? Where is it created? Where is is BORN? It is created by businesses, and investors who provide capital for businesses. So that is where the cycle of wealth (the Economic Cycle) begins.

Wealth, therefore, begins at the top. And it can only trickle down. If America wants more wealth to share among its citizens, America must encourage business growth. That can only be done by providing a friendly environment for business and investors to thrive in - low taxes, reduced regulation. Stop strangling the very people who create the wealth we all crave.

Businesses are the "Golden Goose" that lays the golden eggs we want. If you reduce the feed for the goose, it lays fewer eggs. And if you kill the goose so you can feed your friends and family, there will be no more eggs, and once the goose is gone, you starve.

Got it?

Good. Now go out and create some wealth. And while you are at it, tell government not to get in your way, or take your working capital. And vote accordingly in November. You may not have wealth now, but I would bet you WANT it. Don't let government make it more difficult for you.


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