Why you must make your child rich Chapter 3
Chapter 3 - The rich will always get richer, and the poor will always get poorer.
If you are rich, you will be able to cut more costs per unit of production if you do business.
If you are poor, you probably can't even start a business at all but work for others, and be the resources of the rich to cut costs on. Even if you can start your own business, your scale of business may not be big, thus less purchasing of materials in bigger bulk, thus saving less costs per unit of production, thus less competitive, thus sooner or later you will be forced out of business. It's a uphill battle even if you manage to win.
If you are rich, you have enough resources to be in different businesses and diversify your risks.
If you are poor and in a business, you will only have that much resources and probably only be able to be in one or few businesses. You take a bigger risks of losing all your investment
If you are rich, you will have bargaining power in many business transaction. You are a big customer, so small companies will rather earn more in total amount and earn less in each unit of product (due to big orders). Economics of scale
If you are poor, you have little bargaining power in all transactions. People CAN afford to lose you as a customer or as a business partner, after all losing you is just a small amount of business loss. they rather put their efforts to service the big customers. if you cant ask for more servicing, eg delivery, free repair etc,and you probably have to use your own resources to do it, thus engaging MORE costs.
If you are rich, you can afford to hire the better employess who are experienced and are more probable to deliver results. For every dollar spend on a capable employer, you get more profit.
If you are poor, you can only afford to hire new people or people with less capability. Capable people are all hired by the rich. so you end up having to train them, or cover the work of the less capable, thus engaging MORE COSTS. For every dollar spend on a less capable employer, you get less profit.
If you are rich, ONLY A BIG MAJOR MAJOR SCREW UP CAN EVER MAKE YOU POOR AGAIN. It is LESS LIKELY THAT YOU WILL FAIL WITH ALL THE SMART PEOPLE YOU HIRE AND POWER IN BARGAINING.
if you are poor, any screw ups will make you...well since you are poor already, more poor. IT IS MORE LIKELY THAT YOU WILL FAIL WITH THE LESS CAPABLE PEOPLE YOU HIRE AND LESS POWER IN BARGAINING.
Absolute truth in a capitalism economy. Capital=money. You have money, you play the game good. You have more money, you play it better. Period.
"So what? You telling me that the poor can never work hard and become rich and live a comfortable life? c'mon! whatever happen to the work hard and you will be rewarded talk?"
Well...time for the last chapter...
End of chapter 3
If you are rich, you will be able to cut more costs per unit of production if you do business.
If you are poor, you probably can't even start a business at all but work for others, and be the resources of the rich to cut costs on. Even if you can start your own business, your scale of business may not be big, thus less purchasing of materials in bigger bulk, thus saving less costs per unit of production, thus less competitive, thus sooner or later you will be forced out of business. It's a uphill battle even if you manage to win.
If you are rich, you have enough resources to be in different businesses and diversify your risks.
If you are poor and in a business, you will only have that much resources and probably only be able to be in one or few businesses. You take a bigger risks of losing all your investment
If you are rich, you will have bargaining power in many business transaction. You are a big customer, so small companies will rather earn more in total amount and earn less in each unit of product (due to big orders). Economics of scale
If you are poor, you have little bargaining power in all transactions. People CAN afford to lose you as a customer or as a business partner, after all losing you is just a small amount of business loss. they rather put their efforts to service the big customers. if you cant ask for more servicing, eg delivery, free repair etc,and you probably have to use your own resources to do it, thus engaging MORE costs.
If you are rich, you can afford to hire the better employess who are experienced and are more probable to deliver results. For every dollar spend on a capable employer, you get more profit.
If you are poor, you can only afford to hire new people or people with less capability. Capable people are all hired by the rich. so you end up having to train them, or cover the work of the less capable, thus engaging MORE COSTS. For every dollar spend on a less capable employer, you get less profit.
If you are rich, ONLY A BIG MAJOR MAJOR SCREW UP CAN EVER MAKE YOU POOR AGAIN. It is LESS LIKELY THAT YOU WILL FAIL WITH ALL THE SMART PEOPLE YOU HIRE AND POWER IN BARGAINING.
if you are poor, any screw ups will make you...well since you are poor already, more poor. IT IS MORE LIKELY THAT YOU WILL FAIL WITH THE LESS CAPABLE PEOPLE YOU HIRE AND LESS POWER IN BARGAINING.
Absolute truth in a capitalism economy. Capital=money. You have money, you play the game good. You have more money, you play it better. Period.
"So what? You telling me that the poor can never work hard and become rich and live a comfortable life? c'mon! whatever happen to the work hard and you will be rewarded talk?"
Well...time for the last chapter...
End of chapter 3
posted by rolento @ 12:29 AM
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