We live in a world obsessed with success. To be successful means to have accomplished what you set out to. So being successful does not mean to be rich, unless riches are what you were seeking as your goal. Sadly, when people talk about being "successful" we generally assume they are talking about financial success because we live in cultural paradigm that attaches the idea of success to the money in your bank account.Now this is not to say financial success is not important- quite the contrary. Everyone has some level of financial success they want to achieve, even if their financial goals are just to keep food on the table. Still, we live in a world that is largely ignorant of economics and seems to think that making a lot of money is a direct result of hard work, education or luck. While all of these are factors contributing to economic success they don't get to the real KEY to financial success.
The Simple Key to Financial Success.
In a market based economy VALUE is the key to your financial success- that simple. In the workplace when someone gives you money it is because they are exchanging that money in return for some value you are giving to them. In my business we hand over money to our employees because they provide us with the labor and that labor is valuable to us because without it we would have to do everything ourselves and our customers would not be taken care of. The best employees (the ones who provide the most value to us) get higher pay. The economic value of something is determined by supply and demand. The higher the demand for something and the lower the supply- the higher its value. Bill Gates has billions of dollars because he created a product of so much value that millions of people have been handing him bags of money to get his products for the last couple decades. So again, if you want to be financially successful CREATE FINANCIAL VALUE FOR OTHERS and you will find people willing to give you money to have it.
 |
| High level employees are paid more because (according to those cutting the paychecks) they provide more economic value to the organization. This is because the skills they have tend to be in higher demand when compared to the supply of people that have those skills. |
Know Who Your Customer Is.
Another important factor to consider is who you are creating financial value for. Ultimately that is the person who cuts your paycheck. Everyone has a customer. An employee usually has one customer, the owner of the company. The employee's financial success is based on how much economic value the employee brings to his customer (the owner of the company) and how well the employee is able to negotiate with the company owner to get paid for the value he creates. The company owner has many customers (essentially the customer is the boss for the owner of a company). The business owner's success is how well he provides value to his customers and how well he can negotiate with them pay for the value he adds.
Let's Change The Rhetoric
This concept is not very novel, it's basic economics. The reason I write this is because when people talk about achieving financial success they talk about things like work hard, get education, wake up early, never give up. All of these things are great, but they all are just means to the end of making you of value to others. We now live in a world where, because of the "work hard and get education" rhetoric people feel entitled when they work hard and get educated. The problem is that just because you worked really hard to get that degree in underwater basket weaving does not mean your skills are of much financial value to society even if your skills are of great absolute value. Nearly always in a market based economy like the U.S, people are paid according to the value they bring to the table. So, if you want to be financially successful then learn to create financial value for others and they will exchange their money in order to get it.
