People must choose: consumerism or capitalism
Consumerism leads to debt, capitalism leads to wealth.
It's really that simple. University graduates in the U.S. owe, on average, $2,000 from their credit card. That's just the beginning. People get more and more into debt as they "progress" through life.
Why? It's mostly a lack of self-control. But it's also because the system is so powerful that it can easily overpower (seduce, persuade, convince) average people.
But first, let's examine consumerism vs capitalism. The insight is this: the more you consume, the less you capitalize. For example, if you spend $20,000 on a car, then that's $20,000 that will never work for you. If you took that $20,000 from your bank account, then you have effectively "decapitalized" it. That is, you have eliminated its capacity to work for you.
Any item that you buy for personal consumption will make you lose money FOREVER. Remember Warren Buffett's first rule of investment: Never lose money. (His second rule: See Rule #1).
For you to recuperate the money that you spent buying a car or any consumer item, you would have to resell the car or the item. It's not easy. Even if you did resell it, you will only get a small fraction of the original amount of money you spent.
Capitalism is quite different. It's about putting your money to work. It's about making sure that you NEVER lose your money, and that you actually earn a satisfactory return. The simplest example is putting money in a bank: you have "security of capital," and you earn a small percentage in interest.
The truth of the matter is this: Society makes it easy for you to do the wrong thing, and makes it difficult for you to do the right thing. The wrong thing to do is buy stuff, even with money you don't have (credit card, etc.) and that you actually have not yet earned! This is like trying to get the reward before you work hard to deserve it.
The right thing to do is invest your money into as many investment vehicles as possible. By "investment vehicle," I mean money machines. The most powerful and prolific money-producing machine known to man is your mind.
As the saying goes, "Pour knowledge into your mind, and your mind will pour gold into your purse."
In the end, people usually choose either one of two paths: consumerism, or capitalism. These two paths are highly addictive. Once you start, it's hard to stop. This is why "the rich get richer, the poor get poorer."
The rich simply chose the path of capitalism (that is, they are extra careful WHERE they put their money, and they make sure they NEVER lose their money). The poor don't care where their money goes: they tend to indulge in instant gratification.
The rich use every single dollar they have as a soldier whom they send into battle to bring back MORE money. The poor easily and often mindlessly give up money in return for material things to indulge their senses or give them a temporarily pleasant experience.
It's really that simple. University graduates in the U.S. owe, on average, $2,000 from their credit card. That's just the beginning. People get more and more into debt as they "progress" through life.
Why? It's mostly a lack of self-control. But it's also because the system is so powerful that it can easily overpower (seduce, persuade, convince) average people.
But first, let's examine consumerism vs capitalism. The insight is this: the more you consume, the less you capitalize. For example, if you spend $20,000 on a car, then that's $20,000 that will never work for you. If you took that $20,000 from your bank account, then you have effectively "decapitalized" it. That is, you have eliminated its capacity to work for you.
Any item that you buy for personal consumption will make you lose money FOREVER. Remember Warren Buffett's first rule of investment: Never lose money. (His second rule: See Rule #1).
For you to recuperate the money that you spent buying a car or any consumer item, you would have to resell the car or the item. It's not easy. Even if you did resell it, you will only get a small fraction of the original amount of money you spent.
Capitalism is quite different. It's about putting your money to work. It's about making sure that you NEVER lose your money, and that you actually earn a satisfactory return. The simplest example is putting money in a bank: you have "security of capital," and you earn a small percentage in interest.
The truth of the matter is this: Society makes it easy for you to do the wrong thing, and makes it difficult for you to do the right thing. The wrong thing to do is buy stuff, even with money you don't have (credit card, etc.) and that you actually have not yet earned! This is like trying to get the reward before you work hard to deserve it.
The right thing to do is invest your money into as many investment vehicles as possible. By "investment vehicle," I mean money machines. The most powerful and prolific money-producing machine known to man is your mind.
As the saying goes, "Pour knowledge into your mind, and your mind will pour gold into your purse."
In the end, people usually choose either one of two paths: consumerism, or capitalism. These two paths are highly addictive. Once you start, it's hard to stop. This is why "the rich get richer, the poor get poorer."
The rich simply chose the path of capitalism (that is, they are extra careful WHERE they put their money, and they make sure they NEVER lose their money). The poor don't care where their money goes: they tend to indulge in instant gratification.
The rich use every single dollar they have as a soldier whom they send into battle to bring back MORE money. The poor easily and often mindlessly give up money in return for material things to indulge their senses or give them a temporarily pleasant experience.
posted by Super Peter at 5:09 PM
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