Capitalism, money, an unrelenting hustle. Most people think these are all terrible things that are the bane of society. They espouse this view while enjoying social media on the internet, and drinking Starbucks, all possible because of Capitalism.
Most people do not have a macro education on finance, economics, business, or how things really work. They believe they are owed everything just for showing up, or that businesses and profit are evil. Without business, without profit, a company cannot scale and grow, hire employees, KEEP employees, pay bonuses, and donate to the community. If you value yourself and your abilities at a certain price, you would not take a much less salary just because, would you? So why should a business either?
The purpose of this rant and post is to encourage people to re-evaluate their knowledge, or to open their eyes and realize financial literacy and education is important in moving up in this world. And please, spare me the you cannot because of a, b, and c. If you want it, you can do it. It took me over 10 years of getting my shit together to just get to where I am now. What is the alternative? Let life pass by, look back and say shit? Hard pass on that.
So lets take a look at this circular flow chart of economy to give you an idea of how money moves around:
Borrowed from study.com, this diagram shows the relation of money, goods, and services. A firm pays out salaries to households, and at the same time creates a good to be purchased in the free market. Next, a household buys and in turn exchanges money to the firm for said good. The firm in turn pays out more incomes to households from this income off of the goods created and sold. That income the household earns is then spent on goods and services, which all cycle around in the economy.
At the same time, the banks lend money out, which allows for people and businesses to access credit to either buy goods, homes, or start a business to grow, create more income, and create jobs as well. These businesses pay income taxes to their local governments, which in turn allows for more re-investment into that community. Capitalism rewards success, which encourages competition and people creating better and more efficient products and even services.
Sometimes, people are in situations in life where they cannot have access to an education in school or credit from a bank. In those cases, you need to go the un-conventional path and either join the military, serving your country and at the same time being able to pay for your education. Or, get into the construction industry. You learn a valuable skill, get paid more than most office jobs right out of college, work good hours and have the ability to work a second job to get yourself up on another level in life.
We will continue to post informative articles on business and finance, to help open peoples eyes up to the resources around them.