Economics made simple


There’s a book I read called “Rich Dad Poor Dad”.  I highly recommend it because it makes economy in a simple mindset.

1) There’s an income

2) There’s an outcome

3) there’s maintenance cost

4) There’s a residual income

Bottom line is : If you add all the costs and and income, and your income is lower than your costs, then you’re going to continually be in the hole and you need to change it up.

The main reason I talk about this is because it doesn’t just apply to money.  It can also apply to time.

For every task you do, there is going to be a initial cost and a maintenance cost.  (One time cost could be considered at a maintanance cost of zero).  There’s also going to be an outcome and a residual outcome (automation).   Basically if you have too much in terms of tasks versus time perhaps it’s best to offload some of that work to other people (such as 3rd party or other team members or community or whatever) or figure out how you can lower the cost by striking out the tasks that are unnecessary.  Again this also includes looking at the maintenance cost of automation as well.  Cost vs Benefit should be looked at carefully.  I can’t say that I do this well.  Every day is a learning process.

Side note : In the same book, it talks about a Japanese saying about the 3 symbols of powers.  1 is a sword, power by might; another is the coin, power by money; last is a mirror, power by knowing yourself.  Out of all 3 powers, the mirror is the strongest.

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