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  • Writer's pictureNeil Perlin

You're So Greedy

You’re So… Greedy!


One of the tragedies of our time is the idea that your wanting to control your own earnings is greedy but someone else’s demanding to control your earnings is virtuous.


Imagine that a friend of yours has a great idea for a new business. Maybe it’s a new restaurant or a new twist on electric bikes. Your friend is pretty sure that there’s a market for it. There’s just one problem – your friend doesn’t have enough money to start the business.


So your friend asks you if you can help. Can you loan some money to get the business going? It’s a risk, but your friend is bright and hard-working and has always shown good judgement. So you put up $1,000 out of your savings and wish your friend luck. 


Then you realize that there’s another problem. You’ve lost the use of that $1,000 until your friend pays you back. You’re losing the interest that the money would earn in a savings account, for example. And there’s also a risk. What if the business fails? And many new businesses do fail, even in good economies. You’ll be out that $1,000.


So you modify the deal with your friend – you’ll get back the $1,000, plus $50, a year after the business opens. Congratulations! You’re now an investor. And, according to some people, greedy. What right do you have to demand your money back with interest?


But without some payback for your risk and loss of control, why should you or anyone bankroll any new business? And without investment, new businesses would have a harder time getting off the ground. And many new businesses tend to create new businesses in their wake. So, your $1,000 may indirectly help create dozens of new jobs.


You’ll also know if your friend is becoming successful when activists suddenly start demanding that he or she “give back to the community”. The clear message is that your friend only succeeded at the expense of the community. But, in fact, your friend most likely succeeded by offering the community a product or service at a good price. Your friend took the risk; the activists risked nothing and contributed nothing. 


But you’re greedy…



 

Written by LCRC Contributor,

Neil Perlin, Elmore



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