This Week’s Power Topic – Money – "Mind The Gap"

http://paulgraham.com/gap.html

Do yourself a huge favor, take a break for a few minutes and read this, this article is fantastic! It is probably one of the best articles that I’ve ever found, for understanding personal and society concepts of money, wealth & success. This is a complete essay and is pretty long but based on this:

Like chess or painting or writing novels, making money is a very specialized skill. But for some reason we treat this skill differently. No one complains when a few people surpass all the rest at playing chess or writing novels, but when a few people make more money than the rest, we get editorials saying this is wrong.

Why? The pattern of variation seems no different than for any other skill. What causes people to react so strongly when the skill is making money?

I think there are three reasons we treat making money as different: the misleading model of wealth we learn as children; the disreputable way in which, till recently, most fortunes were accumulated; and the worry that great variations in income are somehow bad for society. As far as I can tell, the first is mistaken, the second outdated, and the third empirically false. Could it be that, in a modern democracy, variation in income is actually a sign of health?

Some Great Quotes:

…wealth is not money. Money is just a convenient way of trading one form of wealth for another.

…few of us create wealth directly for ourselves. Mostly we create wealth for other people in exchange for money, which we then trade for the forms of wealth we want.

In the real world, wealth is something you have to create, not something that’s distributed by Daddy. And since the ability and desire to create it vary from person to person, it’s not made equally.

Will technology increase the gap between rich and poor? It will certainly increase the gap between the productive and the unproductive.

The only thing technology can’t cheapen is brand. Which is precisely why we hear ever more about it. Brand is the residue left as the substantive differences between rich and poor evaporate. But what label you have on your stuff is a much smaller matter than having it versus not having it.

Technology seems to increase the variation in productivity at faster than linear rates. If we don’t see corresponding variation in income, there are three possible explanations: (a) that technical innovation has stopped, (b) that the people who would create the most wealth aren’t doing it, or (c) that they aren’t getting paid for it.

Bottom Line – Wealth is created through vision, change, focus, determination, work smarter, not harder. THE ONLY WAY to get rich, is to produce more value for others than they would have otherwise. What is that value that you have to give? What is your gift to the world?

Paul Graham – is an essayist, programmer, and programming language designer.