Who Is Keeping The Money?

I remember once my school teacher told me that if I wanted to earn money, I would have to study well. And I don’t need to tell you how unreasonable that assumption was, that the money is directly linked with education. So what exactly makes some people earn more money than the others. I kept pondering over this question for many years, and in the mean time I collected few clues that could help me to understand about money making. In this post, I will try to debunk the false notions that most people have about money.

First myth is – If you study well, you will get in to a reasonable position and make money. Well that is true, but only the first part and that too, to some extent. Once you finish your education, you easily get the job and earn money. But that doesn’t mean if you want to earn more money you will have to study more. In fact when you see most of the scholars around you, they are never among the richest of the people. On the other hand, the people who didn’t take up quality education and didn’t go on to join the job market have also made huge sums of money in certain cases. I believe we all know a number of entrepreneurs both in India as well as outside, who went on to earn massive amounts of money even without a college or university degree.

Secondly people say – you really have to be smart in order to make money. Well, Terence Tao is the person with the highest IQ in today’s world (IQ 230). He is currently working as a mathematician in Australia. His father told the press that at the age of two, during a family gathering, Tao attempted to teach a 5-year-old child Arithmetic and English. Today he is contributing extraordinarily in the field of mathematics and has won a huge number of honors for his work. But is he that rich? Certainly not.

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There is a big pool of people which follows simple rule – Money comes with hard work. Those people need to look at the world around them. From the roadside workers, to the cleaners, dish washers, peons and many more. No matter what amount of hard work people put in these professions, they are not going to be rich. The money is associated with only certain professions, we will discuss that little later.

When people are out of reasons and explanations they say – money is a matter of luck. It goes in the hands of a fortunate person. And I have two major problems with this explanation. First, if the destiny needs to decide our fate, then why to put an effort to make money. Let us just buy lottery tickets. Which doesn’t make any sense, at least to me. Secondly, if it was about luck, then money should have been evenly distributed among different professions, different sections of the society. But again, fortune doesn’t favor the truth here.

Therefore all these explanations are nothing but mere an excuse to justify their inability to make money even when they desperately want to.

Then who makes money?

For that we need to look at money not only as cash or the valuable assets but a form of favor that you earn when you do something. For example if I earn Rs 500 after writing an article, I have earned favors. With that amount I can get a number of favors which can be – getting head massage, laundry service, or even buying certain things like fruits, vegetables, coffee etc. The logic is simple – when we do someone a favor, we earn the favors in return. And this is important for everyone to survive and enjoy the luxuries that they wish to have.

The interesting thing here is that one cannot justify the amount of effort being put by an individual and the favor that person is getting. In the above example I did a favor by writing an article. While the person who cleans my dishes, did a favor me. But he had to work ten times as much as I worked to earn the same amount of money. Probably this is one flaw in the capitalistic model. Now this is where the important question arises. Why do different people make different amounts of money even when they work for same number of hours?

The answer lies in the basic theory of economics – supply and demand rule. When there is a shortage in the supply and the demand is higher, the prices will go up. And vice versa. When a servant is doing the chores, and if he asks for an increment, there will be number of other servants available who would work for the person. But when it comes to writing an article, probably there are not as many people available. Not to forget that the quality of the work is extremely important. When I am hiring someone as a peon in my office I won’t get bothered if he is not skilled enough. But let’s say I am selecting an actor for my movie, in that case the skill requirement has to be checked. This is only because of the fact that people are more concerned about the quality of the movies that they are going to watch than the cleanliness of their houses. If people were more conscious about cleanliness than they are about the movies they watch, sweepers would make more than the actors because people would be willing to pay them. But the truth is opposite. Therefore, money making in any profession is only because of the demand of that work and the supply being provided.

Let’s get out of the job market and talk about business world, because the money is more pervasive among business people than the others. There are few businesses that continue to make a lot of money while others fade away or do not make that much profit. Why? Again the demand and supply rule applies. A business which caters the needs of the people is more likely to grow and earn profits. But doesn’t every business do that? Not really. If you look at certain businesses, they are more closely associated with the needs of the world than the others. Not to forget that not only the demand but also supply part is important. And also the market they are serving. Microsoft enjoys no competition when it comes to operating system market worldwide and therefore huge profits. Your local shopkeeper has huge competition and serves small market, therefore makes small profits.

There is one more thing that I would like to mention in the end. That is to choose the unethical path to make money. I am not encouraging these methods but since these are already prevalent, therefore they do need to be analyzed. This include a number of ways. For example – extortion, corruption, illegal activities like prostitution or drugs distribution. In such cases, the supply is often less and demand is very much there. Also, since there is a high amount of risk is involved, the prices often go very high and thus people do make a lot of money. But the problems associated with it are too many and therefore people never get the real happiness in these professions, which teaches us a wonderful lesson about money.

Money is like an end result of a certain task. There are certain ways in which you can make more money but of course we need to set our priorities right. Most times we assume that we want money, but we actually don’t. If we really wanted, we would choose those money-making paths. What we want is the real happiness which is only associated with the work and the relationships that we share. Still, if you are looking to make money, do consider these points.

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