My Theory of Creating Value
I don’t agree with the old sentiment that, “It takes money to create money.”
Because this just simply isn't true.
Ben Bernanke’s printing press aside, it is innovation that creates money. Via new ideas, new skill-sets, new knowledge, and new paradigms of thinking to kickstart new ways of doing old things. My philosophy is that value is created by innovating a new way to reach a current objective [dibs on trademark].
And once you achieve that objective, you raise the bar and set yet another objective to reach for. Requiring innovation once again to achieve it. And such is the nature of perpetual human progress.
You see, in business - its not about taxes or employees or management or salaries. As an entrepreneur, you are a visionary; an adventurer who is tapping into the fundamental forces that makeup our universe - pushing the boundaries to create innovation for civilization. And prosperity for yourself & family.
Tools of Capitalism
Lucky for us, mankind has already progressed through the ages and innovated the very model of creating value. Giving us two additional important tools to more easily create it. These tools are concept of savings and the investment of capital.
The biggest advantage of capitalism; the main theoretical output is: to increase the value of money. It does this primarily by lowering prices. Which improves living standards. And encourages saving. And savings is at the root of economic growth and capital formation.
The Model of Value Creation
While brainstorming the concept of a gold standard, the economic policy which was the basis for the Industrial Revolution, I realized that the formula for creating value in a capitalist system is simple. There are only 4 fundamental keys.
The difference between stagnant sales revenue and an explosion of profit is a paradigm shifting ideological vision, powered by a dynamic strategy, and fueled by innovation.
It goes without saying that creativity, intuition, and insight are your sources of innovation. In addition, research, education, and good old brainstorming can lead to new discoveries.
Above all, it is the execution & application, what matters most. Ideas are great, but actions create results.
Value is created by innovating a new way to reach a current need, objective, or vision.
(ie- a faster car, a bus that can fly, a city in space).
They say that “everything starts with an idea” - yet the kicker is that it doesn't always have to be your idea. In other words, if you already have access to value, you can use it to create savings & capital by simply putting existing (and often times hidden) concepts, assets, or ideas into motion.
Savings is the lifeblood of a healthy financial picture. And in addition to earning interest, savings can be made available to businesses to make capital investments.
The ideal environment for savings is in an economy where your money gains in value (unlike the many inflationary currencies of today). This is the basis for sound money and savings.
Capital can help your innovation create a bigger impact by providing you the fuel you need to manifest innovation faster and more effectively.
Capitalism Creates Prosperity
When these four fundamental concepts are applied together, they form a synergy of perpetual wealth creation and prosperity for the economy’s population at large.