In this video we are going to talk about the money paradox. This is a really deep video so get ready to think. This is something people do not usually talk about. Most people think money is great. What is the problem? I need more money! That attitude is ignoring very big money problems that you are going to face in your life and business career. So in this video, we are going to talk about the money paradox. WATCH NOW
When you go to business school, you learn all about money. Business is the study of money, and an attempt to figure out how money works. The general idea behind business is that money incentivizes our decisions. Everyone has limited resources. You go through life making purchase decisions based on supply and demand. In general, the best decision for your life and your business will be the one that makes you the most money. And this idea is very helpful to make decisions in life. But there is a paradox about money that a lot of people do not talk about. The problem with money, is that sometimes money incentivizes bad choices. This is the great dilemma of money. You will come across this again and again in your life and it is very confusing. These are two completely contradicting statements. Sometimes money will tell you to do the right thing, and sometimes the wrong thing. What do you do? How do you make choices?
The most common example of this is environmental issues. Should your company dump old chemicals in the river? Or should you dispose them correctly even though it will cost more money? Most people will recognize that the correct decision is to dispose of your chemicals correctly. Most environmental issues are similar. We realize as human beings that we should not trash our planet. And often we choose to do the right thing and take care of our planet, even though it costs extra money.
But how can that be? In this case, the correct decision is the one that will cost you the most money, which is completely opposite of what you learned from all those years you spent in business school. This is a fairly straight forward example. But in business, you come across these dilemmas over and over, and it becomes very difficult to make decisions.
Let us talk about the news. The news media is very easy to criticize these days. Most news networks have lost a lot of credibility and trust from their audience. This has happened mainly because of clickbait headlines and biased reporting. But there is a key business decision that is being made at all these news networks. All these news networks are under increasing pressure to make money. With the internet, people can get their news for free. The news networks are desperate to get your attention, which is why they resort to clickbait, which is why they lose credibility. I would point out that this is the very same money paradox we are talking about. If you are running a news network, and all you cared about is money, you would order your news people to use clickbait to get as many views on your videos as possible. You are destroying your credibility in order to make money. This is an example where money is telling you to make the wrong decision, when what you should do is report the news honestly so you grow your credibility. You will make less money, but people will trust you as the source when they need to get news.
Let me repeat that. You are deciding to make less money to do the right thing.
Let us talk about video games. One video game platform right now is called Twitch. In case you do not know, Twitch is a website where people can live stream themselves playing video games. On Twitch there are two types of live streams that are making the most money right now: hot tub streams and gambling. Hot tub streams are where people wear scantily clad bathing suits while they sit in a hot tub, and gambling streams are where they gamble live on stream and get paid millions of dollars by casinos to promote gambling. People are making enormous amounts of money doing this, and business school told us that your decisions should be guided by whatever makes you the most money. But in contrast, I would argue that it might not be the best decision to promote gambling online or wear scantily clad bathing suits online. This again is another example of the money paradox. Why would you choose to do something that makes you less money?
Now I am not sending any hate to anyone who chooses to make a hot tub stream or a gambling stream. I am just pointing out that sometimes the harder decision is to make less money. You are choosing a less profitable types of live streams, in order to build the business of your dreams. You want to build a business doing something you love to do and you are proud of.
I am here on YouTube making a channel about accounting called WolvesAndFinance. I am faced with the same question. I could probably get a whole lot more views, and a whole lot more money if I had scantily clad people in my videos gambling. I could do both and I would make so much money. But I do not do that because I have a clear vision of what I want this channel to be about. I believe that I have something valuable to offer accountants and business professionals with a helpful and informative video every single week. And I decide to make less money in order to service those customers. And I plan on keeping on doing that so I can continue to grow my business year after year after year.
This is the money paradox, and it is something you really need to understand because you will run into it again and again throughout your career in business.
The question everyone is asking about at this point is “How do I make that decision? How do I decide when there are two opposite choices?” I am going to share with you something that has helped me whenever I have been faced with the money paradox.
Money is a guide, but it should not control your life. You control your life. In order to do this, you need two things: Vision and Ethics. You start with a clear vision of what you want to accomplish in your life and your business. And you also start with a clear vision of what you stand for as a person and your ethics. You need to be very clear about your ethical boundaries. What lines will you not cross? For example, are you going to take care of our planet? Do you stand for that? Another example, are you going to invest to create a safe environment for your workers? Do you stand for that? If you understand vision and ethics, and money is incentivizing you to do something that is in conflict with what you stand for as a person, you will know that money is incentivizing you to make the wrong choice.
This might seem to be a simple thing. You will just decide to do what is right. But it is not that easy in a business, because other people you work with may not have ethics. What if they want to do the wrong thing in order to make more money? You might think it is easy to stand for something like taking care of our planet. But it is a lot harder than you think. Imagine standing in a room with a bunch of your co-workers, and they want to cut corners on environmental standards so that they can get their bonuses. Then you are faced with an even more difficult situation to stand up to your co-workers to do what is right. It is incredibly hard to do the right thing when it going to cost everyone money.
When you are faced with those moments in your life, you need to remember one thing.
Reputation. Reputation is more valuable than money because you cannot buy reputation. You earn reputation through years of doing the right thing.
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Neither Zach De Gregorio or Wolves and Finance shall be liable for any damages related to information in this video. It is recommended you contact a CPA in your area for business advice.