Is someone else getting poorer when I make money?
If I get rich, doesn’t that make someone else poor?
That’s what society tells us, right?
Maybe that’s true. But maybe not!
Howie Reith, a former financial advisor, has an awesome answer to this question.
Imagine a two-person economy. You fish, and your friend Fred cuts down trees and chops firewood.
You catch fish with your bare hands. You catch two fish per day. You trade one of your fish with Fred for 10 pieces of firewood.
One day, in lieu of catching your fish, you decide to build a net. This net allows you to catch five fish per day.
You could continue trading one fish to Fred to get 10 pieces of firewood. Fred is no wealthier or poorer than he was before you created the net, however you are much wealthier.
You decide to begin trading two fish to Fred in exchange for 15 pieces of firewood. Since Fred now has more food, he feels stronger, and is able to cut even more firewood for himself and to trade with you.
Both you and Fred are now far wealthier, and no one else is poorer.
Productivity is not a zero sum game.
I agree with Howie on this one. Wealth building done right makes everyone richer. What are your thoughts?