There is an old saying, “The more you put in, the more you can take out”. It means that you must put the value in first. You must contribute something of worth, something that makes a difference, something your customers (your boss, your clients, your community) value! Value always comes first, the money comes second.
And here’s a paradoxical truth about getting rich: To make lots of money, you must sell your goods and services for less than your customer believes they are worth! (Who would pay more than something is worth?) Most of us get it backwards. We say, “pay me more money, and I’ll work harder or I’ll go to school and add more value”. But in economics, it never works that way.
Creating value is about changing (transforming) the quality or nature of something. It’s about using earth, water, sun and seeds to grow valuable corn. It’s about transforming an eager student into a skilled doctor. It’s about turning a good idea into a useful tool. It’s about putting this booklet on the Internet, making it available, making it useful, and creating value.
So, let’s focus on adding tons of value! Everyone has the opportunity to add significant value. By using your skills to create a product or provide a service that makes life easier, more comfortable or more profitable, you create value. Or, by investing in someone else’s company, you increase their ability to serve customers.
So, how will you do that? That is the only question.
Less than a generation ago, there were other questions. Examples included: Will the union get me a raise? Will they add dental care to my health insurance benefits this year? Teachers asked when they would receive tenure, and engineers asked about the company’s retirement benefits. Those were valid questions only a few years ago. Today, they no longer apply. No matter what your skill, someone is working very hard to provide the benefits of what you do at a cheaper price. Let’s pick an extreme example. You might think that brain surgeons could count on significant income, but even that is no longer true. Pharmaceutical companies are racing to produce drugs that reduce the need for surgery, or that prevent illness altogether. And managed care companies now routinely prohibit operations that only a few years ago were common. In fact the need for specialists of all types, including neuro-surgeons, is actually going down!
There is no such thing as job security! Someone, somewhere is working very hard to eliminate your current job, or to reduce your income. To become wealthy, all you have to do is provide a benefit that lots of people value. How do you do that? Generally, by giving people something they want, or by removing something they don’t want. One of the most successful businesses no one ever heard of during the 90’s was “SafetyKleen”. They haul away the waste oil and solvents from gas stations and repair shops. It’s dirty, disgusting stuff and no one wants to touch it! So, people value the service of having someone take it away. It’s a great example of providing value by eliminating a problem. Check out their stock chart over the past 10 years. Lots of folks got very, very rich! Johnson & Johnson has become a multi-national company largely on the basis of eliminating headaches (they sell Tylenol brand pain reliever). Proctor & Gamble removes dirt from our clothes (Tide detergent) and plaque from our teeth (Crest toothpaste). The point? People will pay you to solve their problems!
Attorneys solve problems. Real Estate agents solve problems. Dentists and doctors and Chiropractors and fitness centers eliminate or prevent problems and people value these services!
Or, provide a pleasure people…value! Walt Disney made people laugh, and he laughed all the way to the bank! Fax machines and email save us time and postage, so we value them and both fax machines and email software (and often, extra telephone lines!) are standard equipment in every office and in many of our homes. McDonalds and other fast food restaurants do not serve great food, but they do serve convenience, reliable, predictable service, and speed. In our hurry-up culture, these are things that we value, and they have made the McDonalds restaurant chain (and their stock holders) very, very rich.
The possibilities are unlimited, but you must provide value, and you must take action!