Producer vs consumer

I want to talk about one of the most important business lessons that I know of.

There are two groups of people in this world. I know, I know, that cliche statement again.
“Two groups of people” statement, I mean. But for the sake of this post I am very tempted to use that cliche because it is useful if we want to understand why some people get rich and why some never don’t.

Those two groups are: consumers and producers.

Consumers have cash. Producers have something of value. Consumers want what producers have. They want to own it or experience it. They hand their cash to producers and they walk away with that valuable thing. Producers walk away with cash.

The producers rinse and repeat this process many times.

The way producers get the things that consumers value is twofold: they either create or buy (or steal, but that’s illegal) valuable stuff with the intention of selling it to consumers.

In this case producers may buy valuable stuff just like consumers would do. The only difference is that they buy with the intention to sell.

Consumers buy with the intention to consume.

That’s how producers create wealth.

That’s how consumers stay poor.

Of course producers become consumers as well. They have to eat or drive a car for example. However their main focus is on producing things of value.

The primary focus of consumers is consuming things of value.

There you have it.

I believe that’s how wealth is created. I believe If we want to meet our financial goals, we must become producers. We must produce things of value (valuable enough that people want to pay for them). We must sell these things in the marketplace to enough people fast enough. We must own a business that has something of value.

I know, that this sounds like simple and basic stuff, but believe me, it is not easy to implement. If it was easy, then everybody would be financially independent, and that was not the case the last time I checked it.

What do you think a man/woman should do to become financially independent? What is your best business advice?

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