Dec 1, 2015
You have problems if you focus too much on money or too much on production.
If you focus too much on money, all you think is "get money, get money, get money." You borrow as much money as you can. You convince people to pay you for services or goods you have not produced. You gamble or invest hoping you will get money without having to work for it.
For example, the manager of a computer company is more concerned about selling computers than making computers. She buys huge advertisements, hires excellent salespeople and pays them big commissions. Because her company cannot make enough computers, and the ones they do make are bad quality, she gets fired by the owner. The company has a horrible reputation and closes down
If you focus too much on production, all you think is "produce, produce, produce." You build your product or provide your service without any attention on money. You think, "If I just do nothing but produce, I'll eventually get some money."
For example, a dentist loves making people's smiles look perfect. He hates asking for money. So he works hard fixing people's teeth, but never collects his fees. He does not focus enough on money and goes out of business.
"When either money or production get out of balance one has trouble. All production and no money is as bad as all money and no production.
"This also answers the world mystery of booms and depressions which, unsolved, drove the whole field of economics into a mad subject."
"Well-paid delivery in high quality is the correct answer. Only then can a boom continue."
"There are no shortcuts to honest prosperity." -- L. Ron Hubbard
All Money, No Production
As you may have noticed, too many people have gotten stuck on getting money and not production.
For example, Fred hears how people are making money by buying houses and then selling them for a big profit. Fred also learns he can borrow a great deal of money, even though he doesn't make enough money to pay it off. He is convinced, "I'll just buy this big house with this big loan. I'll sell it in a year and make a big pile of money, just like everyone else."
Joe owns a company that has a $1 million retirement fund. Hundreds of workers have given part of their pay into this fund. Pete convinces Joe to give him the $1 million so he can turn it into $2 million through big house loans. Pete gets a big commission from the bank for getting Joe's $1 million.
Barney owns an investment company. He tells the mortgage company, "Let me take control of your $100 million in loan accounts. I have investors who will give us $150 million as they think real estate will keep going up. You and I will each get a $2 million commission!"
Fred can't pay back his loan and no one will buy his house, so he goes bankrupt. Pete's plan completely fails wiping out Joe's company retirement fund meaning Joe has no money for his workers' retirements. Pete has earned a bad reputation and cannot get a job. Barney asks the government for $150 million to bail him out.