Our speaker said that every morning he goes to work, whether he has a client or not. People don’t pay him to work – he will be working anyway. They pay him to make whatever he would have been doing that day his second best choice.
An example: Bob has been building web sites for $50/hour and loses his client. He begins fund raising for a non-profit. A paying customer comes along offering him only $30 to build a web site.
Some people might say, “I won’t do that… it costs me $20 to take the work because I am worth $50.” Bob says, “Before it cost me nothing to give my labor away for free, but now it costs me $30 to continue to do so.”
For most of us, it is more gratifying to do things for others than for ourselves. And, if you want to be paid some day, that pay will come from others. Many people start doing low-value things for themselves (for no pay) instead of high value things for others (for no pay). A computer programmer might spend weeks refurbishing a basement instead of building a system for an impoverished entrepreneur with a good idea.
When I returned home I wrote to everyone I knew (about 200 people) to say I was unemployed, which meant it cost me nothing to work for them for free. Many friends offered to let me run errands, but Morgan Stanley described two weeks of documentation that absolutely nobody there wanted to do. The pay was $20/hour – much less than I had been making. Before the conference, I might have been insulted, but now I realized that running errands for friends would cost me $20/hour.
Morgan paired me with a professional editor, and I discovered something: I couldn’t write. They realized that too, but they figured out that I was a good APL programmer, so they offered me a full-time job.
However, Mobil Oil heard I was working at Morgan Stanley, and they made me a better offer.
My life changed on that morning in May, and now I look at every setback simply as a lowering of the opportunity cost of doing something different.
And I rejoice in the fact that there is no shortage of work… because I love to work.
To recap:
- There is no shortage of work, or things to learn.
- The best way to learn something is to commit to teaching it.
- Be generous with others and they will be generous with you.
- It is seldom a matter of money as much as it is a matter of will.
- Opportunity cost is more important than direct cost.
- Don’t kill yourself looking for a job when there are few of them.
- Concentrate on looking for work instead.
- Look for work with the highest value – not just the work that pays the most.
- Find work of value to others, not just yourself.
- Be willing to work for free because sometimes there just isn’t money to pay you.
- People might pay you to do what they want instead of what you want.
- If you are not doing anything of much value, people do not have to pay you much to do what they want instead.
- It is hard to enjoy your life if you do not like your work.
How about you? What work do you love?
Now you are ready to go to our Philosophy Page and begin exploring how we might benefit you.
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This article is about every-day situations and problems most of us experienced/know themselves but with quite unusual explanations and opinions. Amazing.
The same principles apply to business price standards and the current economic stall. Prices are staying too high, based on a more stable and flush economy. People cannot afford to pay the same prices now, but services and goods will not lower their prices. So, they go without anything. As an example: My lawn/tree service will not lower their prices. They offered to cut a small limb and sweep off a roof for me for $80. I would have to work four hours at my current job to pay that. I cannot, and will not, and am giving the jobs to someone else who works by the hour. So, who is the loser and who is the winner? Another example: There are three convenience stores in my immediate area. All three of them sell cat food in small cans. Two sell them for .99, the third sells it for .75. The third also sells most items cheaper than the other stores. I told him I appreciated his prices, and he said, “It makes good business, because people come to me. I don’t make as much on each item, but I make it up in volume.” This principle is lost on many people, and in the refusal to see where loss and gain collide, we all lose. We refuse jobs, refuse business and complain about everything. True, if no one is lowering prices, some businesses cannot continue to pay high overhead while taking a beating on their own goods. However, small margins are often made up in volume, and word spreads fast. Pride and principle can be an expensive lesson. Thank you for an excellent article on issues I have been pondering for a long time but when I try to talk to others about these principles I get a long, hard look of incomprehension. Well written and expressed. You ARE a good writer!
leave it to a hedge fund manager to blame the Great Depression on the greediness of labor.
Dear tRex:
Our comments are moderated. Usually, we want to keep the discussion on topic, and while we encourage people to attack ideas expressed, we dislike attacks against people (especially me).
But, I realized you might be putting into words thoughts that many people might be having.
Regarding the Great Depression, my goal is not to lay blame, but to explain.
And the goal of NSoW is not to argue what is the best economic policy that should be implemented by others, but what is the best approach to dealing with our own circumstances – concentrating on what we can do as individuals.
In the late 1930’s, my grandfather wrote to a friend about how good the Great Depression had been to them. By volunteering for pay cuts, he helped keep his employer alive. Because brokers were going bust, they were able to rent a huge home for very little. Because they had so much extra space, they took in a young couple, exchanging babysitting for room, board, and clothes. With the free time, Grandmother went to work for a housing developer, and because money was so tight, she took compensation in the form of a house built at cost. In a few years, they owned a home free-and-clear and Granddad’s career took off since there were so few experienced people still around when opportunities opened up. Free of the burden of meeting day-to-day costs, the young couple were able to save enough money to buy their own business.
Rather than grouse about who caused the sorry state of the economy, or try to find someone to blame, they all went to work – and were rewarded for doing so.
You can read the entire story here.
As for being a hedge fund manager, I was one from 2000 to 2006, but am no longer. I am not a fan of that industry – but that is a separate discussion.