Many people I have spoken to believe that the primary purpose of business is to make money. Although producing a profit is important, if our focus is always to make money above everything else, then our final product or service will reflect that. With higher prices and lower value, the business is actually taking money not only from their customers, but also their employees and society as a whole. Essentially, money is being consumed from the economy rather than infused back into it.
This can be seen in the following charts provided by the St. Louis Federal Reserve Bank. As corporate profits continue to rise;
employee wages have hit an all time low with respect to a percentage of the GDP
What bothers me is that even those who are trying to become financially free through a small business of their own oftentimes focus solely on the income rather than in providing a quality product or service to their clients.
I believe that we need to start focusing on providing a valuable product at a lower cost as a result of increased efficiency so that we can put more goods, services and MONEY into the economy.
Further, I don’t believe anyone – regardless of the size of their company needs to build million dollar homes and travel around the world while those that work for them are struggling to survive. With respect to financial freedom, which I talk so much about, after you have earned enough passive income to pay your bills, increasing your spending is actually taking us in the wrong direction. Instead, we should be paying off our long term debt obligations and living debt free so that we can give more, serve more and live a better life. After all, isn’t that what financial freedom is all about?