If you are smart, why are’nt you rich?
If you look around there are plenty of smart people, far more smart people than rich. And if you really look around not all the rich are smart. I mean they are smart, but not as smart as some of the not-rich smart guys. But it is generally accepted that in order to accumulate wealth you need to have intelligence. But being intelligent does not ensure wealth. Have you wondered why? Well I did, and here’s what I came to conclude.
The way I see it there are two things to this. If you’re intelligent in common things, like if you have really good common sense, making you a smart guy, then you are as good as the next guy with common sense. Common sense prevails because it is common sense. And if you are going to apply common sense to making your fortune you are going to end up doing all the common things the rest of the folks will do. And you are going to be in a very crowded market.
And if you are really smart, smart as in uniquely smart, you will apply something very uncommon into making your riches. That way you’re intelligence is going to guide you towards something that others with common sense will not think of. But just getting the start is not enough, because once you do this uncommon thing, you are going to have people who take the queue and follow suit.
I will tell a pretty good example of this kind of scenario. Sometime back, in the town that I was living in, there was a very successful communications bureau. These guys were pretty good and had a pretty diverse portfolio of services. After seeing their success, communication bureaus started to mushroom around the town. At the height of it, along a two kilometer road stretch there were some 60 odd communication bureaus. But the original guys kept on diversifying and managed to stay ahead of the competition.
Naturally, all these businesses were competing for the same business and were not very profitable. Then around town there were a few pharmacies that were doing very well. So what happened next? Most of these Comms bureaus were converted to pharmacies. This conversion happened within a time span of one year. What happened to these pharmacies is anybody’s guess.
So ideally, your approach will be very complicated that it is hard to comprehend. Thus your road to riches will be quite unique and you will have a pretty good chance of success. When you talk about business there are few things that you should incorporate into your business, in order to stay ahead of the competition; to stand out from the crowd. It is said that your business should be based on resources that are rare, valuable, and hard to copy and doesn’t have good substitutes.
This may give us some idea as to why all the smart people are not rich. According to this theory a ventures success is based on a formula that is hard to copy and impossible to substitute. Implicitly this means that formula eludes common sense. This is a result of inability to understand the successful formula. If it is not understandable, it cannot be copied or substituted for that matter. It is said at times, even the successful ones themselves do not quite understand why or how their formulas are working.
In economic terms your knowledge is not valuable if it is known by many or knowable. In other words, if your knowledge is common, then there is not much value in it. But if your knowledge is rare, valuable, hard to copy or substitute, it certainly will have a higher economic value.
So now I know why I am still not as rich as much as I am smart 😉