The Economy of You

We’re going a different direction this week friends.

We’ve spent the last few weeks on some heavier topics – rejection and financial literacy.

Great things to learn about but let’s do something different.

Let’s talk about your economy.

Whether you know it or not.

You have your own economy.

I can hear you sitting on your couch now, saying, wait, what?

Yes, and hear me out. This will be good.

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What is an economy in the first place.

Here’s the definition according to Britannica –

The process or system by which goods and services are produced, sold, and bought in a country or region.

Your family has it’s own little economy.

• Things are Produced – if you mow your lawn, you produce a freshly cut law. If you work at a bank writing loans, you produce loans for the bank and dreams for your clients. If you are a mom, you produce the children you are raising.
• Things are Bought – we all buy butter, milk, eggs, bread, and sugar. If you are a pro cook, you’ll buy the expensive olive oil imported from Italy, or like me, whatever bottle looks the best. You sometimes buy time, sometimes you buy little inexpensive things and sometimes you buy cars.
• And there’s a system you built to do these things – you go to work in the morning, you eat dinner sometime between 6-7, go grocery shopping once a week or so, work out a few times a week, you save for your future in some way, and you think and act a certain way based off your values etc.

You produce, you buy, everyday – somehow.

It’s pretty crazy to think about but everyday, just like the US economy, in our own little worlds, we are producing and buying on our homebuilt economic systems.

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I’d like to introduce you to another aspect of every economy.

Competitive advantages.

And something that I’d like you to explore in your own economy this weekend.

I listed three components of your economy above. Things you produce, buy and the system to do so.

In each of these areas, you have advantages that are unique to you, and also, advantages that have yet to be created.

This final piece is what I want to focus on. How you can create competitive advantages in your own economy and bring more value to it (IE, more money, time, freedom, purpose, etc).

Let’s talk value in the context of competitive advantages.

Here’s a quick list of things that are valuable to anchor our minds in this exercise -

Uniqueness, scale, efficiency, stability, speed, cost.

First, it must be said that the world, outside of your own economy, is not out to make you rich.

Our economy simply exists and creates enormous wealth at a high level.

The farther you get down from our national economy to state, to city, to neighborhood, to family economies, the more variance and more important it is for you to build a value creating system for your future success.

To build competitive advantages in your own economy, you need to take the three core areas, producing, buying and systems and add in your own competitive advantages based off you and your unique circumstances.

Here’s how this looks.

• For producing – if your skillset too basic, you can’t demand a higher income. Or if your job creates instability because of the way you earn money (reliance on tips, for example), you’ll have a hard time saving. Ideally, you want to separate your effort and results. So you get something like a dollar in and a hundred out.
• For buying – if you spend money on things that add scale to your financial life, like assets, you’ll be increasing your probability of success in the future. But if you spend money on things that cost a lot and bring little value, you’ll be inefficient and stunt growth.
• For systems – if you have a basic system that everyone else has, like little savings, no unique skills, slow moving and not well thought out, don’t be surprised by your future state that will be filled with stress and financial anxiety.

Be critical, be wise, and focus on what makes you unique and building an economic system that benefits you greatly, one filled with competitive advantages only you can create.

This doesn’t need to be complex but it does need to be well thought out.

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Let’s leave this here and take a deeper dive in future weeks.

I hope you found this helpful and I hope you can find some areas of improvement in your economy of you this week.

Remember – systems scale, random fails.