economicmultipliers_2

Economic Multipliers (2)

Do you know what these are?

I'm still not going to tell you but . . .

These determine whether we CREATE wealth in systems.

Although I'm not (yet) going to tell you, I'm going to share some more text I wrote on May 5, 2010 regarding wealth retention and creation along with a few additional comments:

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'Every nation in the world right now is struggling to deal with collapsing financial and capital bases and the generation that has been raised on the Internet for the most part has no idea how those financial and capital bases were originally built ...'

'We are building 3G and 4G networks to accommodate (for the most part) entertainment and gaming. I have nothing against those activities (and know a lot of people make a lot of money on them) but if you look at any future generation’s ability to maintain their communities and build their own bases of wealth, not very many of them will be able to do so playing games and watching TV.'

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I'm going to give you a quick example of the difference I see between 'tool' and 'technology' people because we MUST think about this if we want to MAKE SURE that we are building bases of wealth that CREATE economic multipliers.

Dan Ariens, President of Ariens Company recently (within the year) sent me a book they had published celebrating the history of their company and their snowblowers (now called Sno-Thros®). Many of the testimonials were from families who had passed their machines down through more than one generation and watched their kids and grandkids earn money using the 'almost never fail' equipment.

If you buy one of their machines, you also receive extra shear bolts, one of the most common things to fail. If you don't know what shear bolts are, they are the equivalent of an equipment protection plan: If anything binds up in the machine — be it a chunk of ice or branches that were buried under the snow — the shear bolts fail. The shear bolts are designed to sacrifice to save the engine and the machine.

Now, some people think Ariens machines are expensive but they cost less than a computer (if you add in the necessary software, printers, etc.) The Sno-Thro® machines are designed to last for over 30 years and if you live in the neighborhood of someone who owns one who has the time and always thinks they should help out a bit during the most major of snowstorms, you are very lucky indeed.

Oil, gas and routine maintenance normally cost less annually than it costs for two months of television or Internet service.

Now that's the assessment of a 'tool' person looking at a 'tool' which can generate a longterm economic return.

Today, because of technology, we are living in a new age of thought. Most of the technology we take advantage of has been around for only 3 generations (1950's+ with most consumer products coming into use in the last 30 years). Obsolescence has become the norm. As a result, I believe WE MUST get high technology companies to think about what existing technology is going to be giving us 3 generations from now: How will it have been used and be used to build the up and coming generations' bases of wealth?

In the early 90's, I bought an HP IIIP laser printer. I loved that printer and would have been happy to keep it forever. But when I bought it, I had a computer with a 120 Megabyte hard drive. Technology has changed. Now, I find myself with another HP laser printer (which I've also loved) which, to date, I have not been able to get new printer drivers for. The printer is 'too old.'

When I buy things, I consider them to be 'investments.' I look at their return.

I plan to buy a new laser printer and may even opt for a color one. But I also know (my 'tool' person persona) that what I really want is for the printer that I already have to work. You don't have to reearn money you don't have to spend.

Now, I will also tell you this (and this is my 'technology' person persona): Today, if I do buy a new laser printer, it will 'technically' cost me nothing — IF I look at existing costs. And this is where the 'tool' people sometimes do not understand the 'technology' people.

Because newer printers are usually designed to use less ink or toner and less energy, their operational costs are less. Because they are SO inexpensive in comparison to the printers years ago (especially if you consider their enhanced capabilities), they MAKE economic sense. I haven't done a lengthy survey but I suspect that toner and ink prices are on the whole lower than they were years ago, also decreasing expense.

New technology purchases give people A LOT of economic value IF the equipment is used well.

But, since I suspect that I am one of the FEW technology users that values (in a dollar sense) goods based on their longterm productive uses (see P.S.), I believe WE ABSOLUTELY NEED the technology companies to start thinking about how their products CREATE economic multipliers and how they can encourage individuals and groups to use technology in ways where we MAKE SURE that we create future bases of wealth.

Those future bases of wealth will determine whether people can afford their products in the future — no matter how much they cost.

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P.S. I must add some caveats to this statement. When I buy tools, I usually say to myself: 'If I use this tool (x) times, I will have gotten my money's worth' and sometimes I only need to use a tool once to feel I've gotten my money's worth. I also know most individuals purchase items with financial considerations in mind (but not necessarily productivity considerations).

Businesses of course must purchase technology (and tools) based on their return on investment. I believe THEY get hit the hardest when more than one piece of equipment becomes simultaneously obsolete.

And note: For my 'personal' persona, I have to be reminded sometimes that simple JOY has an intrinsic return! — lots of techie and non-techie products and tools are just simply 'fun' — I'm working on getting better at just enJOYing them!