I’m not certain I ever compared the two, but there seems to me that virtually all things we buy, rent, contribute to, use, wear, eat, drive, and I suspect the list is endless, involves “profit.” Without profit, nothing would ever be grown, manufactured, bought, sold, eaten, worn, delivered, or any verb you can imagine. None of the previous would be in existence, without the word ‘profit.’
Profit, is the difference between the cost of what is bought, manufactured, grown, written, or whatever your day may involve, and the price they have been sold for, at any level. A farmer would not plant a seed or harvest a crop, unless he could sell it for more than it cost t grow. A contractor or builder, would not invest in a home unless it could be sold for a profit, and a stock broker works for his commission, which is his profit. Nothing would be done on Earth, without a profit motive. Charities need a profit to exist. Any charity, if it is legitimate, has to take in more than it costs to advertise, pay employees, keep books, etc., before it can distribute to the needy. That is a profit
I just got a haircut before I began writing this, and the barber makes a living cutting hair, which is a profit. My town has a water and sewer system, which has to take in more than it costs to operate, including wear and tear, diminution of water source, and replacing worn-out pipes, plus the billing department. Nothing we do, once in a while or every day, has to sell, or distribute, more than it costs to obtain. Hence, a profit. Without a profit, America would cease to exist.
Communist and socialistic nations make no profits, have no concept of it, have no “Bill of Rights,” no guns allowed, and pity the poor citizens. Their rulers dictate everything, the citizens have no method of removing them.
Making a profit, is not easy, and many businesses, and for that matter, the entire world, marriages, churches, hospitals, dealerships, wholesalers, retailers, etc., often go broke or collapse, if a profit is absent. If, as the previous column mentioned, a marriage or enterprise of any kind can fail, it is often not based making a profit. If a marriage accumulates excessive debt, it can fail. If a farmer harvests his crop, and the market price, or his lack of good management is lacking, the farmer, without a profit, will go bankrupt. If a business doesn’t keep track of material costs, rent, advertising, employee costs, utilities, taxes, insurance, transportation, compared to his selling price, there will be no profit, and if the entrepreneur borrowed, and failed to re-pay, a bank may go bankrupt.
The degree of profit made or earned, can vary immensely. A super market considers itself lucky, if it can show a net profit of 10%, and if a restaurant can keep food costs at 35%, and bar costs at 25%, it is well managed. Location, location, location, is a term used by real estate sales people, as it is very important in either a residence or business, to show a profit. We recently went to a yard sale, at a home which sold in 12 hours! Why? It was a great home, bordering on a beautiful lake, and its price was extremely reasonable. Another home was listed at $849,000 and was sold at $550,000. The builder didn’t control his costs, and took at least a $200,000 bath on his project. He made no profit.
As I write this on Friday, December 16th, the stock market has gone down over a thousand points in the last two days. Who took a bath on stocks? Did all the fake ‘money managers’, lose some of their client’s money? I can’t predict the future, and that’s why I have never owned a share of stock. but even as the absurd Federal Reserve (has no reserves and is not federal), has raised interest for the 7th time (who gives the fed the right to do that anyway?), gold and silver prices are virtually the same as before the market crash. Colorado Gold, makes a tiny profit on a huge volume, does no advertising and has no offices or managers. That’s how we make a profit. 99% of people have no idea of how important, the word ‘profit’ is, and most never even think of it. I do, and that’s why I write this for you to consider how wonderful, the American capitalistic system is, and we are virtually the only nation who uses it as much as is possible, under un-profitable politicians. I’d like to give them some lessons on economics.
Making a profit in any sector, large or small, requires expertise, skill, and even luck, to make a profit, and that’s why probably 90% of Americans have jobs, which requires none of the skills required to make a profit. Large corporations, or a corner store, will hire workers with no managerial skills, but who will do their job, get paid, and hopefully manage their debts, love their mates, and raise their offspring well. Those employees with managerial or technical skills or inventive genius, will advance and get raises, but this is not a profit for the worker, but the company or corporation that hired them. A good employee will get and deserve a bonus for their work.
Why am I concentrating on ‘profit’ so much? Because politicians, in general, have not the slightest idea of profit, cost control, balancing a budget, or basically even one of the needed appurtenances required for that magic word, ”Profit.” A politician, in any party, is paid a fraction of perhaps what they should be paid, considering the huge power they have over everything, with their votes. Why do doctors, lawyers, and professionals of every sector, give up their positions to become a politician? It is obviously power and stature. To maintain their prestigious office, they have always, and always will, vote funds from the public treasury, to get needed votes to stay in office. The term ‘earmarks,’ has recently been re-installed in a politician’s abilities to garner votes, and I am certain it will be exercised at every possible opportunity.
As your days go by, I challenge you to find any activity you engage in, which does not have the term ‘profit’ attached to it. Just a thought. don@coloradogold.com or 970-249-4646.