Trade Rush

Monday, October 1, 2012

Producers and consumers

I make it a habit to ask my kids what they learned in school. If you aren't learning anything in school what is the point in going. I was talking to my 7 year old and he told me they were learning about producers and consumers. This is something I have been trying to teach him as well but in different terms. I asked him what each of things were. His response was producers make things or produce things for consumers to buy. Consumers buy what producers make. That was a good answer to me. It explained it in simple enough terms for anyone to understand. I asked him what category was he in. He told me he was a consumer because he went to the store to buy things but he would like to be a producer because they get the money. If a class full of 7 year olds can understand this concept. Why can't adults. Many people want to become more financially stable or want to have more money but do not understand this basic concept. As long as we are spending money and not making we will never achieve our financial goals. Going to work everyday you are producing an income for yourself. Like most people that money is probably already spent or consumed since there are bills to pay. Let's make an example and say that by going to work we produced $2. Our rent is $2 which is consumed from our paycheck. We now have nothing left over. Let's take that same example as say the $2 we made at work we didn't spend and held on to it. We now just produced $2 and have $2 more to our name. Wouldn't it be even better to turn that $2 into $4. That is where the real producing comes in. There is nothing wrong with working a job to produce an income. What we need to do is take that money and produce it into even more money. Then we will become true producers. You can do this many ways such as own a business, sell stuff on the side, invest your money and more. It is up to you but we all have to start some where. As long as we continue to be more consumers than producers our finances will always be difficult. I am like my son. I want to be a producer because they get to make money.

No comments:

Post a Comment