Always Be in The Business of Creating Value

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Yesterday I watched a part of the movie Rogue Trader. Based on true happenings and one of the worst bank tragedies. It's about how a young man worked his way up in one of the world's oldest merchant bank, Barrings Bank, and through greed got the bank bankrupt. He singlehandledly caused the collapse of UK's oldest private bank. And how? By trying to make money without creating value: speculation.


Speculation is when you try to get more than you give. The popular forms are gambling, day trading and currency trading (popularly known as Forex in Nigeria). But there are other less popular but common forms of speculation. Email spamming is one. I'm constantly getting mails from eCommerce and news gossip sites in Nigeria that I didn't subscribe to. Someone is harvesting people's emails online and selling them to companies and people so they can flood our mail inbox with news we are not interested in, news about what Kim Kardashian did yesterday, and e-fliers of products we are not interest in buying. That someone is trying to make money without creating value. He is speculating. And like most speculators, at the start he is making easy money. But soon the businesses that benefit from him will face a similar fate as Barrings bank. Gmail, Yahoo and other email providers will mark their domain as spam generators, and even the legitimate business mails they send will always end in people's junk/spam folder. Then when they don't desist, their domain will be blacklisted and their online reputation will be irreparably damaged. When you go to their website your browser will show you a warning that the site is linked to malicious activities and ask you if you really want to continue. When you send them an email you will get a mailer daemon telling you that the domain is blacklisted. It's not going to happen in 5 months or even 1 year, it happens when things couldn't have been rosier for them. When they begin to put in all they have in hope of sustaining the growth they are experiencing. Then, like all inevitable endings, it happens like a thief getting caught at the job he planned to make his last, everything comes crashing down. Years of dedication and work comes to naught. Like gambling all gain and more is lost. 

Speculation is not illegal, most aren't. Speculation, like playing the lottery, isn't bad, wholly. It's just that the gains of speculation are often short-lived and the pain of those gain, in the end, can be killing. Killing businesses and destroying wealth. Even in stocks, just as you shouldn't set aside a part of your salary for gambling, you shouldn't have a portion of your portfolio dedicated to speculating. In all you do, as an individual or business, avoid speculating. Always be in the business of creating value. Don't be involved in transactions where someone has to be ripped off or make a loss for you to make a gain. Or where the gain you seek is greatly out of proportions with the value created. 

Though it's much harder to make gain purely by creating value and painful at the beginning, it has an end that is more desirable and non-destructive. It's like building a house, if you take the huge pain to dig deep and work hard at having a great foundation, you can peacefully, even if slowly, build a mansion on it. But the guys who want immediate structures will have trouble keeping a mansion on a weak foundation.


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