Whenever we look at successful people, it’s not long before people proclaim that they can mind read, the successful are greedy, this is why they are successful. The term exploitation get’s thrown about at the drop of a hat, and anyone defending them has their mind read successfully. They are greedy themselves. They don’t entertain the notion that some people make their fortune by providing a service or product that people value. They value the product or service more than their money, otherwise, they wouldn’t pay for it.
For me, it’s been a killer, I’ve made roughly £36,000 for every £1,000 I invested, and I turned down job offers to join a financial tech startup and produced exponential growth, moving into different fields. How did I get it so right? Paradoxically, I wasn’t greedy in my planning, I thought of others when making decisions. Being greedy and not considering others will lead you to miss key variables in your analysis, and end up losing out. Here are 2 scenarios as to why this is the case:
Increasing tax on the rich
I’ve used this example before, it’s just such a clear-cut, good example of how to introduce this concept. To imagine this, let us look at two people. Man A and Man B. Both are lower-middle-class guys, they earn enough to live, but they still have to count the pennies. Man A is greedy. When he gets introduced policy changes, he will use general terms to justify his decisions, but he only really cares about how it affects him. He will pay lip service to others, but he doesn’t really think that much about them. Man B is also a little greedy (he’s human), however, he does think in depth about how the change will affect others. In this example, they are both given complete control over tax reform.
For man A it’s simple. He cares about himself and he wants more money. Therefore, he instantly suggests increasing the tax for the rich heavily. Shallow philosophy about how the poor are being exploited, and whoever opposes him is a shill for the rich. Man B on the other hand stops, he thinks, how will this affect others apart from himself? The rich will have to pay more tax. So far he’s on the same lines as man A, however, he thinks more, because he’s not so blinded by greed. What would the rich think about having to pay more tax? Had they made financial plans/investments based on the current tax? Would they just shrug their shoulders? If he was in their position, what would he do? If they left and went to another country, not only would his country miss out on their investment, but he would collect no tax from them at all.
This happened in France in 2012. Large tax hikes were supported by short-sighted greedy people like man A. The result, the rich left the country as others happily accepted them resulting in a 200 billion loss with an annual shortfall of 7 billion. GDP fell every year by 0.2%. Lower and middle-class families ended up paying more tax to make up for the deficit [link]. Now France is trying to entice UK bankers in a Brexit deal, some income is better than none. By not considering others, and man A ended up poorer. His greed blinded him from a key variable, what would the rich do?
Similar outcomes for other short-sighted greedy policies yielded same results. For instance, rent control was welcomed in New York by renters who didn’t think about landlords, only themselves. Honest landlords left, crooks who didn’t care about laws profited. No more residential development happened, and renters had no inventive to share or downsize due to the rent cap. Rogue landlords started burning down their houses to cash in, and there was a housing shortage. This is so well established that it’s in most introduction to economics textbooks and even charities like Shelter discourage it pointing out that it will hurt the people it’s supposed to protect [link]. However, it doesn’t stop people like Corbyn exploiting short-sighted greed to get cheap greedy votes.
Hang on isn’t speculative investing in bitcoin all about greed? Your desire to do well is, but you’ll increase your risk of failing if you plan with a greedy mind. I made a lot of money in Bitcoin investments. However, it’s not an easy cake-walk where you just sit back and watch the cash roll in. People outside like to think this, but risk-taking requires a lot of mental reserve. I know a number of bitcoin investors who freaked out and sold at a loss. I bought bitcoin when it was £250 a piece. At the time, I was having to send bank transfers to random people on the internet, and hoping that they will send me bitcoin. Luckily, I never got ripped off. I told everyone I knew that they should buy it. However, only 2 that I know of did. How did I get this early, and why did others pass even though I told them about it?
Let us look at an early investment of bitcoin from a greedy planning perspective. If you only care about yourself, you’ll see it as the following, no one is backing it, it’s volatile, heads of banks are ignoring it, and there’s not much protection as it’s a bit of a wild west. No bank will recover your funds if it’s stolen or lost. To a greedy person, skipping on an early investment in bitcoin is a no-brainer. It has no value to them, just risk.
Now, let’s look at bitcoin while considering people other than you. It negates the need for a bank as it’s peer to peer. Big deal, you have a bank, people you interact with have banks, it’s not really a big problem. However, for people who cannot get a bank, whose government restricts their spending, it gives them international banking by just having an internet connection and an email. A public blockchain ledger will prove their transaction, they do not have to pay other people to have their back in financial disputes. Cryptocurrency could be a safe haven for people who are trapped under governments exploiting inflation to skimp on their debts. When considering others, the value of bitcoin looks very different. Again, the greedy mind misses all these variables and uses.
It’s not just evident in early investing. To a greedy person who does not see these variables, and only buys cryptocurrency because it’s on the rise, and they don’t really think that there’s value in it, they freak out when there’s a price correction:
I have pulled some of my profits out over time, I can’t predict the future completely. However, if you’ve thought about people other than you, you’d see the value. If you only thought about yourself when investing, you would see a slump and think it’s going to zero. At every slump, people messaged me telling me that they were selling all their bitcoin and that I should do the same. I diversified, but I kept bitcoin through 3 major price corrections. Now we are getting into the time frame where it’s down to government regulation, but I still think that crypto will liberate many people.
And there you have it, not considering others and only focusing on yourself and your needs leaves you with huge blind spots, you will not be able to make fully informed decisions. I turned down job offers from prestigious institutions including UCL, after meeting James, the co-founder of ASF financial tech company. It’s a small team, but when he spoke about what he did, he wasn’t greedy. He spoke about how his company is affecting people in the car industry, liberating funds for people to get their car repaired for 0% interest. His excitement wasn’t on how much money this could make, he was excited about how his company could help people in other fields, and how it could improve life everywhere. This company had value because he and the team thought about others. My recent success I put down to considering others and working with people who also have this outlook.
One side note, avoid moral outrage. Most of the time it’s used to cover up primitive greedy emotions. They rarely consider multiple points of view or others. This short video is very good at highlighting this and how it’s hidden under the superficial title “economic justice”: