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Wealth Creation and Relationships April 2, 2008

Posted by shaferfinancial in Uncategorized.
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John D. Rockefeller noted early on that business works better when people cooperate.  He spent his early years trying to get his fellow businessmen to cooperate in order to negate the boom and bust environment of oil production.  However, he largely failed in this endeavor having to use other means to bring market discipline to the oil industry.

This early business insight has proved to be prescient.  Long term wealth creation requires people to develop relationships based on transparency and ethically upright behavior.  Whatever short term advantage is engendered by fraud and dishonesty, proves to be illusory.

Mortgage originators who leave a trail of foreclosed properties and bankrupt individuals are now working in other fields.  Investment advisors who claimed outsize returns now are feeling the wrath of their clients undersized portfolios.  Businesses are bankrupt or bought out for pennies on the dollars.  The government attempts to reset its obligations to consumers who feel victimized.  But the truth alludes all these folks.  The government can’t protect you from yourself.  You are best advised to work with people who provide transparency and behave in a ethical manner.  It makes no difference if the business is run out of someone’s home or is a well established mega-corporation, these rules still apply.

Build relationships with people you do business with.  Start small and develop the trust over time.  Value their expertise and experience fairly.  If you do business with the lowest bidder, then understand that you will get less expertise, value, etc. 

Building relationships is critical to long term success in wealth creation.  Never forget it!