Happiness, Health, Wisdom and Wealth ^™

The second most important thing to understand about earning money is the law of supply and demand. Why is gold valuable and garbage not. Supply and demand! Gold is in short supply and high demand. Imagine a football field, including the end zones. All the gold ever produced in the world would only fill it ten feet deep. That’s all the gold ever mined! All six billion of us have to share it. That’s less than an ounce and a half for each of us. So we compete for it. We compete by bidding up the price. Low supply and high demand results in a high price.

Garbage is in high supply and low demand. We have a lot of it and we don’t want it. Imagine that same football fields, including the end zones. Image it filled with garbage a bit taller than the tallest building on earth. That’s about how much garbage we create EVERY DAY! So garbage has negative value. That means we pay people to take it. You may do it through taxes or fees but you are paying people to take your garbage. High supply and low demand results in a low (or in this case negative) price.

Changing just supply or just demand doesn’t result in a large change in value. Think about air; the demand is really high; after all you’d die without it. But there’s so large a supply that the cost is low. Yes; cost. Air is not free anymore. Everything you buy has the cost of keeping the air clean built into it. But air is still very low cost. So, high supply and high demand results in low cost. What about low supply, low demand? Well, we probably don’t even need an example for this one. If the demand is low, a low supply won’t drive the price up. So, to sum up, things have value if a lot of people want them and there isn’t enough give everyone as much as they want.

What does all this have to do with income? As you prepare yourself for the job market you want to acquire skills and abilities that put supply and demand in your favor. That means that you want to acquire skills and abilities that are in high demand and that are in short supply. Why do engineers get paid more than fast food workers? Both technology and fast food are in high demand but a very small percentage of the population have the skills and training to design the lens system for a digital camera while virtually all of the population can say. “Do you want fries with that?” Engineers; low supply; high demand; high pay. Fast food workers; high supply; high demand; low pay.

So, what have we learned? In order to create income that maximizes both enjoyment and dollar value the goal would be to create a situation in which you can convert your play into a low supply, high demand skill package that will let you produce high income while having fun. How does one do this? How about and example?

Let’s say you have a tremendous passion for movies. If left to yourself you would watch movies all day every day. Well, you can’t get paid for watching movies so you’re out of luck, right? Wrong! Lots of people get paid to watch movies. Movie critics get paid to watch movies and write about them. Researchers hire people to watch movies and do things like count the number of violent acts. Film professors get paid to watch movies and tell students about them. Get the idea? Let’s say you decide on film critic, OK, what’s next. You’d want to develop a skill set that would enable you to thrive in the world of film critics. You’d want to practice writing film reviews. Maybe take some journalism classes. Maybe go to college and major in film and minor in journalism. Maybe write reviews for a school paper, or a neighborhood paper or start a website where you review films. You’d want to develop a style that makes people want to read your reviews more than those of other reviewers. This all may take a few years but at the end of that time the probability is high that you will be able to make a good living reviewing movies and who knows maybe someday be one of the famous ones! And while you’re getting prepared you’ll be spending most of your time doing something you really love.

A couple of words of caution; first, before investing a lot of time preparing for ANY career; spend so time job shadowing someone who already does it. During your preparation time continue to job shadow several people engaged in the career you are pursuing. There was a young man who wanted more than anything to work outdoors with animals. He decided to plan for a career with Fish and Game. He arranged to job shadow a Fish and Game officer. After the first outing he changed his mind. In fact, he saw the light in the first minute when the officer handed him a bullet-proof vest and said, “Put this on.” The young man learned that Fish and Game officers didn’t spend their time enjoying the company of the animals in the great outdoors but were much more like police that carry guns and wear Kevlar and spend most of their time dealing with people who don’t follow the rules. Imagine if this young man had not job shadowed but had gone to college and spent a great deal of time and money only to find out years later that he hated the only job he was qualified for!

The second word of caution is never give up but be flexible. There was a young lady who wanted to be a police officer. That’s all she had ever wanted. She had been on ride-alongs; she loved it! She applied to the police academy only to find she didn’t meet the height requirement. She was devastated. Someone suggested she run for sheriff, the only requirement there was 50% of the vote plus one. She did and she has been the sheriff in her county for decades.