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The Economics of Trust

Wednesday, October 28th, 2009

In our world today, the trading system is based mainly on fiat money. Fiat money means that the currencies in dollar notes are declared to be legal tender by governments. For example a Singapore ten dollar note means that the Singapore government accepts a $10 payment for goods and services within Singapore. This same $10 bill can also be used to pay off $10 worth of debt incurred in Singapore. Therefore all the dollar bills of the respective countries are always imprinted with the country stamp as a watermark. This watermark serves as a form of trust that a dollar bill is legal tender by that country. This is the reason why when the exact same dollar bill that does not have the watermark is considered to be counterfeit.

During the period of barter trading, when a person decides to trade his wheat for another person’s meat, the wheat trader trusts that he will get the meat that he wants. The issue of trust is even more relevant for fiat money. People only use money to invest or buy something provided that they trust the product or service to a certain degree. Why there is a trust is really because there is a provision of value.

The currency that we use is worth a value because the government of that country will honor its value of use. When the Japanese left Singapore after World War 2, the banana notes in circulation became worthless because the Japanese will not honor the banana notes’ value of use for trade in Singapore. When a company does not pay up its debts on time, it is an act of distrust. When debts accumulate, the company will eventually go bankrupt. It is similar in other circumstances as well. When the employee embezzles, he will be terminated immediately even though that employee may be a talented person who is capable of generating huge sales for the company. Without trust, money created and earned will soon be destroyed.

The currency that we use is worth a value because the government of that country will honor its value of use. When the Japanese left Singapore after World War 2, the banana notes in circulation became worthless because the Japanese will not honor the banana notes’ value of use for trade in Singapore. When a company does not pay up its debts on time, it is an act of distrust. When debts accumulate, the company will eventually go bankrupt. It is similar in other circumstances as well. When the employee embezzles, he will be terminated immediately even though that employee may be a talented person who is capable of generating huge sales for the company. Without trust, money created and earned will soon be destroyed.

Five Online Business Tips

Friday, August 7th, 2009

With the number of websites and blogs online numbering in the billions it only stands to reason that you will never stay in business unless you do things as good or better than your competition. You have to treat what you are doing as a business. This article will give you five online business tips that if you follow will help you make money and be in business for the long term.

1. Coach John Wooden was quoted as saying “do not mistake activity for achievement”. This sums up the way people play at internet marketing. Goofing around online today is not running an online business. To be effective you first have to accept responsibility for what you do everyday. If you are not doing things to promote and move your business forward you are just wasting your time.

2. Set meaningful goals and work towards them. You should be able to sit down and read your long term, intermediate, and short term goals. If you have not written them down you are not serious about hitting them. Along with this is creating a daily log of things you need to get down. Spending a few minutes at the end of the day writing down what you want to accomplish tomorrow will go a long way in helping you become successful.

3.Do some basic accounting in your business. Accounting 101 states the income minus expenses equals profits. Many online business owners make the mistake of thinking since they work at home they have no overhead. Of course this isn’t true. Certainly operating a business from home offers some benefits in terms of keeping your costs down. But you still will have expenses. Hosting, domain names, some advertising, product development, autoresponders, outsourcing, and other things can come into play.

4. Most successful internet marketers will tell you the fortune is in the follow-up. You can sell a product one time and be done or you can build a list of your customers and work to sell back end products. A good customer is worth a small fortune to you if you treat them right. Plus it costs less to make a second sale than it did to make the first one. Understanding this basic premise is what separates the successful from the failures. This tip alone can keep you in business for years and years. Build a list and treat your customers and prospects right and they will stay with you.

5. Lastly it is important that you spend as much time as possible in your business working at what you are good at or like the most. If you like to build web pages do as much of that as you can. This might mean that developing fresh content is not your favorite thing to do. You could hire an article writer to do that for you. Maybe you really enjoy interacting with other internet marketers and you hang out in discussion forums all day. That could be great for your business if you hire a website builder to keep your site active and fresh.

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