Paradigm Shift

Throughout our lives, we make payments (expenses) for the goods and services we need and, in turn, get paid (income) for those we offer to others. Whether you are talking about people, organizations, companies, entire communities or states, the same forces are at work and I’ll be referring to them interchangeably in this article. Their collective activities generate constant flows of money, goods and services and constitute the fundamental dynamics of our economies at every level. It is part of what’s referred to in economics as the circular flow of income. The main enabler of these transactions is money and, in any particular period, we always hope to bring in more money than we pay out in order to stay solvent. Everyone works vigorously to ensure that the balance in the flow of money (cashflow) always favours them i.e. they want to have a surplus of income over expenses in any given period. But, alas, it is usually not possible to sustain such a positive cash bala...

We all end up buying or selling something at some point in our lives and the way we feel after each transaction depends on how we think we fared in the end. Sometimes we’re left scratching our heads and wondering how we got into the deal in the first place and, at other times, we may feel gleeful at what we perceive to be a great bargain or windfall depending on whether we are buying or selling. The sad truth is that all business transactions are prone to risks and it is very important to understand the nature of these risks in order to protect yourself from the frequent mishaps people often encounter. A business transaction (a trade), in its simplest form, involves a buyer and a seller and the two are involved in the exchange of value. In his book, The Science of Wealth , Amasa Walker determines that an article or service has value: “when it is an object of man's desire , and can be obtained only by man's efforts . Anything upon which these two conditions unite wil...