Wealth Is Not a Zero-Sum Game

A lot of my family’s financial growth has come as a result of real estate investing, and a lot of the hate has been directed toward this part of my overall portfolio. The ethics of real estate investing are debatable, but today I want to address the overall concept of wealth.

Wealthy people are often painted as evil or undeserving of their wealth. This is certainly true for some wealthy people, but certainly not all of them.   I believe the origin of this hate stems from one basic misunderstanding: Many people are under the mistaken assumption that wealth is a zero-sum game.

Zero-Sum Games

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A “zero-sum game” is the geekified, formal term used in game theory for contests like this, where the winner’s gain is equivalent to the loser’s loss. We can explain this economic theory with a simple example: – John has 10 apples and is in a room with Sandy. – For Sandy to walk out of the room with 7 apples, they have to be taken from John.

When it comes to general wealth, the simple way to perceive this is to think: since that girl is rich, her success is coming at my expense. You can see how this thinking might create a lot of hostility, especially in a society where social media encourages people to show off their success like never before.

Wealth is Not a Zero-Sum Game

But here’s the truth about business and wealth that belies this simplistic way of thinking: Business is magic. It has the power to create money and wealth out of thin air.

Quite literally in hunter-gatherer societies, you ate what you killed that day. If you didn’t kill a deer, you might go hungry. Your gain was that deer’s loss.

The Magic of Business

But as soon as human civilization got to a point where people were trading goods or working with or for each other, we gained the magical ability to defy the laws of physics. Through effort and intelligence, people could all of a sudden create situations where value could be created out of thin air.

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