Two types of money.

Did you know that there are two types of money?   One person, in answer to this question ventured, "good and bad?"   Another person answered, "cash and credit".  Getting closer.....   

A very wise gentleman asked me this question early in my business career.   I looked for a fancy theoretical answer that would show off my knowledge (I had none).   The answer he gave me to the question of two kinds of money was this: "the kind of money where you work all week long and then you go collect your check, and the kind of money that gets mailed to you."   The next natural question he asked me was, "which kind do you want?"   Naturally I wanted the kind of money that gets mailed to me.  That gentleman and I eventually became business partners and he would share SO much knowledge and philosophy with me that I will be happy to share with you.

So now that we know there are two types of money and we know which type we want let's see how it applies to minority communities.  We have already cited the statistic that Blacks represent about 12% of the nation's population and control less than 1% of the nation's wealth.  Clearly Black folks are not benefiting from the theory that money can be mailed to them.   Or, the kind of money that is being mailed to them represents dependence and not independence.

Here are some obstacles my partner Majic and I have identified within economically  disenfranchised communities.   There are many businesses that people run that do get the owners a certain level of success.   In many of these cases the owner prides him/herself that they are stacking cash and keeping a lot of their business success under the radar of the tax man or a ticked off ex-spouse.  They are running cash businesses and squirreling money off the books.

What is the problem with this?   When a business like this wants to grow they have an impossible task in convincing a prospective investor or lender that their business is in fact profitable.  They have done such a good job of running their business off the books that they can't demonstrate their success.

The first question a business owner like this would ask me is, "why would I want to pay taxes, unemployment insurance, FICA tax, etc."  In order to understand the answer to this question and in order to get the type of money that gets mailed to you, you will have to understand the concept of "leverage".   In the next blog we will talk about leverage and how it can help you become a business leader and not just one of the crowd.


The author, Philip Stephano, is owner of PrimalTweet a social media marketing company in Bucks County,  PA.  He is passionate about helping local and regional business around the country to use social media as an effective tool to find local prospects and customers. To learn more about Stephano go to http://about.me/philipstephano