Reclaiming Consumer Sovereignty (part two)

Sep 25, 2011 by

Sovereignty, whether it is in politics or economics begins with the power to make choices and then being vigilant, protecting our right to that power. The first step is know the difference between needs and wants. The basics of survival are needs; food, shelter, and clothing. Everything else is a want. These wants usually end up wasting resources, income, and productivity. Try making decisions to fulfill your needs instead of your wants and you will probably be less stressed and content. Wants are not bad if you can afford them, after taking care of your responsibilities. Wants also supersede the other important financial responsibility, to save for a crisis or retirement. A reasonable student of mine once expressed this by saying “don’t forget to pay yourself“.

When people save, money becomes available for loans that are used for enlarging manufacturing capabilities, the workforce and inventory which creates economic growth. Savings turns into loans made by the depository institution or banks. Loans are paid back to the lender so there is a strong motivation for the business making the loan to invest those monies in growing their business, thus making more income and profit to pay back the loans. The saver also receives a portion of the interest gained from the lenders loan. That creates greater consumer sovereignty than simply spending. When you spend there is no incentive for the profit to be used to reinvest and expand, therefore profit will turn into a new yacht instead of more jobs.

To maintain power in the financial world it is paramount to transact business directly with the business proprietor. When you deal with the owner of a business there is a relationship that builds, a connection, bond, and trust that develops. A faceless entity, for example a corporation, is not a good foundation for a business relationship. People that work for the corporation do not suffer for a bad business relationship on a personal and financial scale as do those we transact with personally. If you rightfully have a complaint the owner of a business will take it more seriously because they also have bills to pay. It is in their self-interest. They accept all the risk and earn their profit by selling a good product and providing customer service. Keeping our dealings, whether in government or economics, close to home will always result in a more responsive and satisfactory outcome.

Debt is a costly venture. The percentage rate of interest and the length of the term will always be to the advantage of the bank. Paying off your debts as quickly as possible will help reclaim sovereignty and relieve stress. If you owe a debt are you truly in control of your finances? When you owe a debt does some other person have power over you? Debt free is not possible in all situations but the lessoning or eliminating of those burdens gives you power, the power to make more choices.

Sovereignty means control over your life, and the ability to have choices. Financial life can have an infinite amount of choices, but only if we make reasonable economic decisions. As always it is up to us to self-govern and be fiscally responsible. Remain vigilant!

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