Our Roles in the Economy

Each of us has three primary roles in the economy.

1. We are employees or owners. We either own a business or work for someone else to produce the income necessary to support our needs and wants.
2. We are consumers. We purchase the things we need and want from others. Many years ago, human beings were hunter gatherers. Simply put, we met our needs by hunting and gathering the things we needed for our survival. Today, we consume to survive.
3. We are investors. We are taught to save for a day when we will no longer be able to work or, if we are lucky, for a time when we wish to retire. We can't simply put the money in our mattress and hope to live on it. We must invest our money so we can achieve financial independence.

Of the three roles, we will be consumers the longest. From our first diaper as a baby to our last meal, we are consumers for life. We consume every day; even when we’re on vacation.

At some point in our late teens or early 20s, we enter the workforce and become full time employees. We will likely spend forty to sixty years in this role.

Similar to our role as a consumer, we will be investors for most of our lives but that typically doesn’t start until our 20s or later.

Our roles are often opposed to each other. As a consumer we want low prices. But as an employee we want high pay and as an investor, we want the best return on our investment. As a consumer, we like the idea that the "customer is always right." But as an employee of a company, we feel there has to be a happy medium between being treated unfairly by a customer and being able to share our feelings about the exchange. At Equanomics, we will focus on finding the best balance among our roles. The goal is always to take the path that creates the greatest quality of life.

As previously stated, we will always be consumers. That means we either need to be working or investing to support our role as a consumer. We all understand the concept of being an employee or an owner but what do we know about being an investor? Unless we invest professionally, it doesn’t take up the amount of time that it does to be an employee or consumer. Because investing is typically thought of as something we are doing for the future, it is often put off until a later date. We are not taught the concepts of investing when we are in school. As a result, most people have only the most basic understanding of the topic, if they understand it at all. Couple this with the fact that roughly three-quarters of Americans are living paycheck-to-paycheck, with little or no emergency savings and it will be clear why investing is not a top priority. That leaves most of us with a glaring problem. Of the three roles you play in the economy, your success as an investor will have the greatest impact on your life.