These 10 laws of money were penned down by me in the starting stages of my career. They came as a product of my analysis of the practical experiences that I had as a founder and CEO of an advertising agency. Today, when I reflect back after having gained years of knowledge and exposure, I still find these laws to be very profound, capturing the deeper connection between value, expertise, trust, scale, and financial outcomes.
1. Time value of money not same for everyone. A labour working 8 hours a day will not earn as much as a junior designer. A Junior Designer working 8 hours a day will not earn the same as a CEO.
2. Value of money is differentiated by the expertise/ knowledge/ competency of the person. The more superior knowledge a person has, the more he would be able to charge. For example, a doctor charging his hourly consultancy fee can be way high, just because of his knowledge and expertise in the field.
3. Brand value matters a lot. People pay 10 times or even higher amounts for a same product that costs way less, just for the brand value. Example is the iPhone. Phones with equal technology are available at way lesser prices, but still iPhone is the leading smart phone seller in the world.
4. Trust is important. People tend to pay more just for the trust that they might have in a particular person/ service/ brand or product.
5. Demand & Supply influences the value of money at different times. A situation in which a particular company is in need of a service and is unable to find suitable service provider, would lead to the company investing higher amount to the company that can provide the desired services. (Many people tend to take advantage of this situation. They exploit people in need and people who are stranded.) The same might not be the case, in case the demand is not there or the supply is very high.
6. Paying capacity just influences the final purchase and not the make or buy decision. A super rich person may not want to spend even a small amount on the thing he might not like, where as a person of a low income may decide to buy a super luxury good that he cannot afford. This could result in he making a provision for it and buying in the future or taking loan/ emi and buy it.
7. The value of money is different for different people. It varies according to their net worth and standard of living. Rs. 100 holds a lot of value for a poor person, where as it is peanuts for a wealthy guy. For this wealthy guy Rs. 1,000 could be of a lot of value, which might not be the case for a person wealthier than him and so on.
8. Level of business and Scale of operations matter a lot. An F1 driver earns way more than a go cart driver. This is because the scale of F1 and its reach is not comparable with that of Go Cart.
9. Either you work for money or make the money work for you.
10. Social Status matters. People in the high society buy/ do things for making a social statement. For example, people owning specific phones/ cars to influence their social stature or HNIs giving a sponsorship after being influenced by the fame and glitters of other sponsors giving money.
