Summer Blogoff Entry ~ Financial Collaboration of Stoneage Man
The Summer Finance Blogoff 2012
Financial Collaboration of Stoneage Man
Since the dawn of humanity when our ancestors lived in caves, mankind has always thrived when it has cooperated and collaborated with each other. Do you really think that Stoneage man tackled mammoths on his own? Of course not. He will have recruited the help of his whole tribe so that between them they would all succeed and eat for the next few weeks.
As mankind progressed it found that it always did better when it collaborated, shared ideas, knowledge and manpower. From this, the markets were born and the natural propensity to help one another developed out of a need to fulfil our own ends (Adam Smith). There is nothing wrong with this selfish intent as it works, resulting in a fully functioning free-market economy.
However, it occurs to me that we are not totally utilising those around us for our mutual gain. There are many economic benefits to be gained through collaboration with others, especially when it comes to personal finances. It seems odd to me that people aren’t trying to utilise these methods, particularly since times are tough at the moment. Ideas of collaboration that spring to mind are as follows:
- Some savings accounts and funds require a certain level of minimum investment. If you find a great investment, paying a decent return but you don’t have the full amount to meet the minimum requirements, why not split the investment with a close friend. You can share the rewards after.
- Business ventures are another idea. Investing in a friend and his business or starting a business together is something that in my opinion is not done enough. People should be more willing to give things a go. You don’t know if you’re the next business mogul or investing pro until you give it a go.
- Borrowing off a friend may give you a better rate of interest than a personal loan from a bank. Furthermore, your friend may be earning a better rate from you rather than had he put his money into the bank.
- Instead of trying to save up for your first/ next property why not pair up with a friend and fund the deposit in half the time. If you’re young this is a good way to get on the property ladder rather than both of you trying to save up for houses. If you’re older and are looking for investment properties this is surely a quicker way to achieve your goals?
- Sharing a car could save you a small fortune in the cost of a car, insurance, petrol, repair and maintenance. Likewise for other expensive items.
As you can see, there is loads of scope for people to cooperate with each other on a financial level and reap large rewards. So what’s stopping people doing this?
Some may criticize this idea and argue that there will always be lack of trust preventing this sort of collaboration. It is very clear that in all 5 scenarios a large amount of trust is required between yourself and your friend. I would be very careful about who you choose to collaborate with. You might even think about writing up a contract for the transaction, especially since so much money is involved.
Nevertheless, I hope that you can all see that we can learn from Stoneage man. A bit of collaboration can go a long way. The rewards could potentially be in the tens or even hundreds of thousands.
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