Once upon a time there was this quaint little village.
It was a great place to live except for one problem.
The village had no water unless it rained.
To solve this problem once and for all, the village
elders decided to put out to bid the contract to have
water delivered to the village on a daily basis.
Two people volunteered to take on the task and the
elders awarded the contract to both of them. They felt
that a little competition would keep prices low and
ensure a backup supply of water.
Self-employed thinking
The first of the two people, Ed, immediately ran out,
bought two galvanized steel buckets and began running
back and forth along the trail to the lake which was a
mile away.
He immediately began making money as he labored
morning to dusk hauling water from the lake with his
two buckets. He would empty them into the large
concrete holding tank the village had built.
Each morning he had to get up before the rest of the
village awoke to make sure there was enough water for
the village when it wanted it. It was hard work, but
he was very happy to be making money and for having
one of the two exclusive contracts for this business.
Business owner thinking
The second winning contractor, Bill, disappeared for a
while. He was not seen for months, which made Ed very
happy since he had no competition. Ed was making all
the money.
Instead of buying two buckets to compete with Ed, Bill
had written a business plan, created a corporation,
found four investors, employed a president to do the
work, and returned six months later with a
construction crew.
Within a year his team had built a large volume
stainless steel pipeline, which connected the village
to the lake.
At the grand opening celebration, Bill announced that
his water was cleaner than Ed's water. Bill knew that
there had been complaints about dirt in Ed's water.
Bill also announced that he could supply the village
with water 24 hours a day, seven days a week. Ed could
only deliver water on the weekdays. He did not work on
weekends.
Then Bill announced that he would charge 75% less than
Ed did for this higher quality and more reliable
source of water. The village cheered and ran
immediately for the faucet at the end of Bill's
pipeline.
In order to compete, Ed immediately lowered his rates
by 75%, bought two more buckets, added covers to his
buckets, and began hauling four buckets each trip. In
order to provide better service, he hired his two sons
to give him a hand for the night shift and on
weekends.
When his boys went off to college, he said to them,
"Hurry back because someday this business will belong
to you." For some reason, after college, his two sons
never returned. Eventually Ed had employees and union
problems. The union was demanding higher wages, better
benefits, and wanted its members to only haul one
bucket at a time.
Bill, on the other hand, realized that if this village
needed water, then other villages must need water too.
He rewrote his business plan and went off to sell his
high speed, high volume, and low cost, clean water
delivery system to villages throughout the world.
He only makes a penny per bucket of water delivered,
but he delivers billions of buckets of water, and all
that money pours into his bank account. Bill had
developed a pipeline to deliver money to himself as
well as water to the villages.
Bill lived happily ever after, and Ed worked hard for
the rest of his life and had financial problems
forever after. The end.
That story about Bill and Ed has guided me for years.
It has assisted me in my life's decision-making
process. I often ask myself, "Am I building a pipeline
or hauling buckets?" Am I working hard or am I working
smart?"
And the answers to those questions have made me
financially free. (Roberrt Kiyosaki)
