How Can You Be In Economic Profit?
by: daretobefree
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Word Count: 380
According to wikipedia, economic profit is defined as “the increase in wealth that an investor has from making an investment, taking into consideration all costs associated with that investment including the opportunity cost of capital”. This is the income of the entrepreneur, the business owner.
Economic profit is a better alternative in the long run than wage system. In order to be truly financially free, get involved in the profit system. Earning a yearly salary will never make one rich or financially free. Making a profit from owning your own business whether it may be an online or brick and mortar business or even a franchise enables financial security, tax advantages and earning potentials. Online business is more preferable than most other businesses due to low overhead costs, no inventory storage, no employees to name a few advantages.
The employee in a wage system and not in economic profit gets paid hourly or salary but does not reach maximum earning potential. The more the employee climbs the ladder and advances is paid the scraps left after paying the government, Fica, state and other taxes first. An employee is hired based on skill set to assist the employer in making economic profit. The wage system is definitely not the pathway to riches and financial security even though the employer grants benefits such as health, dental, life insurance, retirement plans. As long as the company flourishes and management continues to do business ethically (unlike the Enron situation), the employee has a shot in securing a comfortable standard of living and eventual retirement security. As long as the employee has a job, money is coming in. But when the employee is no longer employed, the money stops (unless a layoff has occurred and the employee receives a severance package, but it is not a permanent solution and limited time only).
The best way to be in economic profit is to become an entrepreneur. Certainly there are risks involved. Yet life and living is a risk into itself. But a person may never truly know his or her own earning potential otherwise. Comfort and security are not common words associated with the entrepreneur, for these words are associated for the employee who risks less and never achieves their full potential.
Article Source: http://www.ArticleStreet.com/profile/daretobefree-10642.html
About the Author
Catherine Heridis is an expert author and Online Marketing Consultant. To get Free Training on how to become a successful online marketer and own your own home business, click here: http://www.networkandgrow.net?t=ecoproftartcl
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