‘Capital’ means ‘Principal.’ What does ‘Principal’ mean in business? The ultimate goal of any business is to create wealth. Wealth serves as the foundation for creating value, and that value must be generated solely through production. To produce, the cost must be invested first; the source of that cost is referred to as ‘Principal.’ In other words, the result of a transaction through trading is ‘revenues,’ and if costs and expenses are subtracted from sales, what remains is ‘profit.’ If costs and expenses exceed revenues, it results in a losing trade; if they are lower, it results in a profitable trade. Therefore, principal serves as the benchmark for profitability; in other words, it is referred to as capital. Whether a business is good or bad is determined by its profitability. If the principal is insufficient, borrowing capital becomes necessary, which is termed “debt.” Just as the number of principals capable of producing tankers differs from those that can create bicycles, the si...
To prevent the boat from overturning when a large wave approaches, the bow should face the front of the wave. If you confront a big wave from the side, there is a high probability that the boat will capsize. Navigating life’s crises is akin to a ship facing the waves. One should confront them rather than dodge or avoid. Of course, even the ship’s direction is ineffective when dealing with waves that are too large.
- Joseph’s “just my thoughts”
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