by Frederick Mann
(Excerpt from WealthBooster Magazine -- Issue #90 -- July 8, 2002)
If you look back over your life, you may find that you took some actions that paid off big time, you did some things that were very beneficial to you -- high pay-off actions!
You most likely also did some things that had a major negative impact on your life, things that were harmful to you, things that damaged you a great deal -- major negative pay-off actions! Or, Big Mistakes!
In between there were probably decisions and actions that didn't make much difference -- neutral or zero pay-off actions -- largely or completely a waste of time!
Then you probably also did things that caused minor improvements -- small pay-off actions.
And there were probably actions you took that resulted in minor damage -- low negative pay-off actions -- small mistakes.
So, you can evaluate your past actions in terms of relative pay-off on a scale or continuum, ranging from major negative pay-off actions at the bottom to high pay-off actions at the top.
It may be worthwhile and enlightening to make a list of all your past decisions and actions that had a major impact -- for better or worse -- on your life.
(Talking about "for better or worse," I read somewhere about a poll saying that 80% of women felt they were happier before they got married, compared to afterward. Does this show that marriage is a negative pay-off action for 80% of women? And what about having children?)
It may be very worthwhile to think about what you're going to do next in terms of potential pay-off?
What is the maximum benefit I can get if I do such and such? How likely am I to get this benefit? How can I improve what I plan to do in order to increase the maximum benefit and/or raise the probability that I will get the benefit?
What is the maximum damage I may suffer if I do such and such? What is is the worst-case scenario? What is the risk of loss? How can I protect myself against loss?
It's very important to realize that certain actions that produced high pay-offs under particular circumstances may produce negative payoffs in other situations. For example, a temper tantrum may be a high pay-off action for a baby to get what it wants. The same may not always apply to a grown-up.
It's also very important to realize that we live in a world where difficult-to-predict bad things can happen: earthquakes, fires, floods, depressions, currency collapses, etc. Actions (or non-actions) that ignore such risks may result in major negative pay-offs.
Time is an important consideration. Some actions may have a high short-term pay-off, but cause disastrous long-term damage. The food that gives you pleasure today, may kill you in ten years! See #TL09: How To Achieve Superhealth
Similarly, some actions that have short-term negative pay-offs, may bring about enormous long-term pay-offs. Eating less and suffering from unsatisfied hunger pangs, may result in short-term discomfort, But a longer, healthier life.
Yet another very important thing to realize is that we live in a world populated by some people who become very good at doing things which are high pay-off actions for themselves, but negative pay-off actions for their victims. Some of these people are very good at showing their good side and hiding their bad side. See #TL15A: The Good and the Bad.
Trusting the wrong people can be expensive!
To become more successful, choose (moral) high pay-off actions and follow through with them!
by Frederick Mann
[DTF Note: The following story was about an actual scam "e-currency" named "OSGold" and the related ponzi-scam named "OSOpps", which collapsed in 2002 - shortly before this article was written.]
Suppose I create an e-currency called TrueGold. I launch an online system that enables customers to buy and sell, and to transfer and store quantities of TrueGold.
People pay me US$s, e-gold, etc. and in return I give them TrueGold. If they want to exchange their TrueGold back into US$s, e-gold, etc., I facilitate the exchanges.
Suppose I also start a high-yield program called TrueOpps that pays "investors" 40% per month. It's very easy for me to generate these returns because I can create all the TrueGold I wish (out of thin air) to pay whatever returns I like.
Month after month, the system works better and better. Everyone is happy. Customers love using TrueGold for their transactions. "Investors" love the consistent 40% a month returns. Everyone is getting high pay-offs.
The reputations of TrueGold and TrueOpps improve day by day. People from all over the world pour US$s, e-gold, etc. into TrueGold and TrueOpps.
Eventually, I've built up a "little fortune" of about $20 million from TrueGold and TrueOpps. Because the TrueGold to pay the 40% TrueOpps returns is "created" out of thin air (called "inflating the currency"), there's now $40 million equivalent of TrueGold in customer accounts.
Every week I watch the numbers:
(1) How much US$s, e-gold, etc. is coming in to purchase new TrueGold.
(2) How much US$s, e-gold, etc. is going out to redeem TrueGold (customers converting their TrueGold into US$s, e-gold, etc.)
(1) can be regarded as a gain or positive pay-off for me; (2), as a loss or negative pay-off for me.
As long as (1) is higher than (2) I'm happy. But if (2) starts to exceed (1) more and more often, I'm not so happy. Because it shrinks my "little fortune" of about $20 million.
Then suddenly one day, I stop (2) -- I stop redeeming TrueGold. Many TrueGold customers demand US$s, e-gold, etc. in return for the thousands in TrueGold they've "earned."
I have a problem. If I resume (2), it will just eat up my "little fortune" of about $20 million. If I try to satisfy all the redemption demands, my "little fortune" of about $20 million will be eaten up completely and I'll be left with nothing for all my "good work."
So what do I do? What high pay-off actions are available to me?
[Of course the OSGold/OSOpps operators had already decided their next action, prior to starting their scam.]
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