The Laws of Profit

Many of nature’s laws have been explicitly recognized and named. Others have not, but they demand adherence just the same. I was surprised when my Internet searches came up empty for any reference to the “law of profit.” I suspect life’s dependence on profit is so obvious that it has escaped formal definition, until now.

Based on observation and simple logic, three corollary natural laws of profit are as follows:

First Law of Profit:
Survival of life requires that the sum of life-sustaining gains be at least equal to the sum of expenditures during life-sustaining activities.

Second Law of Profit:
Security of life requires a sum of gains greater than the sum of expenditures required for basic survival.

Third Law of Profit:
Advancement of life increases in direct proportion to net gains beyond the requirements of basic survival.

Wealth is money or assets available for development or investment, and is a sign of the financial strength of individuals, organizations and nations. This straightforward definition is fitting for the context of this book. Such material wealth stands as the primary means for advancements of civilizations. The human corollary to material wealth is emotional wealth of individuals. Material and emotional wealth depend on and inspire each other. And together, they confirm The Third Law of Profit.

Whether relating to individuals or companies, material wealth needs to be weighed in the broader context of net worth. Only by subtracting all liabilities from total assets can we get meaningful measures of worldly success, creditworthiness and promises of future well-being. Net worth, at any point along our material and emotional journeys through time, provides us with good measure of how far we have advanced beyond the threats of nonsurvival.