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The Tootsie Roll Strategy


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I read a fascinating article by an economist.

It was about how he watched his kids and their friends after they'd been trick or treating.

There were about seven or eight of them.

They'd just finished, and had chosen his house for the after party.

Meaning they were going to dump out all their candy, count their loot, and make whatever trades they wanted.

So they started trading the candy they HAD for the candy they wanted.

But then something interesting happened.

Without being told, these kids started using an intermediary "placeholder."

They traded something they had for this intermediary placeholder.

Then they would use this intermediary placeholder to trade for what they wanted.

The intermediary placeholder they were using were Tootsie Rolls.

The reason we humans use intermediary placeholders is something economists call the "coincidence of wants."

If have something, and you want something else, this CAN present a problem.

You have to find somebody that not only HAS what you want, but also WANTS what you have.

Like if you were a kid on playground with a bag of chips.

You'd have to wander around until you found something some other kid had, that you wanted MORE than the chips.

But it would also require that whatever they had, they would want YOUR chips more.

You might find another kid with a bag of cookies.

And if you wanted the cookies more than the chips, you'd offer a trade.

But the other kid would ONLY trade if he wanted the chips MORE than the cookies.

Any time you have a bunch of people, a bunch of stuff (or the skills people have) you'll run into this problem.

The "coincidence of wants" problem.

But as this economist watched these kids, it seems that we humans have an INSTINCTIVE way of deciding what kind of "thing" is acceptable to be used as this intermediary placeholder.

The little kids used Tootsie Rolls.

Nobody needed to tell them to.

They didn't even need to talk about it.

They just sort of started using them.

Of course, there is another, more common word for this "intermediary placeholder."


Or currency.

And if you hopped into your time machine, and went back to ANY society in the past, or ANY society in the future, you would find different forms of currency.

Once you have enough people with enough skills, and some form of currency, then economic activity will EXPLODE.

Everything you need to MAXIMIZE how much money you make is already in your brain.

Since they are very essential human instincts.

All you need to do is figure out to calibrate these instincts to MAXIMIZE your income.

Get Started:


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