The author emphasizes how a
good business relationship can last for a long time – sometimes through
generations. We learn that by being a banker, you are putting your reputation
on the line. However, bankers who have a physical branch have the advantage of
making these personal relationships. Thus, even if they don’t have the best
interest rates, they do have the trust of their customers. The author also
discusses the venture capital model. He describes how money is being invested
in the people just as much as the idea. I agree with this, and I believe
personal connections and trust are by far the most important aspect in
business.
Chapter 2 discusses the personal connection
people can make through finance. The
author believes that the recent market crash could have been prevented if we
had an economic model where people could have had a deep, personal connection
between each other. For
instance, he mentions that many years ago, it was the norm that bank clients
had a very strong relationship with their bankers - the bankers would know
everything about their clients, and their families as well. To support his claim, the author talks
about the CSA – Community Supported Agriculture. The CSA is an existing economic model in the
United States. Here, the
farmer partners together with his community. The community becomes shareholders of
his farm, and the proceeds are shared between the farmer and the community. In essence, the community works
closely together with the farmer to make sure that the farm will be profitable,
thereby creating a strong relationship with the farmer. According to the author, this model
works very well, and he emphasizes that there is no doubt that a strong,
personal relationship among people will be beneficial.
The author seems to make connections between the economy and emotions in this section of the book. A tighter community creates relationships and trust, which allows people to care for each other and therefore care about each others money and hard earnings.
ReplyDeleteIt is interesting to see that if we had a tighter relationship with our communities and the people in them, we could have potentially prevented so much harm to our economy.
ReplyDeleteThis chapter is great for showing how collaboration and cooperation is essential for businesses to thrive in the communities they exist in. If more people were less greedy with their business practices, then we could open a new era of success for mankind.
ReplyDeleteI completely understand how the relationship between our communities and people is an key step in having great collaboration and cooperation in the business world. Good work.
ReplyDeletePersonal connections within the finance world are definitely becoming less important. The stock market for example completely disconnects two parties when shares are exchanged. Even the exchange of real estate is becoming less personal as the internet becomes a major avenue to find and purchase property.
ReplyDeleteIf things were to be looked at from a macro perspective, it could be argued that personal connections are slowly starting to disappear in finance and in many other industries that society takes for granted. We're living in a world where greed dominates any type of personal relationship that could be forged between two genuinely good humans. I found the CSA approach very interesting and seems like highly effective in the building of relationships that last for a long time.
ReplyDeleteThe quote that stood out to me: "The author believes that the recent market crash could have been prevented if we had an economic model where people could have had a deep, personal connection between each other." That's an interesting opinion on preventing a disaster.
ReplyDeleteI like your example about banks. I feel this is very true too personal connection is always the most important thing when doing business
ReplyDeleteThe author has a great example of an ideal win-win situation. However, one problem is that we live in a corrupt society where personal relationship is sometimes mistreated for one party's sole benefit.
ReplyDeleteI like your viewpoint that personal connections and trust are by far the most important aspect in business. good job!
ReplyDelete