From Poor Dad, Rich Dad, by Robert Kiyosaki
Once upon a time there was this little village. It was a great place to live except for one problem. The village had no water unless it rained. To solve this problem once and for all, the village elders decided to put out to bid the contract to have water delivered to the village on a daily basis.
Two people volunteered to take on the task, and the elders gave the contract to both of them. They felt that a little competition would keep prices low and ensure a back-up supply of water.
Each morning, he had to get up before the rest of the village awoke to make sure there was enough water for the village. It was hard work, but he was very happy to be making money and for having one of the two exclusive contracts for this business.
The second winning contractor, Bill, disappeared for a while. He was not seen for months, which made Ed very happy since he had no competition. Ed was making all the money. But: Instead of buying two buckets to compete with Ed, Bill had written a business plan, created a corporation, found four investors, employed a president to do the work and returned six months later with a construction crew.
Within a year, his team had built a large volume stainless steel pipeline which connected the village to the lake. At the grand opening celebration, Bill announced that his water was cleaner than Ed’s water.
Bill knew that there had been complaints about dirt in Ed’s water. Bill also announced that he could supply the village with water 24 hours a day, 7 days a week. Ed could only deliver water on the weekdays. He did not work on weekends.
Then Bill announced that he would charge 75% less than Ed did for this higher quality and more reliable source of water. The village cheered and ran immediately for the faucet at the end of Bill’s pipeline.
When his boys went off to college, he said to them, “Hurry back because someday this business will belong to you.” For some reason, after college, his two sons never returned. Eventually, Ed had employees and union problems. The union was demanding higher wages, better benefits, and wanted its members to only haul one bucket at a time.
He only makes a penny per bucket of water delivered, but he delivers billions of buckets of water, and all that money pours into his bank account. Bill had developed a pipeline to deliver money to himself as well as water to the villages.
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Today, I want us to keep in mind to build a nice shinny pipeline and not plan to haul water buckets. – It may take longer, but will pay out in the long run.