Collecting Early, Paying Late…

is the second rule of capitalism. The first is buy low, sell high.

  • Your mortgage. You collect the house first, and pay the bill later.
  • Payment terms in a company for services. You get the service, then pay the bill later.
  • Your paycheck. Your employer is the one collecting early on your labor and paying late.
  • A dinner out. You eat the meal, then pay the check.

The world is filled with people collecting early and paying later. This can be a powerful tool. It can build a business that you don’t have all the capital for up front. It can help you survive in a world where your cashflow isn’t always steady.

However, for many important things, the kind that generally don’t involve cash, we don’t get this sort of benefit. If you’re trying to become a well-known writer, you have to write first, and get the followers second. If you’re trying to get fit, you have to put in the effort and pain first and get the fitness later.

While there are many things, like a house, that can benefit from you collecting early and paying late, don’t get trapped in a cycle of it. Some things are too good to be true, and the best things don’t happen this way at all.