In the last series of Lets Talk About Money I revealed to you that money gains its power from trust and that without it money is worthless. I also elucidated that when more people begin to accept money as a mode of payment in exchange of goods, services and more, the more powerful money becomes. This is why during a crisis when governments enact policies, most people think it is to protect the currency which is true but really they are trying to ensure that you the people continue to trust in the system.
They know that once they loose your trust it would signal the collapse of them a good case being the collapse of the Communist system. Stephen Richards Covey the author of the famous book known as “7 Habits of Highly Effective People said, “Trust is the glue of life. It is the most essential ingredient in effective communication. It is the foundational principle that holds all relationship” including the relationship we have with money. Proverbs 11:13 says “Whoever spreads gossip betrays secrets, but the trustworthy person keeps a confidence.” In this series we are going to see how this concept actually manifests itself in the world today.
The Exploding Samsung Note 7
When customers went in to exchange their money (trust) for the sumsang phone they were basically telling samsung that we trust that your phone is what you say it is and will function as you say it will. This is basically the conversation when you exchange money for goods or services. The money you give in exchange for the item is an expression of your trust. So when sumsung betrayed the trust of its customers with the exploding Note 7, the result was customers withdrawing their trust in the company which was reflected in their share price dropping by 7% with over $25 Billion being wiped of their market value. The loss of trust had an effect on the value of the company. If you also notice a loss of trust also immediately resulted in a loss of money.
Sumsung noticing impending disaster recalled all those phones and were willing to repay their customers to win back their trust. To ensure continued trust in the company from loyalist and newbies the Note 8 was launched with numerous advertisements depicting how they had invested a lot of time and money on their batteries, assuring their customers that the phones were safe to use, by highlighting information they would once rather not have shared while showing images and videos of engineers working on the batteries. Zig Zigler an American author, salesman and motivational speaker said, ” If people like you they will listen to you, but if they trust you they will do business with you.”
In the definition of trust we found that trust is also a firm belief in the reliability, truth, ability, or strength in and of people and not only things or institutions. Take a look at celebrities and famous personalities. They have a huge following of people who believe in anything they do. Their large following is what makes them people of fame and value hence huge corporations pay them heftily to sponsor their products on TV or social media pages. This is because of the number of people who have put their trust in who they are and what they do. Some have gone to the extent of buying up everything that is associated with the famous personality be it clothes, electronics and more. They are willing to trust the item because they have seen their favorite famous personality posing with it. I will further go into this in another blog as there is a lot to unpack here.
So if money gets is value from trust and trust is only something that can be expressed by the human being (You and I), then of real value here is us the human beings. But why is it that people still chase after money and hold it in such high regard if the money they so revere gains its value and power from the trust they give it? This is a very good question which I’m sure most if not many of you might be asking or may not even have thought about. In my next blog series I will dive into this question and hopefully be able to full give you peace of mind on it.