Credit Rating and Required Rate of Return: Suppose you and Warren Buffett borrow money from a bank. The bank will assess your credit ratings differently. Maybe the bank could offer Warren Buffett a loan without interest since it can be advertised as a bank used by the renowned investor. However, it will likely charge you interest because you have a lower credit rating and less fame than Warren Buffett. The interest rate each borrower faces, based on their creditworthiness, is called the required rate of return for creditors. Under the same conditions, the cost of poverty is much higher for the poor than for the rich. Poverty inherently involves costs. - Joseph’s “just my thoughts”
The number of gas stations along the road decreases as vehicle mileage increases. If you do not understand your business ecosystem and only manage it diligently, the consequences will stay with you. A gas station is a subordinate part of a car. Therefore, changes in car performance have a ripple effect on many related industries. I must constantly monitor and study the ecosystem in which I operate my business and decide how to respond when changes happen. The shift from internal combustion engines to electric vehicles also impacts gas stations. The world is changing rapidly right now. - Joseph’s “just my thoughts”