Producers vs Consumers: How Each Spends Money

Successful people think and act different than most people. Successful people typically become successful by being producers, whereas most people spend most of their time as consumers.  The differences between producers and consumers extend to several areas, but one in particular is how each spends their money.  What is the main difference between producers vs consumers and their view on spending money?

The difference can ultimately shift the scales between success and failure in your business.  This article shows you the difference so you can be aware of your own habits and mindset on spending money.

It’s a Spectrum

There is no doubt that “producer vs consumer” is a spectrum, not an either-or, and we’re all in the middle somewhere at various points in our lives.  We are all some shade of purple.

At certain points in our lives we lean more towards being a consumer, and other times we lean more towards being a producer. And that’s OK, but you must recognize where you are so that you can make adjustments if needed.  I’ve shared previous thoughts on being a producer vs a consumer before, and the reality is that successful people spend most of their time on the producer side of the spectrum.

The remainder of this article will help you determine where you are, and therefore, how to make some changes, if necessary.

How Consumers Spend Money

Here’s are some diesireable spend targets for consumers:

1. Distractions: This normally means entertainment of some form. You spend money to forget about your situation, or at least take a mini vacation from that situation.  Gadgets and technology, entertainment services, the most comprehensive TV packages, frivolous shopping, gambling, drugs and alcohol, etc…These are very effective distraction tools, and consumers flock to them.
2. Consumable Fads: These are products and services that attempt to provide “quick-fix” feelings or solutions. Fat-burner pills, drugs and alcohol again, get-rich-quick schemes…These are all consumable products and services that are meant to make the consumer THINK that their problems will be solved with little to no effort.
3. Image: Spending money on things they THINK projects a certain image.  Here’s the reality… the purpose behind that projection is really just their own discontent.  Why project an image?  Because maybe if you can get somebody to believe it, then it must be true.

Consumers also tend to have a skewed vision of the concept of VALUE.  What has value to a consumer?  Essentially something that meets the criteria above.  The problem is that these items actually only have VALUE to the SELLER, NOT the BUYER.

How Producers Spend Money

Producers desire to spend money on really just one thing…and that one thing is INVESTMENT.  Producers also understand that investment normally takes time.  They do not buy into “quick-fix” items.  The return usually requires patience.

Here are the types of investment that producers use to reach their goals:

1. Financial Investment:  This is spending money specifically to make money.  The purchase of stocks, bonds, real estate, or an investment into a business.  The purpose of this spending is financial return.
2. Self Investment: There are 2 main categories here:
   • Personal and Professional Development: Books, classes, seminars, courses, personal coaching/mentoring…anything that can help them acquire the skills they need to achieve their goals.
   • Health: Producers realize that their personal HEALTH is an INVESTMENT, NOT a COST.  Producers generally invest in their health in the following ways:
     • Better quality food and/or nutritional supplementation: Better input equals better output.
     • Exercise: The gym membership, of course, but it also could mean the proper equipment such as running shoes or a bike (gotta have a bike to be a cyclist).
3. Investment in others:  Producers see value in investing in others.  Sometimes that investment is not intended to produce a financial gain, but simply a relationship gain, or a social gain, or a time gain, or a quality gain.  As they invest in themselves, they invest in others.  Here are some ways:
   • Philanthropy: Giving to organizations and people in which they see value. This is distinct from financial investment in that there is no expected financial return on investment.
   • Service: This includes paying for service from people who can do it better than they can, or will save them valuable time.  The expected return is time or quality.  Producers understand that success requires a great team, even for a sole proprietorship.  It also includes rewarding those that give them good service.

You may be saying, “Now, wait a minute…Are you trying to tell me that producers don’t have fancy cars, and beach houses, and the finer things?

And are you trying to tell me that producers don’t have drug habits and overspend frivolously?”

Of course not.

It’s not as if producers never purchase luxuries, or distractions, or spend on something frivolous, or even get themselves into trouble.  We’re talking about the bulk of the money that is spent when they are in “producer mode”.  That’s an important distinction.

More Blue than Red

And one quick aside about when you are consumer mode…The key to sustainability is to be a consumer WITHIN your means.  We all have different means, so you can’t compare yourself to others.  That’s one of the huge problems that we all have (myself included).  It’s so hard, yet so critical.

Resource utilization is a key skill to be successful.  Money is simply one of your resources, like time and people and raw materials.  It’s likely that if you want to accomplish the vision for your life, you’re going to want to spend most of your time on the producer side of the spectrum…More blue than red!