The Multiplier Effect

Posted Nov 28, 2022 at 12:06

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In economics there is a term called the multiplier effect. It describes the journey money has when it is spent and how far reaching its influence goes. 

For example, you get paid £1000 for work. You spend £400 on a new garden shed from Bob’s sheds. Bob uses part of this £400 to do a weekly food shop and spends £200 on his car. Both the mechanics and the supermarket use the money to pay their staff's wages, who then go and spend the money on *insert good/service* and the cycle repeats. After a while, that £1000 has helped hundreds of people/businesses to pay for items/services totaling tens of thousands of pounds in value, way more than the initial £1000 earned.

This is a great example of how actions can have consequences far beyond the original act. 

It doesn’t just work with money either. You may have heard of the butterfly effect before, which is a similar concept. One act that happens today can have a hugely significant impact on something tomorrow, next week or next year even. 

So let’s replace the £1000 instead with a smile to someone in your local store, or towards a family member. (it doesn’t have to be a smile but you get the gist, something positive). That one gesture can spark the change ever so slightly in that person’s mood. That in turn will make that person's next interaction more likely to be positive as well, and so on and so on. Now let’s flip it. Imagine how that goes when you are negative towards them instead. It’s going to make their mood and potentially their next interaction more negative also… and so on and so on. 

How you act in your everyday life matters much more than you realise. So if you do feel like you’re more on the negative side, or even just neutral, ask yourself why and then ask how can I change that. You might find it easy, you might find that you need help with it but in the end you will be a healthier individual for it.

The effect may be miniscule or it may change someone’s entire life path. Either way the large scale potential is there, so do something good with it. Put yourself on the right path and allow that road to be opened up for the people around you.

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