Lesson 3 A Balanced Life
Extended Reading
The Tulip Craze
Can you believe a single flower once cost more than an entire house?
In fact, this happened in the Netherlands in the 1600s.
At that time, the Dutch Republic had amassed great power and wealth through international trade.
Because tulips were regarded as a symbol of both prosperity and good taste,
affluent people would plant them in their gardens to show off their wealth.
As the Dutch economy continued to boom, the popularity of tulips skyrocketed and their price was severely inflated.
Once rumors that selling tulips yielded large profits started going around,
many people began to buy up tulip bulbs intending to resell them.
Since the supply couldn't meet the demand, the price of these flowers went through the roof.
According to one report, at the peak of the craze, a single tulip bulb was worth as much as one of the grandest houses on the most popular canal in Amsterdam!
But do you think a trend like this could go on forever?
In February 1637, no one could afford to buy these expensive flowers any longer, and the price collapsed abruptly.
Economists explain that this happened because people entered the tulip market in order to speculate on the price of tulips hoping to get rich.
People spent extreme amounts of money on these flowers with no rational judgment.
As a result, they lost their property and fell into debt.
Now this unprecedented phenomenon is referred to as "tulip mania."
This historical get-rich-quick scheme teaches us to always be cautious when it comes to dealing with money.
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