If you were interested in the greatest profit you'd put all your surplus revenue towards producing greater profits in the future and just draw a subsistence wage rather than living in a big house or what have you.
But people don't, so I assume that goals don't work like that.
I might want to make the world a better place while still living in a nice house. Maybe that's not logical, but it seems to be the case that advancing your primary goal a short way with your money may not be as satisfying as advancing your secondary goal a long way with the same money.
I suppose a more formal way of expressing that idea would be to say that your goals are weighted as multiples of how interested you are in the results of those goals. If I value a world-changing company twice as much as I value a nice house, then all that needs to happen is that a given sum of money is twice as likely to get me a nice house as it is to get me a really nice company.
Which lines up with the idea that when your company is small and you don't have a lot of money it's probably not a good idea to be buying huge houses, but later on a few hundred k here and there probably won't make a lot of difference to the health of the company.
You do have a point, especially in your first paragraph, but I think it's important to separate the goals of the business from the goals of it's founders, management and employees. The latter probably have goals of at least making a decent living, and that of course impacts the profit-making goal of the business.
However, I also think you're confusing profits with wages. Non-profit organization employees can have quite high wages, but that doesn't impact whether the goal of the organization is to turn a profit.
But people don't, so I assume that goals don't work like that.
I might want to make the world a better place while still living in a nice house. Maybe that's not logical, but it seems to be the case that advancing your primary goal a short way with your money may not be as satisfying as advancing your secondary goal a long way with the same money.
I suppose a more formal way of expressing that idea would be to say that your goals are weighted as multiples of how interested you are in the results of those goals. If I value a world-changing company twice as much as I value a nice house, then all that needs to happen is that a given sum of money is twice as likely to get me a nice house as it is to get me a really nice company.
Which lines up with the idea that when your company is small and you don't have a lot of money it's probably not a good idea to be buying huge houses, but later on a few hundred k here and there probably won't make a lot of difference to the health of the company.