Sunday, November 14, 2010
Other People's Money
Most people only wish to have all the material goods to show off to friends instead of generating any type of real wealth.
As I wrote earlier, sometimes I run nightclubs.
But the thing is, I hate running nightclubs.
Most people only call after what they were doing has failed.
But as in construction - rebuilding is more expensive than building.
As is often the case, I've been approached by a group of guys who love to floss their platinum and diamond watches and jewelery.
"I'll get you one of these.", one guy said as he looked at my old Gruen, Hamilton or Patek Phillipe watches.
(I didn't buy them, they were my grandfather's from back in the forties and fifties. MY cost; $0.00 - resale value, more than $0.00. THEIR cost; thousands - resale value, less than thousands. Why pay for something that loses value?)
My standard agreement is payment from the increase in sales.
But if the group is dumb enough to agree to such terms I just decline the offer.
An increase in sales is not the same as an increase in profits.
Anyone not knowing this is too dumb to succeed.
After someone points out that they do understand this, we then negotiate a percentage of the increase in profits which I will receive.
While I'm working on my humility - I must be good at what I do.
Most people who open new clubs offer to give me a percentage of their business (usually 30%) if I reach my sales and profit goals.
I then sell this percentage back to them (If I choose) or sell this percentage to another investor.
People are suckers.
Most are so anxious to be thought of as being cool that they will allow you to make money with their money.