Franklin Veaux (tacit) wrote,
Franklin Veaux
tacit

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Some late night thoughts about the nature of money

Gah. It's late, and I can't sleep 'cause I'm waiting for Shelly to get home from work, so let's talk money.

Exhibit A: One of my clients, a large, publicly-traded corporation that makes custom uniforms and apparel, primarily for the hospital and tech industries. They make those weird-looking bunny suits that chip manufacturers use in cleanrooms, that sort of thing. They have manufacturing and warehousing facilities in five states, thousands of employees, and brought in a tad over $130 million dollars in 2003, with net profits after expenses and tax of approximately $5 million. A huge, successful business.

Exhibit B: A tiny, privately held company occupying one office not far from my client's corporate headquarters, employing less than twenty people, running an online Internet dating Web site. They bring in, oh, around $66 million a month, give or take. Roughly five times what my client makes, in other words. And almost all of it's profit.

Wall Street doesn't like the "adult" industry, of course. I don't believeany porn or sex-toy companies arepublicly traded, and I have to wonder what the Fortune 500 might look like if it listed sex-related businesses. Wal-Mart would probably still top the list,ofcourse, butI suspect after that things might get interesting.




Money doesn't work the way people think it does. Take lawyers who work on commission, for example. (Please!) Now, if you're injured in a car wreck and you're suing someone's insurance company, you might think that the lawyer who works on commission will get you the best possible settlement, because his financial interests are tied to yours. After all, the more money he winds for you in the settlement, the more money he gets, right?

Wrong. You're not his only client. He has thousands of other clients, in an unending stream. That changes the equation.

Suppose he can put in an hour working on your case, and get the insurance company to offer you an $8,000 settlement. Or, he can work 15 hours on your case, and win an $80,000 settlement for you. What's he gonna do? He's gonna try to talk you into settling for $8,000. Why?

Well, let's say he works 45 hours a week. If all his clients take the paltry $8,000 settlement, he's brought in a grand total of $320,000 in settlements in a week. If all his clients get $80,000 settlements, he's only brought in $240,000 in that week. Which would you rather have--a percentage of $320,000 or the same percentage of $240,000? It's a no-brainer. He wants maximum income per hour worked, which means...you get the chump change, chump.




On a more personal front, the Chinese government is still doing everything in its collective power to make my life complicated. Certain old-guard factions in the Communist Party in China still oppose with all the spirit they can muster from their feeble and ancient bodies any attempt to drag China into the seedy, dirty world of capitalism and free enterprise, and are continuing to block the Chinese venture capital firm that wants to invest in another client of mine, even though the rest of the Chinese government has given the deal the official go-ahead. As a result, my client can't pay me (or indeed anyone else), and as a result of that, my client and I are still in limbo with regards to the move to Atlanta. So we're here in Tampa for at least the next six months or so, while my client's representative flies back and forth between here and Beijing on an almost weekly basis, trying to discover whatever voodoo black magic is going to be necessary to get the money out of China. In other words, it's just business as usual for my life.
Tags: economics, geek
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