Investment Opportunity

May 9, 2008

I think now is an appropriate time to talk about employment at a corporation. I got a job at one once, but I want to reemphasize what I said in that article. I didn’t get that job because I wanted the money. I had a different goal in mind.

Before I get into the particulars, I want to mention an investment opportunity that I’d like you to consider. I want you to invest in my company. I want you to put your capital in right now, paying into the fund monthly, and in return we’ll pay you back around 0.5% of your contribution every month.

I know the interest rate isn’t very good, but there is potential room to improve it! If you continue to invest in the company over a period of years, your monthly pay back may increase up to .02% per year. The actual payback increase is mostly based on factors outside of your control, but if you stick with it for a long time, you may see returns as high 1% per month. One way you can slightly raise the odds of the increase is to invest more. If you put in twice the capital of your peer investors, you will receive exactly the same monthly pay back in dollars (in effect, halving the interest you are earning), but at the end of the year you might have slightly higher chance of receiving that additional .02%.

This is all subject, again, to forces beyond your control. I reserve the right to arbitrarily give increases to some investors, but not others. Depending on the contract you sign, your peers may make more than you at the outset, but you have no way of checking this. At any time, we may cut off your account, which means we will refuse further investment from you, and you will get nothing in return for your investments thus far. There is no way you recoup your sunk costs, despite the poor returns.

The upside, is that after many years of substantial investment, a very slim minority of arbitrarily selected investors will be invited to be partners in the company, and they will be compensated with the difference between investors’ capital payments, and their monthly payback allowance. Partners, needless to say, are paid handsomely indeed.

Does this sound like a reasonable investment to you?

Welcome to the Corporation

Welcome aboard, Employee #3456764!

This is a snarky investment proposal for people who work for a corporation or who are thinking of working for a corporation. We accept corporations because they feel “normal” in our society. Because of this “normalcy,” the pathways through our brain are burned separately for “corporate employment” and “investment.” The fact is that they are one in the same, and the above proposal is exactly the investment you are making when you work for Acme, Inc.

The capital mentioned in the proposal is human — your time. You put in your time, and you are compensated from a portion of the value you create. It’s slight of hand to think that it’s anything but an investment of value for a given return of value — just because in goes time, and out comes money, doesn’t mean it’s a better deal. It just means it’s easier to hide what a scam it is.

The point here is to help people realize that this style of employment is a waste of resources, and a waste of life.

There are rare circumstances when it makes sense.

  • When the company genuinely provides a context for you to make more money than you could otherwise. For example, you can work yourself keeping 95% of the value you create, and that means you bring home $10,000. You can work for Acme, making .5% of the value you create, but that .5% is worth $20,000.
  • When the company provides a context for learning that you could not create on your own.

The first circumstance is what you’ll tell yourself you fall into, but you don’t. It’s only true very rarely, and if you live in a first world country, opportunities to make more money than a corporate schill abound, you’re just not looking in the right places.

The only times I can think of when this is true is on the opposite extrema of the salary scale. If you are a person of genuinely low intelligence, who has trouble with academic work, then you may qualify. You probably can make more working with your hands for a company, than you could make on your own. You will probably be providing a service directly to the company, like janitorial services. On the other hand, if you’re made in the shade with more money than you know what to do with, executive leadership may provide you the opportunity to make bigger deals and work with more money than you could otherwise. Generally, those people will bleed into exception two, looking for new experiences simply because another million won’t make a damn bit of difference to their lifestyle.

A Better Way

If you aren’t slow, and you aren’t filthy rich, you have better options than corporations. Build something of value that will continuously provide income once it’s built. Write small software packages. Write a book that will sell. Take photographs that you can collect royalties on. Do all of the above and more.

The take home point here is to think about money separately from time. Spend your time living, loving, learning, being. Make money some other way. If you can spend your time living passionately, and your passion happens to bring home the bacon, well awesome. It’s rare to find someone with an honest passion for investment banking, but it happens. I’m lucky that technology and helping people is a lucrative business. You may not be that lucky, but don’t get stuck letting your passion play second fiddle to your mortgage.

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