Thursday, October 18 , 2018, 2:27 pm | Fair 76º


Paul Burri: Here’s a Deal You Can’t Refuse — Or Can You?

It pays not to get too greedy when a good opportunity comes your way

If I offered you a money deal that you couldn’t refuse, would you be irritated if you later found out that I made even more than you did? Let me be more specific; here’s my offer. “If you will lend me $2,000, I will pay you back $2,500 in 60 days, guaranteed.”

So you lend me the money, and 60 days later I pay you $2,500. If I figure this correctly using the old formula (I = PRT (Interest = Principal x Rate x Time), that comes to 150 percent interest you just made. Not bad, huh? Got any problem with that?

But then 60 days after that, you learn that I made $2,600 on that deal. I used your $2,000 to somehow (legally) earn a total of $5,100. Then I paid you back your $2,000 plus an extra $500 and still had $2,600 left to keep for myself. (Please don’t ask me how. I’m just trying to make a point here.)

So would you complain to me that it wasn’t fair that I used your money and made more than five times what you did on the deal? I’ll bet you would because I’ve seen it happen more than once. And I still don’t understand how the person who made a really nice 150 percent profit could feel justified to complain that the other guy got so much more.

Where would you have been and how much would you have made on your $2,000 if I hadn’t come along? Did you do the research or figure out that great deal? Did you have any of the risk that I did if it hadn’t worked out? No, of course not. And still you seem to think that it’s not fair.

Better be careful about complaining to me about our deal. You just proved to me that you are greedy and cannot see a great deal when you get one. I won’t come to you the next time I have another opportunity like that last one. I don’t need the hassle.

This whole thing reminds me of many of the episodes I have watched on Shark Tank, a recent television show where would-be entrepreneurs come before a panel of five savvy investors asking them to invest in their “greatest idea since the invention of four-ply toilet paper.” Invariably they expect the panel to invest thousands of dollars in their company for a puny share of the business — usually 15 percent to 20 percent.

Of course, the investors are too smart for that and usually counteroffer to invest; but only if they get a controlling interest in the company. And then the inventor often turns them down because he or she is afraid to lose the controlling interest in his company. What’s wrong with this picture? Bottom line: Without that key investment, the inventor has no company, no chance of success, no nothing. The inventor would rather have 100 percent of nothing than, say, 25 percent of a million-dollar company. Greed (and some stupidity) enters the picture again.

Lesson to be learned? Be sure you don’t get too greedy when a good deal comes your way.

— Paul Burri is an entrepreneur, inventor, columnist, engineer and iconoclast. He has been a counselor with the Santa Barbara chapter of SCORE (Service Corps of Retired Executives) for the past eight years. SCORE offers free business counseling to local businesses. He is also the membership director of the Channel City Camera Club. The opinions and comments in this column are his alone and do not reflect the opinions or policies of any outside organization. He can be reached at .(JavaScript must be enabled to view this email address). Click here for previous Paul Burri columns. Follow Paul Burri on Twitter: @BronxPaul.

Support Noozhawk Today

You are an important ally in our mission to deliver clear, objective, high-quality professional news reporting for Santa Barbara, Goleta and the rest of Santa Barbara County. Join the Hawks Club today to help keep Noozhawk soaring.

We offer four membership levels: $5 a month, $10 a month, $25 a month or $1 a week. Payments can be made using a credit card, Apple Pay or Google Pay, or click here for information on recurring credit-card payments and a mailing address for checks.

Thank you for your vital support.

Become a Noozhawk Supporter

First name
Last name
Select your monthly membership
Or choose an annual membership

Payment Information

Membership Subscription

You are enrolling in . Thank you for joining the Hawks Club.

Payment Method

Pay by Credit Card:

Mastercard, Visa, American Express, Discover
One click only, please!

Pay with Apple Pay or Google Pay:

Noozhawk partners with Stripe to provide secure invoicing and payments processing.
You may cancel your membership at any time by sending an email to .(JavaScript must be enabled to view this email address).

  • Ask
  • Vote
  • Investigate
  • Answer

Noozhawk Asks: What’s Your Question?

Welcome to Noozhawk Asks, a new feature in which you ask the questions, you help decide what Noozhawk investigates, and you work with us to find the answers.

Here’s how it works: You share your questions with us in the nearby box. In some cases, we may work with you to find the answers. In others, we may ask you to vote on your top choices to help us narrow the scope. And we’ll be regularly asking you for your feedback on a specific issue or topic.

We also expect to work together with the reader who asked the winning questions to find the answer together. Noozhawk’s objective is to come at questions from a place of curiosity and openness, and we believe a transparent collaboration is the key to achieve it.

The results of our investigation will be published here in this Noozhawk Asks section. Once or twice a month, we plan to do a review of what was asked and answered.

Thanks for asking!

Click Here to Get Started >

Reader Comments

Noozhawk is no longer accepting reader comments on our articles. Click here for the announcement. Readers are instead invited to submit letters to the editor by emailing them to [email protected]. Please provide your full name and community, as well as contact information for verification purposes only.