How to Get Rich

monopolymanA few years ago, billionaire David Koch donated $25 million to his alma mater, Deerfield Academy. From his presentation speech:

You might ask: How does David Koch happen to have the wealth to be so generous? Well, let me tell you a story. It all started when I was a little boy. One day, my father gave me an apple. I soon sold it for five dollars and bought two apples and sold them for ten. Then I bought four apples and sold them for twenty. Well, this went on day after day, week after week, month after month, year after year, until my father died and left me three hundred million dollars.

Now on the one hand I love this story. But wouldn’t it have been more plausible if he’d sold the first apple for, say, a nickel?

Well, maybe not much more plausible. Doubling your money every day, it takes just a little over a month to grow a nickel into three hundred million dollars.

I still like the story though.

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10 Responses to “How to Get Rich”

  1. 1 1 Bennett Haselton

    Also, how plausible is it that you could repeatedly resell something for twice what you paid for it, without incurring transportation costs or other expenses that would eat away most of your profit.

  2. 2 2 Harold

    Good story, very amusing. All the elements of a classic joke: set up expectations along familiar lines and then suddenly pull the rug out. You could argue that the original “set up” is weakened a bit by the unrealistic sums of money involving single apples, but by the time you have got to thinking about this, hopefully the punch line has come nad gone.

    It does rather beg the question, where did your father get the money?

  3. 3 3 John Faben

    Bennett – I’m not sure if this is deliberate, but the story doesn’t actually say how much he paid for the apples…

  4. 4 4 Al V.

    John Faben – The story implies (but doesn’t state) that he used the $5 from the first apple to buy two apples, then used the $10 from the sale of the two apples to buy four. The implication is that apples cost $2.50.

  5. 5 5 Ricardo Cruz

    Reminds me of Peter Schiff line a couple of years ago: if you want to become a real estate millionaire, you first have be a real estate billionaire.

  6. 6 6 Benkyou Burito

    Bennet–Most likely by cornering a monopoly opportunity. When I was 15 yrs old I was allowed to fastfood to crewmen working on ships at a private docka friend of our family owned. Small operation, with small boats but it was a long way from town.

    In the morning I would take orders and on my lunchbreak at school I would moped to McDs, BurgerKing, and Little Ceasars Pizza to Fill the orders and deliver them. My delivery fee was $3 so I was making 100$ profit on most every order.

    When the season picked up I went a step further and sold exclusivity to the resteraunts. Little Ceasars gave me $1 cash for every order I brought them as long as I didn’t take orders from the competition. This doubled by the end of the season. McD gave me $1 per order in gift certificates to do the same thing, which I turned arround and purchased the ordered food with (keeping the sailor’s cash). McD upped the ante to $1 gift certificate per order plus a free food item coupon per order.

    At one point, the average order of $3 worth of food would cost me $3 and I would receive $9 for it.

  7. 7 7 Dave

    Benkyou: you sold exclusivity rights to 2 competitors??

  8. 8 8 Benkyou Burrito

    Dave–No. McD does not sell Pizza. I offered delivery of Pizza or Burger-joint fare.

    Originally I would get food from the two proximate pizza places and both of the burger places (BK and McD). Caesar’s manager introduced the idea by quietly offering to make it worth my while to limit the choice to just one pizza option. After that I hinted around a bit to the burger place managers and took the first bite.

  9. 9 9 Neil

    Very useful to know. There are at least two ways to get rich in this country–one, inherit a fortune and, two, invest at 100% return per day. Oh, there is a third way which I am working on–Powerball tickets!

  10. 10 10 Benkyou Burrito

    Neil–3rd option is not so bad really. That ticket can either win or lose, so that’s 50% odds right there!

    (for non-Tracy Morgan fans out there, that was humor)

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