Me, Inc. (4 page)

My mother worked six days a week in a sweatshop. No minimum wage. It was the only job available to her in New York with her skill level. She would lift a winter coat off a hanger, carry it to her Singer sewing machine, sew six to eight bottoms on that coat, hang the coat back on the hanger, and move it to another section. Then she would repeat that process, over and over again.

She made half a penny per button. So, if my sweet mother took down a coat, sewed six buttons on it, and then hung it up again, she would make a grand total of three cents per coat. Somehow, she was able to clear $150 a week doing this backbreaking work six days a week, and she was able to pay rent, buy food, and keep us clothed.

My mother was the best role model for a work ethic I could ever have. Through her, I was able to understand the value of money.

At the age of fourteen, I promised myself I was going to make something of myself, if only to make sure my mother would never have to work again. Within eight years, I would be able to substantially improve my mother's life. A few years after that, she would never have to work another day.

4

Discovering Junior Achievement and Learning About the Capitalist Business Model

“First, have a definite, clear practical ideal: a goal, an objective. Second, have the necessary means to achieve your ends; wisdom, money, materials, and methods. Third, adjust all your means to that end.”

ARISTOTLE

Greek philosopher and writer (384–322 BC)

U
nlike books, television, and comics, school, unfortunately, didn't teach me much.

That's because, generally speaking, most public school curriculums don't focus on real life skills. You never see courses such as How to Get a Job, or How to Balance a Budget, or What Should I Do for a Living?

Opportunity for financial success is all around us. It is there for us to take advantage of. It is there for us to reap the rewards. It is there, but too often we don't understand what it is or how it works. There's no mechanism in place in our society that, as a matter of course, teaches us how to recognize opportunity and capitalize on it. If you have the instinct for it, or happen into a scenario where someone is willing to teach you, then you're at a tremendous advantage.

My earliest jobs included delivering the
Long Island Star-Journal
and working the butcher block in Jackson Heights, Queens. Then, at the age of twelve, I was fortunate enough to enroll in Junior Achievement, and I finally got a real understanding of what the capitalist business model is and how things work. What the “price of goods” is. What “stock in a company” consists of. How one has to do a budget and try to slice off a small profit at the end. How taxes can cut your gross net profit dollars, if any, by a third or a half.

For those not already familiar with it, Junior Achievement is a nonprofit organization, founded in 1919 by Horace A. Moses, Theodore Vail, and Winthrop M. Crane, whose mission was to educate young people about free enterprise, entrepreneurship, and personal finance, and to allow teens to gain a hands-on understanding of how the capitalist model works.

One of Junior Achievement's many worthy endeavors is its after-school Company Program, in which a group of teens gather under the guidance of volunteer advisers from the local business community. Together the teens and the business leader craft their own business model. In essence, they form a company, and learn through practical experience how a business comes together, operates, and, hopefully, becomes profitable.

The company that my group formed was a cookie company. Simple enough, but how do we make money? How much does a cookie cost to make? How many hours does it take to make a cookie? How much do we pay partners and workers in the company? How and where can we sell the cookies? And to whom do we sell our cookies?

In forming our own company, we would decide on the bylaws of the company, that is, the rules under which our organization would operate. We would decide who would be our president, secretary, and treasurer, and who would be our CEO (chief executive officer) and COO (chief operating officer). If you don't know what these terms mean, go look them up and educate yourself. We would decide how many shares of our cookie company we would “sell” to potential investors (in other words, friends, family, anybody) in return for a share of our profits. We would decide how much a share in our company would cost.

We needed to sell shares to fund the company and had to figure out exactly how many shares we had to sell—and at what price—to raise enough capital to do so. We then had to make sure that we could sell enough cookies to turn a profit after covering the cost of buying sugar, the cost of buying flour, and the cost of the equipment that we would need to bake our cookies, etc. Another issue we had to deal with was taxes, which is something that we would all have to contend with when we grew up.

I took notes. I wrote things down. I noticed how I could apply many of the principles I learned from Junior Achievement in my own life and in my own future business ventures. I saw how I could apply it to my own “inferred fiduciary duty to myself”—that is, that it's my responsibility to minimize my financial exposure, and make sure that I outlay as little as possible and only for those things that I felt I truly couldn't do without. I realized that it's my responsibility to try to maximize my financial gain.

So I got it. I understood. I saw the light.

Other chapters in this book will explain my decisions, all based on limiting my financial exposure (spend little money) and maximizing my financial gain (make more money). But for now, suffice to say, the less I spent, the more I earned.

“A penny saved is a penny earned,” said Benjamin Franklin.

Not quite, actually. A penny saved is two pennies earned.

Huh?

Well, any penny that you save and get to keep is a penny you have already paid tax on. Which means that, at the highest tax rate, you would have had to earn two pennies in order to have one penny remaining.

Your IRS “partner” walks, sleeps, and eats right beside you. With any penny or dollar you earn and save, the IRS will make sure it get its share.

What this really means is: spend as little as you can, and spend only for those things you can't live without, in order to have money left over.

5

My Early Jobs and Their Influence on Me as an Entrepreneur

“There is no substitute for hard work.”

THOMAS EDISON

inventor of the phonograph, the motion picture camera, and the practical lightbulb, and pioneer of electric power

A
s soon as I graduated from Newtown High School in Elmhurst, Queens, in 1968, I moved to South Fallsburg in upstate New York, to attend Sullivan County Community College, which is part of the State University of New York. During the summer months, and when I wasn't in class, I also worked part-time in Manhattan.

By this point, I understood the model: Spend little, earn more. Have the skills to earn myself more money. Know where to go to sell those skills. Educate myself. Learn people skills. Learn language skills.

In junior high school, I had noticed that all the girls took typing and stenography classes (steno being shorthand, that is, the thing that secretaries and court stenographers do). So I enrolled in both, because I wanted to improve my skills and because the classrooms were full of girls. By the time I graduated from high school, I could type faster than anyone I knew.

During the summer of 1968, I went to downtown Manhattan and got a job at Kelly Girl, Inc., later Kelly Services, Inc. It was a temporary job service that provided offices and corporations with staff they could hire and then let go of quickly. I could type faster than all the other Kelly Girl people. I could take steno. I could take Dictaphone dictation. I'd take the recordings, listen line by line through headphones, and type up what needed typing. It paid between $50 and $75 per week, part-time.

I also worked the night shift, from 8 p.m. until 6 a.m., on Wall Street at the Williamson & Williamson law firm. I filed, did office work, and typed up all sorts of reports. I would go to sleep by 8 a.m., if I could, and then get up at 2 p.m.

At college, I didn't have a car. I used to hitchhike upstate or back to New York City, or catch a ride to New York with fellow students who had cars. I couldn't see spending the money for a car. Or living off campus. All of it cost money. And I never wanted to waste or spend any money if I didn't have to.

While I attended Sullivan CCC, I worked for Zakarin Brothers in their warehouse, two blocks from the college. First I worked as a “humper,” carrying boxes back and forth, and later as a manager of the floor activities. I earned $100 to $150 per week there.

Because I could type fast, I was able to start a typing service while at college, charging my fellow students fifty cents per page to type their papers. I had to turn away business. Nobody wanted to sit in front of their typewriter, especially since most of them never learned to type.

I typed fast and double-spaced, so it took me two or three minutes to type a page. In the course of an hour, I could make about $10. That was seven or eight times the minimum wage at the time. A fifty-page term paper might take me an hour and a half, and would earn me $25. Over a weekend of concerted effort, I could clear more than $100 and still have time to go on dates, and to concerts and restaurants.

On weekends when I wasn't doing my typing business—and while other boys my age would typically be relaxing, screwing around, and otherwise slacking off—I worked as a lifeguard at the Pines hotel in South Fallsburg. That job paid about $70 to $100, because I also called the bingo numbers to a roomful of women, and got tips for that.

I didn't have the expense of owning a car. I had no rent to pay. I had no girlfriend, though I had plenty of dates. I bought almost nothing. I still don't buy much for myself that I don't need.

I didn't socialize much. If I wanted companionship, I would simply ask a girl if she wanted to come over to help me type up papers. Presto, a date! I had female companionship, and I could stay in my room and continue to earn money. Kill two birds with one stone, as the saying goes.

I was almost nineteen when I joined a college rock band called—
gulp
—Bullfrog Bheer. The band played beer bashes, which were exactly what you'd imagine them to be. People listened to music, rocked out, and drank beer. The band played a mix of the songs of the day, along with some of the original songs that I'd started to write. Despite the fact that I had already started playing bass, I wound up on rhythm guitar in the band, because they already had a bass player.

We would get paid between $150 and $300 for playing beer bashes, and would play two nights on most weekends. So after splitting the money with the three other guys in the band, that was another $75 to $150 for me.

Between my typing money, the weekend band money, and the Zakarin Brothers money, in a good week I could make $500, which was decent money at the time. Not every week, mind you, but enough weeks that it allowed me to pay off some of the college loan that I'd taken out to avoid burdening my mother with that responsibility (and, since I paid it early, I paid less than I could have). God knows that she'd already done more than any mother should be expected to do for a son.

During the summer months of 1969, when I had time off from college, I worked at the Direct Mail Advertising Association. DMAA's angle was asking consumers what junk mail they did not want to receive—junk mail meaning the samples, ads, circulars, and other stuff that you get in the mail that you never asked for—and getting them to respond. And it worked. You let DMAA know which junk mail you did not want, and magically, you stopped getting it.

So DMAA was on
your
side, right? Well, yes and no. What DMAA actually did was to compile a list of people who didn't want ads or samples of certain types of products sent to them in the mail. DMAA would then sell that list to companies, who would use it to fine-tune their mailing lists of who received junk mail relating to those products. In essence, the DMAA would help companies to more accurately market their products to people who would be more inclined to be interested in them. Win/win. People stopped receiving unsolicited stuff they weren't interested in, and the companies learned more about people who
might
be interested in buying their stuff.

I also worked as a proofreader at R. R. Bowker, which published
Publishers Weekly
and
Library Journal
, and as an assistant at
Glamour
magazine. They liked me at
Glamour
. I knew pop culture. I was a wiz at typing. I could take dictation. I could fix mimeograph machines and Rexograph machines, thanks to all the experience I'd gotten after my dear mother bought me both of those duplicating machines so I could publish my fanzines. As a history buff, I could cross-collateralize pop culture trends with historical references.

After graduating from Sullivan CCC with my associate of arts degree in 1970, I moved back to New York to pursue my bachelor's degree in education at Richmond College in Staten Island, which was part of the City University of New York. I moved back into my mother's house in Flushing, Queens. For a twenty-one-year-old, it wasn't the coolest thing to do, but I didn't care.

Apparently, the Condé Nast staff took note of my skills, because after I graduated from college in the summer of 1972, I found work as assistant to Kate Lloyd, the editor of
Vogue
. A nice perk of the job was that I was the only male on the floor. The
Vogue
offices were filled with models coming in and out of their fittings and photo sessions, and most of them were my age. I was fortunate to make new friends.

I had begun amassing a decent amount of money. So much so that I was able to “loan” some money to my mother and her new husband, Eli, for a down payment on a home. A few years after that, I was able to buy my mother her own home and car.