I'm not much of a planner, but I play the tape through before making any decisions - especially financial decisions. I take nearly every opportunity to increase my net worth. I'm debt averse. I don't like debt, and I never have. Unless it's an asset, I buy things with cash, and I don't pay interest on what little consumer debt I accrue.
I don't think I have given much consideration as to why I behave in this way. I can definitely say that I saw my parents struggle through an ample amount of financial turmoil, and I never want to be faced with that.
I guess I should really consider how much these choices were made with an eye toward the future. I would say that I am always planning my next move - and that is what drives my decision making in the present. Over the past few years, that move was paying my tuition without borrowing (okay, okay, and also buying a cool car). That's now over, and I am focusing on saving in hopes of making some investments in property. In the past summers and even during the semester, you can find me working and employing friends to ensure that my business is profitable. All of these decisions I now think were made in pursuit of my current goal: investing in revenue streams that are a little more "hands-off."
As usual, I hope this is, in some way, salient.
Saturday, September 28, 2013
Saturday, September 21, 2013
The Staunch Opportunist
Merriam-Webster defines opportunism as, "the art, policy, or practice of taking advantage of opportunities or circumstances often with little regard for principles or consequences."
I would consider myself a staunch opportunist when it comes to activities that will increase my net worth, so there are not often times when I overlook such opportunities. Recently, however, there was an example.
Through one of my previous clients, I was referred to a small Waldorf-style school to appraise their IT infrastructure. It was what I might call an "alternative" environment. Upon walking through the front door, I was accosted with the strong scent of tea tree oil and several new-age hippies. After spending an hour there speaking with the staff and determining their needs, it was clear that this was a big, multi-thousand-dollar-in-my-pocket project. Being a student and having various other IT responsibilities with other businesses, I didn't think I could make this project work in my schedule. I spent the weekend mulling over the idea, and ultimately, it was very difficult for me to tell the staff there that I would not be able to do the project until at least December or January. I knew that this meant I would lose out on the opportunity to do the work and make the money from it.
I would say that my calculus had to do with time constraints. Owning a business and being a student is a trying endeavor; I simply didn't believe that I could handle everything at once. I wish that there were some loftier, more intriguing motive behind it, but I believe that is what it comes down to.
I would consider myself a staunch opportunist when it comes to activities that will increase my net worth, so there are not often times when I overlook such opportunities. Recently, however, there was an example.
Through one of my previous clients, I was referred to a small Waldorf-style school to appraise their IT infrastructure. It was what I might call an "alternative" environment. Upon walking through the front door, I was accosted with the strong scent of tea tree oil and several new-age hippies. After spending an hour there speaking with the staff and determining their needs, it was clear that this was a big, multi-thousand-dollar-in-my-pocket project. Being a student and having various other IT responsibilities with other businesses, I didn't think I could make this project work in my schedule. I spent the weekend mulling over the idea, and ultimately, it was very difficult for me to tell the staff there that I would not be able to do the project until at least December or January. I knew that this meant I would lose out on the opportunity to do the work and make the money from it.
I would say that my calculus had to do with time constraints. Owning a business and being a student is a trying endeavor; I simply didn't believe that I could handle everything at once. I wish that there were some loftier, more intriguing motive behind it, but I believe that is what it comes down to.
Sunday, September 15, 2013
Organizations and Transaction Costs
First of all, I must admit that my organization vernacular is limited at best, and my experience with formal organizations is also quite lacking. I can speak about one company that I worked for that was rather small, but an organization nonetheless. This was a electronics repair company.
We specialized in Sony Laptop repairs and worked exclusively with the
warranty department at Sony along with some other places like Geek Squad. I believe there were 9 total employees, with me at the bottom. Looking back upon it, it does not seem as though much energy was expended thinking about the organizational structure of the company, or how having a more formal organizational structure might help alleviate some of the many tensions that existed.
There was George, the president, who performed (or didn't perform) the dictatorial duties of what I imagine a bad president might perform. His self-delegated position was the head of demotivational assurance, whose duties included making sure everyone knows that he is the boss and that they are expendable. George owned the company and I will refer to him as the president because I know for sure that CEO would be a misclassification. He was an owner/operator. He performed some repairs whose details he didn't want to disclose to the technicians, presumably for fear that they would learn the trick and undermine his customer base. George kept in close contact with Julie, the parts/finance/customer service/human relations/accounting person. Myself along with three other employees were technicians. It was our duty to perform the repairs along with other random tasks that could be delegated to any one of us at any moment by George. One of the other senior technicians was paid a bit more and also responsible for some amount of supervision over the other techs.There were a few others who fulfilled the roles of public relations, maintenance, and janitorial duties.
Commands came directly from either George or Julie, but George called the shots. So George supervised everyone, the senior tech "supervised" the other techs (he had no real power to do anything other than report to George), Julie was solitary, sovereign, and ultimately subject only to George's commands, and the other employees took direct instructions from George on what to do from day to day. Expenditures all went through Julie, requiring approval from George only sometimes.
For fear that I am beginning to ramble, I will end this part of the monologue in hopes that I have identified something salient with regard to the class material.
As far as transaction costs are concerned, I will speak about these in relation to my own IT business. I incur transactions costs all the time (I think). One example of this is estimating and bidding. I often get calls from small businesses that need a new VPN deployment or a new firewall, or perhaps a new server. In order to transform their need into money in my pocket, I have to send estimates. This process is time consuming and often requires research time.
Another transaction cost I incur (I think) in my dealings with clients has to do with transactions. For example, I did some work for a small business recently whose check bounced. I am then responsible for rectifying this through the bank and the client, often involving trips to and from the client and bank.
There was George, the president, who performed (or didn't perform) the dictatorial duties of what I imagine a bad president might perform. His self-delegated position was the head of demotivational assurance, whose duties included making sure everyone knows that he is the boss and that they are expendable. George owned the company and I will refer to him as the president because I know for sure that CEO would be a misclassification. He was an owner/operator. He performed some repairs whose details he didn't want to disclose to the technicians, presumably for fear that they would learn the trick and undermine his customer base. George kept in close contact with Julie, the parts/finance/customer service/human relations/accounting person. Myself along with three other employees were technicians. It was our duty to perform the repairs along with other random tasks that could be delegated to any one of us at any moment by George. One of the other senior technicians was paid a bit more and also responsible for some amount of supervision over the other techs.There were a few others who fulfilled the roles of public relations, maintenance, and janitorial duties.
Commands came directly from either George or Julie, but George called the shots. So George supervised everyone, the senior tech "supervised" the other techs (he had no real power to do anything other than report to George), Julie was solitary, sovereign, and ultimately subject only to George's commands, and the other employees took direct instructions from George on what to do from day to day. Expenditures all went through Julie, requiring approval from George only sometimes.
For fear that I am beginning to ramble, I will end this part of the monologue in hopes that I have identified something salient with regard to the class material.
As far as transaction costs are concerned, I will speak about these in relation to my own IT business. I incur transactions costs all the time (I think). One example of this is estimating and bidding. I often get calls from small businesses that need a new VPN deployment or a new firewall, or perhaps a new server. In order to transform their need into money in my pocket, I have to send estimates. This process is time consuming and often requires research time.
Another transaction cost I incur (I think) in my dealings with clients has to do with transactions. For example, I did some work for a small business recently whose check bounced. I am then responsible for rectifying this through the bank and the client, often involving trips to and from the client and bank.
Monday, September 9, 2013
Who is this guy?
On a more serious note, Williamson was a student of Ronald Coase, a recently deceased British economist. As a student of Coase, Williamson elaborated on transaction costs - perhaps Coase's finest contribution to the science of economics. From what I was able to decipher of the economic jargon, it seems that Williamson expounded upon Coase's transaction costs. He analyzed transaction costs and gave us a more detailed and complete explanation of their role and some different kinds. Smart dude...
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