Son, This ‘Monopoly’ Investment Scheme Is No Substitute For a Steady Job, by Adam Bertocci

post-imgSon, we need to have a little talk.

I had someone in my office review your contract. Put bluntly, I have severe reservations about your accepting this job. The obvious concern is your salary. $200 as a base is meaningless without a schedule. If you’re only paid for passing Go, with no guarantees of how often that occurs, then you’re really on commission.

Your mother and I are both, frankly, relieved to see evidence of some gainful employment for you. But companies claiming to offer a salaried position that subsequently treat you as a “permalancer” should be viewed with suspicion. Are you aware that they are not withholding income tax, that you’ll be expected to handle it yourself? I won’t even comment on your ill-proportioned understanding of what taxes and costs you expect to incur. You think your medical expenses will total $50 when your so-called job provides no health insurance—and yet you also expect enough earnings to fret about luxury tax? Where are you getting this information?

In this vein, a host of red flags in your career plan and lifestyle have not escaped our attention. First off, try to limit your rent to one-fourth of your salary. A house on St. Charles Place is in your price range. A sprawling estate on Illinois Avenue is not.

This leads me to the issue of your real estate venture.

We will dispense with the question of your $1,500 startup costs, which I hope you’re not expecting us to provide.

Regardless of how you raise the capital, there are far safer ways to make your money work for you than speculation in a market that you barely understand. I presume that this fly-by-night job doesn’t offer a balanced 401(k) of no-load mutual funds, but even a basic savings account would be a start if you could limit your extravagant personal expenses. For avoidance of doubt, gallivanting around Atlantic City buying properties at random, trading them like baseball cards, and paying exorbitant rents to stay at other people’s houses is not a business plan.

Your whole strategy reeks of a first draft. Worse yet, your assumptions are faulty and you make truly stupefying concessions to your exploiters. No legitimate real estate opportunity would require you to purchase a stake in both Atlantic Avenue and Ventnor before developing in Marvin Gardens (actually ‘Marven’—the misspelling in your drafts indicates the lack of research you’ve done here). Whatever bank you claim to be dealing with is clearly counting on its buyers overlooking certain fundamental errors. (This is even before their highly suspect sale of the Pennsylvania Railroad to a thimble.) And who is this bank to buy and sell building materials, or to artificially limit the housing supply? Is this really how things are done in your world? I am not familiar with New Jersey state statutes, but the amount of ink your proposal devotes to potential jail time is truly distressing.

Your fellow speculators are clearly no brighter than you. For avoidance of doubt, it appears that a linchpin of your scheme is to make both the top hat and the wheelbarrow part with residential holdings by tendering an overly generous offer, further sweetening the pot with assets held in a public utilities consortium, then (with no evident interference or wait time from your existing tenants, municipal government, construction unions, or even the weather) rezoning those holdings to develop a two- or three-unit chain of luxury resorts. I’m not just unconvinced of this project’s merit. I’m disappointed.

Real estate investment is not a game. It requires planning, forethought and a long-term strategy. You have been led astray by unrealistic dreams of bank errors in your favor, mortgages at 10%, and expensive nights in boardwalk hotels. Frankly, I find the whole affair irresponsible.

We can discuss your career prospects in greater detail, but, in short, it’s time you learned a thing or two about the game of life. You can start by trading in that ridiculous race car for a sensible sedan, one with room for a wife and four children. And buy some auto insurance while you’re at it. The day of reckoning is sooner than you think.

Adam Bertocci is a writer and filmmaker working in and around New York, best known for the critically acclaimed mashup Two Gentlemen of Lebowski. His website, Twitter, and favorite word are, respectively, www.adambertocci.com, @AdamBertocci, and discombobulated.

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