A partner at a major law firm was taking a much needed vacation on a tiny Caribbean island when he decided to book a fishing excursion. After selecting a local company, the partner and the captain of the boat set sail for a fabulous four-hour tour of the sea. It was the best fishing trip the partner had ever taken.
The partner was impressed by the quality of the trip and the young age of the captain. “If you don’t mind me asking, how old are you?” the partner asked.
“I’m 24” replied the captain. “I’m taking a little time between the end of my undergraduate education and law school.”
“That’s a good idea” said the partner and asked the prospective law student how many trips he ran each day. The captain replied, “Only one trip each day on Wednesday, Friday and Saturday.” The partner then asked why he didn’t run a few more trips and take on a few more customers?
The captain replied that he had enough to meet his needs.
The partner said, “But what do you do with the rest of your time?”
The captain replied, “Every morning I wake up and have coffee on the beach. In the evenings I see my friends and play the guitar.”
“I graduated from one of the top 3 law schools and have built an impressive career working with some of the best investors in the world” said the partner, “I believe I could help you.”
“Forget law school. I have a better idea,” he said.
“If you spent only a little more time running a few extra fishing trips, you could use the extra proceeds to buy another fishing boat. Labor is cheap here, so you could easily find a few people to run the second boat for you and eventually you’d have a whole fleet of fishing boats. With a little bit of marketing, you’d soon establish yourself and your fleet as a premier experience for tourists visiting this island.”
Then the partner added, “The key is to establish a brand so that clients are attracted to you but then to delegate a considerable amount of the work to your employees. After all, there’s only so much time you can spend running fishing trips yourself.”
“Of course, eventually you’d probably want to expand your fishing trip company to other locations. You might live in Miami for a few years and then perhaps start a branch operation in San Diego.”
The captain asked, “Oh? How long would this take?”
To which the partner replied, “Maybe 15-20 years.”
“But then what?” said the captain.
“That’s the best part” said the partner. “After you’ve built up this company, you could sell your fishing operation to a private or public buyer. They’d pay you millions.”
“Millions!” replied the captain. “That sounds wonderful. And then what?”
“Well,” said the partner, “with millions of dollars, you could easily afford to live on a small Caribbean island, drink coffee in the morning on the beach, visit with friends during the day and learn how to play the guitar.”
“At least, that’s my plan,” said the partner.
Let’s talk about it. Some of you may have recognized this as an adaption of the Parable of the Mexican Fisherman, just updated to involve lawyers. The parable is one of my all-time favorites. Do you ever think that you’re working and saving for something you could be doing right now?
Joshua Holt is a practicing private equity M&A lawyer and the creator of Biglaw Investor. Josh couldn’t find a place where lawyers were talking about money, so he created it himself. He convinces the student loan refinancing companies to give you cashback bonuses for refinancing your student loans and looks forward to you discovering how easy it is to track your net worth with a free tool like Personal Capital.