A Tale of Two Perspectives

     During my high school summers I worked as a laborer for a masonry company. This was at the start of the housing bubble in the late 1990’s. It seemed as if every week would bring the start of a new house. We would finish one, and then it was on to the next.

     The summers were hot and humid, and the work was really hard. A number of the other laborers I worked with had rough upbringings and had served time for various reasons. The company owner’s son and I were the youngest of the group, but we definitely worked the hardest. The older laborers would try to game us by getting us to perform the hard work. We knew what they were doing, but we took joy in the fact that we could perform the job of men better than the “men.” We performed so well that we were paid the same wages as the others, even being much younger.

     The company worked with several builders in the area. I vividly recall one in particular. I think he had to be about forty or so. I remember he would watch with a smile on his face, as he had one leg propped up on a tree stump or stack of materials, as the masons bricked the house. It was obvious that he enjoyed seeing us do a great job. But it was something more behind the smile I wouldn’t comprehend until many years later. As an investor, he was really smiling at the manifestation of his vision. You see, he had run the numbers. He knew that the house would sell like hot cakes. He knew that he was about to make bank.

     As a kid, I was clueless of the housing bubble, from the perspective of an investor, that is. My expectations and range of vision were narrow. No doubt, my hard labor was critical to the builder’s success. However, due to my level of expertise, I received a laborer’s wage. Because of the builder’s knowledge as an investor, those wages were a fraction of his master plan. By coordinating and contracting all of the pieces, and evaluating the costs, the builder saw what I couldn’t see – the big money.

     Later in life on a few occasions I would experience that builder’s smile as my own pieces fell into place. (I’ve had some frowns as well, as the pieces didn’t quite fit as planned.) The important takeaway in this is there’s a tale of two perspectives. The builder and I both had interests in his house. As an employee with minimal skill, I was a means to an end, earning an honest wage for an honest day’s work. As a knowledgeable investor with a good financial education, the builder knew that he would be able to pass those costs off to the buyer, in addition to making a nice profit. Now, I understand his smile.

Entertain money.