It All Started With a Suitcase Full of Cash (#iaswasfoc) Chapter 2 - Dinner for Just the Two of Us

2019-01-01T02:31:18.000Z Honest Cash

We had dinner alone, just the two of us, (J.R. and I.) Her whereabouts were more classified than the DOD’s torture docs from Wikileaks. We didn’t know if Dominique was there or just chose to not be visible. Weather permitting, she always flew one of her helicopters over to the island, but the bay where we docked, and the helipad, although directly connected to each other and the main house by a series of tunnels, are on opposite sides of the island and we didn’t venture that far after so many cocktails (honestly, too many cocktails) on the way over. Knowing her, it was anyone’s guess whether she was or was not physically on the island.

She can monitor her guests remotely from anywhere in the world, or onsite in the reinforced bunker situated several stories underground. Outfitted to survive the apocalypse (or at least as serious of a hurricane as the worst one Sir Richard Branson has sat out on Necker Island.) Although she claimed she wasn’t a prepper, Dominique was prepared for anything from a loss of power all the way up to and including any form of the apocalypse excluding the zombie type. She has two-way audio and video wired into every single centimeter of the estate including the pool deck, gardens, surrounding grounds, the helipad, the staff houses—even all the way out past the edge of the water to the end of the boat docks. Everything (and everyone)… boy do I enjoy the nights when she lets me sit and watch the monitors with her—yum! What fun!

Where was I?

Like I said, everyone was under her surveillance…not that privacy mattered much, and secrecy certainly wasn’t an issue—we were all business partners, friends, rivals, and some of us even occasionally lovers. In fact, the only people ever invited to her compound were those she had already seen naked…and yes, that does include the staff. Of which you will hear very little because they display and deserve discretion—more than us boys who do, if not regularly, but certainly on occasion, behave rather badly, even occasionally in public. She has some great stories about Archer specifically (hopefully we’ll get to hear a few of them over the weekend.) Those two dated decades before everyone had a camera in their pocket, or even a cell phone, so Archer was a bit more naughty in public, back when he only had to bribe an onlooker or two to keep quiet, and not worry about their encounters being broadcast around the world.

Surveying the dining room and seeing that the table is set for two, J.R. turns to me and asks, “Since we’re obviously going to eat alone, can I take advantage of your legal expertise? I could use your help in creating another investment vehicle. Like I mentioned on the way over, I finally received approval for the credit card processing firm so I can move forward with a complete end-to-end investment fund…or would you rather not discuss business over dinner? It’s up to you.”

“No, that’s fine. We might as well discuss business, she can, of course, hear us—so I’d rather not discuss anything personal. It always gets back to me, and I’d like to think I have a few secrets I can keep from her.”

“OK, cool. Like most good things in business (and pleasure), it’s not hard, but it is complicated. I’ve been thinking about this opportunity for a while and I think the easiest way to show you what I want is to literally draw this out on a cocktail napkin—let me grab a few paper ones (she’d have a fit if we used her linens as a replacement for parchment.) Plus I want to use the drawing in the marketing materials—I’m no Art Laffer, but I do understand the importance of a simple visual in a sales pitch.”

While J.R. went to find something to use for his B.O.N. (back of napkin) scribbles, I took the opportunity to survey the table myself and couldn’t help but remark in relief, “Oh good, coffee.” I thought to myself…she’s watching us. In retrospect, I should have noticed a few other things but dirty martinis are dangerous, especially while consumed on the water…there’s something about drinking in the open air and especially on a boat that makes the alcohol hit you harder than on terra firma.

“OK, here we go.” J.R. comments as he sits down at the table and since dinner has not been served yet, he draws three circles on a napkin, one inside another, “First, in the inner circle, Level One, we have the physical properties representing property retail income from multi-unit locations we own. Level two represents…”

At this point I interrupt to ask, “Are you going to do the whole sales spiel? If so, let’s get our meal, you can finish the drawing later.”

Sure, no problem, in that case, I might as well start from the beginning—I value and trust your opinion. If I can sell something to you, I can sell it to Sebastian. Now that he’s 50, I’ve heard he wants to branch out into real estate. I’m guessing the old man is tired of hanging out with young jocks with better abs.”

“Dominique has better abs than Sebastian.” I blurt out, even though I know better—damn vodka.

J.R. replies, suddenly cautious and based on his hesitation and facial expression, somewhat suspicious of where the conversation was going, “I’m not going to ask how you know what Sebastian’s abs look like, but I’ll take your word for it—her abs are amazing.”

“You forget I’m her assistant, I see a lot. Not all of it is as interesting or fun to watch as Dominique kicking Sebastian’s ass in pickleball. Apparently she wasn’t easily distracted by his abs—I’m assuming that’s why he took off his shirt for the second round.”

“So it’s true. She is playing again.”

“It’s not tennis, but it’s close—and yes, it’s true which is beyond shocking.” She hasn’t touched a tennis racket in decades, not since she decided the shin splints and inevitable knee surgeries weren’t worth the pain of a professional career…When I mean she quit tennis, I mean she never picked up her racket again except to sell it. “There is a rumor going around that she’s contemplating putting in a Pickleball Court before next year, ‘technically’ it’s not tennis, but (especially for Dominique) it’s hard to not be who you are naturally.”

“Did she really drop out when she was 14?”

“If you’re trying to get me to tell you her real age, you’re not going to get anywhere. I’m not THAT drunk,” and I deflected the question by suggesting, “We should probably ring for dinner, if we want to ever eat that is.” But before I even get my phone out of my pocket so I can request dinner from the kitchen (yes, she has an app for that,) the cook’s assistant carrying the meal on an oversized bamboo tray appears from the butler’s pantry. J.R. and I look at each other and laugh. Occasionally, we forget we’re living in her world—wired and run like clockwork.

While J.R. explains his latest endeavor, we eat everything in sight…which is pretty easy to do given she hires all of her chefs from Michelin rated restaurants and serves meals on priceless antiques, gifts from Archers’ days in the decorative arts and antiques trade. I wish I had the focus to pay better attention and relay the entire conversation because the concept is actually pretty clever—one of these days I should review the video (provided it’s in the archive) in a less intoxicated state. But here’s the basic structure, as described by J.R.

“As I mentioned, the levels are based on the sophistication of the investor. The inner level allows the novice investor to be their own boss by buying into property for rental income—it’s the same model as Fundrise where micro-investors buy in to a real estate portfolio. The second level, consolidates property services which you can also offer to other real estate investors who will be happy to, for a reasonable recurring fee, eliminate the uncertainty of recurring, but not regular expenses like snow removal. The final level, and the most sophisticated is where I’m currently focusing my business for exponential growth. The third level incorporates all of the financial services our renters (and our clients’ clients) use regularly. Because we don’t have to constantly re-sell the customer (or take the more expensive route and try to create new customers every day,) by their very nature, these continuity programs provide ongoing monthly services which are more profitable than one time services. Just like in the second level, we are able to decrease costs, increase ease of use and execution through additional economies of scale. From an investor’s perspective,” J.R. draws a square around the three circles, showcasing the all-encompassing nature of the investment, “and this is where it gets tricky, we’re wrapping up all of the businesses from each of the three levels into one investment vehicle. But because we’re targeting high net worth individuals (at least 100 million in verifiable assets) it needs to look as attractive as the math says it will be profitable.”

….and here is where his sales pitch really kicked in, “Steve Jobs famously only touched a piece of paper once—we believe if you start with selling your customer the most important thing (aka security, in the form of an affordable place to live) it isn’t necessary to “touch” or hard sell the customer multiple times. The satisfied tenant will naturally come to us as a trusted provider to buy “add-on” services which can provide them with reliable transportation, financial success, and eventually even possible home ownership. We’re playing the long game—we plan to add more services as demand, and our technical and physical capabilities allow. Eventually we’ll service all of the first level clients’ financial needs from rent and bill payment to title or payday loans, and credit services using our proprietary tokens…In a nutshell, we’re already using smart contracts for the majority of our businesses so the point of raising money is to develop our own cryptocurrency (obviously with the ultimate goal of an ICO) which will eventually secure and replace the financial entities including the credit card processing company.”

“So, at this point in time, you basically want to create a hedge fund to house all your privately held corporations?”

Well, I didn’t want to use the term hedge fund because that’s become such a dirty word since the crash. In sales I have to be careful about the terms I use…If I was selling in the aughts, I wouldn’t have used the term mutual fund because they were just as radioactive after the S&P scandal in the 90’s (or so I’ve been informed by those of you old enough to remember the 90’s.)”

“Be careful, I resemble that remark. You’re so lucky you’re a CPA. My advice to any young person these days would be to skip law school. Now that blockchain technology is everywhere, my occupation is going to become extinct, or at least equivalently irrelevant as the role of horses after the widespread adoption of the motor vehicle.”

J.R. didn’t respond to my “mini rant” as Dominique would call it, and given his sincere desire for feedback, I offered this advice, “You just have to be honest and realistic when providing accounting numbers to investors. Don’t artificially pump up your projected future revenue dollars without having a realistic breakage percentage built in. There will always be a certain percentage of customers who dropout—calculate the average length of customer retention (I’d suggest using numbers based on tenant turnover because you a. Have the numbers and b. Are targeting the same clients for your financial services…I’m not Dominique so I won’t go all the way into an option D.”

J.R. smiled knowingly and wrapped up the conversation…What I really want is the best opportunity to raise money, with the least amount of government interference.”

“I can appreciate that. Before the blockchain became mainstream, I would have agreed with you that humanity is more likely to cure death before we eradicate taxes.” I’m not going to bore you with the nitty-gritty, drilled-down details, but if you care—I’ll add them to the companion book. Apparently Dominique has started compiling her knowledge into training modules and manuals for new hire onboarding (I had to retype the first few from new notes.) Adding, but letting my voice trail off, “I do enjoy being the one man she lets travels with her—that perk alone is worth having to decipher her handwriting. Besides, I always agree to whatever she wants…it’s not like I have anything else left other than my loyalty to her.”