Once upon a time, there were four friends; Mr. Money, Mr. Brains, Mr. Manager and Mr. Worker. They came from different backgrounds, but they enjoyed each others company. One day, Mr. Brains brought them to a valley sparkling with crystal pebbles. He asked if they would like to go into the Crystal Pebble business with him.
Mr. Money didn't even need a day to think it over. His grandfather left him a huge fortune and the fixed deposit alone earned him $100,000 a month. Mr. Brains may not have that kind of money but he was very smart and he earned $10,000 a month from his company. Mr. Manager was excited though a little apprehensive. He's got a family and his monthly income was $2,500. Mr. Worker's take home pay might only be $900 but he was single and feeling a little adventurous.
They took Mr. Money's car to the nearest coffee shop and discussed their options over a pot of tea. Mr. Brains suggested that everyone invests 10% of their monthly income. Everyone liked the idea, hence on that day they collected $11,340.
| Mr. Money | RM100,000 × 10% | RM10,000 |
| Mr. Brains | RM 10,000 × 10% | RM 1,000 |
| Mr. Manager | RM 2,500 × 10% | RM 250 |
| Mr. Worker | RM 900 × 10% | RM 90 |
| Total Investment | RM11,340 |
The new partners agreed that future profits will be split according to the percentage of their investment against the total sum of $11,340.
| Mr. Money | (RM10,000 ÷ RM 11,340) × 100% | 88.2% |
| Mr. Brains | (RM 1,000 ÷ RM 11,340) × 100% | 8.8% |
| Mr. Manager | (RM 250 ÷ RM 11,340) × 100% | 2.2% |
| Mr. Worker | (RM 90 ÷ RM 11,340) × 100% | 0.8% |
| 100.0% |
They drew plans for a simple shack, ordered a mobile toilet unit and bought shovels and trays for panning the crystal pebbles. The detail of their startup cost is listed below.
| Materials for shack | RM 2,800 |
| Tables and chairs | RM 200 |
| Mobile toilet | RM 400 |
| Shovels and pans | RM 100 |
To save money, they all agreed to build the shack themselves and to take turn cleaning the toilet. But on the first day they build the office, Mr. Money became dizzy because of the heat and he kept hitting his own finger instead of the nail. Out of frustration, he called his gardener to come over and paid him to do the work on his behalf. The gardener was also kind enough to bring an umbrella, a folding chair and a bottle of ice-tea prepared by Mrs. Money.
Mr. Brains did well until he had to install the windows and locks. He kept doing them them upside down. Mentally, he calculated the risk of him doing the work versus the cost of hiring a professional. He called a locksmith and the man fixed all the locks for them. Mr. Brains paid him out of his own pocket.
Mr. Manager and Mr. Worker watched them with incredulity. Did they not promise to do the work together? Look at those two; Mr. Money sits under an umbrella and sips ice-tea, while Mr. Brains paces the grounds and tells the gardener and locksmith what he wants them to do. Mr. Manager, however, advised Mr. Worker not to voice out his complaints. After all, the skewed windows were now straight and the locks a lot more secure.
Days went by and they remained cordial with one another. Mr. Money was doing alright at first. Dipping his feet into the cool stream was nice, but he could only manage to do it in the morning. He spent the rest of the day fanning himself inside the shack. Mr. Brains was also doing his part, in a way. He built a mobile tool for scrapping the stream bed and for depositing rocks into his pan. Under the pan was another gyrating device to swirl out debris. He only came down to the stream once in a while to check his pan and to move the tool. Since the machine could run straight for ten hours, he only stopped it before going home. He spent most of his time leafing through the yellow pages, calling people up and telling them about the crystal pebbles.
Mr. Money felt guilty about not doing his part, hence he asked Mr. Brains to build him a similar machine. In exchange he would hire a man to keep an eye on both their pans. Mr. Brains agreed. They ended the first week with the following result
| Day 1 - 6 | Day 7 | |
| Mr. Money | 1.5 kg × 6 = 9 kg | 12.5 kg |
| Mr. Brains | 10.0 kg × 6 = 60 kg | 12.5 kg |
| Mr. Manager | 5.0 kg × 6 = 30 kg | 5 kg |
| Mr. Worker | 5.0 kg × 6 = 30 kg | 5 kg |
| Total output for week one | 164 kg |
Mr. Brains found a customer willing to pay RM 150/kg of crystal pebbles, so their profit for the first week was RM 24,600 (164 kg × RM 150). In the second week, at day 7 performance level, they produced 245 kg and earned RM 36,750. At the end of four weeks, the total came up to RM 134,850.
Everyone was happy with the profits and agreed to split it.
| Mr. Money | 88.2% × RM134,850 | RM118,937.70 |
| Mr. Brains | 8.8% × RM134,850 | RM11,866.80 |
| Mr. Manager | 2.2% × RM134,850 | RM 2966.70 |
| Mr. Worker | 0.8% × RM134,850 | RM 1,078.80 |
| RM134,850.00 |
Everyone's monthly earning improved by about 18% to 19%. Mr. Brains and Mr. Money were happy with the results, but Mr. Manager and Mr. Worker felt that their earnings were nothing compared to the other two.
Suddenly the situation began to look unfair. Mr. Manager and Mr. Worker began to find fault with their other two partners. Mr. Money must think he was too good to clean the mobile toilet because he hired a truck to come in once a week to pump out the filth for him. Mr. Brain was no better; he hired a man with two buckets to come in every time it was his turn to clean. They, on the other hand, did everything themselves while their two rich partners sat in the shade and talked to each other or lunched with people.
The months went by and the once cordial relationship became strained. They bickered over every small thing. Mr. Money would not stand the cold shoulder, so he demanded for his share back. Outstanding cash after their startup cost was RM 7,840 (RM 11,340 - RM 3,500). They sold his desk and chair for RM 50 and his shovel and pan for RM 25. Mr. Money’s investment of RM 10,000 was returned to him in the following manner.
| Outstanding Cash | RM 7,840 |
| Asset Sold | RM 75 |
| Partner's Coverage | RM 2,085 |
| Total | RM 10,000 |
The RM 2,085 was split evenly between the remaining three partners at RM 695 each. The new share of RM 3,425 (RM 3,500 - RM 75; remember, they sold the pan and furniture) becomes,
| Mr. Brains | RM 1,000 + RM 695 | RM 1,695 | 49.5% |
| Mr. Manager | RM 250 + RM 695 | RM 945 | 27.6% |
| Mr. Worker | RM 90 + RM 695 | RM 785 | 22.9% |
| RM 3,425 | 100.0% |
Mr. Brains was devastated with the reduced cash capital. He had wanted to use the extra money to make more machines. This would have increased profits and their monthly monetary earnings would have gone up a whole lot more. On top of having to pay for the phone bills himself, he also had to pay for the hired worker and the toilet cleaning man who had to come down more often. Their monthly profit before Mr. Money left was RM 147,000 for 98 kg of crystal pebbles. Now it was less by 350 kg, which comes up to RM 94,500 for 630 kg. The new split results in,
| Mr. Brains | 49.5% of RM 94,500 | RM 46,777.50 |
| Mr. Manager | 27.6% of RM 94,500 | RM 26,082.00 |
| Mr. Worker | 22.9% of RM 94,500 | RM 21640.50 |
Their earnings went up about 4 times for Mr. Brains, 10 times for Mr. Manager and 20 times for Mr. Worker. Yet this time round, it was Mr. Brains who began to notice things that makes him unhappy. His output was 2.5 times more than the other two partners. In fact, he believes that 33% of the profit should be cut to him first and the remainder shared out between them.
Daily Output:
12.5kg (Brains) + 5kg (Manager) + 5kg (Worker) = 22.5kg.
Extra Performance of 7.5kg is 33.3% (7.5kg ÷ 22.5kg)
Mr. Brains believed that the fair split should be;
| Total Profit | RM 94,500.00 | |
| Minus Extra Output | 33.3% | RM 31,468.50 |
| Remaining Profit | RM 63,031.50 | |
| Mr. Brains | 49.5% | RM 31,200.59 |
| Mr. Manager | 27.6% | RM 17,396.69 |
| Mr. Worker | 22.9% | RM 14,434.22 |
In fact, Mr. Brains wanted to change the existing system of profit sharing based on owner’s equity to one that would be based on individual production output.
Mayhem issued. How could Mr. Brains be so greedy as to demand RM 62,669.09? Brains explained the reason he brought in Mr. Money into the partnership was so that they could buy large machines to mine the pebbles. A new machine would cost $200,000 which would increase output to 6,000 kg a month. He was trying to persuade Mr. Money to loan the cash to them. They could have increased earnings to RM 900,000 a month after paying off the RM 200,000 loan. Crystal pebbles were in high demand and analysts forecasted that the market would continue to stay high for another two years. Mr. Brains was hoping to earn a stable income of RM 79,200 at the original 8.8% share. Mr. Worker could easily get RM 7,200 (at 0.8%) and Mr. Manager RM 19,800 (at 2.2%). Since Mr. Brains felt that he could not earn the coveted RM 79,200, he was trying to recoup through his extra output.
His partners shouted him down and told him that they were happier with their current earning than the so-called better income he had envisioned. Mr. Brains was shocked; do they mean to say that they were willing to toil under the mercy of the weather from day to day? He began to look around for other options. Production in the new month dropped to 280 kg after he left.
So now the crystal mine has a stock of 280 kg with the potential earning for RM 42,000. There was one problem; Mr. Manager and Mr. Worker were so busy panning for crystal they had no time to talk to their customers. When Mr. Manager did manage to find time to talk to their old clients, they would tell him that crystals were no longer doing well as the market had turned to beads. Could he lower his price to RM 50 a kilogram? Others asked for a supply plan and queried him on the reliability of his on-time-delivery. What kind of shipping terms was he offering them? Could he give them an idea of where the crystal pebble trend was going? Last month's idea on the crystal studded dog collar was a big hit. Where was Mr. Brains?
Mr. Manager began to spend more and more time on the phone. His production performance dropped. He called and called, and finally the customers began to talk back. They asked for price cuts, door-to-door delivery, bulk discounts and a host of other things he never realized could be negotiated. Needless to say, cost went up and production went down.
Mr. Worker began to blame him for incompetence, his wife accused him of seeing another woman because he was always home late (he spent all that time panning to maintain his 5 kg output). He didn't dare hire someone else to do it for him because he did not want Mr. Worker to think that he was too proud to work. The partnership that was built on a pre-agreed system crumbled, because each partner had a different view of what constituted fair.
It was easy for Mr. Money or Mr. Brains to walk out of the partnership. The paradox being, they walked out because they felt they could not reach their full potential in that enterprise. If you read the application form for permanent residence or citizenship of any developed nation, you will notice that they give priority to applicants who either bring a certain amount of money into the country or one who have a needed skill. These people are free to choose a cultural, social or even religious environment that they are comfortable with. History is full of stories about men and women who have the vision, courage and assets to start a new life in another part of the world. I don't see that tendency changing anytime soon.
Read more fable-styled articles.