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RANT YOUR WEALTH EQUATION: How to GET PAID Like Ronald McDonald

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BrooklynHustle

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It will come as a shock to no one that McDonalds profits into the billions each year by helping the world get fat.

Diabetes is a real thing, as is obesity, but that's not what I'm writing about today.

The Millionaire Fastlane explains to us the basic mathematics governing two different compensation models: business owner & employee. This is where the tyranny of Mr McDonald truly comes into play.

Let me explain.

As with all important discussions, we'll look to television classic "The Wire" for inspiration. In the below scene we learn that Mr. Nugget figured out how to innovate the chicken bone all the way out of the chicken, leading to a massive windfall for his boss, Ronald.

(warning: profanity ahead)
View: https://www.youtube.com/watch?v=kGknlEWjxZc


Despite his invention's success, Mr Nugget still continues to earn at the same rate (pat on the back & token raise notwithstanding). Shockingly, Ronald opts not sign his clowny a$$ name on a fat a$$ check for him.

Mr Nugget compensation = hourly rate * number of hours
(OR alternatively, salary * number of years)

Ronald McDonald compensation = units sold * price


I'm simplifying a lot here, but let's notice a few things:

1. Mr Nugget's equation is composed of 2 factors he has very little control over.

  • His hourly rate (or salary) is largely determined by the company. Perhaps he can get a 10% raise if persistent, but certainly not a 100% raise.

  • He cannot increase the number of hours in a day or his approximate life span. As humans, these things are out of our hands.
2. Mr McDonalds' compensation is divorced from time and composed of 2 factors he has considerable control over:

  • To increase units sold, Young Ron has a plethora of options: open up more stores, start selling in new countries, introduce new product lines (McNuggets, etc), show more or better commercials... the list goes on and on

  • Regarding the price, Ronald sets it himself, aiming to maximize total revenues, depending on the information fed to him by his team of financial experts. These days he is probably using a dynamic algorithm to set it automatically.

Things are more complicated and less certain for Ronald, as he needs to hire & manage staff, deal with inventories & distribution, worry about harmful trends such as health consciousness, veganism, etc. In return for his troubles, Ronald enjoys limitless upside. Not to mention that he can deduct any expenses/financial losses from his taxes & he has the option to cash out and sell the business for a large lump sum. Ronald is the Real Player in this Game.

upload_2018-1-8_1-57-42.png

Now let's rewind a few years and imagine that instead of the current situation, Mr Nugget left the comfort & security of his employer's cold but familiar basement to patent his innovative process and start Nugget LLC.

upload_2018-1-8_1-58-5.png

The first years are hard, as he struggles to prove the concept, convince people that the product is edible/safe, and figure out how to market the damn things (why did he ever leave that sweet basement), but eventually he is able to build a sustainable little nugget operation with repeat customers, forcing the market to take notice. Later that year he licenses the rights to genetically-modified boneless chicken to the top 5 food companies worldwide.

Mr Nugget is now a MADE MAN with a vastly different equation.

wraith.jpg


All that said... which equation sounds better to you?

 
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Raoul Duke

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luniac

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I hope Ray Kroc is turning in his grave at today's McDonalds food quality.
Even Kroc stated that capitalism is great only with a strong moral foundation.
I wonder how he'd feel about the obesity epidemic.
Is it morally ok to make billions selling obesity(and worse)?
 

BrooklynHustle

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I'll come clean and admit I eat Mcdonalds sometimes.

I am very aware its terribly unhealthy for me. But hey, they never said they were a whole foods store.:rofl:
 

BrooklynHustle

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I hope Ray Kroc is turning in his grave at today's McDonalds food quality.
Even Kroc stated that capitalism is great only with a strong moral foundation.
I wonder how he'd feel about the obesity epidemic.
Is it morally ok to make billions selling obesity(and worse)?
Personally, it's not the game I want to get into, but everyone has different lines...

Watch the video from 00:30 - "It ain't about right, it's about money..."

View: https://www.youtube.com/watch?v=kGknlEWjxZc&feature=youtu.be&t=30s


I don't subscribe to that thinking, but you're lying to yourself if you think it's not out there



He might tell you (or current management might tell you) the obese are just making bad choices

Also, people often say one thing & do another

I would pay more attention to the actions
 
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mrarcher

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I'll come clean and admit I eat Mcdonalds sometimes.

I am very aware its terribly unhealthy for me. But hey, they never said they were a whole foods store.:rofl:
Personal responsibility is a hell of a thing. No one makes you eat it, especially to the point of becoming morbidly obese. I'll admit to shamelessy destroying a couple of big macs now and then.
 

BrooklynHustle

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Personal responsibility is a hell of a thing. No one makes you eat it, especially to the point of becoming morbidly obese. I'll admit to shamelessy destroying a couple of big macs now and then.
 

Eden H

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Detailed example, ty.

Speaking about guilt, obesity and stuff - old news, but makes you chuckle. This startup mission, quated, "we seek to deliver on our promise of enabling consumers to eat what they love, without any downsides"
260b697af8507c52a83872b0c0fd693e.jpg


Sent from my SM-G930F using Tapatalk
 

BrooklynHustle

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View attachment 17427
It will come as a shock to no one that McDonalds profits into the billions each year by helping the world get fat.

Diabetes is a real thing, as is obesity, but that's not what I'm writing about today.

The Millionaire Fastlane explains to us the basic mathematics governing two different compensation models: business owner & employee. This is where the tyranny of Mr McDonald truly comes into play.

Let me explain.

As with all important discussions, we'll look to television classic "The Wire" for inspiration. In the below scene we learn that Mr. Nugget figured out how to innovate the chicken bone all the way out of the chicken, leading to a massive windfall for his boss, Ronald.

(warning: profanity ahead)
View: https://www.youtube.com/watch?v=kGknlEWjxZc


Despite his invention's success, Mr Nugget still continues to earn at the same rate (pat on the back & token raise notwithstanding). Shockingly, Ronald opts not sign his clowny a$$ name on a fat a$$ check for him.

Mr Nugget compensation = hourly rate * number of hours
(OR alternatively, salary * number of years)

Ronald McDonald compensation = units sold * price


I'm simplifying a lot here, but let's notice a few things:

1. Mr Nugget's equation is composed of 2 factors he has very little control over.

  • His hourly rate (or salary) is largely determined by the company. Perhaps he can get a 10% raise if persistent, but certainly not a 100% raise.

  • He cannot increase the number of hours in a day or his approximate life span. As humans, these things are out of our hands.
2. Mr McDonalds' compensation is divorced from time and composed of 2 factors he has considerable control over:

  • To increase units sold, Young Ron has a plethora of options: open up more stores, start selling in new countries, introduce new product lines (McNuggets, etc), show more or better commercials... the list goes on and on

  • Regarding the price, Ronald sets it himself, aiming to maximize total revenues, depending on the information fed to him by his team of financial experts. These days he is probably using a dynamic algorithm to set it automatically.

Things are more complicated and less certain for Ronald, as he needs to hire & manage staff, deal with inventories & distribution, worry about harmful trends such as health consciousness, veganism, etc. In return for his troubles, Ronald enjoys limitless upside. Not to mention that he can deduct any expenses/financial losses from his taxes & he has the option to cash out and sell the business for a large lump sum. Ronald is the Real Player in this Game.

View attachment 17428

Now let's rewind a few years and imagine that instead of the current situation, Mr Nugget left the comfort & security of his employer's cold but familiar basement to patent his innovative process and start Nugget LLC.

View attachment 17429

The first years are hard, as he struggles to prove the concept, convince people that the product is edible/safe, and figure out how to market the damn things (why did he ever leave that sweet basement), but eventually he is able to build a sustainable little nugget operation with repeat customers, forcing the market to take notice. Later that year he licenses the rights to genetically-modified boneless chicken to the top 5 food companies worldwide.

Mr Nugget is now a MADE MAN with a vastly different equation.

View attachment 17426


All that said... which equation sounds better to you?

So nobody wants to talk about the wealth equation piece? lol
 
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luniac

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Personally, it's not the game I want to get into, but everyone has different lines...

Watch the video from 00:30 - "It ain't about right, it's about money..."

View: https://www.youtube.com/watch?v=kGknlEWjxZc&feature=youtu.be&t=30s


I don't subscribe to that thinking, but you're lying to yourself if you think it's not out there



He might tell you (or current management might tell you) the obese are just making bad choices

Also, people often say one thing & do another

I would pay more attention to the actions

of course i know its out there, i just wonder if Ray Kroc would feel the same way about his industry today. Back then obesity wasn't pandemic like today and fast food probably equaled if not surpassed the organic food we have today.

Although the ray kroc movie did have the part where he accepted the powdered milkshakes, although he was so strapped for cash i guess i could understand it.

The movies inspired me to read the book he wrote, and from that i got a very strong impression that ray kroc had strong moral foundation. He strongly believed in doing right by the customer.
 

MJ DeMarco

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So nobody wants to talk about the wealth equation piece? lol

Shocking, probably the most prolific expose I did in The Millionaire Fastlane .

Even Kroc stated that capitalism is great only with a strong moral foundation.

And that's the problem capitalism is dealing with now, too few people with a moral foundation, and too many money-chasers...

Obesity, Type-2 Diabetes, cancer -- first they profit on the things that create these diseases and then they profit from treating the disease. It is a multi-trillion dollar scam that powers the economy. And consumers have zero self-restraint to stop the scam because it all follows an addictive diagnostic... it tastes good!

The same BS is going on with smartphones, giving users a tiny smidgen of dopamine and addicting them to swipes, clicks, and likes.

Change will have to come from the grass roots level where consumers finally wise up and unblind themselves to their self-induced poisoning at behest of the profiteers. I won't hold my breath.
 

amp0193

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And that's the problem capitalism is dealing with now, too few people with a moral foundation, and too many money-chasers...

I wonder sometimes, if the incentive to be more... "morally correct" in business, would be there if business owners were personally liable for the effects of their choices.

Hiding behind the LLC or the corporation, shields you from any real responsibility.
 

luniac

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I wonder sometimes, if the incentive to be more... "morally correct" in business, would be there if business owners were personally liable for the effects of their choices.

Hiding behind the LLC or the corporation, shields you from any real responsibility.

also what about the corporate pressure on board of directors to increase profits forever with the risk of getting sued if they dont.
 

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WJK

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I hope Ray Kroc is turning in his grave at today's McDonalds food quality.
Even Kroc stated that capitalism is great only with a strong moral foundation.
I wonder how he'd feel about the obesity epidemic.
Is it morally ok to make billions selling obesity(and worse)?
My ex-husband worked for Ray Kroc in his food lab in Santa Barbara, CA many years ago. Mr. Kroc was crazy about the stores being cleaning. The company legion was that he saw a fly in a store, and shortly pulled their licensing agreement. My ex never talked about him worrying about obesity. I don't think it was much of an issue when Mr. Kroc was around.
 

BrooklynHustle

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My ex-husband worked for Ray Kroc in his food lab in Santa Barbara, CA many years ago. Mr. Kroc was crazy about the stores being cleaning. The company legion was that he saw a fly in a store, and shortly pulled their licensing agreement. My ex never talked about him worrying about obesity. I don't think it was much of an issue when Mr. Kroc was around.
Any thoughts on the wealth equations piece?
 

WJK

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Any thoughts on the wealth equations piece?
I see it totally different from the writer's point of view. I understand the business model that he's demonstrating -- but, that only the facade level.

Yes, Mr. Kroc sold hamburgers on a huge scale. I personally believe that Mr. Kroc was in the real estate business, like the oil companies with their gas stations. He sold his hamburgers in order to support his real estate holding. His main business was to sell more prime corners, that he improved with his little stores, that were turn key operations. He had a whole real estate division to choose and purchase the sites. A lot of effort went into doing the demographics for the area, growth patterns, traffic counts, lot configuration and accessibility when choosing the right sites. Then he had full time crews going around the country building his partly prefab, cookie cutter floor plan buildings. His business model was more that of a real estate developer, than a food guy.

The key to his continuing success with the owner/operators was his air tight contracts. The "owners" had to buy their supplies and goods from his company. In California, Kroc's sister distribution company was Golden State Foods. His centralized production kitchens and his fleet of trucks were his lifeline to the whole empire. It gave him total control over the "owners' stores" and gave Kroc a constant daily cash flow from selling them their materials, foods and supplies. His genius was his system and his process.

Does that answer your question?
 

ChrisJHarrington

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Shocking, probably the most prolific expose I did in The Millionaire Fastlane .



And that's the problem capitalism is dealing with now, too few people with a moral foundation, and too many money-chasers...

Obesity, Type-2 Diabetes, cancer -- first they profit on the things that create these diseases and then they profit from treating the disease. It is a multi-trillion dollar scam that powers the economy. And consumers have zero self-restraint to stop the scam because it all follows an addictive diagnostic... it tastes good!

The same BS is going on with smartphones, giving users a tiny smidgen of dopamine and addicting them to swipes, clicks, and likes.

Change will have to come from the grass roots level where consumers finally wise up and unblind themselves to their self-induced poisoning at behest of the profiteers. I won't hold my breath.

I'm pretty deep into the health/wellness industry, and can't help but agree with this statement.

Surgical and Big-Pharma are such big, unethical, profitable industries that they're impossible to break unless the consumer just wisens up and makes better choices. I've been having those conversation with tons of friends in the health and wellness space..

You have some back pain and go to the doctor and the first thing they want to do it put you through surgery for your minor scoliosis because they can make $50,000 off the surgery and then have you on medication for the rest of your life paying tens of thousands to big pharma.

When in fact the better alternative was to just start exercising and eating healthier and you could have ended up with a better outcome (but that wouldn't make surgical and big-pharma as much money...)

Companies that are providing health-insurance benefit programs to employees for making healthier lifestyle choices are what give me hope - and I think it's a space I might step into sooner rather than later..

RedBrick Health
https://www.virginpulse.com/

These companies will essentially pay you to make better lifestyle choices - or reduce your health insurance costs if you take an annual assessment, document that you are healthy, work out daily, etc.

I think by incentivizing the end-consumer to make better choices, they'll start to realize that surgical and big-pharma are the enemy and do NOT have your best interest in mind, and that they can get better results by simply making better choices on a daily basis (like not eating at McDonalds 5 days a week)
 

BrooklynHustle

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I see it totally different from the writer's point of view. I understand the business model that he's demonstrating -- but, that only the facade level.

Yes, Mr. Kroc sold hamburgers on a huge scale. I personally believe that Mr. Kroc was in the real estate business, like the oil companies with their gas stations. He sold his hamburgers in order to support his real estate holding. His main business was to sell more prime corners, that he improved with his little stores, that were turn key operations. He had a whole real estate division to choose and purchase the sites. A lot of effort went into doing the demographics for the area, growth patterns, traffic counts, lot configuration and accessibility when choosing the right sites. Then he had full time crews going around the country building his partly prefab, cookie cutter floor plan buildings. His business model was more that of a real estate developer, than a food guy.

The key to his continuing success with the owner/operators was his air tight contracts. The "owners" had to buy their supplies and goods from his company. In California, Kroc's sister distribution company was Golden State Foods. His centralized production kitchens and his fleet of trucks were his lifeline to the whole empire. It gave him total control over the "owners' stores" and gave Kroc a constant daily cash flow from selling them their materials, foods and supplies. His genius was his system and his process.

Does that answer your question?
Now this is more like it...
 
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jpmartin

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And that's the problem capitalism is dealing with now, too few people with a moral foundation, and too many money-chasers...

What would you prefer, socialism or capitalism? The best of which evil? (Disclosure: I'm a capitalist, but I believe in benevolent capitalism).

Obesity, Type-2 Diabetes, cancer -- first they profit on the things that create these diseases and then they profit from treating the disease. It is a multi-trillion dollar scam that powers the economy. And consumers have zero self-restraint to stop the scam because it all follows an addictive diagnostic... it tastes good!

Pharma industry also runs along similar lines. Create medicines that cause other problems. But can you blame MCD? If the person eats like once in a month, it's not going to cause him much harm as the body will fix it. But if they eat every day, and think about suing the company because they got fat and have Diabetes (and without admitting their lifestyle was one without any exercise)... who would you blame?

The same BS is going on with smartphones, giving users a tiny smidgen of dopamine and addicting them to swipes, clicks, and likes.

Yep, no doubt! And yet we're suckers for the domaine effect. Hard to resist...

Change will have to come from the grass roots level where consumers finally wise up and unblind themselves to their self-induced poisoning at behest of the profiteers. I won't hold my breath.

This is the hardest part... but when change does come, profiteers will still be making money. How? They'll sell organic products at 10x the cost. Nothing really changes.
 

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