A friend of mine told me a story of a lesson he learned from an old Jewish investor from NYC.
Eli was an investor and owned a ton of properties in and around Buffalo. Dorian had a small remodeling company that happened to be really good at drywall. Eli and Dorian struck a deal for a particular job that was to pay $1,500. The drywall was hung. All that Dorian had to do was go in and finish. Well Dorian did just that and when he was done Eli paid him with a check which he had taken the liberty of endorsing for Dorian as “For Deposit Only”. Of course Dorian was surprised but Eli simply offered that it was the way he does business. His was a check that required a bank account.
When Eli offered a second job, Dorian thought that even though he had some quirks Eli appeared to be good for the money, so he took the job. The following friday he finished the job as planned. He called Eli and asked if he could drop off his invoice. Eli was kind of in a hurry and would not have time for a meeting this weekend. He did however have time to explain to Dorian that the Sabbath was about to start and that would plan to talk further on Monday.
On Monday Eli took Dorian’s invoice and asked if the arrangement seemed satisfactory. Dorian’s feelings were as long as the relationship continued as it had so far then he was totally happy. Eli proceed to write him a check for $25,000 as a down payment for the next five projects.
He explained to Dorian that he had passed his test. Eli knew that if Dorian was the kind of person who lived hand to mouth, then he was not the kind of person to be trusted with any long term responsibility. And that sooner or later something would happen in Dorians life that would prevent him from being dependable.
True, it is a broad categorization. But we’re all in business to make money. How much stake do you want to put in the person who can’t manage his own finances?