Oct 5th, 2008
Walden and Otto went out to the site with me today. Here they are helping saw up a fallen tree.
It reminded me of an exchange that has not yet happened:
Aaron: How was school today, Walden?
Aaron: Did they teach you how to make breakfast for 18 people, yet?
Walden: No, Dad. Still no lessons on breakfast prep.
Aaron: Have you told them that you are going to be innkeeper? What are they teaching you in this school?
Walden: I did well in spelling today.
Aaron: SPELLING?! Listen to me now, son: spelling is for kids who don’t know what they are going to be when they grow up.
The investment bankers in my life are aghast that I am building an inn. They see my nice, tidy, debt-free balance sheet and say, “Why would you want to take on debt to build an inn?”
To make a move like this, one must take the long view. When Warren Buffet buys a company, he tells the manager: “Run this company as if you own it and you are not allowed to sell it for 100 years.”
By this criterion, the inn is a no-brainer:
- The student’s experience is improved
- We get complete control over our schedule
- The value of the brand gets a boost from having a “Mecca”
- Assuming we teach many classes each year, we will lower our costs
- The raw book value of the company increases as we pay off our loan
- We get a recurring tax break as the buildings and furnishing depreciate over 39 years
- And, assuming it is successful, we should learn enough to replicate this success a dozen more times
However, I sometimes wonder if it is fair to put the whole family on the 100-year plan. Maybe Walden doesn’t want to be an innkeeper. I love him, and I want him to be able chose his own career.
So, I won’t stand in his way if he would rather be an instructor.