wealthymatters

A Little Math To Wealth

August 21, 2013 2 Comments

During the early part of the eighteenth century, the French government issued a series of bonds to help raise money. With the decline of the French economy in the 1720s, they were forced to cut the interest rates on the bonds, which drastically diminished the market value of said bonds. This resulted in the French government having considerable difficulty in raising money via new bond sales.

Le Pelletier-Desforts, Deputy Finance Minister for France, had a “brilliant” idea as to how to raise the value of existing bonds, encourage the sale of new bonds, and earn some money for the government- a trifecta. His idea was to allow bond owners to buy a lottery ticket linked to the value of their bonds (each ticket costing 1/1000th of the bond’s value). The winner would get the face value of their bond, which was much more than what they could get on the market, plus a ‘jackpot’ of 500,000 livres, which would make the winner instantly insanely rich- essentially set for life.

Unfortunately for the government, the mathematics behind this new fundraising scheme was vastly flawed. If a person owned a bond worth a very small amount, with the lotto ticket for the bond costing just 1/1000th of the value, he/she could buy the lotto tickets extremely cheaply, yet their lotto ticket had just as much of a chance of winning as someone who owned a bond for 100,000 livres and had to buy their ticket for 100 livres. The mathematician, de la Condamine realized that if he was able to buy up a large percentage of the existing small bonds, split into 1,000 livres a bond, he could then buy each lotto ticket for just 1 livre. If he owned enough of these small bonds, he could quickly give himself the bulk of the entrees in the lotto while spending much less than the jackpot, thus assuring he’d win quite often and always win much more than he put in. Read more of this post

Filed under Tidbits Tagged with Le Pelletier-Desforts, lottery, lottery ticket, Marie de la Condamine, mathematics, postaday, raffle, raffle ticket, syndicate, trifecta, Voltaire, winning the lottery

Sara Blakely Of Spanx

August 21, 2013 Leave a comment

wealthymatters

Sara Blakely was 27, working for Danka , selling fax machines door-to-door when one day she had her ‘a-ha’ moment. She was going to a party and needed footless pantyhose to go with her outfit, so she cut the ‘feet’ off her pantyhose. And Bam! Problem solved! Somewhere in there, she’d been praying to ‘the universe’ to give her an idea that would help her make millions and touch people’s lives. She’d abandoned the idea, but when she was watching the Oprah show and heard Opera say that she too cut off the feet of her pantyhose, the spark was rekindled, almost as a confirmation that she should go ahead with her idea.

When Sara began to research undergarments for women and how they’d been made for the last 50 years, she was astonished. From the absurd sizing protocols (only one average waist measure was used on all the products, regardless of the size of the garment), to how products were tested (on manikins not real people), Sara saw that the undergarment industry needed a female perspective – insights from a real woman wearing these items to shape the product development direction so the products were useful, effective, and as comfortable as possible. She broke the mold, and developed a completely new approach to developing women’s undergarments. Read more of this post