I was walking down Bourbon street at about 8pm, enjoying the nighttime atmosphere of New Orleans. A man walked up and asked me a simple question:
"I bet you a shoe shine I can guess where you got your shoes."
It was an interesting question. I'm from Oregon, walking through New Orleans. There's no way he could guess even the state I was from let alone the store I'd bought them from.
Armed with a sense of excitement from being in New Orleans, and the knowledge it would be impossible for a stranger to guess this information, I shook his hand and took the bet.
My first mistake.
He put some shine on my shoes and started polishing away, telling me all about how exciting the town was and hamming away an explanation of how he'd be able to guess just from looking "where you got your shoes." I kept smiling, confident in my secret and enjoying that I'd gotten a free shoeshine.
"So just to be clear, I said I'd be able to tell you where you got your shoes, not where you purchased your shoes. Get what I'm saying?"
My heart sank as I slowly nodded my head.
"So the next time someone asks where you got your shoes, you tell them you got them on your feet. Am I right? That'll be ten and ten, so twenty total for your New Orleans shoeshine."
I walked to a nearby restaurant and used their ATM, more entertained by the encounter than upset at losing the bet. After all, I walked right into the con and he deserved every penny.
"Don't feel too bad, you could've been wearing cowboy boots and I would've charged $80 a shoe. You got off cheap. And making money like this keeps me from snatching purses. Have a great night!"
There will always be people coming at you from left and right with great ideas. Great ideas they want to do with your support, great ideas they want you to do with their support. Each is some kind of investment or risk - pay a certain amount for a reward, take a bet for a big payoff, sacrifice hours of your life to learn an investment secret. The different mixes of seemingly-upstanding cons are endless.
When you sit down at the business table you always look for the sucker, and if you don’t see it – it’s you.[ref]Mark Cuban[/ref]
But rarely do they work out.
More often than not, the person pitching the idea to you is the one who will reap some reward, and they need your trust to do so. It could be a friend who needs your investment so they can start a business that will make them money. It could be a shoeshiner making a bet based on a riddle.
It could be a new employer/employee/customer/client wanting you to sign a new contract.
The point isn't that you need to be skeptical of anyone offering a deal - you can actually make money on most offers out there. The point is that you need to pay attention to what's being offered and any subtleties in the deal.
You could end up walking to a nearby restaurant to get $20 to pay a shoeshiner. Or you could end up signing a legally-binding deal that kills your business prospects for the next several years.
Both are good lessons to learn as you conduct business with both friends and strangers. One of them is far more costly than the other, tho.