Blog by Sumana Harihareswara, Changeset founder

27 Mar 2023, 13:30 p.m.

Brewster's Millions And The Definition of an Asset

The other day, Leonard and I watched the 1985 Richard Pryor film Brewster's Millions. In case you haven't seen it, Brewster's Millions is a comedy with a wacky premise: someone finds out that they've inherited a bunch of money, but with weird conditions. They have to spend a chunk of the money really fast (in the film it's USD$30 million within 30 days), without accruing any lasting assets from those purchases. They can't just donate it or gamble it away or give it as gifts to individuals.* And they can't tell anyone else about the conditions of the will and the reason why they're spending as they are. The heir must demonstrate that they've spent everything by submitting receipts.

The movie's based on a book published in 1902 that people have adapted into more than a dozen movies. And we'd never read it or seen any of the films before, but I presume that a big part of the appeal is that you also get to fantasize: how would you solve this puzzle?

As Leonard pointed out: the first thing to do, perhaps, ought to be to hire professional assistance: experts who could research and advise you on how to do this. But then of course the problem reduces to: what ought those experts suggest?

Some options (and some of these are things Brewster indeed does in the film):

  • Take out lots of ads in the most expensive possible media markets. You do not have to limit yourself to the city or country you're in! I personally think it would be cool to take out ads asking the public to recommend music for you to listen to. Imagine how varied the recs would be!
  • Invest in things it's easy to lose money doing, such as running a restaurant in a bad location, starting a small press publisher, financing a bad play,** or trying to rehabilitate a failing sports team.
  • Donate to political campaigns, or even run for an office you are very unlikely to achieve.
  • Throw huge parties and open them to the public. (You could rewrite The Great Gatsby as Gatsby's Millions!)
  • Commission spectacular live art or sports performances (dance, music, martial arts, and similar). Parades!
  • Buy tons of a cryptocurrency that is about to collapse.
  • Fly to space.
  • Enjoy expensive drugs (vintage wines are the most legal option in the US, but you could travel to places where other options are available).
  • Pay celebrities to come hang out with you.

A few possible loopholes:

  • The knowledge in your head does not count as an asset according to Generally Accepted Accounting Principles, so you could pay experts tons of money to come and teach you knowledge and skills. Similarly, your own body is not an asset under GAAP, so you could pay for lots of physical training, elective surgery, and unnecessary medical tests. I feel unclear about the status of implants as assets, so maybe steer clear of those, but chemical and biological infusions would probably work.
  • The heir can't tell anyone about the conditions of the will, but that secrecy clause might not apply to the executor of the will. So you could pay the executor to tell your friends about the conditions you're under, so you don't drive them away with your actions and so they could possibly help you.
  • I doubt the will's secrecy clause could override doctor-patient confidentiality or lawyer-client confidentiality, so -- with the collusion of your doctor or lawyer -- you could overpay them for services rendered. And a lawyer could help you figure out more stuff you can buy that doesn't count as an asset on a balance sheet.
  • The heir is not allowed to "destroy what is inherently valuable," but that limitation doesn't apply to others. So you could, say, buy a social media platform, then make business decisions that allow trolls, spies, etc. to destroy its value.

Thinking about this reminds me of taking that corporate accounting class back in 2006, as I was starting my master's in tech management, where I learned the definition of an asset. An asset is something you now control, thanks to a past acquisition or transaction at a measurable cost, that you expect will give you economic benefits in the future. And thus that's when I learned that employees don't belong on the balance sheet, because the employer doesn't control them, and because the benefit they'll get from that employment is in the future, not the past. Which means it's harder for a company to quantitatively account for the value that it gets from having particularly awesome employees, use that valuation as support when seeking investment or loans, etc. Accounting is weird:

Every so often I have to remind myself that I am studying not the world as it is, but an internally consistent subset, a continent or a country where profit is the primary motive, taxes are to be avoided, debt has no moral status, and every business is a corporation responsible to shareholders.

Many years later, as a consultant, I'm reflecting on the value my work provides and how intangible it can feel at first. Demonstrating the value often takes a little work -- a case study, after-the-fact qualitative or quantitative assessments, etc. It's there, though!

If Montgomery Brewster were a solo open source software maintainer, would spending money on Changeset's services be allowed within the terms of the will? I think so, based on the understanding that the open source project itself isn't accounted as one of his assets. His project is likely not trademarked (just going off statistical likelihood) so that intellectual property asset wouldn't be a problem. Can you list maintainer privileges for an open source project on your balance sheet? My initial assessment would be "no" (or that it lands in the fuzzy "goodwill" category) but I'm willing to be corrected by experts.

* In the 1985 film, Brewster is limited to donating up to 5% and gambling up to 5% of the $30 million:

You have to spend the thirty million, but after thirty days you're not allowed to own any assets. No houses, no cars, no jewelry. Nothing but the clothes on your back! Now, you can hire anybody you want, but you have to get value for their services. You can donate five percent to charity and you can gamble another five percent away, but you can't give this money away, and that includes buying the Hope Diamond for some bimbo as a birthday present. ...[and] You must not destroy what is inherently valuable, that's instant disqualification.

** Caution that you may stumble into The Producers if you choose this approach.


27 Mar 2023, 14:12 p.m.

Do you think "buy art, donate art to museums" would be allowed under the rules? You aren't donating money to a person and you don't retain the actual object afterwards. Alternatively: buy a shitload of medical debt and forgive it, or skirt the 5% to charity maximum by giving money to 527s, political orgs that are explicitly not charities, or a labor union.

The "can't give it to individuals" clause would piss me off, tbh, because my first thought is: every single campaign on GoFundMe is now funded in full! You could also maybe use a chunk of it as a retainer or deposit for a professional, like a chef, or an organizer.

27 Mar 2023, 23:50 p.m.

Thanks for writing this–I've always heard about this movie but you finally just gave me the excuse to watch it tonight!

I agree that it's an interesting thought puzzle. It's such a simple premise on the surface, but given the exceptions it's also a logistical nightmare to explain to an audience what to rule out. (Those are some good questions Elizabeth!)

One of the most unrealistic parts of this film is how to disperse the money in such an expedited manner. The real world works VERY slowly at times. A lot of things get tied up in billing departments and even the assets he holds for a brief amount of time (like the baseball team) would likely take months of paperwork to untangle.

29 Mar 2023, 15:47 p.m.

Corporate accounting is weird. I used to work specifically in asset accounting and two years after my layoff, I can still recite some of the rules around assets. It's a capital project if it will add value that wasn't there before, extend the life of the asset by X amount of years, or if it's brand new. Otherwise it's maintenance--and that's a problem in the US. Infrastructure work is maintenance, not capital and if your state gets capital funding for infrastructure, they have to spend it on something stupid instead of fixing the ten million potholes or the bridges about to collapse...I need to go lie down now.

30 Mar 2023, 0:37 a.m.

I laughed out loud at this line: “So you could, say, buy a social media platform, then make business decisions that allow trolls, spies, etc. to destroy its value.”