Merchant Advance Blog

Blog Article: Punch-Drunk Money Management

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With the imminent arrival of the Thomas Pynchon novel Inherent Vice in theatres, your blogger has been on a tear watching and re-watching the films of esteemed American director Paul Thomas Anderson. There are some real gems to be had in his catalogue: Hard Eight, Boogie Nights, Magnolia, There Will Be Blood, and The Master to name a few. A night or two ago, I settled in to revisit Punch-Drunk Love. The film, released in 2002, was noted for an idiosyncratically dramatic performance by big-budget funnyman Adam Sandler – one in which he played decidedly against type as a lonely, awkward businessman. In addition to earning a place in the canon of strange films about strange people, Punch-Drunk Love also hides some lessons about business and money management.

Pudding and Proofs of Purchase

Sandler’s character, Barry Egan, is a highly professional, capable and enthusiastic entrepreneur dealing in the trade of novelty toilet-plungers and other such strange paraphernalia. He is introduced to the viewer in a way that betrays a fairly unique sense of consumer and business savvy – a phone conversation in which he appears to outsmart a retail promotion designed to earn frequent-flyer miles by turning in proofs of purchase.

Barry discovers a way to optimize the rewards offered by this promotion, spending relatively small amounts of money on pudding cups to accrue a staggering number of flyer miles worth many times the value of his purchase investment. Anderson rather strangely makes the pudding subplot very important in the overall arc of the film, and as it turns out, this part of the story was not entirely a fictional construct. In 1999, an American entrepreneur named David Phillips actually conducted the same consumer experiment. Phillips succeeded in convincing American Airlines that his claim to the reward was legitimate, and was later awarded the highest rank in their frequent flyer program in perpetuity.

The audience is led to believe that the pudding venture will turn out to be a tragic, misunderstood fool’s errand, a consequence of poor judgement that leads the character to spend thousands of dollars (on pudding he will never eat) for nothing. Surprisingly, Anderson shows us in the end that Barry’s attentiveness to thrift and careful, businesslike management of “the fine print” work out to his benefit after all.

Phone Bills and Punch-Ups

Moments throughout Punch-Drunk Love highlight Barry’s intense loneliness and childlike naiveté. A pivotal series of scenes show him dialling up a lengthy conversation on a phone line offering to help callers “find love,” not realizing that it is in fact a call-girl service with a tremendously expensive per-minute rate. The phone-line operators obtain Barry’s credit information, Social Security number, and home address, and proceed to blackmail him when he realizes the extent of the charges.

Such obliviousness to basic scam architecture and sudden, poor money management as well as disregard of “the fine print” fly in the face of his initially demonstrated, highly intuitive and intelligent business appraisal. Negative emotions drain Barry of his entrepreneurial savvy and set in motion a series of escalating debts that set another of the film’s major plots in motion.

Money Management

As Punch-Drunk Love proves, keeping a clear head about your business’ cash management can be the difference between coming out ahead or finding yourself in perilous circumstances. Take a look at this great article by Reuters, which sums up some key concepts on money management and cash flow if you’re keen to learn more about this crucial aspect of managing your small business operations.

 

 

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