Comment by system7rocks
13 days ago
They bank it as any insurance company should do. Invest it cautiously. Hire sound decent people to run it with solid levels of accountability (including from a board of directors that is mostly made up of a rotating number of clients). Do it from the beginning of the company. Grow your staff slowly. Build enough of a cushion that can last the company years. Right? Right?
I'd run that company well for $250k/annually + benefits (an enormous amount of money).
> They bank it as any insurance company should do. Invest it cautiously.
I hope they aren't investing that capital. AFAIK, insurance capital needs to be liquid, for it to be ready for a payout.
You still didn't address my point is that $25m/yr is a drop in the ocean. "investing $25m properly" will have zero impact on the business.
It will have atleast be > than zero, and doing it every year instead of giving it away to some overpriced CEO will it will accumulate.
I don't think you quite get how little money it is for these types of operations, 25m is essentially missing 2-3 zeros before it becomes anywhere near usable and even worth it to bother.
State Farm’s revenue was $104.2 billion for 2023. His payment was 0.02% of the revenue. That’s basically a rounding error.
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