Robbing Banks is a Rich Man's Sport
Major heists have a poor ROI, making it unattainable for the average Joe
Heists and major robberies, once dominated by the poor and working class, have become nothing but an expensive hobby for rich men unwilling to go to therapy.
The noble days of Jesse James robbing banks as a conduit for financial stability are over. Today’s criminals more closely resemble Thomas Crown than Bonnie & Clyde.
The return on investment (ROI), of such heists are no longer economically feasible, forcing the working class to resort to small ball petty crime, making the major scores only accessible to the ultra-rich.
This post will demonstrate why the ROI of great heists has been declining for decades, the societal implications and what this means for young children aspiring to be the next Neil McCauley or Danny Ocean.
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The Cost of Pulling off a Heist
Heading into my Bachelor party, my Best Man, Augustin asked me what I wanted to do. Like any normal person, I told him I wanted to rob a bank or casino. When else would such a large group of friends be able to leave our work and families behind to accomplish such a feat? After doing what I am certain was a thorough review, he informed me that it was simply not feasible.
Pulling off a medium sized heist would require months if not years of training; the time spent practicing and planning would make it impossible to keep a full time job. Without factoring in the lost income for 11 men with white collar jobs, the equipment and materials needed for first timers, would costs in the hundreds of thousands of dollars. Due to the high risk of getting caught and facing jail time, an experienced criminal lawyer needs to be kept on retainer. If we believed at some point during the heist, we may find ourselves in a gun fight, we would need to pay additional legal fees preparing our last wills and testaments, if any of our party members were to perish.
When reviewing these costs, the initial budget for this heist came in above $3M. Opting for less costly accommodations and restaurants during our stay did not meaningfully reduce the cost. To make my dream a reality, we would need to raise the money from investors.
While working on a pitch deck for this opportunity, we quickly realized that we had a problem. Most medium sized heists only had an expected payout between $1-15M. This return was not high enough for Venture Capitalists (VCs). We met with a few prominent firms and they promptly rejected us.
“Sorry gents, this venture just doesn’t have enough upside for us. We need to underwrite at least a 10X return on our money. If this one is successful and you one day choose to go up-market, come back to us and maybe there will be a fit then. “ Roelof Botha, Managing Partner - Sequoia Ventures
“This looks interesting but unfortunately we have a conflict; Adam Neumann was in here last week pitching something similar and we already gave him $100M for it. We don’t want to be seen backing a potential competitor.” Marc Andreesen, Managing Partner - Andreesen Horowitz A16z
See Footnote for more details1 (If you want to raise VC funding for real, check here)
Other institutional investors were not much help either, citing issues having to do with low Sharpe Ratios and ESG concerns associated with financing crime. We finally had to accept that heists like these were not available to people in our tax bracket. We settled for a more conventional Bachelor party, which was perfectly lovely. However, as I listened to Kygo playing Firestorm to finish his set at Ushuaïa, I couldn’t help but wonder to myself, when did bank robberies and heist become a rich person activity?
The History of Heists/Robberies
Serial robbery is a noble tradition extending back to the days of Robin Hood. As the legend went, Mr. Hood would steal from the rich and give to the poor. At the time the rich consisted of Royals, Aristocrats, the Church and a few corrupt politicians. Income inequality was much worse than it is now; the rich would represent at most 5% of the population while owning about 95% of all assets. These days the top 10% of Westerners own closer to 60-70% of wealth within their country.
This is likely why those living in the Feudal system looked at Robin Hood and didn’t see a criminal. They could not have faith in the invisible hand of the free market or government fiscal policy to help them. Robin Hood who was single handedly redistributing wealth, became the children’s savior and hero.
One of these young children, Jesse James, became one of the earliest and most famous serial bank robbers in American history. The concept of a "serial bank robber" existed before James, but he became a national figure, partly due to sensationalized media coverage, which sometimes romanticized him as a Robin Hood-like figure.
Jesse James and his gang did not perform any elaborate tricks or stunts in their robberies. They would show up as a group of several armed men in the middle of the day, hold up the cashiers of the bank, take a few hostages then ride off with the money as quickly as they can. He would basically just “Raw-Dog” it.
While it wasn’t their primary goal, if they had to shoot some bank employees or law enforcement, so be it. Even if Mr. James and his associates were merely trying to continue the legacy of Robin Hood, the mainstream media footage would inspire many copycat bank robbers, that would co-opt this message. Most like Jesse James came from humble beginnings, but there were some exceptions.
Adam Worth, born three years before Jesse James, came from a relatively well off family. Unlike Jesse James, he was not stealing out of necessity and he wasn’t just after money. Worth was an international thief, going after priceless works of art and sought to avoid violent confrontations. He was a classy and well educated gentlemen, accepted by high society in American and Europe. Worth served as the inspiration for Moriarty, Sherlock Holmes main rival. Not only would he inspire Sir Arthur Conan Doyle, but most modern criminals.
The Ocean’s 11 Hoodwink
For Young Gen Xer’s and Millennials, the gold standard for organized heist films is Ocean’s 11. The film stars an absolutely legendary cast including George Clooney, Brad Pitt, Matt Damon and Julia Roberts. Part of why we love the Ocean’s Trilogy, is because the characters feel relatable. The team largely hails from middle or working-class backgrounds. Each team member has their quirks but they have clear motivations why they want to participate in the operation: money or status. Besides Danny Ocean (Clooney), who just wants to win Tess back from Terry Benedict.
Ocean’s 11 are a cast of lovable misfits, trying to take down the mean Terry Benedict. Sure they were criminals, but they are robbing a Casino with $160M in their vault. I’m sure Benedict has good insurance, it’s practically a victimless crime right? The Ocean’s Trilogy were not alone in depicting this. Other films from the 2000’s such as The Italian Job, The Fast and the Furious and The Town all generally deal with poor or working class individuals stealing from the rich while enacting revenge. Films like these, teach us that it’s not really a crime, if it happens to a rich person.
No wonder there is widespread support amongst young people for the likes of Elisabeth Warren, Bernie Sanders & AOC. T-shirts saying “Eat the Rich!” are merely repeating lessons learnt from childhood heroes such as Jesse James or Danny Ocean.
These people have unfortunately been mislead. Upon rewatching Ocean’s 11, a few things put this poor misfit versus rich mean guy dynamic into doubt:
This group that Danny assembled are experienced and accomplished thieves. When Basher (Don Cheadle) tries to perform a smaller heist with another group, it fails due to the lack of talent. Such heists can only work with an all star lineup.
All star lineups are expensive, especially now that we live in a salary cap era. Reuben is wealthy and willing to bankroll the whole operation, negating the need to go to VCs. Without a friend or relative willing to play the role of Reuben, there is no way they could afford such a massive payroll & expenses.
Linus (Matt Damon), is only added to the group because of his father, making him a “Criminal Nepo Baby”. Terry Benedict on the other hand, built his empire and even after “making it” still works harder than anyone in the Ocean’s group.
While Danny and his crew were not rich, they did not need to incur any financial risk because of the generosity of Reuben. The participants only had to forgo a few weeks worth of wages but since none were salaried, the opportunity cost was far less than your regular Joe with a family to support.
The fact of the matter is, the Ocean’s group and most big score thieves, don’t actually pull off these heists for the money.
Men Would Rather Steal Than Attend Therapy
“Ya gotta be *nuts*, And you're gonna need a crew as *nuts* as you are!”
Reuben Tishkoff - Ocean’s 11
Rusty knew Danny didn’t want to do the Bellagio job for the money. When he pressed him, Danny gave him this whole story of it being a rigged game, and that this was their chance for the little guy to hit back at the Casino! You would swear that Danny Ocean was quoting Robin Hood or Bernie Sanders.
Rusty might not have believed it but he accepted the premise, because he and the rest of the crew were dying of boredom. When Rusty realized Danny was really doing it to win his ex-wife back, he knew the money was only a tertiary consideration. Robbing a casino to win back an ex, who left you over incarceration for stealing is an odd strategy. Yet Danny managed to get the money, outsmart a rival and get his wife back.
When Danny & Rusty first got into the game, they promised they would play it like they had nothing to lose. Throughout the Ocean’s trilogy, they would break this rule, but they always won because they didn’t care about the money. If you look at any successful film thief of the past 40 years, you will notice they did the same.
Neil McCauley (Robert De Niro) from Heat had easily amassed tens of millions of dollars from his recent heists alone but lived a minimalist and isolationist lifestyle. While his crew members were participating in heists out of the necessity to pay their bills or fill a void, McCauley only cared about the score. This is why he was successful and in the clear until he finally slipped giving Al Pacino the chance to thwart him. Although it wasn’t the money that defeated him. He chose revenge over millions of dollars and a clean getaway with his girlfriend.
Think it’s a one off? In The Dark Knight, The Joker (Heath Ledger) set hundreds of millions of dollars ablaze purely to send a message. The Joker did not care about wealth, he simply wanted to sow chaos.
Thomas Crown, François Toulour (The Night Fox) and most Bond Villains are already fabulously wealthy yet they choose to risk jail time or death, for various reasons unrelated to needing money. What do these villains have in common? They are bored unmarried, men who don’t appear to keep regular appointments with a therapist. This is not a coincidence. The unit economics of such heists are so unattractive, that rational thieves wouldn’t attempt them.
Where are the emotionally stable criminals?
The fact is, despite the high potential payoff from such heists, the high costs and low probability of success, render such activities economically unfeasible. When rational criminals evaluate different scores, they calculate its Heist Net Present Value (HNPV). The HNPV factors in the risk versus reward of these activities with the time a criminal would need to allocate. Each would be criminal has their own desired threshold they will want to hit, but at a minimum it should at least equal to or greater than 1, otherwise you are expecting to lose money on the operation.
When crunching the numbers, Mega Heists (>$100M+) have very high anticipated payouts but carry high operational costs, time commitments and a low probability of success. In fact, after evaluating qualifying mega heists of the past 30 years, none had an HNPV greater than one. This is why rational criminals that aren’t independently wealthy have to settle for lower market robberies.
Criminals stealing out of economic necessity are optimizing for lower costs of operations, higher probability of success and lower time commitments. This really only leaves them with Small Ball Crime (<$500K) and possibly Lower Mid-Market Heists ($500K-15M). Toby & Tanner Howard in Hell or High Water are only going after scores of about $40K. Ryan Gosling in The Place Beyond the Pines, only manages about $15K per bank robbery. These men don’t have the resources at their disposal to rob the Bellagio, and if they get caught, who will feed their families? This forces them to settle for small payouts.
Since only wealthy thieves can attempt the big payouts, income inequality becomes further exacerbated. Some recent Defund the Police movements gave temporary hope for the little guy, but many companies responded with private security solutions. Gone are the days where all it took to pull off large heists was a questionable upbringing and a will do attitude.
Even the Fast and the Furious crew that started by stealing drag cars, won’t even get out of bed unless they are commandeering helicopters and visiting multiple continents on the same mission. They have become the rich that they used to steal from.
Unless the government intervenes to do something about this and fast, I’m afraid just like in the days of Robin Hood, the rich will soon be the only group able to pull off heists, of any size. There needs to be a New Deal, type program for young aspiring criminals. Whether it be new university programs or scholarship funds, there needs to be a major reset to level the playing field. Otherwise we will be left with a society where all heists are only performed by bored, rich men who are unwilling to go to therapy.
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These conversations may not have happened as described, or at all.
Classic example of golden handcuffs. I think who’s really getting screwed here is the middle class, again.
The big variable in your cost calculation is the opportunity cost of lost wages. Early in your career it costs you little to get together with your friends and plan a heist for a year. If you find creative hacks to bring down the cost of equipment you might as well give it a try.
Similarly, the ultra rich just don’t have to worry about the opportunity cost at all.
But if you’re comfortably settled in your upper-middle-class corporate job, you simply have too much to lose. Even just watching Oceans Eleven costs you like $1000 in opportunity costs, and if you have to send 4 kids to private school in Connecticut, that’s not something you can afford.
This doesn’t fit with your excellent essay, but true story: Last year a good friend of mine (malpractice lawyer) was constantly pressured by his wife and social circles to keep up the lifestyle. Eventually he just couldn’t take it but wouldn’t talk to his wife or anyone about it. Got a gun, walked into a bank, walked out with maybe 10k, got arrested on the drive back home. He’s in jail for around 3 years, but doesn’t have to deal with the previous pressures. His wife is from a rich family so she’s ok. You’ve heard of “suicide by cop”. I call this “freedom by prison”.