Investing for non investors
The Best Investment You Can Possibly Make If You Are Unsure What to Invest in
Invest in Others, Safely
Publish Date: 07/30/2005
I was a witness to the dot com era start, expansion and bust. I also know of small business incubators. I am familiar with mutual funds, real estate, collectibles and Misc investments and especially how to start one's own business. I am completing my doctorate in investment analysis.
I have nothing against all types of investments IF YOU don't care about the long term consequences of the use of your money. I say that because MOST investments are called, by the IRS, Passive, since most people hand their cash to others and then, cross their fingers and hope. Such passive investments gain little or no leverage, tax benefits or have protection against loss. Finally, they are usually illiquidone cannot get any part of their cash back for days or weeks.
After having been an expert at Allexperts and Askme.com for 5+ years, I have been asked about investments by over 20,000 people. It took me time to review all types of investments and each one's safety factors and their purported returns and their liquidity factors. Most were horribly bland, offered poor returns and no leverage.
Finally, late last year, I used "Star Trek's Spock's approach and that used by Sherlock Homes; when all else fails, review the only choice left! What I mean here is that when my inquirers were not sure and had already said to me "I am not excited by" and The normal investments were listed, I deduced that what was left was not actually a high risk investment tool at all but one NORMALLY used only by very astute investors who had millions of dollars available. Meaning, what was considered to be one of the riskiest investments in existence was in fact, one of the safest! That area or investment tool was VENTURE CAPITAL. Do NOT simply seek out and interview the hundreds of venture capital firms spread out across America, but instead, review your needs and preferences with your attorney and CPA and invest locally in your own community via its entrepreneurs.
MOST venture capitalists invest millions of dollars into a project. While that may be an industrial norm, it need not be. You can decide, with your advisors, what amount per business suits your comfort level and how many investments you can make per annum. Some retirees are now putting as little as $50,000 into a foundation or other fund they create and issue checks in amounts as small as $2,000 or $5,000.
Using this approach, the person with some investment dollars gets to be directly involved in his/her fields of interest, working hand in hand with all age entrepreneurs and entrepreneur trainees.
This investment approach I am discussing is different from foundation grant money. THIS approach is not a grant but an investment. It trades cash investments for an equity stake in a new or expanding company and the investor becomes a PT employee of the firm! [CEO, owner or otherwise.]
The entrepreneur INVESTOR works within the company x' hours a week, and works at those tasks previously agreed upon between the investor and the business creator.
The investor handles the cash, for the security of the firm, and collects a percentage of the net profit, again, on a cycle as previously agreed to [daily, weekly whatever].
The investor uses his CPA and attorney to both protect his investment and to cut the immediate operating costs of the company [paying both from the revenue of the new firm or from the future profits, whatever was previously agreed upon].
By having the investor work within the firm daily, the investment is protected as much as can be, and ideas for improvement can be put to use immediately and waste eliminated.
An investor can receive from 25% to over 3,000 percent return on his money.
Risks: While every business includes risks, these are reduced since the company has the vision of the entrepreneur, the business savvy of the investor, the breathe vision of both
The attorney and the CPA and often times, those 4 people can do the work of 10 and again wind up cutting the expenses of the company, helping to assure a profit to the firm.
The US has over 1,000,000 millionaires. If every one of them financed 1 new business
Start-up per month, unemployment in the US would disappear within 24 months!
Investing for non investors
By: k. kemper
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