Tag: grow the capital

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The Wealth Algorithm (6) – Partnerships


 

Since the beginning of this series, we’ve been on a journey. No hurry, no rush. It’s a journey of a lifetime. Most of us have spent their days under pressure, trying to do several things concurrently. It’s different here. When you come to this blog, I want you to set everything else aside. Read, focus, apply, enjoy the dream of eventually reaching abundance. Through these articles, your reading and application, together, we shall make that dream your reality!

Today, I’m going to talk about the second option of financing that dream, which is partnerships.

I had written an article titled “Investment Partnership (TM)“. It would be helpful to go back and have a look at it before you continue reading.

According to the online Merriam-Webster Dictionary (TM), a partnership is “a relationship resembling a legal partnership and usually involving close cooperation between parties having specified and joint rights and responsibilities”

The keywords in that definition are: Relationship, legal, cooperation, parties, specified rights and responsibilities.

How does that relate to our discussion?

Your intention is to reach a certain sum of money by a certain date. In order to do that, you need a capital to grow. Obtaining that capital requires some sort of financing. An investment partnership (TM), is the option we decided to pursue to secure that financing.

As I mentioned in the article referred to above, this partnership takes place between two parties: One party provides the capital, the second party provides the time, energy and expertise to grow that capital, over a specified period of time. The two partners are equal. They share profit and loss on a 50/50 basis.

The partnership agreement “specifies” the details of the “relationship”: The legal aspects, the type of cooperation, the involved parties, and the rights and responsibilities of each party. It also specifies the capital, the timeframe, and the way any outcome shall be shared between the parties.

From your perspective, here is what you need to do:

  1. Prepare a convincing business plan, that outlines your strategy of how you intend to grow the capital
  2. Find an interested party, who has that capital, and who is willing to consider a partnership with you
  3. Present your plan, and hopefully, win the approval of your potential partner
  4. Work with your new partner on the partnership agreement
  5. Get the funds and start working!

In the next article, I’ll shed more light on each of the above steps. Please spend some time on this post, and let me know if you have any questions or comments.

The Wealth Maker

 

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The Wealth Algorithm (5) – Financing Your Dream!


 

We’re now ready to tackle the process that will take you from your current financial state (networth) to your dream (the clear intention you set few posts ago).

I’m not going to use any assumptions concerning your work status. So whether you were employed, self-employed, unemployed, running a small business, etc, our discussion would start from the networth we calculated in article (3) of this series.

There are so many ways to make money. I’ve covered a number of them in this blog. You could go back and pick the one that suits you. We’ve talked a great deal about value investing, making money online. I touched on HYIP’s. Then finally spent few articles exploring online trading, including binary options trading.

Any one of those requires an initial investment, a capital, a principal. Each method employes a certain technique to grow that capital, while preserving it (this is quite important).

The question now is this: How would you go about securing that principal?

In general, there are two ways: You could either borrow the money, or create a partnership.

The first route includes banks, friends, family, government funds, etc.

The second is a sort of business deal between two equal parties: One party provides the capital, the second provides the time, energy and expertise to grow that capital.

The first option could be difficult these days. Requesting a business loan from a financial institution (like a bank) presents two major hurdles: a) you must provide enough evidence that you’re capable, financially, of returning that loan, at the end of the term. The bank doesn’t care whether you succeed or fail!

The second issue is interest. You might end up paying 50% on top of the original loan in interest. If the loan was $100K, you would be required to pay back $150K at the end of the loan term. Those 50K would come out of your net profit. In some cases, the percentage could be more, depending on how convinced the bank would be of your eligibility for that loan.

Asking friends or family members for financial support to start a business or enter an investment adventure, would raise many eyebrows, and would put you under the spotlight for the duration of your journey. This would add to the pressure, and would exhaust a good deal of your energy.

In the next article, we’ll explore the second option, as I believe it’s the path you should take.

The Wealth Maker