How To Make $20.00 For Every $1.00 Invested

It has been said you can lift the Rock of Gibraltar if you have afulcrum point and long enough lever. When we refer to "financialleverage" we are talking about the same principle. If you buy abusiness building for $100,000 with $5,000 down, this is usingleverage of 20 to 1. For a mere 1/20th of the purchase price, youactually own and control property that is 20 times more valuablethan your cash investment.
If the income of the building is only sufficient to make thepayments and expenses and you don't gain any cash flow, you arestill getting the building paid for and perhaps in 5 years or so,with continuing inflation, you can sell the building for$200,000... a gain of $95,000 on a $5,000 investment. This is thepotential result of proper use of leverage.
A good rule to follow in applying leverage, relevant to anybusiness venture for that matter, is always provide a reserve.Hold back some cash for emergencies. Hold back additional capitalso if you go under you will have a nest egg to start a newventure.
Sometimes when things go sour and there is no way out it isbetter to take the least loss possible, save what you can and getout...NOW! Use the remainder to again find financing, marginleases, mortgages, franchises and all the other manners of usingmoney belonging to others for both their profits and yours.
Selling your property for cash then leasing back on a long termlease is an other form of leverage. If you sell for one milliondollars cash and lease back at $10,000 per month, you havegenerated tremendous leverage. You now have $1,000,000 each with10% down for each property, you now control 10 millions dollarsworth of income producing properties. Sometimes it is possible touse options to hold property, with very little cash down, untilyou can obtain title and take possession. This can producefantastic leverage if planned property.
Going public is an other method used to gain leverage by usingother people's money. You receive money from the public forshares of your corporate stock and at the same time establish amarket value for your unissued stock.
Before you apply leverage on any proposition, be sure know justwhat your are doing. There must be a continuous favorable cashflow to service your debt, pay all your costs and expenses andgive you a reasonable profit. If weakness occurs in any one orseveral of your business entities, it could drag down your entireorganization.
2. IN FRANCHISES
Franchising your business operation packet is another form ofleverage. You are selling others your know-how and the right touse your system and/or product for a price, either a share of theprofits, a bulk payment or a combination of both.
It is not as simple as it used to be to become a franchiser, dueto controls and red tape established by the various state andgovernmental agencies. In some states it is just about impossiblefor the layman to proceed to wade through all the red taperequired to satisfy the laws. However, if it were easy to do, itprobably would not be profitable anyway.
When you have met all the requirements of the various agencies,you will have an operating manual and pro-forma accountingstatement...You will have developed a turn-key package for yourfranchise offering
To get started right get revised statutes of the state from theSecretary of State and study the requirements for establishingand selling franchises.
As your franchises become better known and after you have a fewlocations, instead of selling one franchise at a time, offer areafranchise to "master" franchise holders. Get a portion of theset-up charges for each area plus a continuing percentage ofgross business from each operating unit.
3 IN THE STOCK MARKET
*BONDS
You can earn interest on non-existent money and buy bonds on aregular basis without ever paying for any of them except thefirst five bonds. You will need $500 in cash and a brokerageaccount in both the U.S. and Canada. Open an account with acanadian brokerage House and deposit a &500 check with them. Onthe same day, before your check clears, open a brokerage accountin your home town. This one may be opened without any money.
You buy new issue bonds through your American Broker and statethat they MUST be delivered to your Canadian Broker for payment.The very day that you purchase the bonds, you will start drawinginterest. It will take 5 or 6 weeks for the bonds to bedelivered, and all the time you will be earning interest.
With this plan, you can space your order so that you can have$1000,000 or more in bonds on order. and when they arrive at yourCanadian Broker, it works like this:
The Broker accept the first five bonds of $1,000 each and placethem in your account. When the second $5,000 worth arrives, (youmust always order in $5,000 units), he then sells the first bondsto pay for the third, etc...
The results are BIG profits for non-cash existing money. You canactually earn up to 80% interest on money you don't even have.
Often the new bonds will have an increase in resale value to addto the interest earned. Thus a $5,000 bond at 8% interest ratethat takes 60 days to deliver would earn $67.00 interest. If theygo up in value, you may pick up an additional $200 to $500 oreven more when they are sold.
* PENNY STOCK
Periodically a great deal of money has been made dealing in PennyStock but it is highly speculative and is perhaps once in alifetime that one is able to hit it right to cash in with aspectacularly high yield.
To take some of the speculation out of it, many investorspurchase only 100 shares or so, of a number of differentcompany's stock. In this way they may only $50 to $100 investedin each of 40 to 50 firms. This is one of the best ways to gowhen getting acquainted with this kind of investment.
The stock of one of the Nation's larger firms, which now hasoutlets in about every city in the United States, was selling at60 cents a share in 1963. 100 shares at that time for a total of$60 is now valued at over $75,000!
$9,000 invested in 1948 in stock of what was then a small timberfirm, was worth over $1,000,000 a few years ago, and in additionwould have proceed average dividends over the years sufficient toequal a top salary each year. A person who invested at that timewould have been able to "goof off" from that time forward,receive more money than working for a living and still have overa million dollars in the bank or for other investments.
There are various newsletters covering low priced stock. Oneshould subscribe to several and analyse the information beforeinvesting.