Good on Ron Steen - Invest in a student
However poor or risky this investment may turn out to be should anyone take it up I have to thank Ron Steen for opening up a new market of discussion by asking Ebayers to pony up $100,000 in exchange for 2% of Ron's earnings over a 40 year period.
I don't want to talk about the advert itself too much because it is just too painful:
Quoting the disclaimer "I will not accept Paypal" yet the seller (assumingly his father) prefers Paypal and indeed lists no other means of payment.
The spelling errors are commonplace and it blatantly hasn't been thought through from an investor's perspective.
I really like the idea of being able to jumpstart a child's life by getting rid of the troublesome education costs and I would go as far to say housing.
Not a finance or legal expert by any means but judging by the fine line between "investing in people" and slavery trod here I'm going to imagine a transaction like this would be forbidden by law.
Seeing as I just about fit his model I'll have a little experiment. Lets say my projected earnings based on maintaining the status quo over the course of my working life comes in a just over $2m (this isn't far off base for the average 23 year old brit. This means that anyone wanting to invest in me in my current position could have a 5% stake for $100,000.
However, my proven rate of growth over inflation puts the projected earnings at $2.5m.
With a 5% stake that means from all the figures I could give to a serious investor right now is that (s)he would make just $8650 real money over 40 years (and I'm rushing through this so I know there are a couple of variables missing that would drag this figure down further).
So at best it would be hard to make this a great investment opportunity. To persuade an investor I'd double their money means a 10% slice of flying aqua badger pie.
It would be hard to strike a bargain appealing to both parties.
This post was brought to you on behalf of the fact that I seem to love Dragon's Den far too much.
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