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Rate of return on investment for 2011
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<blockquote data-quote="Sir Loin" data-source="post: 904080" data-attributes="member: 5601"><p>1wlimo </p><p></p><p>Re:</p><p></p><p>Not sure, it depends on how you define "working cash".</p><p></p><p>After deciding to come out of retirement, I decided to raise baby calves and selling them just after weaning, due to limed space (land and facilities ) in my head I knew I would have to invest $5,000 to get started, but I did not loan my new business the 5 grand up front. I loaned the 5 G as it was needed to save the business the cost of interest.</p><p></p><p>I could have just as easily loaned the 5 G to the business up front and had business pay interest on the loan, but then it would cost the business money and a repay schedule would have to be worked out. </p><p>If I did this the business would be borrowing and repaying the loan, with interest, for money it did not readily need.</p><p></p><p>In short: By business has a line of credit of 5 G with me, just as I personally have a line of credit with my bank. And I charge my business the same interest rate as my bank charges me. Prime plus 2 (for the year ) as of every Jan. 15 compounded monthly.</p><p></p><p>The business was started with no cash and only a $5 grand line of credit in the cigar box or left pocket, to be dispersed as needed. That is why it is sometimes referred to as "poor man's accounting".</p><p></p><p>This is exactly like a construction loan to build houses, except my business is building cattle.</p><p>SL</p></blockquote><p></p>
[QUOTE="Sir Loin, post: 904080, member: 5601"] 1wlimo Re: Not sure, it depends on how you define “working cash”. After deciding to come out of retirement, I decided to raise baby calves and selling them just after weaning, due to limed space (land and facilities ) in my head I knew I would have to invest $5,000 to get started, but I did not loan my new business the 5 grand up front. I loaned the 5 G as it was needed to save the business the cost of interest. I could have just as easily loaned the 5 G to the business up front and had business pay interest on the loan, but then it would cost the business money and a repay schedule would have to be worked out. If I did this the business would be borrowing and repaying the loan, with interest, for money it did not readily need. In short: By business has a line of credit of 5 G with me, just as I personally have a line of credit with my bank. And I charge my business the same interest rate as my bank charges me. Prime plus 2 (for the year ) as of every Jan. 15 compounded monthly. The business was started with no cash and only a $5 grand line of credit in the cigar box or left pocket, to be dispersed as needed. That is why it is sometimes referred to as “poor man’s accounting”. This is exactly like a construction loan to build houses, except my business is building cattle. SL [/QUOTE]
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Rate of return on investment for 2011
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