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Formula for Winning in a Capitalistic Economy

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posted on Dec, 30 2011 @ 10:58 PM
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I have been thinking about the existing power bases in the USA and how they are organized.
I have also thought alot about the evolution of these organizations within the economic system in the USA.
I asked myself, Is there a common denominator to be found in various organizations such as:
1) Large Religious groups such as the Catholic Church, Mormon or Latter Day Saints Church, Jewish Temples, Muslim Mosques, and the like.
2) Labor Unions and organized Labor groups
3) Corporations and syndicates
to name just a few...

My answer came about by deconstructing the fundamental natures of these organizations.
At the most basic level:
These organizations can be reduced to a simple description = a group of generally like-minded people working toward a common goal or for a common cause.

The second aspect is that a typical individual member of a group tends to associate with other members in his/her group to a higher degree than with non-members of the group.

The third aspect is that because members of a group are working together for a common goal or cause, there is an increase in the perceived level of trust bestowed to/upon each member by their peers.

Now, I don't want to go on at length about the deconstruction of the examples I listed above. What I would liketo do is present a possible formula which could be followed and which would lead to economic prosperity, political power and influence and potentially increased levels of harmony and peace, though the latter is the hardest part to quantify.

The formula is designed to create outsized returns on investment compared to the general population, and rate of inflation.

So, here is the formula, and like many formulas and theories, there are assumptions to be made at the outset.

Assumption #1 - a group of people has decided to come together for the purposes of implementing this theory/formula.
Assumption #2 - any possible illegal activities would not occur
Assumption #3 - standard capital market economic principles would be followed

Business venture + Capital reinvestment + Networking + Political Influence = Success in the USA

Here's how to do it

The group of people come together with the first goal of increasing economic opportunities for all members. They create an organization with governing documents, perhaps a type of corporation would suffice, and all the legal protections would be employed to the extent that they apply and can be forseen.
The distribution of the gains would be equally distributed amongst all members of the group.
The members of the group are bound by the governing documents to reinvest their gains back into the organization.

Group Members start the Company
Members and their family do business with the company
Members and their family promote the company to non-members within their extended family
Members and their family would be employed by the company and reinvest their equity back into the company
Gain new members by "selling shares" or by "sweat equity" investing
Grow and diversify the company into other markets and businesses
Promote members who have political aspirations
Promote members who have other businesses
Promote members and their family in their education goals and/or future business ventures
Continue reinvesting in the company
Continue promoting members with political momentum and talent to higher and higher offices
Continue to patronize the company and the businesses of other members and their extended family
Continue to gain financial and political influence
Lobby the government to maintain a voice and influence on the writing of laws and regulations
Employ extensive legal council to prevent any blindsides and to aggressively litigate any law suits
Continue with the process indefinitely

The choice of organization I would advocate for starting out is a Hard Money lending corporation. All members would contribute cash to buy "shares" in the corporation. These funds would then be used as capital to loan out at competitive interest rates to qualified borrowers. The interest from these loans would then be reinvested back into the pool of available capital for investing.

Sounds like a bank? Well, the goal is to create a co-op type of banking institution, starting small with hard money lending activities, or even using the internet micro-loan programs.
A possible scenario:
Taking a portion of capital and putting it to work in those internet based micro-lending markets.
Lending capital to members who are real-estate investors for increased rates of return.
Buying and selling cash notes or real estate notes.
Others...

The corporation is open to new members, these would be non-founding members who haven't invested start up capital. These new members are the clients who have agreed to borrow from the company, who have established trust by their history of loan repayment, and have a very high likelyhood of satisfying all present and future loan obligations.

The members of the company will have a preference for doing business with those companies who are owned by other members of the company.
For example, a member is a real estate investor and home builder. Other members will use his/her services for investing in real estate or home building.
Say another member is a physician, the other members will utilize that physician for their care, family's care and will refer others to that physician.
Sound like a networking group? It is exactly that.

Combining a cash flow business with a networking group will allow for mutual benefit to members and extending to the members families.

Any existing members may now "purchase" more shares in the corporation as their financial situation improves. New members would be invited in to the company based on the criteria I mentioned above, and could then according to pre-established terms, purchase shares.

Consider the extended family and friends of the members, they are the pool from which the group gains new members and new loan business. Extended family and friends are also potential referral sources as well.

Look at this example: The market for competitive rate private student loans.
Though it is a niche market, it would have two fold benefits.
A child of a member is going to college/university and would like to take out a loan. They decided, rather their parents decide, to take out their loan with the company. Since the parents are members, there is a higher likelyhood that this loan will be repaid and a higher likelyhood that the child will graduate with a degree. College degree holders tend to earn higher incomes than non-graduates (exceptions exist).

Another example:
A child of a member is starting a small business and would like a loan. The company loans the money, the company instructs the members to patronize the new business, the business is more likely to succeed and the loan is more likely to be paid.

Promoting political influence by endorsing members who are currently in office or who have aspirations to run for office. Seeking out new members who are currently in office. Starting a PAC to solicit donations for said members political campaigns.

Anyhow, I hope I have made myself clear by now.
I appreciate all who read through this long-winded formula and description.
I appreciate all constructive comments, and I'd like to hear if others have had similar ideas or are interested in developing this formula more thoroughly.

Thank you,
Slim




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