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Would You Trade 6% of Your Future Earnings For $600k?

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    Would You Trade 6% of Your Future Earnings For $600k?

    Erickson and two other young social entrepreneurs recently made the decision to, in effect, take themselves public. Through an online marketplace called the Thrust Fund, the three have offered up a percentage of their future lifetime earnings in exchange for upfront, undesignated venture funding. Erickson is willing to swap 6 percent of her future lifetime earnings for $600,000. The other two entrepreneurs, Saul Garlick and Jon Gosier, are each offering 3 percent of future earnings for $300,000...

    Is This a Smart Way to Get Funding?

    #2
    That doesn't sound like such a good deal for the investor. If the woman earns $100,000/year, 6% would be $6,000. It would take 100 years to recoup the $600,000 upfront investment. Even at $200,000/year, that's still 50 years' worth of income.
    Steve

    * Despite the high cost of living, it remains very popular.
    * Why should I pay for my daughter's education when she already knows everything?
    * There are no shortcuts to anywhere worth going.

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      #3
      Does it include the earnings on the 600k?

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        #4
        agree with steve

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          #5
          Originally posted by disneysteve View Post
          That doesn't sound like such a good deal for the investor. If the woman earns $100,000/year, 6% would be $6,000. It would take 100 years to recoup the $600,000 upfront investment. Even at $200,000/year, that's still 50 years' worth of income.
          You think too small LOL

          sure at 100k or 200k of income, it does not look like much
          but if the person has a good idea, and 500k of income (30k per year) it starts looking like a good ROI

          That is not to say I would do such a thing (donate money LOL), but if I were to consider it, I would be looking for a $500k idea, not a 100k idea from the person which received the money.

          Comment


            #6
            Originally posted by jIM_Ohio View Post
            You think too small LOL

            sure at 100k or 200k of income, it does not look like much
            but if the person has a good idea, and 500k of income (30k per year) it starts looking like a good ROI
            Even at 500K, it would take 20 years to recoup your investment. An income of 250K puts you in the top 1.5% of Americans. 500K puts you in the top fraction of one percent. That's an incredible long shot bet. You could do better taking your money to the casino.
            Steve

            * Despite the high cost of living, it remains very popular.
            * Why should I pay for my daughter's education when she already knows everything?
            * There are no shortcuts to anywhere worth going.

            Comment


              #7
              Where do I sign up!!!???

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                #8
                That's $600k in today's dollars, but salary inflation should help in the recoupment. I assume income will be defined based on their total gross income from their 1040?

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                  #9
                  Amen Steve- You would have to be a fool to take a deal like this. Scam is a better word to describe it.

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                    #10
                    I believe investing the 600k would earn more per year than my 6%, so yes, I would.

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                      #11
                      Well that's a no brainer for me. I would take the 600k and give up 6% each year. it's like paying for my 401k in advance. If I can keep the interest earned on the 600k over the next 25 years, i'll give 12% for 1.2 million.

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                        #12
                        Obviously a credible business idea has to be proferred and the money is used to implement the idea. You just need a few to hit and you could make some money.

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