Project Funding through Private Placement Investments
Whether you are a first time reader, or an experienced veteran of the private placement world, let’s all take a step back together to reflect. If you can, try to remember the first time you ever heard about private placement investments. Think about who told you, what they said, where you were, and most importantly, your initial “gut feeling” after the idea settled in.
Did you really believe that private investments like this could exist? Did you also wonder how world officials would allow such high profits?
Well, in this article we will provide the missing pieces to the puzzle, detailing the topic of humanitarian project funding, and its relation to private placement investments.
Over the last 10 years, there has become more and more demand for “project funding sources” in the private placement market. Though it sounds far-fetched, many companies now “promise” to fund almost any project, all for a simple “up- front fee”. As you should hopefully know by now, the “up-front fee” is a classic red flag! Despite what many undercapitalized project managers may want to believe, there is only one way to fund large-scale projects, investing in a REAL private placement program.
For investors with immense wealth, private placement can be an efficient alternative to funding projects in underdeveloped nations. In fact, though many in the business are unaware, the major intention behind private placement is NOT to build wealth, but rather, to fund humanitarian projects. For example, you can build hospitals in a region riddled with illness, provide clean water to those in need, or one of many other related ideas.
Once you have finally found a REAL trader, AND have been paid out for a few weeks, project development becomes a necessity for any investor. Despite the common misperception, 60-70% of your profits MUST be put aside to fulfill your project funding obligations. If you have a project you have developed, and can supply all of the planning documents required, your funding starts the day you receive your first profit disbursement. On the other hand, if you do not have a project, the trader can usually refer you to someone in their network seeking funding. Though many private placement investors may fail to acknowledge this obligation, the truth is, either you fund projects as a humanitarian foundation, or you will get shut down quick!
Now that you understand the project funding obligations associated with private placement investments, you may still be wondering, “What happens to the remaining 30-40% of the profits that are NOT allocated to project development”? Well, we are happy to share some good news with you. Though over 2/3 of your profit may be required to fund humanitarian projects in underdeveloped nations, the rest of the funds can be used for “administrative purposes”. This portion of the profit is usually free to use with little limitation, as long as you are meeting guidelines with the rest of the money you earn. You may be thinking, this sounds great but what’s the catch? Well, there is one “catch” that is pretty important to know, you MUST have 100 Million dollars or more in liquid assets.
If you want to fund a project and do NOT have at least 100 Million in cash backed assets, sorry, but we are here to wake you from your dream. Though private placement programs can produce unsurpassed yields, the investor MUST have enough funds to allow the trader to purchase their own bank instrument contract. By entering a private placement investment at a smaller level (less than 50M), you lose the discount associated with purchasing such a large note. The problem is, with a smaller discount on the bank instrument, trading takes the same effort but produces half the yield, if you’re lucky…
With a topic of such critical importance to private placement, you would expect most people to already know the facts we have provided. Though many brokers and investors may comprehend the basic concept, they’re not well versed enough to explain the guidelines and details to someone else. By creating this article, we hope to have cleared up many of the common misconceptions, allowing our readers to understand the facts in an often fictional business.
To summarize, if want to fund a large project, please explore cautiously based upon your goals and liquid net worth. To those with little capital, it’s not worth rolling the dice with some “funding scheme” when you have little to no chance of success. In contrast, for those with sufficient wealth, private placement can be just the tool you need to fund your project, allowing you to offer a helping hand to others while profiting heavily!
InsideTrade LLC Staff
Phone: (949) 444-2111