Rebirth 79: I opened a bank in the United States

Chapter 248 Time Cost
After some pushing and pulling between men and men, the final price was determined.

Jim invested $460 million to buy 2% of Carter's HT Catering Management shares.And the premium of 60 US dollars is not without cost, which is not a bad thing for Carter:
Within three years, HT will be listed!

Calculating the time, it is now 80 years, and three years later it will be 83 years, and this crisis is almost over.At that time, HT's cash income will not explode like it is now, so it will be listed at that time.
The money that should be made can be made after all, and I can cash out part of it after listing.The listing of HT is also good for Jim.After all, his total assets are only 1400 million now, right?

Carter knew very well that it was impossible for Jim to hold the 460% shares exchanged for 2 million for a long time. His purpose was to cash out after the value of the shares increased!Earn the difference!
"Okay, okay, let's continue with the business. Besides these, are there other financing channels?"

After playing around for a while, Carter restrained his just relaxed mood and continued to ask.

460 million US dollars, a lot is a lot, but for the highway project, that is a drop in the bucket.As for the way of using shares to cash out, Carter does not intend to continue.

At present, among the industries under his own control, only ht has the best fundamentals.Both the system, revenue performance and maturity are very good, so it is worth money!But no matter how valuable it is, it cannot escape the reality that it has only been out for three months
No one will give a valuation as high as 2 million like Rogers. Under normal circumstances, a valuation of 8000 million to 1 million US dollars is very impressive. The valuation of 1 million US dollars. If you want to get out the road repair funds through equity financing, you can't do it by selling HT in a package!

"There are still some. Donation, retirement pension fund investment, asset replacement, and venture capital are all common financing channels. Donation, you are in the two base camps of Douglas and Pearson, basically don't even think about it, just the one you opened Some wages, who has the money to donate? Maybe you can go to Columbus to try, maybe you can raise some, especially those companies engaged in import and export trade, logistics and transportation, maybe they will support you a little, but don’t be too optimistic.”

He took two bottles of mineral water again, took a sip of water, moistened his throat, and after a short rest, Jim said:
"In terms of asset replacement, you don't have many valuable assets at present, so it's not easy to do it. You should focus on finding retirement pension fund investment and venture capital institutions!"

"Retirement pension funds, because the road income is relatively stable, right? Venture capital institutions, don't they invest in companies?"

"The fund is right. The investment of retirement pension funds is mainly to ensure that the pension money stored in the fund does not depreciate. Therefore, the goal of their investment is risk control first, and profit second."

Jim nodded and gave a suggestion:
"After you go back, go to Columbus, Albany and other cities along the route, and talk to them. It's best to sign one, one of that kind, a secure and capital-guaranteed fee grant agreement."

"It is assuming that the charging period is 20 years, such as a total investment of 3 million U.S. dollars. Calculated according to the inflation rate of the same period, assuming that the annual inflation rate is 5%, then theoretically, to recover the capital after 20 years, it should recover more than 7 million U.S. dollars. Dollars are the only way to pay back.”

"The content of this agreement is that if the income does not reach 20 million at the end of the 20-year period, the charging period will be automatically extended until the capital is recovered. If the entire investment has been recovered within [-] years, Then the fee will be lifted as agreed. Of course, this is just a concept, because the inflation rate varies every year, and the value of the currency is also different. The dollar you receive in the first year is definitely worth more than the dollar you receive in the [-]th year. So the specific amount depends on how you negotiate and agree on it.”

"Can it be done like this? If you can have this kind of bottom line, wouldn't the road business be profitable?!"

Carter was shocked. He remembered that he had seen some articles in his previous life, talking about the differences between China and the United States in building highways, and why many highways in the United States did not have toll booths.

If I remember correctly, Carter remembers that the original article seems to say that most of the highways in the United States are funded by the government, which is equivalent to spending taxpayers' money on road construction.After the repairs are completed, part of the tax money from the vehicle tax and fuel tax is transferred to the road trust fund, and the money is used to maintain roads and build new roads.

However, many expressways in China are funded, or even privately funded, so they need to rely on tolls to recover their investment.

But if the construction of highways in the United States can provide this kind of almost 100% capital preservation agreement guarantee, why no one votes? !

"Why not? They want you to fix this road as soon as possible! Moreover, from the economic account, it is a steady profit without losing money, but what if you calculate the time account?"

"If the benefit of your road is not good, I will let you collect tolls for one hundred or one hundred and fifty years, and you will have to get back the principal. What's the point of that? Such a long time , this money is equivalent to a loss! With this money, what can I do?"

Jim patted Carter's shoulder with a smile, and mentioned something as if chatting:
"When we make any investment, we must consider the return cycle. The return cycle is time cost. From many perspectives, the value of time cost is higher than the apparent amount of money."

"To give you an example, there are two businesses now. One, with a profit of 40% a year, will decline to 20% in ten years, and the profit will shrink to 5% in twenty years. Another business, with a profit of 2% per year , it can continue to make profits for a hundred years, which one do you choose?"

In 10 years, 40% profit; in the next ten years, 20%, and then eighty years no, this may not even be eighty years.So if you invest one million, after twenty years, you should reap about thirty-five million.

Another seemingly hundred-year-old business that can fully maintain its capital and increase its value will only earn more than 724 million after one hundred years
"I understand! Also, if the time is too long, it is really meaningless. Even if the first business can only be done for [-] years, but after the funds are recovered, I can still start the next, new business!"

"That's right! That's the reason, so to be honest, I don't recommend you to go to a venture capital institution for road investment. As you said, if they want to invest in this project, they will usually invest in your company, which is responsible for the development of this project. Your income company, which is your DOG real estate. But DOG real estate currently only has two projects, a road that has not yet been launched, and a residential area.”

"Let's not talk about the residential area. I don't know if there will be another one after this one is finished. The road is valuable, and the road income is too long for venture capital institutions. Investing in it is a waste of time and a waste of money."

"But retirement pension funds are different! They must be stable! They must ensure that the money can be recovered no matter what, and that people can be given pensions and pensions."

Following Jim's words, Carter excitedly continued:
"And their disbursement of this money is also a relatively slow and continuous process. Just like this road, as long as there is income, they will be able to issue corresponding payables to ensure continuous cash flow and prevent the capital chain from breaking. It's a great project!"

(End of this chapter)