Enter your First Name and Email Address below to download this model.
The purpose of this model is to compare the potential wealth building results of investing in a business which you will own and operate to other “passive” investments.
The passive investment vehicle could be stocks, bonds, a mutual fund, a certificate of deposit or a money market fund, among others. Professional money managers will look after your investment hopefully resulting in real long-term gains which eventually becomes wealth to be used for taking care of your family, retirement and, if enough wealth is built, philanthropy.
The model is very simple and easy to use. To compare a “passive” investment to an “active” investment in business ownership only two entries in the model are required:
- the amount of money you wish to invest;
- the projected rate of return on that investment.
The model compares the projected 7 Year rate of return in the passive investment to the same amount invested in a business which you will own, manage and exit in 7 years.
Certain assumptions are made regarding your investment in a business:
- The amount of money you will invest in the business will equal 25% of the business purchase price.
- You will operate the business and pay yourself a fair salary from day one of business ownership.
- The business will not increase (or decrease) in value for 7 years.
- The business will be completely paid for in 7 years.
Enter your First Name and Email Address below to download the interactive model. To use the model it is necessary to have Microsoft Excel installed on your computer.