High Returns On Deposits

[davebuczek 21]

Something of interest is the OECD financial country risk rating for Georgia is 6. This is on a 7 point scale. USA UK Germany are 0. Afghanistan is 7. Thailand is 3.

 

Moody's rates it Ba3 or non investment grade speculative. UK is Aaa as is Germany or "prime". S&P have similar ratings.

 

Best wishes with the business but this is a risky way for non residents to invest.

 

Sure this is true. I guess investing in General Motors or Enron wasn't risky? There is always risk (no matter where you invest and no matter what the OECD rating) and you shouldn't judge your decision solely based on that. And the main reason Georgia is 6 is due to the war with Russia (in my opinion). While there is risk that our "big brothers' will come again, I think it is doubtful as the government here has basically let the 2 regions go. For sure they don't like it, but nothing Georgia can really do.

 

There are also other ratings you need to consider (transparency, ease of doing business, protection of the foreign investor). Georgia ranks very high and much higher than many of the countries listed above it in the OECD ratings. There is basically no corruption, so to consider your investment in Thailand or Russia (both rated 3) or Greece and Portugal (both rated 0) less risky than Georgia is not reasonable. I have also lived in Russia and it is one of the most corrupt places on earth, so the fact that it is a 3 on the OECD ratings and Georgia is 6 doesn't really say much to me. Also, didn't Greece just have a little default and screwed many investors? How can it's credit rating be 0?

 

Georgia is committed to the democratic reforms and protecting investors, especially foreign investors.

 

In the end it is up to each person to do his/her due diligence. Saying that this is a risky way for non-residents to invest could be said about any investment in any country and can be supported one way or another.

 

Thanks for the wishes and I am confident (and hope) we will do well. We have a very good team in place and our first objective is to mitigate risk as much as possible before making any decisions. We feel this can be done and still earn very nice profits.

Edited April 4, 2012 by davebuczek

[jacko 8,866]

Well put OP!

[tomcat76 327]

Sorry, not sure I understand what you mean. What I meant by "leaving that to the currency traders" was that I do not want to be in the business of trading currencies and taking currency risk. I am sure there are many people that are successful at doing that, but FOREX speculation is not something I am comfortable with. I want as little currency risk as possible and don't plan on having huge gains/losses on FOREX.

 

In a sense, we're ALL currency speculators (unless you have no assets at all), aren't we? Whatever currency your holding, merely by the fact of your holding it, represents an investment or "speculation" in that currency against all others. It would've been very esoteric to have made that point a hundred years ago, but by this point all major (maybe actually ALL) world currencies are linked, with long-term consequences for holders of losing currencies.

[jacko 8,866]

In a sense, we're ALL currency speculators (unless you have no assets at all), aren't we? Whatever currency your holding, merely by the fact of your holding it, represents an investment or "speculation" in that currency against all others. It would've been very esoteric to have made that point a hundred years ago, but by this point all major (maybe actually ALL) world currencies are linked, with long-term consequences for holders of losing currencies.

Well no, certainly not a person who does not travel outside the country of that currency. Applies to a lot of USA guys I think, many who struggle with the concept of other currencies than the almighty $. Or are you just speaking of BMs under the presumption all have been to Thailand?

 

Being a speculator, or a trader is something quite specialised....... even what the OP is offering to me has nothing to do with currency speculation.... simply it is lending money to a country that is quite desperate for investment, and offering high interest on the loans.

[davebuczek 21]

In a sense, we're ALL currency speculators (unless you have no assets at all), aren't we? Whatever currency your holding, merely by the fact of your holding it, represents an investment or "speculation" in that currency against all others. It would've been very esoteric to have made that point a hundred years ago, but by this point all major (maybe actually ALL) world currencies are linked, with long-term consequences for holders of losing currencies.

 

I sort of agree with you. The point I was trying to make that my functional currency will be the USD (IAS 21 for you non accountants). This means that on my books I do not want to take significant risk of losing against the USD. This is only for my financial statements. For investors that deposit in Euro, they will be paid back in Euro and I will manage this in various ways mentioned in earlier posts so that I do not have any significant risk against the USD.

Edited April 4, 2012 by davebuczek

[tomcat76 327]

Well no, certainly not a person who does not travel outside the country of that currency. Applies to a lot of USA guys I think, many who struggle with the concept of other currencies than the almighty $. Or are you just speaking of BMs under the presumption all have been to Thailand?

 

Being a speculator, or a trader is something quite specialised....... even what the OP is offering to me has nothing to do with currency speculation.... simply it is lending money to a country that is quite desperate for investment, and offering high interest on the loans.

 

Yeap - even a person who does not travel... Let's say I've got $100US in my pocket. I can just about fill the tank of my bigass SUV with that $100 today. I can hold onto the $100, or trade it for something else. If I hold onto it, it's a bet against inflation and essentially in the strength of the dollar (whether I realize it or not). With $100US today I can maybe fill the tank of my bigass SUV here in CA. So then let's say a year from now, the dollar has weakened substantially. The dollar falls, the price of oil (in dollars) rises, and in a year maybe I can only fill half my tank. I lost the bet. I COULD have taken the $100US and put it in Swiss Francs or Chinese Yuan or Gold or Silver or whatever, and still be able to fill my gas tank, but I didn't. In this scenario, I bet on the dollar, and lost... Maybe I didn't THINK of it as a "bet", but the fact is I DID have a choice - it was a bet.

 

I'm not talking about "speculation" in your technical sense, but ready availability of forex and commodity investments now is such that we're all speculating (in the non-technical sense) all the time; we just don't think of it in those terms. 'Just because you think your hand is so good that you draw no cards and instead keep what you've got, doesn't mean you're not still playing poker. 'Same thing as "holding" dollars (or pounds, or pesos, or anything else...)

[jacko 8,866]

Yeap - even a person who does not travel... Let's say I've got $100US in my pocket. I can just about fill the tank of my bigass SUV with that $100 today. I can hold onto the $100, or trade it for something else. If I hold onto it, it's a bet against inflation and essentially in the strength of the dollar (whether I realize it or not). With $100US today I can maybe fill the tank of my bigass SUV here in CA. So then let's say a year from now, the dollar has weakened substantially. The dollar falls, the price of oil (in dollars) rises, and in a year maybe I can only fill half my tank. I lost the bet. I COULD have taken the $100US and put it in Swiss Francs or Chinese Yuan or Gold or Silver or whatever, and still be able to fill my gas tank, but I didn't. In this scenario, I bet on the dollar, and lost... Maybe I didn't THINK of it as a "bet", but the fact is I DID have a choice - it was a bet.

 

I'm not talking about "speculation" in your technical sense, but ready availability of forex and commodity investments now is such that we're all speculating (in the non-technical sense) all the time; we just don't think of it in those terms. 'Just because you think your hand is so good that you draw no cards and instead keep what you've got, doesn't mean you're not still playing poker. 'Same thing as "holding" dollars (or pounds, or pesos, or anything else...)

Man you do complicate life.

PS... did you walk everywhere with that $100 in your pocket and no gas in the big-ass SUV?

[Gabor 296]

Not really a sensible way to look at it, it isn't even an annuity, your principal may be holding it's value in HUF, but you are too heavily tied in to a falling currency.. You also fail to address when the interest in HUF, is insufficient for your needs in Thai baht. In fact it is closer to what was my original aim on retirement. Which was to spend the interest and a small percentage of the principal, with the ultimate aim of having little left when I no longer needed it (my demise or my dementia!). The demise of the financial world put paid to that, interest rates became near zero!

 

But surely your game can be taken to the past, 12 months ago, and you spend all your interest which let us say is 7% on the HUF, and 1st April 2011, you had your 100,000 Euros.You banked it in HUF, getting 265/Euro, a balance of about 26.5 Million HUF. At 7% you would get 154,600 HUF/month.

On the 1st May 2011 you took out the interest, 25,800 baht(at 5.9531 HUF/baht)...not bad.

On 1st April 2012, you took out the interest, 154,600 HUF, (at 7.164), 21500 baht, oops, 4 less LTs.

Plus you now only have 90,000 Euros in the bank.........

Had you put the Euros in the Thai bank, 4.3 million baht, take out 25kbaht/month, residue, 4.0 million baht, which is 97.000 Euros, without adding any Thai interest whatsoever (2.65% a year go).

You should put your money with davebuczek!

 

Sorry about this thread fuck OP, but in the end I recommended you!

 

I stick to the high interest rate, not to the falling currenvy... ( falling because of our cretin government's freedom fight against the EU / IMF etc ) However your investment in 100.000 HUF vs the equivalent EUR.... ( black line is the HUF orange line is the EUR ) Source: The national bank

 

[jacko 8,866]

I stick to the high interest rate, not to the falling currenvy... ( falling because of our cretin government's freedom fight against the EU / IMF etc ) However your investment in 100.000 HUF vs the equivalent EUR.... ( black line is the HUF orange line is the EUR ) Source: The national bank

 

You are only looking from a HUF perspective, again. Here is an experiment,try paying a tart in Baccara equivalent of 1000 baht in HUF!

There was mention in a newspaper I read recently that Hungary is likely to default on it's debt.

Which I believe is rated as junk status.

An old article...

The forint weakened 1.5 percent today and traded at 316.11 per euro at 7:15 p.m. in Budapest. It lost 16 percent since June 30, making it the worst-performing currency in the world. The government’s 10-year bonds slid, lifting the yield above 9 percent for the first time since 2009. Credit-default swaps rose to 646 basis points, a record high.

 

Here is what the value of your deposit relative to USD did yesterday.....

[Gary 4,125]

I managed to take a beating in the US stock market. I was down about 42 percent. I haven't really lost anything yet because I have not sold anything. It has come back some but still down 38 percent. My investing days are over. I learned my lesson. NO more investments.

[davebuczek 21]

Just a quick update for those interested parties:

 

We opened for business a little over a month ago, but we changed directions and decided not to become a microfinance organization. Instead we are an auto-lombard (auto financing company) and we give loans that have a maximum of 30-40% of the cars liquidity price. We decided to only give auto loans, due to the easy process to repossess and to sell (and higher interest rates than with flats). Here in Georgia (country) when a payment is overdue the police are actually involved in locating the car and bringing it to you to sell in lieu of the loan.

 

As of today we have given 20 loans with a total loan value of around USD 50,000. The average interest rate on the loans is 6.26% per month (Yes, per month, not year). Some auto lombards are offering 10%, but we wanted to get the money loaned out as soon as possible so we are offer lower rates (still very high) and a 2% commission fee.

 

For those that invested, we have increased our guaranteed rate to 20% (but may be higher depending on how the company does). If anyone else is interested, please PM me.

 

I know I will get the usual keyboard warriors say that I am full of BS, but I expect that and I don't really care. Speak to anyone who knows me and you will learn that I am dead serious.

Edited July 9, 2012 by davebuczek

[Grandpollo 366]

Not BS but taking in 107% per annum (6.26% pm compounded) and paying out 20% p.a. to depositors (uninsured ones as well) makes you look a little chintzy vis-a-vis the spreads in more traditional financing sources. 87% over your cost of funds is good for you guys and well, to quote Borat (he's from around there), for your investors, "not so much".

 

I think a loan shark, which this is to a degree, offers better rates than this to their sources of funds, why are you so stingy?

[jacko 8,866]

I recently got hit in the gut over an 'investment' that I had held for a couple of years and had reportedly been doing well..... reports can be deceiving, or a deception themselves. My own greed pressed me to leave the money there where it was 'doing well', supposedly. I may be less cocky on investment issues for a while.

[davebuczek 21]

I recently got hit in the gut over an 'investment' that I had held for a couple of years and had reportedly been doing well..... reports can be deceiving, or a deception themselves. My own greed pressed me to leave the money there where it was 'doing well', supposedly. I may be less cocky on investment issues for a while.

 

Jacko, 100% agree as it happened to me also. That is why we may have audits done by an international audit firm to give more comfort to the investors. I am also having agreements that will hold me personally liable if the funds are not paid/returned. Yes, it is a personal guarantee and anyone could say that, but I have a more than reasonable salary being an ex-pat and I am able to pay if the company does not, but I do not expect (and hope) this will ever be the case as the company will have adequate cash flows.

[JohnnyK 28]

I like the part where the police bring the car back. What is their fee for performing this valuable service? Georgian police are renowned for their integrity and incorruptibility. Aren't they?

[davebuczek 21]

That was before 2004 (when Sakhishvili became president). He fired all of the corrupt police officers (see link below) and now the police are legitimate, unlike other former soviet countries. Just like in the US if you try to bribe a police officer, you will be put in jail and laws are enforced. Corruption is very low here.

 

The fee is only the price of getting out of the impound lot with proper papers.

 

http://en.wikipedia.org/wiki/Law_enforcement_in_Georgia_%28country%29

Edited July 10, 2012 by davebuczek

[davebuczek 21]

Just a quick update for those interested parties:

 

We opened for business in the beginning of June, but we changed directions and decided not to become a microfinance organization. Instead we are an auto-lombard (auto financing company) and we give loans that have a maximum of 30-40% of the cars liquidity price. We decided to only give auto loans, due to the easy process to repossess and to sell (and higher interest rates than with flats). Here in Georgia (country) when a payment is overdue the police are actually involved in locating the car and bringing it to you to sell in lieu of the loan. We have had to repossess 1 car and the process was smooth and the police were involved in located the car after we provided a document that we have the lien on the car.

 

As of today we have given 41 loans with a total loan value of around USD 106,000 and we have been profitable since the 2^nd month. Some auto lombards are offering higher rates than ours, but we wanted to get the money loaned out as soon as possible so we are offer lower rates (still very high) and a 2% commission fee.

 

We have some investors, but we would like to grow more and we are still looking for additional investors and paying 15% per annum. If anyone else is interested and would like more info, please PM me.

 

I know I will get the usual keyboard warriors say that I am full of BS, but I expect that and I don't really care as this is a real business with a real opportunity.

Edited September 18, 2012 by davebuczek

[CheshireTom 1,377]

Any particular reason you have gone from 20%+ down to 15%? And why did you choose not to reply to Grandpollo (Post #62)?

 

For those that invested, we have increased our guaranteed rate to 20% (but may be higher depending on how the company does). If anyone else is interested, please PM me.

 

 

We have some investors, but we would like to grow more and we are still looking for additional investors and paying 15% per annum. If anyone else is interested and would like more info, please PM me.

Edited September 18, 2012 by CheshireTom

[Gary 4,125]

I consider myself pretty lucky. I had told myself that if any stock that I held came back to the price I paid, that I would sell them. The majority of my holdings did come back and I did sell them. I even made a small profit. I have two ETF's that are still down over 40 percent from what I paid per share. That's not as bad as it sounds. They are/were high dividend paying funds and I still get over 4 percent dividends based on my original investment. Today the 4 to 5 percent return is not too bad so there is no need to take a loss selling them. If they come back to what I paid for them (doubtful) I will sell them too.

 

In my opinion, investing in anything today is a dangerous thing. The stock market is risky enough let alone an investment that you risk losing it all. There are NO guarantees. This economy is no place for the little guy. I took risks when I was younger because I could always work and make more money. My working days are now over and there is no way to earn more money. Shaky high return investments are tempting but at some point in your life, you have to protect whatever you have accumulated.

[davebuczek 21]

Any particular reason you have gone from 20%+ down to 15%? And why did you choose not to reply to Grandpollo (Post #62)?

 

We are offering 15% as opposed to 20% earlier as already have some investors and don't need the investment as urgently as before. But as I mentioned in earlier posts, all returns (including terms, etc.) would be negotiated up front. We have one investor that we are paying interest quarterly and another one that we are paying semi-annually.

 

And, I didn't think it was necessary to respond to a post (#62) that compares us to a "loan shark" and "stingy". Most of the money invested is ours, we put the time and effort into researching and developing the company and the return we are offering is good in my opinion. It is not loan sharking when it is legal IMHO.

[davebuczek 21]

I consider myself pretty lucky. I had told myself that if any stock that I held came back to the price I paid, that I would sell them. The majority of my holdings did come back and I did sell them. I even made a small profit. I have two ETF's that are still down over 40 percent from what I paid per share. That's not as bad as it sounds. They are/were high dividend paying funds and I still get over 4 percent dividends based on my original investment. Today the 4 to 5 percent return is not too bad so there is no need to take a loss selling them. If they come back to what I paid for them (doubtful) I will sell them too.

 

In my opinion, investing in anything today is a dangerous thing. The stock market is risky enough let alone an investment that you risk losing it all. There are NO guarantees. This economy is no place for the little guy. I took risks when I was younger because I could always work and make more money. My working days are now over and there is no way to earn more money. Shaky high return investments are tempting but at some point in your life, you have to protect whatever you have accumulated.

 

Gary, I 100% agree and I have been there myself. I was caught the the 1999-2000 bouble and did not get out soon enough. I agree that there are always risks involved and everyone should do their own due diligence and decide what their risk/reward tolerance ratio is.

 

The business is going much better than expected as it is still difficult to get loans from banks at lower interest rates (part because of Banking regulations, part due to the bank's taking no risk). I hope this continues as it will help our business grow. The main thing I worry about is the bank's lower rates, which would impact our business. We would not take losses, just our returns will be much lower.

[CheshireTom 1,377]

We are offering 15% as opposed to 20% earlier as already have some investors and don't need the investment as urgently as before. But as I mentioned in earlier posts, all returns (including terms, etc.) would be negotiated up front. We have one investor that we are paying interest quarterly and another one that we are paying semi-annually.

 

And, I didn't think it was necessary to respond to a post (#62) that compares us to a "loan shark" and "stingy". Most of the money invested is ours, we put the time and effort into researching and developing the company and the return we are offering is good in my opinion. It is not loan sharking when it is legal IMHO.

 

Thanks. Where do I find your company's website (apologies if you've already posted the info)?

[davebuczek 21]

Thanks. Where do I find your company's website (apologies if you've already posted the info)?

 

We haven't set one up as we have not needed to. If you would like more details/info, PM me and I will gladly sent it to you.

[CheshireTom 1,377]

We haven't set one up as we have not needed to. If you would like more details/info, PM me and I will gladly sent it to you.

 

Have I missed something somewhere along the line?

 

 

 

The National Bank of Georgia requires quarterly reporting and financials to be posted on the company's website.

 

 

 

However, after we get up an running, I will post links to our website with our results and you will be able to see if I was full of it (as mentioned by many above) or I am serious.

[davebuczek 21]

Have I missed something somewhere along the line?

 

Yes, if you look at post 67 above , you can see I have noted that we changed directions and we won't be a microfinance organaization, but an auto lombard. We are not regulated by the National Bank and are not required to have a website and post financials etc. We will still have an audit done each year by an independenpt firm to be sure that everything is accounting for ok both for financial and tax purposes.