It all started as a simple conversation between me and my friend.
We were discussing how we could make some extra money and decided to look into investing in some businesses. After we spent some time researching, we stumbled upon a pub in our town that was for sale. We had both been there many times before, and I thought it was a great opportunity for us to invest in.
We decided to split the costs and buy the pub. I was going to be the owner, but my friend was going to be the investor. I was going to handle all the day-to-day operations while my friend was going to provide the capital.
I was also going to be responsible for bringing in customers and running the pub.
The deal was that my friend would give me the money to buy the pub and I would pay him back when the pub started making a profit. I figured I could make a decent amount of money if I could turn the pub around and make it profitable.
However, I wanted to make sure that I could still make some money even if the pub didn’t turn out to be a success. So, I came up with a plan. I would sell my friend shares in the pub at a higher price than I bought them. That way, if the pub was a success, he would make a return on his investment. And if the pub didn’t turn a profit, I would still make money from the sale of the shares.
So, I sold my friend’s shares in the pub at a 300% markup. This meant that he would have to pay me three times what I paid for the shares. I figured that this was a fair deal because he was taking a risk by investing in a business that might not make any money.
At first, my friend was a bit sceptical about the deal. He didn’t want to be taken advantage of, and he wanted to make sure that he was getting a fair deal. After I explained the concept of markups and how it worked, he was more comfortable with the idea.
In the end, my friend decided to invest in the pub. The pub was a success and my friend made a good return on his investment. I was also able to make some money from the sale of the shares.
Scams out there
But I know there are some people out there that drag people into this kind of “pub investment” which ends up with the business dying and letting the shareholder’s money disappear into the air.
Imagine I would do the same, Already selling my shares for 300% means I paid nothing to invest in the pub. No matter if the pub dies or survives I still profit.