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Finance


Nation1 and Finance in the Future


In order to fund Nation1 in the future, including all future developments, it is estimated that one million dollars per year will be required.

To achieve this, it has been suggested that Nation1 establishes a trust fund.

Trust Funds


Trust funds are a time-tested method of investing in secure investments for a long term income.
Using a trust fund for long term income involves investing a certain amount of money (Principal) which is never to be touched again, with income coming from a percentage of the return on the investments.

To achieve the necessary $1 Million per year, Nation1's principal must be above $6.66 Million if invested at a rate of return of 15%.
Of course, if the initial principal were to be increased, and only $1million per year or 15% was taken out (whichever was smaller), then the principal would grow and grow, leaving Nation1's National economy growing significantly, hence increasing the possible funding we have for infastructure developments.

Two methods of investing the money from a trust fund have been suggested.

The first involves investing the sum of money into the S&P500.
The reason for investing the money into the S&P500 is two fold.
  1. Because it has, on average, performed at just under 15%p/a since its creation about 45 years ago. More recently, it has performed at an average 17%p/a
  2. Because many, if not most, mutual funds fail to perform better than the S&P500, mostly by trying to get much better returns. Actually, there are more mutual funds than there are stocks.
Perhaps, if we choose to take on this method, we should have a look at the Vanguard investment group.

The second method involves using Tax Certificates in the United States. These can be bought yearly at auction in 27 states and give a GUARANTEED return that differs from state to state. For example, in Arizona - 16%, in Michigan - 50% (second year), Texas - 25%, Georgia - 20%.
The reason these exist is because counties want their property taxes now. They are not willing to wait for people who don't pay and then are penalised for not paying on time.
If you were to take a portion of Nation1's funding (from grants) and place it into Tax Certificates over a number of years, this funding could grow quite significantly. This money could then be placed in the S&P500

Who knows. Maybe in 100 year time, Nation1 will have enough money to make some phisical difference in the world more than mental difference. Maybe we will form and fund our own world aid organisation. Or a peacekeeping force. Or rebuilding devistated coutries' infastructure. Or build schools, farms and clean water facilities in third world countries. Or launch an environmental protection group, buying and preserving nature's beauty.

The possibilities are endless! -- Let's make it happen.


Feel VERY free to contribute to these ideas.
E-mail me if anything is incorrect, outdated or unclear.

Created By Brent Hodgson, Melbourne, Australia
Friday September 1st, 2000

Information thanks to John Burley (Professional Investor, millionaire - Arizona, USA)