BASIC PREMISE: What if investors could invest in individuals as they do in businesses?
DETAIL: There are many under-privileged, high-potential (UPHP) human resources in the world. An umbrella organization (UOrg) institutes screening to identify these UPHP "employees" that they "adopt" and expose to the workforce as competitive professionals, for a legally binding commitment for a life-long % of earnings from this individual. UPHP is thus exposed to a revenue stream they could NEVER otherwise aspire to. UOrg gets a revenue stream that lasts decades and pays back in multiples of the investment (and can use insurance to protect "investments" against death, disability etc.)
IDEA DEVELOPMENT: To share risk/reward, UOrg sells tradeable shares of UPHPs. Income statements and growth prospects for UPHPs are published yearly. This is a new genre of financial instrument to an investing world looking for diversification.
EXAMPLE: An above-average, late-teen, high-school level, Indian villager will require, a MAXIMUM of $1K for basic necessities, and about $1K for basic training /yr. If we make it a 3 yr course and the final year has intensive training worth $1.5k, that will amount to $7.5k. Now consider the revenue stream: a starting tech worker makes $8k/yr, in 5 years this will go to $15k, then $30k by 12 yrs or so. If this person does a stint in a 1st world nation, revenue goes up exponentially to 80k-100k.
At a (giveaway) rate of 15% of income, for the lifetime of a normal tech worker bee, UOrg recoups its investment in 5-7 years and then offers dividends.
ROUGH NUMBERS (after 30 yrs for 7.5k down): A NON-reinvested, inflation-adjusted UPHP approx. return = $120k (or NPV of 50k) which is comparable to a continuously re-invested index fund@10% for 30yrs (131k/53k).
BUT a continuously re-invested UPHP (in Index funds or UPHPs) would give... 571k! (or NPV $235k).
Thoughts???
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Immediate thoughts:
This has been happening for a long time in India. Parents educate their children and then expect them to support them in the later days of their lives. The gaurantee for such a support used to be the close ties in the community.
But over the recent years, children dont feel obliged to take care of them. Such a deal bound by a contract and law should make it worthshile for those parents to provide higher education for their own children and others too.
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