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Author Topic: College student stock exchange  (Read 6888 times)

Elwar

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College student stock exchange
« on: December 07, 2005, 08:44:57 am »

Ok, I had an idea for a way to help college students get money for college.

It'd be a sort of IPO after high school, they put themselves onto this 'market' and sell themselves as an investment.
They'd be able to sell half of their shares of themselves before college and the other half could be sold after college.

Then after college they'd have to pay a percentage of any income earned to the share holders for a set period of years.

For example: John sells 20,000 shares of himself at age 18 in exchange for an agreement to pay each shareholder a dividend starting in 5 years. At age 23 he starts paying 2% of his salary toward the stockholders, split amongst 40,000 shares (he gets half) for 20 years. If he sells each share for $1 he'll get $20k for college. If he averages a 50k salary over 20 years he'll pay all the stockholders back even. Though the original stock price and price from there on will hedge on the bet that this kid might become the next Donald Trump or Bill Gates.

My math could be way off...but you get the point.

The kid could also buy his own stock after college so he only has to pay himself. Or sell the other half if he wants to start a business or something.

A company could be set up that takes an up front cost per trade, and they also track the kid's income to handle the payment to the shareholders.
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CP ridgerunner

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Re: College student stock exchange
« Reply #1 on: December 10, 2005, 12:39:56 pm »

Would they necessarily have to pay dividens every year, or a set percentage, many companies don't yet their stock value rises? I read that Microsoft never payed a dividened for years and it still is not what you would call an income stock unless you bought earler and got more shares through splits.                                                                                                   
    Business Week had a prediction that such future trading would develop, I forget which issue but it was online.
Ok, I had an idea for a way to help college students get money for college.

It'd be a sort of IPO after high school, they put themselves onto this 'market' and sell themselves as an investment.
They'd be able to sell half of their shares of themselves before college and the other half could be sold after college.

Then after college they'd have to pay a percentage of any income earned to the share holders for a set period of years.

For example: John sells 20,000 shares of himself at age 18 in exchange for an agreement to pay each shareholder a dividend starting in 5 years. At age 23 he starts paying 2% of his salary toward the stockholders, split amongst 40,000 shares (he gets half) for 20 years. If he sells each share for $1 he'll get $20k for college. If he averages a 50k salary over 20 years he'll pay all the stockholders back even. Though the original stock price and price from there on will hedge on the bet that this kid might become the next Donald Trump or Bill Gates.

My math could be way off...but you get the point.

The kid could also buy his own stock after college so he only has to pay himself. Or sell the other half if he wants to start a business or something.

A company could be set up that takes an up front cost per trade, and they also track the kid's income to handle the payment to the shareholders.

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Elwar

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Re: College student stock exchange
« Reply #2 on: December 12, 2005, 05:33:47 am »

Would they necessarily have to pay dividens every year, or a set percentage, many companies don't yet their stock value rises? I read that Microsoft never payed a dividened for years and it still is not what you would call an income stock unless you bought earler and got more shares through splits.                                                                                                   
    Business Week had a prediction that such future trading would develop, I forget which issue but it was online.
Ok, I had an idea for a way to help college students get money for college.

Perhaps that could be up to each person selling the stock...Maybe when they go to sell their stock they lock into a dividend contract which would make their stock worth more. Or they may be a 4.0 student with high honors so they figure they can get a decent starting price from just that.

The key difference from regular stocks is you wouldn't have votes on what direction the 'company' should take. You wouldn't be able to vote to have the kid quit his job and go work as a radioactive waste disposer because that would bring in more money...
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mattbarney

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Re: College student stock exchange
« Reply #3 on: December 12, 2005, 08:57:01 am »

Ok, I had an idea for a way to help college students get money for college.

Hi Elwar,

Great idea....a very similar idea has been developed into a business - see here http://www.myrichuncle.com  .  I stumbled upon it a few years ago researching my next book.  Takes the concept of "Human Capital" to the next level, doesn't it?

Matt
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Samuel_Adams

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Re: College student stock exchange
« Reply #4 on: December 15, 2005, 06:40:48 pm »

It would have happened already, indeed I had also wondered just before my college, whether such a business would ever shape up.

Problem: you can't have an IPO without going through lengthy process and paying hefty fees to Investment Banks.

SA
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mattbarney

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Re: College student stock exchange
« Reply #5 on: December 15, 2005, 11:50:04 pm »

It would have happened already, indeed I had also wondered just before my college, whether such a business would ever shape up.

Problem: you can't have an IPO without going through lengthy process and paying hefty fees to Investment Banks.

SA

Samuel -"myrichuncle.com" I cited before seems to have some cash flows, and the Google IPO suggests that while the process may be lengthy, there are alternatives to traditional IPOs.

See these URLs for details on Google's unusual approach
http://www.washingtonpost.com/wp-dyn/articles/A53632-2004Apr29.html
http://www.usatoday.com/money/industries/technology/2004-04-29-google-ipo_x.htm
http://www.wired.com/news/business/0,1367,64609,00.html?tw=wn_story_top5
http://money.cnn.com/2004/04/29/technology/google/

PS - you're may absolute favorite beer! I only drink Samuel Adams these days, you're awesome   :)

Matt
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CP ridgerunner

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Re: College student stock exchange
« Reply #6 on: December 17, 2005, 04:19:05 pm »

Sort of like perfered stock built in rate but no vote.
Would they necessarily have to pay dividens every year, or a set percentage, many companies don't yet their stock value rises? I read that Microsoft never payed a dividened for years and it still is not what you would call an income stock unless you bought earler and got more shares through splits.                                                                                                   
    Business Week had a prediction that such future trading would develop, I forget which issue but it was online.
Ok, I had an idea for a way to help college students get money for college.

Perhaps that could be up to each person selling the stock...Maybe when they go to sell their stock they lock into a dividend contract which would make their stock worth more. Or they may be a 4.0 student with high honors so they figure they can get a decent starting price from just that.

The key difference from regular stocks is you wouldn't have votes on what direction the 'company' should take. You wouldn't be able to vote to have the kid quit his job and go work as a radioactive waste disposer because that would bring in more money...
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