Sunday, January 24, 2010
The Cirle of Money
The circle of money can be experienced in the daily life. It comprises of celebrities like Brid Pitt who has lot of funds and these funds are managed by their fund managers. These celebrities are called HNI i.e. high net worth individuals. All the funds from these HNIs are then collected to make a pool of money. The fund managers then divide this pool of money into hedge funds and then invested in the different part of the world. Say IT sector is booming, there is a growth in the steel sector, etc. these funds are invested in these sectors to get returns on investments. There are a lot of VCs invest these funds into growing sectors like startups in IT sectors. One such start up is maxHeap technologies which has a product name www.commonfloor.com, which is apartment management software e-enabling the communities in many cities across the country. The fund from these VCs is funded to many startups and the returns are to be given over a period of time. The money collected by the celebrities is to return over a period of time with an interest rate say 20% for 10 yrs. Now the money is taken from Brid Pitt and that money is been put into the system. There is an employee in the company named Sandeep Mangal who is a big fan of Brid Pitt’s movies and goes to the cinema to watch his latest flick. The money paid at the cinema is put back in the system and the money goes back to the pocket of the celebrities. The moral of the story is the number of times you circulate the money the more it appreciates.
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