Why Is Washington Broke?

By Michael J. Weiner, CEO, PreConstruction Catalysts Inc.

When you boil all the rhetoric away and understand the underlying cause of Washington’s financial crisis, it comes down to spending more than one is making. Of course, people will point to the sacred cows which are untouchable, but there are other ways the government can tighten its belt.

The amount of money which is spent without a “return on investment” by the federal government is astounding. The mindset of Washington should be asking the question, “What value will the people receive by investing this money into XYZ?” If each agency focuses on its core mission, and asks the hard questions, it would not be a surprise to see the number of approved funds drop to some degree. Even if it causes only a 1% drop in spending, just because the question could not be answered satisfactorily, that is still a significant amount of money.

Another policy Washington needs to stop is the “use it or lose it” mentality prevalent throughout the government. Each year, when an agency finds at the end of the fiscal year that there is still money left to burn, the rush is on to find ways to spend on things that may not have a justifiable ROI. Why must they spend the money towards the end of the fiscal year? Because if an agency shows prudence in being able to save money not used in their budget, they lose that money the following year. What this does is cause agencies to find excuses to spend, instead of encouraging saving. Washington needs to allow the agencies to build up a savings budget that carries forward from year to year, instead of punishing them by reducing their budgets according to how much less was needed. This is one of the dumbest concepts and policies which could allow agencies to build up their saved funds for use in future projects.

There is another money-wasting behavior that Washington needs to curb. When a project is initiated, money is spent along the way. However, too many times, some reason comes along to stop the project in the middle of its tracks. The money that was spent has been wasted.

I once was hired by a contractor to do some public relations work on a project which had doubtful benefit to the greater good of the population. I was paid up front (thank goodness) for two months work. In the middle of performing, the project was suddenly cancelled for political reasons. Imagine this kind of thing happens in every agency, probably every day. All of the money which had been expended became wasted. Sure, things happen which cause a shift in direction. This is as true for the government as it is for business and individuals. However, if a project is weak to begin with, or its benefit is questionable to the citizens of the United States, there should be a review process which answers the above question.

There are many smart, hard-working people who work in public service. The mindset of the leadership needs to trickle down. Think like an Entrepreneur, and look for the greatest bang for the buck. Don’t penalize the people working for the many varied agencies for saving money—let them keep it and sustain their budgets, promoting more savings.

If Washington was a corporation (which it is) and it has many different divisions (agencies), leadership should evaluate how each agency is meeting the needs of the population. One of the Generals at the Pentagon recently took a program out of the budget for a specialized airplane, because, as the General said, it wasn’t needed. It will take other department leaders to have the same courage to eliminate or reduce those initiatives which are not needed or are doubtful. Let’s hope this change can be made soon, before the entire government financial system meets its end.

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Project Finance 101: Planning For Success

Project Finance 101:
The Business Plan

As the program director of the Major Infrastructure Funding Program says, it isn’t the business that fails, it’s the business plan.

The idea is that someone who knows nothing about the details and specifics can read the plan and understand what you are trying to do, how you will do it, with whom you will do it, and how will it meet the stated goals of the project.

 

For example, if you were to be trying to place an Internet-connected laptop to every child in a village, and engage teachers who would teach them in concert with an on-line system, you would need to show how you will use the funds; i.e. buying the laptops, distributing them, teaching the children how to use them, and then monitoring them to track their progress and help them succeed (staff/personnel).

 

What we are looking for is projects that will have humanitarian benefit, such as a hospital in an under-served area; a project that would be beneficial to the environment; a program for jobs-creation.

Each project owner needs to show that the business plan has been thoroughly developed, and the financial needs of the project are spelled out clearly with defined milestones where an additional tranche of the funding would be needed.

Executive Summary & Business Plan Content
  1. Overview: The Executive Summary and Business Plan form one document. These notes are for the assistance of those requiring guidance on the content.
  2. They are not exhaustive, as each business and project will be different, and the document will therefore have to be tailored according to the particular situation. Every letter and figure must be readily legible (at least 10pt.)
  3. Essential Requirements: All documentation must be in clear English or a clear, certified, English translation in the case of any supporting document in local language. All amounts must be stated in 000′s or millions and currency in Euro €, quoting the exchange rate used for conversion from local currency. Local terms, technical terminology, and acronyms must be explained – the investor must easily understand what is being proposed.
  4. The Executive Summary: This is really a brief Summary of the Business Plan, in order (a) to provide financiers and investors with a “snapshot” of the Company and its management, and an outline of the project, and (b) most importantly, to attract their interest in reading the full Business Plan, and funding the project.

It will therefore contain the following summarized information about:

  • The Company – it’s Management, and trading results for past three years.
  • The Project – background, market, summary and justification of proposal
  • Implementation of the Project and the timescale.
  • Project Cost.
  • Capital Contribution by the Company/Promoters.
  • Funding requirement – amount, modus (loan or investment), and proposed terms thereof.
  • Financial projections for 5 years – Gross Revenues, Operating Profit (after tax, interest and depreciation), Cash flow, Net Assets, and Return on Investment. – Only those items.

The Executive Summary should be constructed under the above-named headings, and should normally be contained in two A-4 sized pages, although it may, under certain circumstances, go up to a maximum of four pages.

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About Us

PreConstruction Catalysts, Inc.

Our company creates relationships between Ultra High Net Worth Individuals, Foundations, Trusts, and Private Bankers.

Please visit our website at www.preconstructioncatalysts.com

to learn more.

Thank You.

PreConstruction Catalysts, Inc

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The PPP Boogeyman

The PPP Boogeyman.

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The PPP Boogeyman

The amount of ignorance about Private Placement Programs and their meaning is astonishing. What people do not realize is that just about ANY offering in search of money is a Private Placement: Unless you are raising money from the publicly traded exchanges, PPP covers a very wide number of financial opportunities. Limited Partnerships are one example. Investment into non-publicly traded hedge funds are another.

Where so many make the critical mistake in the realm of so-called “High Yield Investment Programs” (HYIP), is to lump these together with a Managed Buy/Sell (MBS) program, which is solely designed for project funding purposes.

HYIP (appropriately pronounced as “Hype”) are fraught with fraud, and when warnings are issued by government agencies, they are talking about programs where the investor moves money into the promoters’ bank account, or in some other manner. That’s a sure-fire indicator that something is fishy.

However, there are genuine special MBS programs that fall into the category of a Private Placement—and have for over 40 years—for the purpose of funding projects that are infrastructure, humanitarian, and/or environmentally beneficial.

Before judging a program called PPP, it is worth digging a little to find out exactly what the program is doing. If it requires a transfer of money from your pocket to the promoters, that is the time to run. If you dig and learn that the PPP is a Managed Buy/Sell, you could be on to something. With a small handful of people involved in the MBS programs, gaining access is possible only through one of those people. They are out there. Hard to find? Yes, on purpose. Real? Yes, when you have connected to the authentic providers.  

Knowing the questions to ask can help you steer clear of the HYIP garbage dump. Knowing there is a difference between the two programs will help you better understand if you have a genuine opportunity in the MBS, or are just being,er,  Hyped.

 

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Bank Paper and Private Placement Programs

Bank Paper and Private Placement Programs.

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How To Correctly Approach A Trade Platform And Avoid Rejection: Are You Truly Ready, Willing and Able?

How To Correctly Approach A Trade Platform And Avoid Rejection: Are You Truly Ready, Willing and Able?

Being on the receiving end of dozens of submissions that come in on a weekly basis, most come from investors who do not understand the proper etiquette needed to successfully be invited into a program. Many times, an investor has a pre-conceived notion about how to approach a platform. They want to do things their way.

However, those pre-conceived procedures they would like to follow do not fit with the actual way the platform must, by banking rules and regulations, begin the process. The investor who insists on this generally is declined even the chance to be considered.

Think of it this way. You know that a party is being held where the guests are participating in the trade programs. They took the correct approach, followed the order and instructions of the trade platform to conform with banking and trading rules. They are inside having a grand time while they multiply their assets and receive profits for use by the trader.

Now, you were not invited to this party, but you would really like to attend. If you were going to try to barge in and crash the party, you would be automatically rejected, and most likely banned from showing up again. Pretty severe, isn’t it? Yet many times, an investor thinks they can push their way in, which is hardly the way to be invited!

To make yourself attractive for an invitation to the party, you must ‘dress up’ by providing the documents that start the invitation process. Those are commonly the passport and client information sheet of the owner of the bank account, a bank tear sheet no older than 10 days, and some other necessary documents. There is also the matter of your personal manner. Are you cooperative? Have you disclosed everything? Will you act like a partner who has a pleasing personality that the trader can work with?

These are just a few things that you, as an investor, need to be prepared to do.

The next step is presenting your documents to the designated person at the platform. This is how you make the request to come to the party. After a brief time making sure that you and the money you want to use are clean and clear, you have passed through the first doorway towards the party.

This due-diligence is mandated by the Know Your Customer rules. This is also the correct way for the relationship to begin. You, as the investor, have to take the first step and introduce yourself. Your documents are your introduction. If all the necessary paperwork is presented, and you are cleared to enter the next door, you will be dealing directly with the principal(s) of the platform. This is the point where you must pay close attention to the instructions that the platform gives you. They are required to follow ever-changing rules and requirements to invite you through the last door, which is the entry to the party itself. This is the Contract (Asset Management Agreement) which binds you and the trader together for the duration of the program.

Because of the enormous amount of fraud and misrepresentation that has resulted in extremely muddy waters for an investor, each step is taken rapidly but carefully, to make sure that all of the ‘i’s are dotted and ‘t’s crossed at each step.

If you have the right attitude (Willing) , the right presentation of yourself through your documents, and the willingness to let the traders do what they must in order to let you in to the party, then success is likely—assuming you are dealing with someone who truly IS connected to one of the real trade groups.
If you wish more information, contact the person you received this from and ask to speak to the trade platform representative.

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