It is something of a truism that success breeds success. Likewise with money. Money can be used to “breed” money. Provided you have access to the necessary capital in the first instance, and are careful about selecting the kind of opportunities which offer a high return for a minimal risk, you can earn a very worthwhile income… using other people’s money!

One excellent method of amassing a large amount of capital and guaranteeing yourself a very high annual income is to form your own corporation. The cash you generate from the sales of shares is much cheaper than borrowing… there is no interest to pay, it does not incur monthly repayments, will pay your salary and is not subject to taxation.

Regardless of what the company does by way of trading, it is possible to issue shares at a nominal value of, for example, £1.00 each.

You can buy a limited company off the shelf and convert it to a public limited company. You then write into the company charter an authorisation for the issue of one million shares with no par value.

These shares are then divided into lots for distribution. You could keep 300,000 shares for yourself; allocate a further 400,000 for sale to the public at £1.00 each. Then set aside the remaining 300,000 for sale at a later date, when the value of the shares has risen, so that the sale price is much greater than the original £1.00 each. Contact a stockbroker and offer to let them sell your shares at an agreed commission (normally around 20%). Impress upon the broker that yours is a new company, which is set for rapid growth.

With the capital raised from the initial sale of shares invest in getting the company up and running. Once you are trading profitably yours shares will start to appreciate in value. In is not uncommon for shares in a newly established company to show a three or four-fold growth within the first few months of trading.

The initial capital from the sale of 300,000 shares, less 20% brokers fee, will leave you with an operating capital of almost a quarter of a million pounds. With this kind of money it is a fairly straightforward process to employ sales and management professionals to run your company and financial experts to advise on the best commercial strategy. With a three-fold increase in share value your 400,000 shares now have a nominal value of £1,200,000. The remaining 300,000 worth of shares can then be sold at £3.00 each or close to that amount. Supposing you can only sell them for £2.00 each, you still are able to raise a further £600,000 in operating capital.

Keeping your 400,000 shares as a nest-egg for your future, you award yourself a salary of £100,000 per annum as the company chairman. You don’t even need to take on a managing director’s responsibilities, and would be well advised to employ an experienced business professional to fill this post.

The most difficult phase of establishing your own corporation will be in converting your limited company to plc status. The formation or the buying off the shelf of a ready-formed limited company is a straightforward process. However, in order to elevate your limited company to public status will require expert professional guidance.

It is quite possible though, that you could find a suitable business professional to perform the necessary work for an agreed shareholding in your new company.

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