Growfolio Magazine - Winter 2007 Issue

Winter 2007

www.growfolio.com

The Sirius S50

ISSN: 1555-8290

Getting a Loan on Your Terms

Contents Columns From the Editor’s Desk

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Our Relaunch Issue Arrives

Shelf Life

Reaching for the Prize

Inspired

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A Polemic: Gold or Gold Equity

Should gold be a part of your portfolio?

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Give your creativity some love.

p.8 p.17

Features

Business for a Better World

An interview with the founders of Ethos Water.

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why keeping a journal makes business sense

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Getting a loan on your terms

Sirius s50 review

A review of Sirius Radio’s flagship unit.

The framework you need when getting a loan as a young person.

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our new blog

Your between-issue fix.

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m D o r F the Editor’s esk by Jonas Elmerraji

As promised, the hiatus is finally over, and the magazine for tycoons in training is finally back. What has become evident over the past two years of publishing growfolio magazine is the fact that perhaps a monthly publication schedule was a bit too ambitious. For the moment at least, growfolio’s quarterly. Stepping up the schedule once again will be a decision left to you, the readers, so if you’d like to see growfolio as a bimontly publication, get to writing some emails to us! Our readers deserve an explanation, so here goes - we had some issues with a lot of the new contributors we were adding to the roster here. So much so that I took growfolio offline to rebrand, regroup, and rethink what was going on. Since the last issue, we’ve been getting more readers than ever before, and lots of new subscribers - I guess that meant that it was time to bring growfolio back. Unfortunately, we ran into a bit of a problem with our subscriber mailing list a couple of months ago. Essentially, we lost about 80% of the list when About growfolio: growfolio magazine (ISSN: 1555-8290) is an online business magazine for the under 35 crowd. New issues are generally published quarterly, and are available at www.growfolio.com. We’ve been in publication since January 2005.

our web hosting company changed servers on us. Most of those emails are lost forever, so if you want to make sure that you’re subscribed, go ahead and visit growfolio.com/subscribe and sign up again, just to be on the safe side. As a final note, for those of you who are interested in investing (‘cause that was growfolio’s purpose back in the day), since the publication of the last issue of growfolio, I’ve become a contributor for Investopedia.com, the leading investor education website online, so feel free to check out some of my articles on their website. I’m really pleased with the relaunch issue, and hope that you will be too. Until next time,

Advertising: growfolio derives all of its revenue from advertising on our website and in the magazine. If you’re interested in advertising with us, please download our media kit from our website or email [email protected]

Suggestions: For content suggestions or help with subscribing to growfolio magazine, please email [email protected]. Likewise, if you’re interested in contributing, please send us an email with a writing sample of about 500 words.

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Shelf Life A Column by Lorette Luzajic

Reaching for the Prize

Y

ou’re at a holiday cocktail party, and you’re thrilled to get to talk to an inspiring consultant that you’ve been hoping to meet for years. You’d love to pick his brain and find out more about how he got started. Chatting amicably, you’re certain he’s impressed with some of your ideas. Then he asks if you’ve read the new Man Booker winner and what you think about it. You draw a complete blank. The last book you read was Hop on Pop, before your son’s bedtime the night before. With the Pulitzer Prize, the Man Booker, the Giller Prize, the Governor General’s Award, the National Book Award, and the Nobel Prize for Literature, it seems impossible to keep up. And why should you? Isn’t it enough that you slaved through War and Peace back in twelfth grade? Doesn’t Dilbert count as fine literature? Stop sweating - it’s time to replace your dread with healthy curiosity and

explore literature with open-minded zeal. After all, you’re able to confer with everyone on who wore what to the Oscars, and which nominee was slighted. With the help of your local library, bookstore, and the Internet, you can become lit-savvy in no time and map out a few reading journeys that will enrich your life. Give up one night of late-night news or reality TV reruns and replace it with reading, and in no time you’ll have something of substance worth talking about at soirees. Of course, you’ve heard of the Nobel Peace Prize, but Alfred Nobel also made provisions in his will for a literary prize. Since 1901, the Swedish Academy has awarded a writer whose body of work was outstanding and idealistic. The Nobel literary laureate is international and can be awarded for works in any language. Rudyard Kipling won in 1907, and other recognizable names through the century include Yeats, Shaw, Mann, Hemingway, Beckett, Neruda, and Toni Morrison. Pick up 2006 Laureate Orhan Pamuk’s Snow. The Turkish writer’s novel is difficult but

rewarding, and combines current themes of politics, religion, poverty, and individuality. Set in remote Turkey with characters and events from neighboring countries, and written prior to 9/11, the eerie foreshadowing of world terrorist events is noteworthy and controversial, but rendered with a poet’s soul. Many prestigious Pulitzer prizes are awarded each year. Named for Joseph Pulitzer, a Hungarian-born American journalist, the prize stands for excellence in all facets of the newspaper and publishing industries. This year’s fiction winner was Geraldine Brooks, for March, a retelling of Louisa May Alcott’s Little Women from the point of view of the protagonist’s absent father, an abolitionist during the Civil War. Since 1917, several prizes have been awarded each year in various categories of journalism, drama, poetry, and fiction. Some novels that have earned this coveted prize include The Hours by Michael Cunningham, Beloved by Toni Morrison, To Kill a Mockingbird by Harper Lee, and The

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Grapes of Wrath by John Steinbeck. The National Book Award recognizes American books of exceptional merit. Since 1950, prizes have been awarded for fiction, nonfiction, and poetry, and now include a prize for young people’s literature as well. This year’s fiction award went to Richard Powers for The Echo Maker, a complex novel about identity. When ordinary underachiever Mark suffers a car accident, he never fully recovers and can’t believe those closest to him are who they say they are. Neurological and spiritual adventures ensue. Montreal’s Jack Rabinovitch founded the Giller Prize in 1994 to honour his wife, accomplished journalist and book reviewer Doris Giller. The award recognizes excellence in Canadian fiction. Vincent Lam’s takes the 2006 prize for Bloodletting and Miraculous Cures, a collection of short stories woven together by common characters and themes of medical science, its ethics and challenges. Mordecai Richler and Margaret Atwood are recognizable names of previous winners- and Alice Munro won twice. The Governor General’s Literary Awards have recognized outstanding Canadian talent, both English and French, in seven literature categories since 1937. This year’s fiction winner is Peter Behrens for Shelf Life: Reaching for the Prize

The Law of Dreams, a novel about the Irish famine. For 38 years, the Man Booker awards the best novel by a citizen of the Commonwealth or Republic of Ireland. The 2006 prize went to Kiran Desai for The Inheritance of Loss. Populated with eccentrics, exiles, and immigrants, Desai’s second novel examines questions of belonging by asking the age-old question, “Where do I fit in?” Don’t stop here- there are dozens of other prizes like the Orange Prize, the Caldecott Medal, and more. Websites like www.amazon.com can help you find notable books for every interest, and your librarian will be overjoyed to engage in conversation about his or her favourite reads. Make it a real point to include Newbery titles on your kids’ reading list- and if your attention span is rusty, read the Newbery winners yourself. Though the medal is awarded to the absolute best in children’s literature, each and every winner is worthy of adult attention. No one can be expected to keep up with every prize and it’s important to read other books, too- even the best critics may have skipped or ignored brilliance, and there’s something to be said for discovering some of the thousands of lesser-known talents. But committing to read a handful

of award winning books each year is a sure way to enrich your mind- and a great way to steer the conversation at gatherings away from flow charts into more interesting territory.

Getting Started Refresh your world lit chatter by delving into Nobel winner Gabriel Garcia Marquez’s One Hundred Years of Solitude. A detailed, riveting journey into the 100-year hist ory of the village Macondo, this nove l is the most fa mous example of mag ical realism, a Latin American genre that seamlessly melds history with gh osts and other surrealisms that seem impossible to ou r practical culture. Will iam Kennedy fro m the New York Times Book Review ca lled “the first piece of literature sinc e the Book of Genesis that should be re quired reading for the entire human race.”

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A Polemic: Gold or Gold Equity F

ew can argue that gold or a derivative of, should not be a part of one’s investment portfolio. The last 4 years have seen a tremendous ascension in the price of gold (from $272 in 2001 to $725 in May 2006). There is no doubt that investors turn to gold in times of turbulent markets as a safe haven, making gold an excellent hedge instrument. I would also say that bullion, raise or fall, will be one of the most sound investments one may make, superseded only by one’s house. It is readily transferable and is accepted worldwide for payment of goods and services, even more so than fiat currencies. And as seen over the past 4 years can augment in value considerably. The question or polemic is in what form it should take, a straight investment in gold or a gold min-

by Stephen Hill

ing equity. As per usual, due diligence is a necessity when coming to a postulate on which path to take. We can see many advantages of buying pure gold. With the purchase of gold ounces there is little worry about non-goal congruence between boards and shareholders and the politics that ensues therefrom. Giving pure gold much more stability with regards to price as compared to a gold/mining equity. I would also argue that the time needed to properly research which mining company to invest with can in itself take considerable time. For such, this makes tipping the scales towards pure gold more efficacious in terms of time and we all know time is money. On the down side of the sword comes the price or fees of purchasing gold. These can add up considerably, depending on which broker or financial institution you deal with. There is usually a flat fee plus a percentage charge of the amount of gold bought. In

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addition, you will also incur a safe keeping (vault and insurance costs) charge for the storage of your gold.

“But of course with an investment in just pure gold comes lack of diversification.” But of course with an investment in just pure gold comes lack of diversification. Typically gold companies offer and drill for more products/metals than just gold. Silver, copper, nickel would be some examples of other offerings by a company, this fact, will partially prevent yourself from being completely exposed to the price of gold should it head south. Further justification for choosing a gold equity would be ease of transferability. Typically an equity (depending on its’ market capitalization size) will have a quicker turn around time in terms of liquidity. We can also argue that equities are far riskier than pure gold. As one part of the product is tangible (gold) and the other part is not (employees work). Knowing this we can apply the classic formula

of greater risk equals greater reward, giving a gold stock much room for growth or decline. So based on the above arguments (which is not an exhaustive list), pros and cons for gold or a gold equity can be formed. Ultimately you will need to assess your risk tolerance and time line for investment, than you can begin the process of determining what is right for you. One thing is for certain, gold was one of the first means of trade/commerce after the barter system and has been around for forever and a day. Given its’ history and track record, it will probably not be going anywhere anytime soon, making gold (whether pure or an equity) one sound investment, not to mention pretty nice to look at.

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by Jonas Elmerraji

B

usiness is business and charity is charity. Right? Not necessarily so anymore with companies like Ethos water. Ethos was formed in 2002 by Peter Thum and Jonathan Greenblatt as a bottled water company whose purpose is to “help children around the world get clean water.” You see, for every bottle of water Ethos sells, they donate five cents to the cause, with a goal of $10 Million dollars over five years. In 2005, the Starbucks Coffee Company purchased Ethos. Now that Ethos can be found in Starbucks shops across North America, Ethos has a real fighting chance to make their goal a reality. I recently had the chance to ask the founders, Peter and Jonathan, some questions about Ethos, their business model, and other companies like them: growfolio magazine: What does corporate responsibility mean today? Are today’s

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how to integrate such responsible practices into their operations. growfolio: What were some of your concerns about starting Ethos? Jonathan: We started Ethos in 2002 with a simple mission – to help children around the world get clean water and to raise awareness about the world water crisis. However, there were numerous challenges.

corporations doing enough? Jonathan: I believe it’s reasonable to think that businesses have a role to play in society beyond simply generating profits. It is critical that they function as responsible members of the communities that they serve, creating value through all their activities, even those that do not drop to the bottom line. Not all companies subscribe to this viewpoint, but there are numerous examples of businesses that endeavor to generate value for shareholders via profits and to create value for employees, customers, and communities through multiple means. As the marketplace demonstrates increasing demand for the products and services offered by such businesses, I am optimistic that more corporations will explore

Both of us were first-time entrepreneurs so we wondered whether our business would get off the ground. We decided to enter an incredibly competitive market dominated by global multinational corporations, so there was some concern about the competitive landscape and our ability to achieve scale in a crowded field. We offered consumers a product that ostensibly appeared to be undifferentiated – water. Only our brand promise would set us apart and this needed to be communicated, an expensive and difficult proposition when you attempt to engage time-starved, over-stimulated consumers. Lastly, we hoped to donate 50 percent of our profits, immediately complicating our ability to raise capital. Simply put, this business model foreclosed our prospects with numerous investors who preferred to fund businesses that would deliver 100 percent returns. Despite all these concerns, we believed deeply in our vision and held to the conviction that consumers would respond to our promise – every bottle makes a difference. Since those earliest days, even when we faced challenging circumstances, we continually have been encouraged and invigorated by the consumer response

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to our mission and their embrace of our brand in cafes, natural foods stores and, more recently, in Starbucks locations across the United States.

world. We recently announced a commitment to invest $2.1 million to integrated and sustainable water programs in Ethiopia and Indonesia, raising our total to more than $2.5 million.

growfolio: Are charity and profitability mutually exclusive?

growfolio: What keeps other companies from following Ethos’s example of corporate citizenship? If more companies did, what would it mean to the world?

Peter: Ethos is neither a charity, nor is it simply a product or service which generates a profit. Ethos is a mission with a brand; one which encourages and provides opportunity for consumer activism. Our mission is twofold: help children around the world get clean water and raise awareness here in the US about the world water crisis. We provide our customers a great consumer product and the ability to participate in addressing the world water crisis simply by choosing a different brand.

“For these reasons and probably others, businesses like Ethos remain niche players today.”

Peter: Starting Ethos was difficult, relatively complicated, and very risky. In short, there are easier ways for entrepreneurs and companies to make money. Some elaboration follows: 1. Basic microeconomics tells us that price and quantity are the primary drivers of most markets. You can add new physical features, or emotional benefits for differentiation, but over time, those advantages are competed away and become commoditized too. So, basically every industry is a scale game and starting a company that takes more time to scale, and one which is based on benefits related to driving social change seems pretty counter-intuitive.

growfolio: How close is Ethos to its contribution goal of $10 Million to help people get clean water?

2. Building a brand around a social mission is a long term investment. It requires significant communication and feedback with the customer, which implies intensive relationship-building and thus a much longer return horizon on brand investments than those which are focused directly on the customers immediate personal needs or self-fulfillment.

Jonathan: After the acquisition, Starbucks set a goal to raise at least $10 million by 2010, contributions that would be achieved by donating $.05 per sale. Such funds are distributed to the Ethos Water Fund at the Starbucks Foundation and invested through non-profit organizations serving communities in need across the

3. IRS regulation of companies and non-profits is not really set up to accommodate, much less facilitate, the establishment of companies like Ethos. Determining how to “give away” your profits, or structure your company around a mission in some way, adds another layer of complexity to starting a company, which is

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already a difficult thing to do. However, this is getting easier for social entrepreneurs; because there are already many more examples like Ethos out there today than there were when we were getting started. For these reasons and probably others, businesses like Ethos remain niche players today. However, Ethos and some similar businesses have proven that you can achieve a social mission through business, and that you can create value for all actors, and that you can achieve sustainable competitive advantage. To that point, Starbucks acquisition of Ethos is a pretty good signal that other companies are following this path and the subsequent scaling of our social impact are an indication that the benefits can be significant. Though Starbucks operates at the forefront of social business practices on many dimensions, I think that it is fair to assume that others will follow here as they have with other progressive innovations that Starbucks has ushered in. Ethos has a lot to say about the progress they’re making. By donating millions of dollars to help children throughout the world gain access to clean water, they’re speaking multitudes without uttering a word.

Making a Difference Never forget that no effort is too small. The idea of “Think globally, act locally” comes to mind. Every mind you change in favor of your cause is a step in the right direction. Never get discouraged just because it seems for the moment that nothing is happening.

Pick your battles. You can’t win ‘em all - at least at first. Even a small victory is a victory nonetheless. You should always focus on the point most central to your cause: if you’re for stopping the use of fossil fuels, argue your point concisely without mixing too much politics from other groups that are only indirectly related to yours.

Apply these methods liberally. Making a difference doesn’t end at politics. In business, you’re trying to make a difference too, in the minds of your customers or bosses. The rules are universal, so use them as such.

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Taking on the

Sirius S50 by Jonas Elmerraji

If you haven’t been living under a rock for the past several years you’ve heard of satellite radio. Sirius satellite radio, to be precise. Sirius boasts 130 channels of programming, 69 of which are completely commercial free music. Sirius has some pretty nice looking radios to boot. Take the S50, for instance – this Sirius radio is capable of recording 50 hours of live content for portable playback. The folks at Sirius were kind enough to let me play around with an S50 for a month so that I could bring this review to you.

of music, talk, sports, and comedy, shows hosted by some of the biggest names on the radio, and this guy named Howard Stern (heard of him?). The programming is quite simply out of this world. It’s pretty cool when you consider the fact that you can listen to it anywhere in the country clear as a bell. On top of all that, as a subscriber, you can also listen to all Sirius channels online.

Let me start off by talking about the service itself. Realistically, there is something for everyone on Sirius. 130 channels

Now, to the S50 itself. Suffice it to say, the Sirius S50 looks pretty darn cool. It’s black and shiny, and has a really gor-

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geous full color screen. It’s also got some pretty impressive features. The radio can be thought of in two parts – the radio itself, and the dock, which provides power and antenna connections to the radio. Set up is pretty simple, and I had the whole shebang setup to my liking in my car in about ten minutes. One of my favorite features of the radio is its ability to download the title and artist information from each song it plays and show it on the display. It makes discovering what that new song is all the easier. The S50’s biggest selling point is its ability to go mobile and play up to 50 hours of music, either recorded live while it was in the dock, or uploaded via your computer. Recording live content is a one-button deal – you press record, and it gets stored along with the artist and title information. When you do decide to playback your stored music, the Sirius has navigation buttons on the outside of the unit so that navigating using the screen isn’t necessary when you’re on the go. For the most part, I found that the Sirius S50 was excellent. One thing that I would have liked to have seen is the ability to be notified when your favorite artists or songs are playing on any Sirius channel. This is a feature

found in other units, and given the S50’s position in Sirius’s product lineup, I was a bit surprised not to find it. All told, Sirius Satellite Radio is an awesome service, and the S50 is definitely a great unit with few shortcomings. As of this writing, service rang in at $12.95/month. Right now, Sirius is running a holiday special on the S50, selling it on their site for $79.99 – a drastic discount from it’s $179.99 MSRP. You can get a free 3-day trial of Sirius Satellite radio on their website.

Sirius S50 Portable Satellite Radio Pros: Good looking unit, great service, affordable, portability, MP3/WMA compatibility, color display. Cons: No artist alert feature, unit must be docked to receive live content The Bottom Line: The Sirius S50 is an awesome unit, particularly at its current price. If you’re looking into an MP3 player and a satellite radio system, this just might be the perfect combination for you.

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Why Keeping a Journal Makes Good Business Sense by Sandra Pianin

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s I sat at my accountant’s desk this past tax season, I overhead another accountant talking to his client. In essence, their conversation was about keeping good records for tax purposes. The client did not have the paper trail he would need if the Internal Revenue Service questioned his deductions. The man was angry at his accountant for what he should have done to protect his own interests. When I was in college, I worked for a lawyer who had just passed his bar examination. He was busy trying to build a client base. He carried a small memo pad in his handkerchief pocket. In it, he recorded every Xerox copy and phone call he made for the client. When I billed the client for this lawyer, he would get his basic per hour rate plus every cent he spent on

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the client’s behalf. These two stories highlight the absolute need for people to keep accurate records. A journal is the best place to record automobile mileage, expenses and every detail you will want to remember for another day. Of course, there are all types of journals. Visiting a Staples store, you will find all types of bound accounting books. Any one of these will do the job. The best advice you can give someone keeping a journal is to be as clear as possible because you will not remember weeks, months or even years later minute details of an event. A journal also will record the growth of a family. The notes you make regarding children’s important medical details will be invaluable later in their lives. Take a new bound book and begin to record the details of your career. What are your goals for the future? What courses do you need to take to keep up with ever-changing

technologies. What have you learned from working together with co-workers as a team? What have you learned from your supervisor? What dreams do you have for the rest of your life? All of these questions and more will fit neatly onto those pages and be a permanent record of the things you want to achieve. Have you outgrown your current career? Plan within the journal’s pages a career change! Do you want to begin an exercise regimen? Use the journal to keep track of your progress. If you have a creative bent, use your journal to capture a line or a poem. For the artist that might lie just beneath the surface, a journal is the perfect place for a sketch. I have known people who capture the small yet very important details of their daily lives on the back of a cocktail napkin or used envelope. These scraps of paper are too easy to lose. Choosing to keep a journal is a decision you will never regret whatever your purpose.

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that uff out there st ol co s e’ er h T at e way we look can change th e iv look and g a e av H s. g thin . your creativity some love to

For the Webmeißter

Mint, created by Shaun Inman, is by far the loveliest and most concise web statistics program on the internet. We make use of it everyday at growfolio’s website as do countless others who have decided that there’s no other way to do webstats after Mint. You can buy a copy for your server for $30 from haveamint.com.

For the Moviegoer The Neistat Brothers, www.neistat. com, are filmmakers who host a number of their creative and entertaining short movies on their website. They’re free to watch and sure to please. w w w . n e i s t a t . c o m

For the Enlightened

Centripetal Notion is a blog for the thinking man. Covered topics include Art and Design, Science, Technology, and World events. It’s certainly one of the blogs worth reading on a regular basis. You can take a look at www.centripetalnotion.com.

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by Jonas Elmerraji

nvesting in your future is expensive. Be it an education, a home, or a car, sometimes a loan is your only option to get ahold of a big ticket item. But as a young person it can seem impossible to get approved for a loan without parental support. That’s why understanding the ins and outs of the loan process can be so essential to getting that check from the bank.

The Loan Process

1) Who: Who are you? What do you have to offer the bank? 2) What: What’s the money for? A bank is a whole lot more likely to lend money to someone who wants to build a home addition (and add equity) than someone who is planning on spending the money on consumption. 3) Where: Where you’re trying to get your loan can be a big factor of whether or not you get it. In a brick and mortar bank or online, as well as various geographic regions, some places are going to be more prone to lending than others. 4) When: The terms of the loan – both the interest rate and the duration of the loan determine when banks can start recording a profit. 5) How: Can the bank be sure that you will be able to pay the loan off based on the terms? How can you guarantee payback or at least hedge the bank’s risk in some way?

When you’re thinking about getting a loan, it can be important to look at things from the bank’s perspective. You see, to the bank, loans are their traditional number one revenue source. The bank cuts you a check for a certain amount of money (principle), and you in turn give the bank that same amount of money as well as some interest. Interest is the lifeblood of most banks. Loans aren’t hand-outs, and they shouldn’t be approached as such; banks’ prime concern is determining whether or not you will be able to pay back your debt on their timeframe. Who Banks judge potential borrowers based on a number of key things. Who you are is actually an important element of whether the bank Among them: will see you as a viable borrower. Believe it or not, you’re be-

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ing judged from the moment you walk in that door based on the only tools the lender has - your appearance. So dress the part: If you want to be treated like a professional, dress like one. Right or wrong, the lender will use their biases and preconceptions in determining if you’re a good risk. Also, don’t be surprised if the bank does a background check on you.

What

Since it’s their money, it’s also their business what you’re planning on doing with it. If you need a bank loan to fund your gambling habit, chances are you won’t be getting much in the way of financing. If, however, you’re trying to purchase or improve an asset – like a car, home improvements, or investing in your business – banks usually see this as a good thing.

case of the bank, what to offer), the terms of the loan are the biggest factors. Some of the things that can vary are the interest rate, the length of the loan, and the type of loan. Interest is the premium that you’re paying to the bank for the use of their money, so needless to say lower interest rates are better for borrowers. The duration is the amount of time you’ll be paying off the loan, so once again, a smaller number is better. The type of loan you’re looking at is also significant because it can be a big factor in the amount of money you pay during each payment period. Some different types of loans include interest and capital, interest only. (For detailed explanations of different types of loans, check out http://en.wikipedia.org/wiki/Mortgage).

Where

These days, there are alternatives to getting a loan from a traditional bank. Online lending is becoming a popular option because of higher online competition and quicker loan approval. With online lenders, fraud-awareness and reputability become major concerns. Always make sure that you’re only dealing with reputable companies and not readily giving away private information. Where you are in the world can also have an impact on loan approval. This is a matter of scarcity. If you’re trying to get a loan in an economically depressed area, banks are bound to be much more selective of who they loan money to than in an area of vast economic growth. By taking this into consideration, you can get a much more realistic view of your prospects.

When

When it comes down to deciding which loan to accept (or in the

How

The bank isn’t going to give you a cent if you don’t have the means to pay it back later (or if you don’t have enough assets for the bank to get their money back). That’s why they look at a few key things about your financials: 1. Collateral – What major assets do you have that the bank can seize if you default on your loan? Typical collateral includes your home and your car. 2. Credit – Your credit absolutely comes into play when you apply for a loan. If you have bad credit, chances are getting a loan

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is going to be pretty difficult unless you are willing to accept less attractive loan terms. 3. Income – Your lender is going to want to make sure that you can afford to make payments on that loan. Higher income translates to lenders being more comfortable with letting you borrow money. If you don’t seem like a picture perfect loan candidate, getting stuck with higher interest rates and fewer loan alternatives is more than likely. And if you have few assets, bad credit, and are barely scraping by, chances are that lenders won’t be calling you back.

“...it’s quite possible to get a loan without your parents.”

3. Where – Look into online lenders you’re interested in to make sure that they’re reputable and try to avoid looking for financing in areas where bank money is scarce. 4. When – Only go for loan terms that you can live with, and understand what exactly you’re going to end up paying out over the life of the loan. 5. How – Think about what assets you have that can be used as collateral, build up good credit before you go to a lender, and make sure that you have a viable plan for loan repayment.

Conclusion

Let’s face it – the reason that young people typically need a cosigner for a loan is the fact that parents typically objectify the five things that you want to focus on. Young people usually don’t. But when you know what lenders look for, as well as what you can do to make sure that you look like a responsible borrower, it’s quite possible to get a loan without your parents.

Looking Attractive to Lenders

The best way to make lenders fight over you is to make sure that you address each of the five things in a positive way. 1. Who – Dress the part for your loan and make sure that you don’t have any skeletons in your closet that lenders won’t be happy to see. 2. What – Lenders don’t just give money away. Make sure that your need is legitimate and financially justifiable.

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now has a

blog

growfolio is a quarterly magazine, but you’re bound to get bored more often than that. That’s why we now have a blog. It’s updated frequently, so check it out!

growfolio.com/blog

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