Good idea for trust money?

Question

My Grandfather is in the oil business and he runs an LLC that helps oil wells gain capital to drill. The oil well he is currently working on has the potential to bring in a substantial amount of money for the next few decades. If this well is as big as the engineers say it is, Each of my family members will get a trust fund. For me, this trust will be available to my use in my late 20's to early 30's and will yield a substantial amount of money. My question is based on what to do with this money to build more wealth. Specifically, I would like to take this money and own a franchise of some sort (Subway, Sonic, IHOP, Auto zone). So, is this a good idea to start with a franchise so early in my life? How much could a franchise pay out? Is it a risky venture? Are there better ways to gain capital over a relatively short business?

Thanks much

Answer 1

It can be a smart idea. I know several people who bought franchises, and do very well. You need to look at all aspects of the franchise agreement. How much do you pay as a monthly franchise fee? What will your overhead amount to (i.e. wages, food, cleaning supplies, utilities, building/lease costs, taxes, etc.) . The key factor will be the area you place the franchise. Are there 20 other restaurants nearby? How will you ensure it's success? How will you make sure your customer base remains steady? What happens if you go through all of your money faster than you thought because the franchise is not generating cashflow?



Or, could you learn everything you can from your family that's in the business making all of this money, and use your money to reinvest in the business? Find another well like that, and bam, you have how many times over your investment? Restaurants are always highly involved and take a lot of time (normally 50+ hours per week). You'll have more success if you can generate "passive income". This means money that is sent to you without requiring much time from you. For example, dividends from stocks, owning shares in a company like your grandfathers, owning the land with the well so the oil company sends you the lease check, etc. Think about these avenues as well for investments in the future and you'll be fine.

Answer 2

Congrats , now to your question about starting a franchise so early in life,,, if you are interested in being an owner of 1 or more restaurants for example, I would ask you questions.. like. Have you ever worked in a restaurant? what is your experience? What experience do you have that would qualify you as a good owner in making a good business in that field? be it a restaurant , or autozone. If you want to own any of these as a business, you need experience in that kind of business to make it successful. These franchises all have training programs for potential owners and you would need to contact them for details. Contact them and Try working / managing one of these stores first would be a good idea before ever considerring buying one. The main concern in owning any of these type of "local" businesses is... Location, Location, Location. You will have the $ to buy the land in a good location, or an already existing business in a location that you may need to convert. Think about what you like to do first. Own a business that you truly enjoy, or you will surely fail. These type of businesses can give great satisfaction not only in making a profit, but in creating local Jobs!

Answer 3

You do not say how old you are. It is never a good idea to invest in a business you do not understand. Considering the current state of the economy, you would do well to consider investing it in hard assets like farm land. If that doesn't sound good to you, look at the high yielding CD's at Everbank in Florida. You should also consider diversifying internationally to avoid losses due to currency devaluation..

Answer 4

Third stanza of the National Anthem: and this be our motto in God is our believe. Following the Civil War there was once a countrywide sentiment that the nation wanted a unifiying forrce. This was once placed on a brand new denomination of coin, the 2 cent piece. It was once good obtained and went on each and every coin considering then.