One Thousand Ways to Make a Living; or, An Encyclopædia of Plans to Make Money

by Harold Morse Dunphy

41. Please furnish me with a complete statement in writing as to what your company plans to do this year and the immediate future and what profits are reasonably possible from such operations.

42. If I invest $——, please state to what use my money will be put.

43. If it is to be used for a certain purpose, state how much of my money will go to the company and how much will go out on commissions.

44. Will the money I have subscribed be sufficient or will other money be necessary for the company successfully to carry out its plans? If you answer no, how much more will be necessary?

In the event of the above list of questions being answered in full, inform the salesman that you will familiarize yourself with the report and will later call upon him to go over the matter.

First look into the reputation of the men connected with the company. Also the reputation of the trustees and officers. Also obtain the financial standing of the large stockholders. This can be done in cities of over 50,000 by consulting reporting companies. See some prominent merchant and find out the best reporting company in the city. Call or write the reporting company and ascertain from them whether the above parties are good pay and whether they are the kind of men that are successful in carrying out plans. This report is important; it will cost you so much per name but it is well worth the fee to you. If the majority of these men are unknown—or have a poor reputation and are bad pay—it would be unnecessary to go further in your investigations as your chances would be very poor in such a company. Oftentimes this investigation alone will show the promotors have suits pending against them and even judgments on record.

However, if these investigations show the above-referred-to men O. K., submit the signed report to a banker not named as the company banker and obtain as complete a report as possible in writing from the bank and pay for the trouble; if the bank will not give a written report obtain a verbal report and write it down later yourself. If their advice is for or against the investment, obtain their reasons, and if none is given do not give it any thought.

Now see a lawyer and have him give you an exhaustive written report on your signed report, and pay him for it. Remember that it is far better to pay $25 to $50 and know where your investment is to go, than take a chance of losing all you possess. These last two reports will be very valuable to you. I suggest that they be put in writing so that when you are alone in your home you will be able to consider more carefully their report and advice.

Now make a copy of the real property and write the assessors of the county in which the land lies for a report concerning this land and its improvements. This information will be furnished you free of charge. If it be farm property, they can inform you quite well the kind of land and its value and also give you what improvements, if any, are on the land and their nature. And the same is true of city property. While the assessor’s estimate may be a little below the real value of the land it is far better to have the land at too conservative a figure than an excessive figure.

In the event that the company is in possession of mortgages, have a detailed report from the county assessor’s office as to the mortgaged property. This will give you the character of the mortgage security.