Tuesday, February 18, 2003

How to make money in a down market, or,
let's go back to school, or,
indentured servitude
[Chron]
My Rich Uncle, a New York company, is offering human capital as an investment, setting up mutual funds of sorts for investors willing to provide students with funding for college in exchange for a percentage of future earnings....

The human capital contract concept has been around since 1955, when it was proposed by Nobel Prize-winning economist Milton Friedman, wrote Miguel Palacios in a recent report presented at a conference hosted by the conservative Cato Institute. But, Palacios said, the introduction of subsidized federal loans killed the system before it got off the ground....

Students generally get between $5,000 and $10,000 a year and payment rates range from 1 to 4 percent of future earnings on every $10,000 invested. The students also pay My Rich Uncle a one-time fee of 2.5 percent that is automatically deducted from the financial assistance.

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