UKC

If there was the possibility of investing in a new wall near you, would you do it?
Given one of the benfits would be free access, what else what you want to know and has anybody else done this?
I fully understand any investment should be treated as a write off, equally if you don't, you never gain.
Chris

In reply to cwarby:

What is the return going to be? If you invest, say, 1000 pounds and get free access worth, say, 250 pounds then that's 2.5%. Would you be better to stick your money somewhere else, get 3% perhaps and pay for your access?

Also, what are your risks? Yopu would need to do a financial analysis on the Wall to understand what the thing looked like and then do some sensitivity analysis.


That makes absolutely no sense

In reply to cwarby:

I would consider it, but it would depend on the business plan, potential return, amount of control I would have within the business and, of course, 'gut feel'.

If one of the main reasons you're investing is for free access, the maths on whether it was worthwhile, allied to admission fee and the number of visits you expect to make annually, would be fairly easy to calculate.

Finally, I'm sure mr buffett would disagree with your final comment re' treating investments as write offs!

In reply to Removed User: Err, small percentage problem there....

In reply to Removed User:



He's just saying you should only invest money you can afford to lose?

In reply to cwarby:

If I can get 15% I might consider it.

In reply to Removed User: The potential investment is from £200 upwards. If a wall charged £5 in year one, £5.50 in year two and £6 in year three, using it 2/month would equal an investment of £400 plus any return, with the intangible positive of a decent wall near by. Not knowing how prices could rise, there is a potential to future-proof entry costs for an investment.

As stated, I believe any investment (e.g stocks/shares) should be monies you are able to write off or at least tie up for some reasonable time. Anybody who thinks making a killing short term is probably deluded. i.e I'm looking at it eyes open and that to me does make sense. I appreciate your comments though.

chris

In reply to ThunderCat:


Yes, thanks - perhaps I was not as clear as you have stated.
Chris

In reply to cwarby:

No probs - it's one of the first lessons in investing I heard (and the main reason I rarely invest) )))

In reply to cwarby:

Honestly it makes no sense whatever. Who cares about future proofing climbing wall entry inflation? ??? No-one in their right mind!

Just a few issues for starters:

- significant counterparty exposure: who the hell knows if the wall won't go bust in one year?
- investment illiquidity - how can I get my money back?
- most important, as noted above a crap return

In reply to cwarby: Doesn't sound like an investment plan, sounds like buying a season pass for the climbing wall.

In reply to Martin1978: To some extent I agree and whats the problem with that? The entry prices I mentioned are probably conservative, so if you paid £300 for life, would you?

Cheers
Chris

In reply to cwarby:
I can't see it working as an investment in the usual sense. Just seems way too risky. I'd rather just buy a season ticket and invest the leftover money in an ISA or whatever.

I can almost imagine it working as a way of raising capital to build a wall in an area where a lot of people want there to be one - ie get all the people who say "someone should come and open a proper wall around here, the area's crying out for one" to put their money where their mouths are. I think things like concert halls have been built on this sort of principle in the dim and distant past. On the other hand, if you're having that much trouble raising the initial capital, you might just not have a sustainable business plan anyway...

In reply to SARS: Am intrigued to know what financial institution you work for? Surely any investment that is not a fixed return is a risk, but I'm doing it with my money not someone else's.
I appreciate all views, hence the post.
Chris

In reply to cwarby:

Of course it's a risk. What I think you should do though is treat it like an investment with a target return. Focus on earning, say, 15% on your investment. Yes it may not work out, but at worst it will discipline your thinking.

In reply to cwarby:


Nothing wrong, except that it isn't an investment plan.

And what would happen if (for example, simple figures) say all of the 1000 local climbers all invested £300. You'd have £300,000 which would be great. Build the wall and maybe fund the running of it for x number of years. But then you'd have no, or very, very limited further income from new climbers as they would all have a lifetime of free climbing. The money would run out eventually and you'd still have the running costs to deal with.

It's not how I'd be looking to fund a business or climbing wall.

If you were looking at some sort of youth center or community club then maybe traditional fund-raising/sponsorship/local big business/sport grants etc might be a better option?

Not knocking the idea, but I don't think the figures would add up.

In reply to Martin1978: Damn good point.The limit of investment from punters like me is (apparently) £50k. This limits it to a degree. The other side is, it may be a very reasonable business plan, but banks not wanting to help. The guy also has history starting a wall elsewhere that seems to be successful.
Chris

Before anybody asks, I have no link whatsoever with the wall. Yet!?

In reply to Martin1978:
Yes, agree. My basic worry would be that if the business plan's good enough to make it a good investment on purely financial terms then you'd be able to get backing from non climbing investors and then just charge climbers to climb as per usual.

If it's a slightly below par investment in monetary terms, but you think climbers would support it because they're effectively willing to chip in a bit extra to see a new wall in their area then that's a reasonable position, but you should say so.

In reply to cwarby: So the investment is from 200, you get free access and if all goes well a return. Sounds like good business from them to me where you both gain. If they get 10 climbing enthusiasts to put forward that money it pays for holds and equipment the climbers get to use it whenever. I would. Christ I just spent 300 building myself a bouldering cave. Lol If I had use of a whole gym for that price that was close enough to me to make it convenient it would be amazing. Also I'm guessing you will be able to get involved in setting the routes etc and become involved in the local climbing community in a positive way.

In reply to Oceanrower:

Yes. I was trying to type and think at the same time

In reply to cwarby:
>>

But those are two different things. I'm happy to invest long term in something provided it can give me a return but I'm not happy to lose that money.

Something to consider is risk vs reward. If I don't want to lose my money I will invest it in the "safest" things which will generally give me a much lower rate of return. If I have money that I can afford to lose I will invest in much riskier things but expect a much higher rate of return.

In this case you should ask whether the rate of return is matched by the risk. Without a business plan and some analysis this is impossible to answer but I would suggest that this is likely high risk/low return.

Then you have to understand the difference between ownership and management. What is the governance model of the wall going to look like? How much say will you have in its management and how will this be controlled?

I appreciate that you might think that I am over thinking this but if I was going to put money into a venture like this I would want to know these things. Remember - formality will be your friend.

In reply to cwarby: Thanks for all replies, there have been some points I had not thought of and so much appreciated. Out of interest I've just done a quick flick thru' money supermarket and you cannot get over 3% on an ISA or much over 2% on a bond and the best saving rate is 4% (pre tax). As non-risk returns they are not great. I save more money by offsetting on my mortgage! And yet if I put up a few hundred I get a wall. Decisions, decisions.............

Thanks all.
Chris

In reply to cwarby: you're only talking a few hundred quid... like someone else said earlier that's only like paying for a wall pass for a couple of years... i don't think it's such a huge decision.. if you think you'll like climbing there and get enough out of it in terms of training for the next 2-3 years for a a few hundred quid then that's fine isn't it? if it all goes worng and closes in a year then just get your money back through getting some holds, boards, mats etc and whack em up somewhere you can train.

or... put your few hundred into popping a training wall up for me in my garage and you can use it... a. if you live near by and it's convenient b. if you aren't a boring person who i'd find hard work to be around. It's conditional.

seriously, i wouldn't over analyise decision about investing £2.56p and a bag of haribo star mix (haribo tangtastics would be a differnt matter)

PPG financial investments LTD

In reply to cwarby:

You're talking about buying a year/lifetime pass, not an investment as such.

First things first you need to find out *exactly* what is on offer.

jk

In reply to cwarby: did exactly that at The Evolution wall in Eridge near Harrisons rocks when they were trying to get the finances together. Cannot remember exact details but it was along the lines of put £100 in and get £200 free entry. I liked it cause you get to help finance the local wall and you got something in return.

In reply to cwarby:
Market research is the answer to if you should or should not invest. If you invest you should expect more than just free entry. As a share holder you should expect a percentage of profit relative to your investment.