belbincolne Posted July 25, 2004 Share Posted July 25, 2004 I frequently borrow money to buy shares on margin and thus own as much as possible of my own company. As a result I can have a bad cash balance but try to rectify this by paying myself huge dividends. In my last game I was $10,000,000 in the red but paying $4m in dividends of which 75% should come to me as I owned that much stock. Therefor my negative cash balance should go down by $3 pa. But it just floated at around the $10m mark.The base rate was 6% but even if I was paying 10% for borrowing the money then I should have still seen a reduction of $2m pa. Instead, as I said, at the end of the year I was little, if any, better off. I ran this for about 3 years to see what happened and my cash position never improved.Anyone know why not? Quote Link to comment Share on other sites More sharing options...
JayEff Posted July 26, 2004 Share Posted July 26, 2004 I have noticed this too. I maximize the payouts for all the companies in which I have a majority stake, in late December, but I see that in early January my debt has not changed much. I don't know what mechanism is at work, but it could be we pay higher interest than we realize. Quote Link to comment Share on other sites More sharing options...
Bannon Posted July 27, 2004 Share Posted July 27, 2004 Jay -- I believe dividends are paid quarterly (end of month at March, June, Sept. and Dec.). So if you are only maximizing your payouts in Dec. you are missing quite a bit of cash overall.Please correct me if I am wrong on this payout schedule. Quote Link to comment Share on other sites More sharing options...
Lama Posted July 28, 2004 Share Posted July 28, 2004 You're right that there are quarterly payouts, but I think I think I observed that they are at the beginning of the months you mention. Quote Link to comment Share on other sites More sharing options...
JayEff Posted July 28, 2004 Share Posted July 28, 2004 Hehe, that is why i don't notice much change from December to early January :-[ Quote Link to comment Share on other sites More sharing options...
MiG Posted September 23, 2004 Share Posted September 23, 2004 I also think you have to pay some kind of interest over your debt, otherwse I am completely unaware of the system at work here (when shareprices stay the same, the money I can spend shrinks and my debt rises) >:( Quote Link to comment Share on other sites More sharing options...
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