Winter 2007 www.growfolio.

com ISSN: 1555-8290

Getting a Loan
on Your Terms
The Sirius S50
 Contents
Columns Features

3 From the Editor’s Desk

Our Relaunch Issue Arrives 6 A Polemic: Gold or
Gold Equity
Should gold be a part of your portfolio?

4 Shelf Life

8
Reaching for the Prize
Business for a Better

16 Inspired
Give your creativity some love.
World
An interview with the founders of Ethos
Water.

12 Sirius s50 review

A review of Sirius Radio’s flagship unit.

14 why keeping a journal

makes business sense

p.8 17 Getting a loan on your

terms
The framework you need when getting a
loan as a young person.

20 our new blog

Your between-issue fix.

p.17 2
 o m D
F the Editor’s esk
r
by Jonas Elmerraji

As promised, the hiatus is finally over, and the
magazine for tycoons in training is finally back. What
has become evident over the past two years of pub-
lishing growfolio magazine is the fact that perhaps a
monthly publication schedule was a bit too ambitious.
For the moment at least, growfolio’s quarterly. Step-
ping up the schedule once again will be a decision left
to you, the readers, so if you’d like to see growfolio as
a bimontly publication, get to writing some emails to
us!
Our readers deserve an explanation, so here
goes - we had some issues with a lot of the new con-
tributors we were adding to the roster here. So much
so that I took growfolio offline to rebrand, regroup,
and rethink what was going on. Since the last issue,
we’ve been getting more readers than ever before,
and lots of new subscribers - I guess that meant that
it was time to bring growfolio back.
Unfortunately, we ran into a bit of a problem
with our subscriber mailing list a couple of months
ago. Essentially, we lost about 80% of the list when
our web hosting company changed servers on us.
Most of those emails are lost forever, so if you want to
make sure that you’re subscribed, go ahead and visit
growfolio.com/subscribe and sign up again, just to be
on the safe side.
As a final note, for those of you who are inter-
ested in investing (‘cause that was growfolio’s pur-
pose back in the day), since the publication of the last
issue of growfolio, I’ve become a contributor for
Investopedia.com, the leading investor education
website online, so feel free to check out some of my
articles on their website.
I’m really pleased with the relaunch issue, and
hope that you will be too. Until next time,

About growfolio: growfolio magazine (ISSN:
1555-8290) is an online business magazine for the
under 35 crowd. New issues are generally published
quarterly, and are available at www.growfolio.com.
We’ve been in publication since January 2005.
Advertising: growfolio derives all of its revenue
from advertising on our website and in the maga-
zine. If you’re interested in advertising with us,
please download our media kit from our website or
email advertise@growfolio.com
Suggestions: For content suggestions or help with
subscribing to growfolio magazine, please email
support@growfolio.com. Likewise, if you’re inter-
ested in contributing, please send us an email with a
writing sample of about 500 words.

3
Shelf Life
by Lorette Luzajic
Reaching for the Prize
Y ou’re at a holiday cocktail party,
and you’re thrilled to get to talk to
an inspiring consultant that you’ve
been hoping to meet for years. You’d love
to pick his brain and find out more about
how he got started. Chatting amicably,
you’re certain he’s impressed with some
of your ideas. Then he asks if you’ve read
the new Man Booker winner and what you
think about it. You draw a complete blank.
The last book you read was Hop on Pop,
before your son’s bedtime the night before.
With the Pulitzer Prize, the Man
Booker, the Giller Prize, the Governor
General’s Award, the National Book
Award, and the Nobel Prize for Literature,
it seems impossible to keep up. And why
should you? Isn’t it enough that you slaved
through War and Peace back in twelfth
grade? Doesn’t Dilbert count as fine litera-
ture?
Stop sweating - it’s time to replace
your dread with healthy curiosity and
A Column
explore literature with open-minded zeal.
After all, you’re able to confer with ev-
eryone on who wore what to the Oscars,
and which nominee was slighted. With the
help of your local library, bookstore, and
the Internet, you can become lit-savvy in
no time and map out a few reading jour-
neys that will enrich your life. Give up one
night of late-night news or reality TV re-
runs and replace it with reading, and in no
time you’ll have something of substance
worth talking about at soirees.
Of course, you’ve heard of the
Nobel Peace Prize, but Alfred Nobel also
made provisions in his will for a literary
prize. Since 1901, the Swedish Academy
has awarded a writer whose body of work
was outstanding and idealistic. The Nobel
literary laureate is international and can
be awarded for works in any language.
Rudyard Kipling won in 1907, and other
recognizable names through the century
include Yeats, Shaw, Mann, Hemingway,
Beckett, Neruda, and Toni Morrison. Pick
up 2006 Laureate Orhan Pamuk’s Snow.
The Turkish writer’s novel is difficult but
rewarding, and combines
current themes of politics,
religion, poverty, and individuality.
Set in remote Turkey with characters and
events from neighboring countries, and
written prior to 9/11, the eerie foreshadow-
ing of world terrorist events is noteworthy
and controversial, but rendered with a
poet’s soul.
Many prestigious Pulitzer prizes
are awarded each year. Named for Joseph
Pulitzer, a Hungarian-born American jour-
nalist, the prize stands for excellence in
all facets of the newspaper and publishing
industries. This year’s fiction winner was
Geraldine Brooks, for March, a retelling
of Louisa May Alcott’s Little Women from
the point of view of the protagonist’s ab-
sent father, an abolitionist during the Civil
War. Since 1917, several prizes have been
awarded each year in various categories
of journalism, drama, poetry, and fiction.
Some novels that have earned this coveted
prize include The Hours by Michael Cun-
ningham, Beloved by Toni Morrison, To
Kill a Mockingbird by Harper Lee, and The
4
Grapes of Wrath by John Steinbeck. The Law of Dreams, a novel about the Irish of award winning books each year is a
The National Book Award rec- famine. sure way to enrich your mind- and a great
ognizes American books of exceptional For 38 years, the Man Booker way to steer the conversation at gatherings
merit. Since 1950, prizes have been awards the best novel by a citizen of the away from flow charts into more interest-
awarded for fiction, nonfiction, and poetry, Commonwealth or Republic of Ireland. ing territory.
and now include a prize for young people’s The 2006 prize went to Kiran Desai for
literature as well. This year’s fiction award The Inheritance of Loss. Populated with
went to Richard Powers for The Echo eccentrics, exiles, and immigrants, Desai’s
Maker, a complex novel about identity. second novel examines questions of be-
When ordinary underachiever Mark suffers longing by asking the age-old question,
a car accident, he never fully recovers and “Where do I fit in?”
can’t believe those closest to him are who Don’t stop here- there are dozens
they say they are. Neurological and spiri- of other prizes like the Orange Prize, the
tual adventures ensue. Caldecott Medal, and more. Websites Getting Started
Montreal’s Jack Rabinovitch like www.amazon.com can help you find
founded the Giller Prize in 1994 to honour notable books for every interest, and your Refresh your world lit
chatter by delv-
his wife, accomplished journalist and book librarian will be overjoyed to engage in ing into Nobel
winner Gabriel
Garcia
Marquez’s One
reviewer Doris Giller. The award recogniz- conversation about his or her favourite tude. A detailed,
Hundred Years
of Soli-
es excellence in Canadian fiction. Vincent reads. Make it a real point to include New- the 100-year hist
riveting journey
into
ory of the village
Lam’s takes the 2006 prize for Bloodlet- bery titles on your kids’ reading list- and condo, this nove
l is the most fa
Ma-
ting and Miraculous Cures, a collection of if your attention span is rusty, read the example of mag
ical realism, a
mous
Latin
short stories woven together by common Newbery winners yourself. Though the American genre
that seamlessly
melds
history with gh
characters and themes of medical science, medal is awarded to the absolute best in isms that seem
osts and other
surreal-
its ethics and challenges. Mordecai Richler children’s literature, each and every winner impossible to ou
tical culture. Will r prac-
iam Kennedy fro
and Margaret Atwood are recognizable is worthy of adult attention. New York Times
Book Review ca
m the
names of previous winners- and Alice No one can be expected to keep up “the first piece
of literature sinc
lled
e the
Munro won twice. with every prize and it’s important to read Book of Genesis
that should be re
quired
reading for the
The Governor General’s Literary other books, too- even the best critics may entire human
race.”
Awards have recognized outstanding Ca- have skipped or ignored brilliance, and
nadian talent, both English and French, in there’s something to be said for discover-
seven literature categories since 1937. This ing some of the thousands of lesser-known
year’s fiction winner is Peter Behrens for talents. But committing to read a handful

Shelf Life: Reaching for the Prize 5

 A Polemic:
Gold or Gold
Equity
F
ew can argue that gold or a derivative of, should
not be a part of one’s investment portfolio. The last
4 years have seen a tremendous ascension in the
price of gold (from $272 in 2001 to $725 in May
2006). There is no doubt that investors turn to gold
in times of turbulent markets as a safe haven, mak-
ing gold an excellent hedge instrument. I would also
say that bullion, raise or fall, will be one of the most
sound investments one may make, superseded only
by one’s house. It is readily transferable and is ac-
cepted worldwide for payment of goods and servic-
es, even more so than fiat currencies. And as seen
over the past 4 years can augment in value consid-
erably.
The question or polemic is in what form it should
take, a straight investment in gold or a gold min-
by Stephen Hill
ing equity. As per usual, due diligence is a necessity
when coming to a postulate on which path to take.
We can see many advantages of buying pure gold.
With the purchase of gold ounces there is little wor-
ry about non-goal congruence between boards and
shareholders and the politics that ensues therefrom.
Giving pure gold much more stability with regards to
price as compared to a gold/mining equity. I would
also argue that the time needed to properly research
which mining company to invest with can in itself
take considerable time. For such, this makes tip-
ping the scales towards pure gold more efficacious
in terms of time and we all know time is money. On
the down side of the sword comes the price or fees
of purchasing gold. These can add up considerably,
depending on which broker or financial institution
you deal with. There is usually a flat fee plus a per-
centage charge of the amount of gold bought. In
6
 addition, you will also incur a safe keeping of greater risk equals greater reward, giv-
(vault and insurance costs) charge for the ing a gold stock much room for growth or
storage of your gold. decline.

“But of course with an in- So based on the above arguments (which

is not an exhaustive list), pros and cons

vestment in just pure gold for gold or a gold equity can be formed.
Ultimately you will need to assess your

comes lack of diversification.” risk tolerance and time line for investment,
than you can begin the process of deter-
mining what is right for you.
But of course with an investment in just
pure gold comes lack of diversification. One thing is for certain, gold was one of
Typically gold companies offer and drill for the first means of trade/commerce after
more products/metals than just gold. Sil- the barter system and has been around for
ver, copper, nickel would be some exam- forever and a day. Given its’ history and
ples of other offerings by a company, this track record, it will probably not be go-
fact, will partially prevent yourself from be- ing anywhere anytime soon, making gold
ing completely exposed to the price of gold (whether pure or an equity) one sound
should it head south. Further justification investment, not to mention pretty nice to
for choosing a gold equity would be ease of look at.
transferability. Typically an equity (depend-
ing on its’ market capitalization size) will
have a quicker turn around time in terms
of liquidity. We can also argue that equities
are far riskier than pure gold. As one part
of the product is tangible (gold) and the
other part is not (employees work). Know-
ing this we can apply the classic formula

7
by Jonas Elmerraji

B usiness is business and charity is char-

ity. Right? Not necessarily so anymore with
companies like Ethos water. Ethos was
formed in 2002 by Peter Thum and Jonathan
Greenblatt as a bottled water company whose
purpose is to “help children around the world
get clean water.” You see, for every bottle of
water Ethos sells, they donate five cents to
the cause, with a goal of $10 Million dol-
lars over five years. In 2005, the Starbucks
Coffee Company purchased Ethos. Now that
Ethos can be found in Starbucks shops across
North America, Ethos has a real fighting
chance to make their goal a reality.

I recently had the chance to ask the founders,

Peter and Jonathan, some questions about
Ethos, their business model, and other com-
panies like them:

growfolio magazine: What does corporate

responsibility mean today? Are today’s
8

corporations doing enough?
Jonathan: I believe it’s reasonable to think that businesses have
a role to play in society beyond simply generating profits. It is
critical that they function as responsible members of the commu-
nities that they serve, creating value through all their activities,
even those that do not drop to the bottom line. Not all companies
subscribe to this viewpoint, but there are numerous examples of
businesses that endeavor to generate value for shareholders via
profits and to create value for employees, customers, and commu-
nities through multiple means. As the marketplace demonstrates
increasing demand for the products and services offered by such
businesses, I am optimistic that more corporations will explore
how to integrate such responsible practices into their
operations.
growfolio: What were some of your concerns about
starting Ethos?
Jonathan: We started Ethos in 2002 with a simple
mission – to help children around the world get clean
water and to raise awareness about the world water
crisis. However, there were numerous challenges.
Both of us were first-time entrepreneurs so we won-
dered whether our business would get off the ground.
We decided to enter an incredibly competitive market
dominated by global multinational corporations, so
there was some concern about the competitive land-
scape and our ability to achieve scale in a crowded
field. We offered consumers a product that ostensibly
appeared to be undifferentiated – water. Only our
brand promise would set us apart and this needed to
be communicated, an expensive and difficult proposition when
you attempt to engage time-starved, over-stimulated consumers.
Lastly, we hoped to donate 50 percent of our profits, immediately
complicating our ability to raise capital. Simply put, this business
model foreclosed our prospects with numerous investors who pre-
ferred to fund businesses that would deliver 100 percent returns.
Despite all these concerns, we believed deeply in our vision and
held to the conviction that consumers would respond to our prom-
ise – every bottle makes a difference. Since those earliest days,
even when we faced challenging circumstances, we continually
have been encouraged and invigorated by the consumer response
9
to our mission and their embrace of our brand in cafes, natural
foods stores and, more recently, in Starbucks locations across the
United States.
growfolio: Are charity and profitability mutually exclusive?
Peter: Ethos is neither a charity, nor is it simply a product or
service which generates a profit. Ethos is a mission with a brand;
one which encourages and provides opportunity for consumer
activism. Our mission is twofold: help children around the world
get clean water and raise awareness here in the US about the
world water crisis. We provide our customers a great consumer
product and the ability to participate in addressing the world wa-
ter crisis simply by choosing a different brand.
“For these reasons and
probably others, business-
es like Ethos remain niche
players today.”
growfolio: How close is Ethos to its contribution goal of $10
Million to help people get clean water?
Jonathan: After the acquisition, Starbucks set a goal to raise at
least $10 million by 2010, contributions that would be achieved
by donating $.05 per sale. Such funds are distributed to the Ethos
Water Fund at the Starbucks Foundation and invested through
non-profit organizations serving communities in need across the
world. We recently announced a commitment to invest $2.1 mil-
lion to integrated and sustainable water programs in Ethiopia and
Indonesia, raising our total to more than $2.5 million.
growfolio: What keeps other companies from following
Ethos’s example of corporate citizenship? If more companies
did, what would it mean to the world?
Peter: Starting Ethos was difficult, relatively complicated, and
very risky. In short, there are easier ways for entrepreneurs and
companies to make money. Some elaboration follows:
1. Basic microeconomics tells us that price and quantity are the
primary drivers of most markets. You can add new physical
features, or emotional benefits for differentiation, but over time,
those advantages are competed away and become commoditized
too. So, basically every industry is a scale game and starting a
company that takes more time to scale, and one which is based on
benefits related to driving social change seems pretty counter-in-
tuitive.
2. Building a brand around a social mission is a long term invest-
ment. It requires significant communication and feedback with the
customer, which implies intensive relationship-building and thus
a much longer return horizon on brand investments than those
which are focused directly on the customers immediate personal
needs or self-fulfillment.
3. IRS regulation of companies and non-profits is not really set
up to accommodate, much less facilitate, the establishment of
companies like Ethos. Determining how to “give away” your
profits, or structure your company around a mission in some way,
adds another layer of complexity to starting a company, which is
10
already a difficult thing to do. However, this is getting easier for
social entrepreneurs; because there are already many more ex-
amples like Ethos out there today than there were when we were
getting started.
For these reasons and probably others, businesses like Ethos re-
main niche players today. However, Ethos and some similar busi-
nesses have proven that you can achieve a social mission through
business, and that you can create value for all actors, and that you
can achieve sustainable competitive advantage. To that point,
Starbucks acquisition of Ethos is a pretty good signal that other
companies are following this path and the subsequent scaling of
our social impact are an indication that the benefits can be signifi-
cant. Though Starbucks operates at the forefront of social business
practices on many dimensions, I think that it is fair to assume that
others will follow here as they have with other progressive innova-
tions that Starbucks has ushered in.
Ethos has a lot to say about the progress they’re making. By donat-
ing millions of dollars to help children throughout the world gain
access to clean water, they’re speaking multitudes without uttering
a word.
Making a Difference
Never forget that no effort is too small.
The idea of “Think globally, act lo-
cally” comes to mind. Every mind you
change in favor of your cause is a step
in the right direction. Never get dis-
couraged just because it seems for the
moment that nothing is happening.
Pick your battles. You can’t win ‘em all
- at least at first. Even a small victory
is a victory nonetheless. You should
always focus on the point most central
to your cause: if you’re for stopping
the use of fossil fuels, argue your point
concisely without mixing too much
politics from other groups that are only
indirectly related to yours.
Apply these methods liberally. Mak-
ing a difference doesn’t end at politics.
In business, you’re trying to make a
difference too, in the minds of your
customers or bosses. The rules are uni-
versal, so use them as such.
11
 Taking on the
Sirius S50
If you haven’t been living under a rock
for the past several years you’ve heard
of satellite radio. Sirius satellite radio,
to be precise.
Sirius boasts 130 channels of program-
ming, 69 of which are completely com-
mercial free music. Sirius has some pretty
nice looking radios to boot. Take the S50,
for instance – this Sirius radio is capable
of recording 50 hours of live content for
portable playback. The folks at Sirius were
kind enough to let me play around with an
S50 for a month so that I could bring this
review to you.
Let me start off by talking about the
service itself. Realistically, there is some-
thing for everyone on Sirius. 130 channels
by Jonas Elmerraji
of music, talk, sports, and comedy, shows
hosted by some of the biggest names on
the radio, and this guy named Howard
Stern (heard of him?). The programming
is quite simply out of this world. It’s pretty
cool when you consider the fact that you
can listen to it anywhere in the country
clear as a bell.
On top of all that, as a subscriber, you can
also listen to all Sirius channels online.
Now, to the S50 itself. Suffice it to say,
the Sirius S50 looks pretty darn cool. It’s
black and shiny, and has a really gor-
12
geous full color screen. It’s also got some
pretty impressive features. The radio can be
thought of in two parts – the radio itself, and
the dock, which provides power and antenna
connections to the radio. Set up is pretty
simple, and I had the whole shebang setup to
my liking in my car in about ten minutes.
One of my favorite features of the radio is
its ability to download the title and artist in-
formation from each song it plays and show
it on the display. It makes discovering what
that new song is all the easier.
The S50’s biggest selling point is its abil-
ity to go mobile and play up to 50 hours of
music, either recorded live while it was in
the dock, or uploaded via your computer.
Recording live content is a one-button deal
– you press record, and it gets stored along
with the artist and title information. When
you do decide to playback your stored mu-
sic, the Sirius has navigation buttons on the
outside of the unit so that navigating using
the screen isn’t necessary when you’re on
the go.
For the most part, I found that the Sirius S50
was excellent. One thing that I would have
liked to have seen is the ability to be notified
when your favorite artists or songs are play-
ing on any Sirius channel. This is a feature
found in other units, and given the S50’s
position in Sirius’s product lineup, I was a
bit surprised not to find it.
All told, Sirius Satellite Radio is an awe-
some service, and the S50 is definitely a
great unit with few shortcomings. As of this
writing, service rang in at $12.95/month.
Right now, Sirius is running a holiday
special on the S50, selling it on their site for
$79.99 – a drastic discount from it’s $179.99
MSRP.
You can get a free 3-day trial of Sirius Satel-
lite radio on their website.
Sirius S50 Portable Satellite Radio
Pros: Good looking unit, great service, affordable, portability, MP3/WMA compat-
ibility, color display.
Cons: No artist alert feature, unit must be docked to receive live content
The Bottom Line: The Sirius S50 is an awesome unit, particularly at its current
price. If you’re looking into an MP3 player and a satellite radio system, this just
might be the perfect combination for you.
13
 A
Why Keeping a
s I sat at my accountant’s desk this past tax season, I
overhead another accountant talking to his client. In essence,
their conversation was about keeping good records for tax pur-

Journal Makes
poses. The client did not have the paper trail he would need if
the Internal Revenue Service questioned his deductions. The
man was angry at his accountant for what he should have done

Good Business
to protect his own interests.

When I was in college, I worked for a lawyer who had

Sense
just passed his bar examination. He was busy trying to build a
client base. He carried a small memo pad in his handkerchief
pocket. In it, he recorded every Xerox copy and phone call he
made for the client. When I billed the client for this lawyer, he
by Sandra Pianin would get his basic per hour rate plus every cent he spent on

14
the client’s behalf.
These two stories highlight the absolute need for
people to keep accurate records. A journal is the best place
to record automobile mileage, expenses and every detail you
will want to remember for another day.
Of course, there are all types of journals. Visiting a
Staples store, you will find all types of bound accounting
books. Any one of these will do the job. The best advice
you can give someone keeping a journal is to be as clear as
possible because you will not remember weeks, months or
even years later minute details of an event.
A journal also will record the growth of a family. The
notes you make regarding children’s important medical de-
tails will be invaluable later in their lives.
Take a new bound book and begin to record the details
of your career. What are your goals for the future? What
courses do you need to take to keep up with ever-changing
technologies. What have you learned from working together
with co-workers as a team? What have you learned from
your supervisor? What dreams do you have for the rest of
your life? All of these questions and more will fit neatly
onto those pages and be a permanent record of the things
you want to achieve. Have you outgrown your current ca-
reer? Plan within the journal’s pages a career change!
Do you want to begin an exercise regimen? Use the
journal to keep track of your progress.
If you have a creative bent, use your journal to capture
a line or a poem. For the artist that might lie just beneath
the surface, a journal is the perfect place for a sketch.
I have known people who capture the small yet very
important details of their daily lives on the back of a cocktail
napkin or used envelope. These scraps of paper are too easy
to lose. Choosing to keep a journal is a decision you will
never regret whatever your purpose.
15
 that
er e’s co ol st uff out there
T h at
e way we look
can change th ive
s. H av e a look and g
thin g .
your creativity
some love to

For the
Webmeißter
Mint, created by Shaun Inman, is
by far the loveliest and most con-
cise web statistics program on
the internet. We make use of it
everyday at growfolio’s website
For the Moviegoer
as do countless others who have The Neistat Brothers, www.neistat.
decided that there’s no other way com, are filmmakers who host a num-
to do webstats after Mint. You ber of their creative and entertaining
can buy a copy for your server short movies on their website. They’re
for $30 from haveamint.com. free to watch and sure to please.

w w w . n e i s t a t . c o m

For the Enlightened

Centripetal Notion is a blog for the thinking man. Covered topics include Art and
Design, Science, Technology, and World events. It’s certainly one of the blogs worth
reading on a regular basis. You can take a look at www.centripetalnotion.com.

16
 by Jonas Elmerraji

I nvesting in your future is expensive. Be it an education,

a home, or a car, sometimes a loan is your only option to
get ahold of a big ticket item. But as a young person it
can seem impossible to get approved for a loan without parental
1) Who: Who are you? What do you have to offer the bank?
2) What: What’s the money for? A bank is a whole lot more likely
to lend money to someone who wants to build a home addition
(and add equity) than someone who is planning on spending the
support. That’s why understanding the ins and outs of the loan money on consumption.
process can be so essential to getting that check from the bank. 3) Where: Where you’re trying to get your loan can be a big
factor of whether or not you get it. In a brick and mortar bank or
The Loan Process online, as well as various geographic regions, some places are go-
When you’re thinking about getting a loan, it can be important to ing to be more prone to lending than others.
look at things from the bank’s perspective. You see, to the bank, 4) When: The terms of the loan – both the interest rate and the
loans are their traditional number one revenue source. The bank duration of the loan determine when banks can start recording a
cuts you a check for a certain amount of money (principle), and profit.
you in turn give the bank that same amount of money as well as 5) How: Can the bank be sure that you will be able to pay the
some interest. Interest is the lifeblood of most banks. loan off based on the terms? How can you guarantee payback or
Loans aren’t hand-outs, and they shouldn’t be approached as at least hedge the bank’s risk in some way?
such; banks’ prime concern is determining whether or not you
will be able to pay back your debt on their timeframe. Who
Banks judge potential borrowers based on a number of key things. Who you are is actually an important element of whether the bank
Among them: will see you as a viable borrower. Believe it or not, you’re be-

17
ing judged from the moment you walk in that door based on the
only tools the lender has - your appearance. So dress the part: If
you want to be treated like a professional, dress like one. Right
or wrong, the lender will use their biases and preconceptions in
determining if you’re a good risk. Also, don’t be surprised if the
bank does a background check on you.
What
Since it’s their money, it’s also their business what you’re plan-
ning on doing with it. If you need a bank loan to fund your gam-
bling habit, chances are you won’t be getting much in the way of
financing. If, however, you’re trying to purchase or improve an
asset – like a car, home improvements, or investing in your busi-
ness – banks usually see this as a good thing.
Where
These days, there are alternatives to getting a loan from a tradi-
tional bank. Online lending is becoming a popular option because
of higher online competition and quicker loan approval. With
online lenders, fraud-awareness and reputability become major
concerns. Always make sure that you’re only dealing with repu-
table companies and not readily giving away private information.
Where you are in the world can also have an impact on loan ap-
proval. This is a matter of scarcity. If you’re trying to get a loan
in an economically depressed area, banks are bound to be much
more selective of who they loan money to than in an area of vast
economic growth. By taking this into consideration, you can get
a much more realistic view of your prospects.
When
When it comes down to deciding which loan to accept (or in the
case of the bank, what to offer), the terms of the loan are the big-
gest factors. Some of the things that can vary are the interest rate,
the length of the loan, and the type of loan. Interest is the premi-
um that you’re paying to the bank for the use of their money, so
needless to say lower interest rates are better for borrowers. The
duration is the amount of time you’ll be paying off the loan, so
once again, a smaller number is better.
The type of loan you’re looking at is also significant because it
can be a big factor in the amount of money you pay during each
payment period. Some different types of loans include interest
and capital, interest only. (For detailed explanations of different
types of loans, check out http://en.wikipedia.org/wiki/Mortgage).
How
The bank isn’t going to give you a cent if you don’t have the
means to pay it back later (or if you don’t have enough assets for
the bank to get their money back). That’s why they look at a few
key things about your financials:
1. Collateral – What major assets do you have that the bank can
seize if you default on your loan? Typical collateral includes your
home and your car.
2. Credit – Your credit absolutely comes into play when you ap-
ply for a loan. If you have bad credit, chances are getting a loan
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is going to be pretty difficult unless you are willing to accept less
attractive loan terms.
3. Income – Your lender is going to want to make sure that you
can afford to make payments on that loan. Higher income trans-
lates to lenders being more comfortable with letting you borrow
money.
If you don’t seem like a picture perfect loan candidate, getting
stuck with higher interest rates and fewer loan alternatives is
more than likely. And if you have few assets, bad credit, and are
barely scraping by, chances are that lenders won’t be calling you
back.
3. Where – Look into online lenders you’re interested in to make
sure that they’re reputable and try to avoid looking for financing
in areas where bank money is scarce.
4. When – Only go for loan terms that you can live with, and
understand what exactly you’re going to end up paying out over
the life of the loan.
5. How – Think about what assets you have that can be used as
collateral, build up good credit before you go to a lender, and
make sure that you have a viable plan for loan repayment.
Conclusion
Let’s face it – the reason that young people typically need a co-

“...it’s quite pos- signer for a loan is the fact that parents typically objectify the five
things that you want to focus on. Young people usually don’t. But
when you know what lenders look for, as well as what you can do
sible to get a loan to make sure that you look like a responsible borrower, it’s quite
possible to get a loan without your parents.

without your
parents.”
Looking Attractive to Lenders
The best way to make lenders fight over you is to make sure that
you address each of the five things in a positive way.
1. Who – Dress the part for your loan and make sure that you
don’t have any skeletons in your closet that lenders won’t be
happy to see.
2. What – Lenders don’t just give money away. Make sure that
your need is legitimate and financially justifiable.

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 now has a
blog
growfolio is a quarterly magazine, but
you’re bound to get bored more often
than that. That’s why we now have a blog.
It’s updated frequently, so check it out!

growfolio.com/blog

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