Dead capital

It just has to sit in this machine running, right? So this then asks another big question, right? If we supposedly just acquired a business worth $330,000, for a dollar, and then we had to put seven or 800 grand into it, but it's only worth $330,000.

What kind of deal have we gotten involved in, right? This is what I call a dead capital business.

And I've made many videos about this before, right? Because it's worth 330, uh based on its sde or 450 if you want to be generous and say it's worth three times sde but it requires seven to eight hundred thousand dollars of cash inside of it to make it work well this is not a good place to invest seven or eight hundred thousand dollars this business is a dud it's what i call a dead capital business when money has to remain trapped inside an operating machine relative to the value of the machine and relative to the return it produces for you.

So money is invested in this thing that does not yield an adequate rate of return to warrant the investment in here.

I'm gonna link a video here, which talks about dead capital businesses.

It's a video that every baby boomer out there needs to watch.

It's one of the first videos I made on the topic, and it's from almost 10 years ago.