I sent an employee to a newspaper the next day to advertise for a manager position at our small holding company. Our system would assist me with this process, and all I needed to do was speak with the newspaper. I spent about $500 to place a job posting. A few candidates showed up the following day: one was a 21-year-old who had just graduated from college, and the other was a 32-year-old man with previous management experience at a small holding company. The third candidate wasn't worth mentioning.
After reviewing their backgrounds and resumes, I decided to hire the 32-year-old with managerial experience. I asked him to decorate the office and gave him an $8,000 budget on a company card generated by our system.
A few days later, we had three new hires: two men and one woman for the front desk, and we also contracted a cleaning company. The office, though small, was suitable for future expansion. We decorated it with desks and various embellishments, creating a pleasant environment reminiscent of the 1950s.
With the initial goals of hiring employees and decorating the office completed, I then turned my attention to furnishing my apartment. I visited a small furniture store and purchased the essentials, which worked out well. I encountered a minor issue with internet and phone service, but I managed to resolve it.
A few days later, the company was settling in, and we made our first investment. I instructed my employees to visit different financial institutions and deposit $85,000 across about 20 banks, allocating $4,250 to each one. The average savings rate was 1.5% per year, and the banks were pleased to accept our deposits.
Two days later, we lent $800,000 to the treasuries, which was a safe investment with a 2.5% interest rate payable annually. We planned to use $75,000 of that amount in the coming two to three months to offer short loans at an 8% interest rate. Our aim was to lend money to individuals or institutions that could provide financial information regarding their company, the purpose of borrowing, and their repayment methods. Our loans were intended to be short-term, lasting about two to three months. As we settled in, we also began searching for companies that would benefit from our financial services.
Now, a month after we first opened, we've been connecting with other businesses. I haven't made many detailed progress updates in my diary; I've mostly written summaries of events and missed some details, but that's okay—not everything needs to be recorded, as time is precious. For a few days, nothing significant happened, but we started loaning out money. We also put out advertisements in the newspaper, and the company began to get on track. We provided loans backed by our treasury assets.
We needed to adhere to a monthly payment plan starting in our system. One percent of $1 million is $10,000 a month, and our expenses for salaries, rent, housing, and utilities fluctuated between $13,000 and $14,000 altogether. I think we made a mistake by putting $800,000 into treasuries; it felt unwise, as that money is locked in for 10 years, and we have to wait for the next interest payment, which is due in a year.
However, we managed to pay some expenses out of our loan repayments that came back in a few weeks. We withdrew $15,000 from four of the banks, so now we had 16 banks with balances of $4,250 each. With this money, we could pay off the system, but next, we increased our cost to borrow to 19% and started loaning out money, which fluctuated between $50,000 and $80,000. The starting interest rate was 19%, and it reached as high as 30% during this process. Though it was a quick turnaround for profits, we managed to get through the year. Our expenses were cut back, and we didn't hire additional staff. It has been a tough year for us.