MARKETPLACE
NEWSLETTER
-----··
PAGE 15, AUGUST 30, 1974
Route Sale
Some very sudden buy and sell dee· .
.
made to buy a route of an o
t
l.SJ.ons being made these days F
Th"
pera or who'd · f
d
• or example, offer
is route's my annuity. Practi.·call
in o:me some months ago "Me
11?
J t
Y
runs b
t lf
'
, se . No sir'
us received a letter ad vi.sing
. .
y
l.
se
•
Took
me
40
years
to
make
i.· t 'ti· ck.·"
about new ownership •
. Were we surprised? To a certain
being offered for good routes very ~:!r::~ we were~ But not completely. The kind of money
lated a nice amount of worldl
~
g. Especially to an operator who has accumu-
stocks, bonds, etc., etc. andy ~~;:essions over the past 40 years. Like real estate
to resist.
'
so much cash offered, very h d f
'
ar
or the average man
Yet, when figures made known purchase
t
·
seemed very high Some tho't i·t'"
tr go _himself a real bargain. Sure his offer
.
•
away ou of line" On
t
h~m ten years to pay it off." All wrong. Because •
e rou eman said "It'll take
figured the economics of inflation.
neither the seller o; this routeman
. Inflatio~ over these past years has been galloping. This year it's
investment is there that can return today's rate of inflatio
d
t trhunning wild. What
·
f · t?
.
.
n an , a
e same time,
1
b
a so ring a pr~ l . Inflation this year running at rate of over 12% annually. Well
rated bonds paying 8 1/2% to 8 3/4%. Not so well rated, paying 9%. That's loss of any-
where from 3% to 3 1/Z% per year provided price of bonds don't go down.
With inflation certain to continue at rate of 10% per year maybe more for some years
to come, what better investment than route that can cover infiation's con~tant rise and
still show a comfortable profit? Therefore, if this operator would have figured inflat-
ionary hike as part of value over 5 years, would have asked 50% more money. Money's
available, but what to invest in to cover rate of inflation is the problem.
As far as the operator herein concerned and since he's rather well off and also in
his latter 60s, the amount of money offered for his route was extremely attractive.
"Because" , as he realistically put it, "even if I continue for another ten years or so
of life, I'll have more than enough to carry on with my present living standard without
touching a single penny of my own investments."
In this case, both buyer and seller happy. Seller happy to have such a cash cushion
for his remaining years. Buyer got a bargain considering inflation. This operator now
admits if he was in his 50s or younger would not sell but, if he had to, would have
asked much more for his route to cover inflation's bite for this year and the years yet
ahead. He was surprised, even somewhat dazzled by figure offered and many tho'ts, such
as today's investment against inflationary pressures, escaped his mind.
Now for just a touch of history as to what this industry did for this man and for so
many, many others. He'd lost his little drug store in '33 as the depression bit hard
and deep. With few dollars he had left, and quite by accident, bought his first pinballs.
In fact, his former drug store was his first location. He worked hard. lieports, "I fell
in love with this business." Not only made a very good living all these past years but
put three kids thru college. Even helped set them up in their own businesses. They're
all married. "And", he now concludes, "gran'pa has arranged a very nice trust fund for
each of my five grandchildren and for as many more as will yet come into being."