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Warbucks/Red, Inc…in a Nutshell
   by Ray Como   

Tom, an investor-friend called the other day because I mailed him a collection of "Como Strategies." In the packet, I included Laughlin's Warbucks-Red, Inc. Strategy.

Interested, apprehensive and cautious, Tom asked me a lot of probing questions. "How do you set up in Nevada? Who does the paperwork? What makes this Nevada corporation legitimate? How do you set up a checking account? Telephone? Who takes messages? How much does it cost? How can I find out more? What literature is available?"

Standard questions, I guess. So I explained the benefits of a Nevada corporation in general. I explained Laughlin's Nevada Headquarters Program concept. I reviewed costs. And I told him "invest in a Corporation Manual."

Tom went on. "What if I can't lend the kind of money the Warbucks Strategy suggests?" he queried. And added "What if it's not practical. For example, I own a franchise and the franchisor cuts all checks, what about that?"

Then it dawned on me. Tom was open minded but definitely had a bad case of "Strategous Interuptous."

Strategous Interuptous: When one limits the power of a complex strategy by evaluating its content rather than its essence.

Let me explain. The Warbucks-Red, Inc. Strategy is merely one powerful application of Laughlin's Nevada Headquarters Program concept. It is, for practical purposes, universally applicable to all businesses.

Now let me explain what I told Tom then I'll show you an array of other applications you can use to spur your imagination.

Tom owns a service that leases medical personnel to hospitals and other health care facilities. The health care facility pays Tom a flat contract rate of $15-$45 per hour depending on the profession they require. Then Tom pays his people accordingly. Get the idea?

Tom was stuck on how to use Warbucks-Red, Inc. in exactly the same way as Laughlin described in their Special Report. I said. "wait a minute! That's not the highest-and-best-use of that strategy...for you." I went on. "Consider this. Form the parent corporation in Nevada. Let's call it Warbucks Health Care, Inc. (WHC, Inc) and hire your hometown corporation as an independent contractor. Call it Hometown Health Care, Inc. Pay HHC, Inc. a contract rate equal to what you pay yourself for what you do now. Then pay your staff as you do now. Negotiate as you do now. Create contractual agreements with the hospitals just as you do now. Do everything exactly as you do now except for one thing--your hometown activity is merely to support the executing of contractual agreements. Contractual agreement with health care facilities and your professional staff who you lease out. What is the essence of this strategy? All these contractual agreements are owned by Warbucks Health Care, Inc., who ultimately earns the income in Nevada, state tax free. Get it?" I continued with lots of examples.

"What if you are in construction? Then all your jobs should be bid by Warbucks Construction Corporation and subcontracted to Hometown Construction, Inc. HCI should #1. Be at risk. #2. Make tiny, tiny profits. And #3. Be hopelessly in debt to WCC.

What if you are in advertising? Then all your advertising contracts should be sold and serviced at home by independent contractors and assigned to Warbucks & Warbucks, Inc. in Nevada for a small fee. W & W, Inc. ultimately gets the profit.

If you are in publishing then all your copyrights should be owned by Warbucks Publishing Corporation. All fees, royalties and list rentals should be negotiated and serviced by independent contractors at home. However, the lion's share of these royalties and fees will be collected by Warbucks Publishing Corporation of Nevada.

If you are a mortgage broker at home, that's fine. It's just that all the mortgages you personally originate or contract to buy will conveniently be assigned to Warbucks Mortgage Corporation. WMC will then collect interest or better, the early payoff in Nevada.

If you like to buy and sell real estate then it would make sense to contract to buy real estate at home and immediately assign your contract to Warbucks Real Estate Corporation. WREC will process the transaction and ultimately earn the buy/sell profit in Nevada.

If you like to own real estate for long term growth and estate building, you should take title in the name of Warbucks Holding Corporation of Nevada. Then you should lease the property and thus the thrill of management to Hometown Leasing, Inc. Hometown Leasing, Inc. will earn a small management fee, but the benefit of appreciation, tax shelter and equity build-up will go to Warbucks."

The fact is this: The Warbucks-Red, Inc. Strategy is truly powerful and is universally applicable to almost all businesses. You just have to think a little.

© MMI By Ray Como. All Rights Reserved

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Ray Como has created, produced, copyrighted and self-published 15 audio cassette programs and lots of other forms and tools for business, real estate, corporations, selling, marketing, finance, management and Entrepreneurship.
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