Capital Recovery

  

Categories: Bonds, Econ, Regulations, Tax

There are two main definitions for this one. Think of them as the good twin and the evil twin.

First, the good twin: capital recovery happens when you make back your initial investment. From now on, anything you bring in is gravy (meaning profit).

So, you invest $10,000 in your brother-in-law's dog washing business. He promises to pay you dividends every quarter out of his profits. After three years, your dividends have totaled $10,000...your next dividend payment will put you in the black for the investment. You've reached the point of capital recovery. You've recovered your original capital.

Now, to the evil twin: capital recovery represents a nice-sounding way to refer to debt collectors. If you keep getting a call from the nice lady from North Star Capital Recovery, you may want to block the number. Or pay back that credit card you stiffed three years ago. Whichever strategy seems best to you.

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then investors in it make an absolute killing like if you don't dilute

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