Thus the broker-dealer behaves like a monopolist facing a linear demand curve, and offers half the quantity demanded, so that the price is driven below the marginal cost.

Think about what you like to do in your spare time. Do you play an instrument so that you could provide music for social occasions? Perhaps you know how to bake beautiful pastries or can sew like a professional. Can you groom pets or teach a craft? Get your creative juices flowing about what you could do in your spare time that would bring in the extra income to pay your invention costs.

The USPTO database is the same one that you would find if you went to one of the patent and trademark depository libraries that are scattered around the country. By the way, although you can do these searches on your home computer, it is a good idea to go at least once to one of these libraries if you have the opportunity to do so because the librarians are so knowledgeable and helpful and it is a wonderful experience for an inventor. It’s just a great place for creative people to hang out and learn! The United States Patent and Trademark Depository Libraries around the country frequently hold free classes and seminars on all subjects related to inventing, patents and trademarks. Call your nearest branch to be placed on a mailing list for these opportunities.

In practice, though, things often go quite differently. Should the company temporarily swoon, you will get a call from your broker advising you that the loan is now due and you need to either come up with more cash or he will sell out your shares, at a loss, and cover the margin. Now a particularly optimistic type will find more cash, buy more shares, and set himself up for an even bigger fall. Many optimists have lost their life savings from a series of these episodes. Lawsuits inevitably follow.

In particularly bad markets, you are more likely get a call stating that the matter has already been taken care of and you now own only 50 shares of this company, but you no longer owe the broker a dime. This may be fortunate as it avoids the opportunity for you to put up more of your cash. However, should the company immediately recover and soar, lawyers will argue for you in court that you were not given proper notice and an opportunity to cover the deficit, which you certainly would have done.

Unfortunately, buy ratings have a dual purpose. Buy ratings sell stock to you and they sell services to companies issuing stock and bonds. In 2000, brokers made more than $30 billion dollars helping companies issue stocks and bonds. These stocks and bonds are always given buy ratings. That keeps the client coming back; it may or may not keep you coming back.

Studies show that buy-rated stocks have random returns on average no better than the market. Frequently they serve to prop up stock prices temporarily so insiders can cash out their stock options at a profit before the collapse. Insiders have to act quickly, though. According to a 2001 study by Investors.com, buy ratings on IPOs by the analysts of the underwriting firm lead to losses six months later of greater than 50 percent.

Investors also go to their broker for comfort and support during the markets down periods. Unfortunately, a full-service broker is not a financial counselor or a psychologist, but a salesperson looking for a commission. He will always have a product to sell you in an attempt to ease your discomfort.

If your debt situation is worse than you care to admit, your credit score will help to bring you back to reality. It’ll also help you measure your progress in the eyes of lending professionals.

I’d suggest that you check your credit score once a quarter as you’re trying to clean up debt. It’s kind of like standing on the scale when you are trying to lose weight. It’s where the rubber meets the road. Either your overall situation is improving, or it isn’t. Getting your credit report isn’t the same thing as getting your credit score. Ideally, you would check both two to four times per year. You can receive your free credit report, which shows your account history and should be checked for errors once per year by visiting www.AnnualCreditReport.com. Your credit score, which is actually computed for lenders by private companies like the Fair Isaac Company (creators of the FICO score), is not required to be given to you for free. However, you can visit websites such as www.MyFico.com and pay a small fee to view this score that determines your rates on loans.

Here are the basic ranges and ratings for the FICO credit scores:

700–850. You’ve got “Very Good” to “Excellent” credit depending on where you fall in that range. Getting a loan is usually no problem for people with scores in this range, and borrowers with these scores usually get the best rates and terms.

680–699. You’ve got “Good” credit. With a score in this range, you can usually get a standard loan as long as your other factors, like income and down payments, are solid.

620–679. You’ve got “Okay” credit. You can usually get a loan for smaller purchases without a co-signer or a major down payment, but you’re going to pay for it. Borrowers in this range and below start getting charged higher interest rates and fees.

Below 620. It’s official, you’ve got “Bad” credit. You may or may not get approved for a loan based on how far below 620 your credit score is. If you do manage to get approved, the further your score falls, the higher the interest rate you’ll typically pay.

To make sure you’re not taking two steps forward and three steps back, make a chart where you start tracking your short-term balance, long-term balance, monthly debt service, and credit score.

It doesn’t matter how you create this chart. If you know how to use a computer spreadsheet, you can do it there. If not, go steal some paper and crayons from the closest kid you can find. Whatever you do, make sure it’s got a graph that plots your progress or decline. I promise this will go a long way to keeping you motivated and on track.

At its core, this requires one or more of the following:

• A reduction in the nominal or present value of the company’s debts.
• An extension of the period over which its debts are serviced.
• The provision of new finance.
• The appropriate restructuring of the business of the enterprise.

A loan workout may be formally defined as: An out-of-court agreement between the stakeholders of a company on a mutually acceptable course of action, with the aim of rescuing an enterprise with a commercially viable future. Loan workouts are entered into voluntarily by all the participants affected by their terms, without being compelled to do so by a court. There is also a distinction between the company (or the legal entity) and its business undertakings. The focus of a loan workout is on the latter. In certain circumstances, a business may be viable, whereas the company which owns it, may not be. In such circumstances, a loan workout may focus on the commercially viable parts of an enterprise (provided they are a relatively significant element of the group), whereas other parts may be subject to statutory insolvency procedures.

A typical loan workout involves three stages:

• The calling of a moratorium to achieve stability.
• A restructuring of the company’s business and finances.
• A refinancing once the business has been turned around, or the implementation of other exit strategies by the company’s lenders.

Insolvency procedures aimed at rehabilitation are also common, providing for the stabilisation and, usually, sale of the business to new owners, under the supervision of a specialist appointed under the provisions of a statute.