Self Directed IRA Investing

A Note is short for Promissory Note.  

A Promissory Note is nothing more than a document between parties describing a payment obligation that someone signs because they received financing for something.  Here’s and example, I go out and buy a new Gas Stove from a store and I don’t have all the money.  They offer to finance it for me and I sign a document that says I now owe the Store X amount of dollars for Y term at Z Interest rate.  It also describes what will happen if I pay early, stop paying, etc. 

Here’s another defininiton from en.wikipedia.org/wiki/Promissory_note

“A promissory note is a contract detailing the terms of a promise by one party (the maker) to pay a sum of money to the other (the payee). The obligation may arise from the repayment of a loan or from another form of debt. For example, in the sale of a business, the purchase price might be a combination of an immediate cash payment and one or more promissory notes for the balance. “

Notes are created for just about any service or thing that is sold today:

Real Estate, Mechanic Liens, Yachts, Airplanes, Motorcycles, Cars, Appliances, Businesses, Mobile Homes, Private education companies, etc. 

Will

This entry was posted on Wednesday, June 27th, 2007 at 6:58 pm and is filed under Investing Basics. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.