" How to Make Money Without Money The Art of Transferable Letters of Credit and Assignments of Proceeds is certainly a valuable reference book for specialists or non-specialists on the subject of letters of credit. The amount of information contained in the book is considerable for people wishing to better understand the particulars of trade finance techniques." -- Raoul Gisler First Vice President, Head of Trade and Commodity Finance Swiss Bank Corporation, Geneva
" How to Make Money Without Money provides enlightening reading on the subject of letters of credit. This book is not only a worthwhile introduction to the pitfalls awaiting the lay trader starting his business, but also gives a step by step guide to the execution of trade transactions." -- D. Paul Schuilwerve Director, Trade & Commodity Finance MeesPierson NV, London
"This book gives a real trader's perspective on the world of trade finance from the signing of the deal to the realization of profit, outlining the pitfalls that await the novice and experienced trader." -- Michael Rolfe Commodity Banker Credit Agricole Indosuez
"This book gives a smooth and interesting introduction to the domain of letters of credit for new and experienced traders alike." -- Antoine Lolas Manager, Documentary Credits Royal Bank of Canada
"This book is a real treasure and offers top-level guidance for all people involved in international trade finance." -- Pierre-Olivier Fragniere Head of Trade and Commodity Finance Banque Nationale de Paris, Geneva
How to Make Money Without Money. The Art of Transferable Letters of Credit and Assignments of Proceeds teaches how to use accepted banking instruments such as transferable letters of credit, back-to-back credits, and assignments of proceeds. The book shows how to make use of the buyer's funds to finance trade without investing in inventory or putting up any type of security, in essence, making money without money.
Through the use of real life case studies the book uncovers the secrets of success in the international trading business. Actual letters of credit and bank guarantees are reprinted, together with fax correspondence between companies concluding import/export transactions, to give the reader practical experience. For newcomers to international trade the book will serve as a reference guide to Contracts, Incoterms, Export Documentation, and UCPDC 500. For those who are already involved in international trade, reading the book will give a better insight into the structure of complex documentary credit transactions.
The book is written from a strictly practical perspective. If you have ever dreamed of making millions in international trade, this book may be the most important purchase of your life.
About the Author
JACOB KATSMAN started to trade internationally in 1987 when Mikhail Gorbachev opened the iron curtain to the West. He gained experience in trade finance and letters of credit while working for trading companies in Canada, Russia, China, and Belgium. Katsman's focus markets for the last ten years have been the former Soviet Union and Asia. He has exported brick-making equipment, automobiles, tires, electronics, coffee, and cognac to these markets, and imported ferrous and non-ferrous metals. To this day Katsman is involved in international trade and continues to use various forms of letters of credit and bank guarantees in his daily business.
Partly a reference book on letters of credit, partly a how-to book filed with trading anecdotes, How to Make Money Without Money brings to life a topic that has never before been shared with the public in this manner. No other book goes into such detail on the subject of how to use transferable letters of credit and assignments of proceeds to make money. Financing techniques known primarily by Chief Financial Officers of multinational corporations are brought together in this book in simple language
for anyone to understand.
Katsman is a cofounder of the Continental Commodity Exchange, a real time commodity exchange on the Internet.
Excerpt. © Reprinted by permission. All rights reserved.
What would you do if you had a million dollars? Would you buy a new house or a car; or would you go on a world tour or perhaps donate it to a charitable institution? Most likely you would invest in stocks/bonds, mutual funds or a business that would bring you a regular return on your investment. It is not difficult to make money when you have money. The real challenge is how to make money without money? This book is devoted to answering that question.
In simple language the author brings to light ways to use someone else's money to make money through a thorough knowledge of documentary credit transactions. The book focuses on practical aspects of international trade and banking and teaches the reader the most basic and the more complicated aspects of letters of credit. It is both a how-to manual and a resource book.
Chapter 1 describes the ins and outs of "the contract," the critical first step in the transaction. Incoterms such as Ex-Works, FOB, and CIF, and the basic aspects of letters of credit are covered in this chapter.
Chapter 2 provides the crucial information necessary to make money without money. Practical uses of transferable letter of credit, assignments of proceeds and back-to-back credits, are introduced and explained.
Chapter 3 brings to light various uses of stand by letters of credit and performance bonds and gives samples of how such documents should be structured.
Chapter 4 is true to its title "Trader's Know How." It compiles information about international marketing, exclusive rights, foreign exchange and other pertinent aspects of the trading business. In this chapter, the risks of selling FOB are discussed in great detail and suggestions of how to minimize them are presented.
The case studies in Chapter 5 give a taste of what it is like to trade and teaches using examples of other trader's mistakes. The first case study, "Telephones from Hong Kong to Russia," shows how to use an independent quality inspection certificate in the letter of credit to protect the company against claims. The second, "The Vessel Named Yick Fat," describes the use of performance bonds. The third case study "Exclusive Rights" explains how a Russian trading company made millions through an exclusive rights to sell Belgian brick-making machines in the former Soviet Union.
Chapter 6 presents checklists for the seller after the documentary credit issuance and upon submission of documents to the bank. This part of the book presents actual shipping documents such as: bills of lading, commercial invoice, certificate of origin and others from successfully concluded transactions in a point by point format. For newcomers to international trade, this chapter will be the most valuable asset.
Chapter 7 is the actual text of UCPDC 500 as published by the International Chamber of Commerce. As this document provides the laws and regulations of letters of credit that the banks rely upon when checking documents, UCPDC 500 is reprinted in its entirety to enable the reader to have a complete reference guide within the confines of this book.
Chapter 8 is a glossary of technical terms used in documentary credits, shipping and banking in general. This chapter will help readers familiarize themselves with the language used in the trade.
In essence the book not only teaches how to use transferable letters of credit and assignments of proceeds to make money without money, but provides a manual for the international trading business. It gives the reader the most valuable asset of all: Power of Knowledge.