Abstract:
A method and system for providing an investment opportunity whereby investors are provided a positive return on their investment, while, at the same time, receiving the benefit of an imitation stone that satisfies their required criteria in a precious stone includes identifying a prospective purchaser of a precious stone and, based on the total amount of money that the purchaser is willing to spend, offering an imitation stone for a fraction of the price, and investing the remainder with a predetermined rate of return. The money is invested through an investment entity, with a central administrator facilitating the transactions and receiving a percentage from the investment entity. Various retailers of stones may perform the actual sale to the purchaser in return for a commission from the central administrator. In addition, aspects of the invented method and system may be computerized, including electronic communication among the various entities within a network.

Description:
FIELD OF INVENTION  
       [0001]     This invention relates generally to providing investment opportunities to investors and, more specifically, to identifying potential investors as prospective purchasers of precious stones who are willing to accept (and pay for) an imitation stone and have the remainder of their allotted finds be invested at a predetermined rate of return.  
       BACKGROUND OF THE INVENTION  
       [0002]     It is well-known that businesses and other ventures often seek investors who have the present ability to depart with a certain amount of money, for a given period of time, and in return, receive certain benefits in the future. The magnitude of the future benefit may generally depend on the amount of money invested, the length of time for the investment, and the level and type of risk, or uncertainty, that the investor is willing to accept.  
         [0003]     It is also well-known that individuals who are in the market to purchase a precious stone, e.g., a diamond, ruby, sapphire, emerald, etc., have generally made a decision to spend a sizeable amount of money in purchasing the stone. However, even though most consumers may consider the purchase of precious stones to be a wise investment, there is a large amount of uncertainty associated with actual worth, the liquidity, and the appreciation in value of a precious stone.  
         [0004]     More specifically, the valuation of precious stones, such as, e.g., diamonds, in general, is fairly subjective. As such, consumers rarely, if ever, really know whether they are over-paying for a specific diamond, or whether they are “getting a good deal”. In addition, even when a consumer feels that he/she has paid a fair price in acquiring a specific stone, he/she has no way of really knowing whether, and to what extent, the stone has appreciated over time. Moreover, a re-sale market for such stones is not generally available. For these reasons, it is often difficult for consumers to liquidate their precious stone if they so desire.  
         [0005]     Thus, although prospective purchasers of a precious stone represent a group of individuals who have already decided to depart with, or “invest”, a considerable amount of money, the choice as to the means for investment, e.g., the stone, is generally made as an emotional decision, and not necessarily one that is financially sound vis-à-vis a long-term investment. A need, therefore, exists for a method and system by which individuals willing to invest an amount of money are identified and provided with an overall investment product that is both emotionally satisfying and financially sound.  
         [0006]     The features and advantages of the present invention will become more apparent through the following description. It should be understood, however, that the detailed description and specific examples, while indicating particular embodiments of the invention, are given by way of illustration only and various modifications may naturally be performed without deviating from the spirit of the present invention.  
     
    
     BRIEF DESCRIPTION OF THE DRAWING  
       [0007]      FIG. 1  shows an illustration of communication links and potential interaction established among individuals, entities, equipment, and/or electronic computers that may be used in the practice of an embodiment of the present invention.  
     
    
     DETAILED DESCRIPTION  
       [0008]     To address the above-mentioned issues, an embodiment of the present invention is directed to providing an investment vehicle for the consumer by offering to the consumer an imitation stone, e.g., an imitation diamond, ruby, sapphire, emerald, etc., whereby the consumer will be provided with a specific rate of return on his/her investment.  
         [0009]     Certain features of an embodiment of the present invention may be described with reference to the illustrative example that follows. It is noted that, in the present application, a diamond is used as the means by which a potential investor is identified. However, such use is for illustrative purposes only, and other precious stones, for which imitations, or substitutes, are readily available, may also be used in conjunction with the other features of the invention described herein. In addition, the terms “consumer” and/or “investor” are used to refer, generically, to a purchaser, or buyer, whether the purchase (of the imitation stone) is to be made in person (e.g., at a retail store), over the Internet (or similar media), through mail order, or. otherwise.  
         [0010]     As shown in  FIG. 1 , the present invention involves the flow of information among several entities, including some or all of: (1) a seller  10 , who may be a seller of both precious (i.e., actual) stones and imitation stones, wherein the seller functions as the central administrator, or clearinghouse, for the process according to embodiments of the invention; (2) one or more investors, or purchasers,  20 , who wish to spend a specified amount of money to purchase a precious stone; (3) one or more investment entities  30 ; (4) one or more retailers  50  of precious and/or imitation stones; and (5) marking equipment  40 , such as, e.g., an engraving machine, that may be used to individually mark each stone for each respective purchaser  20 .  
         [0011]     In one embodiment, the process according to the present invention is initiated when the seller  10  identifies a consumer  20  who is considering buying a precious stone (such as, e.g., a diamond) for a specified amount of money, e.g., $10,000.00. Having identified a purchaser who has already made the decision to depart with $10,000.00, the seller  10  then offers to the purchaser  20  an imitation diamond of the purchaser&#39;s choice that costs, e.g., $500.00. The goal, from the seller&#39;s point of view, is to offer to the purchaser  20  an imitation diamond that looks and feels as close to the actual diamond that the purchaser  20  had originally sought, so as to fulfill the purchaser&#39;s emotional, or sentimental, criteria and, at the same time, enable the purchaser  20  to invest the remainder of his/her money in an investment vehicle other than a diamond.  
         [0012]     Thus, in the above example, assuming that imitation diamonds do not cost more than $1000.00, the purchaser  20  would potentially have at least $9,000.00 left over (i.e., the “remainder”) that could be invested. With this in mind, the seller  10  then presents the purchaser  20  with one or more investment options for investing the remainder, wherein each option carries a different rate of return depending, e.g., on the amount of money being invested and the period of investment.  
         [0013]     For example, the seller  10  may offer: (1) a 4% rate of return if the purchaser  20  agrees to invest $5,000.00 through the seller  10  for a period of 5 years; (2) a 5% rate of return if the purchaser  20  agrees to invest between $9,000.00 and $9,500.00 through the seller  10  for a period of 5 years; and (3) a 4% rate of return if the purchaser  20  agrees to invest between $9,000.00 and $9,500.00 through the seller  10  for a period of 3 years.  
         [0014]     Thus, in the above example, assuming the purchaser  20  is willing to invest the entirety of the remainder and to maximize his/her rate of return, he/she would agree to buy the imitation diamond that costs $500.00 and invest the remaining $9,500.00 in option (2), with a 5% rate of return. In other words, the purchaser  20  would pay to the seller  10  the sum of $10,000.00 in return for the imitation diamond, plus a certificate that indicates that, if the purchaser  20  leaves his/her $9,500.00 untouched for the period of 5 years, then, at the end of the five years, he/she can redeem the certificate for the face value thereof, which will reflect the predetermined rate of return of 5%.  
         [0015]     Thus, from the consumer&#39;s point of view, the “front end” of the method and system of the present invention operates as an annuity, or similar investment product, in order to provide the purchaser  20  with a fixed or predetermined rate of return over an agreed-upon period of time. In the “back end”, the seller  10  must invest the $9,500.00 remainder in such a way that, at the end of the agreed-upon term (e.g., five years in the above example), the actual value of the principal plus interest of the remainder will be higher than the face value of the certificate to be issued to the purchaser  20 . Put another way, the seller  10  must be able to invest the remainder in such a way as to earn a higher rate of return than that which is promised to the purchaser  20 ; the difference will constitute the seller&#39;s profit.  
         [0016]     According to an embodiment of the invention, in order to achieve the above-mentioned goal, the seller  10  contracts with an insurance company, brokerage company, investment company, or other similar entity (generally referred to as “investment entity”  30 ) which actually takes and invests the remainder, and is the actual guarantor of the purchaser&#39;s rate of return. In this way, the seller  10  may be thought of as a “broker”, whose commission is constituted by the difference between: (1) the rate of return that the investment entity  30  is willing to provide to the seller  10  (i.e., an “ultimate” rate of return) and (2) the rate of return that the seller  10  can negotiate with the purchaser  20 .  
         [0017]     In practice, given that the investment options offered to the purchaser  20  provide higher rates of return for longer periods of investment, the contract between the seller  10  and the purchaser  20 , as well as that between the investment entity  30  and the seller  10 , may include penalty provisions for early redemption. Thus, in the above example, if the purchaser  20 , having chosen option (2), decides to redeem his/her certificate after three years rather than waiting for the agreed-upon five-year period to expire, then the investment entity  30  may charge the seller  10  a penalty (for early withdrawal) which, in turn, may be passed on to the purchaser  20 . The penalty may be calculated on a sliding scale, on a flat-rate basis, or on any other basis generally known in the art.  
         [0018]     In one embodiment, the transactions described above are computerized, and may take place over the Internet. In such an embodiment,  FIG. 1  represents an electronic network, in which the reference numbers refer to, e.g., computers used at each node to establish communication among the various individuals, entities, and/or equipment.  
         [0019]     In operation, in a computerized embodiment, the seller  10  creates a web site which includes pictures and descriptions of various pieces of imitation stones, such as, e.g., diamonds in the illustrative example used herein. The purchaser  20  contacts the seller&#39;s site through means generally known in the art, e.g., through the purchaser&#39;s computer, cellular phone, hand-held device, or other means of communication over a network. Here, as before, the seller  10  also provides one or more investment options to the purchaser  20 .  
         [0020]     Once the purchaser  20  decides on a specific (imitation) diamond, as well as the amount of the remainder that the purchaser  20  is willing to invest, the purchaser provides certain required information to the seller  10 , and enters into an online agreement to purchase the imitation diamond for its stated price, and to pay that price, in addition to the remainder amount, to the seller  10 . The payment may be achieved electronically, or through more traditional means such as, e.g., sending a check to the seller  10 .  
         [0021]     Based on the information collected, which may include the purchaser&#39;s contact information, credit card number, etc., and the specific imitation diamond and investment option chosen by the purchaser  20 , the latter is then issued a receipt promising delivery of the diamond, as well as the certificate evidencing investment of the remainder, within a given number of days.  
         [0022]     Once the seller  10  has received the funds, e.g., the $10,000.00 in the above example, the seller&#39;s computer  10  then may either download the information gathered from the purchaser  20  in order to provide hardcopies of pertinent information to the investment entity  30 , or it may automatically forward the information electronically to the investment entity&#39;s computer  30 . The investment entity  30  will then issue a certificate in the purchaser&#39;s name, indicating a rate of return (to be paid to the purchaser  20 ) that has been previously negotiated between the investment entity  30  and the seller  10 . Again, this may be sent to the seller  10  in hard copy, or to the seller&#39;s computer (or other reception device)  10  via electronic transmission.  
         [0023]     In one embodiment, once the seller  10  receives the certificate information, the latter is input into the seller&#39;s computer (if the certificate information was not received electronically), which then communicates the information to a marking apparatus  40 . The latter may be, e.g., a laser-engraving machine, or other machine capable of affixing identifying indicia onto the imitation diamond. When an engraving machine, e.g., is used, the machine engraves the policy number (for the purchaser&#39;s investment) and/or other identifying information onto the diamond. In this way, the purchaser  20  will not be at risk of losing the entirety of his/her investment should the diamond and/or the certificate be lost. The seller  10  then sends the engraved diamond and the certificate to the purchaser  20 .  
         [0024]     In an alternative embodiment, the present invention may include a “point-of-sale” element. Here, one or more retailers  50  may contract with the seller  10  to sell an imitation diamond, along with an investment policy, to a purchaser  20  who may walk into the retailer&#39;s store, or otherwise contact the retailer  50 , e.g., through a web site set up by the retailer  50 . In order to clarify the scope of the invention, the term “walk-in purchaser” may be used to refer to purchasers who buy the diamond and investment policy through the retailer  50 , regardless of whether such purchasers actually physically visit the retailer&#39;s store, or simply contact the retailer via a website, etc.  
         [0025]     In return for the sale, the retailer  50  may receive a commission (e.g., at a per-sale flat rate, or based on the future value of the annuity, etc.) from the seller  10 . As before, the seller  10  negotiates a rate of return with one or more investment entities  30 , wherein the seller&#39;s profit is equal to the ultimate (rate of) return provided by the investment entity  30  to the seller  10 , minus the commission paid by the seller  10  to the retailer  50  and the (rate of) return paid by the seller  10  to the walk-in purchaser  20 .  
         [0026]     As with the embodiments that were discussed previously, the embodiment described immediately above may also be either partially or entirely computerized. Thus, for example, the purchaser  20  may contact the retailer  50  electronically, and the retailer  50  may then transmit the purchaser&#39;s information to the seller&#39;s computer  10 . Regardless, however, once the sale has been finalized, the retailer  50  may send the purchaser&#39;s imitation diamond to the seller  10  who, upon receipt of the funds to be invested on behalf of the purchaser  20 , proceeds as outlined previously.  
         [0027]     It is known, in general, that the rate of return is directly proportional to the amount of investment, such that an investment entity may provide a higher rate of return for larger investments by the seller  10 . Therefore, in embodiments of the invention, the seller  10  may pool the remainder amount, or investment funds, from a plurality of purchasers  20  and invest the resulting total investment amount through the investment entity  30  so as to receive a higher ultimate rate of return from the investment entity  30 . This may be specially applicable where the investment entity  30  sets sequential thresholds for paying progressively higher rates of return.  
         [0028]     While the description above refers to particular embodiments of the present invention, it will be understood that modifications may be made without departing from the spirit thereof. The accompanying claims are intended to cover such modifications as would fall within the true scope and spirit of the present invention.  
         [0029]     The presently disclosed embodiments are therefore to be considered in all respects as illustrative and not restrictive, the scope of the invention being indicated by the appended claims, rather than the foregoing description, and all changes that come within the meaning and range of equivalency of the claims are therefore intended to be embraced therein.