Contracts aren't necessarily part of investment. Investment is simply offering financial support to a business venture in the hopes of profit. So I guess if you look at it, giving the money to F&G wasn't technically an investment because Harry wasn't expecting profit from it. It does still meet the other half of the definition though. I could even stretch and say it meets the first half as well. It was already mentioned that F&G called the money a loan, which implies that it will be paid back. This in turn means that Harry breaks even on the transaction. Then Harry gets permanent freebies at the shop, which could be called profit of a sort. So, though he didn't intend to profit, in reality he did, whether he wanted to or not.

Perhaps they didn't have the necessary credit or collateral? Remember, these are 16 year olds. Poor 16 year olds with shady school records at that. No sane banker would loan money to them.

Sure it's possible, especially with magic, but it's something that is never elaborated upon in canon, so we have no way of knowing how the newspaper is run. I prefer to go with Occam's Razor on this one. The simplest solution (i.e. it works essentially the same as in the muggle world) is likely the correct one. Besides, I still find it difficult to believe that every wizarding business was started out of pocket. Businesses take a lot of money to start up, especially ones that revolve around sales.

I think his was referring to this:

In short, this is a very difficult topic to argue on because, like most of the peripheral elements of canon, it isn't talked about very much. So we can go two routes: accept canon and only canon with no interpretation, or accept canon, but recognize that some elements are left almost completely unexplained and that these elements may need to be interpreted.

Personally, I think that the realm of finance and business is one of those unexplained areas. It's an area of the magical world that we are only give a very tiny glimpse of, so it would be a bad idea to completely dismiss all theories related to it that aren't expressly stated in canon. Just because Harry doesn't see something doesn't mean that it doesn't exist.

 

Harry gave it to them as a gift. If they are to pay him back, it would be the 1000 they took and maybe something extra. They wouldn't, and shouldn't, give him a cut of the profit.

At the end of the book they're 17, adults, but I guess I can see your point.

Here, the two biggest newspapers are owned by private owners, not groups. Also, the Lovegood's newspaper is probably owned by the family, and in 5 year they too had many copies to distribute.

Again, I'm not sure how things happened in England, so I can't really say. What I can say that from the dates we do know of, the stores are quite old. That's not to say that they're stagnant, [new brooms each year, pet fashion...] just that most stores has changed so many hands it's hard to tell how they were originally built.

 

That someone mentioned the word "loan" doesn't make loans common place, and doesn't mean that Gringotts gives out loans.

For a start, even if we say that the wizarding economy does have organised borrowing (as opposed to wealthy individuals giving/lending money), it's perfectly possible that it's wizarding companies that do it, not Gringotts. As deposits are kept distinct and in their vaults, Gringotts wouldn't have the money.

Plus, does anyone else get the feeling that the word "loan" here was used as a figure of speech, rather than an actual technical usage? I don't think it means that they have an arrangement where they pay Harry back.

I think this was more a reference to bribery, rather than a legitimate purchase

 

The 'gift' that Harry gave the twins is considered a contract under English common law. When Harry gave it to them, it was just a gift. But the twins protested, and said that it'd be repaid, thus nullifying the first agreement (the gift) and instituting a legally binding contract for repayment.

Not all contracts are written. Verbal ones are just as enforceable as non-verbal ones.

 

Yes, but does that mean they need to give him back 50 percent of all profits [or something similar] or just to give back the amount at an unspecified time?

 

I'm sorry, but I fail to see how whether or not Harry gave them a loan is important. @OP: It is implied that the Potters had substantial cash. Use that ambiguity to your advantage. Just write shit and be done with it.

 

Assuming the twins have earned as much money as was implied, Harry having shares in the store could support him.

 

A bank, by definition, is a financial institution that accepts deposits and channels the money into lending activities
Or at least that's what my iPod touch tells me
To think that this large wizarding bank, run by greedy ass goblins, wouldn't use timeless banking tactics to increase their wealth is ridiculous to me.
As far as the quibbler, it is never explained exactly how it is funded, just that it is run by xenopholis.
With old pureblood money I again doubt that these family's had enough gold to last for multiple generations with out some sort of family investments. All the crazy amounts of spending the Malfoy's do, if done from one generation to the next, would easily dry all they're money up unless they had some sort of income outside of the salary malfoy makes as a board governor. Even muggle aristocracies from long ago contained some sort of primitive investing.
Another thing, Hogwarts. I do believe that as a private institution students pay tuition. I don't think the ministry can afford to pay a whole staff and a board of governors. I think that students pay some sort of tuition to fund the school, and like most private schools probably offers scholarships (or god forbid the family takes out a loan) so families lesser off can afford their childs education. However because of the lack of explanation in canon for more than just one topic of of our discussion, there is a lack of concrete evidence to back my claims. But as we all know the absence of evidence is not evidence of absence

 

I agree. The point of the thread is to argue whether or not Harry is rich. Since it's canon-established Harry is not a partner of WWW - or at least one who doesn't get a share of the profits - then it doesn't matter whether or not Harry gave them a loan.

 

Loan =/= shares.

You iPod touch is lame. I can think of a few improvements.

"A Muggle bank, by common practice, is a financial institution that accepts deposits and channels the money into lending activities."

Sure, they might want to. But they can't conjure money. Banks traditionally use their deposits to fund loans. Gringotts can't do this, because it's not so much a bank as a glorified collection of safe boxes.

 

It's been established that the money deposited in Gringotts just stays in your vault, i.e. not being channeled into lending activities. According to your definition Gringotts is not a bank.

 

If gringotts is just a glorified safe box then why do so many wizards keep accounts there? I understand purebloods would as they are huge muggle-phobes but what's to stop any intelligent half-blood or muggle-born to just take all their gold convert it to muggle currency and deposit/invest in the muggle economy(the one that makes some, yet not total, sense) they could easily become wealthier than even the richest purebloods through this path. Of course as proven time and time again your average witch or wizard is severely lacking in intelligence or financial ambition

 

You over estimate the power of interest on savings, I think.

Also, one reason why they wouldn't convert to Muggle seems pretty obvious: the currency they use is Galleons. They'd have to convert money every time they went out to the shops.

 

I know, but it does give the implication that they were rich enough that a single relative could spend the no doubt huge amount of money to get it.

 

Not really on savings, I'm saying take your money and invest in profitable muggle businesses. It's pretty clear that one galleon is worth much more in muggle currency than in the wizard world. And they wouldn't really have to convert everytime, just take enough gold to make profitable business ventures in the muggle world. Not to mention don't most muggleborns have to convert money everytime they go to diagon alley. Unless they start up an account at gringotts which is apparently a terrible place to have your money sitting anyways. The only benefit is that you are pretty much safe from an economic crisis, unless of course the goblins decide to rebel in which case the whole wizarding world is in peril.

As far as the initial question of harry being rich, I think it is safe to assume he is pretty well off. I personally think he is of some substantial wealth, but richer than bill gates? A nice thought but no.

Now my question is where is gringotts getting all of it's money? The number of employees there must be alarmingly high for a bank that does not make money hand over fist. Not to mention I doubt taming dragons in the bellies of the tunnels is a cheap endeavor. Not to mention how many curse breakers are there working for gringotts? We know that outside of goblins they do employ wizarding kind, so again where does all of their gold come from if not from, what we would deem, standard banking methods?

 

Kind of offtopic, but the buying and selling of Galleons probably don't go for the same rate. Anyhow, all answers you could get here is speculation, and could come from someones arse, rationalization or comparison to the muggle world.

 

Off topic? Yes, but so is the entire discussion we've been having on the so-called wizarding economy. And most answers to the original discussion not to mention any topics that have spun-off are all pulled from someone's ass. Or a well thought (or poorly thought) rationalization/comparison to the muggle world which we have come to the conclusion, will never be applicable due to muggle's lack of magic and abundance of logic. Or at least what we consider logic...

 

Given that Bill Weasley is employed to find treasure, I think we know one source of gold for the Goblins.

 

fair enough, but this full time security force that always stands on deck, all the goblins, people with desk jobs like Bill after he transfers, or Fleur when she gets her job to help improve her english, I doubt are getting paid on the fairly inconsistent income of treasure hunting.
Then again we must wonder, just how much money do they make off of the loot they do find?
This whole wizard central banking system makes even less sense than the muggle counterpart.