{"id":107,"date":"2014-02-27T23:02:00","date_gmt":"2014-02-27T23:02:00","guid":{"rendered":"http:\/\/mn.arenter.com\/coach2\/2014\/02\/27\/bankers-secret-lesson-1-cover-your-downside\/"},"modified":"2022-01-18T02:27:19","modified_gmt":"2022-01-18T02:27:19","slug":"bankers-secret-lesson-1-cover-your-downside","status":"publish","type":"post","link":"http:\/\/mn.arenter.com\/coach2\/2014\/02\/27\/bankers-secret-lesson-1-cover-your-downside\/","title":{"rendered":"Banker’s Secret Lesson #1, Cover Your Downside"},"content":{"rendered":"

My mentor once taught me, never work without a safety net<\/u>. \u00a0\u00a0<\/span><\/p>\n\n\n\n\n
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Construction of the Golden Gate Bridge<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

This is the same lesson that can be learned by observing the world’s largest banks and investors. \u00a0<\/span>
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\n<\/span>Banks are very good at covering their downside. \u00a0They do a great job at mitigating any loss that might come their way. \u00a0 The cover the downside and let the upside take care of itself. \u00a0 In business, nothing is\u00a0guaranteed; however, what banks do it try to protect themselves against loss. \u00a0\u00a0<\/span>
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\n<\/span>Over the next several blog posts, I’m going to reveal lesson’s learned from banks, and how you can cover your downside on real estate deals. \u00a0 \u00a0Begin thinking with the bankers mentality and you’ll begin to see things with a different lens. \u00a0 Try to figure out how you can be on the receiving side of inflation, how you can be on the receiving side of appreciation, on the receiving side of opportunity costs, all the while – protecting your downside.\u00a0<\/span>
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\n<\/span>The most obvious<\/u> way banks look to protect their investment is asking for some type of\u00a0collateral. \u00a0 \u00a0If I came to you with a gold brick or a Lamborghini, or something of great value and asked you for a loan at 10% of the value of the thing, would would be a good deal? \u00a0 Would you be OK giving me a loan for let’s say $10,000 if the thing was worth $100,000? \u00a0 \u00a0You can’t lose right??! \u00a0 \u00a0This is how banks look at lending\u00a0opportunities. \u00a0 They say, “if\u00a0everything goes bad and the person stops paying, can I\u00a0recoup\u00a0my investment and\u00a0maybe even make more?”<\/span>
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\n<\/span>As investors, we need to always be thinking of how can I cover the downside. \u00a0 Regarding\u00a0collateral here’s an\u00a0interesting\u00a0question: \u00a0Are there ways to make the collateral worth more once you’ve loaned against it? \u00a0 How can you continue to increase your upside and also make the downside so attractive that you make money in either case. \u00a0\u00a0<\/span>
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\n<\/span>More later. \u00a0Keep thinking of ways to cover your downside. \u00a0 \u00a0Till next time.\u00a0<\/span>
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My mentor once taught me, never work without a safety net. \u00a0\u00a0 Construction of the Golden Gate Bridge This is the same lesson that can be learned by observing the world’s largest banks and investors. \u00a0 Banks are very good at covering their downside. \u00a0They do a great job at mitigating any loss that might […]<\/p>\n","protected":false},"author":1,"featured_media":280,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"pagelayer_contact_templates":[],"_pagelayer_content":"","footnotes":""},"categories":[26,18],"tags":[],"class_list":["post-107","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banker-mentality","category-investor-tips"],"_links":{"self":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/107","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/comments?post=107"}],"version-history":[{"count":1,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/107\/revisions"}],"predecessor-version":[{"id":281,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/posts\/107\/revisions\/281"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media\/280"}],"wp:attachment":[{"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/media?parent=107"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/categories?post=107"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/mn.arenter.com\/coach2\/wp-json\/wp\/v2\/tags?post=107"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}