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Get Rich (Wealthy): Just YOLO’d Into a Mortgage with a Responsible Down Payment

Welcome to Get Rich (Wealthy), my personal finance and investing column for Hard Money. Today, I’d like to tell you about my latest wild YOLO trade.

After losing 90% on AMC calls, I needed to regroup and come up with a bold strategy to get my money back. I needed to gamble, I mean invest, even bigger this time if I am going to get my money back.

Here’s the trade: I wire a reasonable down payment of 20% to the local bank. Let’s call this 20% my initial capital. The bank provides the other 80% in the form of margin. This means I can use the bank’s money to buy whatever asset I want.

In this case, I want a reasonable four bedroom, three bathroom colonial home on a quarter acre lot in a safe area with good schools.

With this solid asset in hand, I only need to pay the bank 3.45% per year in interest. This is a pretty minimal borrow cost versus the 45% I have been paying to short GameStop this year.

So how am I going to make my money back?

It’s simple: I can wait 30 to 50 years and flip this home for a 200% profit. That’ll get me about one-fifth of the way back to break-even on the money I initially lost.

I also have one other option to speed up my payback period. Instead of just living in the house with my family, I could turn it into a startup incubator and allow three to 15 smart young entrepreneurs build their companies while working and living under my guidance.

If just one of their startups turns into the next UberCab or SnapGram, then I’ll 100x my investment at a minimum.