This note from a reader in England gives another important fact about raising money…think big. Here is what he shared.
"Gary, I don't know if the ten times theory hangs . Let me tell you a story.
"I was having real difficulty finding a bank that would finance the
purchase of our house. I needed 150 000 pounds and had 60,000 to bring to
the table. All kinds of people rejected my submissions.
"Then I found what I thought was the deal of a century. Several hectares -
a whole hospital was going up for sale. The council had granted permission
for 650 two and three bedroom houses and units, and an article in the
newspaper revealed that the highest bid was 30 million. The bids were to
close in 48 hours. So I contacted my bank, the ones that refused me my home
loan, and asked for 75 million dollars. They thought I was joking, but when
they had established that I wasn't, they sent me to the 'centre' - a part
of the bank that I never knew about previously. My branch couldn't loan out
more than 2 million, you see.
"In spite of promises to get back to me with an answer in 24 hours, the
bank took longer. But they did come back with a 'yes.' What is curious is
that they couldn't care less about who I was or what I earned. There was no
way I could ever service 75 million with my salary ($80,000/year) so they
didn't even ask for my resume, let alone tax documents.
"I rang the sellers to put in the bid but they had closed bidding half an
hour earlier. The hospital has sold for 30 million.
"I didn't mind, I'd learned a valuable lesson: Reach for the sky and you
will at least reach the top of the trees. It seems to me that there are so
many of us scrambling for mediocre opportunities that the chances of
realizing them become relatively small. On the other hand there are so few
of us who feel capable and worthy to reach for huge opportunities thatthe
chances of getting what you want are exceptional.
"I watched the development with interest. The cheapest 2 bed unit in the
complex sold for 550,000 and the more expensive ones for as much as 2
million. Even after finance and development costs, the developer made a
This is a good lesson to realize if kept within reason. Think big but be able to start small. More on this next lesson tomorrow! Until then, good investing.