Last Updated on February 1, 2025 by T.J. Fitzgerald
Understanding the numbers behind note investing can be the key to unlocking profitable opportunities. Let’s dive into some essential mathematical concepts that will sharpen your investment acumen.
Yield Calculations: Your Profit Compass. Yield is the heartbeat of note investing. It’s not just about the interest rate – it’s about how much you’re really earning on your investment. For example, if you purchase a $100,000 note at a 20% discount, your actual yield will be higher than the stated interest rate. This is where the magic happens!
Time Value of Money: Today’s Dollar vs. Tomorrow’s Dollar. Remember, a dollar today is worth more than a dollar tomorrow. This concept is crucial when evaluating long-term note investments. It helps you compare different investment options and understand the true value of future payments.
Real-World Application: Interest Rate Adjustments. Let’s say you’re considering a note with an adjustable interest rate. If the rate increases from 5% to 6%, it might seem small, but it could significantly impact your returns over time. Always calculate the long-term effects of rate changes before making a decision.
By mastering these mathematical principles, you’ll be able to:
• Accurately assess investment opportunities
• Make informed decisions on note purchases
• Optimize your portfolio for maximum returns
Ready to put these concepts into practice? Our beginner note program offers one-on-one mentoring with professional funders who bring extensive deal structuring experience and risk assessment skills to the table.
IN THE “HOW TO TURN 90%..” PROGRAM, YOU WILL LEARN:
