The 74% Return: The Power of Velocity
Why speed matters more than the interest rate
One of the highest annualized returns I ever earned in private debt wasn’t 20%, 40%, or even 60%.
It was 74%.
When people hear a number that high, they immediately assume it was high-risk. They assume it was a gamble.
The Reality: It was one of the safest deals I have ever done.
Most investors chase the “number” (the yield). They want the biggest percentage promise on the paper. Professionals chase something else entirely: Process. Structure. Velocity.
1. The “High Yield” Trap Amateur investors look for a 15% or 18% annual return. They lock their money away for 3 to 5 years to get it.
The problem? Money sitting still is money at risk. If you are locked into a deal for 5 years, you are exposed to 5 years of market changes, interest rate hikes, and economic shifts.
2. The Engineering of Velocity The 74% return didn’t come from charging a borrower 74% interest. That would be predatory. It came from the Velocity of Money.
The Deal: A short-term bridge loan secured by real estate.
The Duration: The principal was returned in just 74 days.
The Math: When you earn a solid return in just two months—and then get your capital back to do it again—your annualized return skyrockets.
Velocity compounds faster than yield.
Think about it this way:
Option A: Lend at 12% for one year. You make 12% total.
Option B: Lend at 4% for one month. If you repeat that 12 times, you make nearly 60% total.
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3. Time is Risk In private lending, time is the enemy. The longer a borrower holds my money, the more time there is for something to go wrong.
By focusing on short-duration loans (6 to 12 months) with strict milestones, we reduce our exposure.
We get in.
We verify the asset is improved.
We get out.
This is risk management disguised as profit.
The Bottom Line Don’t just look at the coupon rate. Look at the timeline. A modest return that comes back in 90 days is often far more powerful than a massive return that locks you up for a decade.
Are your returns built on discipline—or on hope?
Next Step: If you want to see the specific math on how we calculate “Velocity” for our private debt deals, comment down. I can share a simple breakdown.
Cheers,
Jon