By Brent Pritchard

I don’t think it’s a coincidence that dog is God spelled backward. The love of a dog is close to, if not, perfect. While dogs may not be all-knowing, they are very smart (and they know a good book when they see one, which might explain why they eat people’s homework if they want their people to also feed their brains):

Do you like to receive and read letters? Have you ever thought about the fact that the most popular salutation is spelled with the same letters that describe what you’ve been asked to do?!

Here’s an excerpt from my book Would Your Boomerang Return? What Birds, Hurdlers, and Boomerangs Can Teach Us About the Time Value of Money (2023):

Here is something that is not openly acknowledged or talked about that often: LTV is overrated. The LTV metric doesn’t consider the Cap Rate (CR). Unfortunately, we can’t combine these two acronyms to form a word that will help you remember to avoid this pitfall without “buying” a few vowels. By adding “Y” and “E” and “O” to the mix, we can spell “covertly,” which speaks to how deceptive LTV has been for so many people over the years. Let’s not repeat this history. Be a yeoman and remember that Debt Yield (DY) is a better metric from the lender’s perspective, since it considers the amount of mortgage capital and thus is the approximate cap rate that would lead to the return of investment.

This text is from Chapter 3, which is where I weave in some knowledge from my days as a real estate professional to help bring the topic to life for the reader.

What investment metric didn’t seem to exist prior to the Great Recession that everyone (and their dog) was saying after? (Hint: It’s not LTV or CR.)

Brent Pritchard is an author and college finance educator with over two decades of industry experience and cofounder of Boxholm Press, LLC, a family-owned-and-operated publishing company providing educational content, products, and services. He pioneers an innovative and approachable new way of learning and teaching the Time Value of Money as well as thought leadership in other business topics. His most recent book is Would Your Boomerang Return? You can contact him on his website here.