Chapter One

A Man with a plan

"Lend Me £23,000 and I will make you a millionnaire!"

It doesn't matter which way a person looks at those words, there is no doubting that the statement is either brave or insane - I like to think it might have been both.

Some people might think that these are words that have been taken from a fiction novel, but as they say - life is stranger than fiction - and these words were said by a very real person. I cannot assure that it was those words exactly however the context of the statement was the same as is shown above and the figure referred to is the same. The statement was said by a man in the UK in 1946 as part of a business proposal he was putting forward to a bank manager.

Let's spend a few moments considering the factors.

The UK in 1946.

Just like a number of other countries, in 1946 the UK was recovering from the Second World War, rationing was still in place and the economy was not at its greatest. Admittedly it was not as bad as it had been but still - it wasn't the best time to be asking for a loan of any size.

A Business Proposal to a bank manager.

I am no expert in asking for loans from a bank however I am fairly sure that it isn't usually the bank manager who deals with the approval of the loans. Admittedly given the size of the loan it is possible that the manager would have had to give some kind of approval however if we are to believe the story it was the bank manager who gave the loan.

The Figures

Even by today's standards £23,000 is a large amount to be asking for as a loan without any collateral to put against it. Let's assume for a moment that there was a full business proposal in place when the money was requested - which I have been advised there wasn't - but let's assume there was.

In 1946 the average house cost was £1,459.00 based on figures I have managed to gain access to which it is reasonable to presume relates to a 2 bedroom terraced property. This on its own means that the amount being discussed was the equivalent to a 100% mortgage (no deposit) on approximately 16 houses.

At this stage it is feeling like the statement should have been made whilst wearing a balaclava and brandishing a shot gun however I am confident that it was made amicably not aggressively.

Even with all of these details it is difficult to put the full scenario into context because in reality £23,000 wouldn’t buy one house in today’s market.

So let’s reassess the situation using the equivalent figures from 2017 – 71 years later in a world that is thankfully more stable than it was in 1946 financially.

Based on inflation and other factors like the decimalization of the Pound Sterling in the 1970s the loan amount in 2017 would be approximately £911,317.00. Suddenly it is looking less achievable without the aforementioned balaclava and shot gun but let’s say they aren’t an option.

Anyone who is working out the statistics of this figure has probably already worked out that it is around about 39 times larger than the original request. On that basis we would need to change the assured return from one million – hence making the manager a millionaire – and make it a guaranteed return of 39 Million pounds.

The first thing that comes to mind is that there is no loan in the world that has an interest as high as that however – the loan wasn’t requested based on the interest rate. The request was made based on the return that was expected from the investment and the fact that the man requesting it was confident in what he was intending to buy with the money.