The Laughing Banker

Updated: Oct 15, 2020

--original story by Benjamin N. (Woody) Woodson, CLU, Life Trustee of LUTC and re-printed from Managers Magazine.

I entered the manager’s office of my neighborhood bank and made this proposal:

“Mr. Bank Manager, there is a piece of vacant land in my area that I’m interested in buying. It is well-suited, the town is developing in its direction, and I am virtually certain that its value will rise. I’ve thought the matter out carefully from every angle and I’ve come to the conclusion that the land would be a very good buy.” “There are several reasons why I prefer the prospective capital gains of a vacant lot to the current cash income I could have by buying another type of property, such as an apartment building.” “For example, I don’t particularly need a supplementary income at the moment, because these are the best earning years of my life.” “Also, the extra income that I would receive from income-producing property would, in any case, be cut considerably by the income tax I would have to pay.” “For these reasons, I think that the purchase of this land is a good-buy – provided I can be sure that its value will increase over the years, enough to represent a good return on the investment I make.” “Since I don’t want to lose money on this enterprise, I’d like to make an agreement with you and your bank that will protect me financially and give me security and peace of mind.” “The purchase price of the land is $28,000. If I buy it at that price, I want to have a written guarantee from your bank to protect me on several points.” Specifically: “I want your guarantee that the property will be worth $100,000 in 35 years (at which time I’ll be age 65) and that the bank will buy it from me at that price.” “I’m prepared to accep