We often treat borrowing money as a math problem. We assume that if the credit score is good and the collateral is there, the loan is approved, and the risk is managed. But as Walt Postelwait explains, the spreadsheet doesn't tell the whole story. As a former commercial lender and the Co-Founder of Portfolio Watch, Walt spent years on the other side of the table. He learned that while assets get you to the table, it is "Character" that gets you the check, and more importantly, helps you survive when things go wrong.

In this episode, we move beyond the basics of debt. We discuss the critical difference between "Consumer Borrowing" and "Strategic Leverage." Walt shares the specific metrics lenders use, like the 1.25 Debt-Service Coverage Ratio, and explains why "Gateway Businesses" like laundromats are often a trap. Most importantly, Walt shares the raw, unfiltered story of his own 66-unit real estate development failure. He walks us through the "Sunk Cost" trap, the red flags he ignored, and how he relied on relationship capital to pay everyone back and avoid bankruptcy.

Key Talking Points:

• The Character Metric and why lenders prioritize grit over cash flow
• The difference between Bad Debt (consumer) and Good Debt (strategic leverage)
• Understanding Debt-Service Coverage Ratio
• A real life lesson of leveraged borrowing gone wrong
• How AI is changing how borrowing will work in the future

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• The Book: https://escapetheclock.com/book
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Episode References & Resources:

• Business owners have a median net worth nearly 9 times higher than wage earners ($1.3M vs $155k) — Federal Reserve Board (2023) — https://www.federalreserve.gov/econres/scfindex.htm
• Roughly 20% of new businesses fail within the first two years — U.S. Bureau of Labor Statistics (2024) — https://www.bls.gov/bdm/us_age_naics_00_table7.txt
• Construction projects specifically face a 98% chance of cost overruns or delays — McKinsey & Company (2022) — https://www.mckinsey.com/capabilities/operations/our-insights/the-construction-productivity-imperative
• 52% of financial services companies are accelerating their AI adoption for risk management — PwC (2025) — https://www.pwc.com/us/en/industries/financial-services/library/ai-in-financial-services.html

Connect with Walt:

• Website: https://portfoliowatch.co/
• LinkedIn: https://www.linkedin.com/in/walt-postlewait-0082ab31b/

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Thank you for listening. This podcast is for education only and is not financial advice.