FinanceDeal Structure
The Silent Wealth Destroyer
Also known as: Flat interest trap, simple interest erosion
TO-original framework. Simple interest doesn't look aggressive. It quietly transfers value from seller to buyer every year the principal goes unpaid, through a structure the seller never modeled.
WHY IT MATTERS
Introduced in D.6 (Simple Interest Is a Silent Wealth Destroyer). Simple interest on seller notes doesn't look punitive and doesn't sound unfair. It quietly transfers value from seller to buyer every year the principal sits unpaid — not through a visible mechanism, but through one the seller never modeled. The buyer's cost of carrying the debt is the same on day one as it is on day one thousand. No escalating penalty. No compounding urgency. The buyer can park on the founder's money indefinitely while deploying it in acquisitions that earn returns well above the flat carrying cost.