Financial Leverage

I want to talk to you about financial leverage. Now I’m speaking your language, right?

We all have limited resources at any given time. And as you already know, that definitely includes money.

When we apply the principle of financial leverage, what we’re really talking about is “How can we leverage other people’s money to start investing?” We want our money to be out there working hard for us.

Banks are our first method of leveraging money in this way. I know some people go around saying that they hate banks for one reason or another. But the reality is that banks help us leverage money.

When I’m investing in property, financial leverage gives me the ability to make my money work harder for me. I can leverage $100,000 or less to gain access to a half-million-dollar property.

What’s not to love about that?

If you buy the right investment assets, it can pay off big time. And when you start tapping into other people’s money, it gives you even better leverage in that space.

There’s one thing to consider with regard to this type of leverage… 

When someone else is lending you money, they’re really making an investment in you. And like any good investment, they want a return.

So, ask yourself, “Am I a good investment? Or am I a risky penny stock?”

When you’re a good investment, you’ll continue to make money year after year. And you know this is very important when you’re just starting to build your portfolio.

Leveraging money is a great way to build your wealth – even when you have limited resources. But you need to make sure that you continue to be a good investment for the people who put up that money.

— Todd Polke