Leverage by Marcus Larcombe | Income Solutions
Summary
The definition of leverage, in a financial context, is to borrow money, hoping that the profits made will be greater than the interest owed (Investopedia 2019). If you weren’t allowed to borrow money, many people would not be living in what they believe to be their own home and a lot more families would be renting. So, you are forced to earn money through trading your time (working) to be able to have enough in your bank account to pay down and hopefully off, your home loan. The good of real-world leverage is utilising human capital and technology to increase your productivity then more than what you could simply working by yourself. If you receive a pay increase, instead of going shopping and buying a new watch or the latest iPhone, save it and invest.