leverage

Good morning! We’re getting settled into our new apartment. We had like 10 guys show up from our church and we moved everything from the Uhaul into our 3rd floor apartment in 24 minutes! Lifesavers.

DEFINITION
What does “leverage” mean?

• Leverage in finance means using borrowed money to try to increase the amount you can invest. Think of it like this: if you want to buy something expensive, but you don't have enough money, you might borrow some from a friend or a bank. You now have more money to buy that thing, but you also have to pay back what you borrowed later. In finance, companies and investors use leverage to buy more assets or make bigger investments than they could with just their own money. If their investments do well, they can make more money. But if things go wrong, they can end up owing a lot more, which is risky.

PRACTICAL ADVICE
Leverage is LAME

• People love to hype up “OPM” or using “Other People’s Money” to make investments in things like real estate or even stocks.

  Why would you want to stress yourself out like that? This is the classic “get rich quick” scheme that typically doesn’t work out for most people.

HELPFUL RESOURCES
New video: 10 REALISTIC Ways to Save Money

• If you haven’t watched today’s video, check it out!

OUR COMMUNITY
What are your questions? Or share a win!

• Reply to this email with any personal finance question you have, or share with me any wins in your life! (I’ll respond to your questions anonymously in future emails)