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How Leverage Can Boost (or Break) Your Wealth!
Disha Soni
March 08, 2025
FinWord of the Day
- March 08, 2025
What is leverage?
Leverage is the use of borrowed capital or financial instruments to fund the expansion or increase the potential return on an investment.
It’s a double-edged sword—when used wisely, it can accelerate wealth-building, but when mismanaged, it can lead to financial stress.
Where You See It:
Investing: Borrowing to buy stocks or real estate to increase potential gains.
Business: Companies use leverage to expand operations, acquire assets, or grow faster than they could with just their own capital.
Personal Finance: Credit cards, mortgages, and business loans are all forms of leverage.
Smart Strategy Tip:
Not all leverage is bad! The key is using it for appreciating assets (like real estate) rather than depreciating ones (like cars or luxury items). Keep debt manageable and ensure you have a plan to pay it back.
Happy investing, and we'll see you tomorrow for another bite-sized financial term!
Thank you for reading FinWord! I’m Disha Soni, an Independent Financial Security Advisor based in Canada.
My goal is to simplify finance and help you feel confident of your financial journey.
If you’d like to explore how I can support your financial journey, connect with me here
Website: www.dishasoni.ca
Disclaimer:
All characters/examples in this article are fictional in nature. Any similarity to individuals, living or dead, is entirely coincidental. Nothing in this communication can be construed as investment or legal advice. Please consult your financial advisor before making any investment decision.
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