Leverage
From CaseyPedia
Leverage refers to the use of credit or borrowed funds in order to multiply the rate of return on an investment. When the return is negative, excess leverage causes the borrower to lose more than he invested, a situation known as being under water.
The use of leverage on sweet deals allows a real estate entrepreneur to quickly achieve a six-figure negative net worth. Casey Serin repeatedly warns his blog's readers not to get over-leveraged, while proceeding to do just that every single time he gets access to more credit:
I have come to appreciate the power of leverage. I’ve said it before and I’ll say it again… leverage is a beautiful thing. However, I must treat it with great care, unlike I’ve been in the past.[1]
[edit] References
- ↑ Attorneys Say Corporate Credit is OK, Need a Plan, IAFF, February 21st 2007
