Increase Your Financial IQ Book Review ? Part 4: Leveraging Your Money
Posted by:According to Robert Kiyosaki, leverage, in its simplest terms, is basically “doing more with less”. It could be in the form of leveraging other people’s money like acquiring a loan for your house. It could be leveraging other people’s time by hiring employees for your business. Or it could be leveraging technology like putting up an online store to reach out to more people, 24 hours a day, 7 days a week.
Things to note when applying leverage:
Investing for capital gains vs investing for cashflow
Some people invest only for capital gains. Their motto is “buy low, sell high”. When you purchase a house for PHP 1 Million in the hope that you can sell it for PHP 5 Million after a few years, you are investing for capital gains.
Others invest only for cash flow. They want to receive a steady fixed amount of income every month. When you invest in Retail Treasury Bonds and receive a regular interest earnings, or invest in stocks that give dividends, you are investing for cashflow.
To invest for both capital gains and cashflow, you need to increase your financial intelligence so you can control the investment and increase its value at the same time provide a steady stream of income for you.
More tips on taking the first step to apply leverage
Tags: Book, Financial, Increase, Leveraging, Money, Part, Review