David & Donni talks about the power of leveraging "good debt". In many cases, there isn't capital available after spending cash on an asset. Even if there is cash available there would be even more cash available with a solid leverage play.
What are some reasons that leveraging OPM(Other Peoples Money) is a good thing, with proper management?
-Example 1: You borrow $100,000. Then you purchase the asset for $100,000(assuming all taxes are covered). Well, now you are using your personal money to do all the other work.. You may be subject to the rate at which you are generate this money. Which could require more time, etc.
-Example 2: You borrow $100,000 but work out a payment plan for the asset. (Keep the down payment in mind). Let's say your payment is $1,500. Well, now you still have money to use in order enhance the asset(Increase the equity). The plan is to leverage what you have available to you.
– Paying the money back as you leverage will increase business credit
– If you're using a credit card with a significant spending limit (again with the correct plan of action)
you will increase in points as you are paying it back which, in many cases increases your spending limit if managed properly.
– If something unfortunate happens, at least wouldn't have lost all the money.
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