Saturday, 20 April 2013

Leveraging

What is leveraging? In essence, leveraging is to use a small amount of money to control a large amount of money... As an investor, you need to know your leverage power and as you have already known, your leverage power is a function of your earning power and your credit score amongst others. Always review your credit limit. I just did mine and happy to know I have much greater leverage now and bankers are offering their service to me, instead of me begging them for credit loan! So always review your credit limit every 6 months.

Using Faizul Rizuan's example, each credit card would be able to leverage up to 4 x your monthly salary and allows you (if your credit score is good) interest free loan and / or low interest balance transfer.

Using this method, it would be easy to raise a sizable amount of money for down payment fairly quickly. The more you earn, the more you can leverage.

A guide would be about $500 / month for 4 years for about $20,000 for 1 bank.

Always remember even with the above mentioned method, it is prudent to have positive cashflow at all times!

1 comment:

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    Property leveraging

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