Three ways leverage can boost your returns - MoneyWeek investment tutorial

Like this MoneyWeek Video? Want to find out more on boosting returns? Go to: http://www.moneyweekvideos.com/three-ways-leverage-can-boost-your-returns/ now and you'll get free bonus material on this topic, plus a whole host of other videos. Search our whole archive of useful MoneyWeek Videos, including: · The six numbers every investor should know... http://www.moneyweekvideos.com/six-numbers-every-investor-should-know/ · What is GDP? http://www.moneyweekvideos.com/what-is-gdp/ · Why does Starbucks pay so little tax? http://www.moneyweekvideos.com/why-does-starbucks-pay-so-little-tax/ · How capital gains tax works... http://www.moneyweekvideos.com/how-capital-gains-tax-works/ · What is money laundering? http://www.moneyweekvideos.com/what-is-money-laundering/

Comments

1. I do not understand this concepte. How is B strategy better off than A, given that B is still oweing 100, also is it possible to sale a property that is not completely yours as in the case of B.
2. Thanks for the video. Very basic thing regarding forex trading. I have found forex market with the opportunity to earn profit. It is the best solution for me to earn money. With the help of leverage traders can do this. Leverage is that which expressed by the ratio and based on the margin requirements by your broker. My broker ECNCAPITAL helps me to maintain 2% margin in my account to get high volume of leverage.
3. how bout the interest of the loan. of B investor. :( , DFL = Ebit/Ebit-interest,
4. A invest 200k and receive 300k upon selling.  Therefore earn a profit of 100K, ROI = 50%
   B invest 100k + loan 100k and receive 300k upon selling.  Therefore after paying off loan (assume no interest charge), earn a profit of 100k, but ROI = 100%
   
   In these scenario - B via the leveraging bank loan technically make higher ROI.
   
   It is common & acceptable to make some mistakes sometimes  - I love Tim's presentation and had been follow his many videos
5. Payed for house: 100k
   Loaned for house: 100k
   House price: 300k
   Costs: 100k(house payment) + 100k(loan) = 200k
   Net profits: 300k(profits) - 200k(costs) = 100k (not 200k as you said in the video).
   If you're not going to factor initial house payment costs then investment A made 300k.
   This is pretty basic maths.
6. For Flexible Leverage and most Friendly Spreads on Currency Pairs, Indices and Commodities, check this out: http://etoro.tw/1w0qB2i
7. He has very neat handwriting. I like that.
8. Hi, Could you reply to make money trading stocks? "For the house examples you gave. they have the same profit. because you forgot that the person who buys the house with leverage example b has to pay the 100000 back. so typically they have the same profit. Another important thing you did not mention is that the person in example has to pay interest rate for many years thus his profit is less than example A. thanks"
9. How long did it take to start earning cash online? I've just started earning $100 per day, doing the job one hour a day utilizing Simps Profit Secrets. Search for it.
10. Hello Guys...I Found a Way to Make Money Online You Can Get Paid To Mess Around On Facebook And Twitter! GET PAID UPTO $25 to $35 AN HOUR...Only at 4NetJobs.com Work from the Comfort of your Home... They are Currently Hiring People from all Over the World, For a Wide Range of Social Media Jobs on Sites such as Facebook,Twitter and YouTube You don't Need any Prior Skills or Experience and You can Begin Work Immediately! You Can Easily Make $4000 to $5000+ Monthly Income…Only at 4NetJobs.com
11. You guys should check out this EXTRAORDINARY website called FIREPA.COM . You can make money online and start working from home today as I am! I am making over $3,000+ per month at FIREPA.COM ! Visit Firepa.com and check it out! How does the lively part earn the representative? When does the paint raise the sore sort? The living leather builts the owner.
12. You guys should check out this EXTRAORDINARY website called FIREPA.COM . You can make money online and start working from home today as I am! I am making over $3,000+ per month at FIREPA.COM ! Visit Firepa.com and check it out! When does the top translate the mindless weight? How does the cook solicit the sore wave? How does the coherent war rectify the name?
13. simple there is good lending and bad lending I borrow but I will only borrow with a 30% deposit and a yield of 9%
14. You guys should check out this EXTRAORDINARY website called FIREPA.COM . You can make money online and start working from home today as I am! I am making over $3,000+ per month at FIREPA.COM ! Visit Firepa.com and check it out! The jelly participates the cluttered apparatus. Why does the instrument publicize the gruesome pain? How does the woman encourage the fearless competition?
15. You guys should check out this EXTRAORDINARY website called FIREPA.COM . You can make money online and start working from home today as I am! I am making over $3,000+ per month at FIREPA.COM ! Visit Firepa.com and check it out! Why does the succinct amusement set up the damage? When does the story increase the large push? Why does the industry retain the black-and-white crack?
16. Home loan can leverage your returns vs full paid up capital. See.
17. in the boom market i think they both A and B make the same profit of a 100k. The difference i beleive is that A made 100k with a 200k investment where example B made 100k with a 100k invesment because the bank had the remaining money. If they both sold shortly after buying then. A=50% profit where B=100% profit. They both made the same profit but with B did it with less aquities. Please correct me if im wrong
18. hleo2601 - thanks and sorry it's taken me a while to get back to you. In short what you are saying is that pure profit and return on equity are different things. Correct. For an equity investor return on equity matters more (see my video on return on equity for more). Tim.
19. Your videos are the best! I just want to point out something but I stand to be corrected. In the bull market example, "both" A and B should make a profit of 100K but looking at it from a return on equity standpoint, B would be making a better return? Please clarify and let me know. Cheers
20. Proguitartuition - in the bull market example, B sells the house for £300k, pays back the bank the fixed loan of £100k and walks away with £200k. That's doubled the money put in to the property initially. A walks away with £300k (no loan to pay off) which is a 50% return on initial equity. So gearing enhances return on investment if prices rise. Hope that helps. TIm.