How to Use Debt to Build Wealth | Leverage Explained
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- เผยแพร่เมื่อ 13 พ.ค. 2024
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In finance, leverage (or gearing) is about using debt (other people's money) rather than equity (your own money) for the purchase of an asset. It allows businesses to use assets they wouldn't normally be able to afford.
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In this video I'll explain how to tell the difference between good debt and bad debt according to Robert Kiyosaki. Because sometimes it's worth going into debt and other times it can leave you in a financial mess.
00:00 What is Debt
01:00 Good Debt vs. Bad Debt
03:42 How to Use Debt to Grow a Business
07:12 Why Debt Always Carries Risks
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#Finance
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Get access to the full course about "Fundamentals of Financial Analysis" here 👉 www.xelplus.com/course/learn-financial-analysis/
"working with other people's money, improved your ROE" Been struggling to understand Financial Leverage for weeks and this video did it in minutes.. Thanks a million, will definitely look at your other videos.
Excellent! Glad it was helpful.
I am glad that I came across your youtube channel! Your simplicity in explaining frightening facts for others makes my mind at rest and understanding.
As always, great job! You rock!! Thank you so much, for all your tutorials!
This video explained the concept in such an easier way than most other videos on youtube! Thank you!
You're amazing Leila. A really great tutorial on debt with a well explained example.
Love these financial videos! Really helpful information Leila :)
Thank you!
Nutshell, impulsive purchases made on borrowed money will put a big dent in your income / assets, resulting into lesser net worth in the long term. Thanks for this lovely video :) Cheers :)
Your explanation about the debt is amazing. It will be useful for the investors to choose companies which are debt free.
Darn, this makes me highly educated about financial perspective!!! Keep them coming Leilani 🤗🤗🤗
Very good explanation on leverage, its up and downsides. Great for people without financial background, robust explanation.
although I am not from the commerce background but I am sure you are a guiding light for many entrepreneurs out there....God Bless you😇
Thank you so much! Could you please make more finance related videos? I love how you present everything in the simplest way
Thank you! Will do!
Many thanks, appreciated. And best wishes 2021
Leila, I discoved your channel only recently, and I must admit you are really good at what you do! Keep up the good work!
Welcome aboard, Robert!
That was a simple and super helpful explanation.
You are awesome as always, Leila. It helps me to understand business finances better. Thanks and Cheers!
You're so welcome!
Thank you for explaining this in simple and clear terms.
For me as an accountant ....i really preciate and like this video ... Thanks Leila
Thank you. Great Insights.
Simple and clear as always expect from you, thank you Leila
You're very welcome, Tarek 😊
Thanks madam, what a great explanation.
as always you are the best and amazing Leila :)
Nice tutorial with a nice example. I really like your examples. Waiting for another one...
Thanks...!
More to come!
Great move from excel to finance
The best presenter
Very clear. Great to use such a simple model. This is why some businesses go under, but do not see the cliff.
Leila, you have an incredible ability to simplify and explain concepts which works in every subject! Thanks for this video which made me understand Financial Leverage so easily! And you have a nice attire here to add more charm! 😊👍
Thank you!
Hi Leila. Great lesson! Leverage can be friend or foe, depending on skill, timing and luck. Good to keep in mind. Thanks and Thumbs up!!
Thank you, Wayne!
Excellent video! A very easy way to understand this subject. Congratularnos, keep doing this.
Thanks Oscar, will do!
Wonderful, you make it easy and clear... Thanks for your hard work
My pleasure 😊
Please do more of these financial videos..Very helpful
this is a clearly explained and very useful video for business Thank you so much
Thank you❤
great and simple explanation as always. thank you very much.
just a small feedback, there is an extra noise which is distracting. maybe you need to do something with the mic to quiet this noise.
your explanation of financial leverage is very helpful. Thank you.
My pleasure!
Great knlowledge delievered in a soothing tone and beautiful accent!
Always love your explanations. Going to use this one to teach my kids about the finer points of using loans.
Glad you like it!
Excelent work as always, Leila is the best!
Thank you very much, Roberto!
Great Video with fantastic examples!
Very informative thanks Leila!
Thank you, Chris!
Hello Leila,
Excellent video! You make finances sooooo easy to grasp and understand. This motivates people to act, which in turn gives people the tools needed to improve their lives, their families lives and others. What a God send! Please keep up the spiritual work!
Bill
Thank you for the kind feedback, Bill!
Excellent topic!
Glad you think so!
This is a good topic, thank you
Glad you think so!
This is a great asset to me by listening to your teaching... Leila keep it up!
Thank you! 😃
Excellent explanation as always
Thank you!
thank you so much!!!!!
Thanks Leila for explaining it in a simple way :)
You're welcome 😊
Well done.
Excellent explaining with Case Study Images, Bravo Madam Leila, big fan from 🇵🇰 Pakistan.
Thanks for watching!
Great stuff, Chief. Thanks much.
My pleasure!
Hi Leila thank you for the detailed explanation. Really helped me to get my head around the leveraging concept. In your opinion what would be a good Equity/Debt Ratio ? how would you rate a company who has a equity/asset of 1.0 vs 0.75 vs 3.0? your insights are greatly appreciated :)
Awesome as always. I am your fans!👏👏👏
Thank you so much 😀
Absolutely love this channel!
Much appreciated!
Very interesting move from Excel videos to finance coming from someone with a degree in finance and who works in asset management. Looking forward to see where this leads your channel. Cheers!
We do have several others already in the Finance and Accounting playlist in case you're interested.
@@LeilaGharani . Thanks!
awesome video well done!
so helpfull
Please more fin related videos, very thorough explanation, hats off to you
Damn Leila your channel is my new obsession. Thank you! "Gharani University" 😆
Glad to have you aboard! 😁
Very well explained! And to make it more complex, the company has also to pay the repayment of debt other than interest.
Exactly! Debt ratio is important for any business.
Very good info
You are very good speaker and presenter, are you shifting your core expertise from excel to equity.
Thank you! I have several videos on finance and accounting because I strongly believe that everyone should have a basic understanding of these topics.
Really helpful 👍
Glad you think so!
Very good video
Love the video!
Thank you!!
You are an endless source of knowledge and also a beautiful woman.
thanks..
Good Evening Mam ... As usual I always gain if I watch your videos ... Thanks a lot ...
Glad to hear that!
Hi Leila, your videos are really valuable assets for us..
Glad you think so, Kishor!
I think world travel was one of my most inspirational moments in my life and pushed me further along to my path to success. I'd say the vast majority of the time you shouldn't go into debt for time off, yet i grew leaps and bounds by doing it. I've told young people if they want to take on debt that it can be worth it for the experience that you will cherish and look back on your whole life. And it's something to work towards once you experience it.
brains and beauty
Really good video. Very didactic. I wish the average citizen was really aware or more conscious about this (not to talk about politicians). Running a business wisely takes things like what show in the video. Poor financial education standards (at least in many countries) lead people to take really bad business and personal decisions which they regret for a lifetime. I’ve seen this more often than I would have liked to. To me the solution is clear: to teach financial fundamentals at school. Education + wisdom + perseverance = success. Many thanks 🙏
I absolutely agree José! Some essentials in finance and accounting should be part of any education.
Please do a video on CSR and Corporate governance report of companies
Great video 🙂 love to learn about finances and business from women, it's such a breath of fresh air and finally there are more role models to identify with for women like e.g. me. Feels less imposter then. Thank you Leila 👍🏼
Thank you 😁
Leila, what online business would you recommend as a viable source of income? Shopify, Amazon? Both incur so many fees that some people say they are working for $2.00 (USD)/hour, which may not be terrible if it's a self-automated business. Wondering if you have a video on it? We would trust your advice.
I am in love with you Leila... Your elegance and eloquence is magical. 💥💥🌟 😀I have never understood any topic cos I get carried away all the time while staring at you.
😊
This is why more folks now put smaller down payments on home, and invest the rest in stocks, making ~7% annually there vs. the 3% interest cost on home loan.
Great tip!! I’ve been saving for a 20% down payment but I haven’t considered if I were to the invest the money instead
Kindly explain IFRS 9 too 😊
extraordinary. each tutorial is very useful and can make my job easier. the point is the knowledge given to this channel is extraordinary. thanks for the tutorial. when do you think I can be like this, please support my friends. you are very extraordinary.
both of them are extraordinary, channel Mr. isnaini panglima and channel Mrs. Leila Gharani.
Is the best
Great
Ma'am mujhe Microsoft office 2019 ka setup chahiye.
What about paying the principal? The lemonade stand example talks about paying interest only.
Absolutely! The example is about profitability but we talk about the balance sheet and paying the principal at 07:35.
@@LeilaGharani Thanks Leila, I will watch it again. Thanks for all the excellent content you put out!
Please do economics!
Thanks for the video, if we are discussing debt and equity, instead of only ROE, we should also take into account the debt to equity ratio. This way, no one loses any money as an investment, and beware of the high leverage. Thoughts?
Absolutely! Debt ratio is a very important factor. Thanks for your feedback!
I like your style today
Thank you!
Hi guys, maybe its a stupid question but how do you get to a Net Income of - 18 ?
When will the accounting video series resume?
We are planning a few videos for this year. Did you have anything particular in mind?
@@LeilaGharani I think there were videos about inventory methods : LIFO, FIFO planned among others
is leverage or debt both are same terms?
Yes
Sooo leverage the business responsibly during good times, tighten up the belt during bad times.
But what about credit score? If I start using credit cards and I pay bills on time. It's gonna build my credit score and will help me in future getting loans for businesses.
P. S - I'm in my 20s now
Bad Debt is debt that You pay back
Good Debt is debt someone else pays back for you 💯
👍
Make video on international taxation.
This is request. You are explaining difficult things in such a simple way.
I can think of a number of fortune 500 CEOs who must have been completely oblivious to the concepts explained in this video.
I'm in love.
Holy smokaroos! Am I seeing Leila hit a finance topic. Indeed! I have made some comments on vids and use a lot of the things you talk on all the MS products. I do Mainframe coding but utilize a lot of tools. I have been investing in etfs, mutual funds, and stocks like crazy the past several months. Leila, you need to double your $ in 3 years. I know you can. ; ) Ive been investing good. I could do better.
Thanks Mike! I'll do my best :)
you are amazing medam
isn't the right term is - Return On Investment (ROI), rather than Return On Equity?
It's pretty much the same thing. For a single investment like Capex or a project it's usually ROI. But if you're putting equity in a company it's usually ROE.
When Operating profit for one stand = $2, shouldn't the Net income be $2 - ($5*5) = -$23 and not $18, hence ROE becomes -23%
Beauty 🌹and the 🧠 brains
Higher Loan ....100% Business cannot stand in LONG RUN
To each their own, but I sleep like a baby at night not worrying about debt or making payments. It's all great in a good economy, but good economies don't last forever. Look at everyone struggling with student loans. I believe much of what Dave Ramsey says.
For most personal items I agree. I only buy when I can afford it. But if you're buying a home or run a business that requires assets, taking on loans is often the only way.