Profit Center #3: Leverage

In a nutshell, leverage is being able to use a small amount of money to purchase a large asset. An asset such as real estate, for example, may be purchased by investing only 25% of your own money (equity) and borrowing 75% from the bank (mortgage) . In essence, your money works harder because every dollar that is invested equals four dollars in assets. The equity in the property increases as the property appreciates in value, but the amount borrowed does not increase. Best of all, you can borrow up to 75% of the equity to buy more properties.