Leveraging 2.0: Win-Win Wealth Acceleration

After the 2008 financial crisis, the controversial topic of borrowing to invest entered at new Leveraging 2.0 era that is safer for everyone. Armed with the reality that leverage magnifies both good and bad returns, and clearer suitability guidelines, investors, advisors, and lenders are more cautious and responsible.

Opportunity

Even cautious clients, advisors, dealers, lenders and money managers can benefit from learning that there are many leveraging strategies, with varying amounts of risk and complexity.

Leveraging Strategies Click for larger chart

Thus any single attitude towards leverage cannot apply to each of the strategies. One concept is a "can't lose" strategy, and applies to over half of high-net-worth clients in most cities.

Investors cannot benefit from ideas they are not aware of. Helping clients understand the simpler, safer Leveraging 2.0 strategies (click for chart) and only implementing repsonsible leveraging is a win-win for everyone involved.

  • One strategy takes advantage of market volatility (which will never disappear), and makes advisors look good during down markets.
  • The Dividend Landlord strategy takes advantage of historically low interest rates relative to dividends, with blue-chip dividends paying most or all of the "rent". (click for chart)

Like using a vehicle, leveraging can get you from A to B faster, if you use the tool responsibly. Responsible leveraging means using responsible strategies, responsible amounts, and responsible timing.

For most investors, the common view that "leveraging is too risky" is valid for the riskier, more complex strategies. It is also true that everyone can benefit from understanding how the simpler, safer Leveraging 2.0 strategies could help their wealth accumulation plans.

Learn more about how Leveraging 2.0 strategies can produce win-win benefits for everyone involved by calling 519-663-2252 or emailing info@TalbotStevens.com.