Investing: Know your leverage

Filed under Investing

Leverage:

1. (a) The action of a lever (b) The mechanical advantage of a lever

2. Positional advantage; power to act effectively

3. The use of credit or borrowed funds to improve one’s speculative capacity and increase the rate of return from an investment, as in buying securities on margin.

Leverage in Business, Finance & Investment

Basically we can have a great leverage by using Other’s People Time & Other’s People Money.

For example, the owner of the unit trust company or an insurance company will create a system where they can have thousands of sales individuals to sell their financial products. At the same time, they got the investor’s money to accumulate their own wealth.

Yes, the greatest salesperson in the company could achieve millions on commission annually but the real wealth is with the owner of that company who knows the power of leverage.

A smart business man and investor always looking for a leverage in their ventures.

Islam & Leverage

I personally think that the concept of leverage in Islam has been laid down in Quran & Sunnah by these nass.

a. The Lailatul Qadr is better than a thousand months. (al-Qadr : 3)

b.
(Bukhari & Muslim)

Read further: The concept of Leverage by Dr Azwan


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Learn to Invest by Yourself
Buffett on $5B Goldman Investment
7 Basics of Investing

5 Comments

  1. haruman
    Posted August 15, 2007 at 12:51 am | Permalink

    pakdi.. nak tny avafx kt sebelah post ni..dienye software psal investg ke?-

  2. Posted August 15, 2007 at 1:32 pm | Permalink

    Leverage is important, taip ramai yang tak tahu dan nak buat semua sendiri. Boleh buat sendiri but there’s only one you. You cant do all at the same time :)

  3. Posted August 15, 2007 at 1:32 pm | Permalink

    avafx ad is not mine. automatically generated by a script. am sorry. can’t answer the question.

  4. Posted August 15, 2007 at 1:38 pm | Permalink

    yup. leverage ni kena betul2 digunakan sebaik mungkin utk dijadikan manfaat yang byk di pihak kita :)

  5. Posted July 23, 2008 at 11:35 pm | Permalink

    Leverage is great, I use it all the time to increase my ROI through many of my ventures

2 Trackbacks

  1. [...] people money is a leverage tool. Credit card. Personal loans. Overdraft. Share margin facilities. Business on credit. Thus, please [...]

  2. By Hukum Leverage Haram? | [My] Esprit De Corps on January 9, 2008 at 9:02 pm

    [...] Investing: Know your leverage 2. Concept of [...]

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