Wednesday, August 13, 2014

Main secrets to making a lot of money - "Leverage"!

My blog is about make / making money secrets, so time to cover this main topic:

To people who are interest in the secrets to making a lot of money, especially if you have only small limited capital to start with, I can sum up for you, very simple, and it is just 1 word: "Leverage"!

Trading futures by itself is based on "leverage" (if you understand the principle of the "futures" financial instrument).

In fact, many Singaporeans have knowingly or unknowingly been using "leverage" in their favourite investment: property!

Property investment is an investment that is fundamentally based on "leverage", because there is basically no other asset / financial instrument where you can get 80% loan from banks on the cheap!  (Property mortgage loan is the cheapest form of bank loan available anywhere in the world compared to renovation loan, personal loan, business loan, etc!).

Trading futures is also by itself based on "leverage", because for each US$1 position you opened (be it "long" or "short"), you are controlling about $20 position!
That is to say, when you open a $50,000 position, you are exposed to $1,000,000 ($1 MILLION) opened position and hence market risk!

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