Why do you need leverage? Lesson from Warren Buffett

Berkshire Hathaway has a debt-to-equity ratio of 0.87

For every $1 million of shareholder contribution in the business, Berkshire takes on $870K of debt.

While there are many recordings that Warren Buffett suggests people to not use leverage nor margin, his most successful business has debt. $499 Billion of debt.

In Investing Accelerator, I teach that the optimal debt-to-equity ratio is below 1:1. Sometimes 2:1 is okay.

This is the same as buying a house with a mortgage.

You can easily get a mortgage to finance 50% of your house and sometimes up to even 90%.

Can you imagine buying a property without a mortgage?

So in other words - debt is good.

Debt has risks, of course. But learn to use debt.

In Investing Accelerator, we use debt by mastering how to use options to multiply our return.

We use options to generate monthly passive income as well.

We find discounted blue chip stocks to buy and hold and for monthly passive income.

Because learning how to use debt effectively is the key to making money.

Like Robert Kiyosaki says - Debt is money.

Cheers,

Eric

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Eric Seto

Chartered Professional Accountant (CPA)

Chartered Investment Manager (CIM)

Founder of 5MinInvesting.com

In July, my goal is to help 20 people without a financial background to master investing through Investing Accelerator. Comment "RETIRE" below and I will DM you.

Step 1 - Attend the free webinar - how to get 30%: https://5mininvesting.com/free-case-study/

Step 2 - Schedule a call here to see if you are a good fit: https://bit.ly/48mJlgR

Remember to go to the Classroom tab for additional investing resources.

Invest as an Angel investor (Target 12% per year, up to 24%. Raised $1.2M so far. Closing in Dec 2024. Accredited investor only): https://5mininvesting.com/fund-raising-round/

If you are an accredited investor, comment "ANGEL" and I will DM you.

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