Financial Independence By The Way Of Three Little Pigs

Look at the first picture closely. LOL!


The Little Pigs are excited at the idea of financial independence and each little pig proceeds with its own way to reach FI - high leverage, low leverage and zero leverage. LOL!

Business Leverages And Personal Leverages. (2) (Refresh)

Read? Business Leverages And Personal Leverages. (2)


How many retail out there understand the difference?

Trump describes these bankruptcies as if no one was hurt in the process, except high rollers and sharks.

Business Leverages And Personal Leverages. (2)

Read? Business Leverages And Personal Leverages.

It is world between personal bankruptcy and private limited/limited company bankruptcy!

Don't anyhow hor!

Personal bankruptcy may drag in the whole family together to suffer!


What do we know about Donald Trump's four bankruptcies?

Trump describes these bankruptcies as if no one was hurt in the process, except high rollers and sharks. He says that he has started hundreds of companies, but only used bankruptcy proceedings four times


He and his family were never hurt by any of these four bankruptcies!

Leverage With Margin Account??? (2)

Read? Leverage With Margin Account???

Long long ago; in the famous CBox; Uncle88888 came to know one guy going around forums and cboxes boasting about his leverage return on his bond trading like you didn't leverage on low interest rate you are dumb!

Not sure now what happened to his bond trading and his leveraged gains?

Our OWN Money and Other People Money?

How do some people think about Return On Capital? Actually it is Return on Own Capital


All cases have $50K as Capital


Investor A invested all $50K @ 5% yield and received $2.5K investment income. ROC or Return on OWN Money is 5%

Investor B invested $40K @ 5% yield, $10K as war chest and received $2K investment income. ROC or Return on OWN Money is 5%

Investor C invested $30K @ 5% yield and put $10K own money and leverage up to 200% with another borrowed $10K in margin trading account and reserve $10K for margin call. 

Total investment @ 5% yield and e.g. margin interest charge @ 1% will receive $2K + $0.4K = $2.4K and Return on OWN Money is 6% 

Somehow Investor C will feel that he is getting superior Return on OWN Money by thinking Mathematically in this form $0.9K/$10K = 9%! Wow!

Hmm ... 

Business Leverages And Personal Leverages.

Are business leverages very dangerous and disastrous to the business owners and management? 


I don't think so. The fallout from failed business leverages will cause companies to go bankrupt and are limited to the shareholders' fund.  The impact to the  company is  Management and Staff  are to find new job elsewhere.


But, fallout from failed Personal Leverages may go beyond your personal bankruptcy and may cause severe financial and psychological damages beyond yourself and can be extended to your family and your next-of-kins. 

So beware! Leverage is a double-edged sword! And don't always think that you are so smart in using OPM (Other People Money). 


You can ask around. How many people will believe that they could be striked by Lightning? 

Yet, when you read the newspapers, cases of people struck by lightning is not that uncommon hor.