Leverage | Wisdom, Wealth, and Wellness

Jonathan Satovsky
CFP®, ChFC®, CIMA®, CPWA®, CDFA®, DACFP

Good morning, good afternoon, good evening. Depending on the part of the world you’re in. This is Jonathan Satovsky of Satovsky Asset Management. And on today’s episode of “Seeking Wisdom, Wealth, and Wellness,” I want to talk about leverage.

As Charlie Munger and Warren Buffett say, the three most dangerous things are liquor, ladies, and leverage. Well, leverage could be great and it could be dangerous. As they say, “you concentrate to get rich and you diversify to stay rich.” But if you use leverage, simple math, if you take 100% of your portfolio and you believe the markets will average 10% a year, and you want to leverage that, you borrow money to buy more of the market than 100 cents on your dollar. And that leverage can amplify your returns as long as your borrowing cost is less than the return that you’re earning. Of course, if markets go backward and they go down, leverage works in the opposite way, where it could really bankrupt you much faster.

So leverage can help accelerate your wealth and it can help deteriorate your wealth during challenging times. So be careful and use leverage judiciously on your path to Wisdom, Wealth, and Wellness.

Have a great day.

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Video Recorded December 27, 2022
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Disclosures

This blog post is not intended to be, nor should it be construed or used as, an offer to sell, or a solicitation or offer to buy any securities or interests in any strategy offered by Satovsky Asset Management, LLC (“SAM”). SAM is a registered investment advisor with the Securities and Exchange Commission – for more information see www.adviserinfo.sec.gov. Please remember that different types of investments involve varying degrees of risk, and that past performance is not indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy (including the strategies recommended or undertaken by SAM) will be profitable. Market index information shown herein is included to show relative market performance for the periods indicated and not as standards of comparison. The market volatility, liquidity and other characteristics of SAM’s portfolio composition are materially different from the securities listed on public market indices. Market index information was compiled from sources that SAM believes to be reliable. No representation of guarantee is made hereby with respect of the accuracy or completeness or such data. Opinions are as of date of video and are subject to change. A copy of SAM’s current written disclosure statement discussing our advisory services and fees continues to remain available for your review upon request. SAM undertakes no duty to update information presented herein.

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