Growing Money

Ownership enables wealth creation. When a person owns quality assets, their net worth not only appreciates with the assets but it also gives the owner leverage to deploy elsewhere in the market for even greater exposure. 

The savviest money managers use this pattern to maximize returns while minimizing portfolio drawdown risk.

Scenario 1:

Hope earns $100, spends $100 on silver (or the S&P 500), then secures a silver deposit loan (or margin loan). With the loan, she gains access to $70 for 1 year, costing $5-$10. During this time, her investment increases in value to $110. Meanwhile, Hope earns 10% on the $70 she borrowed. In total, Hope earns a 12% return on her initial investment. This 12% increase in net worth isn't taxable because the investment object was not sold for capital gain.

Explanation: 

This use of money mimics the wealth creating patterns of the mega-rich. The wealthy leverage (use loans) their high-value assets such as stock portfolios, real estate, business ownership. Individuals with less wealth can deploy the same tactics with less expensive assets such as stocks, bonds, precious metals, business ownership, and peer-to-peer lending.