Give You A Lever And You Can Pry Your Profits.

By using this tool of financial leverage, you can magnify the profits of your investment so that you can get extra benefits on the basis of original income.

The income formula is enlarged through financial leverage: the final yield is the base yield + (basic yield loan interest rate) * leverage ratio.

In this formula, the final income you will get will be determined by your basic yield, the interest rate of borrowed leveraged funds and the leverage ratio.

The higher your basic earning rate, the lower interest rate you borrow on leveraged funds. The higher your leverage, the higher your final yield will be.

The leverage ratio in the formula = borrowing capital / principal, that is, the more money you borrow, the less capital you have, the higher leverage you have.

Take a simple example, Xiaoming (wherever you are) invested in XX loans of 10 million yuan, with an annual interest rate of 10%.

This rate of return should be compared to slag in everyone's eyes.

Many people feel that it is better to save banks than to be in fear.

However, most of the rankings are relatively advanced, and the platform that is widely recognized in the industry is now almost the same rate of return, and there is a further downward trend.

So when Xiaoming wants to get a higher yield, he can't afford to invest in a higher risk platform. What does he want to do? Smart Xiaoming went to XX bank to borrow 100 thousand of the annual interest rate at 5%, and then invested in XX loan.

After Xiaoming's operation, what is his current income? In this case, Xiao Ming's basic yield is 10%, while the borrowing rate is 5%, leverage ratio = borrowed capital / principal =10/10=1.

Then the final yield is =10%+ (10%-5%) * 1=15%.

It can be found that Xiaoming's yield has increased from 10% to 15%, and the rate of return on investment has increased by 50%.

Next, let's go back to reality.

We can see from the example just now that theoretically, financial leverage can effectively enlarge investors.

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At this time, we must be eager to try. Then, where is the new problem? Where can we get financial leverage?

Method 1: net value standard

The net value, also known as asset or security mark, is a way of financing for investors to borrow their own accounts receivable on the platform and issue loans on the platform.

Many platforms will allow investors to invest in net worth in order to improve their popularity or satisfy different investors' requirements for investment period. This is the easiest way for them to get money.

One way.

However, at the same time, the general interest rate of such leveraged funds is relatively high, most of which will be around 10% or even higher. Moreover, the net value of loans is affected by platform popularity and policies, and the stability is relatively poor.

More famous platforms with net worth are Lu Jin, pat, loan, easy loan network, group credit network, Hongling venture capital and so on.

Method two: bank consumer loan

With the gradual increase of the risk of economic downfall, the default rate of corporate borrowing is getting higher and higher. Banks have less and less outstanding assets that can be acquired from public business, and the losses they may suffer are bigger and bigger.

Many banks turn to another way to start developing personal credit business, so that everyone can have access to leverage funds through bank consumer loans.

The characteristics of this kind of leverage fund are: the interest rate level is relatively low, and the general lending rate is between 6-9%. It is not ruled out that individual excellent borrowers can get loans less than 6%; the term is relatively long, the general borrowing period is one year, but there are 3-5 years; the loan policy is more stable, and the validity period of a general credit can reach 2-3 years, or even longer.

And this kind of loan products are generally divided into two types: invitation system and application system.

The so-called invitation system is a number of banks for the quality of our customers, such as in the bank has to pay wages or large loans, financial management customers, the bank will lend you the amount of money, and invite you to use the loan products.

This kind of loan does not require you to submit additional information to the bank. The application is convenient and quick, but it must be the invitation of the bank to use it. Not everyone can enjoy it. Among these products, there are comparatively excellent fast loan (annual interest rate 5.6%) and E loan (annual interest rate 5.22%) of the bank.

The so-called application system is that the borrower voluntarily submit information to the bank to apply for the loan amount, and the application process is rather cumbersome.

In general, large state-owned enterprises, civil servants, career establishment staff and financial industry practitioners will have more advantages in applying for loans.

Among these products, 5.6%-6.6%, 6%-7% and 6%-7% are 5% of the best products in Ningbo.

Credit card is the most common credit consumer product in our life. We can get short-term leverage through cash in cash.

However, compared to the first two methods, the cash flow of credit cards is short (the longest interest rate is only 50 days), the cash flow process is more complex, the risk of cash policy is higher, it may be sealed up by the bank or reduce the credit card amount, and the credit card generally can not get the amount of money. Therefore, we do not recommend that we should get the main leverage fund as a means of obtaining money.

Of course, everything has two sides.

Although financial leverage can help you get extra benefits, there are also some risks.

First of all, leverage investment will face the risk of being magnified by the investment platform.

As shown in the formula, your extra income = (basic yield - loan interest rate) * leverage ratio. If your basic yield can not exceed the borrowing rate, you get a negative spread.

If the investment platform runs or is unable to be accepted due to overdue payment, your base rate of return is bound to drop to a very low level.

In this case, the higher leverage you have, the worse you will lose. Leverage will not only help you to make a profit, but it may even make you lose your blood.

In the face of such risks, the best solution is to reduce the risk of investment platform and try to choose a reliable platform.

At the same time, we must diversify our investment and not put eggs in one basket, so that we can guarantee that we can maintain a capital base, at least not lose a lot of money, so that we can better avoid such risks.

Secondly, leveraged investment will also face liquidity risk.

This kind of risk mainly occurs when some friends lack their ability to plan their funds, and when they want to repay, the investment is not yet expired. Eventually, there will be an embarrassing situation of paying money but not paying cash.

To avoid such risks, first of all, we must improve our ability to plan funds, such as keeping accounts well, calculating our own funds, and ensuring that sufficient investments will expire before the repayment date, so that we can repay our debts.

Secondly, at the beginning of leveraged investment, we must guard against arrogance and impetuosity, and not be blinded by temporary greed, and borrow too high leverage at once.

Beginners can start from a lower lever level and wait until they are familiar with the rhythm of leveraged investment, then gradually increase their leverage ratio to get higher returns.

Even if you are a proficient, you must keep your leverage ratio at around 1. Do not use too high leverage, and ensure that you can spend more than 1.2 times of your due date on the maturity date.

Finally, leveraged investment may face policy risks.

Regardless of the consumption and loan of the bank, or the net value of the platform, the rules will change over time.

The consumer loans and net worth that can be borrowed now may not be borrowed for any time because of policy changes, or the interest rate on loans will become very high, exceeding your basic rate of return, which will cause you to borrow leveraged investments and lose money.

The best way to deal with such risks is to keep an eye on the latest policies, to ensure that their leverage level is high, and that their leverage ratio is too high to avoid maintaining their leverage through borrowing new and old ways.

Once the borrowing policy changes dramatically, even if we can not continue to borrow money, it will not cause its own losses. At the very least, it can not continue to invest in financial leverage.

I hope you can make good use of financial leverage, so that it can help you get higher returns.