How to go about ‘Leveraged Investing’
By Joseph Samson
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Today, due to global financial crisis, lenders have become more wary. It has led to introduction of stricter rules in the system and a more responsible outlook of things.

Before using leverage for investing, you should decide whether you need to borrow or not. However, it is equally important to understand that there could be good reasons to borrow for your child's education, for buying a new house or a car. If you borrow for such purposes, you should make larger down payments in order to reduce your debt. You should not borrow unless there is a desperate need of it.

Consider the total cost of borrowing

After the collapse of Lehman Brothers and Bear Sterns, more and more banks and financial institutions began to fail, dragging the global economy in the worst ever crisis. Therefore you should keep a close watch on your cost of borrowing.

Not repaying debts can really make things complicated. Your builder might come across similar problems with his investments and borrowings, thus compelling you for early instalments. This can also take place at your office leading to layoffs by your employer to pay off his debt. Therefore before borrowing, each one of us should reckon the cost of borrowing and then decide accordingly.

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(Comments Posted : 1) Post Your Comments
1. That's understandable that cash makes people independent. But what to do if somebody does not have cash? The one way is to get the credit loans and short term loan.
BEATRICE31Strickland (Posted: May 17, 2012)
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