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Resources Highlighted In The Episode
In this week’s episode, we discuss the power of leverage and the impact it has on investing in cash, shares and property.
The podcast is broken down into the following sections:
- Quote of the Week
- Introduction to Leverage
- Power Of Leverage – cash
- Power Of Leverage – shares
- Power Of Leverage – property
- Inspirational Article of the Week
In this episode, we refer to a couple of resources, which are linked below:
Figures Used In The Podcast
In today’s episode, we discuss many examples.
All calculations can be found in the attached spreadsheet and I’ve reiterated the examples below.
- House prices increase by 7% a year (which is 4% above inflation)
- We rent the property for 10 months a year for 20 years, starting at £600pm, increasing in line with inflation at 3% per year.
- Costs (repairs, service charge, ground rents, etc) are 25% of the annual rent and increase in line with inflation
- Tax is paid on all rental profits at 20% and capital growth at 18% – this will be much less in reality but we shall keep it consistent for our example
- Interest only mortgages
- 5% interest rate on mortgages
Finally, if you have any questions or opinions on this episode, please leave a comment below. I respond to all comments and it would be great to hear from you!