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using other people’s money to multiply your money
the simplest example of using other people’s money to multiply yours is … your purchase of a home with a mortgage / home loan
you put down 10% or 20 % of the cost of the home and the rest is borrowed from the bank
over the period of the next 15 , 20 or 30 years ( depending on your borrowing terms ) , your home generally appreciates and multiplies your money
Other examples are
early stage investors investing in a startup .. waiting for 7 to 10 years to make an exit when that startup sells out to bigger investors or goes public with an IPO ( Initial Public Offering )
Companies go to borrow money – either from banks or the stock market ( for an IPO )
After some years , the revenue grows a lot along with the profits and you pay off the bank’s debt – and are now with zero debt , a very good situation to be in.
A public company could go private as well – it purchases all the outstanding stock listed in the stock market .. recent examples hexaware in india , dell in the us