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