Leverage - Gearing

Please click to see how leverage can work for you

Technically, these are slightly different terms but being highly geared or highly leveraged means that you owe a lot of money in relationship to your assets. If you want to see how this works in visual terms click on the link above.

I know all about leverage - in 1979 I borrowed (along with two equal partners) some £270,000 at 24% interest from Twentieth Century Finance on the back of £9,000 of equity. As it happened, this had a happy ending and two years later I left the partnership with £40,000 in cash and a Rover SD1. But in general, gearing can be harmful to your health if something goes wrong.

DON'T TRY THIS AT HOME

Bob Cory

---

Modified on 06/10/2019 at 10:43:34 by ℗ Bob Cory