Financial Leverage and Debt (The Backwards Way the Rich Get Richer)

The wealthy use financial leverage and debt to advance their wealth. Most of us understand debt as the a method for retail establishments to separate us from out money. But the wealthy use debt to leverage themselves into greater amounts of wealth and to avoid taxes. AJ breaks down the math on why it makes more financial sense to borrow money than to withdraw from investments.

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00:00 Introduction
01:28 Definition of "leverage"
03:10 Why do the wealthy take out debt?
05:27 Avoid taxes with leverage
06:05 Basic example of compounding interest
07:44 What happens when we try to reinvest?
09:40 What happens when we try to reinvest...but with leverage?
13:50 Conclusion