Charlie Munger, Vice Chairman of Berkshire Hathaway, used to say “there are only three ways a smart person can go broke: liquor, ladies, and leverage.” While a dictionary might suggest that leverage simply is another name for debt, leverage often is associated with very high multiples of debt (200%+) used by “sophisticated” investors. Leverage continuously […]
Good and Bad Debt
Many people fear debt and want to be completely debt free. Owing money to anyone else forces you to pay them money before you can pay yourself and out of control debt can wreck your financial future. However, debt is really just a tool. Do we want to be free of cars, scissors, or butcher […]