How will you use the power of leverage ? LEVERAGE 1.0 : I have $1 and I know how to earn $2 from it. But earning $2 is not interesting to me. So I found a way to borrow $30 to do it. My debt ratio is 30:1 Supposedly after it is done, I earn $60, pay back the $30 and $5 interests/fees. I could have earned $25 instead of $2. This is the power of leverage, amplify my earnings. But when things go south, I haven't earned the $60 yet but I have already owed someone $35. I just needed more time and I CAN get more time by just paying more interest /fee. This time its another $8. So I will need to pay back $43 but if I could earn the $60, I still have a profit of $17. Not as good as $25 but still better than $2. Just in case my $60 still hasn't come in yet, I could extend my time again by paying another $10 interest /fee. By then my potential profit is $7, much worse than $25 or $17, but still better than $2. However eventually the interests add up so much that I don't ge