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Show Summary:

In this show, Scott Dillingham, discusses the concept of calculated leverage and its importance compared to regular leverage. He emphasizes the significance of having a positive mindset in all aspects of life, including investing. Scott explains that having a growth mindset helps individuals overcome fear and take risks, leading to personal and financial growth.

He distinguishes between good debt and bad debt, using examples such as buying a car as bad debt and leveraging income-generating assets to pay for expenses as good debt. Scott emphasizes analyzing investment opportunities and expenses before making financial decisions. He also mentions the book "Think and Grow Rich," which suggests that visualizing and believing in desired outcomes can attract success.

Scott then discusses a personal example of using calculated leverage in investing. He borrowed money from a rental property at a low-interest rate and used it to purchase an investment with a proven track record of high returns. He highlights the importance of considering past returns and taking a long-term perspective, despite temporary market fluctuations.

Overall, Scott encourages listeners to adopt a positive mindset, understand the difference between good and bad debt, and use calculated leverage to make informed investment decisions that can lead to financial success.

Thanks for tuning in today. Today I'm gonna talk about calculated leverage and what that means compared to regular leverage. I'm gonna talk about your mindset and help and how it can help you to grow personally and financially. We're gonna go over what good debt is versus bad debt. There's multiple ways of leverage, so we dive into what those are, and we put it all together to show you how you can make more money.

So first thing I want to speak about is mindset. So there are many investors out there, or just regular people who are scared to invest. They have a mindset which sets them up for failure. They think if I buy this GIC or this mutual fund, my money could go down. I don't really want to invest because I don't wanna take a loss.

When really it's, it comes down to knowledge. So in life, in everything you do, You must have a growth mindset or a positive mindset. And it works for everything. Imagine you're meeting your spouse for the very first time and you wanna ask this person out on a date. If you're fearful that you're gonna be rejected, you're not.

You're not gonna make that introduction conversation. You're gonna just walk away and you didn't make that connection. But if you have a positive mindset or a growth mindset saying I want to grow. I want a relationship. I want to talk to this person. You're gonna get out there, you're gonna talk to them, and you're gonna create success.

Now, not everything is gonna work perfectly, but it's all about the mindset, right? You can't win every single time, but you need to get out there with everything in life, whether it's your job, relationships, financially, with anything you wanna learn, and you have to take a positive and say, what did I learn from this?

How can this help me with my day-to-day life and improve on it from there? So with investing, it's incredibly important to have a positive mindset. Because there's ups and downs with investing, right? It's like a rollercoaster. Sometimes a stock or an investment is going up and sometimes it goes down. So there's tricks that you can learn to see the overall big picture.

So you're not really concerned if it goes up or down in a day, right? You look at it. From a month by a year, by the past five years, right? There's things that you can do to eliminate that fear of the rollercoaster, and by eliminating that fear, that is how most people became wealthy. It's all about your mindset.

So everyone who's really happy, really healthy, really financially strong, have the mindset of growing in success and positivity. So regardless of what you're doing or the purpose of listening to this today, you've always gotta have that strong mindset. Now, as far as calculated leverage, so a lot of people are scared to leverage when it comes to their finances, but the leverage with everything else I'll give you an example.

Say your wife or your husband says, you know what, I'm gonna mow the lawn. But if I mow the lawn could you massage my back after? That's leverage. That's a form of leverage, right? You're doing something and you're getting something in return. It doesn't matter what it is, right? You could cook and clean because you wanna night to go out with your friends, right?

That's leverage. So you're doing something to create a result, and when you leverage, you can create leverage in any types of money scenarios. Relationships with friends and family member, you can leverage your time for different activities. And you can also leverage your mind. So when I was speaking to you about mindset and having a growth mindset, that's leveraging your mind to grow and to get to where you want to, where you want to go.

One of the books that I read was Think and Grow Rich. And I loved it. It was one of the first books ever read. And in it, it speaks about how when you want something so badly, you imagine that you already have it. So when you have time to yourself and you're thinking about life, imagine where you want to go.

What you want to do and imagine it already has happened. So when you create that illusion in your mind that you have what you already desire, it naturally will come to you. And it's a really weird thing when I read it. I didn't know if I believed it or not, but I read other books and they talked about it as well, right?

The universe gives you. What you ask for, and the best way of asking for it is to believe you already have it. And it just comes and it's a really weird concept. I don't know how it works. I can't explain it to you, but the fact is, it's true. So that comes anything you can think of, whether it's a financial goal, personal goal, anything that you want.

If you sit down, think about it, believe you have it. It will come there. So this is all leverage. Now, mainly I'm gonna be speaking about leverage for investing. So when you leverage to invest, I don't think people should borrow from their line of credit and buy any investment or take out a mortgage and just get anything.

That's why I refer to it as calculated leverage. You want to analyze the investment opportunities. And you want to analyze your expenses and you calculate what that looks like before you make a decision. Now, before we get into some examples of that, I wanna speak about good debt and bad debt. So we grew up in a world, at least I did in my friends and people I know did.

So I'm assuming you did as well, but were your parents. Said debt is bad. You've gotta pay off all that debt in school. They don't teach you too much in school, but in school they do talk about debt and how it's good to pay it off and you should pay your highest interest bills first and all of that is good, but there's good debt and bad debt.

For an example, bad debt would be you went out to and you bought a car, and that car cost you $500 a month. That would be bad debt. Now, if you used leverage and calculated leverage a different scenario would be was you want this car, the payments are $500 a month. So instead of saying, how can I qualify for debt to buy this car?

Right, which leaves you with a monthly liability. Instead, you can say, what asset can I purchase that will give me income that I can pay off this car? So for an example, let's say you bought a rental property. The rental property, if you bought it correctly, should have a positive cashflow. And for our silly example here, let's just say that cashflow is $500 a month.

The example of good debt would be you would buy a rental property to create a $500 a month income, and you would use that income to then buy your car. So now it's a wash. You're not gaining a, an income from the rental property because your profits you're using for the car. But that's still smart debt because it's working for you.

You're not. Having to pay out of your pocket to get this, and it doesn't have to be real estate. It could be dividend paying stocks that you purchase. There's so many different options and investment strategies out there, and we dive into them more like inside the club, like we have. Specialty investors that are within our investing club and they've got many courses and they'll talk about things and they even talk about specific investments and that's all in our club.

Now I'll touch more on good debt, and then we'll talk about a few other strategies here as soon as we come back after this quick break. All right, welcome back. So in the first part, I ended off with good debt versus bad debt. So I want to touch on a few more examples of that and then I'll give you more examples of how you can use leverage to really grow.

I've got some really cool numbers here to share with you. So I used an example of using good debt to pay for a vehicle. Now, you don't always have to use good debt to pay for an expense, but if you want to purchase something and have an expense, you should always try to look for ways that you can make money that would pay for what you're looking to buy.

That way, you're always in a positive scenario. You're not in a negative. Canada's like major corporations and companies are all speaking about it. You can see it in the news. There's people around the world that are worried about Canada's debt level and most of it is bad debt. It's not good debt, so you want to be extremely careful.

I'm not trying to suggest everybody goes into debt, but what I am trying to say is that if you do it smart, you can make. Good money and I'll touch on that in a minute. But there are many different ways to, to use debt. So I'm gonna give you an example of an investment that I have personally done.

I'm not a stock picker. I'm not certified to give any advice about stocks or anything like that. But I purchased one I'll share in the club. I'll share which one it is. So then you can actually see and you can track the performance and see that and confirm everything that I'm telling you. Now, we do have certified people to speak about those certain invest within the club, so you can go there and get some advice.

But here I'm just gonna touch on an investment that I made. So I borrowed 200,000 from one of my rental properties and I purchased an investment. Now interest on mortgages. Currently it's two, two and a half percent depending on the lender, the loan to value your credit score all of those good things.

So let's just call it two and a half percent for calculation's sake. So I borrowed 200,000 at two and a half percent. Okay? And I used that money to purchase an investment. So here's another cool thing and I recommend speaking to your accountant. I spoke to mine and they said that this was good.

So with CRA, they will give you a tax deduction on your interest when you borrow from your home or other borrowing avenues like loans, lines of credit, that type of thing. They will give you a tax deduction for the interest paid as long as you use that money for other investments. So it's a really cool scenario because.

You're borrowing money from your equity, then you're getting a bit of a tax write off. Now, not all investments apply, so this is why you need to speak to your accountant, make sure you're purchasing ones that do apply for this tax deduction. But in my case, I got the tax savings, right? So the interest I was able to write off, which was great.

The numbers astound. This investment that I purchased 90% of the time beats all the professional stock pickers. A fund manager's in performance on an annual basis 90% of the time. So it's huge. It's so easy to win and to make money with this type of investment because it's so good. Now, I will introduce you to people that are stock pickers that actually do beat this performance that I'm about to share with you by picking stocks, but it's very rare that they can, right?

But on an annual basis it works out. 26.62%. Now, what I was mentioning about the rollercoaster is some investors get scared, right? When the market goes down, they get scared and they want to pull. Don't do that. You have to look at the market as a whole and you have to consider past returns. Now, a past return does not mean there will be a future return, but at least it's a history.

When Covid came, it went down. I don't know the percentage, but it. It went down quite a bit and then it automatically jumped back up right after that, and it's almost double the price that it was pre covid. So investments over time generally go up and there's a chart, it's called index, so it's A N D E X.

You can look at it. It's the growth of your money over the years and it shows you all the different recessions and stuff and what you could have invested in and what your money would be worth. Now, if you bought it back then, and it's a great tool that you can see that over time based on past history, everything is going up.

But when you come back and you look at it, so I borrowed the money at 2.5%, but I'm averaging a 26.2% annual return. That's smart, that's calculated leverage, and the investment is actually quite a safe investment. I know the banks like to push GICs and things like that. Those investments are better for the bank.

The more money that you park at a bank, The more that they can lend out. So they really like to push those and say how safe it is and you should get it because it's good for them. These types of investments that I do, that I speak of, and the other professionals that are gonna be on the show speak about are investments that are gonna be good for you.

So that's what our focus is here. We're not trying to make the banks happy, we're trying to make you happy. So again, in the club we'll show you the. Item that I purchased. You'll see the chart, you can see the numbers and confirm everything. If you want to check that out right away, it's invest lend city.ca, and you can check that out.

Also, be sure to tune in next week. I'm gonna dive into the pro pros and cons of the different borrowing options that are out there for investing, whether that's investing in real estate, equities, EFTs, mutual funds, you know what? Whatever the case may be. I'll show you the pros and cons of all the different investment vehicles that are out there that I have personally used and that I set up for my customers at Lend City.

And then you can determine what is best for you and your investing strategy. And then after that we're gonna be diving into some personal growth tips. On future episodes as well, and with featuring special guests that, again, will talk about these specific investments, returns, case studies, all of these things.

So you can see what others are doing that you may not see. But we get to see this because we are in the financial world. All right, I look forward to seeing you then. Take care.