1)Leverage: is the typically thought of as exerting force using a lever or to use to the maximum advantage. For our investments we only have a set amount of capital that we can use towards each investment, so we want to get the most of each Dollar that we put in.
If you were going shopping for new investment and you spotted the perfect one for your portfolio. For example purposes, let’s just say it cost $100. If you were able to get that perfect investment for $30 you would buy it right? You would have the same upside risk, but the most you could lose is the $30 you invested. Sounds too good to be true…but investors do this everyday. When they really like the investment, rather then buying just one time at $30, then would buy it 3 times so they have $90 invested and it is still cheaper than buying the stock. Now they have 3 times the upside potential as simple buying one stock position.
2) Risk Less: By using the above example we can see that $30 is less than $100. In percentage terms you can invest as little as 15% of the asset price and have similar upside results. For example if a $100 stock goes up $10, that is a 10% return. If you had the same 15% smart investment then may only get $8.5 back but that is a 56% return vs just a 10% with the stock.
3) Lock in Profits: This is unique to this asset type. There is no other product that allows you to lock in profit or exit like a smart investment. At any time that you have a profit you can lock it in. This means you can take your profits off the table ad reduce your risk at any time.
4)Create Income: This is NOT a dividend. This is similar to buying a house and renting it out as an investment. The rent is the income stream. No other product gives you this flexibility. You can collect your rent weekly or monthly!
