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Using O.P.M. to gain wealth

O.P.M. – Other People’s Money – is a very interesting concept. It would have to be the most widely used method of acquiring wealth.

Saving alone does not produce enough to create wealth due to the constraints on how much that can be saved at any one time.

Using property as an investment vehicle means you can borrow money from the bank (OPM) and over time the property grows in value, the rent pays the overheads and wealth is created.

To enhance the above scenario, you can repay the bank loan faster. Every dollar you repay the bank lessens the amount of interest you are charged and increases your equity.

Equity is the difference between what you owe on the mortgage and the market value of the property.

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