This is a thoughtful and important conversation because leverage is one of the least understood accelerators of wealth creation.
I actually agree with the broader premise that many wealthy individuals use leverage strategically — but I also think survivability matters just as much as acceleration.
Leverage amplifies outcomes in both directions.
The difference between productive leverage and destructive leverage often comes down to:
timing,
cash flow stability,
risk tolerance,
asset quality,
tax structure,
and whether someone can psychologically and financially survive volatility long enough for compounding to work.
I also think there are different forms of leverage:
financial leverage (debt),
business leverage (systems),
technology leverage (AI),
media leverage,
and ownership leverage.
Many of the world’s wealthiest people ultimately combine several at once.
Personally, I’ve become increasingly interested in the idea that the real goal is not maximizing returns at all costs — it’s maximizing long-term compounding while avoiding catastrophic downside.
That balance between leverage and resilience is fascinating.
— Dr. Rich Bushart
P.S. I explore themes like leverage, ownership, timing, and compounding more broadly in my newsletter, The Billionaire Gap.
Debt is a tool, but retail margin is not Buffett float. Leveraged ETFs are not long-term compounding machines unless the path happens to be friendly -- which it often is not. And buying high-yield funds with borrowed money is not “infinite yield”; it is a carry trade with liquidation risk.
What do you mean "often it is not"? Buying a leveraged ETF that tracks the index has proven to outperform. QQQ vs. TQQQ. SPY vs UPRO. SOXX vs USD. The list goes on.
TQQQ has crushed QQQ over certain periods because the path was extremely friendly: strong tech leadership, trend persistence, and a long growth bull market.
But leveraged ETFs do not simply multiply the index over time. They multiply the daily path. That works beautifully in a sustained bull market, but brutally in a choppy or down market. TQQQ was down roughly 79% in 2022 and more than 80% peak-to-trough from its 2021 high.
So I’m not saying leveraged ETFs cannot outperform. Clearly they can. I’m saying the outperformance is path-dependent, and that is where people get hurt.
I've personally had huge success with triple leveraged ETF's, BUT only as a tool when a market correction is fierce. 2022 interest rate hike market correction, 2025 reaction to Trump administration tariffs, 2026 reaction to war in Iran.
It's a tool in the toolkit for opportunistic investments.
This is making me think of 1929 and all those folks who were buying on margin & then jumped out of windows when the market crashed. So very dangerous when the current market is clearly overvalued & we have a narcissistic sociopath dragging us into a war that has closed the Hormuz Strait & all the negative knock on effects which we’re only beginning to feel.
Stop with the fear. Question yourself why this doesn't make you instead think about the people who become wealthy using these tools, considering we've been on the strongest bull run in history.
This is a thoughtful and important conversation because leverage is one of the least understood accelerators of wealth creation.
I actually agree with the broader premise that many wealthy individuals use leverage strategically — but I also think survivability matters just as much as acceleration.
Leverage amplifies outcomes in both directions.
The difference between productive leverage and destructive leverage often comes down to:
timing,
cash flow stability,
risk tolerance,
asset quality,
tax structure,
and whether someone can psychologically and financially survive volatility long enough for compounding to work.
I also think there are different forms of leverage:
financial leverage (debt),
business leverage (systems),
technology leverage (AI),
media leverage,
and ownership leverage.
Many of the world’s wealthiest people ultimately combine several at once.
Personally, I’ve become increasingly interested in the idea that the real goal is not maximizing returns at all costs — it’s maximizing long-term compounding while avoiding catastrophic downside.
That balance between leverage and resilience is fascinating.
— Dr. Rich Bushart
P.S. I explore themes like leverage, ownership, timing, and compounding more broadly in my newsletter, The Billionaire Gap.
Debt is a tool, but retail margin is not Buffett float. Leveraged ETFs are not long-term compounding machines unless the path happens to be friendly -- which it often is not. And buying high-yield funds with borrowed money is not “infinite yield”; it is a carry trade with liquidation risk.
What do you mean "often it is not"? Buying a leveraged ETF that tracks the index has proven to outperform. QQQ vs. TQQQ. SPY vs UPRO. SOXX vs USD. The list goes on.
TQQQ has crushed QQQ over certain periods because the path was extremely friendly: strong tech leadership, trend persistence, and a long growth bull market.
But leveraged ETFs do not simply multiply the index over time. They multiply the daily path. That works beautifully in a sustained bull market, but brutally in a choppy or down market. TQQQ was down roughly 79% in 2022 and more than 80% peak-to-trough from its 2021 high.
So I’m not saying leveraged ETFs cannot outperform. Clearly they can. I’m saying the outperformance is path-dependent, and that is where people get hurt.
I've personally had huge success with triple leveraged ETF's, BUT only as a tool when a market correction is fierce. 2022 interest rate hike market correction, 2025 reaction to Trump administration tariffs, 2026 reaction to war in Iran.
It's a tool in the toolkit for opportunistic investments.
This is making me think of 1929 and all those folks who were buying on margin & then jumped out of windows when the market crashed. So very dangerous when the current market is clearly overvalued & we have a narcissistic sociopath dragging us into a war that has closed the Hormuz Strait & all the negative knock on effects which we’re only beginning to feel.
Stop with the fear. Question yourself why this doesn't make you instead think about the people who become wealthy using these tools, considering we've been on the strongest bull run in history.
Fear can have a side effect of self preservation. Not all fear is bad. What happens with your plan if there is a market downturn????