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Leverage by Richard Cayne of Meyer International Ltd Thailand

When discussing financial transactions and companies, oftentimes the word “leverage” comes up. Being leveraged can be either a good thing or a bad thing, however, depending on the topic at hand. So what exactly is leverage in the world of finance and how cautious should one be when leverage is used in investing?

“While leverage can be an excellent strategy for turning a profit, there is nevertheless a great deal of risk”, says Richard Cayne of Meyer International in Bangkok, Thailand. “While it may yield broader opportunities, your ultimate success in an investment depends on many other features”.

Leverage is basically debt

In a nutshell, leverage is actually a form of debt, but not just any type of debt. The term leverage generally means a debt encountered for the expansion of investments, the financing of assets or business expansion.

The term “highly leveraged” comes into play when this form of debt surpasses its equity. While it could be argued that this comes down to the advantage of semantics (investors tend to lose confidence when the word debt starts getting thrown around a potential opportunity), there are also positive elements involved in “leverage” that don’t apply to the word “debt”.

Let’s imagine a lever. A real, physical lever. It assists in the moving or lifting of objects that would be considerably more difficult to manipulate manually. By this same logic, we can begin to imagine what financial leverage consists of. It gives people or entities the ability to pursue transactions and investments that they would otherwise be unable to afford.

Leverage can pay huge or backfire spectacularly

The losses a company incurs can be greater than they can afford if a transaction fails as a result of relying too heavily on the borrowed capital used to fund the transaction in question. A fine example of this would be LBO’s, otherwise known as leveraged buyouts. When a buyer chooses to pursue an LBO, they generally borrow at least 90% of the purchasing price. That’s an incredibly high debt ratio, so with LBO’s comes a much greater level of risk. 

Take the company Silver Lake, for example. They ultimately raised 85% in leverage when they decided to acquire Dell, the well-known computer company. However, the risk paid off after restructuring and cuts. What initially started as a $2.4 billion dollar investment in the year 2013 eventually grew into $6 billion dollars by 2019.

But on the flip side of this, you could also look at the energy company TXU, which was purchased by a cluster of private equity firms for a whopping $45 billion dollars. After seven years and a failure to yield returns, the company finally went bankrupt.

Pay attention to leverage

Being too highly leveraged should serve as a cautionary tale in the boom and bust world of LBO’s. Miscalculations and losses can be incurred by even the shrewdest of dealmakers.

The risks involved in leverage need to be understood when it comes to your investments and finances, which is precisely why it’s important to reach out to a trusted financial advisor like Richard Cayne of Meyer International if you’re considering leveraging as an option.

Richard Meyer Cayne

Richard Meyer Cayne of Asia Wealth Group Holdings, the Meyer Group, Meyer Asset Management and Meyer International Ltd has been involved in wealth management planning for decades. Originally born in Montreal Quebec, Canada, he later relocated to Tokyo, Japan for over 15 years and now resides in Bangkok, Thailand. 

While he runs the Meyer Group and serves as the high credibility CEO of Asia Wealth Group Holdings Ltd, a London, UK Stock Exchange-listed Financial Holdings Company, as well as the Managing Director of the Meyer Group of Companies www.meyerjapan.com. and has additionally been the managing director of multiple organizations that specialize in helping high net worth individuals with succession planning .

Having worked with clients all over the globe with everything from portfolios to bonds to mutual funds to offshore investing to investing in retirement for your golden years, Richard Cayne of Meyer International can help you invest the right way and protect your cash. 

Richard has been a financial advisor involved in wealth management planning solutions and asset management in Asia for over 25 years and while living in Tokyo, Japan, he assisted many high net-worth Japanese families create innovative international tax and wealth management planning solutions. The financial holding public company of which he is CEO can be seen at Asia Wealth Group Holdings Ltd or the stock exchange link:

https://www.aquis.eu/aquis- stock exchange/member?securityidaqse=AWLP Asia Wealth Group Holdings Ltd – Richard Cayne Thailand. Meyer Asset Management Ltd has been in the wealth management space since March 2000 and uses fundamental analysis along with modern portfolio theory.His image worldwide as a professional advisor has been sterling and he maintains a firm command and understanding of all things finance-related.

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Richard Cayne

CEO Meyer International

Richard Cayne Born in Montreal Canada has lived in Asia for over 25 years.  Starting in Tokyo Japan in the 1990’s Richard was in the wealth management sector and specifically helping Japanese High Net worth Individuals with their wealth management needs.  From retirement planning, education fees savings or generational wealth transfer with tax efficient planning Richard has pioneered the offshore financial investment space in Japan.  In Tokyo Japan he was member of various Chambers of Commerce as well as Tokyo Chuo Rotary Club. 

In 2000 seeing the offshore financial planning needs of the Japanese market he setup Meyer Asset Management Ltd to grow the network of clients.  Very few options existed at this time in Japan and the options for investment were quite limited to a handful of generic funds offered by the banks. So wanting to open a world of choice for his investors in Europe, North America and in Asia Richard created relationships with over 200 banks, investment houses and insurance groups.   After 10 years Meyer Asset Management Ltd was ready to grow to serve the needs of various clients all around Asia.  With an eye on the fastest growing region being South East Asia Richard set his eyes on Thailand being the gateway to South East Asia and a very big transit hub in the region.

2010 Richard relocated his company Meyer International to Bangkok Thailand to serve the needs of clients around Asia.  In addition he listed the Meyer Group on a UK London stock exchange so as to show his groups commitment to transparency and sound corporate governance.  Richard is proud to say the Meyer group has thousands of clients over 5 continents. 

Richard Cayne believes the best way to get an understanding of financial planning is to talk about it with one’s family.  In the home with the children and look into strategies and technique to help children learn about it so that they can grow up to be more financially savvy.  From regular savings techniques like dollar cost averaging to understanding the basics of asset allocation one can learn to protect and grow one’s wealth over time.  Richard likes to emphasize that understanding risk is important especially how to evaluate risk adjusted returns.  For example a bank account has low risk but generally no interest is given and so it while being a good parking spot for cash with not protect it from the erosive powers of inflation.

In addition to many public speaking events on the wealth management topic Richard Cayne write articles viewable at richardcayne.com and is an Google & Amazon approved author of Richard Cayne - Estate Planning, Family Savings, & Retirement Richard is member of various Chambers of Commerce around Thailand as well as a supporter of the Cambodia Children’s fund and Baan Dek Foundation which fosters children’s education, health and safety in Thailand.

Richard speaks English, French and a working knowledge of Japanese and is reachable at meyerjapan.com

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