BOSS: Dex's Leverage Lecture
Lesson 11 of 11 in our free Good Debt vs Bad Debt guide: a 5-minute money game with the key points below.
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Questions you'll answer
Dex's £3,000 sits on a card at 24.9% APR for a year with no repayments. Roughly how much interest does that add?
Dex finally asks: 'So what's the actual leverage move?' What's the honest answer?
Quick facts
- Red flag: “Smart people borrow to invest. Max out your cards and send it to my fund” — Pushing you to borrow to the limit and send it to a stranger is a classic scam move.
- Red flag: “for 10% a week” — Impossible returns. 10% a week compounds to over 140 times your money in a year.
- Red flag: “with zero risk.” — Every investment has risk. 'Zero risk' plus high returns means scam.
- Red flag: “Only 4 spots left!” — Fake scarcity to rush you.
- Red flag: “My fund isn't on any register, banks just don't understand it.” — Not FCA-authorised. Check the FCA register, and never invest with an unregulated stranger.
- His student loan, repaid as a share of income → Leans good. Income-contingent and linked to his earning power.
- The trading course on a 24.9% card → Leans bad. High-interest debt for something that doesn't reliably earn.
- Three BNPL plans for gym clothes → Leans bad. Consumer debt that stacks up.
- A small loan for a bike that lets him do delivery shifts → Leans good. It produces income, if the shifts are steady and the loan is affordable.
- Myth: “Dex: 'Borrowing to trade doubles your gains and can't hurt your losses.'” — Leverage magnifies losses too, and the debt plus interest stays even if the trades go to zero.
- Fact: “The total cost of debt includes interest, fees and what you couldn't do with that money.” — That's opportunity cost on top of the bill.
- Myth: “Dex: 'Good debt is any debt a rich person would take.'” — Good debt depends on YOUR affordability, total cost and what it buys.