My husband and I talk about this phrase a lot when we are talking about money – especially when we’re trying to figure out how to make more of it or keep more of what we earn.
The phrase is OPM. It is a very important thing to know all about… It stands for “Other People’s Money”.
We could be sitting around just having a casual chat, and one of us will say something like, “Yeah, that thing we did totally happened because we used the Power of OPM!”
OPM can come from a lot of places.
- Mortgages
- Credit cards
- Personal loans
- HELOCs
- Private lenders
- Family loans
- Hard money
All of it is OPM. It’s money you borrow to build wealth without tying up all of your own cash.
You see, the power of using Other People’s Money is that you only have a set amount of money, and that is called your net worth. But if you use OPM to your advantage, you can get further along financially than you will by just paying cash. Thanks to leverage.
Understanding the power of OPM is the difference between slow growth and multiplying your results with the same amount of money.
This is also why investors at different stages use leverage very differently.
The Power of OPM in Action
If you leverage OPM the right way, you can go farther, faster.
Example:
- You could buy one house for $100k cash and keep all the cash flow.
- Or take that same $100k and put $20k down on five houses, using OPM for the rest.
Then instead of having one house that cash flows and appreciates, now you have FIVE houses with FIVE tenants paying down your mortgages and five properties appreciating.
One decision = FIVE income streams + FIVE tenants building your equity for you.
Leverage Is a Tool – Not a Lottery Ticket
After all – you do have to pay all that money back someday.
Leverage (OPM) is like any power tool.
Used correctly, you build wealth faster.
Used carelessly, you can do a lot of damage.
OPM is powerful, but only if you borrow with a plan, not hope.
Once you understand it, you can’t help pointing it out everywhere – like a private joke only people building wealth actually get.
You start noticing it constantly.
Every flip, every rental, every “success story” suddenly turns into:
“Oh look… OPM paid for that.”
And honestly? It never gets old.
Coming Up Next: Your Rental Listing Photos Are Raising Your Property Taxes
Disclosure: This post contains Amazon affiliate links. If you purchase through them, I may earn a small commission at no extra cost to you.
