As an example, let's say a bank raises $10,000,000 in capital, they then are allowed to leverage by a factor of ten. That means  they can bring in $100,000,000 in deposits and  they can invest the money in loans and bonds. If their cost of deposits is 3%, and their loans and bonds yield 7%, they have made a 4% spread. After paying expenses and taxes, let's assume they net 1.5% or $1,500,000. They only made 1.5% on total assets of $100,000,000, however; they have made a 15% return on equity for their shareholders. The shareholders put up $10,000,000 and the bank made $1,500,000, thus a 15% return for investors.

So, the use of positive leverage, or the use of other people's money, { the depositors } has been employed for getting a higher return for investors than they could get from investing their capital in traditional investments.

Positive leverage can be used by doctors and business owners in much the same way in non-qualified, wealth accumulation plans. This also is accomplished by using other people's money for creating wealth. Let's assume that a business owner has enough cash flow to contribute $60,000 a year to a wealth accumulation program. Instead of using that money for a contribution, he could borrow money and use the $60,000 to pay the interest on the loan. { He may be able to deduct the $60,000 at the corporate level} In this example, we will assume the interest rate is 6%, so with $60,000 in excess cash flow, the owner could borrow $1,000,000 to place in a safe earning asset. The asset, could in turn; be used as collateral for the loan.

Now if the earning asset earned just 3/4 of 1% higher than the loan cost, {these types of assets are available with a little research} then the power of compounding over a reasonable horizon of time can build quite a large war chest for the owner. Just 3/4% in positive earnings would provide about $600,000 for the owner in 10 years, close to $1,200,00 over 15 years, and over $2,100,000 in 20 years. These accumulation numbers are net of paying off the loan and the interest for the loan during the wealth accumulation period. If an earning asset is found which provides a 2-3% positive spread,  the accumulation account will become quite sizable over the same time period.

So in conclusion, the use of positive leverage, which is the use of "other people's money" , can be a very efficient way for a business owner to use corporate dollars to fund a personal wealth accumulation plan. Many people do not realize, that buy using excess earnings to pay interest on borrowed money; will provide growth in a wealth accumulation plan at about twice the rate as using the money to make annual contributions to a plan. Therefore, the key is to use leverage, in a safe earning asset, in order to provide a larger pool of money for the retirement account of the owner!