Notes
To optimists and go-getters, leverage, debt, or borrowing sends your profits to the moon.
To gloomy pessimists, it deepens your losses.
Both are correct. In fact, leverage amplifies the difference between your gains and the interest payable. The formula is as follows:
Leveraged Returns = (Asset Rate of Return - Loan Interest Rate) × (debt ÷ equity) + Asset Rate of Return
This introduces a third scenario. As illustrated by the default settings, leverage can drag upon decent returns such that despite profiting you would have been better off without borrowing.
But mediocrity does not fit dinner-party binaries of financial triumph or defeat, so...