P.S. It is also called leverage because the same rule of proportionality applies: With a 10x physical lever, e.g. the lever is 10 cm on one side of the fulcrum

P.S. It is also called leverage because the same rule of proportionality applies: With a 10x physical lever, e.g. the lever is 10 cm on one side of the fulcrum and 100 cm on the other, moving one end of the lever by 1 cm will move the other end by 10 cm. With 10x financial leverage, e.g. you use $10 of equity (your own money) and $90 of debt (borrowed money) to invest $100 in assets, an extra +1% return on assets corresponds to an extra +10% return on equity.