Ascendant Financial and Heffernan Financial Services

The Money Multiplier Method

Money Multiplier Formula Money Multiplier Calculator
Ascendant Financial is an independent SEC Registered Investment Advisor and client-centric wealth management practice located in Flagstaff, Phoenix and Mesa Arizona. Founded in 1990, Ascendant has been providing investment consulting, estate planning and wealth transfer services to individuals and families for over thirty years. For more information click https://www.ascendantfinancial.ca/service/financial/what-is-money-multiplier-formula-calcuator/.

The firm is an advocate for Becoming Your Own Banker a personal finance strategy focused on you and your family not the banks. This strategy includes a use of time tested dividend-paying whole life insurance to optimize cash flow and wealth transfer.

Founder, JD Hoyt has joined Heffernan Financial Services as an Executive Vice President effective May 1, 2023 along with his team. Heffernan is an established national full service investment firm offering brokerage and asset management services.

Heffernan provides financial planning to families and business owners to help them ascend to the next level in their lives. Using advanced strategies, Heffernan helps clients prioritize their values and goals while maximizing their income and protecting assets through proper risk management, tax planning and asset preservation. Heffernan does not act as an attorney, accountant or insurance agent for its clients; however, its registered representatives may be engaged in those services per their separate licensed individual capacities.

The Money Multiplier Formula

The Money Multiplier is a ratio that indicates how much an increase (decrease) in the Monetary Base (which is currency in circulation plus bank reserves) will multiply into more broad money supply (M1 or M2). It’s an important concept for budding economists because it illustrates the impact of an expansion of inside money on financial markets.

The basic formula for the Money Multiplier is 1 divided by the Reserve Ratio which is also known as the legal reserve ratio (LRR). The LRR represents the amount of commercial banks’ reserves that they are required to keep with their central bank. The more the LRRR is, the less the money multiplier will be.