The Power of Leveraging (how YOU can leverage more too)

The Power of LeveragingIn this blog post, we will discuss about The Power of Leveraging (and how YOU can leverage more too).  By applying leverage properly, you can have more time freedom and wealth in your life. 

We will discuss the different forms of leveraging and what can YOU do to increase leveraging in your business and your life.  With that being said, let us dive right in! 

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Leverage is the reason some people become rich and others do not.
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What Is Leveraging?

If you look up the word “leverage” in a dictionary, it will probably tell you something like this…

“The action of a lever, a rigid bar that pivots about one point and that is used to move an object at a second point by a force applied at a third.”

Confused?

You may be wondering then what does “leverage” have to do with time freedom and building wealth? 

Well, let me give you another definition that is simpler to understand…

“Leverage” is the action in which you can get more done with less.

And yes, as Robert Kiyosaki, the author of the # 1 Personal Finance book Rich Dad Poor Dad, has said,  “Leverage” is the reason some people become rich and others do not.”

To me, leveraging is not only about building wealth, but more importantly, it is about creating time freedom.

Different Forms of Leveraging

How well we learn to leverage will dictate how much time freedom and wealth we can have in our lives.

4 Main Forms of Leveraging

There are 4 main forms of leveraging:

  • Other People’s Time (OPT)
  • Other People’s Money (OPM)
  • Other People’s Knowledge (OPK)
  • Systems (including technologies)

Now, before you hate me and start thinking that leverage is EVIL (you mean I have to use other people?!), I promise you that as you read along, you will discover that leverage is not only good for you, in fact, you may have already been doing it every day and in many different ways.

In most cases, leveraging creates Win-Win and is beneficial for all parties involved!

An Employee has Little or No Leverage

You may not realize this, but if you are in a job today, your Employer is leveraging on you.

Your Employer is giving you a pay check, so that he can leverage on your time (Other People’s Time) and he can get more done with less of his own time.

(Suggested reading – also check out Robert Kiyosaki’s Cashflow Quadrant concept.) 

Nothing wrong with that, most people have a job and the Society does need people to contribute in many different ways.

My point here is just to help you realize that leverage is indeed used everyday, everywhere.

Time is the Most Valuable Resource

Now, as an Employee, more often than not, you don’t have any leverage.  If you do, you have very little. 

You will need to be trading your own time day in and day out in exchange for a pay check.  Even if you are a manager and have a team you are supervising, chances are that you still need to be in the office or working for certain hours a month to maintain your salary.

Time is the most valuable resource in the World. 

If you lose your money, you can always make it back.  But if you lose your time, you can never make it back.  Period.

So I cherish time – I want to spend my time doing things I love and with the people I care about.

I would rather earn 1% off 100 people's efforts than 100% of my own efforts.

 

If you are working in a job today AND you agree that time is the most valuable resource you have, then you may realize that being an Employee with little or no leverage is probably not such a smart thing to do.

If that is the case, then you may want to start looking for ways you can leverage so that you can have more time freedom back in your life (examples below…).

 

But… I am Self-Employed?!

If you are Self-Employed – such as a real estate agent, insurance agent, doctor who runs her own clinic, lawyer with her own practice, accountant with her own firm, or a small business owner, you often have even less leverage than a regular employee.

In most cases, you are the one handling every aspect of your business – defining business directions, business development, meeting with clients, closing sales, handling logistics, delivering products, doing marketing, handling bookkeeping just to name a few. 

Chances are that you are working even longer hours than a regular employee.  Not only that, your income stops when you stop work and you don’t even have paid vacation days.

(Suggested reading – also check out Robert Kiyosaki’s Cashflow Quadrant concept.) 

So, if you found that you are in this situation – again, perhaps it is time to start looking for ways you can leverage more so that you can have more time freedom back in your life (examples below…).

The Power of Leveraging

 

Real Life Examples

If you look around and pay attention, you will find that examples of leveraging is indeed everywhere.  The only thing is whether or not you recognize its usage and if you are using it too.  Now, let us take a look at some real life examples.

(1) Leveraging with Other People’s Time (OPT)

Below are some examples of OPT, do you recognize them? And are you using any of them?

  • Real estate broker Sandy recruited a real estate agent Lin and provided her with training and support.  In return, Sandy gets a percentage of what Lin produces.
  • A business owner pays a salary to hire a staff, and in return, leverage on the staff’s time.
  • A financial planner recruits team members and provides them with training and support.  In return, get a percentage of what her team produces every month.
  • Jennifer hires a cleaner so she can spend less time cleaning on the weekends and spend more quality time with her children.
  • A couple hires a wedding planner to arrange their wedding, so they can spend less time stressing out about the details of their wedding arrangements.
  • Business owner Sammy in Canada hires a virtual assistant overseas so that things can get done while she sleeps at night.
  • A couple hires a baby sitter to look after their children one night a week, so they can go on a date night.

As you review these examples, I am sure you begin to understand that leverage does make sense and it is used everywhere.  Like I said earlier, leverage is the action of getting more done with less and in return, all parties benefit.

(2) Leveraging with Other People’s Money (OPM)

Below are some examples of OPM, do you recognize them? Are you using any OPM method?

  • Getting a mortgage from a bank in order to buy a house.  In return, you agree to pay a certain interest to the bank over 30 years.
  • Raising funds from investors such that a business idea can be executed.  In return, the investors receive a percentage of the profits.
  • Your parents lending you money such that you can finally put a downpayment to purchase your first home.
  • Raising funds from investors such that a development project and buildings can be completed.
  • A sophisticated investor receives a loan from a bank to purchase an apartment complex.
  • A sophisticated stock trader borrows money from a broker to do margin trading.

When it comes to investing, the ability to leverage on Other People’s Money (OPM) can help you to accelerate your goals.  However, be sure to understand the difference between an Asset and a Liability and that you have the financial knowledge to invest properly.

(3) Leveraging with Other People’s Knowledge (OPK)

Business and investing are team sports.
Robert Kiyosakid
Best-Selling Author of Rich Dad Poor Dad

 

As Robert Kiyosaki has said, “Business and investing are team sports.” It is impossible for us to learn everything in the World, so it is important to leverage on the right individuals and build the right team. 

Below are some examples of using OPK, do you recognize them? And are you applying any of these?

  • Having a great attorney, accountant, real estate agent and tax advisor on your team when you start investing in real estates.
  • Getting coached by a mentor who has achieved what you want so you can learn from her experience and accelerate your success.
  • Consulting a specialized doctor to cure certain illnesses.
  • Taking a value investing class from an experienced mentor so that you can learn from to invest in the stock market properly.
  • Building your network marketing business by following a successful upline leader who has done what you want to achieve.
  • Reading books on the topics you want to understand more on.
  • Participating in a mastermind group so that you can network and learn from people who are successful and have similar goals.
  • Taking an online course to learn about how to do affiliate marketing properly. 

In fact, the fastest way to learn is to follow someone’s experience and knowledge, you can drastically cut down your learning curve and achieve your dreams much sooner.

(4) Leveraging on Systems (including Technologies)

We are now in the information age.  Whether we like it or not, we have to admit that the internet is very powerful.  It is connecting people, sharing information at the speed of light and creating many new millionaires each year.

Below are some examples of leveraging on systems (including technologies).

  • Tom is a business owner.  He purchased a McDonald’s franchise so that the restaurant’s system and branding is already in place.
  • A stay-at-home mom started a blog about gardening and turning it into a full-time income from the comfort of her own home.
  • An online store reaching customers worldwide 24/7, 365 days a year.
  • A person with no prior business experience creating a full-time income in network marketing by following its proven system.
  • Professor Susan shares her knowledge to hundreds of students around the World at the same time using webinars.
  • An internet marketer set up an online campaign and able to travel the World for 1 month while her business continues to grow.

As you read through these examples, I believe you will begin to understand why successful and rich people leverage to create more time freedom and wealth.

It is about delivering more value, working smarter and creating win-win relationships. 

How To Start a Purpose-Driven Online Business


In this FREE course, I show you how to start an online business that not only fills your wallet but also your heart.  From finding the right business idea, to creating your website, all the way to earning your first income and attracting readers. Join now!

What’s Next?

I hope this blog post has helped you to understand the power of leveraging and be more open to start leveraging more.

Resources

By leveraging properly, you can create more time freedom and wealth in your own life.  How are you currently leveraging in your life?  How would you leverage more by using OPT, OPM, OPT and systems/technologies? Leave me a comment below!

I hope you have found value in this post.  If you have enjoyed it, please LIKE and SHARE it with your friends.  Sharing is caring!

 

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