If you want to be a millionaire, you need to understand the Power of Leverage.
When we talk about leverage, we aren’t just talking about debt.
We’re talking about how you leverage:
In the broad definition, the word leverage simply means the ability to do more with less.
– Robert Kiyosaki
When you think about it, isn’t that what we all want?
We want the ability to achieve more in our lives while doing less.
We want to be the best we can be and to do it with the minimum effective dose.
In the 4-Hour Body, Tim Ferriss describes the minimum effective dose as the smallest dose that will produce the desired outcome.
Below, we’ll dive into the ten types of leverage you can use to do more with less and equip you to use them today.
Time is one of the only limited resources.
But, it doesn’t have to be that way.
While there are only 24 hours in a day there are still ways you can maximize the time you have:
- Learn to say NO
Be ruthless with the time you have.
Elon Musk, for example, maps out his time before the day even starts in 5-minute increments.
From the moment his head lifts off the pillow, he knows what he’s going to do through the day and can remain hyper-focused on those activities.
Your priorities are what you need to be focused on.
To determine what those priorities should be, I want you to use the Warren Buffet 5 / 25 Rule:
- Write down your top 25 goals
- Highlight the top 5 goals and focus on them until done
- Cross off the other 20 goals and ignore them until you finish the 5
You need to be focused on your highest-priority tasks, but you can’t do that if you are stuck in the weeds.
One of the best ways you can deal with this is to outsource lower-value activities to free up time.
Determine what budget you have available to use for outsourcing and consider what can be outsourced locally, such as car washes, housekeeping, power washing, etc and what can be outsourced geographically, such as virtual assistants, research assistants and personal assistants.
If you have a team, delegate.
If there’s higher value work you can be focused on, delegate everything else.
Goal: Schedule it and forget it.
Where you can, automate your life.
Determine what can be done by systems and technology and use it.
The less time you spend thinking about repetitive tasks, the better your life will be.
Learn to say NO
To be focused on your priorities, you need to have time.
To have time, you need to learn how to ruthlessly say NO to people:
- Remember, if you say YES, what are you saying NO to
- If what you’re saying YES to was tomorrow instead of 6 months from now, would you say YES
Your brand or reputation will determine your future.
As Warren Buffet said, It takes 20 years to build a reputation and five minutes to ruin it.
Focus on building a reputation that will open doors for you and do everything in your power to keep those doors open.
To build a reputation that will serve you:
- Network with others
- Share your expertise
- Build an online presence
- Deliver on your promises
- Engage with your audience
To create wealth, you need to own assets that will print you money while you sleep.
If you want to succeed as a business owner, labor will be one of your most critical resources.
The right team will ensure you have the skills, passion, diversity and culture fit you need to succeed.
To build the right team:
- Hire strategically
- Retain top talent
- Empower employees
- Encourage innovation
- Invest in good leaders
- Provide growth opportunities
- Invest in training and development
Digital leverage is a powerful tool.
It’s the use of technology or digital platforms to create value for you or your businesses.
Very few things provide you as much asymmetrical benefit.
As a simple example, when you post on social media, you can have a couple of outcomes at the extreme:
- Your post stinks and it gets buried in the algo
- Your post goes viral and you add 75,000 followers in a day
I’ve seen that first one a lot of times myself and I’ve had friends achieve the second one, even if it’s an extreme.
My point is, the Upside FAR outweighs the Downside.
Here are some simple ways for you to use digital leverage:
- Write a blog
- Build a website
- Use social media
- Publish a YouTube video
- Record short-form videos for YouTube and TikTok
Pick a platform that aligns with your skills and strengths and start publishing.
Get your money to work for you.
Instead of just letting your money sit idle, invest it in ways that can potentially earn you more money.
It may take time to see returns, but the benefits of investing can be significant.
Here are some ways to get your money to work for you:
- Invest in stocks
- Invest in yourself
- Start a side hustle
- Invest in real estate
- Pay off high-interest debt
Financial leverage is the simplest leverage.
Yes, the financial independence (FI) community is right when they say credit card and consumer high-interest debt is bad.
But, not all debt is created equal and not all debt is bad for you. Financial leverage is the use of borrowed funds to increase the potential return on investment. It involves borrowing money to make an investment with the hope of earning a higher return than the cost of borrowing.
In fact, certain debt can be useful and productive, such as:
- Business investments
- Real estate investments
Your network will help you create opportunities for yourself or your business.
Building strong relationships will help you increase your influence, gain new insights and create opportunities.
A survey showed 85% of jobs are filled via networking.
To build your network:
- Provide value
- Use social media
- Network strategically
- Collaborate with others
Knowledge leverage is the use of knowledge, skills and experience to create value in your work and personal life.
By leveraging your knowledge, you can increase your productivity, efficiency and effectiveness.
As Dr. Seuss said The more you read, the more things you’ll know. The more you learn, the more places you‘ll go.
To create knowledge leverage:
- Be curious
- Ask questions
- Read and research
- Seek out new experiences
- Invest in education and training
In today’s digital age, there are many tools and software that can help you be more efficient and effective.
The greatest tool you can be using to increase your leverage today is ChatGPT.
Here are some more ways to increase your technology power of leverage:
- Use software
- Learn new skills
- Use social media
- Use cloud storage
Your geography can be leverage or you can move to take advantage of other location’s benefits.
Depending on where you live or work, you may have access to certain resources, opportunities or networks that can help you achieve your goals more efficiently and effectively.
You can also use geographical arbitrage, which is the practice of taking advantage of differences in prices, wages or costs of living between different geographic locations. It involves earning income in one location and investing in another where the cost of living is lower or the opportunities for growth and profit are higher.
With remote working, the opportunities for geographic arbitrage have increased exponentially. For example, if you earn a high income in a city with a high cost of living, you may choose to relocate to a lower-cost city where you can maintain the same standard of living with less money.
Alternatively, you may invest in a property or business in a location where the real estate or business market is less competitive or has more growth potential.
Here are some ways to take advantage of the geographic power of leverage of where you live:
- Use local resources
- Attend local networking events
- Take advantage of the local culture