To Create Wealth or Success, You Need Leverage

All great achievers, throughout the ages, have applied the power of leverage in one form or another.  Archimedes, the most-famous mathematician and inventor in ancient Greece, is known to have said, “Give me a lever long enough and a place to stand and I will move the entire earth.”   But on your own, you are without leverage. You have to rely on your own knowledge, your own experience, your own resources, and your own money. This is the long, slow way to wealth. Eventually, your resources run out. You become discouraged; and you quit.

  If you want to create wealth the easier way, you need leverage. But what exactly do we mean by leverage? In the physical sense, a lever is an assisted tool to gain an advantage. For example, you can more easily lift a heavy object with a lever than you can lift it unaided. In finance, leverage is a powerful technique to multiply your financial gains with just a small amount from out of your pocket.   There are three parts to leverage. The first part is the Objective (Your Dream) that you intend to bring into reality, which could be, say, to build a multi-crore business firm. The second part is the Fulcrum, which would represent you and your commitment. Like the Fulcrum, everything hinges on you. The third part is the Lever itself, which could be many kinds. And assuming your Lever is strong and long, you will be able to move large objects---that is, control a lot of things with minimal efforts and do so with speed.   In the business world, there are six kinds of leverage that can achieve the maximum results with minimum effort or the least amount of money. They are as follows:  

1. Getting a Mentor’s Help. A mentor is one who has tackled the ‘mountain’ before you. He knows the terrain, the challenges, and the pitfalls. He knows what to do and what not to do. That’s why drawing from your mentor’s experience is the quickest, safest, and easiest way to be successful.

 

2. Working with a Team. With a team, you can spot one another’s blind spots. You can encourage discouraged team members. Likewise, they can encourage you when you are down. They can fill in the gaps with their skill sets and complement you. Together, you all can achieve more in a faster and easier way.

 

3. Tapping into Your Network.Your social network increases your leverage---that is, the more connections you have, the more leverage you possess. You have to make contacts to get contracts, because at some levels all business is done through people. If you have 500 valuable contacts in your social network, and if these 500 contacts know another 500 people each, then your ultimate reach is 500 times 500, or 250,000 valuable contacts. Obviously, a one-person team is not enough. You need the power of a social network.

 

4. Using Other People’s Money. In real estate investing, for example, if you put 10% as a down-payment on a Rs.2,00,000  property that goes up in value by 5% in one year, then the property would be worth Rs.2,10,000 after 12 months.  In other words, you get the leverage not only on your Rs.20,000 but also on the remaining Rs.1,80,000 that you borrowed.And here’s your gain: your Rs.20,000 investment has earned you Rs.10,000, which is a 50% return on your money on just one deal.

 

5. Applying Tools and Skill.If you want a speedy result, you need high-tech tools---computers, the Internet, phones--- that can aid fast communications, fast calculations, and fast decisions.  Having appropriate tools and knowing how to use them (the skills) is critical to your success. Think of those who are extremely successful today. Do they work 10 times harder? Are they 10 times smarter? Of course not. The bottom line is that they have developed their skills.

 

6. Following a System.Whether your primary focus for wealth-creation is in investments, real estate, business, or technology, you should learn whatever you can about that particular field. Systems which are developed through years of trials and errors can produce predictable outcomes with fewer defects. As such, mastering the systems or the processes will help you to get more results at a much higher speed.

  Most high-net worth people are masters at using all six kinds of leverage. Granted, only one kind of force to the lever might not be powerful enough, but when you put together several of them--- the combined forces of mentors, teams, networks, others’ money, tools, and systems---you can achieve almost anything in life.