It is absolutely necessary to use leverage, if you want to become rich. In fact, it is necessary to use large amounts of leverage. The more you can use the more leverage you need to use. Before you think I’ve lost the plot and only recommending that you borrow money to drown under the weight of debt, I mean clearly.
A common misconception is that the leverage refers only to loans of money (also known as gearing). The leverage is much more than just borrow. In fact, there are 7 ways to “leverage” and most of the seven that are used and the more you use the richer you become.
What is leverage?
Leverage is the ability to control a lot with just a little. It gives you the possibility to use more than you. By leveraging a change can be achieved much faster. Take the same speed, or speed. The more influence you have, the faster your journey to wealth.
The 7 ways to leverage
What are the seven forms of leverage? Well, they are:
1. OPM (Other People’s Money)
2. OPT (other times)
3. OPW (other people’s work)
4. EXP (Other People’s Experiences)
5. OPI (other people’s ideas)
6. Scalable production and distribution
7. Scalable Customer Base
Let each of these in turn …
OPM:
OPM or gearing is simply the use of debt. It’s what you put in the liabilities section of your personal balance.
Why prepare? Can not save yourself rich? The only way to save only make you rich is that if you have a good income, very low cost, and the tenacity and the ability to save for a long period of time.
For example, if you’re 25 and plan to save up to 65 years of age (40 years) and can manage to save $ 650 per month and achieve a 5% compounded return after taxes on your money, you’d have a pension pot of nearly $ 1 million. While this is laudable, it certainly is not intelligent and has an extraordinary amount of time and effort. Furthermore, while 1 million U.S. dollars may seem a lot in fact it is, especially in 40 years from now. In fact, with inflation at 3% of its $ 1 million will be worth approximately $ 300,000 and produces annual revenues of about $ 21,500 in today’s money. Retirement is not a very rich!
If you want to get rich is to save hard and use the money from others to move their goals faster. OPM allows you to buy assets before, at a faster pace, and control a larger amount than saving the entire amount. These three features allow you to leverage to get richer faster.
If you save $ 10,000 a year and loans by 90% after one year you could buy an investment property cost $ 100,000. If you waited until you saved $ 100,000 then it would take 10 years and the price of the property would be much much higher.
It is generally true that “it takes money to make money.” However, you do not need the money. OPM allows you to accelerate your wealth creation program.
OPT:
Many companies, small businesses and individuals who are able to sell their time. These range from workers to professionals specializing in a particular field.
I have an accountant, lawyer, insurance agent, mortgage broker, and so on. I can use all these people, because they save time and money. Save money because I spent my free time to make more money, and knowledge helps me.
OPW:
This is similar to OPT, but now you employ people to use their time. Bill Gates is applied OPW take enormous style. It takes time and effort than 65,000 employees. OPW (and OPT), in essence, allows a person to capture the time and effort of many. Lets you quickly build what it could not produce one or more lives.
EXP:
One of the best resources and benefits from the disposition of you is the experience of others. It’s a huge waste of time and totally unnecessary to try to learn everything you need to know by trial and error. You can learn from the experience, knowledge and mistakes of others.
This can be through a mentor, OPT, OPW, books, seminars, CD, school, college, etc.
It makes no sense learning by trial and error what someone else has already learned and can give you.
OPI:
This usually refers to learning and copying good ideas that produce revenue. Franchises and business networking are testimony to the power of the IPO – a proven method to learn and play by himself.
The process of wealth creation is the ultimate use of the influence of the IPO. The system of wealth creation is the same today as yesterday, last week, last month, last year, the latest generation. Sure, technology changes and systems are refined and improved, but the fundamentals remain unchanged. The process is tried, tested and works every time without fail. Just learn and apply it diligently. No trial and error. Do not waste your precious time. Only IPOs.
Scalable production and distribution:
Can your product or service easily scale of production and supply? A book can be easily reduced, since you can print as many times as demand requires. Compare this with the face-to-face teaching is not easily scalable. Can easily be a book anywhere? Well, until the advent of the Internet could not. Now you can buy and easily distributed via e-mail anywhere. But that’s nowhere near as easy to produce and is supplied as an electronic book, it’s just bits of information that can be downloaded instantly from anywhere in the world.
Scalable client base:
A restaurant or a corner store does not have a scalable client base. You can only serve customers in their local area. People all over the world want your product or service, but if you do not know about or can not reach you, then it is as if there were.
Let’s look at the dotcoms of the late 90′s. The Internet gave companies a truly global customer base for virtually no cost. Your potential customer base is highly scalable, which is why they were so highly valued. The problem was that its production and distribution was not highly scalable, since it still had to deal in physical products … were very old economy after the “sale.” People forgot that. Those companies that are traded on non-physical products was scalable in production and distribution and customer base, and scalable. These are the actual business of next-generation Internet really warranted. Is likely to recognize some of them – Google, Yahoo, Ebay, E * Trade, Facebook, and so on.
With leverage, you’re not alone. You can tap the strengths of all the resources you need around you. You can greatly multiply the effectiveness of a person. Through leverage, production systems and sales can work and grow, regardless of whether the inventor or owner. Leverage allows you to create systems that run themselves. Leverage is essential to create wealth. Those who want to be rich or are in the way of wealth must focus on understanding, mastery and full use of advantage.