Leverage – I am always fascinated by the distinctions between the wealthy, the poor, and the middle class.
What sets apart a person living on the streets from someone residing in a luxurious home and earning a high income? I believe that everyone has a story to tell. What sets apart someone like that from someone earning millions or tens of millions of dollars?
We all have 24 hours a day, we all have the same opportunity. Is it education, is it their background, is it because of luck, is it because of hard work?
No, it’s not any of those things, it’s not any of those things. I think the key difference between the wealthy and the less wealthy is the use of leverage.
Rich people use leverage and poor people don’t. Now there are many many forms of leverage. Let’s first define what leverage actually is.
What is Leverage?
Leverage is achieving a task with minimal effort. Just like a lever, right? You can use less, the least amount of effort to lift something very very heavy.
That’s all that it means, using leverage. So there are many many forms of leverage. I am going to share just a few of those along with how rich people use it.
How Digital Nomads Can Leverage LLCs for Tax Advantages and Long-term Growth
How Rich People Use Leverage?
#1 OPT – Other People’s Time
The first form of leverage is OPT, other people’s time. Rich people know how to use OPT, other people’s time.
For example, a CEO hiring employees is leveraging other people’s time to perform certain tasks for the organization.
For example – I have people coming to my home for cleaning work, and I am using other people’s time to help me do tasks. It may not be something I enjoy doing, it may not be something that is worthwhile for me to do just because my worth and rate is much much higher. So, that is the use of other people’s time – OPT.
#2 OPK – Other People’s Knowlege
The second form of leverage is other people’s knowledge. Because as a person, you can only do so much. You can only learn so much, you can only know so much.
To grow with the, if you want to grow your income, rich people you notice, they have a lot of advisors around them in all areas of their lives like health, finance, spirituality, etc.
For example, most of us ask our CA how to reduce taxes – Income Tax, GST. How to do tax planning? A few of you also seek help from a financial planner for doing financial planning.
Rich people are surrounded by people that are smarter, and that have specific knowledge.
People who have been there and done that, versus poor people, you notice they don’t read books, they don’t hire people, they are rugged individualists.
They take on everything on their own. You know what, you want something done, you do it yourself, right?
That’s a poor person mentality. So that’s the second form of leverage.
#3 OPM – Other’s People Money
Another form of leverage is using funds from external sources. Wealthy individuals excel at using and maximizing OPM, which stands for other people’s money.
They buy a piece of property, they put a down payment, and they borrow from the bank to buy an investment. An entrepreneur might be in the midst of securing initial funding, and gathering funds from investors, which essentially belongs to someone else.
Rich people, we don’t use our own money. Only poor people use their own money.
So that’s number three, the third form of leverage, other people’s money.
#4 OPR – Other’s People Relationships
And the fourth form of leverage is other people’s relationships. Wealth comes from relationships. And rich people are very good at leveraging relationships.
For example, there’s an important person I need to meet. Maybe I don’t know that person, and would ask my friend, hey can you make an introduction?
Can we do some business together? I will give you another example, let’s say you have an offer, you have a product, a service that you’re promoting and you want to leverage other people’s relationships, OPR, you would maybe do a potential joint venture with someone else who already has an existing customer base.
That customer base trusts and believes in that particular person.
You can have that person, the influencer, promote your product, your program, and your service so you are leveraging other person relationships to get more customers.
And there, if he promoted your products, you will be more than happy to give him a commission, in our world it’s called the affiliate commission. That’s leveraging other people’s relationships.
#5 Technology
Rich people also leverage technology, automation, and software, right?
All these tools that are out there, that can, AI nowadays, that could help you to be more efficient, more effective that rich people also utilize.
So technology, I believe it’s a huge part of leverage. Even your smartphone, right? The smartphone that you have, the different apps that you have is all those, many forms of leverage.
So think about it, it doesn’t matter what business. It doesn’t matter what industry, it doesn’t matter what investment they do.
What it boils down to, is you study and you look at every single rich person, they are masters of leverage, in some way, shape, or form.
The more you know how to utilize that, the more successful you’ll be.
And the more you know how to utilize the leverage the more successful you’ll be and the wealthier you’ll be.
I’m gonna leave you with one quote by John D. Rockefeller – I would rather earn 1% off a 100 people’s efforts than 100% of my own efforts.
Think about it.
