There’s one word that’s making people millionaires and billionaires, and it’s not luck, timing, attitude, or mindset. It’s something more measurable than that, and it’s called leverage. It’s how the rich get richer.

Even if you don’t consider yourself wealthy now, you absolutely must understand how it works if you want to get ahead in life.

Time Equals Wealth

I want you to imagine this. If you had $86,400 in your bank account and someone stole $10 from you, would you throw away the remaining $86,390 while you chased that person? Or would you say forget it and move on?

Now imagine there is a bank account that credits $86,400 to your account every single day but there is one catch. It carries no balance, so at the end of the day, the balance is zero. Now what would you do? You’d withdraw every dollar everyday, wouldn’t you?

Well you know we do have that bank account. And that bank account is called time. Every single day you have 86,400 seconds deposited to your life. How would you spend that time? It carries no overbalance and it doesn’t allow any overdrafts.

You’ve heard of return on investment – ROI – but here is a more powerful concept – ROTI – return on time invested. Most people when they think about that one word that makes people millionaires and billionaires, what comes to mind is “you got to work your face off.”

Hustling is a given. You need to hustle just to get your foot in the door. But that’s not the one word that makes people millionaires and billionaires.

Leverage is the word that makes rich people richer. Imagine yourself lifting a big, heavy stone with two hands and it doesn’t even move. You tried your best. However if we use a long pole as a leaver, we can lift that heavy stone with the same manpower. That’s leverage: maximum productivity with minimum effort.

There are many forms of leverage. I’ll give you four today.

Watch this video about the four forms of leverage.

 

1. Financial Leverage

The first kind of leverage is financial leverage. The idea behind this is you are using other people’s money so you aren’t limited by the size of your own pocketbook.

Imagine you are buying a piece of real estate. You borrow from the bank and put down your 20% down payment. Then you borrow the rest. It could be 80% from the bank. That’s money leverage.

You’re using the bank’s money to create more wealth and to build your business. Here are some other examples. Borrowing money from the bank so you can buy new equipment for your business. Borrowing from an investor to get funding. Debt leverage, is one form of financial leverage.

2. Marketing Leverage

Marketing leverage is when you can control and generate your profit increases using no cost or low cost marketing.

Imagine running an ad on social media and you create the ad once. That ad is seen 24/7 by anything from ten thousand to a hundred thousand people. Even though I’m not there “marketing and selling” all day, my ad is working for me. I leverage marketing while it’s being viewed by possibly millions of people. 

3. Social Leverage

Social leverage is hiring people to do tasks. Your time and your hourly rate is worth X amount of dollars so you hire someone. You can’t outsource but you can delegate to someone whose hourly rate is a bit lower than yours and they can handle certain tasks.  

Hiring team members that share your passion and dedication to your business is your ultimate goal. You can leverage their loyalty to your mission and grow your business together.

4. System Leverage

Lastly, you have system leverage. The advantage of leveraging systems is you can get more done with less effort.

For example, I’m using the QuickBooks software to manage my finances and do my bookkeeping. That’s a form of system leverage. Or if I’m using an email system that allows me to craft one email that goes out to two million people. I’m leveraging technology to grow my business.

Leverage Equals Wealth

Millionaire and billionaires have used different forms of leverage in terms of finance, people, marketing, and systems. Their level of affluence opens more doors for them because more money making opportunities come to them. They have a strong desire to generate more wealth, and they don’t waste time looking for opportunities.

If you want to increase your money or grow your business, learn to leverage. Leveraging is how you can gain momentum and gain more success at a faster rate.  I also show another way to increase your income in this article.

Which type of leverage you used to increase your income? Comment below.

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