How to Get Rich by Using Leverage

Most people fail to become rich because they fail to use leverage. They work for their money, and only earn money per hour they work. Then they put their money into a bank account or mutual fund and because they only use their own money to invest, they hardly make anything. If you want to become rich, then you need to learn how to get rich by using leverage.

Leverage is doing more with less. The more leverage you have, the more you can do with less. For example, if I have $10,000, and I just invest my own money and earn 10% per year then I will earn $1,000, but if I leverage my $10,000 by using someone else’s money and I can earn 10% on $100,000 then I can earn $10,000 per year or 100% return on investment. If I use none of my own money, then the leverage is even higher, and the return on investment is infinite.

To become rich, you need to master the art of leverage. There are three important forms of leverage that you should learn how to utilize if you want to become more productive and richer, instead of poorer and poorer. The less leverage you use to longer it will take you to become wealthy. I am not saying that you cannot become rich without using leverage; I know it is easier to get rich by using leverage. If it weren’t for leverage, I would have little or no chance to become rich.

Leverage #1 – Other People’s Money

This is one of the easiest and best forms of leverage. Everyone knows of this form of leverage because everyone knows about buying a house using the bank’s money. You are leveraging the bank’s capital to be able to purchase a property. For the privilege to use their money, you pay them interest on their money. This can be very expensive if you are trying to pay off your own house, but if you leverage the bank’s cash and someone pays the interest for you (through renting the property from you), then they are ultimately buying your asset for you.

Using other people’s money is great as long as you are not the one paying the interest. If someone else is paying the interest, then this is an excellent form of leverage. It could be your customers or your tenants paying the interest, but as long as you are not paying for it, then it doesn’t cost you anything to leverage other people’s money. You then can buy an asset that you wouldn’t have been able to afford otherwise. This makes you wealthier than you ever could have been by yourself.

Leverage #2 – Other People’s Time

Most people go to work, and they use no leverage at all. They get paid a certain amount for every hour that they work. They are limited to the amount of income they can earn because they can only charge so much per hour, and they can only work so hard. Rich people, on the other hand, have other people working for them. Instead of working for money, they have other people working to make them rich. They might have 20 employees, making them rich, meaning their leverage is 20:1, they might have 1,000 employees, making them rich, and their leverage is 1,000:1. Using other people’s time to make you rich is something you need to do if you want to be very rich. If you wish to be average, then you can get rich working with wages. But if you desire to be very rich, you need someone else who works for you.

Shortly I will have an accountant and tax strategist who works full time only for me. I will also have writers and marketers who work full time for me, make me rich. I don’t have to work; I have to pay them to work for me. As long as they make more for me than I pay them, I can hire as many people as needed. This means that the more people I rent, the more I get rich.

Leverage #3 – Technology

With the invention of the personal computer and the internet, it is possible for almost anyone to become rich without requiring a lot of money. Technology is excellent leverage because it works for you 24 hours per day, and it is a lot cheaper than hiring someone to work for you 24 hours per day. You can also reach people all over the world by using the leverage of technology.

One of the best forms of technological leverage is the internet. I have a variety of websites on the internet that work for me 24 hours per day. At any point in time, people can go to my website and sign up for my free email newsletter, or they can buy a product from me. It is like having a store that is open 24 hours per day that anyone in the world can come and buy things from me. This is excellent leverage for me as I can work once to create a website and then for the next 10-20 years (or more) it can work for me and earn me money. Even better, I can leverage someone else’s money to pay for someone else’s time so they can create the webpage for me, then I earn money for years to come. You should know what you are doing before you start using the leverage that slowly, but it gives you an idea of the endless possibilities of leverage provided by technology.

So if you want to become rich, then you need to begin to learn how to master the art of leverage. The better you are at using leverage, the lower your risks, and the higher your return can be. To put it, the better you can use the leverage of other people’s money, other people’s time and technology, the quicker you can become rich with a small amount of money.