Why Leveraging Is Essential in Today's World
We all have the same 24 hours a day. How is it that some people are able to “achieve” more with that time than others? The key lies in leveraging opportunities effectively.
Archimedes once said:
“Give me a lever long enough and a fulcrum on which to place it, and I shall move the world.”
Leverage may carry negative or risky connotations. However, when used correctly, it can empower you to accomplish seemingly impossible tasks and attain significant outcomes, as this quote suggests.
Whether consciously or not, we've all engaged in leveraging at various points in our lives. From utilizing technology and tools to enhance productivity, to turning to friends and family for support during tough times.
The truth is, leveraging is essential if you want to get ahead. For instance, a promotion from a solo contributor to a managerial role often entails a substantial pay increase. The reason is because as a manager, you're entrusted with achieving higher goals by effectively leveraging your time through the support of direct reports.
By actively seeking and wisely employing leverage, you can get ahead than most and detach your earnings from your time. Here are several types of leverage worth mastering.
Technology Leverage:
We're all familiar with how technology shapes our lives and boosts productivity. We've likely relied on common tools like autopay and calendar reminders. Yet, it's valuable to occasionally reassess our daily routines, identifying areas beyond the basics that we can automate, streamline, or delegate. Doing so can liberate time for increased productivity or simply enjoying activities we love.
Identifying and addressing these areas not only benefits us but also opens up potential monetization opportunities, as others who face similar challenges might be interested in purchasing or learning about your solutions.
Financial Leverage:
Financial leverage is a personal favorite and a specialty of mine. I first encountered the concept of financial leverage when we purchased our house, which is a duplex. I come from an upbringing where borrowing money is frowned upon and we avoid buying stuff unless we can pay for it in cash. However, due to the high home prices in this area, like many others, I had to secure a mortgage and borrow money from the bank. To my pleasant surprise, factoring in the rental income, my monthly housing expenses were lower than when I was renting. Additionally, I benefited from property appreciation and gained equity.
That's when the concept of financial leverage truly resonated with me. With careful debt management and focusing on positive cash flow, leveraging becomes a viable strategy. I began acquiring more rental properties, effectively leveraging my capital through borrowing and maximizing my earning with a little extra time by having tenants contribute to mortgage payments.
Human Capital Leverage:
The concept of human capital leverage often goes hand in hand with financial leverage.
A common example is when someone hires a nanny to free up their time to focus on a higher-paying job.
In my case, I hire contractors to assist in repairing my rental properties, tackling tasks I may not have the time or skills to do myself. This enhances the value of my rentals and allows me to rent them at a higher price. Similarly, for my flip houses, it's about increasing the property's value to sell it at a profit.
When you consider it, this approach enables me to achieve more within the confines of 24 hours.
Social Media Leverage:
You've likely heard the saying, 'Your network is your net worth.' In today's digital age, social media offers a transformative opportunity to cultivate authentic personal and professional relationships.
Building your social media following can significantly amplify your reach, influence, voice and open up new opportunities.
In the realm of job searches, recruiters and companies often favor candidates with a strong social media presence. These individuals are perceived as industry experts, especially if they share mutual connections with the hiring teams.
For businesses, a strong social media presence fosters brand awareness and trust, facilitates engagement with followers, generates leads, and provides invaluable metrics and feedback loops for improvements.
Moreover, a sizable following can empower you to advocate for issues you deeply care about.
The objective is to separate your income generation from the constraints of time. When you detach your earning from your time, you create opportunities for passive income streams or sources of revenue that continue to generate returns even when you're not actively working.
