Leverage – The Lowest Hanging Fruit to Wealth
Leverage doesn’t only refer to borrowing money. It’s a common misconception because there are seven forms of leverage, so it’s more than borrowing money. And if you want to build your wealth, then using leverage is necessary.
Simply put, leverage can be understood as the ability to control a lot with just a little. If you have enough leverage (and there’s never enough,) your journey to wealth will be faster. Let’s take a look at all the seven forms of leverage.
1. OPM (Other People’s Money)
OPM stands for the use of debt. It’s also known as gearing, and saving alone can make you rich only if your income is massive and expenses very low. For example, you’re 20 years old and want to save until you’re 60. Your income-expense balance allows you to keep $650 each month, with a 5% compound return after taxation. When you reach 60, you will have saved almost $1 million. This takes a lot of effort and time.
OPM, on the other hand, allows you to save hard and use other people’s money to achieve your goals – buy assets at a faster rate, earlies, and control more money than saving everything. Borrow and invest to fast-track your wealth creation.
2. OPW (Other People’s Work)
Bill Gates uses the OPW leverage. It’s when you employ people to leverage their time, which allows you to capture the time and effort of many. That will enable you to produce something in a shorter time than you could do yourself in a lifetime.
3. OPT (Other People’s Time)
There are individuals, small businesses and companies (professionals specialized in a particular field) that will sell you their time. These are mortgage agents, lawyers, accountants, and other providers of services that you can use to save time and money.
4. OPI (Other People’s Ideas)
Networking and franchise businesses most often leverage the power of OPI, which refers to copying and learning good income-producing ideas. The fundamentals of OPI don’t change over time, because the wealth creation system is the same today as it was in past decades. It is what makes OPI the ultimate wealth creation system. Learn and apply, without wasting your time.
5. OPE (Other People’s Experiences)
Other people’s experiences are among the best resources of leverage you can use. To learn everything that you need to know takes an enormous amount of time and effort, which you don’t have at your disposal. Learn from the mistakes, knowledge, and experiences of others – school, college, seminars, books, mentors, OPW, OPT, and so on.
6. Scalable Customer Base
A local business, such as a restaurant, can only serve customers in that locality, so their customer base isn’t scalable. On the other hand, people from all around the world may be able to buy your product or service, but it doesn’t matter if they don’t know about it. Thanks to the Internet and Digital Marketing tools, you can reach audiences around the globe and scale your customer base up.
7. Scalable Production and Distribution
How about your products or services; can they be scaled for production and distribution easily? For example, a book can be printed as many times as the demand for it requires. On the other hand, teaching is a face-to-face service that can’t be scaled that easily. The age of the Internet allows us to buy and distribute efficiently. But again, that’s no match for an Ebook, which can be downloaded instantly from a remote location.
There are many resources and strengths you can tap into on your path to wealth creation. Use leverage to multiply the effectiveness of one individual, because then the systems of sales and production can grow independently of the owner or inventor. To build your wealth, you need to understand, master, and utilize leverage.
Are you ready to set on your path toward wealth creation? Are you already on it? Blackhawk Partners and our expert advisors on investing, and trading can help you reach your goals and make the correct moves at the right time.
Leverage our experience for your benefit.