The Concept Behind Leverage

Leverage means many things. I could never grasp the concept of what it meant when people said that “leverage equals power.” I thought that maybe this was a bad word since I associate the word power with people who are power hungry and greedy. But before the word power even means authority or command over others such as a strict boss, power just means the ability to do or act.

On the most basic level, having leverage means having something that gives you an advantage over somebody else. I kind of see it as two people living in different houses who both wish to have electricity, and only one has access to a lever. When that person pushes down on the lever, power is produced. Because of that lever, he is able to now cook food, watch TV, take a shower, go on the internet, etc. while the other person is left in the dark.

In business or in life, having leverage is important. Robert Kiyosaki, author of many Rich Dad books, has said that leverage is the ability to do more with less. The reason why there is such a big gap between the rich and the poor is because the rich have more leverage than the poor. The more money a person has, the more he can do to use that money and invest in things that make him or her more money. They have an advantage. That’s why if you ever wonder how bogus it is that some people are billions and wonder how hard it is to get to that path, once a person is a millionaire or has millions of dollars, they have a lot more options that they can do with their money to make them more money, most likely through multiple streams of income. It’s probably a lot more making money as well.

A poor person starting at nothing has zero leverage. That’s why it’s harder for poor people to become rich. If you look all over the world, you’ll see that poor people don’t have a lot of ways to make more money. A person with a million dollars would have a lot easier of a time making a million dollars than a person with zero dollars trying to make the same amount of money, because the first person has leverage, and that is their money, which could be used to produce more money. They are at an advantage.

But it’s not impossible for a person with no money to make a million dollars, because money is not the most important type of leverage. What’s more important than money as a type of leverage is time. With lots of money, you can make more money, but you can never make more time. With lots of time, you can always use that time to make money. You’ve probably heard the saying, time equals money. That concept applies here, meaning that everybody has time. It’s their leverage, but it depends on what they do with that time that counts.

There are many types of leverage – networks, money, time, technology – but the most important type of leverage your mind. Donald Trump quotes, “Brainpower is the ultimate leverage.” Your mind and brainpower are sort of the same thing.

To have the ultimate advantage, you need to do much as you can to educate yourself and fill yourself with knowledge. You want to be the person with the lever, not the person who is left in the dark. Many people in the world are left in the dark because they do not want to take the effort to learn. There’s always more things to learn. The more you learn, the more leverage you’ll have. The more leverage you have, the more advantage you’ll have. And with a big advantage, it makes life a whole lot easier.

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