Did your parents advise you to get a college degree so you could earn more? That used to be solid advice. Do you believe that having strong experience in an occupation is the secret to earning more? That too, used to be true. Were you led to believe that “white collar” jobs pay better than manual labor “blue collar” ones? That premise, like the two before it, is now irrelevant. Because the rules have changed...
Which leads us into part four of our series on the key philosophies that determine your worldview – and the results that worldview produces. More specifically, the philosophy you develop about leveraging earning power and money. In case you’re just jumping in, here’s the premise we’re operating on:
There are seven major, life-defining philosophies you develop about prosperity – these 7 philosophies determine your worldview – and this resulting worldview regulates the level of prosperity you will experience.
The 7 areas of life-determining philosophies are:
Let’s dig into the concept of leverage. Because leverage is a force multiplier, it truly is a prosperity superpower. In part six of the series we will explore the philosophy you develop around the financial issues. But a huge element in your level of financial literacy is going to be contingent on where you come down philosophically on leveraged versus non-leveraged.
The non-leveraged model is pretty simple; it’s what most of the world does. They trade hours for money. Thus, their earning power is restricted by how many hours of productive work they can physically produce. In terms of creating wealth, this is the very worst strategy to employ, no matter how rewarding the hourly rate may be. A pilot earns an extremely lucrative hourly rate, but she can be out earned by any 16-year-old who understands leverage and has a Shopify account.
The leveraged model looks simple as well, but when you look under the hood, it is quite profound. Because leverage allows you to transcend the limitations of space and time...
You can leverage your money. You might only put down $100,000 and buy a $2 million apartment building which would leverage your earning power. You can leverage your labor. Instead of mowing ten lawns a day, you can hire 10 workers who each mow ten lawns a day, again leveraging your earning power. You can leverage your time and effort. If you join a direct selling company and sponsor and train a dozen people, then teach them how to duplicate your results, you can build an organization which produces thousands of hours of productivity every week. There are some limitations to these models, because you still are dependent on others. You’ll need people willing to loan you money, work for you, or who believe in your leadership abilities. Nevertheless, anytime you can apply leverage, you’re much better off than the non-leverage model of trading hours for money.
There are still some other approaches. You might drive for a ride share company, training hours for money. But if you set aside a certain percentage of that money and put it to work through leverage, you’re on your way to escaping the trading hours for money trap.
You work for money or money works for you. Choose wisely.
There is still another level of leverage, the highest one which produces the most lucrative and rewarding results. That is when you leverage your mind. Learning the right knowledge turns your brain into a 24/7 earning machine. Knowledge which gives you skills like developing algorithms and writing code allows you to put a legion of robots working for you. Broader based skills such as critical thinking, lateral thinking, writing, and speaking will also allow you to use your mind for practicing leverage. Acquiring knowledge in other select fields, particularly marketing, persuasion, and psychology will give you the same opportunity.
When you leverage your mind, reputation, and time, you’re not dependent on anyone else. For more on this, read this essay here. What philosophy have you had in terms of leveraged versus non-leveraged up until now? How leveraged (or not) are you in your wealth creation? When you cease working with your time, and instead employ that time to learn skills and knowledge that your mind can utilize to earn – you escape the “trade time for money” model, which is inherently finite and limited. That’s when things really get exciting. Please check in below with your thoughts. And next post we’ll explore the fifth area: spirituality.