Wealth Creation Through Leverage

Wealth Creation Through Leverage

Massive wealth creation requires leverage. What is leverage? It is the power to control a lot with just a little. This is an important principle that all rich men know and don’t joke about. No man knows everything. If he wants to create wealth with minimal stress, he must use the power of leverage in its many dimensions. In business, there are five types of leverage:

1. Money from other towns (OPM)

2. Experience of other people (OPE)

3. Other People’s Idea (OPI)

4. Other People’s Time (OPT)

5. Other People’s Work (OPW)

This dimension of leverage has been the indispensable tool of rich men and I think it is important that you and I begin to explore this gold mine in our pursuit of wealth creation. Your level of mastery of this leverage will not largely determine the amount of wealth you will be able to create, but rather it will accelerate the rate at which your desire for wealth creation will come to fruition. There is something that is common to all these dimensions of leverage. All five types of leverage focus on people. If we start looking at each type of leverage mentioned, you’ll find out that people, I mean human resources. What I am saying is that understanding leverage in terms of human capital will definitely impart your desire to create wealth. There is no success alone.

What leverage does is amplify your outcome. Take, for example, investing in real estate or stocks. There are times when you’ve spotted a money-making opportunity in either of these two investment opportunities, and yet you don’t have the financial resources to finance the deal. In such a case, as a savvy entrepreneur, you know it’s time to look for a margin or a loan knowing full well that once you can close that deal, the loan or margin will work out at a nice profit for you. the end. It will end for you a win-win situation without a penny out of pocket. You can see the need to really master the use of leverage in depth to enjoy its full benefits.

I should also make it clear that there are downsides to leverage when it is not well managed.

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