J. Paul Getty (1892 - 1976), who created one of the world's greatest fortunes, said: "I'd rather have 1% of the effort of 100 men than 100% of my own effort."
Leverage is a factor by which a lever increases, or multiplies, a force.
The simplest device for creating leverage is the lever. A lever is a stick which rests on a fulcrum near one end. When you push the long end of the stick down a long ways, the short end moves a small distance up with great force. With this device a man can easily lift several times his own weight.
Now how does this apply to your rat race escape?
Well, leverage encourages you to find ways to multiply the results attained from the work you put in. Rather than lifting just 5 pounds of weight when you apply 5 pounds of force... you want to find a way to lift 100 pounds of weight when you apply 5 pounds of force!
The concept of leverage requires a different way of thinking about things. Most of us have been raised with the puritan work ethic of taking pride and joy in our hard work. Now while this is definitely still very valuable... working hard should never come before working smart. Unless you are doing the work purely for the joy of it, and not for the outcome.
Leverage says - work smart first, to figure out what tools or methods will maximize your output from the limited input you can provide.
Once you've figured that out, go forward and work hard to provide that limited input, confident that your work will not be in vain!
It can also refer, in an economic sense, to the use of debt to acquire assets in a market economy. Imagine - in some countries in the world, you must have 100% cash to build or purchase a house. This is a scenario where there is no leverage - exactly what you put in, is what you get out.
In many other countries though, you can use debt as leverage to acquire a home many times more valuable than what you put in. For example, you could buy a $100,000 house by paying just $10,000 up front! Wow! That's like using 10 pounds of effort to lift 100 pounds of weight!
Robert Kiyosaki, creator of the Rich Dad series of books and tools, famously said: “If you’re working hard physically and not getting ahead financially, then you’re probably someone else’s leverage!”
In addition to leveraging other people's money (in the above case, the money of the lending bank),
You can also leverage other people's TIME.
Most people realize the value of money, but underestimate the value of time. There are so many things that each of us is capable of doing. BUT, if we insist on doing all of these things on our own, it will take FOR EVER to get them all done!!!
Instead, we can leverage other people's time - they spend their energy doing some specialized tasks for us, and we get better results in shorter time. So just like the above example of financial leverage - we can put just 10% of the time into a project, and still end up with 100% of the desired results - by leveraging other people's time.
Here's an even less obvious way by which you can apply leverage. KNOWLEDGE. So in theory, it is possible for you to read, study and learn everything you need to know on a particular topic. Like affiliate marketing, or escaping the rat race.
However, there are many people who have already studied your area of interest in-depth, and can give you the specific pieces of knowledge you need, when you need it.
So while you could spend all your time becoming an expert in each and every area of your life... it would be better for you to leverage the wisdom of others when you need it. So again, you can put in just 10% of the knowledge needed to accomplish a complex task, and still get 100% of the results. By leveraging specific pieces of knowledge from others!
There's one more really cool area of leverage - technology leverage, or AUTOMATION.
This is particularly evident with the Internet.
There are many things that we could do in a more manual fashion, and still attain our results. But it would likely take more time. Instead, we can and should seek to use automation whenever possible.
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