Leverage may be a dirty word right now, but it’s still the best way to build wealth.

LEVERAGE: Lets begin with OPM–Other People’s Money

Leverage has gotten a very bad name in this current financial crisis. And lets be honest–debt and the deficit we’ve accumulated is the bane of our country’s present financial problems, not to mention so many individual’s over-leveraged experience, along with the anxiety-filled, sleepless nights that come along with it. What were we thinking!?!

But measured, reasonable, wisely applied leverage is still the best way someone with limited means can become someone with great means. It begins with a critical difference in mindset.

A consumption mindset asks: “How can I manage my debt in order to live the richest lifestyle possible.” The pursuit of this kind of life is an invitation to a stressful, workaholism that is something to be avoided like malaria.

.

A non-leverage mindset asks: “How can I scrimp and save, and use whatever is left over to slowly build my nest egg.” The question to ask here is, “Am I avoiding leverage out of the decision to live as debt-free as possible or out of fear?” The former has a lot to be said for it, the latter is just another way to try to avoid all risk.

A leverage mindset asks: “How can I use borrow money wisely to multiply my money-making and business building activities in order to accelerate my returns?”

The biggest difference is NOT how we invest the money we HAVE but how we invest the money we DO NOT HAVE. It is how we leverage the money that we DON’T HAVE that can make us wealthy.

A leverage mindset does not look at an investment with the objection: “I just can’t afford this.” Instead it strategically considers, “How can I best use leverage to pay for this investment in a way that increases my overall return without taking on undo risk.

And don’t forget all those other…

OTHER PEOPLES’ RESOURCES that will leverage your TIME, TALENT & TREASURE…

OPE-XPERIENCE–Learning from MENTORS via in person books, etc.

OPE-XPERTISE–Using business ASSOCIATES to do what they are better trained at

OPM-ONEY–Borrowing CAPITAL which yields a higher rate than you are paying for it

OPT-IME–Building a skilled & committed TEAM to compliment and further your mission

OPS-YSTEM–Working to create the ULTIMATE in LEVERAGE: A TURN-KEY SYSTEM

Leveraging your time: never forget the 80/20 principle.

LEVERAGE: Adapting our Business to the Reality of Pareto & Parkinson’s Laws

Being busy is a form of laziness–lazy thinking and indiscriminate action. -Timothy Ferriss, The 4-Hour Workweek, p. 73 ff

Pareto’s Law–the 80/20 principle (Vilfredo Pareto, 1848-1923)

80% of Pareto’s garden peas were produced by 20% of the peapods he planted

80% of the wealth was in the hands of 20% of the people

80% of the outputs result from 20% of the inputs

80% of the consequences flow from 20% of the causes

80% of the results come from 20% of the effort and time

80% of company profits come from 20% of the products and customers

80% of all stock market gins are realized by 20% of the investors and

The list is infinitely long and diverse, and the ratio is often skewed even more severely: 90/10, 95/5, and 99/1 re not uncommon, but the minimum ratio to seek is 80/20

Parkinson’s Law dictates that a task will swell in (perceived) importance and complexity in relation to the time allotted for its completion. It is the magic of imminent deadline.

There are thus two synergistic approaches for increasing productivity that is inversions of each other:

1. Limit tasks to the important to shorten work time (Pareto’s Law, 80/20)

2. Shorten work time to limit tasks to the important (Parkinson’s Law)

The best solution is to use both together: Identify the few critical tasks that contribute most to income and schedule them with very short and clear deadlines. If you haven’t identified the mission-critical tasks and set aggressive start and stop times for their completion, the unimportant becomes the important.

The key to having more time is doing less:

(1) Define a short to-do list and (2) define a not-to-do list.

-If you had a heart attack and had to work two hours a day, what would you do? (from The 4-Hour Workweek, 78-81 of )

-If you had a second heart attack and had to work two hours a week, what would you do?

-If you had a gun to your head and had to stop doing 4/5 of different time-consuming activities, what would you remove?

-What are the top three activities I use to fill time to feel I as though I’ve been productive?

-Learn to ask, “If this is the only thing I accomplish today, will I be satisfied with my day?”

-Ask yourself three times a day, “Are you inventing things to do to avoid the important?”

-Use Parkinson’s Law on a Macro and Micro level.