I can think back a lot of years to 2005. That was the year I started making more than Six Figures for a year. For someone that was just 3 years out of college, that was pretty good. At least that was what I thought. I was a W2 employee back then so when I started making over $10,000 per month, my take home pay was close to $7000 or so, maybe a bit more. It was the most I had ever made in a monthly income, and it felt good. One of my co-workers saw I was doing fairly well and set me up with his financial planner friend. So, I thought I was doing pretty well in my first year of making a Six Figure per year income and so maybe I’d put some of my hard-earned money with a financial planner. It was 2005 and the markets were hot, and me as a big shot was ready to invest.
I met with the financial planner and sufficed it to say, I was not impressed. He was young also and arrogant and maybe two arrogant 20-year-olds making good money, just did not mix well. We did go over a lot of numbers and talked about what it meant to get to certain net worth goals and how much savings that would take. It was educational, but I did not like his style, so we did not meet more past that first meeting. One thing that did stick out to me and has stuck with me for a long time was what he said to me about saving money and becoming wealthy. He said that if I wanted to get to the net worth goals that I hoped for, that I had “to make a lot more money per year than just six figures” to get where I wanted to go financially.
He was definitely right about that, and I knew it. Making just $100 to $200k per year was not going to get me to financial freedom. Then I started making over $300k per year and I thought I was getting to be in a better place financially. But then you have more kids and more expenses and a more expensive home and more expensive cars and it all adds up and I found I was not saving as much money per month as I needed. Making a lot of money per year is definitely a great way to get ahead and be in a better financial place. But it is not enough. Unfortunately, it is not even close to enough.
Leverage is the ability to influence a system or environment, in a way that multiplies your efforts. Better said, it is investing the right amount of effort, through the proper channel, to yield greater returns for your business. Leverage is the best way to build long term wealth. In order to grow your wealth and obtain financial freedom, you truly need to multiply your money and efforts through the power of leverage. You can use leverage in all parts of your finances, in investing, in your business, and especially through systems.
Let’s talk about some examples. In my sales jobs, I have to leverage all the tools, operations staff, product knowledge, marketing methods, and service that are at my disposal to sell at a high level every day. When it comes to investing, we need to leverage the power of compound interest in the markets to see our money grow. If we want to buy rental properties, we can leverage a mortgage to finance the majority of the purchase price and leverage other people’s money to pay the mortgage payment through the rent payments and ideally make a positive cash flow. In business, we need to leverage the power of systems to be able do more through the system than we can do on our own. In running a business, often times if there is an existing system that is working, then the owner can hire employees to follow that system and make more money for the business. The platform economy leverages the power of their online platform to continue to bring in more and more consumers that spend money through their platform and make that platform business more revenue.
In life and business, using leverage can multiply your efforts and allow you to achieve success faster than your own efforts alone. At Side Business Freedom we aim to build a business that can duplicate our efforts and plug business owners into a system where everyone can achieve success together with the ultimate goal of a stable business that produces massive amounts of passive income. Like any business this will take a lot of effort to get the ball rolling, but once that ball is rolling, it will spit off passive income that will be able to change your life.
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