Leverage — This is everywhere in life but only few can identify

Leverage !!!

What is the leverage?

In Physics I learned a unique concept. If you want to move a heavy load you can use fulcrum as support and by putting efforts using lever.

“Give me a lever long enough and a fulcrum on which to place it, and I will move the world.” – Archimedes.

So lever is a leverage because without it you cannot move the heavy load.

Leverage

For example

• Screwdriver is a leverage used to move in/out the screw.

• Book is a leverage used to teach you something from other person's knowledge.

I can say that in modern world we find a lot of leverages which you can use to gain advantage of following:

• Knowledge through Internet

• Buying / Selling Stocks through Digital Apps

• News on the go because of Twitter

Question is why I should know about the leverage?

This is the question I also thought about.

Let's take a hypothetical scenario

Suppose I am standing in a plain field seeing Sun rise around 6,000 BC. My first though what to eat because now I am hungry.

I started looking around everywhere.

Then I see an Apple Tree.

I need to go up to get the Apple or I should look around to use a stone to throw at Apple.

Then I climbed up and got my Apple.

Now After 3 hours I again feeling hunger this time I want to eat Meat.

For that I need tool.

To make a Tool either I spend my own time to build from scratch or find from someone.

If I make by myself I need a lot of time with trial and error.

But If I get help from someone who made it. That is Leverage

Because that someone spend his time to build the tool and I am only using it for my hunting purpose.

In a nutshell we all need a leverage.

Examples of Leverage

Since my early years I know only these two types of leverage.

1. Physics Leverage: The oldest leverage is when Lever and Fulcrum used to move load .

   
   

2. Finance Leverage: When you use money of the bank to buy something.

Four forms of Leverage

One day I read a quote from a modern philosopher Naval ravikant on internet

In the Age of Infinite leverage, Judgment is the most important Skills

He further explained Leverage into 4 forms

• Labour: Spending your time. (Oldest). everyone has access to it.

• Capital: Use other person time using money. (Older) Only rich has access to it.

• Media: Use digital media to do something to get something (Newer).

• Code: Use software to do something. (Newest)

“The one who leverages the markets is an entrepreneur. The one who leverages the mobs is a politician.” - Venkat

Background of Leverage

In the last 500 years, a third leverage emerged  Media (Paper Printing) in around 1456 AD in Italy.

Because of this knowledge spread wide. Before this knowledge and information was sitting in the minds of people.

Conclusion

So if you want to be successful you need to use how to use leverage.

• Want a new car - leverage capital using car loan.

• Want get things done - leverage a labour to pay rate cheaper than you hourly rate.

• Want to be wealthy - leverage a business where you sell product

“If you don't have leverage, you're never going to make real wealth.” - Naval Ravikant

Remember your time is finite and that cannot be leverage.  You must know how to use leverage to make wealth

To improve the OUTPUT: increase the Leverage (input-to-output ratio). Keep search many leverages in the life to use in your favour.

Stay tuned next time.