Using leverage can make you wealthy. When I talk about using leverage most people think I'm talking about borrowing money. Certainly that is a form of leverage, leveraging other people's money. When I talk about getting wealthy, most people think I'm talking only about monetary wealth. Surely that is a form of wealth, but not the only important form of wealth.
I want to suggest several types of leverage that can be of value to you. Most of us know that if we use other people's money to buy something we can buy more than we might have bought using just our own money. This kind of leverage is debt. Debt can be a double edged sword; sometimes it works to your advantage and sometimes it works against you. Personally, I believe in being conservative when using this kind of leverage. There are times when you'll see a fantastic opportunity and the only way to capture it is to borrow some of the purchase price. It may well be worth doing so if you plan to capture outsized returns.
Leveraging other people's money will allow you to control larger assets than you might have otherwise done and receive a stream of income that is out of proportion to the money you personally invest. Commercial real estate is a great example of where this can work for you. I assume that if you are reading this article you already understand the application of this kind of leverage in real estate investing. So, I won't expand on that discussion in this article.
There are other important types of leverage that can bring wealth into your life. Some other kinds of leverages include using other people's minds, other people's time, other people's knowledge and other people's skills.
Examples of this kind of leverage are everywhere. You may pray to God to receive his wisdom and use his mind. This is an important form of leverage that can lead to spiritual, emotional, physical, family, social, and temporal wealth if the advice given is heeded and obeyed. Notice the different kinds of wealth that I identified in the previous sentence. All of these types of wealth have great value and, yet they are not all defined in dollars.
When employing someone else either as an independent contractor or as a direct employee you hope to leverage their thinking, problem solving skills, expertise, time, effort, leadership, and productive capabilities of all kinds. For example when you engage a personal physician you leverage his expertise to improve and preserve physical, and/or mental health. Health is wealth.
Picking the brains of friends, attorneys, real estate professionals, doctors, insurance specialists, and hundreds of other specialists and professionals will leverage their studies, expertise and judgement and help you to create better outcomes than you might have created for yourself. If you want to maximize your results and improve the probability of success then leverage the right specialists.
Over the years I've seen leverage work even inside my family. My sons are both information systems experts. I leverage their wisdom when making choices about computers and software and systems. My father is a real estate guru. I've learned from him in the real estate arena and leverage his wisdom and experience in that area and other areas continually. My wife is a nurse and an administrator. She helps me make better business and family decisions and/or makes them herself. She works in the home and out of the home providing additional value beyond what I can do. We hire a service to take care of the yard, thereby freeing up our time to allow the focus of our time in areas where we can have bigger results. My mother knows how to create, develop and maintain relationships better than anyone I know. Her example in this area can be leveraged. My brother and sisters, aunts, uncles, and cousins all have specialized knowledge that is a help to me from time to time. I hope I can also give something to them as well. These are symbiotic relationships founded upon love that provide value to all.
Leverage can be wonderful when it is working for you. Don't forget to leverage the expertise, judgment, skill, leadership, wisdom, and brain power of others. That will give you positive leverage. While you're at it, don't forget that there is great wealth beyond the $ sign. Relationships and love are forms of wealth. Spiritual, mental, emotional, social, and physical health are all forms of great wealth. Money alone will not buy all these forms of wealth. Look for opportunities for leverage everywhere in life and it will multiply your returns. Don't forget that you usually need to make the down payment before you can expect the leverage. Be willing to allow others to leverage your time, talent, expertise, wisdom, etc. as well while having faith that you are planting the seeds of a great harvest.
Investing in stocks, real estate, and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I promote precious metals. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.