PRINCIPLE OF LEVERAGE, ESP. OTHER PEOPLE'S EFFORTS
TO MAGNIFY THE GAINS, AFTER, OF COURSE, THE COSTS



Not a new idea, but a very, very necessary one.  Having more power directed toward getting what you want in life will bring you those things that you want more quickly and more effectively (if you use the power well).

Recall that the definition of power is the ability to produce desired results.  One is more powerful if one directs energy more directly toward getting the results AND even more powerful if one also learned how to apply the energy more efficiently and effectively.  The latter is what leverage is about.  Leverage can make oneself much more effective per amount of energy used (so that one produces more desired effects/results from the same amount of energy!).  (Read Having Power In Life - Being Effective So That You Trully Get What You Want Out Of Life.)

(The principle of leveraging is related directly to the principle of synergy, which you should know AND definitely use as often as you can, for it will immensely leverage your efforts into greater results!)
_____________________________________________________


Definition:  Leverage is utilizing assets (people, time, money, connections, systems, knowledge, family, strategic alliances) to get the maximum return, results, and rewards (or savings of your time) from utilizing those assets.  (See business dictionary definition: Leverage.)

Risks: Risks are increased, sometimes dramatically.  So it is necessary to be educated before using any form of leverage other than a straight purchase of a service that saves you time.

Many people have lost money and gone broke from either misusing leverage or from being whipsawed when a risk occurs (which it occasionally does!).  (The use of debt to buy an asset is called "leverage", where we are leveraging the dollars we have to be able to buy something much bigger, due to adding the borrowed dollars.)

Basic principle:  We're all familiar with a fulcrum (something placed toward the middle holding a plank/lever up) where a much lighter person can lift a much heavier person on the other end of a plank - by being further out from the center on the plank.  This is the "teeter-totter" in a public park, where the heavier person has to move closer to the center in order to balance each other.  The point is that we can use a lever to magnify the effects (weight moved, for instance) on the other end of the lever.

Financial, investments leverage: The idea of leverage where a few dollars of one's own are used but where other's money (an investment or a loan) is added to create more total funds.  In financial terms, borrowing more on an investment increases the risk - and you shouldn't be doing it if you're not a super expert, as this is a super trap - seek knowledge first before you are dazzled with some great financial pitch. 

Business leverage: In business, if you're the owner, you attempt to pay other people to do work that generates money for the business, but you must pay them plus the overhead.  By using other people you increase the reward, but also you increase the risk.  Most people fail in business, because they did not take enough care to plan and learn how to use the efforts of others effectively.  Read the Business Books in the Resources section.


THE MORE COMPLEX AND/OR THE BIGGER, THE MORE LEARNING NEEDED

This takes a great deal of learning, so some people may choose not to learn this at the higher levels.  However, if you want to move the world, a big lever is necessary - and in that case, leveraging other people's efforts is required, as yours will not be sufficient. 

[Archimedes: "Give me a lever long enough and a place to stand and I can move the  world."]


OTHERWISE THE SIMPLE BASICS ARE EASY TO LEARN

For those who do not wish to move the world, it is very productive to learn the simple basics.

The simplest of all:  hire someone else to do a specific defined task, such as clean the house.  You pay them a specific amount that is worth less than what you can produce with the time and energy you saved.  A person earning $50 per hour can afford to spend $25 an hour to free up one hour to utilize elsewhere.  (However, a smart financial person will figure out what is left over after taxes and benefit costs, so $50 might net him/her $30, which makes the decision alot closer.)

If you would spend 10 hours setting up a computer system and an expert could set it up for $200, then you would "make a profit", so to speak (plus the value of not making so many mistakes!).


IN ORDER TO LEVERAGE VIA PEOPLE

You need to do this:

Screen for the ability and responsibility level to perform what is needed

Enroll them in "the cause", "the mission", the meaning, etc. and in doing an excellent job.

Train them to be effective, including having written "directions" (procedures) on what to do, including policies and rules to follow.

Monitor, inspect - How are they doing?

Adjust - If the job is not being done, confront it and fix it or go your separate ways.
(Read the pieces Shall I help Him Or Fire Him Or Ignore Him? and link from there into the "Having To Fire Someone" piece.)


This page will be added to and built, as I finish my project on how to effectively leverage myself into having this site and The Life Management Alliance reach more people and benefit people at an even greater level....


Educational, outside sites

Principle Of Leverage: In business (video 6:43)

Principle Of Leverage:  Expertise. Simple.
______________
To learn this more deeply

Leverage (Wikipedia)

Related references on this site

Time/Productivity Contents/Links

Power In Life Contents/Links

The Power Formulas  - One page overview.

Shall I help Him Or Fire Him Or Ignore Him?
If you intend to go into business, study alot!  Read Business Books in the Resources section.