POWER
OF LEVERAGE
Keys to Wealth:
Leveraging S E T $
By: Clinton Swaine
If you want to be rich and happy then don’t
go to school! That was the name of the first book by Robert
Kiyosaki, author of the best selling book Rich Dad Poor Dad
and a series of books on becoming financially free. His book
changed the paradigm of hundreds of thousands of individuals
from working hard for money to have their money working hard
for them. There are many ways to build financial freedom and
a key concept in nearly all of them is the power of leverage.
There are four key elements in earning income.
They are Skills, Energy, Time and Money ($). It is how these
skills are used to generate money that makes the difference
between the poor, the middle class and the ultra wealthy. Let
us examine the four different areas.
Skills. This category is the
highest paying of all the four areas. Skills represents the
actual talent, expertise, knowledge and resources that go into
completing a transaction. For a factory floor employee this
might mean pushing certain buttons or picking out bad items
for Donald Trump it may be the knowledge to structure a deal
with multiple parties, using tax advantages and market timing
to create another billion dollar project. I cannot emphasize
this enough your skills are your most valuable assets. This
is far more important than money in any bank. The concept that
a millionaire can lose his money and make it all back again
and more is based on the competence and skill level acquired
by the Millionaire.
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Energy.
This is the back breaking physical, mental and emotional energy
spent during the task. Using energy, especially physical is
a log, hard road to success. Ask how many physical laborers
are multi millionaires and you will get the idea. Blood, sweat
and tears alone is seldom the path the financial success for
99% of the Fortune 500.
Time.
This is the lowest paying category and yet critical in the equation.
There is a common misconception that Time is Money. The biggest
mistake an entrepreneur can make is to trade time directly for
money. Once that hour is gone, it can never be repaid. The objective
is to create income streams for infinity from time worked so
that the income climbs the longer you remain working. Most hard
working people are paid based purely on time rather than performance.
It has been estimated that most people spend less than 50% of
their work hours actually working, the rest being spent in lunch
breaks, tea breaks, useless meetings, talking and generally
wasting time. A time for money mentally is recipe for poverty
as very few employers will pay people over $500 per hour or
$20,000 per week or $1,000,000 a year on a wage or salary plan
and yet this money can be made by entrepreneurs who avoid this
paradigm.
Money
($) This is the last category and for some a highly
lucrative way of becoming wealthy without having to spend energy
and allowing you to build wealth. Most people never become wealthy
because they never put any money into their work and expect
money out ie a paycheck. Without having any risk there is little
chance of gain.
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The
biggest key to great wealth is being able to leverage all four
SET$. The most money is earned by the people with the highest
skills who also leverage others peoples skills (OPS) and resources.
By employing people you are able to use others peoples time
(OPT) and energy (OPE). As time is a highly limited resource
from a personal point of view, the more you can outsource lower
earning activities while maintaining the higher earning activities
the greater the wealth you will create. Donald Trump does no
empty his own trash, wash his cars or mows his lawn. These tasks
are low paying jobs and a poor use his Skills, Energy and Time.
We
often hear of no money down and a sound entrepreneur guards
his cash and uses other people’s money (OPM) wherever possible.
There are many others who would love to earn 8-12% on their
money allowing an entrepreneur to use their money more effectively
where it can earn higher returns.
The
bottom line is every time you take out the trash, mow your own
lawn, do your own dishes or do anything which could be outsourced
to someone else you are stealing from yourself not only at that
time but by the law of compounding years into the future. How
many millions have you frittered away doing the dishes?
Clinton
Swaine is the creator of the game ‘The Millionaire’s Market’
which is designed to teach people about building passive residual
income. For more information he can be contacted at 909 578
5824 or visit www.millionairesmarketgame.com
This article is © by Clinton Swaine, 2005
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