May 19, 2024

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Studying business science

Creating Wealth Through Leverage

Massive wealth creation requires leverage. What is leverage? It is the power to control a lot with just a little. This is one important principle every wealthy men knows and don’t joke about. No man knows it all. If you want to create wealth with minimal stress, you’ve got to engage the power of leverage in it’s multiple dimensions. In the business arena, there are five kinds of leverage:

1. Other Peoples Money (OPM)
2. Other People’s Experience (OPE)
3. Other People’s Idea (OPI)
4. Other People’s Time (OPT)
5. Other People’s Work (OPW)

This dimension of leverages has been the indispensable tools of wealthy men and I think it important for you and I to start exploring this goldmine in our quest for wealth creation. Your level of mastery of this leverage will to a large extent determine not how much of wealth you will be able to create but it will hasten the rate at which your wealth creation desire will come to fruition. There is something that is common to all this dimensions of leverage. The whole five kinds of leverage center around people. If we begin to analyze each kind of leverage stated you will discover that people, I mean human resources. What I’m saying is that the understanding of leverage in terms of human capital will definitely impart your desire to create wealth. There is no solo success.

What leverage does is to amplify your result. take for example, investing in real estate or in stock. there are times you have spotted a money making opportunity in either of these two investment opportunities and yet you don’t have the financial resources to finance the deal. At such instance as a smart entrepreneur, you know it is time to look for a margin or a loan knowing fully well that once you are able to close that deal, the loan or margin will be taken care of with some good profit for you at the end. It will end for you a win win situation without a penny from you pocket. You can see the need to really master the use of leverage in-depth to enjoy all it’s attending benefits.

I must also state clearly that there is the demerit sides of leverage when not well manage.