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The Power of Leverage

less than 1m read
·Nov 3, 2024

Last piece of making money is you have to have leverage. Leverage is critical. Leverage, you know, Archimedes famously said, “give me a lever long enough and a place to stand, and I will move the Earth." That was a very powerful statement where he was basically saying it's the power of leverage.

Humans are not evolved to understand leverage. Our evolutionary past maps inputs to outputs; it's a one-to-one ratio. So, for example, if I'm chopping trees and I'm like harvesting wood to go start a fire, then basically if I put in, you know, 8 hours chopping wood, that's probably going to get me eight times the output that I would get from 1 hour of chopping wood.

Whereas with leverage, you know, I might have bulldozers or chainsaws, or I might have lumberjacks working with me. If I make the right decision on how to cut down the wood, how to store it, and how to ship it and transport it, I get a multiplier effect. It's very important to understand the different kinds of leverage that are available.

Because if you want to make money, you need that specific knowledge, you need that accountability, and now you're going to need to use whichever form of leverage best applies to your situation.

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