If you have ever bought anything on credit, you’ve used leverage.
Let’s say you put some money you had saved down on a car and finance the rest. With the loan, you have to pay five years of interest—not an inconsiderable sum. But you get the car right away, and all the opportunity it brings: picking up your date, taking a road trip, and of course, driving to your job to make the money you need to pay off your car loan. The car may not be “worth” the money you paid plus interest—certainly not after you’ve driven it around for five years—but living without a car carries its own costs.
Without the loan, you would have whatever amount you had for a down payment, but you would have to spend at least a few years saving up the rest of the car’s purchase price. And you would probably be taking the bus—making it that much harder to do everything you want to do, including making a living.
The loan is your leverage—it’s what enables you to do more with your money.
But leverage isn’t always money. Sometimes it’s about channeling your energy and effort, enlisting the help of your friends and colleagues, applying technology, working with the press or social media, or mentoring someone who goes on to mentor 10 more people.
I’ve used leverage to increase capital for my businesses, but I’ve also used it to get the most out of my marketing, to raise funds for civic initiatives, and to do more in philanthropy than we possibly could have with our money alone.
Think of the literal ...