Did you catch this?
 

In the June, 2001, issue of his "No B.S. Marketing Letter," Dan Kennedy reported that one of his Gold Members had sent out the exact same sales letter by both email and snail mail ... to the very same mailing list. -- Guess what? -- The paper & ink version out pulled the email version 3 to 1 ... on top of the response from the email.

As I have often said ...

You can make a fortune in mailorder without ever doing any marketing on the Internet - BUT - you can't make a dime on the Internet without knowing, understanding & using mailorder marketing methods.

Just shows to go ya ...

Jim


The Cold-Blooded Truth about Mailorder!

So True, Jim...
 

Hi Jim,

Fantastic point you make, and a great reminder. So often, we get caught up in "tactics, techniques, tricks & strategies," that we forget about the underlying fundamentals of marketing that have worked for over a century, and will still work next century!

I attended Kennedy's conference in April in Phoenix, and he touched on this very topic. We also touched on a related topic, which is very powerful, which is the concept of "object mailing."

Some of the attendees reported incredible results by inserting a relevant object into their direct, offline pieces to get their prospects' attention!

Thanks again for the reminder. I'd love to discuss marketing principles any day.

Best,

Jesse

> In the June, 2001, issue of his "No
> B.S. Marketing Letter," Dan Kennedy
> reported that one of his Gold Members had
> sent out the exact same sales letter by both
> email and snail mail ... to the very same
> mailing list. -- Guess what? -- The paper
> & ink version out pulled the email
> version 3 to 1 ... on top of the response
> from the email.

> As I have often said ...

> You can make a fortune in mailorder without
> ever doing any marketing on the Internet -
> BUT - you can't make a dime on the Internet
> without knowing, understanding & using
> mailorder marketing methods.

> Just shows to go ya ...

> Jim

Re: Did you catch this?
 

> In the June, 2001, issue of his "No
> B.S. Marketing Letter," Dan Kennedy
> reported that one of his Gold Members had
> sent out the exact same sales letter by both
> email and snail mail ... to the very same
> mailing list. -- Guess what? -- The paper
> & ink version out pulled the email
> version 3 to 1 ... on top of the response
> from the email.

> As I have often said ...

> You can make a fortune in mailorder without
> ever doing any marketing on the Internet -
> BUT - you can't make a dime on the Internet
> without knowing, understanding & using
> mailorder marketing methods.

> Just shows to go ya ...

Hi Jim,

Thanks for that example. It seems to me that some of the most successful people online are those who came from mail order marketing....

By the way, I've found Jim Straw's products some of the best I've come across anywhere....

As many here know, my background is in science, as a physics academic. If I need a piece of knowledge in physics, I have no problem finding it in a book or journal somewhere....

BUT, I've realized that commercially valuable information is often different. People just don't publish commercially valuable information as readily as they publish other kinds of info. The reason why is that many people can make more money by using it themselves, by applying it, and at the same time hiding the information from their competition!

Which is why some of the products Jim Straw produces are priceless.... They give you solid, real, honest-to-goodness money-making information, things that have been done and which worked and were profitable, with all the info given which you need to make it work. That's not as common as you might think (with all the entrepreneurial books out there)....

So, thanks Jim, I'm grateful to you for having provided all this great info in your products, for us beginners to feed our minds with (and make a little cash too).... :)

- Dien




Jim Straw's Power Tools for Entrepreneurs....

Jesse, some more thoughts on leverage.... Would you agree with this?
 

Hi Jesse!

Jesse, your posts about leverage below (such as this one and also this one) have really made me think....

Jesse, is this how you understand using the concept of leverage? Let me first give an example....

First, what is a lever? A lever is a tool you can use to allow yourself to (for example) lift much bigger weights than you normally could....

So, for example, by yourself, using only your arms, you may not be able to lift a big boulder. You might be able to lift a small rock -- but not a big boulder, because it's too heavy.

HOWEVER, if you use a lever, you can use that leverage to lift a much heavier object than you could normally....

The way I see it, the way almost EVERYONE works is like trying to lift the boulder directly. They want to lift the big boulder -- that is, make a lot of wealth -- but they try to do it directly with NO leverage! No wonder they can't do it!

Those, however, who know about the concept of leverage use it.... They use leverage, of one kind or another, to easily lift that big boulder (or make those big profits)....

To better explain this, what I mean is that the average person, including the average small businessperson, is selling their time, and how much money they make is directly related to how much time they spend working. This is the connection you have to break!

It's NOT generally possible to break this as an employee. Practically the only way to break this connection between money and time is as a business person....

Now, on to forms of leverage. For example, Jesse, you mentioned your employees.... Employees are a form of leverage, by using employees you can accomplish more.

For example, let's take someone who starts a lawn-mowing business.... How much money they can make is limited by how much time they can spend mowing lawns. If (say) they charge $20 per hour to mow a lawn, they can make a maximum of about $800 per week (for a 40-hour work week)....

However, what if they are able to get more jobs than they can physically handle? One thing they could do is then employ someone -- say at $15 per hour -- to mow lawns for them.... This gives them leverage. Suddenly, they're no longer limited to just how many hours they can work. In fact, the only limit is how many jobs they can get mowing lawns, and how many good people they can hire! They've started to break the link between their income and their time....

Jesse, now, your post really made me think of the following.... If you do something, and it's profitable (whether small or large), then you can often use leverage (of one kind or another) to increase that profit, so that it becomes a large profit. For example, in our lawn mowing business above, one person working by himself or herself can only make about $800 per week, which is about $40,000 per year.

Most people, if they started this business, would be stuck there. They would just earn that $40,000, year in, year out.

However, someone who knows about leverage knows then that, since they *are* making a profit, that they can use leverage to increase that profit.... Such as by taking on employees.

(Another way is to start a franchise, where you run the franchise which gets the jobs, which you then give to the franchisees, and you can guarantee to them a minimum income per week.... This is how one large lawn mowing franchise business I know of in Australia -- called Jim's Mowing -- operates.... People pay to own a franchise, and for that they get a guaranteed weekly income, and they don't have to look for lawn mowing jobs, because the jobs are given to them.... Jim Penman, who started Jim's mowing, started his own lawn mowing business in the way I described above. However, when he got more jobs than he could handle, he would sell them to others with their own small lawn mowing businesses.... Eventually, this grew into a large franchise business.)

What I'm trying to get at is that if you are making a profit without using any leverage at all, you can probably almost always increase it through leverage, of one kind or another....

There are many types of leverage. Taking on employees is only one kind.... Using commissioned salespeople is another kind. There's also capital leverage, by borrowing money or using the money of investors. And other types of leverage too....

The thing about leverage, however, is that with some forms of leverage you could also be increasing your risk, so you'd have to take that into account. Other types of leverage, though, it seems to me, can decrease your risk....

However, if you are a small, profitable business, then the way to grow is to think about what kinds of leverage can I use, to help break the link between money earned and time spent?....

I'd love to hear your thoughts on this!

- Dien

Re: Jesse, some more thoughts on leverage.... Would you agree with this?
 

Hi Dien,

Thanks for taking the time to post such detailed and lucid thoughts on this fascinating and important topic. Some comments below, threaded into your message:

> Hi Jesse!

> Jesse, your posts about leverage below (such
> as this one and also this one ) have
> really made me think....

> Jesse, is this how you understand using the
> concept of leverage? Let me first give an
> example....

> First, what is a lever? A lever is a tool
> you can use to allow yourself to (for
> example) lift much bigger weights than you
> normally could....

> So, for example, by yourself, using only
> your arms, you may not be able to lift a big
> boulder. You might be able to lift a small
> rock -- but not a big boulder, because it's
> too heavy.

> HOWEVER, if you use a lever, you can use
> that leverage to lift a much heavier
> object than you could normally....

> The way I see it, the way almost EVERYONE
> works is like trying to lift the boulder
> directly. They want to lift the big boulder
> -- that is, make a lot of wealth -- but they
> try to do it directly with NO leverage! No
> wonder they can't do it!

*** Great example, and your definition is spot on! It's certainly no coincidence that the first 5 letters of leverage are LEVER :)

What's interesting is that most everyone would use a lever to lift a boulder, or a jack to raise a car. So without even necessarily knowing it, they are applying principles of leverage into their lives. Yet when it comes to leveraging oneself from a time and/or business standpoint, very few people know what to do, let alone take action on it.

Is this because they lack intelligence or motivation? Not at all! It's actually very similar to Kiyosaki's assertions about money not being taught in school, and people therefore just doing what is 'conventional', or accepting what they learn from their parents, etc.

And 'conventional wisdom' dictates that the way to earn money is through a job. A job would be an example of linear income -- trading time for money. But linear income is not limited to employees. Many highly skilled and respected professionals such as doctors, lawyers, and accountants, also earn linear income. Remember, no matter how high your hourly rate, you are still not leveraging yourself unless you create ways to get paid when you are not working.

Don't get me wrong...I have the highest respect for those who have a job, and carry it out with skill and enthusiasm. Leverage is not necessarily for everyone. But it sure can open up some amazing possibilities. More on that in a moment, below some of your other comments...

> Those, however, who know about the concept
> of leverage use it.... They use leverage, of
> one kind or another, to easily lift that big
> boulder (or make those big profits)....

> To better explain this, what I mean is that
> the average person, including the average
> small businessperson, is selling their time
> , and how much money they make is directly
> related to how much time they spend
> working. This is the connection you have to
> break!

> It's NOT generally possible to break this as
> an employee. Practically the only way to
> break this connection between money and time
> is as a business person....

> Now, on to forms of leverage. For example,
> Jesse, you mentioned your employees....
> Employees are a form of leverage, by using
> employees you can accomplish more.

> For example, let's take someone who starts a
> lawn-mowing business.... How much money they
> can make is limited by how much time they
> can spend mowing lawns. If (say) they charge
> $20 per hour to mow a lawn, they can make a
> maximum of about $800 per week (for a
> 40-hour work week)....

> However, what if they are able to get more
> jobs than they can physically handle? One
> thing they could do is then employ someone
> -- say at $15 per hour -- to mow lawns for
> them.... This gives them leverage. Suddenly,
> they're no longer limited to just how many
> hours they can work. In fact, the only limit
> is how many jobs they can get mowing lawns,
> and how many good people they can hire!
> They've started to break the link between
> their income and their time....

> Jesse, now, your post really made me think
> of the following.... If you do something,
> and it's profitable (whether small or
> large), then you can often use leverage (of
> one kind or another) to increase that
> profit, so that it becomes a large profit.
> For example, in our lawn mowing business
> above, one person working by himself or
> herself can only make about $800 per week,
> which is about $40,000 per year.

> Most people, if they started this business,
> would be stuck there. They would just earn
> that $40,000, year in, year out.

> However, someone who knows about leverage
> knows then that, since they *are* making a
> profit, that they can use leverage to
> increase that profit.... Such as by taking
> on employees.

*** Again, right on the mark. If I had to choose one single quote, to sum up the power of leverage, it would be the following from Billionaire J. Paul Getty:

"I'd rather have 1% of the efforts of 100 men, than 100% of my own efforts."

This goes right along with your comments about having employees. Paying employees, or subcontractors, to carry out certain tasks for you, is certainly a viable and basic model for creating leverage.

But here's something that's not the most comfortable point to discuss, but extremely important:

If you have an employee working for you, you have to calculate your return on investment on that employee, just as you would on any ad or marketing campaign. This may sound somewhat cold and callous, but the truth is that you can only have people working for you if it is profitable. It is incumbent upon you, as a business owner, to calculate exactly what each employee is worth, as compared to what you are paying them.

Now getting back to your point about "breaking the link between time and money," here's another very interesting fact to consider.

The entire *concept of creating info-products* was spawned by the principle of LEVERAGE!

Think about it for a moment. Why do people create their own products? It's so they can take their expertise, and be paid for it up to infinity, rather than be paid only for the number of hours they are able to work. It goes hand in hand with your lawnmowing example. An info product creator is limited only by the number of units that he or she can sell.

> (Another way is to start a franchise, where
> you run the franchise which gets the jobs,
> which you then give to the franchisees, and
> you can guarantee to them a minimum income
> per week.... This is how one large lawn
> mowing franchise business I know of in
> Australia -- called Jim's Mowing --
> operates.... People pay to own a franchise,
> and for that they get a guaranteed weekly
> income, and they don't have to look for lawn
> mowing jobs, because the jobs are given to
> them.... Jim Penman, who started Jim's
> mowing, started his own lawn mowing business
> in the way I described above. However, when
> he got more jobs than he could handle, he
> would sell them to others with their own
> small lawn mowing businesses.... Eventually,
> this grew into a large franchise business.)

> What I'm trying to get at is that if you are
> making a profit without using any leverage
> at all, you can probably almost always
> increase it through leverage, of one kind or
> another....

*** Bingo! You hit the nail on the head. Virtually any *non-leveraged* activity can be translated into a highly leveraged revenue stream. This is the entire thrust of what I aim to do on a daily basis for ourselves and our clients.

> There are many types of leverage. Taking on
> employees is only one kind.... Using
> commissioned salespeople is another kind.
> There's also capital leverage, by borrowing
> money or using the money of investors. And
> other types of leverage too....

*** This is one area of leverage where I'd be extremely interested in expanding discussions. I'd love to hear your thoughts (or anyone else's) on what investment vehicles, real estate ventures, or anything of the like, produce the greatest return, or highest leverage, and why.

> The thing about leverage, however, is that
> with some forms of leverage you could also
> be increasing your risk, so you'd have to
> take that into account. Other types of
> leverage, though, it seems to me, can
> decrease your risk....

*** Here, I can only speak from personal experience. And I can say without question that the more leveraged I've been, the LESS risk, or exposure I have had. A large reason for this is because leverage, in many ways is synonymous with diversification. The more leveraged you are, the more people, ideas, documents, money, etc. you have working for you at any given time. Therefore, you are not solely dependent on any one income producer, as you are with linear income.

Thanks again, Dien, for your input on this topic. It's certainly one that I'd be interested in continuing to talk about!

All the best to you and your mom...

-Jesse

> However, if you are a small, profitable
> business, then the way to grow is to think
> about what kinds of leverage can I use, to
> help break the link between money earned and
> time spent? ....

> I'd love to hear your thoughts on this!

> - Dien

Re: Dien, some more thoughts on leverage....using affiliate programs
 

Dien,

One of the biggest ways the info-product producers seem to be able to leverage themselves is through an affiliate program. For instance, Jim Straw has offered an affiliate program whereby you can simply post a link to Jim's site with an id tag, and any sales generated from that link will earn you a commission. (I think you are already one of Jim's affiliates...)

Cory Rudl, Allen Says, Ken Evoy, Marlon Sanders...just about any of the "names" you can think of on the Internet have large afiliate programs. They not only leverage themselves by producing a product which they sell over and over again--they extend that leverage with an affiliate program. They "share the wealth".

The application of the lever is certainly something to consider. The same amount of "work" applied to a project using a "lever" can produce a much larger result than a singular effort applied to the project alone.

There are several software programs available for adding an affiliate program to a project...can you or anyone else recommend the "best" one?

Be blessed,

JDB

P.S. I'm glad your mother is better. I will keep her in my prayers.


Leverage your sales efforts with auctions...

Thank You, Dien ... (dno) (DNO)
 

Jim, Dien, Jesse, John and All, More on Leverage!
 

Hello All!

Wow, this (and other recent) discussions on Leverage have certainly gotten me thinking!

I also had this vision, reading the interaction between Jesse and Dien, of you two having a deep discussion on business principles in a meeting somewhere in Hawaii...hey, its nice to have a vision to go towards, right? Seeing as you both appreciate Hawaii so much! What could be leveraged there?! *Putting on my thinking cap*

Anyway, I digress!

One of the ways I use Leverage actually combines some of the lines of thinking I have been integrating into my work through a piece from Gordon's Pictogrigm's on Finances. Looking at RESOURCES differently, such as TIME and MONEY and the "Stuff we Possess right NOW to create more abundance."

As a writer, I take each piece that I write and use it in as many different forms as possible and make as many things from it as possible, thus leveraging a one-time-exercise into a much larger possibility.

For example: whenever I write a Personal Development article, I publish it first in my ezine, Discovering Your Passion. Then I send it out to other publishers for use on their websites, ezines, etc. I also use the content of my article in my individual coaching sessions, teleclasses or audio-programs. I can use an article as a foundation of a chapter for a book or course. My tips articles are now being woven into a tips booklet.

My articles also are one way I promote my services. They brand me. They have brought me opportunities to speak, to appear in publicity pieces, and I have made COUNTLESS connections with people ALL the world over from people who have read my work and connected with me from there.

This week, as I have had a rather challenging time emotionally, my mailbox has continued to be filled with email from people who write thanking me for the impact my writing has had in their lives. Folks I have never met all over this planet tell me that what I have written has made a powerdul difference for them. This then creates MORE leverage for me because it provides fuel for me to keep on keeping on....

Continuing the thinking process over here...

With Purpose and Passion,

JULIE JORDAN SCOTT




Dare to Discover Your Passion, Decide to Live Your Destiny!

Leveraging Summit on Napili Point, Maui? :)
 

Hey Julie!

Thanks for joining this scintillating discussion on Leverage! Just be warned that fully utilizing the power of leverage, or even talking about it for that matter, can get your blood boiling, heart pumping, and all sorts of other fun stuff :)

With that important disclaimer, I proceed :)

Great visual you had about Hawaii. My mind has already transformed me back to Maui where I was just a 2 short months ago (wistful sigh). Dien, what's your favorite spot on Hawaii? Isn't it just complete paradise over there?

In fact, as I alluded to in my last email, real estate is one of the most proven and powerful forms of leverage out there. So I'm sure you won't be surprised to hear that my mind is seriously gravitating back to the Maui condo concept we discussed...

Anyway, YOU do indeed practice leverage in your work, with great skill and precision. Articles have this amazing ability to take on a life of their own, and yours are certainly no exception. Now if we can just productize your '21 days' program as we've discussed, it'll be like leverage on steriods :)

Julie, thanks again for joining this discussion! I welcome additional thoughts from you, Dien, John, or any other "Closet Leveragers" out there!

All the best,

-Jesse

> Hello All!

> Wow, this (and other recent) discussions on
> Leverage have certainly gotten me thinking!

> I also had this vision, reading the
> interaction between Jesse and Dien, of you
> two having a deep discussion on business
> principles in a meeting somewhere in
> Hawaii...hey, its nice to have a vision to
> go towards, right? Seeing as you both
> appreciate Hawaii so much! What could be
> leveraged there?! *Putting on my thinking
> cap*

> Anyway, I digress!

> One of the ways I use Leverage actually
> combines some of the lines of thinking I
> have been integrating into my work through a
> piece from Gordon's Pictogrigm's on
> Finances. Looking at RESOURCES differently,
> such as TIME and MONEY and the "Stuff
> we Possess right NOW to create more
> abundance."

> As a writer, I take each piece that I write
> and use it in as many different forms as
> possible and make as many things from it as
> possible, thus leveraging a
> one-time-exercise into a much larger
> possibility.

> For example: whenever I write a Personal
> Development article, I publish it first in
> my ezine, Discovering Your Passion. Then I
> send it out to other publishers for use on
> their websites, ezines, etc. I also use the
> content of my article in my individual
> coaching sessions, teleclasses or
> audio-programs. I can use an article as a
> foundation of a chapter for a book or
> course. My tips articles are now being woven
> into a tips booklet.

> My articles also are one way I promote my
> services. They brand me. They have brought
> me opportunities to speak, to appear in
> publicity pieces, and I have made COUNTLESS
> connections with people ALL the world over
> from people who have read my work and
> connected with me from there.

> This week, as I have had a rather
> challenging time emotionally, my mailbox has
> continued to be filled with email from
> people who write thanking me for the impact
> my writing has had in their lives. Folks I
> have never met all over this planet tell me
> that what I have written has made a powerdul
> difference for them. This then creates MORE
> leverage for me because it provides fuel for
> me to keep on keeping on....

> Continuing the thinking process over here...

> With Purpose and Passion,

> JULIE JORDAN SCOTT

Leveraging by using an affiliate program.... Do you have a good program to recommend?
 

Hi John,

> One of the biggest ways the info-product
> producers seem to be able to leverage
> themselves is through an affiliate program.
> For instance, Jim Straw has offered an
> affiliate program whereby you can simply
> post a link to Jim's site with an id tag,
> and any sales generated from that link will
> earn you a commission. (I think you are
> already one of Jim's affiliates...)

Yes! It's true.... Many big online successes seem to use affiliate programs....

I see affiliate programs as an online version of a commissioned sales force.... Having more people out there selling your stuff on commission can certainly help with sales and profits (and is a great form of leverage).

> The application of the lever is certainly
> something to consider. The same amount of
> "work" applied to a project using
> a "lever" can produce a much
> larger result than a singular effort applied
> to the project alone.

Yes! I agree with you here! :)

This whole discussion has certainly gotten me thinking about using leverage in a greater basis in my own activities.... At the moment, I only use a little bit of leverage, but I need to think and work at it more.... These discussions have certainly helped me realize that it is almost impossible to earn an highly above-average income without using leverage!

> There are several software programs
> available for adding an affiliate program to
> a project...can you or anyone else recommend
> the "best" one?

You can "do it yourself" with your own software, which may be the best option if you can accept credit cards already. I must admit I haven't looked at the software to do this myself, though, yet.... (Any good suggestions?)

However, there are also programs where you can "outsource" your affiliate program. The company will handle everything, all you do is promote, pay your fees, and deposit your checks.... :)

One option is Clickbank -- www.clickbank.com . I've used Clickbank to take orders before, and I've had no trouble. They've been around for a while now.... However, you have to pay a joining fee to use them, but apart from that you pay them a percentage (rather than a flat fee).

Another option is the Affiliate Tracking Network -- www.affiliatetracking.com . They charge flat rates I believe. Another advantage here is that you can change the percentage you pay each individual affiliate, which permits some negotiation and flexibility.... I believe this is what Yanik Silver uses for his affiliate program.... It's a good idea to compare the two options (at least)....

What other software or companies providing affiliate tracking services can you use? (The floor is open to suggestions! :) )

> P.S. I'm glad your mother is better. I will
> keep her in my prayers.

Thanks John, it means much to me.... :)

- Dien

Using leverage in your investments....
 

Hi Jesse!

Wow, again, lots of great stuff in your post! You've given me a LOT to think about.... :)

> *** Again, right on the mark. If I had to
> choose one single quote, to sum up the power
> of leverage, it would be the following from
> Billionaire J. Paul Getty:

> "I'd rather have 1% of the efforts of
> 100 men, than 100% of my own efforts."

I hadn't heard that quote, thanks for sharing it. I think it's right on the mark too.... :)

> This goes right along with your comments
> about having employees. Paying employees, or
> subcontractors, to carry out certain tasks
> for you, is certainly a viable and basic
> model for creating leverage.

> But here's something that's not the most
> comfortable point to discuss, but extremely
> important:

> If you have an employee working for you, you
> have to calculate your return on investment
> on that employee, just as you would on any
> ad or marketing campaign. This may sound
> somewhat cold and callous, but the truth is
> that you can only have people working for
> you if it is profitable. It is incumbent
> upon you, as a business owner, to calculate
> exactly what each employee is worth, as
> compared to what you are paying them.

Thanks, Jesse. I hadn't thought about that point, but the way you put it makes it crystal-clear.... I know what you mean, though, about how it may seem uncomfortable to some. However, the truth is, unless a business makes a profit, it can't provide employment in the long run anyway.... And for it to make a profit, the "return on investment" per employee must be positive....

So, while it may seem "cold" in the first instance, when you see the bigger picture, it's vital to the sustainability of the business and for continued employment....

> Now getting back to your point about
> "breaking the link between time and
> money," here's another very interesting
> fact to consider.

> The entire *concept of creating
> info-products* was spawned by the principle
> of LEVERAGE!

> Think about it for a moment. Why do people
> create their own products? It's so they can
> take their expertise, and be paid for it up
> to infinity, rather than be paid only for
> the number of hours they are able to work.
> It goes hand in hand with your lawnmowing
> example. An info product creator is limited
> only by the number of units that he or she
> can sell.

Yes, this is becoming clear to me too. :) And it's clear you can have many types of leverage, all working together in harmony.... Like an info-product along with an affiliate program (as JDB points out below).... :)

> *** Bingo! You hit the nail on the head.
> Virtually any *non-leveraged* activity can
> be translated into a highly leveraged
> revenue stream. This is the entire thrust of
> what I aim to do on a daily basis for
> ourselves and our clients.

Jesse, your business sounds like it's a good one for both yourself and for those who use your services.... :)

> *** This is one area of leverage where I'd
> be extremely interested in expanding
> discussions. I'd love to hear your thoughts
> (or anyone else's) on what investment
> vehicles, real estate ventures, or anything
> of the like, produce the greatest return, or
> highest leverage, and why.

Hmmm.... Well, here are the different types of investment "leverages" which come to mind for me....

Regarding real estate, first I should say that I don't have any real estate investments at present. Most people who invest in real estate use leverage by borrowing from the bank.... The way to make this work is to be sure that the rental money coming in from your property MORE than pays the bank's loan and interest fees....

One way to ensure this is to ask the real estate agent what they estimate you could rent your property out for. Then, compare that to what the bank will charge you if you take out a loan, and make sure that the amount of rent you'll have coming in, more than pays for what you're going to be paying the bank....

A good friend of mine does this, with good results. He also likes to look for houses which are structurally sound, but which may be cosmetically not very good looking.... He can then often get it cheap. Just a paint job and maybe some new carpet later, and it's ready to rent out at a higher rate.... However, it's important that you're sure it is structurally sound, and that anything "bad" about it is just "cosmetic," which can be easily fixed. (He never buys a place he'd need to do major renovations on -- that's a possible trap which I know some have fallen into! He always makes sure it's structurally sound before he buys it....)

Another approach with property is to use an option contract (which is another form of leverage). The essential idea is to get an option on a house, which means that you have the option to buy the house for a certain price, for a certain amount of time. This also gives you control over selling the property for a fixed amount of time -- that means that nobody can then buy the property, except through you. You then use this option to sell the house at higher than your option says you must pay for it....

I think the essential way this works is if someone offers you a higher amount for the house than you need to pay for the option contract, one way to do this is then to sell the option contract to them. So, for example, let's say you have an option to buy a house for $500,000, for a period of two months. Then, let's say you get a buyer for the house who is willing to pay $550,000. What you can then do is sell them the option contract for $50,000, and they pay the rest -- $500,000 -- to the property owners. You controlled the house for a period of time through your option contract, even though you never owned it.

However, I don't know many details about this method. I know Jim Straw has an info-product on this (someone who's bought it recently told me it's quite good, but I haven't yet gotten it myself.... It's on my "things to get" list. :) )

There are also other approaches too, which I've read about.... There's the "no money down" approach, and a couple others too.... I'm going to have to head back to my bookshelf and refresh my memory on those. :)

When it comes to stocks, there are also several ways of obtaining leverage.... However, there could be some added risk here too for some of these methods....

Again, you could borrow from a bank to invest in the stock market. The main problem here is that the value of your stocks could go down, but you'll still owe the same amount of money to the bank. A lot of wealthy people in the late 1980s went bankrupt this way. They were highly leveraged in the stock market, and when the crash of 1987 happened, they were wiped out. However, others use borrowings to greater effect. (Warren Buffett uses several forms of leverage, and borrowing is one of them, but he only borrows a relatively small amount compared to the total value of his investments.)

Another approach is by using margin loans. This is again a type of borrowing to buy shares, using the shares themselves as collateral for the loan. If the value of the shares goes down too much, they could force you to repay the loan back early on.

Another approach I'm aware of is one which Warren Buffett used early on in his career. He started a limited partnership, to invest other people's money. As the general partner, he paid himself a percentage of returns over a certain minimum amount. Essentially, the way it worked was if he made money for others by investing their money, he made money for himself too. However, if he lost money for others, although he would take that loss and count it towards the next year, he would not make any personal loss himself (he just wouldn't be paid).

At the same time, Buffett gave the investors a better deal than they would get with a managed fund -- who you pay whether they make money for you or not. You could also set up something like this using a company structure (which could be more flexible than the limited partnership structure). This is probably the lowest-risk way I can think of to use leverage in the stock market....

Other common ways of using leverage are by trading in options, or by buying and selling futures.... However, these approaches are often seen as high risk....

I don't know which one of these is the best, though, Jesse.... However, you've certainly give me more food for thought! I'm also going to look again at my property investment books and see what else I can find.... :)

> *** Here, I can only speak from personal
> experience. And I can say without question
> that the more leveraged I've been, the LESS
> risk, or exposure I have had. A large reason
> for this is because leverage, in many ways
> is synonymous with diversification. The more
> leveraged you are, the more people, ideas,
> documents, money, etc. you have working for
> you at any given time. Therefore, you are
> not solely dependent on any one income
> producer, as you are with linear income.

Thank you for clarifying this.... I was a bit unsure that using leverage could reduce your risk, but I thought that maybe it could.... And now you've clarified that! :) I do know in some cases it can increase your risk -- such as by borrowing from the bank to invest in the stock market, for example.... But there are other ways where you can use leverage to decrease it too.... :)

> Thanks again, Dien, for your input on this
> topic. It's certainly one that I'd be
> interested in continuing to talk about!

Yes, me too! Already, I finally see things much much clearer than I have ever seen them before.... :) I'm really grateful that you posted on this topic.... :)

> All the best to you and your mom...

Thanks Jesse! Your kind words mean a lot to me.... :)

Best wishes :)

Dien

Closet Leveragers
 

Two Types of Employee Leverage
[*]Employees that duplicate you, enabling you to do more of what you already do. Dien talked about this in his lawn mowing example.
[*]Employees that do what you cannot, enabling you to accomplish bigger tasks than you otherwise would be capable of. Such as a builder who uses qualified electricians, carpenters, plumbers, etc., to build something. Donald Trump is a great example of this. Henry Ford is another example (using mechanics, welders, etc., to make cars).


Of course, there's also leveraging your money, which has already been discussed.

How about leveraging your leverage? (MLL - multi level leverage)

Leveraging your money to create something that leverages your time by using employees to do tasks you're unable to do.

Interesting. Like one of those Chinese Dolls.

And something else... someone, somewhere in this thread, I believe, asked about income... and fast methods.

On this point I'd have to agree with Roger Dawson (http://www.rdawson.com/) and say that the easiest money you can make in the quickest amount of time is by Negotiating. A single sentence can make or save you hundreds or thousands of dollars. Time taken... about 2 seconds, if that.

But all this raises an interesting point...

How Much Effort Are YOU Willing To Do For An Income of $X?

And

How Much Time Are YOU Willing To Put In For An Income of $X?

Regardless of leverage.

Let me run through a hypothetical so you can see how these questions relate...

Joe Worker works a job and makes $26,000 a year ($500 a week - $12.50 an hour for 40 hours work). He dreams of breaking free of the binding shackles of his job, he dreams of financial wealth, he dreams of being his own boss, he dreams his dreams.

And so, with dreams flittering around his head, he begins to research various ways he can make money for himself.

He researches Mailorder. He likes the idea of information products and their mark-up (and the leverage they provide), and he also likes the idea of drop-shipping (and the no-stock ability it provides even though its mark-up is less).

He researches Real-Estate. He likes the idea of No Money Down, Quick Flip Fixer Uppers, Leveraged Buys, Options, Liens and positive cash flows.

He researches "Teaching". He likes the idea of a lot of people paying to attend a class or workshop he puts on. And he likes the idea of then, or instead, of leveraging that and having someone else present a class he promotes.

He researches "Consumables". He likes the idea of selling products which are consumed and thus need to be bought again. He also likes the idea of services which are consumed and need to be bought again (such as lawn mowing).

He researches Import/Export. He likes the idea of being a middleman and skimming a profit off the top as the goods pass through him, if even on paper.

He researches Vending. He likes the idea of a machine which takes the money and provides the product.

He researches Rack Jobbing. He likes the idea of having racks in many stores all selling products he gets a slice of.

He researches Chattel. He likes the idea of buying low and selling high.

He researches Auctions. He likes the idea of selling his chattel through an auction.

He researches Consignment. He likes the idea of selling his chattel through a store on consignment.

He researches "Finding". He likes the idea of finding buyers for sellers and sellers for buyers, for a cut.

He researches Hiring. He likes the idea of getting money over and over again for the same product.

He does an extremely large amount of research. He wants to have as many options available to him before he decides which one he'll pursue. To make sure he can pick the one he feels more drawn to.

Having completed his research he settles on "Finding" as the way he's going to make his fortune. After all, all it takes to make money as a Finder is research - research to find buyers for sellers and sellers for buyers - right?

And so, with the information he's got about Finding, he begins. He begins to track down a buyer for something he's seen offered for sale with finder's fees.

He writes letters and makes a few phone calls and discovers that the "fee" offered for finding this thing is $100.

He thinks about the amount he'd get if he found the item and decides it's too little, or not worth the effort, and goes looking for something else which offers a bigger fee. Like maybe $1,000, or $10,000.

STOP.

Lets look at what Joe is doing here.

Joe is willing to work for someone else for $12.50 an hour. Using that as a starting point, he SHOULD be willing to put in 8 hours of effort to find the item with the $100 finder's fee attached. But he not willing.

Based on what Joe is willing to do, as far as his job goes, he should be willing to put in 2080 hours to find something with a $26,000 finder's fee (the amount of hours he works in his job for the amount of money he gets from his job). But, in all reality, Joe would give up on finding that item if he couldn't find it in a couple of weeks after only putting in maybe 8 hours.

So Joe decides finding isn't what he thought it was and opts for Mailorder. And because he wants to spend as little of his own money and time as possible, he chooses the drop-shipping route.

He gets his "kit" from the drop-shipper and begins. He places his ads and sends out his sales material to those who respond.

After one month he's only made $100. He's not happy. He begins to see his dreams slipping away. He's not making the Big Bucks like he thought. And so he tosses aside the idea of drop-shipping.

STOP.

It took him 10 minutes to place the ad, 5 minutes to send the sales material to each of those who enquired, and 5 minutes to send the name and address of each buyer to the drop-shipper. He made ten $40 sales, of which he got to keep $20. His costs were $100 leaving him with a profit of $100. His total time was the initial 10 minutes, plus 50 minutes to send the buyers' details to the shipper (60 minutes so far), plus 250 minutes to send the sales material to all those who enquired (310 minutes all up).

His hourly rate works out to be $19.38 an hour -$6.88 more than he'd get in his job for the same amount of money.

But he's not willing to go ahead with it. Even though he is willing to continue to work for someone else for $12.50 an hour.

What is Joe's problem???

Joe's problem is that he is WILLING to put in more time for less money for someone else than for himself.

He "happily" works 40 hours a week for $12.50 an hour for someone else, but will not work that many hours for the same amount of money, pursuing his own things.

Joe's like the unemployed person who want to go from welfare straight to middle management. The graduate with a basic degree who wants to be placed at the top of the corporate pile.

Joe doesn't realise that the "small" amount he gets working for himself, initially, is so "small" because he's learning the ropes. He wants the big bucks that come with experience even though he has none. Yet, the Money God/Force won't allow that to happen.

The Money God/Force wants him to serve his apprenticeship first. To Learn By Doing first. To gain experience First. Only then, and only when IT sees he knows what he's doing and can handle it, will IT bestow upon him the rewards he seeks.

While Joe could certainly do with the ability to FOCUS, he can't focus until he gets rid of the double-standard he operates under.

Joe First needs to be willing to work for himself for the same amount, or even less, as he's willing to work for someone else.

Joe First needs to be willing to put in the same amount of time for himself, or even more, as he's willing to put in for someone else.

Joe First needs to honestly answer the two question...

How Much Effort Are YOU Willing To Do For An Income of $X?

And

How Much Time Are YOU Willing To Put In For An Income of $X?

If Joe isn't willing to put in at least the same amount of time and effort for himself, as he's willing to put in for someone else, Joe won't get very far.

Your thoughts?

Michael Ross.

Hawaii would be inspiring! :)
 

Hi Julie!

> Wow, this (and other recent) discussions on
> Leverage have certainly gotten me thinking!

Me too.... The potential applications of this discussion are HUGE.... I agree with Jesse -- I really believe it is the KEY. :)

> I also had this vision, reading the
> interaction between Jesse and Dien, of you
> two having a deep discussion on business
> principles in a meeting somewhere in
> Hawaii...hey, its nice to have a vision to
> go towards, right? Seeing as you both
> appreciate Hawaii so much!

Heheheh.... Yes, the leveraging summit in Hawaii is a fantastic idea! (We could body-surf in-between our discussions!)

> One of the ways I use Leverage actually
> combines some of the lines of thinking I
> have been integrating into my work through a
> piece from Gordon's Pictogrigm's on
> Finances. Looking at RESOURCES differently,
> such as TIME and MONEY and the "Stuff
> we Possess right NOW to create more
> abundance."

> As a writer, I take each piece that I write
> and use it in as many different forms as
> possible and make as many things from it as
> possible, thus leveraging a
> one-time-exercise into a much larger
> possibility.

YES! That's a good way to do it, Julie!

I haven't done the "article thing" in order to promote, but I think it's a good idea.... I might give it a shot. (I think I'm not a bad writer, when I put my mind to it....) :)

> For example: whenever I write a Personal
> Development article, I publish it first in
> my ezine, Discovering Your Passion. Then I
> send it out to other publishers for use on
> their websites, ezines, etc. I also use the
> content of my article in my individual
> coaching sessions, teleclasses or
> audio-programs. I can use an article as a
> foundation of a chapter for a book or
> course. My tips articles are now being woven
> into a tips booklet.

Julie, that's a great example -- and there are some great ideas there too.... You're giving me some good ideas! :)

> My articles also are one way I promote my
> services. They brand me. They have brought
> me opportunities to speak, to appear in
> publicity pieces, and I have made COUNTLESS
> connections with people ALL the world over
> from people who have read my work and
> connected with me from there.

> This week, as I have had a rather
> challenging time emotionally, my mailbox has
> continued to be filled with email from
> people who write thanking me for the impact
> my writing has had in their lives. Folks I
> have never met all over this planet tell me
> that what I have written has made a powerdul
> difference for them. This then creates MORE
> leverage for me because it provides fuel for
> me to keep on keeping on....

That's a great example Julie.... I know I have personally benefited so much from talking with you and reading your stuff too. :) I think you're one of the most inspirational writers around.... I'm just waiting for Oprah to discover you, so you can be an expert on her show.... :) (I really mean that -- I know you're definitely good enough, Julie, to be an expert on Oprah....)

Thanks Julie! I loved your post.... The summit in Hawaii is a GREAT idea! :) I would definitely pay what it costs to travel for something like that, if it meant a chance to interact in person with many of us here! :)

- Dien

Re: Leveraging Summit on Napili Point, Maui? :)
 

Hi Jesse!

> Great visual you had about Hawaii. My mind
> has already transformed me back to Maui
> where I was just a 2 short months ago
> (wistful sigh). Dien, what's your favorite
> spot on Hawaii? Isn't it just complete
> paradise over there?

Heheh, Jesse, I was last in Hawaii quite a while ago (over 10 years ago). Once upon a time, if you flew from Australia to the US mainland, you could choose to stop over either in Auckland, New Zealand, or in Honolulu.... Now, with these longer-range jets, you just fly direct to LA or San Francisco! (Unfortunately, since I enjoyed the Honolulu stop over.... ;) )

I've never been to Maui, but I've heard it's great! In fact, a good friend of mine, Steve Birch (who designed the Sowpub logo), has moved from Northern California and is based in Maui right now, so I hear from him that it's a great place.... :)

Anyway, there have been some great ideas discussed here.... The types of leverage which there are boggle the mind! However, mastering even just a few of these can be enough to put you on the road to prosperity.... :)

Thanks for sharing your thoughts, Jesse, I've really enjoyed your posts.... :)

- Dien

You Must Flip Burgers Before You Can Own McDonald's...
 

Hi Michael,

Great scenario you took us through! A classic illustration of the 'jackpot' mentality.

With a more evolved perspective, Joe Worker would have been *thrilled* to be earning $19.38 per hour with his new venture, rather than disappointed! Heck, that's a 55% RAISE from his salary, not to mention that he is taking control of his own financial destiny!

Plain and simple, the reason why the rewards of Leverage are so incredible is because so few people are willing or able to leverage in the first place.

Think about it.

9 out of every 10 new business ventures fail. Period. And of the 10% that DO achieve some measure of success, I'd be willing to bet that 90% of them do not leverage. Far too often, what starts out as an exciting 'business ownership' idea ends up with the owner simply buying himself or herself a job.

So what we now have is 1% of all business owners, at the absolute most, who leverage. Why is this the case? For the exact reason that Michael pointed out with his Joe Worker example:

Leverage takes a degree of vision and persistence that almost no one is willing to put forth.

Call it persistence, or just call it dumb stubbornness, but thankfully, I was able to forge through numerous 'growing pains' to the point where I am now very highly leveraged (though I've still only scratched the surface of what is possible!).

Heck, when I first started entrepreneuring, I can say with certainty that my 'hourly wage' was less than that of a minimum wage worker at a burger joint. These were frustrating times, as I just KNEW I was onto something, but the results did not follow. I was learning, educating, failing, starting over, evolving, constructing flawed business models...but the results just weren't coming! I felt like the most underpaid professional in the world!

But to fast forward to the present, things could not be more different, and I could not be more thankful that I persisted. Through the power of leverage, it's now not uncommon that I'll earn more with a single hour of work than the fast food worker will earn in an entire month of working full time (160 hours).

But while the money is nice, Leverage is really more about Lifestyle in my opinion. There's that old saying that "No one ever wished on their death bed that they had spent more time working."

Leverage is all about working LESS and prospering MORE.

Michael, thanks again for this very true to life example! It really made me think...and really made me thankful.

All the best,

-Jesse

> Two Types of Employee Leverage
> Employees that duplicate you, enabling
> you to do more of what you already do. Dien
> talked about this in his lawn mowing
> example.

> Employees that do what you cannot, enabling
> you to accomplish bigger tasks than you
> otherwise would be capable of. Such as a
> builder who uses qualified electricians,
> carpenters, plumbers, etc., to build
> something. Donald Trump is a great example
> of this. Henry Ford is another example
> (using mechanics, welders, etc., to make
> cars).
> Of course, there's also leveraging your
> money, which has already been discussed.

> How about leveraging your leverage? (MLL -
> multi level leverage)

> Leveraging your money to create something
> that leverages your time by using employees
> to do tasks you're unable to do.

> Interesting. Like one of those Chinese
> Dolls.

> And something else... someone, somewhere in
> this thread, I believe, asked about
> income... and fast methods.

> On this point I'd have to agree with Roger
> Dawson (http://www.rdawson.com/) and say
> that the easiest money you can make in the
> quickest amount of time is by Negotiating. A
> single sentence can make or save you
> hundreds or thousands of dollars. Time
> taken... about 2 seconds, if that.

> But all this raises an interesting point...

> How Much Effort Are YOU Willing To Do For
> An Income of $X?

> And

> How Much Time Are YOU Willing To Put In
> For An Income of $X?

> Regardless of leverage.

> Let me run through a hypothetical so you can
> see how these questions relate...

> Joe Worker works a job and makes $26,000 a
> year ($500 a week - $12.50 an hour for 40
> hours work). He dreams of breaking free of
> the binding shackles of his job, he dreams
> of financial wealth, he dreams of being his
> own boss, he dreams his dreams.

> And so, with dreams flittering around his
> head, he begins to research various ways he
> can make money for himself.

> He researches Mailorder. He likes the idea
> of information products and their mark-up
> (and the leverage they provide), and he also
> likes the idea of drop-shipping (and the
> no-stock ability it provides even though its
> mark-up is less).

> He researches Real-Estate. He likes the idea
> of No Money Down, Quick Flip Fixer Uppers,
> Leveraged Buys, Options, Liens and positive
> cash flows.

> He researches "Teaching". He likes
> the idea of a lot of people paying to attend
> a class or workshop he puts on. And he likes
> the idea of then, or instead, of leveraging
> that and having someone else present a class
> he promotes.

> He researches "Consumables". He
> likes the idea of selling products which are
> consumed and thus need to be bought again.
> He also likes the idea of services which are
> consumed and need to be bought again (such
> as lawn mowing).

> He researches Import/Export. He likes the
> idea of being a middleman and skimming a
> profit off the top as the goods pass through
> him, if even on paper.

> He researches Vending. He likes the idea of
> a machine which takes the money and provides
> the product.

> He researches Rack Jobbing. He likes the
> idea of having racks in many stores all
> selling products he gets a slice of.

> He researches Chattel. He likes the idea of
> buying low and selling high.

> He researches Auctions. He likes the idea of
> selling his chattel through an auction.

> He researches Consignment. He likes the idea
> of selling his chattel through a store on
> consignment.

> He researches "Finding". He likes
> the idea of finding buyers for sellers and
> sellers for buyers, for a cut.

> He researches Hiring. He likes the idea of
> getting money over and over again for the
> same product.

> He does an extremely large amount of
> research. He wants to have as many options
> available to him before he decides which one
> he'll pursue. To make sure he can pick the
> one he feels more drawn to.

> Having completed his research he settles on
> "Finding" as the way he's going to
> make his fortune. After all, all it takes to
> make money as a Finder is research -
> research to find buyers for sellers and
> sellers for buyers - right?

> And so, with the information he's got about
> Finding, he begins. He begins to track down
> a buyer for something he's seen offered for
> sale with finder's fees.

> He writes letters and makes a few phone
> calls and discovers that the "fee"
> offered for finding this thing is $100.

> He thinks about the amount he'd get if he
> found the item and decides it's too little,
> or not worth the effort, and goes looking
> for something else which offers a bigger
> fee. Like maybe $1,000, or $10,000.

> STOP.

> Lets look at what Joe is doing here.

> Joe is willing to work for someone else for
> $12.50 an hour. Using that as a starting
> point, he SHOULD be willing to put in 8
> hours of effort to find the item with the
> $100 finder's fee attached. But he not
> willing.

> Based on what Joe is willing to do, as far
> as his job goes, he should be willing to
> put in 2080 hours to find something with a
> $26,000 finder's fee (the amount of hours he
> works in his job for the amount of money he
> gets from his job). But, in all reality, Joe
> would give up on finding that item if he
> couldn't find it in a couple of weeks after
> only putting in maybe 8 hours.

> So Joe decides finding isn't what he thought
> it was and opts for Mailorder. And because
> he wants to spend as little of his own money
> and time as possible, he chooses the
> drop-shipping route.

> He gets his "kit" from the
> drop-shipper and begins. He places his ads
> and sends out his sales material to those
> who respond.

> After one month he's only made $100. He's
> not happy. He begins to see his dreams
> slipping away. He's not making the Big Bucks
> like he thought. And so he tosses aside the
> idea of drop-shipping.

> STOP.

> It took him 10 minutes to place the ad, 5
> minutes to send the sales material to each
> of those who enquired, and 5 minutes to send
> the name and address of each buyer to the
> drop-shipper. He made ten $40 sales, of
> which he got to keep $20. His costs were
> $100 leaving him with a profit of $100. His
> total time was the initial 10 minutes, plus
> 50 minutes to send the buyers' details to
> the shipper (60 minutes so far), plus 250
> minutes to send the sales material to all
> those who enquired (310 minutes all up).

> His hourly rate works out to be $19.38 an
> hour -$6.88 more than he'd get in his job
> for the same amount of money.

> But he's not willing to go ahead with it.
> Even though he is willing to continue to
> work for someone else for $12.50 an hour.

> What is Joe's problem???

> Joe's problem is that he is WILLING to put
> in more time for less money for someone else
> than for himself.

> He "happily" works 40 hours a week
> for $12.50 an hour for someone else, but
> will not work that many hours for the same
> amount of money, pursuing his own things.

> Joe's like the unemployed person who want to
> go from welfare straight to middle
> management. The graduate with a basic degree
> who wants to be placed at the top of the
> corporate pile.

> Joe doesn't realise that the
> "small" amount he gets working for
> himself, initially, is so "small"
> because he's learning the ropes. He wants
> the big bucks that come with experience even
> though he has none. Yet, the Money God/Force
> won't allow that to happen.

> The Money God/Force wants him to serve his
> apprenticeship first. To Learn By Doing
> first. To gain experience First. Only then,
> and only when IT sees he knows what he's
> doing and can handle it, will IT bestow upon
> him the rewards he seeks.

> While Joe could certainly do with the
> ability to FOCUS, he can't focus until he
> gets rid of the double-standard he operates
> under.

> Joe First needs to be willing to work for
> himself for the same amount, or even less,
> as he's willing to work for someone else.

> Joe First needs to be willing to put in the
> same amount of time for himself, or even
> more, as he's willing to put in for someone
> else.

> Joe First needs to honestly answer the two
> question...

> How Much Effort Are YOU Willing To Do For
> An Income of $X?

> And

> How Much Time Are YOU Willing To Put In
> For An Income of $X?

> If Joe isn't willing to put in at least the
> same amount of time and effort for himself,
> as he's willing to put in for someone else,
> Joe won't get very far.

> Your thoughts?

> Michael Ross.

How you can leverage your leverage!
 

Hi Michael,

> How about leveraging your leverage? (MLL -
> multi level leverage)

> Leveraging your money to create something
> that leverages your time by using employees
> to do tasks you're unable to do.

> Interesting. Like one of those Chinese
> Dolls.

Great point! It's true.... You can multiply leverage....

In fact, this friend I've mentioned (who's in the early stages of becoming a property tycoon, I think), is in a sense leveraging his leverage....

He got his first house with bank money and his own deposit. BUT.... He can then use THAT house as part of the collateral for the NEXT house.... And then those TWO for the next house.... and so on! Each house builds on the other.... With every new house he gets, it takes him LESS time to get the NEXT one, because he keeps increasing his leverage!

A different type of multiple-leverage, perhaps, but it shows that you can leverage upon leverage.... :) I'm sure there are other examples too which could be found on leveraging your leverage.... This is an interesting topic, and certainly something I'm going to ponder further.... :)

I also liked your points about time.... It's easy to get frustrated in the early stages of *any* endeavour, especially when the "instant wealth" doesn't seem to materialize!

However, I think it takes a certain amount of tenacity to be a big success in anything....

Those who are successful have a combination (I believe) of persistence and experimentation. "Persistence" means they DON'T GIVE UP, and "experimentation" means they TRY NEW THINGS (don't make the same mistakes over and over, but experiment with different things a little bit....).

I think with both persistence and experimentation, it's possible to be a big success in almost anything you put your heart and mind to....

I also like what you say about calculating your "hourly" rate....

Even though they may put in a few hours work to sell something by mail order, as you point out, many people might count it instead as the few *weeks* it takes them to make a profit (rather than the actual time it takes working to make it happen).... Of course, the way you point out is the sensible approach!

Jesse also wrote an great motivational tip on a similar topic earlier (it's related to Michael's point), so here's a link Jesse's excellent tip, for those who didn't see it.... :)

http://www.sowpub.com/cgi-bin/forum/webbbs_config.pl?read=4290

Thanks Michael.... It's a great reminder.... I guess with this type of activity, it helps to do several things simultaneously.... So you fill those hours, with multiple activities, each making you a high rate per hour while you're working on them!

- Dien

Re: You Must Flip Burgers Before You Can Own McDonald's...
 

Hi Jesse,

> Plain and simple, the reason why the rewards
> of Leverage are so incredible is because so
> few people are willing or able to leverage
> in the first place.

> Think about it.

> 9 out of every 10 new business ventures
> fail. Period. And of the 10% that DO achieve
> some measure of success, I'd be willing to
> bet that 90% of them do not leverage. Far
> too often, what starts out as an exciting
> 'business ownership' idea ends up with the
> owner simply buying himself or herself a
> job.

> So what we now have is 1% of all business
> owners, at the absolute most, who leverage.

Wow, when you put it that way, it sounds amazing....

Jesse, I have no doubt that this is the big "secret" (as close as there is to one) of highly successful people in business....

> Leverage takes a degree of vision and
> persistence that almost no one is willing to
> put forth.

> Call it persistence, or just call it dumb
> stubbornness, but thankfully, I was able to
> forge through numerous 'growing pains' to
> the point where I am now very highly
> leveraged (though I've still only scratched
> the surface of what is possible!).

> Heck, when I first started entrepreneuring,
> I can say with certainty that my 'hourly
> wage' was less than that of a minimum wage
> worker at a burger joint. These were
> frustrating times, as I just KNEW I was onto
> something, but the results did not follow. I
> was learning, educating, failing, starting
> over, evolving, constructing flawed business
> models...but the results just weren't
> coming! I felt like the most underpaid
> professional in the world!

Jesse, thanks for sharing this example! I know that many of us here can probably relate to this!

However, and I agree with you fully, it takes a degree of persistence to really see things through.... Sometimes you've got to head down a lot of dead end streets before you stumble on the freeway to your destination.... :)

> But while the money is nice, Leverage is
> really more about Lifestyle in my opinion.
> There's that old saying that "No one
> ever wished on their death bed that they had
> spent more time working."

> Leverage is all about working LESS and
> prospering MORE.

Yes, I think this is what MOST people want.... I remember reading a survey of people who start their own businesses, and if I recall correctly, the number 1 reason was LIFESTYLE....

They wanted to choose their own LIFESTYLE, and many of us have strong independence streaks. Unfortunately, many who go after this dream find themselves with what is in reality a JOB and a lower pay than they had before! But using leverage (of the many various kinds) is a way to free yourself from the the quicksand! Of course, it takes dedication and persistence....

Thanks Jesse, fantastic post, and thanks for sharing your experiences.... I really appreciate it. :)

- Dien