As usual Gordon, you're too modest...

Hey Dien,

Thanks for your thoughts...Leverage is an absolutely fascinating topic, and I, for one, would be very interested in a larger scale discussion on the topic.

What makes Leverage of such paramount importance is that it is directly proportional to quality of life! It's really that simple. The more leverage you have, the more fulfilling life you're going to lead. Yet, as with money, it is a great fallacy that something so crucial is not taught anywhere.

Great example you gave of your friend looking to buy his 3rd property! I'd love to find out the specifics of how he's been able to succeed in that regard. Real estate is an area in which I am becoming increasingly intrigued...

Also, excellent example you give of software being a *highly leveraged* product to sell. I am flying to Florida in a couple of weeks to meet with one of our clients for whom we've been able to build a ridiculously high revenue stream selling financial software.

Software, in many ways, is like info products on steroids! It's no wonder that the infamous Bill Gates -- richest man in the world -- made his fortune selling software.

Thanks again, Dien, for your informative post. I'd be happy to discuss this topic in more detail any day!

Best,

Jesse

> Hi Jesse,

> YES, I agree with you fully! Though I must
> admit I'm still working out the variety of
> ways in which leverage can be used.... There
> are many types of leverage. We should
> probably have a discussion about what some
> of the various types of leverage are.... :)

> Yes, I feel the same way! Robert Kiyosaki
> really has a gift for teaching so that
> people *want* to learn. I also bought a copy
> of the game "Cashflow 101," and in
> my opinion it was worth it. It helps
> (particularly) with getting your mind around
> a good way to buy properties....

> Using Robert Kiyosaki's approach, a good
> friend of mine is now looking to buy his
> third house in about 4 years! (Almost a
> house a year....) He's using leverage quite
> a lot....

> The whole key he's using is to make sure
> that the rental income coming in from the
> house MORE than pays the bank what they are
> charging him for the loan + interest. (My
> friend asks the real estate agent selling
> the property for an estimate on what kind of
> rental income it would bring in, to make
> sure it will be enough to pay the bank.)
> That leaves some money left over to pay
> bills and to pay a real estate agent to
> handle the tenants etc.

> My friend has even arranged it so that after
> everything is paid, there's still some of
> the rent money left over for himself! Each
> house he buys NOT ONLY pays for itself, but
> ALSO gives him an added regular income
> stream as well.... (And his interest
> payments are tax-deductible.) The more
> houses he buys, the more money he makes. And
> my friend just works a regular, average
> paying job -- nothing spectacular.

> He told me that the hardest bank loan to get
> is the first one. He said that after they
> see that you are making a steady income from
> the property you bought with it, then
> they're happy to loan you more money....

> Anyhow, he learned this from Robert
> Kiyosaki.... I see I've gone off on a
> tangent.... I guess it's related to leverage
> (by using bank loans). :)

> Thanks for sharing this, Jesse.... That's a
> great test!

> Jesse, THANKS for sharing your web site!
> That's a GREAT example of an alternative to
> info-products online.... It's an automated
> service -- I like it. :)

> Software has the same advantage as
> info-products -- reproduction costs are very
> low, leaving you with a potentially very
> large profit margin. And some software can
> be quite expensive.... I know a guy who has
> the local rights to some advanced
> specialized billing software for medical
> clinics. If a clinic buys it, it costs them
> around $50,000 (including installation). He
> only needs to sell a few of these a year to
> make a great income....

> And selling the services of some software
> is a good-looking model too.... :)

> Jesse, thanks for sharing your example....
> It's a great example to learn from.... :)

> I really enjoyed your post, Jesse.... Sorry
> it took me a while to respond (the past
> couple days have been a bit hectic).

> It'd be nice to talk a bit more about
> leverage.... I might try to write a post
> about this (near the top) later on, to see
> if we can get some further discussion going
> on this.... I agree with you, LEVERAGE is
> the big difference between a small business
> owner who is working like crazy and getting
> nowhere, and those businesses which just
> grow and grow....

> Thanks Jesse, that was a great post. :)

> - Dien