Once you understand it, know how to use it, and do so often, you’ll build wealth faster and far more effectively.
Part of the problem for most people is that they simply don’t understand how to build wealth. Stocks, bonds, 401(k)s, real estate – those can all be PIECES of the wealth puzzle.
However, the piece of the puzzle most people are missing is LEVERAGE. Focusing on leverage will fast track your wealth creation.
There are several different types of leverage, although the one you’re probably most familiar with is “other people’s money” (i.e., debt).
We’ll save that for last because I’d like to first cover some points of leverage that could be far more powerful in the speed of your wealth creation than OPM.
First, Other People’s Time
You probably already buy other people’s time, such as accountants and lawyers. This is another form of leverage. Because they save you time – freeing you up to make more money doing the things you do best – they ultimately make you money.
Think about it this way: if it takes you three hours to research your insurance options and you can bill your time out to clients at $500 per hour, you’ve just cost yourself $1,500.
How much would it have cost to engage an insurance broker to present you with the best options? Potentially nothing, assuming the agent receives commission from the insurance agency you choose. Even if you’re paying a broker, the typical fee is just 10-15% of the policy amount.
When it comes to real estate… you can’t run around doing repairs on all of your properties yourself… or chasing late rent.
Having a solid team in place who can cover all of your anticipated needs is crucial to building wealth through real estate investments. Leveraging other people’s time allows you to put your own time to its highest and best use, like finding new real estate deals.
Second, Other People’s Work
leverage-staff
This is similar to leveraging other people’s time, but in this instance you’re employing them to leverage their work – for example, hiring an assistant. It allows you to produce more than you could produce on your own, like finding even more new real estate deals.
Third, Other People’s Experiences
There’s no sense in trying to reinvent the wheel. Instead, use resources such as mentors, books, seminars, blogs, videos and podcasts to learn from other people’s experiences and leverage that knowledge to make smart investments.
As Mark Twain famously said, “Learn from other people’s mistakes for you won’t be here long enough to make them all on your own.”
4. Other People’s Ideas
As you take those experiences from others, look for proven methods that can be replicated. That’s exactly what my company Cash Flow Savvy offers busy professionals: a proven method you can use to grow your own income-producing real estate investment portfolio.
5. Scalable Production and Distribution
Another type of leverage exists when you can scale production and distribution. With real estate investments you’re not looking to scale distribution, but you can scale production in a sense. As your cash flow begins to increase from your existing properties, you’ll have additional money to invest in new properties, allowing you to continually grow your portfolio.
You’ll find that if you focus your efforts on growth by leveraging your own real estate income, you’re portfolio will grow very quickly and therefore, your income will grow very quickly.
6. Scalable Customer Base
A scalable customer base, isn’t a type of leverage you’d use in real estate investing if you’re focused on rental properties, but you might if you were flipping. That’s not something we discuss much here, but it’s an important consideration.
You’ll want to leverage a list of buyers that you cultivate when you’re ready to sell. And even if you focus your investing on rentals, you’ll still be leveraging someone’s list of buyers if you ever eventually want to cash out on a property.
7. Other People’s Money
This is the form of leverage you’re probably the most familiar with. Let’s say you have $80,000 in cash that you’d like to invest in real estate. You could look for one house or condo to buy for $80,000 or less. For argument’s sake, let’s say this property generates a positive cash flow of $400 per month, or $4,800 per year.
leverage-other-peoples-money-in-real-estate
If you’re willing to leverage other people’s money, however, you can buy eight $80,000 houses and put $10,000 down on each. If each of those properties had a similar cash flow potential, you’re looking at $38,400 annually before debt payments. With the right financing terms, you can make more money by leveraging other people’s money to buy the additional properties, while even other people’s money… your tenants… are paying off the debt on the properties.
My students and clients are leveraging business credit to finance all 7 of these forms of leverage… Other people’s time, work, experience, ideas, growth, customers and other people’s money, too. Yes, their using these funds to leverage other people’s funds. Their creativity never ceases to amaze me.
They’ve found a private source of business credit that allows you to access up to $150,000 to jumpstart… or restart… your real estate investing. Complete their 60 second application, state your income and as long as your credit score is in decent shape, you’re in. In as little as 7 days, you could receive up to $150,000 to put to work in your real estate business as you see fit.
Receive $50,000 minimum… guaranteed… or you pay zero fees, of which their fees are nominal, as well.
Click the button below for instant access to this private source of business credit.
If you want to be wealthy, you must first stop doing what poor people do… and second, start doing what wealthy people do.
Part of the problem for most people is that they simply don’t understand how to build wealth. Stocks, bonds, 401(k)s, real estate – those can all be PIECES of the wealth puzzle.
However, the piece of the puzzle most people are missing is LEVERAGE. Focusing on leverage will fast track your wealth creation.
There are several different types of leverage, although the one you’re probably most familiar with is “other people’s money” (i.e., debt).
We’ll save that for last because I’d like to first cover some points of leverage that could be far more powerful in the speed of your wealth creation than OPM.
First, Other People’s Time
You probably already buy other people’s time, such as accountants and lawyers. This is another form of leverage. Because they save you time – freeing you up to make more money doing the things you do best – they ultimately make you money.
Think about it this way: if it takes you three hours to research your insurance options and you can bill your time out to clients at $500 per hour, you’ve just cost yourself $1,500.
How much would it have cost to engage an insurance broker to present you with the best options? Potentially nothing, assuming the agent receives commission from the insurance agency you choose. Even if you’re paying a broker, the typical fee is just 10-15% of the policy amount.
When it comes to real estate… you can’t run around doing repairs on all of your properties yourself… or chasing late rent.
Having a solid team in place who can cover all of your anticipated needs is crucial to building wealth through real estate investments. Leveraging other people’s time allows you to put your own time to its highest and best use, like finding new real estate deals.
Second, Other People’s Work
leverage-staff
This is similar to leveraging other people’s time, but in this instance you’re employing them to leverage their work – for example, hiring an assistant. It allows you to produce more than you could produce on your own, like finding even more new real estate deals.
Third, Other People’s Experiences
There’s no sense in trying to reinvent the wheel. Instead, use resources such as mentors, books, seminars, blogs, videos and podcasts to learn from other people’s experiences and leverage that knowledge to make smart investments.
As Mark Twain famously said, “Learn from other people’s mistakes for you won’t be here long enough to make them all on your own.”
4. Other People’s Ideas
As you take those experiences from others, look for proven methods that can be replicated. That’s exactly what my company Cash Flow Savvy offers busy professionals: a proven method you can use to grow your own income-producing real estate investment portfolio.
5. Scalable Production and Distribution
Another type of leverage exists when you can scale production and distribution. With real estate investments you’re not looking to scale distribution, but you can scale production in a sense. As your cash flow begins to increase from your existing properties, you’ll have additional money to invest in new properties, allowing you to continually grow your portfolio.
You’ll find that if you focus your efforts on growth by leveraging your own real estate income, you’re portfolio will grow very quickly and therefore, your income will grow very quickly.
6. Scalable Customer Base
A scalable customer base, isn’t a type of leverage you’d use in real estate investing if you’re focused on rental properties, but you might if you were flipping. That’s not something we discuss much here, but it’s an important consideration.
You’ll want to leverage a list of buyers that you cultivate when you’re ready to sell. And even if you focus your investing on rentals, you’ll still be leveraging someone’s list of buyers if you ever eventually want to cash out on a property.
7. Other People’s Money
This is the form of leverage you’re probably the most familiar with. Let’s say you have $80,000 in cash that you’d like to invest in real estate. You could look for one house or condo to buy for $80,000 or less. For argument’s sake, let’s say this property generates a positive cash flow of $400 per month, or $4,800 per year.
leverage-other-peoples-money-in-real-estate
If you’re willing to leverage other people’s money, however, you can buy eight $80,000 houses and put $10,000 down on each. If each of those properties had a similar cash flow potential, you’re looking at $38,400 annually before debt payments. With the right financing terms, you can make more money by leveraging other people’s money to buy the additional properties, while even other people’s money… your tenants… are paying off the debt on the properties.
My students and clients are leveraging business credit to finance all 7 of these forms of leverage… Other people’s time, work, experience, ideas, growth, customers and other people’s money, too. Yes, their using these funds to leverage other people’s funds. Their creativity never ceases to amaze me.
They’ve found a private source of business credit that allows you to access up to $150,000 to jumpstart… or restart… your real estate investing. Complete their 60 second application, state your income and as long as your credit score is in decent shape, you’re in. In as little as 7 days, you could receive up to $150,000 to put to work in your real estate business as you see fit.
Receive $50,000 minimum… guaranteed… or you pay zero fees, of which their fees are nominal, as well.
Click the button below for instant access to this private source of business credit.
If you want to be wealthy, you must first stop doing what poor people do… and second, start doing what wealthy people do.
https://www.bizjournals.com/denver/news/2018/04/25/cherry-hills-firm-named-in-securities-fraud.html
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