How to increase profit using Leverage

Are you sick and tired of doing the same thing over and over again? Well, my friend there is, but first, let me let you in on a big secret. It's a concept that highly successful people are using. This is what I call the concept of Leverage. Let me start with the definition of income, well you know the formula, its income equals rate times time.

Income=Rate x Time↑

For instance: 100 dollars for 5hours will be totaled as Income=100x5=500

Now, what do people do to try to increase their Income? They increase their time, so some people work more hours or get two jobs, but what the real majority of people do to try to increase their income is to increase their rates.

What normal people do

Income=Rate↑x Time

(Rate increased)

Income=Rate x Time↑                

(Time increased)

This is the main reason why we were told to get a good education so we'll get a good job. So people try to get promoted, some pursue better careers or maybe take an MBA or Ph.D. This is what I call the employee mindset. What I'm just saying is there is a better way. Let me talk to you about the new mindset the Leverage mindset or what I call the Entrepreneurial mindset.

Let's step back for a while to see the difference again, income equals rate times time. Here's the enlightened definition of income it is income equals rate times time times Leverage.

Income=Rate x Time x Leverage

What is leverage, leverage is something that you use to gain maximum Advantage? Let's say you want to move a huge stone, for that, you use a lever. This is the same principle when you have an exhaust tyre you don't use your hands to lift the car right? you use the jack. So basically you leverage your efforts through the lever or a jack and this is what the concept of leverage is all about.

 Business owners or entrepreneurs leverage their income through their employees. Let's say you as a business owner has people, then you are basically leveraging her income through those employees.

Income=Rate x Time x Leverage

Where Leverage= 1, 2, 3 ...etc.

For instance: Income=Rate x Time x 1, 2, 3

Say for 3 employees having 100 dollars paid for 5 hours work,

Then Income=100 x 5 x 3 =1500 dollars.

So, Using Leverage concept Business owner is getting 1500 dollars income without increasing the rate and time of the employee’s job.

One of the richest men during his time has profoundly put the concept of leverage in a single Statement. Jay Paul Gary said I'd rather have 1% of the efforts of people than cent percent of my own efforts.

 Now let's take a look at investors. They leverage their income through their money to invest in “companies” who in turn leverage through their employees that create sales. Even superstars leverage too, superstars leverage their income through their skills that allow them to earn endorsement income like if you're LeBron James from the numbers of shoes sold or if you're Lady Gaga from the number of records sold.

On the other hand, employees basically do not have leveraged income because their income is based on their own efforts, so leverage equals and therefore income equals rate times time.