Why Leverage is So Important

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Real Estate and Business Investors are privileged with leverage.

Leverage is the ability to spend your time doing what you want to do as opposed to spending your time doing what you have to do.

If you are one that seems to never have time for the things you enjoy in life, maybe it’s time to incorporate leverage.

Video Transcript

Hi. Jay Massey here, with the CashFlowDiary.com. Just yet another tip of why business and real estate. Rock, in my opinion.

One of the things that many people already know, but yet, have experienced about business or real estate, is just the concept of understanding why leverage is so important.

Let me share with you what I mean.

Many people say they wish they had more time, or they also say that, “I don’t have any time. That’s why I’m not doing something, is that I don’t have time.” What’s interesting is that by investing your time, you begin to get what I call a better return on your time, and most people don’t think about getting a return on their time.

For example, you’re watching this video right now for a few minutes. This video, for a few minutes, should
produce a return on your time. I don’t know what idea or concept you’re going to get from it, but the point is a return on your time is very, very important.
Most of us, we grow up being told to go to school, get good grades, get a job, and then we accept a return on our time, and we call it our paycheck, our salary, or our hourly wage. What if you decided suddenly that your time was worth more?

What would you need to do to become worth more?

See, by thinking about, as Jim [inaudible: 01:36] would say, “Not how much you make in an hour, but the value you bring to the hour.”
When you start thinking about that, that changes your concept of return on time and the things that you should do. Leverage is very key to this in understanding that you need to be using your time as the highest invest use.

1Here’s an example that many of us can relate to: Washing your car. Washing your car, I don’t know, for some of you, it’s beyond ridiculous. You probably actually treat your car like a kid or a baby, or something of that nature, and that’s fine. Maybe it’s your hobby; that’s good.

For most of us, washing our car is a chore that we don’t want to do, and maybe we should outsource it. Let’s say it takes you 3 to 4 hours to actually wash your car. That’s a big car. Maybe it’s only 2 hours, how about that?

Or even 1½ hours. You earn, say, $15 an hour. $15 an hour, and if it’s 1½ hours, that means it $22.50 that you would ordinarily, at whatever job or whatever it is that you’re doing, be able to earn, but instead, you spent that time washing your car.

What if it cost you $9.99, though, to wash your car, and they could do it in 30 minutes? What does that mean?
That means in that hour you got value for the equivalent of $20 in real time, and what’s even important, is that while they were washing that car for that 30 minutes, guess what you got?

You got the benefit of leverage. You used someone else’s system so that you could focus and do something else, whatever that something else is. Maybe that something else is simply spending more time with your kids. Maybe that something else is actually writing a book or getting started with some new idea or concepts. It doesn’t matter.

You experienced leverage.

If you’re interested in more information like this and others, definitely check out our website at CashFlowDiary.com. You can also check out our iTunes podcast; we have that available for you. Or check us out on the Facebook page. For some of you, you may want to go ahead and take advantage of our complimentary course, Cash Flow Foundation.

It’s the beginning of our Cash Flow Creation System that will absolutely teach you how to never need a job again.