By Paul Yung
Leverage is a concept that I believe is most misunderstood for individuals and businesses for laziness. Leverage means front-loading work to build an asset that will do the work for you, freeing up time and resources to focus on higher-level tasks.
For businesses, leverage can take many forms. One example is a leveraged manager who recruits and trains a team, investing in their skills and abilities. In the short term, this may create more work for the manager, but once the system has been built, the team can take on much of the workload themselves. This allows the manager to focus on higher-level tasks, such as strategy development and relationship building, rather than getting bogged down in day-to-day operations.
Here’s an example, rather than hovering over every member of her team managing by watching, she creates performance measurement systems and manages her team in part through key performance indicators.
This creates more work in the short run. It would be far easier (initially) to just tell everyone what to do. Instead, she created a management system.
Once the asset has been built, the system does a significant portion of the work the manager would otherwise have to do herself. A team is one form of asset. A management system is another form of asset.
Probably the most important example of leverage in business is investing in technology. By implementing software or automation tools, businesses can reduce the workload of their employees and increase productivity. This frees up employees to focus on tasks that require a human touch, such as problem-solving and creativity.
I’ve seen many companies trying to save cost by giving out cheaper hardware and alternative software that decreases daily productivity. The accumulation of this drop in productivity ultimately hurts the bottom line more than the extra you can invest in technology in the first place.
In personal finance, leverage involves investing in assets that will increase your earning potential and reduce your workload over the long term. This could mean investing in education and skills development, such as taking courses or attending workshops, or investing in physical assets, such as real estate or stocks.
The key to leveraging assets in personal finance is to consistently repeat the process over time. By building multiple assets and skills, you will become more productive and valuable in your career, becoming an asset wherever you go. This plays out well at home as well. I started reading parenting books and followed parenting content creators on social media, and the lessons I learnt are priceless. Surround yourself with content that will help you leverage on others experience and you will save yourself time, effort, and brain cells.
As Malaysians, we have a strong work ethic, but we must also work smart. Understanding the power of leverage and investing in assets that will pay off in the long run is key to achieving our goals and dreams. By investing in ourselves and our future, we can position ourselves for success in our careers and personal lives.
What can we do to be more leveraged?
Invest in education and skills development. This could mean taking courses or attending workshops, reading books and articles and following content creators, and participating in groups and forums in our field to stay up to date on the latest trends and techniques.
Leverage is one of the biggest pros for direct selling. You build your asset upfront by building and training your network. You can do this by leveraging on the company’s training and resources. In turn, you will get commissions that have the potential to be perpetual. To maintain your income you help to manage your networks questions and inquiries, which is comparatively easier than what you have done in the beginning. To increase your income, you build additional sales channels by expanding your network, what you did in the beginning but it’s easier now that you can leverage on the success of the network you already built. Leverage, is why I’m a big proponent of direct selling. Front loading effort for continuous income.
Finally, we can look for opportunities to leverage our time and resources in our current roles. This might mean delegating tasks to other team members, automating routine processes, or finding ways to streamline our workflow.
Leverage is a powerful concept that can improve our work and life.
By investing in assets that will pay off in the long run, we can position ourselves for success and financial freedom. By being more leveraged, we can achieve our goals while enjoying more time and freedom in our personal lives.