Here's sharing a Powerful Concept that can help you achieve Wealth and Riches...
Copyright (c) 2007 Dennis Ng
Albert Eintstein said that the "power of compounding" is possibly the most powerful financial concept. What is the second most powerful financial concept then?
In my opinion, it is Leverage.
What is Leverage?
Leverage comes from the word "Lever".
Simply put, it means the ability to do ever more with less. If you understand how to harness the power of leverage, you can achieve maximum results with minimum effort. Think in terms of doing more and more with less and less.
What is the greatest Leverage in the world?
It's the leverage of your mind!
What you think is real becomes your reality.
So what is your reality? Whatever "belief" you accept would eventually become your reality." Some people believe they can never succeed. Some people who are born poor believe they can become rich. So what is your belief
Humans will never fly was the reality for most people less than 100 years ago. However, the Wright brothers who invented the aeroplane think it is possible for human beings to fly! And they went on to "invent" the aeroplane.
Most people have "limiting beliefs". When you think about it, the only "limit" is the limit we place on ourselves and accept.
Give you another example. Singapore was just a sleepy fishing village years ago. However, Sir Stamford Raffles saw in his mind that Singapore can become a great port and even today, Singapore still remains one of the busiest ports in the whole word. Thus, the ability to leverage your mind to see "possibilities" instead of negativity and obstacles is one way one can move ahead in life.
So the number one lesson I want to share with you is:"our mind is our most powerful tool of Leverage."
Most people do not achieve MORE because they have NEVER grasped the concept of Leverage.
What are the things we can leverage on?
1. Other people's money. For instance, if you start a business, and you get other shareholders in to chip in money. That is leveraging on other people's money. When you run a business and you borrow a loan from the bank, that's also leveraging on other people's money!
2. Other people's experience. For example, I worked in the bank for 7 years before I move out to set up my own business. While I was in the bank, I keep tapping on the experience of "business owners I meet"; my superiors who were in their 40s and 50s. I asked them about the Oil crisis in 1973, the Singapore recession of 1985. In 1973, I was just a 4 year old, but does it mean that I cannot tap on the experience of those people who are older than me? Of course we can!
3. Other people's knowledge. For example, I consider myself a financial expert. It took me more than 14 years to acquire the expert knowledge I have. However, am I an expert in say "Information Technology"? No, I can simply leverage on the expertise of IT specialists. Am I an expert in SMS marketing? I'm not, but I can leverage on the expertise of a SMS marketing expert.
4. Other people's customer base Human beings seem to be very different. We can be tall or short, slim or plump, old or young, we can be from different races. But if you think about it, each of us are in a different business. Our customers, no matter who they are, ultimately, they need the same things!
5. Leverage on a Network: eg. Business Community, such as Chinese Chamber of Commerce. By tapping on Chinese Chamber's broad membership base, a business can reach out to potential suppliers/clients easily if they are members of Chinese Chamber as well.
6. Leverage on information eg what services/products would be in demand in next few years in Singapore? Keeping up on information on business trends can help one leverage on the profit making opportunities.
7. We can leverage anything and everything. Even a computer can be a tremendous tool of leverage. SMS can also be used as a effective tool of leverage.
If you understand and apply the power of Leverage, then you are likely to achieve greater results with less efforts.
Before you get too excited, here is a note of caution: you must know what is the upside potential and what is the downside risk. For me, I'll only do something if I estimate the upside potential is at least double of the downside risk.
Make sure the risk-reward ratio is in your favour! Think in terms of risk and reward instead of risky or safe.
About the Author
Dennis has 15 years of bank lending experience. He founded http://www.HousingLoanSG.com - a Leading Mortgage Consultancy Portal in Singapore. He is often quoted in newspapers for comments on Housing Loans. Please send your comments to dennis@housingloansg.com or call him at +65 6737 8801
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