2 Accumulating Wealth and Attaining Riches

“If you understand and apply the power of leverage, then you are likely to achieve greater results with less effort.”

A powerful concept that can help you achieve wealth and riches

Albert Einstein 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'. So what is leverage? Leverage comes from the word 'lever'. Simply put, it means the ability to do even more with less. In relation to this, if you understand how to harness the power of leverage, you can achieve
maximum results with minimum effort. In this case, thinking in terms of doing more and more with less and less.

So what are the things we can leverage on?

1. Other people's money

For instance, if you start a business,you can get other shareholders to invest money in the business. That is leveraging on other people's money. When you run a business and take a loan from the bank, that is also leveraging on other people's money.

2. Other people's experience

You can tap on the experiences of people who have been there and done that. If you want to start a business, you can approach a successful business owner. If you want to get out of debt, you can approach someone who was once debt-ridden but now is debt-free. Tap of the experiences of people who are older to learn from these lessons in history.

3. Other people's knowledge

For example, I consider myself a financial expert, where it took me years to acquire the knowledge I have. However, am I an expert, in say, information technology? No, but I can simply leverage on the expertise of IT specialists.

4.Other people customer base

All of us are made to be different. We can be tall or short, slim or plump, old or young. We can also be of different races. But if you think about it, even though each of us is in a different business, our customers, no matter who they are, ultimately need the same things!

5. Other people's network

For example, if you are a member of a business community, you can tap into their broad membership base and reach out to potential suppliers and clients easily.

6. Leverage on information

Leverage on information such as what products and services would be in demand in the next few years. By keeping up with information on business trends, one can leverage on potential profit-making opportunities.

7. We can leverage on anything and everything

Even a computer can be a tremendous tool of leverage. SMS can also be used as an effective tool of leverage. If you understand and apply the power of leverage, you are likely to achieve greater results with less effort.

About the Author:

Wen Ge Leo is a financial adviser, and also an enthusiast and vivid promoter of Passive Investing, where his website provides free invaluable tips to hassle-free investing. Get your free report on 'the common mistakes made by investors in the stock market' on his website. You can also ask him for financial advice on through his website for free!