Friday, November 9, 2012

Yes, leverage is now good…

When we talk about Leverage, the common meaning is “financial lever”. The financial lever is a fancy way to mean debt. In the past few years, we overindulged on home equity loans not only as a financial tool but we overindulged in those fancy words throughout which the mainstream media dressed all the swindles the Wall Street folks did to us!!! In my latest post, "Is Leverage still good", I wrote that certain use of debt financing were not convenient anymore because they were real scams.

In addition I also explained there's good and bad debt. The good debt allows you to generate cash flow, while the bad one it'll eat your cash flow.
However even the good debt could eventually become bad if we are over-indulging in refinancing.
What we mean for over-indulging? It's really simple: If I buy a $100 grand apartment and I ask for a loan of $70G I have to invest $30G. This is obviously a use of the debt as a financial tool. However if through those same $30G I try to get a $3M mortgage, even a 10 year child would tell me maybe I am over-indulging a bit.
Unfortunately this is what happened with the financial crunch. Someone got incredibly rich, at the big masses' expenses and these people are now paying the crisis.
You got to know how to keep your debt under control and you have to know how to manage it. However if I am here today, it's because I want to give you a new vision of the leverage as a financial tool and not only.

 Here you'll read how the leverage can become positive.
Today the world has changed and the old economic laws have been swept away by the digital system. Today you can be in more places at the same time and make money side by side. If you start using these tools you can really give your finances a boost. 
You know when they say "that person has that little bit extra?" ...there you go! if you keep reading my posts you can have that bit extra too.  
Job Leverage in one example: If you are a seasoned pro, you can decide to work 10 hours a day and being paid on an hourly basis. If you devote yourself more than usual, you can work 12 or 14 hours a day.
However if I am telling you: you can increase the value of that same day like about 40 or 100 hours more, would you believe me? The point is really simple. If you write a book, every reader pays a fee that's represented by its price-tag. If your readers become 40 or 100 you multiply your presence and your fee as well.
The difference is the simplest: while before the boost you worked 1 to 1, this way you work 1 to infinite. Obviously this is just an example but it gives you a clear idea about the difference.
A form of leverage that allows you to make money is Real Estate.
If you buy a property, you receive a rent for every time-lapse. If you buy 2 properties you obviously have 2 rents for each time-lapse. This way you keep growing.
However you can make a fair objection like: "I have limited resources". Being this the situation you can get a mortgage. Obviously it has to be financially solid. In practice it's your tenants who pay your mortgage rates, then you automatically grow richer. At this point your new job is finding a property that once it has been rented out it can repay your mortgage back. Even a bank leverages its customers. For every deposit, the bank can clearly loan a higher size of it. And if you think about it, there are analogies between the bank's role and that of a Real Estate entrepreneur who invests in rental building.
Another form of leverage is the one of the Multilevel Marketing. A very discussed subject and in some cases even controversial. However like in every field there are bad apples that ruined a business that in the past demonstrated to be very efficient instead. For those who don't know what MLM is, when you enter a MLM, you can sell or look for distributors by creating a pyramid scheme. The commissions you generate are shared among all the people above the distributor. Paradoxically, after you worked to recruit a network of distributors, you can even make money without too much effort. All these leverage forms were linked to some form of works.
Nonetheless, if you really want to leverage the leverage we have to look inside of us. There's indeed an Inner Lverage. This is our stream of thoughts. You may have read in my latest post how the Law of Attraction works. In short, you get what you re focused on, no matter if you want it or not. Thoughts become real things.
Here it is, the leverage of this extremely powerful law lies in the fact of thinking more often about what you really want. You have to figure it out, you have to feel it, you have to live it, you have to imagine the whole thing so intensively that you really would feel like as you'd already got it. And you have to do it often. More often than you can ever think and more times than when you think of those things you don't want. The non-objectives become real too if you just focus on them. The non-objectives are worrying racing thoughts. What you don't want: a negative person or somebody who hurt you, a bad situation, a situation to escape from. All you don't want becomes real if you think about it too often and with an "associated pattern" as said by the Neuro-linguistic programming (NLP).
According to the NLP When you are "associated" you are "inside the event" or picture looking around you and to the outside. When you are disassociated you are outside of the event or picture looking inwards, watching your own behaviour. When you are associated you live your experience through your emotional sphere, when you are dissociated you live your experience without the weight of the emotional sphere.
So the power of the mental leverage is not only in the use of the law of attraction. It's about using it all the time! 
This form of leverage also includes writing down your objectives and as we said in "the Survival Handbook" , the Tracking Ob is meant to impress in your mind what you'll become. At the end of the day you might understand that leverage is linked to time.
If you are able to break the rules of time. If you manage to assign time not a 1 unit value but infinite, you will be able to understand the value of leverage.
The new value of leverage...
Luigi Foscale


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