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Thursday, March 11, 2021

Understanding Leverage

The word Leverage comes from Lever, which means "make load lighter". 

But before we talk about Leverage, it is important to understand the Concept of Linear growth.

 Most people who work, follow the 40/40/40 plan. 

They work 40 hrs every week, for 40 years and retire with money that can satisfy only 40% of their neccesities and in most cases leave behind a debt for their children to repay.

Retired after working for 40 years

Almost every person who works to earn a living works to earn money by Linear growth. That is, he trades his hours for money. One unit of working hour gives him 1 unit of money. The definition of Linear growth is "Input equal to Output".

Linear growth is pretty fair because your output is equal to your input. But the drawback is that there will always be a cap on your earning, no matter how hard you work.

Lets take an example:

A Professional and A Doctor.

A Professional working the Linear way

A professional works unlimited hours of a day to reach his project deadlines, sacrificing his family life, his health for years leading a life of insecurity and fixed income.

A Doctor attending his patients all his life

A Doctor on the other hand can earn as much as the number of patients he sees every day. He may earn a little bit more than other job goers, but end of the day he too has sacrificed his health and family life to earn better money.

Point to remember is that A Doctor too cannot make money, the day he does not see any patients.

Here both feel trapped, frustrated, angry and unhappy trying to trade their time for money.

That is the problem with income based on linear growth. If you are not personally doing the work, your work does not get done and in return you don'y get paid.

Imagine the day, when the professional, the doctor or the shop owner are unwell and can't work.

Now that we have understood the meaning of Linear growth, let us now try to know how Leverage works.

To understand Leverage, Lets try to understand the following statement: " I would like to earn 1% of 100 men's efforts, rather than 100% of my own efforts".

This is a very powerful statement that have changed lives of common people and turned them into millionaires. 

Did you understand the meaning of the statement? lets try to look deeper in it.

The word Leverage comes from Lever, which means "make load lighter".

Imagine you have a product which you sell in your shop. If you sell, you earn, if you don't sell, you don't earn. Now imagine your product is sold in 100 shops around town. In other words, 100 people are now spending 8 hrs a day selling your product. In other words, you just leveraged by working 800 hrs a day!!

And this is a Win Win situation, both for you and the 100 people selling your product.

The key is to become a successful Franchiser and develop a system that is practical, simple and duplicable for others to follow in your absence.

And before you proceed ahead choose one of the following: Get paid 1000 times for the work you do Once or you get paid once for the work that, you do a 1000 times.

And if you choose the right option, then you have just taken the first step to leave behind a legacy for your children.

This takes us to the concept of Exponential Growth or Explosive Growth. 

Exponential Growth is a time honored, wealth building concept that rich people have taken advantage of for thousands of years. For a common man there is always more month at the end of his money. For a wise man, there is always more money at the end of his month.

How Franchising works.

Mc Donald's Marketing Plan

Mc Donald's did not have 20.000 restaurants around the world when he started. They just started one restaurant and then started just another one like the first one. 

The question is can you find just one person who wants more freedom, security, family life and happiness. If you can, then just coach this person into your system that is simple, duplicable and exponential. 

if you start a small setup, then start another one just like the first one, you are on track to follow the Mc Donald's system of franchising.

And if you can start this setup at a very minimal investment, your franchisee model will appeal to everybody and your pace of starting new franchises will be much faster than that of Mc Donald's system.

written by:

Dr Hitesh Bathija


  1. Brilliant.. way to make people understand the power of leverage.

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