Leveraged Income?
Leveraged income is income derived from other people's efforts. Unfortunately the majority of the people in the world earn linear income. Linear income means they trade their time for money. Unfortunately, no matter how clever they are or how high their hourly rate, they are still restricted to only 24 hours in a day and therefore a limited earning potential. Leverage income allows you to use the time and efforts of others to create an income. By learning to leverage your time, you can financially benefit not only from your own efforts but from other people's efforts.
HOW CAN YOU LEVERAGE OTHER PEOPLE'S EFFORTS?
Imagine that you are in the business of mowing lawns and that you could make R40 for every lawn that you mow. If you were to average 5 lawns per day, you would earn a gross income of R200 a day before expenses. This is an example of linear income where you use 100% of your own efforts to create an income. This is what the majority of people do for their entire lives.
Now, imagine that you own a lawn mowing referral business where instead of mowing then lawns yourself, you spend your time finding lawns that need to be mowed and employ others to do the physical work. Let's say you have reached a point where your business now employs 20 people who each mows 5 lawns per day. This means that you are mowing 100 lawns per day which is a lot more than you could have done by yourself. You pay each person R30 per lawn, but you charge R40, so that you make a profit of R10 per lawn. Even though you are now only earning R10 per lawn in profit, when you add it up, you are far ahead. Using the power of leverage you are now earning R1 000 per day (i.e. R10 per lawn x 100 lawns = R1 000 per day).
The choice is yours, you could spend your days getting dirty and sweating as you work hard (not that there is anything wrong with this) and get paid R200 per day, from which you will need to deduct running costs or you could earn R1 000 per day by just finding lawns to be mowed. As a smart business person which one is a smarter option?
Don't misunderstand this, to get to a stage where you can start to leverage off others efforts you may have to do the physical work first. That is , it might take you weeks or months of mowing lawns yourself before you have enough customer base and before you can start employing others to do the work. A smart business person is willing to make short-term sacrifices to make long-term gains.
Unfortunately, in most traditional businesses, like the example above, the only person who benefits from the work of others is the business owner, even though it is loyal, hard working employees who do most of the work.
This does not in any way mean you should quit your job tomorrow to start your own business. If you have a solid referral base, good understanding of cash flow, management skills and the capital to get started, you might perhaps consider it. Unfortunately the majority of the people are not in this position. The good news is that today there is a business opportunity that allows you to use the power of leverage without having to quit your job or require a substantial up-front investment. This is the power of Network Marketing.
Not only does Network Marketing allows you to benefit from the efforts of others so that you can earn leveraged income but it also enables you to earn residual income, the kind of income where, when you stop working, you continue to get paid - for life. Because Network Marketing uses both leveraged and residual incomes, it is now being recognised and endorsed by many business leaders in the world today.