ScottHallett.com

Leverage.

It’s a word I learned from Robert G. Allen

Basically, it means your ability to move a lot – or make a lot happen with little effort.

It’s crucial to understand how leverage works in business, and just how important it is.

Example:

If you have a mailing list of 5 people, then you have no leverage.
If you have a mailing list of 25,000 people, then you have leverage.
If you have a mailing list of 125,000 people, then you have MASSIVE leverage.

Here’s another example:

If you have a website that generates 5 hits a months, you have no leverage.
If you have a website that generates 25,000 hits a months, then you have leverage.
If you have a website that generates 125,000 hits a months, then you have MASSIVE leverage.

If those 125,000 people are targeted to what you sell and are ready to pay $$$, well - you know…

You see where I am going with this?

Now, obviously money is the best form of leverage, but I didn’t want to come out with that one first.

If you have $100,000 in cold hard cash lying around, you have some serious leverage.  And its universal leverage – you can do just about anything with it.  You can invest it immediately and see immediate returns from it.  This is why they say the rich get richer.  And it is why the rich who get richer do so at an exponential level.

But these are not the only types of leverage.  You may not have a list of people you can take advantage of.

Instead you may have a Rolodex full of rain-makers who love you and are willing to help you out.

Or you may just have one person who has a lot of leverage that can help you out.  If you have the ability to work with someone else who has leverage – then you ultimately have the same leverage.  Here is an example.  Suppose you have an uncle that has a storefront that gets about 3000 people a day.  If he allows you to promote your product or service in that storefront for free – or for a significantly smaller commission than he would normally charge, then you are set!

Are you starting to see how all of this works?

Two things for you to think about:

1. Think of all the types of leverage that there is out there in the business world, and how they can be applied.
2. Think of ways that you can start to harness leverage so that when you need to apply it – you will have it.

One great business idea and the leverage to get the traction it needs to move - then that may be all you need to make it.

If you start now, maybe in a year or two it will be the difference between success and failure in your entrepreneurial endeavor.

Always be thinking about these two things.

The best forms of leverage may take a long time to build – so even if you don’t have a product or service, start building your leverage now.

This is why entrepreneurs network.

This is why people do joint ventures.

Start building your leverage now!

And remember – even if you don’t have a product, you always need to be building the brand of “You”!

Ciao,
- Scott

What is the first thing you need to learn?

It is the difference between income that is earned the old fashion way, and income obtained the passive way.

When I was younger, I was told (and believed) the best thing I could do was to learn a skill – like fixing a computer or preparing a tax statement – the kind of skill that can get you a job, a job where you can apply that skill to earn a wage.

I did that and it has taken care of me.  So all in all it was sound advice.  But there is a better way to make money that I have learned from the direct experience of being in the rat race.

The problem is that in order to receive money, even if it is $100 and hour, you will have to trade a unit of work for it – and you will eventually run out of hours in the day that you can trade.  Additionally any wage worth working for may take a significant part of a lifetime to obtain the education, skills and experience to make.

And even then, in order to make more money, you need to either increase your wage or work more hours.

Ultimately you will work yourself out of free time and end up trading all that you really have to give.

And what is it you are really giving up?  It is time – which is a non-renewable resource.  We only have a set number of hours on this planet, and for most people it is spent either working or sleeping.

As you get older, it becomes very apparent why one would want to break out of this cycle.

Savvy entrepreneurs know that the way out is not by working for a wage, but rather creating an investment vehicle that works for them while they are lounging on the beach in Hawaii.

Of course, it is easier said than done and can take a long time to be successful (if you are successful at all).

But don’t let this deter you, at any point in your life.

If you could go back to school and learn to invest wisely or create some investment vehicle -or- learn a trade, like plumbing or fixing a computer that required you to use that skill set to earn money, what would you rather do?

Well that good thing is that you don’t have to go back to school – you can start now and you can even capitalize on whatever skills you have learned along the way to create some type of intellectual property to earn you passive income.

From this point forward think about the different ways that passive income is obtained, and what skills are required that will allow you to create and/or invest in those vehicles that will provide regular returns on one-time investment.

What’s your magic number?  What would you need to earn in order quit your job?

Well, the first step is to decide that it is possible for you (or anyone, at any age or any skill set) to take the first step and learn what is possible.  And if it helps, start small.

Who knows, maybe 3- 6 months from now, you might just have little operation bringing in an exta $500 a month – would it be worth the initial investment in “YOU” in regards to learning?

Only you can answer that, but it is the start.

More on this to come…

So, to sum up this very first rule of entrepreneurship:

• Earned income:  Wage based or salaried work.
• Passive income:  Income received on a continual basis without having to work directly for it.

Quick note:  There is actually a difference between residual and passive income, but for the sake of this post, what I am referring to is income received on a (semi-)regular basis without being directly involved in each transaction.