Leverage and How Money Works

Core Concepts:

1. Leverage and Work:
   • Work is defined by outputs, calculated as Volume x Leverage.
   • Work rate: The speed at which you work, defined as (volume x leverage) ÷ time.
   • Outputs drive enterprise value; leverage is the key to amplifying results without increasing time.
   • To succeed, you must out-leverage and out-skill your competition.
2. Understanding Leverage:
   • Leverage uncaps potential; time constraints do not apply.
   • Money = Time = Leverage: The “game” is rigged because there are no set rules—leverage changes the game.

How to Avoid Missing Leverage:

• Avoid optimizing without proper knowledge.
• Do not try to balance too many things at once.
• Steer clear of “half-built bridges” (incomplete projects).
• Ignore distractions (e.g., “women in red dress” scenario) and stay focused on what truly matters.

How to Make Money:

• Focus on doing one thing consistently and improve with help from others.
• Learn from mistakes and evolve continuously.
• Ordinary businesses executed over a long period can yield extraordinary outcomes.
• Consistent action is more valuable than sporadic bursts of effort.

Stages of Change:

1. Uninformed Optimism: Initial excitement without knowing the challenges.
2. Informed Passion: Growing understanding and refined focus.
3. Crisis of Meaning: Questioning the purpose of your actions.
4. Crash and Burn: Potential failure point.
5. Achievement: Success through perseverance and informed optimism.