Record Of Special Events: A Little Post on Leverage

Wednesday, April 29, 2009

A Little Post on Leverage

The media seems to categorize the use of leverage with some sort of evil deed but whether it’s a corporation or individual, leverage is part of our lives like turkey is for Thanksgiving. It’s not necessary, but having it benefits everyone. Like so many products that some dislike (credit cards come to mind as another example), don’t always blame the arrow when you miss the target.

Good Use of Leverage

Instead, use leverage wisely and you might just come out ahead. Below are a few areas where good use of leverage can propel us into the road of success and prosperity.

Buy a Home - Mortgages are the most commonly talked about form of leverage. You will be hard pressed to find any first time home buyers who can pay all cash for their first house, so using your down payment as leverage is actually not a bad idea as long as you don’t over stretch yourself and buy a property that you cannot comfortably afford.
Our Power as Customers to Get Better Treatment - The customer is always right, or at least so they say. Never ever take advantage of someone else but demand to be treated appropriately or just take your business somewhere else. Always make sure everyone in the relationship know that you are the decision maker in the transaction and you will be happier every time.
The Competition - This is the heart of comparison shopping. Remember those advices that tell you to use a quote from another company to start a bidding war? It really works!
Your Expertise - You already know what you learned so why not teach someone else and earn a side income? How about offering a service part time? For example, Peter from Bible Money Matters uses his design talents to help design logos for others. Follow him and earn some money on your own too.
The Internet - We already have access to it everyday so why not leverage that access to save more money? Coupon sites give great deals and Google is an awesome place to find out what other people think about different products.
Your Time - Just because something takes time doesn’t mean it can’t be beneficial. To-Do Lists and planning are all ways to leverage your time to free up more time.
Services - Can you leverage your cell phone and turn it into the only phone service you have? Since you have Internet and so many shows are available online, could you cancel your TV subscription?
Lack of Total Transparency - When I was in an elevator during my visit to China, I saw a little TV that showed ads the whole time. I thought it was a brilliant idea but what my friend told me was even more interesting. Apparently, the company that made them started out by leveraging the lack of communication between advertisers and building owners. On one hand, they told advertisers that they have all these locations and buildings lined up that want to install the TVs. On the other, they told the building owners that advertisers are already lined up to have ads displayed. They got around the “chicken or the egg first” problem without actually trying to answer the question.
Your Assets - Think about subletting a room out to supplement your income. You may even be able to rent out your huge DVD collection. Don’t let the last word of this post stop your imagination.

Leverage Can be Bad Too

The minute you abuse anything is when disaster usually starts. Here are some uses of leverage that you absolutely need to avoid.

Our Power as a Supervisor - Overworking your employees just because they need the paycheck is not a good use of leveraging the situation. Gain respect by first respecting others and understand their needs because everyone is more productive long term.
Needy Customers - In fact, customers are not always correct. Just because you are the decision maker doesn’t mean you can do whatever you want. Again, show respect.
Excessive Risk - Whether it’s buying too much house or borrowing money to speculate on stocks, don’t risk too much or else you may lose everything.

Leverage can work in your favor or it could destroy you. The outcome is up to you.

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