The 4 Invisible Forces That Explode Your Earning Power

The 4 Invisible Forces That Decouple Time From Money

If you want to stop trading your time for money, and deliberately increase your earning power, you need to become a master of leverage.  

The more you can earn, the easier it is to save. And the easier it is to save, the faster you can achieve your financial goals. But most people go about this all wrong. We're conditioned to believe that income is a function of intelligence. And many smart people stay broke because of this belief.

The truth is, income is only loosely correlated to intelligence. 

Instead, income is about leverage. 

The greater your leverage, the greater your income. 

Leverage is the force multiplier that makes your time and talent more productive. But this can be a tricky concept to really grok, So in this episode, Terry breaks down the concept of leverage to first principles.

By walking through several powerful examples, he shows exactly what leverage is and how it works to decouple time from money. The four different forms of leverage, and exactly how you can become a master of leverage to predictably increase your income without getting lucky. 

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Transcript

Terry: 0:30

Hey there, legend. You're back with Terry, and welcome to the third and the final deep dive in this Earn Your Worth framework. now. So far we've talked about the Universal Money mechanic that drives prices up and that happens when demand exceeds supply. and I shared with you the Earn Your Worth framework as a way to get this mechanic working in your favor. And we used a bit of a superhero analogy to simplify this framework. The first parts knowing yourself, and that's about honing your superpowers. The second part is serving others. And that's all about figuring out who you are here to save. And the final principle in our framework is gonna be the focus of this episode. And it's gonna be all about amplifying your impact. So, in keeping with our superhero analogy, this is about making your time and talent more productive so that you can save as many people as possible.'Cause what I've learned and continue to learn is that in the long run, your compensation is a function of your contribution. Because money is a measure of value. So by figuring out where and how you can create the most value and offering it to more people, you can predictably grow your income and make saving easier than ever. I remember about five years ago, I met a listener who reached out to me on Instagram and we had a bit of a conversation and he told me that he'd grown his income so much that he was actually saving 80% of what he earned. And he wasn't living like a papapa, he was living a very comfortable lifestyle. and the reason he could save 80% of what he earned is because he was earning$1 million a year. he'd figured out a super specialized skill and become a category of one for some very high paying customers. So, the point I'm making here, and I've been laboring for this whole series, is making more, is not about doing more, it's about creating more value. But I find that this is counterintuitive to most of us, and I think it's because of the way we get paid. If you get paid by the hour, it's easy to think that making more money equals spending more time working. But the truth is, time and work are not the same thing, and neither is effort. It's possible to do more work and create more value without expending more effort or time. and if you know how to do this, you can make more by doing less. The key is to become a master of leverage. Like supply and demand. Leverage is a universal law that governs money. I think the schooling system taught us that income is a function of intelligence. Like the greater our intelligence, the greater our earning power and our income. That's not true at all. I know some very smart people who make very little money, and I've met many people of very low intelligence, who tend to make a lot of money. The truth is income and intelligence are not linked, but income and leverage are linked. The greater your leverage, the greater your earning power. So in this episode, I'm gonna break down the concept of leverage and share what I've learned about how it can be applied to explore your earning power, we're gonna start with first principles and learn through a notable example of an Aussie self-made billionaire whose product you probably use. And then we're gonna look at the four different types of leverage and how they work to decouple time from money. And what's interesting is for each type of leverage there are what I call meta skills. And these are specialized skills required to create that form of leverage and these skills are mostly learned by doing. And once you've mastered them, you can use them in any arena to build leverage and explode your earning power. So if you've listened through this full series and you're still not sure what your superpowers are and you're not sure where you should be focusing, don't worry. I'm gonna give you a roadmap for increasing your income by strategically building leverage in what you already do. Using these meta skills. Then no matter where you are, what you're doing, you're gonna be much more valuable and much more valued as a result. And that is what's gonna increase your bargaining power and your earning potential. So that's what we're gonna be covering in this episode. Think of it as a roadmap for building high income skills. That pay off wherever you are, whatever you're doing. So we're gonna talk about what leverage is, how it works to increase your earning power, and how to build leverage to decouple time from money to make more by doing less. And this is gonna be very tactical. It's not gonna be kind of general. We're gonna talk about real specific examples. We're gonna delve into and decode those examples. And I'm gonna show you how you can use leverage and how to strategically build it over time. If you've ever wondered why some people seem to do it so much easier and yet earn far more than everybody else, the answer is in this episode. And if you've ever wondered how you can be earning more money while doing less work, then the answer is in this episode. And if you apply what you're about to learn here, there is absolutely no way that you can't be making a lot more money in the future. Now let's start with the most important question. What am I talking about when I talk about leverage? I realize this can be an abstract concept, but it's much easier to understand when you see how it works. So I wanna break it down through a real life example. Melanie Perkins is one of Australia's most prominent self-made billionaires, she's built enough leverage to earn roughly around$8.5 million a day. So let's talk about how she did it. Melanie Perkins is from Perth, and she was a 19-year-old design tutor working at university And she saw a lot of students spending entire semesters just to learn the clunky design software that is Adobe. And I'm not sure if you've ever spent any time in Adobe, but my God, it takes you months to actually just understand the interface before you can start doing anything. And so she spotted this problem she said, everyone's creative. Why can't we give people tools that make everyone more creative? Why do these tools have to shut people out? And she started with this niche. And in business terms, you would call this a beachhead market. You would think about one specific problem that you could solve that really well to prove and validate a hypothesis. So in 2007, she partnered up with this guy Cliff Albrecht, and they started Fusion books. This was a web-based yearbook platform. Where students could design their own books via this drag and drop interface. So she kind of saw that there was all these teachers having to put together these yearbooks every year. And it's a thankless task. There's a lot goes in there. Some people love it, some people hate it. But the key point was, it was a very hard task to do. It was a very time intensive project. And so she started with this problem and it turned out that she was correct. People did want help solving this problem. And Fusion books continue to grow and reports say that it became the largest yearbook company in Australia and expanded into New Zealand and also France. And so that's her first taste of building something real, generating cash and proving that she could lead. And with Fusion books working, the vision becomes a little bit bigger. She starts asking a different question. What if design tools could be for everyone globally? so her and Cliff pitched this broader idea to investors. but they were largely rejected. Most people said they love the idea, but you're never gonna scale without a top tier technical co-founder. And this is at a time where it's really important to have someone who knows how all this stuff works. So this becomes the challenge they've gotta get through at the time. And they keep pitching this idea, getting the same kind of rejections going, basically love the idea, but just don't think you are the people to execute it. You are gonna need to be able to solve for that problem. And in late 2012, they bring in former Google engineer, Cameron Adams. They bring him in as a co-founder and basically sell him the vision and say, what if we could do this? And once he's in, that's when all the doors start to open. That's when the capital flows and the real platform build begins, so they use this new influx of capital to be able to buy talent, to build a team they can use to get the first version of Canva off the ground. But it was 20 12, 20 13. That's when they got this seed funding and when it was secured. And that's when they launched the first version of their product. And I was actually one of the first people to use Canva, believe it or not. I was doing a private business course at the time and it had just launched and these people came in and they were teaching us how to use Canva. And I brought that back and I used this in so many different locations and I think I was one of the first 200 people, to use it. And I think there's more like 240 million users these days. But 2012 and 2013 is when they started and when they kind of first got out into the world. By 2013, the company was valued at 1 billion. Then by 2014, they had this small but growing user base. By 2016, 2017, they had millions of users and they reached profitability around 2017. By 2021, the valuation was 40 billion. By 2023, they reported revenues of around$2 billion plus. That's absolutely insane. When you think about, this is a private company. They've never gone public, but they've built an absolute behemoth. And in tech terms, they call this a unicorn. and Canva quickly builds this cult following because it kind of democratizes design in a similar way to Henry Ford made automobiles more for everybody. It's kind of what happened here with design and word of mouth. Canva used this really cleverly this word of mouth to make it really easy to refer people. They created these global templates and allowed users to share their own designs. And Canva became a bit of a movement, not just a tool, and as it continued to grow, Melanie Perkins net worth exploded along with it. And it's estimated now that she's worth around$14 billion So from being this student in Perth with a modest first business to global tech billionaire, her earning potential, her impact multiplied massively because she unlocked all these different levers. And the key point that I want you to take from this case study is that Canva could not exist without Melanie Perkins and her insight, but Melanie Perkins could not have built Canva without becoming a master of leverage. So let's use her story to break down the concept of leverage and see how she used it specifically at different forms to build her empire. So what is leverage? Well, In physics, leverage is using a lever to apply less, force to move a bigger load. In business, leverage is using systems, tools, or resources so that your effort produces outsized results. It's force multiplication in practice doing more with less. At its essence, it's really simple. Output equals input times leverage, where input equals your time, your energy or your capital. Leverage is the multiplier that turns one unit of input into many units of output. Without leverage, growth can only be linear, but with leverage, growth can become exponential. And I like to visualize this. If you think about two triangles that are sort of pointing towards each other, tilted on the side where you've got the point of those triangles or the point of these pyramids, like touching, You think about input as a left triangle and output as a right triangle. so the left triangle is pointing directly into and connected to the right triangle when there's no leverage. Both those triangles are the exact same size. The input equals the output When there's leverage. The first triangle is much smaller than the second triangle. The second triangle is much bigger because that's the force multiplication side of things. I like to use that visual to think about how leverage actually works. A smaller input equals a bigger output over time. Then there's leverage. If the input equals the output, those two triangles are the exact same. There is no leverage. and our spirit animal for this series, Naval Ravikant, he codified four different forms of leverage. The first is labor, the second is capital. The third is code or product, and the fourth is media. So let's go through these one at a time just to break them down and understand them even better. Labor leverage is the oldest form of leverage. The first time somebody employed somebody else to help'em get a job done. That was labor leverage. So this is using other people's time, their skill or connections to achieve a desired outcome that you couldn't achieve on your own. Melanie Perkins used labor leverage when she teamed up with Cliff Albrecht. First up, she borrowed his skills, his expertise, his abilities, his connections. Because together able to come up with something they could not otherwise do solo, she had the insight and he had the commercial now. So those two brains working on the same project to found fusion books. That was a form of labor leverage. They just borrowed each other's labor and skill sets to be able to do more than they could do alone. Then they hired these freelancers to build their first version of fusion books. That's more labor leverage, more brains, but also specialized skills in building that code required for the first version of that product. Again, that allows more work to be done in less time. But the question is, how did she acquire that labor leverage when she was hiring those developers? How did she actually do that? Well. She did that because she used this other form of leverage called capital. And Capital. Leverage is using money to buy time, growth, investment, credit fund, whatever it is, converting money into other forms of leverage and capital is the most versatile form of leverage. it allows you to transmute one form of leverage into another. Could be anything. You can turn capital leverage into any other form of leverage. and that's what makes this form really unique. so Melanie Perkins acquired Capital Leverage when she raised money from her friends and family for the first version of Fusion books. And later on when she raised money from investors for a first version of Canva and ongoing, she used capital to require more labor leverage, which was then used to create the third form of leverage, which was product. And product Leverage is where you build something once, but you can scale it infinitely. This could be digital or it could be physical, but essentially you're building something that allows somebody get some sort of solution or outcome beyond your physical presence. Anytime this happens, you've created product leverage, and Melanie built product leverage first with Fusion books because without Fusion books, without that software, she would have to sit with people and actually show them how to do it and help them actually do the process of building their yearbooks. But by creating this web-based interface that allowed people to drag and drop elements and easily create these yearbooks, she was actually able to help more people at once than she could ever do on her own. That decoupled her time from money because she could get paid anytime someone used that software. Versus anytime she was with somebody helping them. So creating that code that just made it so much faster for school teachers to create those yearbooks. And it just meant that many teachers could be using their product at once. Canva was the same idea, but just for a broader market. If we're gonna try to democratize design, how do we make it easier for anyone to create what they want? And because they'd hit on this insight, which is everyone wants to be more creative, the user base for Canva exploded. And this leads us to the last form of leverage. So media essentially is any congregated audience that exists that you can speak to one to many versus just one to one. media used to be permissioned. You have to get somebody's permission to stand in front of that crowd or be on that radio show, or be on that TV show or write that book. But with the advent of the internet, media is now permissionless leverage. You can get the word out for free. social media has made it free to reach a global audience, to reach anyone anywhere, with any message, without having to ask somebody else's permission. And what Canva did really well was create PR in the beginning, use kind of the old form of media permissioned sort of storytelling where they're getting magazines to come in and talk about this new product and what it's doing and create that kind of hype and buzz. And they mostly did that to bring on investors to get more capital. But as they stopped needing more and more capital, they started to be able to create more media leverage through user generated content. They made it much easier for people to create their own templates and share their templates with other people, which would bring new people into the platform, give them a taste of what it was about, and grow the user base even further. And they were really, really clever about that. They didn't really have to pay for advertising or anything like that. The product by itself did a lot of its own marketing, but also the way they built it and they allowed that user generated content to, to grow was a massive part of getting the word out for them. I think it was a brilliant idea. So these are the four forms of leverage, labor, capital code, or product and media. Now I just wanna share a few observations around these different forms of leverage. Naval sort of says. That's the first two, labor and capital, their permission to leverage. You need somebody's permission. They need to choose to follow you. If they're gonna be a part of your team and you're gonna benefit from their time and talent and their skills and capital, you need somebody else's permission to be able to get that money as well. And so that's really not up to you. It's other people giving you permission to have that leverage. Whereas what's different and why the internet is such an amazing opportunity now is because it's created permissionless leverage in media and product specifically as I just mentioned with social media. You can reach a global audience now and you can build your own audience and you can create your own distribution without having to get through any gatekeepers. That is a completely new opportunity and one that I've benefited from just by starting the podcast I use permissionless leverage created by the internet, and that has generated for us coming up to a million downloads now, and nearly 2 million in sales as well. Now, that doesn't mean I'm a multimillionaire because obviously you've gotta run a business and there's costs and things that come from outta that, but it really has completely changed what I believe to be possible. How I live my life and the choices I have on a day-to-day basis, all because of this new form of permissionless leverage and the platforms are available. It costs me 19 cents per episode to have every episode we've ever recorded online, hours a day accessible to a global audience. And I find this absolutely incredible. Like I got on a call last week with a lady shout out to Celine who just joined the mentorship and she actually listened to the first season of the podcast. This was recorded nearly six years ago. And at the end of that season, she booked a call. She ended up coming through. we're Starting to work with her now. Now that is leverage. That is me benefiting from work that I did six years ago, but that's still valuable to people. That's still valuable. It's still working for me right now as well. That is when time and money have completely decoupled unbelievable opportunity that just did not exist before. And so when you think about, the internet and sort of the theme of this series, that's really what I'm trying to get across here is yes, our money doesn't work as well as our parents did. But we have so many more opportunities to make money than they ever did. And if you really start to look at this and understand the concept of leverage and think about how the internet has changed things, you'll see there's so much to gain by just starting to move in this direction. Just starting to think about it a little bit differently and allocating more time, energy into this space. You see, opportunities are really just endless and it comes down to your creativity and your ingenuity. The Internet's also created permissionless leverage in the form of code. You can learn how to code and now you can even vibe code. I've created products for myself in like two, three hours that you could sell. That could absolutely, you could sell. Because code on the internet allows you to solve problems for people in repeatable ways and create products. They basically have infinite scale. You can have many, many people using the same thing and all paying for its use at the same time, whereas you, yourself personally, could never help that many people all at once. Again, unbelievable opportunity. It's like having a factory without actually having to have the infrastructure. you just need to have the skills. You just need to be able to build those things and understand how to build those products. And it's getting easier and easier now because the code itself is being commoditized by ai. So really it's all about insight. If you've got a deep domain insight and you understand the problem better than anybody else, it's getting easier and easier for you to create that code. I mean, we built our own tech product with Moeller in the whole background of what we do. this is a tech product that's connected to open banking, gives you a real time feeds and a complete customized dashboard, financial operating system that's geared towards your goals. We created that, and I don't even know how to code. Ryan's really pushing this project, and really sort of taking the lead and taking control of that now, but that would never have been possible and it's getting easier and easier to do. So if you've got a deep domain insight in that way. There's just so many more opportunities for you in this space. the main thing I want you to take from this section is leverage is just about doing more with less. And it's created when you figure out how to use labor, capital, product or media to get more done in a given unit of time that you could do a loan. If you think about debt, leverage and finance and money, that's when you use other people's money to acquire a bigger capital base than you could do alone. The kind of leverage I'm talking about, that's about using labor, capital, product, and media to create more value than you could alone. And Melanie Perkins story is just a masterclass in leverage. She started with labor by teaming up with Clip Albrecht. then moved to capital by raising the friends and family, converted that capital into more labor leverage to build the team. Then used the team and their skills to be able to create the product in forms of leverage with fusion books. Then use more labor leverage to get the co-founder from Google, which created more capital leverage, which they then use to build a bigger team, create version one of Canva, and bring more capital leverage in, build a bigger team, better product, and just keep going. And you can see how this whole thing has compounded over time and they've just amplified it with media in the beginning. And then also UGC, and social media over time. Now that's 12 years and it's compounded to$8 million a day. So she's doing all right. and you might've picked up on this pattern here, but there's a reason why the world's of wealthiest self-made people tend to be business owners. Because if you think about it, building a business is the ultimate form of leverage, That's you creating something that exists outside of yourself to solve a problem for many people, for many more people than you could actually solve for yourself. And building a business itself demands that you become a master and start to understand how to use these different forms of leverage and stack these up over time. Managing people that's labor leverage. Managing money that's capital leverage, managing the delivery of your product or service. That's product leverage, and managing the marketing and getting the word out to bring more users and get more customers, get more clients. That's all media leverage. So it's not a mistake that most wealthy self-made people. They're business owners. They've either bought or built their own businesses, and in doing that, they've had to build forms of leverage over time. And I'll say what I said at the start, income is not a function of intelligence. It is a function of leverage. The more leverage you have, the more earning power that you're gonna have over time as well. But I don't want you to think the only way to use leverage to increase your income is that you have to start a business.'cause you absolutely don't. Leverage works to increase your income regardless of whether or not you're employed or you are the one doing the employing. So what I wanna do now is show you exactly how I used leverage to double my income in less than 12 months when I was working in sport. And I have to say in an industry where there's a massive abundance of talent looking for very few opportunities, it's not an easy thing to do this. Most people spend years stuck at the same level of income and they never really make progress But once you see what I'm about to show you, you're gonna see how leverage decouples time and money and how you can use it to create more value wherever you are, whatever you are doing. And that's gonna come back to you in the form of money, in the form of income. was just a few years into my career as a performance coach in the A FL When I burned out and almost quit, I hadn't really had a day off in months and I hadn't experience with an athlete that completely changed my trajectory as a coach. I'm running around one morning and just trying to organize all the day's sessions for the rehab group. And this requires a lot of collaboration with medical staff and a lot of other people as well. I'm running in and outta the medical department through the athlete's change rooms, as I set up these tailored sessions outside on the field. And as I move through the change rooms, one athlete asked me what his plan is for the day. I just say to him, Hey mate, I'll be with you in a sec. And the truth is, I actually didn't know.'cause I had discussions with the doctor the day before about his plan, but the doc was yet to clear my plan. We were yet to actually confirm that and just make sure we'd reach consensus on it. So I keep rushing back and forth, getting information and setting up all these coins for sessions outside. And 10 minutes later, he asked me again and I followed him off again. And 15 minutes later he asked me again and I still don't know, but I don't have time to stop and explain. And as I'm walking away on this last occasion, I hear him say this joke, he says, don't mind me mate. I'm not really that important. And this comment, it just floored me. See, at that point I'd been working nonstop and there's periods of time where I hadn't had days off in months. there's not a full day I'd had to myself. And despite how hard I'd been working, the perception was I didn't care. So this was a real gut check for me. I went home that night and I just took this massive step back. I had to recognize that my calculus was all wrong. The things that I thought were important were not important. I'd been operating on the assumption that the harder I worked, the more valued I'd be adding and the more I'd be valued. But that actually wasn't the case. I'd never put in more effort in my life, and yet the perception was I didn't care. So I went back to the drawing board and I asked myself this question, if working hard isn't valued, then what is valued? And it was pretty obvious when I stopped to think about it. What was valued was time. Time spent consulting with athletes, engaging them in the process, getting their commitment, really working with them. I really just banked on compliance because that came along with my position. They had to do what I said. My job as the coach, their job as the athlete, coaches, listen to athletes. Let's just get it done. But that actually didn't work. I wasn't really building trust. I wasn't building buy-in I was working my ass off. But I had to acknowledge I just wasn't the best coach. And I don't think I was valued or valuable at that point. I think I was useful'cause I was getting a job done. But whether I was exceptional, that really was not the case. So I made this long list of all these tasks, all the tasks that I had filled my plate with nobody else I'd filled my plate with all these tasks. I thought these things were really important. I thought it was important for me to do these things and stay busy doing these things. And I made a list of all these tasks and almost every one of these tasks had nothing to do with consulting athletes and spending time with them, and those important moments that matter when we're working through their plans. So every single task that wasn't that I put it under the microscope. And in the process of doing that, I built this system. I called it the sports rehab system. And essentially what I tried to do was automate, delegate, systemize. It's just try to get everything else that wasn't that off my plate. So I could spend more time doing that. And I built this tear based system for progressing any athlete from injured back to full fitness.'cause that was my responsibility at the time. And every tear had success criteria specific to that injury and specific progressions for that injury, for strength, stability, and conditioning. So this took months. I spent my whole off season doing this and I codified this rubric. I codified it into a configurable rehab planning suite of tools, and that made collaborating planning and reporting 10 times easier. instead of spending all my time just planning sessions and preparing for sessions, I can now do that very quickly and I could do it very effectively because everybody was speaking the same language. I had this common language and everyone knew exactly what was happening and what was next at all times. And this actually works so well that I got bored. And on one occasion I got stuck in traffic on Punt Road. I was sitting in traffic for 40 minutes. And if you've ever been in Melbourne and you know what Punt Road is, You'll know that it's an absolute shocker to get stuck on. And on this day, my junior staff had seen the plans and I was able to have a quick phone call with them. And by the time I turned up to the session, they completely set the whole thing out correctly and they'd started walking athletes through it. Doctors were across everything, everything was managed. And I realized I dumb myself out of a job. I'd got so effective now that I didn't need to do any of the logistical coordination stuff. It was so much easier. And that meant that I could spend all my time talking to athletes, spending my time really understanding them, spending my time getting by and getting commitment. And I was more effective than ever because I was a lot less busy. And the athletes loved it. They were now part of that process. They felt more confident in their plans and not surprisingly, they got better results. And it was because of this that, not long after that, I got headhunted for a role with the Australian rugby. they'd gotten wind of my system. They actually, had the exact problem that my system solved. They had these, all these different people doing different things across the country, different ways of doing things, different language, different ways of talking about it. And they needed a common approach. They needed a systemized way of coordinating this process because in rugby, athletes spend time at their franchises. Maybe New South Wales, Queensland, wa at the time, Canberra athletes are all over Australia, but then they've gotta be ready for the international system. But there was no centralized way of doing that process. And when they saw what we were doing and they saw the way that it worked, they were very interested in that. So I was told that I wouldn't actually have to apply for the role. I would go straight into their shortlist. And I remember walking past, and I remember all these people who are much more qualified, much more experienced than me, just leaning on their qualifications and experience. But they didn't have this, they didn't have a product, they didn't have a system, nothing to point to. It was all about me. Hire me, I'm your solution. Whereas I was like, well, I've got the solution. It looks like this, it works like this. And because of that. I kind of differentiated myself in a really important way and this is what doubled my income overnight, because the new role that I was taking on was at the international level, working at a senior level of management, working with a national coach with all the franchises around Australia. So now I had to really lean on and learn labor as a leverage and really influence people through what they were doing and try to build up this new way of doing things. But this new level of responsibility, this came with income as well, So that's why my income went up. I actually had the tools to do more with less and I had that responsibility. So can you see how I ended up using leverage to allow me to do more higher value work in less time? Now, I would've never had the language or the knowledge to articulate what was happening at the time. I didn't know what leverage was. I would've never have been able to explain to you, Hey, I'm doing this. but by building my rehab system, I'd unwittingly built product leverage the suite of tools that I built around this. It codified expertise and made it more useful for professionals and more accessible for athletes regardless of who was using it. And that's what allowed me to streamline all the planning and offload all the preparation for sessions onto my junior staff, which meant that I could spend most, if not all of my time, Consulting with experts and athletes and less time planning in preparing for sessions. This is what improved my outcomes dramatically, but also my reputation. And by delegating to junior staff, I began to learn how to use labor leverage instead of doing everything myself as a lone wolf. And that was my first opportunity to start learning that skill stack. And it was probably the only reason why I was actually given that job at such a young age.'cause I actually had shown experience managing people at that point. Now I would say I was still ill-equipped for the level of management that I actually had to take on there and I had to learn very quickly. But I had some experience there. now, something to note through this whole process is that I didn't make any extra money whilst I was doing this. I put a lot of time, energy, and effort in to be able to solve this problem, but I didn't get any extra money during that time. All that extra income came in one big hit. After those results were obvious, it all came to me then. So it was almost like I was putting it in, putting it in, and then I got paid back for all that when I got the new job and the much higher income. and this is how leverage decouples time from money, it, increases your income by allowing you to be more productive in a given unit of time for a given unit of effort. The more leverage you apply, the more money that you can make with a lot less effort. Okay, so now that we've decoded leverage through a couple of examples, Let's talk about how you can start building leverage strategically to increase your earning power. Now, I'm not gonna talk in generalities here. I'm gonna share what I've come to see as the playbook, because the more I've looked at this, the more obvious it is that there's a pattern to the way that people build leverage over time, and it tends to follow a similar path. So we're gonna walk through that path right now, and the good news is you can move much faster When you see this path and you walk it deliberately, plus you don't have to know or do everything yourself. The goal here is to accumulate leverage. The key word that I want you to take from that sentence is accumulate. You don't need to become a master of every form of leverage yourself. You just need to gain access to that form of leverage and point it towards your own ends. in the same way that you used debt to gain control of a property. you didn't save all the money yourself. You just needed to become someone others could trust with their money to be able to gain control of the asset that grows at a much faster rate than your savings. You don't need to own every meta skill that creates each formal leverage yourself. You just need to become someone capable of accumulating that level of leverage. And there are three ways to accumulate leverage. You can build leverage, which is mastering the skills and tools yourself. You can borrow leverage, which is partnering with other people with shared values and objectives. Or you can buy leverage, which is employing others with the skills and tools that you need to create the outcome that you're looking for. and you might remember Daniel Priestley is someone that we're referred to a little bit through this series. He was the guy that sort of talked about that money mechanic of demand and supply. another quote that he's really famous for is, income Follows assets. And I think most people think of that and they think, oh yeah, property and shares and that sort of thing. But they're really ignoring the, his main point assets are the skills you have, the things you build that create leverage in what it is you're doing. When it comes to income assets are the skills and tools that you build to create leverage, because the more leverage you get there, the more income and earning power you're gonna have. They make your time and talent more productive. so what we're trying to do here is accumulate more assets to create more value in a given unit of time, But first, you need to adopt the winning mindset. And that is what I call the investor's mentality. You might remember I said, I spent all these months building this system, doing this different way and sort of coming up with all these new ways of doing things and my salary and my income didn't increase at all. During that time. I was doing a lot of extra work to make this work. It came to me later on. What I've learned and continue to learn is that if you are ever gonna master leverage and you're ever gonna benefit from the income that comes with leverage, you need to adopt an investor's mentality. And what do investors do? They make contributions without immediate expectation. And they do it for years before their efforts compound. Side note, that's why loving what you do is such an advantage. You know, I'm doing that job in sport. I'm not seeing that as work. I'm actually really enjoying that. I'm engaged with what I'm doing. I'm just thinking about ways to do it better. I'm not looking at the clock wondering why I spend extra three hours today. I didn't get an extra money for it. I'm engaged in that process and I'm enjoying it. I'm enjoying seeing the fruits of my labor as well. the key point here though is that you cannot expect income without immediate effort if you're not willing to expend effort without immediate income. I'm gonna say that again. You cannot expect income without immediate effort if you're not willing to expend effort without immediate income. It works both ways. So if you're ever going to build and accumulate leverage, you're going to have to become an investor in that sense of the word. You're gonna have to get comfortable with making contributions without expectation for the longer term, for the bigger picture, for the end game. If you're not willing to do that, you're always gonna have your time capped to money. So, having said that, let's talk about the actual process. There's four steps to this to be able to apply leverage strategically to grow that earning power. And the first one is you wanna find the 80 20. If I go back to my story, I learned that not everything I was doing mattered. There was a lot of things I was doing that did not matter, and that's what caused me to stop and figure out what does matter. And the process that I used is really the 80 20, the 80 20 rule is a really famous observation from the economist, Wilfred Pareto. And what he found was, in all economies, 80% of the wealth was held by 20% of the people. But over time, he noticed that this rule, this 80 20 rule, 80% came from 20%. He saw that in all these different arenas, all these different environments, you can see it everywhere. 80 20 is a law. And the reason I'm harping on this is because 80 20 is leveraged thinking.'cause if you can find the 20%. The 20% of your inputs that are contributing to 80% of your outcomes, you know where to spend your time and energy and talent trying to solve the problems better, right? And so if you think about that, step out of the problem for a second and say, what do you do? What's the 80 20 of what I do? What really matters and what doesn't matter? And what we're trying to do here is create more space for the stuff that matters by getting everything else off our plate. so here's how I did it. I wrote down every task that I did on an index card. I wrote them down on their own index cards. And then once I'd done that, I clustered the cards into categories, themes, if you like. And then I looked at these themes and I said, Let's rank the categories in terms of the importance to outcomes. and I think it's good to probably test your thinking with this as well. maybe someone who's more experienced with you create these ranks and basically say, here's what I'm kind of doing. What do I think is most important here? And this is where I think you can, create an opportunity where you get mentorship and wherever you're at, find somebody who's steps ahead of you and say, Hey, what do you think? I think this is the most important part of what I do. How do you see it? And tell me why. Get those categories right. And once you've got them right now, you wanna look at the categories that sit lower on that and figure out how do I automate, delegate, or drop all these trivial tasks, get them off my plate in some way. So that I can spend more time focusing on the tasks that really matter. Find the few things that I can do to create an outsized impact on the results. This is where we wanna start applying leverage. And again, what we talk about here is asset allocation. where do I allocate and apply my time and talent in the best spot to create the most value. if you do this, you're gonna be streaks ahead of anybody else.'cause you're actually thinking about where is the value. Most people don't do that. Most people come in, clock in, clock out, do what they're told. This is you being proactive. Once you've done that and you've found the 80 20, you know where to focus. The next step is to find out your leverage type. Now, as I was reading through the different types of leverage, I talked about labor, capital, product, and media. You're probably thinking there's one of those that you've got higher affinity to than the others. There's one that you gravitate towards because it's more aligned with the specific knowledge you have and maybe the existing skill stack that you've developed across your life. What you wanna do with this step is figure out which of these leverage types, labor, capital, product, or media, which of those do you have the most affinity with? Because that's where you wanna actually start building leverage. If you're not sure which one of these leverage types is most suited to you, then I've created a bit of a diagnostic that will help you discover which is most suited most. Relevant for you. And also we'll talk you through the meta skills to build that form of leverage, which really brings us to step three in this process. Once you know what your leverage type is, then we wanna think about how do we build the meta skills that create this form of leverage Because there are prerequisite skills, things that you can get good at that create more leverage in this space. Each leverage type has this skill stack that will help you create that kind of leverage in whatever industry you're in. There's a lot of skills that go into kind of creating leverage in all these different spaces and all these different industries. But these skills are ones I'm gonna talk you through right now. I'm just gonna list them. They're the ones that you can master very deliberately to make you more valuable in that space, make you more productive in that space. Wherever you are, whatever you're doing, they're gonna make you more valuable. in the interest of time, I'm not gonna give full descriptions of these'cause that that would be a lot of time. I'm sitting here talking about what this means, what this means, what this means. If you wanna know exactly what this means and exactly how it works and why it matters, for each form of leverage, just take that diagnostic,'cause it'll have these meta skills listed under each form of leverage so that you can get a bit more context for this as well. What I'm gonna do now is I'm just gonna list off the meta skills required for each form of leverage. All right, so let's talk about the meta skills that build labor, leverage, talent identification, sales and recruiting, negotiation, team development, communication, delegation, project management, coaching feedback and conflict resolution. If you systematically start to build some of these skills and start to clump them together, You're going to get better and better at developing labor. Leverage meta skills for capital leverage include financial literacy, capital allocation, risk assessment, risk management, probabilistic thinking, and financial reporting. Same thing. Get good at those skills. You're gonna get better and better at using capital as leverage. Meta skills for product leverage. Systems thinking first principles, reasoning, design, sensibility, abstraction and modeling, prototyping and iteration, technical translation and learning agility. Get better at those skills. You're gonna get better at building products that decouple time and money and create more product. Leverage meta skills for media, leverage, creativity, culture mapping, storytelling, copywriting design, content creation, presentation post-production, and media buying. Get good at those skills and you're gonna get better at figuring out how to get the word out, how to get more people across what you're doing, which is gonna create more media leverage. Once again, take that leverage type quiz. If you wanna know more about. Each meta skill with models for each type as well. So for each type of leverage, I'm gonna give you a model and say, this person's a master at this, and these are the meta skills that sort of sit within it. And these are descriptions of these meta skills. So think of it like a bit of a buffet that kind of shows you cool. You are good at that. These are the different things you can get good at to build more leverage here. So if you've completed step three, what you've done so far is you've found the 80 20 where to focus on what you're doing to get the most outcomes for the smallest inputs. Then you've figured out what your leverage type is. Then step three, you've systematically figured out what meta skills you need to master to build that form of leverage. Step four is to reinvest your gains. See, what happens is once you've built meta skills in your leverage type, you're gonna get good at one of these things and you're gonna have more income, you're gonna have more influence and more career capital. And you want to use these resources to strategically acquire more forms of leverage via one of two paths. Path One is that you can borrow other forms of leverage and then buy other forms of leverage. So after you've built the meta skills that make you a master of your leverage type. You can use your career capital to partner with other people who have shared goals and objectives. And Melanie Perkins is an awesome example of this, right? She borrowed Cliff Albrecht's, capital leverage and all the meta skills that come along with that. And she used that capital leverage to buy product meta skills for product leverage. And that's how they got the whole thing started. So that's the first path. Borrow additional leverage, and then buy other forms of leverage. The second path is buy other forms of leverage and then borrow other forms of leverage. So after you've built meta skills that make you a master of your leverage type, then you use your increased income to build a war chest that lets you buy other forms of leverage. So a really good example of this is Mr. Beast. If you don't dunno, Mr. Beast, I don't know where you've been living, but he's the biggest YouTuber in the world. he even had a TV show on Amazon more recently, just Google him, if you dunno who he is. But he built unbelievable media leverage and absolutely gamed. YouTube became the king of that platform, and built such a strong income from that level of media mastery that he was able to employ a team. so he was able to buy time and talent and people around him and build this production company. And the level of production leveled everything up and that only increased him further. And you can just see, just watch a few of his videos. The level of production required and the size of the stunts, the size of the things that he was doing, just absolutely unbelievable. And he did that to just build this absolute media empire. And then he just converted all the extra cash from that into other forms. And more recently product leverage. So you might go into Woolworths or Kohl's and you might see these Mr. Beast bars. he's actually used his brand, his personal brand, to create product leverage in the form of these Mr. Beast bars. He's also got physical locations and restaurants over in the states and built more product leverage through that as well. I think he's a really good example of the buy then borrow path'cause he's partnered with business people, to be able to expand his empire over time as well. So I think he's a really good example of that second path. Melanie Perkins is more borrow than buy, whereas Mr. Beast is buy than borrow. But the key point between the two of these, if you think about this, these two different examples, is the first part of this process is strategically building and mastering one form of leverage. Mr. Beast was unbelievable at building media leverage and then using that to accumulate other forms of leverage, whereas Melanie Perkins was unbelievable at labor leverage and leadership and use that to acquire other forms of leverage over time and to continue to reinvest. But these two paths, they are reinvestment paths. You don't just take money off the table, you keep reinvesting, you keep growing the thing, and you keep trying to do more to make more better. And again, this is all about amplifying your impact. So if you've got a superpower, how can you do that? How can you keep reinvesting to amplify your impact to get more results, do more with less? That's really what this whole thing's about. so if you wanna accumulate, leverage and exploit your earning potential, you must adopt that investor's mentality And follow that four step sequence. Find the 80 20, figure out your leverage type strategically build meta skills, and then reinvest your gains. Reinvest your gains to accumulate more forms of leverage. Reminder. If you're not sure how to do that, just take that leverage type diagnostic that's gonna help you with all of the above. Alright, so we're at the end of this episode, the last deep dive in our series. And here's the big point. You cannot increase your earning power predictably without leverage. Your income is not a function of your intelligence. Your income is a function of leverage. The more leverage you have, the more earning potential you're gonna have. Over time leverages the force multiplier that turns focused effort into outsized results and lets you achieve exponentially more without working exponentially harder, and by producing more outputs for a given input. Leverage allows you to decouple time from money and there's four forms, labor, capital, product, and media. And to master those forms of leverage, you need to think 80 20. Identify that leverage type, master those meta skills and keep reinvesting your gain to accumulate other forms of leverage. If you do that, if you follow that roadmap, there's no way you can not make more money. Now that is gonna take time. And that's why I said the investor mentality really matters. But here's something I want you to consider. While everybody else uses all their energy in transition from one sure thing to the next, going back and forth like, Yo-Yo Dieters always trying to find the next big thing. They don't compound their time and energy. They don't build leverage over time, but they're expending the same amount of energy. You're gonna work hard anyway. You may as well work hard for something that compounds. I guarantee this is not more, I think it's harder to spend your life working, doing things that are not necessarily paying off, working hard, trying to find one thing, move to another thing, and just hoping something works out versus just get very deliberate. About thinking your way through this and understanding these principles and putting them into practice. And that's essentially what we're gonna cover in the last episode in this series. We've talked about the full framework now of giving you the full roadmap, which is know yourself, know what your superpowers are, know what your kryptonite is. and then we said serve others. Figure out where you can create the most value and try to find that. Try to course correct towards finding the location in which people, really want to need what you have. And the last one here is all about amplifying your impact. Accumulate leverage to be able to serve and save as many people as possible. In order to be able to put these principles into practice, you need to build a development plan. You need to think about yourself as a product. You need to think about yourself as somebody who can evolve, who can improve, and you need to design that version of yourself in the future and start working backwards from that. When I left sport, that's exactly what I did. I basically looked at a bunch of people who had the life I wanted, and I pulled out all the parts I liked about the lives I lived, and I built a model. And then I started looking at that model and saying, okay, that's the ideal I'm working towards. What are the skill or skills that these people have that I don't have? What do they know that I don't know? What qualifications do they have that I don't have? What connections do they have that I don't have, and how do I actually start to fill those gaps in order to be able to become somebody worthy of living that kind of life and having that kind of existence. That's really what I've done, I'm absolutely still on the journey. I don't think I've mastered this at all actually. I still think I'm in the beginning of this, but I have benefited from this and I have seen how powerful this is over time. And it is a game. And once you start to see that game kind of working for you, it's absolutely worth the effort. it's not gonna be an overnight thing. And no, it's not easy to sell you because it's so much easy to say, Amazon Drop shipping's gonna make you money tomorrow and you're just gonna be free. Financial freedom, passive income, all that kind of bullshit. But the truth is, anyone that's done anything of merit has become a master of leverage. And they've either done that consciously or unconsciously. And if you follow this roadmap from this episode and in this series, you cannot help be making more money because you're working with the laws that govern money. So in the last episode of this series, I'm gonna be talking through how I build my development plans, how I actually do this in a strategic way, and how I work towards that over time. So lemme know what you thought of this episode. Hopefully this was helpful. I did do this a couple of times'cause there's, again, it's very ambitious to try to get all this stuff into one episode, but hopefully I got there and I'll see you in the next one.