The Leverage Equation Read online

  The Leverage Equation: How to Work Less, Make More, and Cut 30 Years Off Your Retirement Plan

  Todd Tresidder

  Copyright © 2018 | Todd R. Tresidder

  All rights are reserved.

  With the exception of brief quotations in a review, no part of this book may be reproduced or transmitted, in any form, or by any means, including electronic, mechanical or photocopying, recording, faxing, emailing, posting online, or by any information storage and retrieval system, without written permission from the publisher.

  Published by FinancialMentor.com

  ISBN for Print 978-1-939273-02-4

  ISBN for Ebook 978-1-939273-03-1

  Financial Mentor and the Financial Mentor logo are trademarks or registered trademarks of CreateCorp Business Solutions, Inc. and/or its affiliates, in the United States and other countries, and may not be used without written permission. All other trademarks are the property of their respective owners.

  For bulk orders, please contact [email protected] for a generous discount schedule.

  To my wife, Katherine,

  and our wonderful daughters,

  Jenna and Ashley.

  Thank you for your patience and support.

  Every word was written with you in my mind.

  Limit of Liability

  Disclaimer of Warranty

  The publisher and the author make no representations or warranties with respect to the accuracy or completeness of the contents of this work and specifically disclaim all warranties, including without limitation warranties of fitness for a particular purpose. No warranty may be created or extended by sales or promotional materials. The advice and strategies contained herein may not be suitable for every situation. This work is sold with the understanding that the publisher is not engaged in rendering legal, accounting, financial advice, or other professional services. If professional assistance is required, the services of a competent professional person should be sought. Neither the publisher nor the author shall be liable for damages arising here from, and both the publisher and the author specifically disclaim any liability, loss, or risk taken by individuals who directly or indirectly act on the information contained herein. The fact that an organization or website is referred to in this work as a citation and/or a potential source of further information does not mean that the author or the publisher endorses the information the organization or website may provide or recommendations it may make. Further, readers should be aware that Internet websites listed in this work may have changed or disappeared between when this work was written and when it was read. While every effort has been made to make this book as complete and accurate as possible, there may be mistakes, both typographical and in content. Use at your own risk.

  Additional Books by Todd Tresidder

  How Much Money Do I Need To Retire?

  Don’t Hire a Financial Coach!

  (Until You Read This Book)

  The 4% Rule and Safe Withdrawal Rates in Retirement

  Variable Annuity Pros and Cons:

  Surprising Truths Your Advisor Won’t Tell You

  Investment Fraud:

  How Financial “Experts” Rip You Off and What To Do About It

  Additional Courses by Todd Tresidder

  Expectancy Wealth Planning

  Risk Management:

  How To Make More By Risking Less

  OVERVIEW

  INTRODUCTION

  “Life is too short to be living somebody else’s dream.”

  —Hugh Hefner

  How can you lift a 7000-pound car without anyone to help you?

  The answer is the same as how you can achieve financial independence well before your retirement age. It’s the same solution that will get more done in a day, with less effort. And it’s the answer to breaking free of almost any limitation you think you have – whether it’s time, money, skills, connections, or anything else.

  Leverage is the strategic tool that expands your resources beyond your present limitations to produce greater results than you could generate on your own. Leverage gives you access to more capital, more technology, larger networks, greater knowledge, and smarter systems than you personally possess.

  Mastering leverage can:

  Accelerate your financial results

  Multiply your wealth

  Improve your quality of life by freeing up your time from mundane tasks

  Allow you to focus your attention on what you enjoy and are good at

  Mastering leverage is how I retired at age 35, just 12 years after graduating from college with thousands of dollars in student loan debt and zero assets. In this book, you’ll discover how to apply the same leverage principles I used (and more!) to break through whatever limitations hold you back so you can produce even greater results.

  THE DECEPTIVE HALF-TRUTHS THAT HOLD YOU BACK

  Most people misunderstand leverage.

  For example, when you hear the term “leverage” do you think of financial leverage, such as mortgages in real estate or debt financing?

  Sure, that’s one type of leverage, but it’s only one of six! It’s also the riskiest. The other five types of leverage multiply reward without increasing risk. Even better, when you master certain types of leverage, it’s entirely possible to increase your reward while reducing your risk at the same time!

  Another common myth about leverage is that it’s exploitative or manipulative. Maybe you’ve seen the depraved villain on a daytime soap “use” people through leverage in some shocking and morally bankrupt way. You think: “I would never do a thing like that!”

  But leverage is not about “using” people. It’s about making smart business decisions that benefit all participants; and it’s about responsibly applying other people’s resources to overcome obstacles that limit your success so you can achieve greater results with less personal effort. Leverage done right creates jobs, grows wealth, and serves people.

  THE 4 PIECES OF CONVENTIONAL WISDOM I DON’T ENDORSE IN THIS BOOK

  There’s plenty of success advice out there. Unfortunately, many of the ideas taught are really just conditional half-truths masquerading as universal facts. The problem is: these half-truths frequently work well and are repeated so often that it’s easy to accept them as fact. But that’s where the danger begins, because any idea taken as fact – when it actually isn’t – will limit your ability to see better alternatives. You won’t recognize the exceptions that disprove the rule.

  The good news is that when you learn the pros and cons of the multiple leverage strategies taught in this book, you’ll see how much of the conventional “wisdom” is really just low-leverage half-truths.

  For example:

  Retirement planning is NOT just about saving and investing until age 65 (Spoiler alert: You can become financially independent at any age! You don’t have to wait until age 65; leverage will show you how to enjoy financial freedom earlier).

  Asset allocation across a diversified portfolio of stocks, bonds, and mutual funds is NOT the only way to invest for retirement (Spoiler alert: Higher leverage asset classes and investment models exist that can accelerate your wealth while reducing your risk).

  Making more money is NOT just about getting a promotion, or a raise, or working longer hours (Spoiler alert: trading time for money caps your income because there’s a limit to how many hours you can work. You must learn how to separate your income from hours worked so you can make more while working less).

  It does NOT take money to make money (Spoiler alert: you can separate your wealth growth from your return on equity equation by leveraging other assets).

  Don’t worry if you have subscribed to any of these conventional beliefs about investing and wealth before readi
ng this book. It’s not your fault. They’re repeated so often by mainstream media that it’s easy for your mind to accept them as true without questioning their validity.

  This book will open your mind to different strategies for achieving success and breaking through the roadblocks that hold you back. You’ll discover a new framework built on leverage that will unlock these mental traps. It will open the door to a completely different way of producing greater results with less effort and using fewer of your own resources (including time and money).

  This isn’t get-rich-quick hype. It’s a provable fact based on financial science, rooted in research, and grounded in mathematics (but don’t worry – it’s just high school algebra). The point is that it’s real, and I’ll show you exactly how it works.

  Not only that; it’s common sense. You already know it’s true because the evidence is all around you. For example, when you hear in the news how someone went from zero to multi-millionaire by age 20 or 30, what was the mechanism? How did they do it?

  With the rare exception of extreme frugality at an early age, every one of those stories involves either business or real estate success. That’s because these two asset classes offer multiple opportunities for leverage so wealth can be created more quickly than investing through conventional asset allocation.

  In fact, the research on how the rich get that way proves that the vast majority of wealth is created through business entrepreneurship and real estate. Conventional paper asset investing through stocks, bonds, and mutual funds takes a distant third place, and even then it’s usually after an entire lifetime of saving and compounding.

  So if conventional paper asset investing is the slowest strategy for wealth building, why do financial experts promote it? Because it’s a one-size-fits-all solution that’s easy to sell and it has the backing of academic research proving its validity. It’s a good business model for the investment firms – because it’s simple to communicate and implement; because it’s generic and doesn’t require them to develop a plan that accounts for your personal strengths; and because it doesn’t require any special adaptation to your timeline or personal goals. It’s an efficient business model for them, but it’s not the most effective alternative for you. It’s not wrong, but there are faster, more efficient ways to grow your wealth that may match your life situation and goals much better.

  If you want financial independence while you’re still young enough to enjoy it, and without being dependent on extreme frugality to make the numbers work; or if you would like to use alternative asset classes like business or real estate in your wealth plan; then you’ll want to broaden your thinking by trying strategies that are different from the generic financial advice you get everywhere else.

  Either you’ll learn to master leverage or you’ll work far harder than necessary to produce far fewer results than you’re capable of. This book, The Leverage Equation: How to Work Less, Make More, and Cut 30 Years off Your Retirement Plan – will help you completely shift your awareness. It will give you the essential tools that you need to work smarter – not harder – in order to achieve tangible results in your financial life.

  By the end of this book, you’ll know:

  The real reason you’re not as rich as you should be (Surprise! It’s not what you think…)

  How $10 can realistically become $1000 (without taking crazy risk or working long hours)

  The hidden trap of regular paychecks (and how you can overcome it!)

  The truth about (and the dangers of!) highly leveraged investments

  The 9 principles of leverage that maximize your financial results (and lead to a more fulfilling life)

  The right (and wrong) way to apply each of the six types of leverage.

  Plus, you’ll get more than 100 practical, usable examples of leverage strategies that you can implement immediately in your business and financial plans. (In fact, you can download the full list of “101 Leverage Hacks: A Cheat Sheet for Quickly Implementing Leverage in Your Wealth Plan” right now at https://financialmentor.com/free-stuff/leverage-book)

  YOU’RE ALREADY A MASTER OF LEVERAGE

  Best of all, you’re already a master of leverage because you use it every day. It’s not technical or complex. In fact, it’s so common that you don’t even realize you’re using it, and that’s why you haven’t yet consciously put it to work to grow your wealth and improve your life.

  For example, every day you’re already leveraging:

  All the employees who manufacture the cars you drive (but that you didn’t build).

  The workers who created the clothes you wear – from the seamstress who sewed the item, to the textile company that created the fabric, to the farmer who grew the raw material.

  Your smartphone, which you use to accomplish many tasks – and that leverage extends beyond the functionality built into the phone to include the electricity you use to charge it and the engineering talent that designed it.

  The fact is you’re already leveraging other people’s skills and resources almost every minute of your life. Leverage is an automatic part of your day. The difference is it’s just not conscious; that is, it’s not conscious until something breaks.

  A few years ago, I was skiing when a massive storm knocked down a major power line, cutting off all power to the town and surrounding area. There was no electricity, so almost nothing worked; the cell phone towers went out, and the airport only functioned because of backup generators.

  Just imagine being stuck in a freezing house in a massive storm with no electricity, no heat, no lights, no cooking, and no phone or data connectivity – and you’ll begin to understand how leverage-dependent our lives have become. Then imagine no running water as well, because, in this case, they had to drain the system to protect the pipes from freezing. That means no toilets, no showers, no drinking water, no heat, no electricity, etc.

  None of these resources belonged to me. On this trip, I was leveraging all of them for my own use – until they stopped working. It was a wake-up call, because the reality is that nearly every aspect of our lives is touched by leverage in some form in order to increase quality and efficiency. Leverage generally operates so smoothly that we scarcely even notice it’s happening.

  But there is a big difference in how the people who become wealthy use leverage – and that’s what this book will show you. They’re intentional and strategic in how they apply it. They use it to accelerate results in their wealth plans.

  With The Leverage Equation, you too will learn how to take your casual, everyday use of leverage and repurpose it into a deliberate, strategic, wealth-building strategy.

  You’ll become a master of using – in uncommon ways – what is all around you every day, in order to produce much greater results with much less effort.

  APPLYING LEVERAGE IN YOUR LIFE

  As you begin this exciting journey, always remember that nobody gets rich without leverage. If you aren’t employing leverage in your business and wealth plans, it means you’re compromising the speed, time, and work effort necessary to reach each level of success.

  Leverage isn’t difficult to master; it’s something you can implement right away and then reap the benefits for years to come.

  It’s time for you to stop working harder than you should to earn less than you could. Leverage will show you how to break the cycle of living paycheck to paycheck, so you can start building your financial future. A life of financial freedom is absolutely possible, and the simple steps and strategies in this book will set you on your way to freedom.

  Todd Tresidder

  https://financialmentor.com

  HOW TO BREAK THROUGH THE CONSTRAINTS THAT LIMIT YOUR SUCCESS

  Give me a lever long enough and a place to stand and I will move the entire earth.

  – Archimedes

  It seemed impossible to achieve. I had backed myself into a corner with my old business model, and there was no way to move forward.

  FinancialMentor.com was already a lucrative
financial coaching business, but the revenue model was maxed out because I couldn’t work more hours. There was just one of me to coach the clients and only so many hours in a day. Worse yet, the prospective clients only wanted to work with me and would not accept a referral to other coaches. I had hit a wall.

  I wanted to transition the business from a coaching services revenue model to a product-based business model. My goal was to build out a series of educational courses and books that “put Todd in a box” so that my knowledge gained over three decades in the financial business could reach more people at a more affordable price point – but how could I get it done?

  I wasn’t willing to work more hours, and I lacked the skills to build the new business model that was required. Special technology skills were necessary to build out the course platform, configure the sales process, and connect all the online automation systems so they communicated properly. I didn’t know how to do any of that.

  Also, new skills were required to write, edit, and market the books and courses, but I had no experience in that field either. As for the website, it needed a redesign to reorient the user experience so that it converted to educational products. I didn’t know how to do any of that, and I didn’t have the time to get any of it done.

  However, once I defined all these constraints (and more!) that were preventing me from achieving my goals, the answer became obvious – leverage.

  I employed time leverage by hiring a new assistant to manage social media, site administration, and the content post-production tasks like image creation, video production, and editing. I employed experience leverage in the form of a technology consultant, who then employed systems leverage through third-party software packages to connect all the online business systems that ran the course, the mailing lists, and the sales conversion processes to ensure they worked together. I didn’t know how to do any of that myself. I never have.