What is the “Levered Mindset” and How Can it Help Me Earn More?
Levered Income was created to show you how to create residual income streams, increasing your overall income and income stream diversification. I seek out the tools and the processes (the “levers”) needed to maximize the efforts needed to create multiple income streams and to build businesses that generate residual income.
Sure, everyone wants more income, but how do you get there? I focus on the specific levers you can pull to increase your earning potential. The levers are actually small businesses themselves that can be grown to provide consistent sources of income in the future and are something that I am doing now to earn income.
Imagine a world around you of levers. The Levered Mindset is the understanding of all of the levers around you and how they affect you. Some of the levers I look for are:
Which levers are available for you to pull to increase income now?
Which levers are hurting you in the long run?
Which levers help you?
And most importantly, which levers can I build to increase cash flow?
There Are Potential New Income Streams Everywhere.
The last 10 years has completely turned the world of business upside down. There in now unprecedented access to tools to start and run a business at a fraction of the cost 10 years ago. You can incorporate a company online in minutes, open a retail shop with worldwide access and inventory for less than $500, and hire staff around the world based on need versus geographic proximity. You can get specialized university quality online training without the $150,000 degree and mounds of student debt. The world is available at your fingertips.
Imagine the business of YOU as an empty box. Focus on each lever as a potential income stream and that lever is a “worker” of sorts that will pay you something and deposit it inside of your box. The majority of people have one lever that they pull which deposits the entirety of their income into this box. The lever is their job where they sell their time. This lever returns no leverage - 1 day earns the same amount, every day.
Step outside of that box and look inside. You have a single source of income that is delivered by one lever that has a 1 to 1 (or less!) leverage ratio. What happens if the lever breaks and the person loses their job? Having all of your income originating from one client is very risky and this path is followed by the majority of workers out there. Someone once told me that the definition of insanity is doing the same thing over and over and expecting a different outcome.
How Do I Get Started Using Levers to Create Residual Income Streams?
Let’s look inside the box again.
Lets say the “employee lever” pays $1000 per month. You decide that it is too risky with just one source of income and start looking around for levers that can add to the box. You have some savings ($5,000) and decide that the “Dividend Stock” lever is easy to pull to get started. After some research, you find a solid REIT (Real Estate Investment Trust) that pays a 5% dividend and a has a great dividend growth rate. This investment pays $250 per year in dividends ($5000 x 5%), or $20.83 per month.
At this point 2 levers are putting $1,020.83 in the box. Since you opted for dividend reinvestment, the $20.83 is reinvested in the REIT and share count and income are increasing every month!
Einstein’s 8th Wonder of the World
“Albert Einstein famously stated: “Compound interest is the eighth wonder of the world. He who understands it, earns it... he who doesn’t... pays it.”
Adding Levers
Looking around for other levers, you read on the internet that you can mine crypto currencies on your computer and with your model computer, you can make an additional $50.00 per month (after electricity costs) mining cryptocurrencies. You set up the free miner and press “go”. You think this cryptocurrency “lever” could break at any time, so you sell it immediately and save the proceeds.
Now with 3 different levers under your belt, you look to leverage any other assets you have available. You realize that 2nd bedroom that you have been using for storage might make a cool short term rental since you live near downtown. You clean it up, take pictures, and create an AirBnB profile renting the room for $50 per night. It takes off and you are able to rent the room 6 nights a month, adding another $300.00 to the box.
With 3 additional levers working, income has increased $370.83 per month or 37%! Calculating 5, 8-hour workdays per week and 4.33 weeks per month, a typical month hours worked in a full time job is 173.2 hours. Multiplying 173.2 x 37% is 64.08 hours of work.
Those 3 levers of new income do not require 64.08 hours of work per month.
Real World Scenario
In a real world scenario (I actually do all of these levers), setting up and operating one miner would take me about 10 minutes per month, REIT stock research 30 minutes per month and AirBnB guest preparation about 1 hour per guest (6 hours total per month for 6 guests). Total of 6 hours and 40 minutes. That is almost a 10-to-1 lever compared to your job!
Once you find levers that work for you, scaling operations is simple. You can think of these big levers as the income “idea” levers and then devise other levers that work on the big levers to make them even easier. The goal is to create income streams with the least amount of friction and using tools to improve and make it smoother every day. This philosophy of constant improvement is critical to being able to adapt to new opportunities.
Where on the Levered Income Site Can I Learn How to Create Residual Income Streams?
The Levered Income website is divided into different potential Income Levers, each contained in a constantly updating page on how that income lever is performing in real time for me. Within those “Income Lever” categories are posts about how to build specific income lever out and how to create residual income streams with that lever.
There are also general levers about how to employ technology to support your different businesses and to make you more effective in your quest to create residual income streams.
I am slowly adding all of the different income levers I have created or am currently creating to Levered Income. The links will go live once I have added the new lever section to the website, or you can reach it from the top menu.
In addition to the general business and specific income levers, there is also a “The Levered Mindset” area where I post items that don’t fit anywhere else. I hope you enjoy the website and that you can find something that will help you learn more about how to create residual income streams.
Thanks for reading!
