Source

The second article here is from an old archive dated 2011. You know I have been blogging since 2009, but I didn’t earn a single penny. I just love such a thing. So, it’s more of a personal pleasure though I don’t receive any incentive from such an activity.

I actually have 29 blogs. I am more like squatting here and there on the web, an “illegal settler” if there is such a thing in cyberspace. It never entered my mind that in exploring the world of Web3 I could monetize the time and energy that I spent during those 15 years of seemingly wasting my precious resources. Now, at least, I don’t need to start from scratch.

After learning a few basic things about blockchain, cryptocurrency, DeFi, and particularly about Hive, I can now expand or make some twists or update those articles to make them relevant or contemporary in the fintech world.

Starting with zero knowledge in any field isn’t easy. It will take time, a lot of unlearning and relearning has to take place until you gain some familiarity with the subject, and then that’s the time to speak. After close to two years of listening to great content creators on Hive, it just came naturally for me to experiment with video uploading. There was no plan, just simply doing a trial and error and I like what I see.

Leverage

This time my topic is about leverage.

As you know, the most important word in the business world is cash flow. Robert Kiyosaki explained this in his first four books: Rich Dad Poor Dad, Cash Flow Quadrant, Guide to Investing, and Rich Kid Smart Kid.

Now you made the right guess that leverage is the second most important word in the world of business. Other words I know to describe the same idea are credit, liability, financial obligation, and borrowed money. They might not be technically accurate but I guess this is how common people understand the term.

Robert Kiyosaki’s fifth book, Retire Young Retire Rich is all about leverage. For him, the use of leverage distinguishes those who become rich from those who do not.

Debt as a Form of Leverage

There are many forms of leverage, says RK. Debt is one form. People who do not know anything about financial literacy think that all debt is bad. They do not know how to distinguish good debt from bad debt.

Yes, in the Bible, if we will follow what King Solomon said, we will conclude that all kinds of debts are bad for he equated borrowing with slavery. "The borrower is a slave to the lender" (Proverbs 22:7). And I also wrote in my financial freedom article that debt is a form of slavery and it is very popular in our time.

However, we should also be reminded that there is a huge difference between the economics that we find in the Bible and the economics in modern times. Today, the entire global economy is operating based on debt or credit and if Kiyosaki is correct in his analysis, in this kind of system, the savers and those who stick to traditional finance are the losers and that is why you will find schools like ours that are rich in asset but extremely poor when it comes to liquidity. Most people are afraid of debt for they equate it with risk and possible loss of the collateral that they will use in financing their business or programs and services.

The problem is not the credit itself but the way nations, corporations, families, and individuals use it. We use something that we don’t understand. With financial literacy, you will learn to distinguish the difference between a bad debt and a good debt. Armed with such knowledge, Robert is confident in his claim that he is deep in good debt, which made him rich and financially free.

Three Important Forms of Leverage

In his fifth book, Kiyosaki discussed three important forms of leverage that people who want to retire young must learn to use. These are your mind, your plan, and your actions.

Your Mind

Let’s explore first the idea of using your mind as your leverage. I have been hearing a lot from @taskmaster4450 the same emphasis that what’s in between your two ears is your most important asset.

Now, how are you going to utilize your mind as an effective leverage? The most important tools to maximize the leverage of your mind are the words you use. Your life depends on the words you use. Your use of disempowering words will make your life poor and miserable. On the other hand, your use of empowering words will make your life rich and successful. Saying to yourself, “I can’t do that,” “I can’t blog,” “I don’t know how to do vlogging,” “Blockchain, cryptocurrency, and DeFi are risky,” or “I will not be successful,” and other similar words are examples of disempowering words. By saying words like these, you are using your mind against yourself. So you see, your mind could either be your most powerful asset or your biggest liability. Therefore, guard your thoughts and your words. They could either build or destroy your life.

Your Plan

The second form of leverage is your plan. In his third book, Kiyosaki explained that investing is a plan. Since investing is a plan, this implies that time is the most important element to succeed in your plan. There is no such thing as building a skyscraper in one day, but many embrace this idea in the crypto space with this mooning mindset.

While exploring this form of leverage, I find one disturbing observation. Most people do not see the importance of having a financial plan for their future.

When I was in South Korea, I observe that every weekend, many old people, hundreds of them, both men and women are lining up in front of one church just to receive 1,000 Korean Won, and then they will go to another church to do the same. I have no idea how many churches they visit doing the same thing but I observe such a phenomenon happening repeatedly every weekend during the four years of my stay in that country.

And then I asked why these old people arrive in such a helpless state. What happened during their younger years when they were still very productive?

And then I reflected. I told myself I don’t want to become like them. I don’t want to go on begging from one church to another just to provide food on my table in my old age.

In the Bible, aging is not considered something that you have outgrown your usefulness. It should be your most productive year. The peak of one’s life is not young age, but old age provided your inherent worth, influence, and reputation increase with the passing of years. And this can only happen if you have a plan.

Your Actions

The third form of leverage is your actions. Kiyosaki recommends that an appropriate action for those aspiring to retire young is to spend your time not working for money but applying the skill of putting money to work for you. In the context of cryptocurrency, this would mean putting tokens to work for you. In traditional finance, you can put money to work if you commit yourself for a considerable period to acquire assets like real estate, paper assets, and businesses. In the digital world, you can put tokens to work for you by growing your stakes for years in different ways such as buying them on the market, creating content, and engaging with other Hivers and lions.

I think that’s all I can say about leverage.

Grace and peace!

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Note: This is the transcript I used in the 3Speak video where I talked about leverage.