Time to do a ‘Leverage Audit?”

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One of the great things about technology is that it seems on almost a weekly or monthly basis that there are new tools that can help increase our productivity. So in today's post, I want to talk about why regularly assessing if you are applying leverage in the right ways can be the key to increasing productivity and getting more done.

The ideas here come from the book 'The Leverage Equation' by Todd Tresidder which I would most definitely recommend reading:

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We often always assume that when we talk about 'leverage' we automatically think about stock market traders and high-risk behaviours. This however only covers a very small piece of the picture with leverage which is financial leverage. This type of leverage can be very effective as well but I'm not really going to focus on this. It certainly requires great care and it can potentially work but risk management is absolutely key.

To understand how and when to apply leverage you need to have a fairly strong grasp of expectancy. Which revolves around the probability and magnitude of the expected win if you succeed vs the probability and magnitude of expected loss if you lose.

This sounds complex but it doesn't have to be and we make this assessment intuitively every day. It's just about a fair assessment of the risks. Having your work experience intern sort the post is the effective use of leverage, having them organise your accounts, less so.


The other forms of leverage we don't talk about

  • Time Leverage - Using other people's time so you're not limited to just your 24 hours a day

  • Technology and Systems Leverage - Using other people's technology systems so that you can scale your work and communication.

  • Communication and Marketing Leverage - Access other people's audiences and networks (if they are willing of course)

  • Network and Relationship Leverage - Expand your reach to include people's connections so you're not limited to your own circles.

  • Experience and Knowledge Leverage - Employ or access the expertise of knowledge of others so you don't have to learn everything yourself.


The reason I think this is useful as it helps build humility as you have to address some harsh truths about where your shortcomings may be. However probably more importantly, in a world of ever-advancing technologies, there are increasingly more options to 'outsource' certain components of our lives. Understanding which lever to pull and when to pull it is going to be the difference between the businesses that grow and thrive compared to the ones that get left behind.

Here is a few examples of leverage I've found relatively recently:
 

  • After spending a few hours trying and failing to design the Principles Personal Finance logo myself. (It was terrible). I outsourced the logo design on the website Fiverr. I'm a bit concerned about the implications for the graphic design market going forward but I was very pleased with the results.

  • My website is run on Squarespace. This blog will be updated on this which is leveraging the work of thousands of website creators so a complete novice at website design like me can operate and manage a site with no training.

  • My videos are created leveraging other video creator'’ expertise. I use a subscription service called Envato Elements and after leveraging the expertise of various other creators watching online tutorials. It allows me to create compositions that are well above my skill level. (SPOILER - watch the start of Managing Inflation on the intro and if you look closely enough you will see them on the film design the 'sweet memories' template I use that I couldn't delete. Well in many ways, isn't referencing Central Bankers and Venezuela's inflation issues just the sweetest of memories?)

  • The 'old fashioned way' or phone or email ping-pong to set up meetings seem crazy once you've set up Calendly.

  • Professional networks allow direct access to the expertise of hundreds of other professionals. I'm a member of Next Gen Planners which is a great community of forward-thinking financial planners. There are regular questions posted to the group and I've seen some seriously obscure and specific planning solutions found through a combination of a wealth of experience in the group.

  • I was very grateful to be on the Maven Money Podcast (Andy) last week and I'm on Meaningful Money (Pete) next week. Andy and Pete were both very much 'mentors I've never met and really shaped a lot of what I'm doing right now with Principles Personal Finance but they have been kind enough to help me with that and it's allowed me to connect to a wider audience.


Make yourself unnecessary

How many of us want to work 'on' the business instead of 'in' it? You can't leverage every aspect of your life and nor would you want to. The idea is thought that by applying leverage in the right way you can focus on the high enjoyment and high value tasks and less on the ones which can be outsourced can allow you to add more value to your business.

Now any leverage-based strategy has to be done with a keen understanding of expectancy and the phrase 'delegate don't abdicate' here is very important.

Your Leverage Audit

In a world where our attention is always increasingly stretched making sure that we can focus on our high-value tasks is key and

  • Is this a high-value task that cannot be outsourced?

  • Is this an effective use of my time?

  • Am I the best person to solve this problem for my business?

I personally am trying to work on adapting this behaviour more. It's not easy but I think the professionals (and financial planners) of the future who are successful are going to be the ones who understand where that balance lies. Ultimately what is at stake is controlling your time:

"It’s actually really important to have empty space. If you don’t have a day or two every week in your calendar where you’re not always in meetings, and you’re not always busy, then you’re not going to be able to think. You’re not going to be able to have good ideas for your business.

It’s only after you’re bored you have great ideas. It’s never going to be when you’re stressed, or busy, running around or rushed. Make the time. [7]"

The Almanack of Naval Ravikant

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