"Wealth is when small efforts produce big results. Poverty is when big efforts produce small results." -- George David
A lever essentially anything you use to multiply your power. A crow bar makes it possible for you to lift a much heavier weight than you could lift with your bare hands.
According to my Webster's, leverage is:
"1: the action of a lever or the mechanical advantage gained by it
2: POWER, EFFECTIVENESS
If you work for a paycheck, you have practically no leverage. If you own a businesses employing 100 people, you effectively get paid for part of their efforts. You have considerable leverage. If you're in an MLM program, and have 100 people in your downline, and you get paid far part of their production (depending on the compensation plan), you can get phenomenal leverage.
"The greatest mathematical discovery of all time is compound interest." -- Albert Einstein
If you have your money work for you, particularly at high rates of compound interest, you gain phenomenal leverage. See Money Skill #6.
You can gain even more leverage (at lower risk), if you have other people's money work for you. This is the case with many of the programs on the Risk Meter.
If you can borrow money, paying 10% in annual interest, and you can utilize this money to earn you a 20% return per year, you get leverage. You can get similar leverage by buying stocks on margin. You can gain an even greater degree of leverage by buying or selling futures contracts. However, these forms of leverage are double-edged swords. If instead of making 20% per year, you lose money, or if markets turn against you, your losses could compound alarmingly to the point of forcing you into bankruptcy.
In Chapter Seven of Multiple Streams of Income: How to Generate a Lifetime of Unlimited Wealth, Robert G. Allen has a section called "The Awesome Power of Leverage."
