Chapter Content
Okay, so, like, finding leverage, right? It's, um, it's everywhere these days. And what's really cool is that, like, that genuine curiosity you have? It can actually lead to some serious financial rewards, more than ever before. So, if you want to, like, build a solid foundation for your career, you should really be following that true curiosity, you know, digging deep into what you actually *want* to know, instead of just, you know, chasing after whatever everyone says is the hot, money-making thing right now.
It's funny, because it's often through those unique passions and hobbies that we end up, like, mastering knowledge that only we, or maybe just a small group of people, have. If you can blend that curiosity with, like, your genuine interests, that's when you're most likely to find what you really love.
And, you know, if something seems really interesting at first but then just, like, fizzles out and bores you, then it's probably just a temporary distraction. It's not a true, like, intellectual curiosity. So, just keep looking.
I always try to focus on the thing itself, whatever it is. It's kind of like a hallmark of artistic creation. Whether it's starting a business, getting in shape, you know, dating, making friends, I always feel like life is really about focusing on the thing itself, experiencing the process, and just being present. And the crazy thing is, when you actually focus on that, you end up doing it better! Like, even if you're trying to make money, you might even end up making the *most* money.
Actually, the year I made the most money, I was like, working the least and honestly, I was caring the least about the future, you know? I was mostly doing stuff just because it was fun. I was basically telling everyone around me, "I'm retired! I'm not working anymore!" And that allowed me to spend my time on projects that I thought were really valuable. And because I was only focused on the process, I ended up with, like, the best results.
The less you desire something, the fewer anxieties you have, the fewer attachments you have, and the more naturally things flow, and the more you follow your heart. You'll just naturally keep doing it in your own way, and the quality of your work just goes up.
Don't chase trends, chase what actually interests you. And if following that curiosity and that thirst for knowledge happens to meet a societal need? Boom. That's when you get, like, really rewarded financially.
You're also more likely to gain skills that society can't, like, train someone else to do. Because, if society *can* train someone else, then they can just replace you. And if you're easily replaceable, society doesn't need to pay you a lot. You gotta remember, having a unique skill that society needs is the key to, like, climbing that career ladder. If society *can* train you, then eventually, they can just write some code and a computer will replace you.
To get paid, you need to offer something that society needs but can't get anywhere else. A lot of people think you can learn how to make money in school, but, like, not really. School doesn't teach you how to, like, actually "do business."
Really think about it. What unmet needs are out there? And how can you be the first person to offer that product or service, and then scale it up? That's the real challenge. It's all about understanding and meeting society's needs. And those needs, they change from generation to generation, but they're usually tied to, you know, technology.
When a new need pops up, and you happen to be the *only* one with the right skills, that's your moment to shine. You might build a brand on Twitter, YouTube, you know, by offering stuff for free. There might be some risks and losses along the way, but you're building that personal brand, you're building that reputation. And when the opportunity comes, you can really leverage that to scale up what you're offering.
So, overall, there are, like, three kinds of leverage.
First, there's labor leverage, which is, you know, having people work for you. It's, like, the oldest kind, but it's not always the best in today's world. I actually think it's kind of outdated. Managing people is just so complicated, so challenging. It takes serious leadership skills, and you can end up just being hated by everyone and, you know, metaphorically eaten alive by your employees.
Then there's capital, which is a better form of leverage. That's using money to amplify your decisions. It's a more modern form, and it takes some skill to use. In the 20th century, people made crazy amounts of wealth using capital leverage. It was the main type back then. If you look at the wealthiest people, a lot of them are, like, bankers or corrupt politicians in corrupt countries. They're people who basically control a lot of money. And if you look at the top executives at big companies, most of them are in finance, except for, you know, the tech companies. Capital leverage has a pretty big amplifying effect. Managing capital is usually easier than managing people because as it grows, it's not as hard as managing a growing team.
And finally, there's the newest leverage, which is the most accessible to the average person. That's "products with zero marginal cost of replication."
That's, like, books, media, movies, code. Of all the levers you can use without needing anyone's permission, code is probably the most powerful. All you need is a computer.
Don't think of people as rich versus poor, or white-collar versus blue-collar. The modern way to think about it is "people who use leverage" versus "people who don't."
Products with zero marginal cost of replication is the, like, main thing to focus on. It's a relatively new concept, only a few centuries old. It started with the printing press. Then broadcasting accelerated it. And the internet and programming just made it explode. You don't need anyone to work for you, you don't need anyone to invest in you, you can multiply your efforts a thousand times over.
This, like, podcast, is an example of leverage. In the past, if I wanted to share my ideas, I'd have to sit in a lecture hall and talk to a few hundred people, max.
This new kind of leverage is creating totally new wealth, and it's creating all the new billionaires. The previous generation, wealth was created by capital. You had Warren Buffett making money investing. The new generation is all about code or media. Joe Rogan makes like, fifty to a hundred million a year from his podcast. PewDiePie, that YouTuber, I don't know exactly what he makes, but it's way more than what the news says. Then you have Jeff Bezos, Mark Zuckerberg, Larry Page, Sergey Brin, Bill Gates, Steve Jobs… Their wealth all comes from code-based leverage.
One of the coolest things about this new leverage is that you don't need anyone's permission to use it or to be successful with it. To use labor leverage, someone has to decide to follow you. To use capital leverage, someone has to give you money to invest or build a product. But programming, writing a book, doing a podcast, tweeting, making videos… you don't need anyone's permission for that. It's, like, a great equalizer. It really levels the playing field. A great software developer has a whole army of robots working for them. They write the code, and then the robots work, even while they're sleeping and making money.
You're never going to get rich renting out your time.
Whatever stage of life you're in, the goal is to increase your independence, not just get a promotion or a raise. Being independent, being responsible for your own unique output, not just trading time for money, that's the ideal situation.
Humans are evolving. There was a time when there was no leverage. If I helped you chop wood for eight hours, we got eight hours' worth of wood. Output matched input. Then we invented leverage, we invented capital, collaboration, technology, productivity. In this age, as a worker, you have to maximize your leverage to get the biggest impact from your time and energy.
Leverage can increase output thousands of times compared to someone who isn't using it. With leverage, judgment is more important than hours or effort.
It's not just 10x more efficient. It's like, 1000x! Just look at people on Twitter like John Carmack, Markus Persson, Satoshi Nakamoto.
For example, a great software engineer writes a small, correct piece of code, a small, correct program, and they create five hundred million dollars of value for the company. But ten engineers who work ten times as hard can waste their time building the wrong model, building the wrong product, programming in the wrong way, or using the wrong viral marketing. There's a mismatch between input and output, especially for those using leverage.
One of life's goals is to control your time. The ideal job is a leverage job. In that situation, you have control over your time and responsibility for your output. If you provide an amazing solution for a business that turns things around, you're going to get paid. Especially if no one else understands how you did it, they'll have to keep paying you to keep doing it. And you were able to do it because of your obsession, your skill, or your talent.
If you're specialized, responsible, and you know how to leverage, society will pay you what you're worth. Then you have more time, and you become super efficient. You don't need to attend useless meetings, you don't need to show off, you don't need to create reports to show how much work you did. You just focus on the work itself.
And when you only focus on the work, your efficiency skyrockets. You can arrange your work so that you work when you're energized and don't bother when you're not. Then you can win back your time.
Working forty hours a week is an industrial age concept. A knowledge worker's schedule is more like an athlete's schedule, with times for training and sprints, and also times for rest and reassessment.
Sales is a good example, especially high-end sales. A real estate agent might not be an ideal job because it's so competitive. But if you become a top real estate agent who knows how to market themselves *and* sell houses, then you might sell a five-million-dollar mansion in a tenth of the time it takes someone else to sell a hundred-thousand-dollar apartment. There is a disconnect between input and output.
That's true for the building and selling of any product. The jobs in the world are basically divided into two categories: leverage jobs and non-leverage jobs. So, don't choose a support job like customer service. In those roles, the output is tightly coupled with the input. You get paid based on how long you work.
The reason why input and output are disconnected is because of tools and leverage. The more creative a profession is, the more mismatched the input and output are. And the jobs where the input and output are tightly coupled are the ones that don't create wealth and don't create wealth for you.
To join a great tech company, you either need to know how to sell or how to build. And if you don't know how to do either, go learn!
Learn how to sell, learn how to build. Someone who can do both is unstoppable.
"Selling" and "building" are really broad concepts. Building is hard because there are so many variables, including design, development, manufacturing, logistics, procurement, and even the design and operation of services. So "building" has a ton of definitions.
Every industry defines its own builders. In tech, the builders are CTOs, programmers, software engineers, and hardware engineers. Even the laundry industry has "builders." The "builders" are the people who design the laundry service, who make sure the process runs smoothly, and who make sure all the clothes are delivered to the right place at the right time.
Then there's selling. Selling is also really broad. It doesn't just mean selling a product to an individual customer. It can also mean marketing, media, recruiting talent, raising capital, motivating employees, or public relations. It covers a lot of ground.
Get paid with your mind, not your time.
Okay, back to real estate. The lowest-level job in real estate is home repair. The repair person shows up at 8 a.m. to fix things for ten or twenty dollars an hour. There's no leverage there. They have some responsibility, but it's not real responsibility. They're responsible to the boss, not to the client. There's no real specialty there because lots of people can do it. So, you're not going to get paid much. You're selling your skills and renting out your time, and the pay is going to be slightly better than minimum wage.
One level up from that is a contractor who builds houses for owners. They might have a contract for fifty thousand dollars and pay their workers fifteen dollars an hour, and they keep the difference.
Being a contractor is clearly better than being a repair person. But how do we measure good or bad? How do we know the difference? It's better because the contractor takes on some responsibility. They're responsible for the outcome. They'll lose sleep if the project isn't going well. They hire people, so they have labor leverage. They also have more specialty, like organizing a team, making sure they finish on time, and dealing with city regulations.
One level up from that is a real estate developer. They buy property, hire contractors to increase its value, and then sell the property for a profit. They might start by borrowing money or raising capital from investors to buy the property, then tear it down, rebuild, and sell it. The workers get fifteen dollars an hour, the contractors get fifty thousand dollars per project, and the developers make a lot more. They buy low, sell high, and make five hundred thousand or a million dollars after paying for construction. Here's the catch: what do the developers have to do? They have to take on massive responsibility.
Developers take on more risk and responsibility, and they have more leverage, so they need to be more specialized. They need to know about financing, city regulations, real estate market trends, and whether the risk is worth taking. It's a lot harder than being a contractor.
One level up from that is a real estate fund manager. They have massive capital leverage. They deal with a lot of developers and own a lot of houses.
One level up from that might be someone who wants to have maximum leverage in the real estate market and have the most specialty. They say, "I know everything about real estate, from basic construction to property management and sales, to how the market works and its boom-and-bust cycles. I also know the tech industry, I know how to hire developers, I know how to write code, I know how to build a great product, I know how to get venture capital, I know how to exit, and I know the ins and outs of both tech and finance."
But obviously, that's not realistic because no one has that much knowledge. To achieve the goal, you can build a team with the people who have the different skills. Then, together, they have the expertise in tech and real estate. This high-risk, high-reward approach means the company has huge responsibility and also huge risk because the founders are putting all their time and energy into it. The company will hire a lot of developers. That's code leverage. The money that gets invested, plus the founders' initial capital, is capital leverage. And the company hires top talent, like great engineers, designers, and marketers. That's labor leverage.
The end result might be a company like Trulia, Redfin, or Zillow, with the potential to create hundreds of millions or billions of dollars in wealth.
As you go up the levels, the leverage gets bigger, the responsibility gets bigger, and the specialty needs to be higher. Add capital leverage to labor leverage, and add code leverage to labor and capital leverage. That's how you build something bigger and get all the upside potential, achieve extreme value, instead of just collecting a paycheck.
Start as a wage earner and keep leveling up, aspiring to more leverage, more responsibility, and more specialty. Combine all that with the magic of compound interest, and you can become very wealthy over time.
The only thing you have to avoid is ruin.
Avoiding ruin means not going to jail. So, don't do anything illegal or unethical. Nothing is worth losing your freedom or your reputation. You want to avoid a catastrophic loss that wipes you out completely. Avoiding ruin also means not doing things that threaten your safety or your health. You have to take care of your body.
Don't do things that could cause you to lose everything. Don't bet it all, don't take huge risks. Instead, make bets that have a good chance of paying off big.