• Romtein Rostami

Leverage

Updated: Sep 3, 2019

Noun.

Use (something) to maximum advantage.




The most exciting part of being alive in this rapidly changing technology landscape is the fact that today, more than ever we have access to leverage. What does that word mean to you, how many forms of leverage can you think of? Especially interesting are new forms of leverage today that didn’t exist 20 years ago. Now more than ever you have the opportunity to amplify small gains in a meaningful way:

The most common forms of leverage available to us are:re

  • Hiring others and delegating tasks to employees is one of the most easily recognizable forms of leverage, and in our nascent global marketplace we are beginning to exchange complex goods and services with less and less friction. Since the dawn of time humans have been exchange value for labor, but now more than ever this means borderless, international and micro-services.

  • Code, media, and the internet have profoundly changed the scope of what an individual can do. For the first time ever you or Aunt Martha (who everyone knows for her amazing lemon meringue pies) have the tools to craft a website that will accept orders for you 24/7 and reach consumers on a platform of 4 billion people and growing. The reason this is incredible is because if Aunt Martha (or you) wanted to sell meringue pies before, the actual baking and creation of the pie would have been the easy part. If you lived any other time except right now, you and Martha would be spending a great deal of your energy and mental bandwidth thinking about how to find consumers for your product. Billionaire business magnates and kings of industry from previous generations were severely disadvantaged compared to our current opportunity to provide services on this incredible technological platform hardwired into our lives.

  • The final deeply exciting tool we have access to that would have been considered mystical by previous generations is margin trading. The reason this is so valuable is because even small statistical advantages, like being right 51% of the time can have significant impact when the result is amplified through a form of stock/FOREX /crypto trading tool called margin. Yes, it is as simple (and dangerous) as you think it is. When you trade on 50x margin, a 1% increase in your asset value would result in a 50% increase in your position. Of course, the reverse works the same way as well meaning the risk of a position being closed or liquidated is much greater as well. Naval Ravikant says it best: "In an age of infinite leverage, judgement is the most important skill".

This is wonderful because in order to dramatically change and upgrade our financial state we only need achieve small reliable positive outcomes. Once we have a baseline for compensation, once we have started to do some exchange, we have the opportunity to apply multiple forms of these incredible tools uniquely available to us for the first time to dramatically increase our output and joyfully receive a reciprocal amount of value exchange (money) back.


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