Earn with your skill, not your time!

One of my favourite concepts in Math is Unitary Method. Taught effectively through first principles, I developed mastery over the concept through school. If 10 monkeys eat 30 bananas, how many bananas will 30 monkeys eat? Pat came my answer, 90 bananas!

Ok let’s make it tougher. If 10 men dig 2 wells in 5 days, how long with 20 men take to dig 4 wells? Some back of the envelope calculations, and pat comes the answer 5 days!

Unitary method was taught to me under the overall mathematical concept of Time and Work. The more time you invest, the more work you have done. The more work you do, the more you can earn. The linearity of logic had been established.

Becoming good in Math was the Seen effect. The Unseen effect was an ingrained unquestioning belief in this adage: more time leads to more output which leads to more earnings. In my first semester of Management education, I was introduced to Taylor’s Time and Motion studies, which further cemented this belief.

It took some unlearning for me to break out of this linearity of logic. Courtesy my following the work of Naval Ravikant (on Twitter @naval) for the last few years. Naval introduced me to this amazing concept of passive earnings through leverage, i.e., allowing your work to earn while you are not “actively” at it. Investing in the stock market with a “long time horizon”, learning to code and create content are examples of leverage. With the internet reaching most households, access to leverage has been democratized. And that’s such a wonderful thing.

Partner me in this though experiment. In the industrial age, workers were paid for every hour worked in the factory. If you worked 8 hours, you would earn a certain amount. Work >8 hours, you will be entitled for Overtime wages. Hence the number of hours you put in at work is directly proportional to your earnings.

Now replicate this for a YouTube content creator. The time required to create and put out a video maybe one Sunday afternoon. Not to discount the several hours spent in honing and perfecting the skill, once the video is uploaded, the creator stops “actively” being involved. In case the video goes viral, options of earning through ad revenues, affiliate incomes, etc. become a reality. If the content creator is good, she creates courses online which people pay for and attend. Content is the leverage, earnings are completely de-linked from hours worked. Unseen Effects of Unitary Method Math classes shaken!

Historically, leverage was unequally distributed. In the post-Industrial Revolution world, access to land, labour and capital were the factors of production. To create output, you needed labour and capital at least, if not land. Bank loans, large workforces, etc. were outcomes of these factors of production. In the internet age, output can be created by anyone sitting in front of a computer screen. Provided she knows how to invest, code, or create content. ?

You don’t need to have “family backing”, “access to capital”, or “a pedigreed education” to undertake this journey of earning through leverage. All it involves is finding areas that you enjoy, putting yourself in the open, and allowing the universe to do its thing.

Do write back to me sharing what are the modern tools of leverage available at your disposal. I’ve written about code, content and investing; what else? Eager to hear.?