EP 068: Doing Things That Compound

One of the things I have been repeatedly told in my business career is never to trade your time for money.

Focus on building leverage.

I’ve decided that this is terrible advice.

Once upon a time, I used to play a lot of golf.
(handicap 12)

I was a member at one of the more prestigious clubs in my area.

Something interesting about golf is you often get to meet a lot of very wealthy people.
Club membership is expensive + the cost of equipment is high.

Sure enough, many Doctors, lawyers and business owners tend to congregate at golf clubs.


The car park at my club was always loaded with incredibly expensive cars.
I’m not talking about your average Mercedes or even a Porsche.

I’m talking about cars that cost the same as houses.

Now golf is also a very social sport.

A round of 18 holes + some time at the 19th (the bar) can take 3+ hours.

When you play with someone you get to learn a lot about them.

Being I was someone who was looking to be wealthy at this point in my life, I would always ask questions about what they do.

What was interesting is that 99% traded their time for money.

Yes, even the ones who were business owners.

So what gives?

Why are they not all obsessed with getting leverage in business like I was?

They knew something I didn’t

What they had worked out was…

Because of the earning power they have trading time for money, they could accumulate capital quickly and put it into things that compound.

They didn’t care about trading time for money.

They cared about how much capital they could put into investments so that compounding could do its thing.

Compounding capital is the ‘thing’ that sets these guys free to play golf on a Wednesday…
Not leverage.

Now I’m not saying leverage isn’t incredible and something worth pursuing.

But what if you could harness both?

I suspect many business owners are out there seeking leverage but… have very little compounding for them.

If you can earn a high amount by trading your time for money, it might actually get you financially independent far faster than just pursuing leverage. 

What made me a financially independent person is not how much leverage I had.
But the combination of leverage and compounding.

In my opinion, you need both! 

Anyhow, this week on the podcast, Grant and I talk about doing things that compound and why it’s more important than leverage alone.

Leverage will only take you so far.

Compounding is the thing that moves the needle and ultimately gets you to a point of financial independence.

All information we share is NOT financial or investment advice and is purely intended for entertainment and educational purposes only. Always seek professional advice before acting on any financial decision.

Episode Highlights:

00:00 Welcome To Business and Investing
01:46 Compound And Leverage Explained
03:25 Is Obsessing Over Leverage Profitable?
06:47 The Power Of Compounding
09:24 How Affluent People Build Wealth
12:39 Overcoming Your Business’s Built-In Profit Ceiling
15:21 The Problem With Just Playing The Leverage Game
17:45 Why Many Developers Lose Money & Rob Flux’s 1-In-6 Rule 
19:54 Charley’s Cheat Code To Winning At Life
24:51 Is There A ‘Best Approach’ To Building Cash Flow? 
26:37 Why No One Talks About Combining Leverage And Compounding
31:36 How Awareness Affects Your Wealth-Building Decisions

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