1、 Find expertise

To make money in society, one must provide what society needs but cannot obtain. If society has created the necessary products and services, you will no longer be needed.
So first of all, we need to figure out what you can provide to society that it needs but cannot obtain, and providing these things is a natural and easy thing for you.
This is your specialty.
To find the right expertise for yourself, you can recall what things you could almost effortlessly accomplish in your childhood or adolescence.

Sometimes, even if you don’t think it’s a skill yourself, people around you will notice. Your mother or your best friend during your upbringing will know what’s special about you.
Under the combined influence of genes, growth environment, and individual response to the environment, each person has developed their unique expertise. Expertise is an organic component of a person’s personality and identity. Once you find a field that you naturally enjoy and excel in, you can continue to move in this direction.
No one can compare to you in the matter of ‘becoming oneself’.

2、 Leveraging the leverage effect

Obtaining wealth requires leverage. Leverage can come from labor, capital, code, or media.
Firstly, labor leverage refers to letting others work for you.
Labor leverage is the oldest form of leverage, but in modern society, its effectiveness is not the best. I even think this is the most backward lever.
Because managing others is a very complex and challenging task that requires excellent leadership skills, failing to manage them well can lead to a situation of being betrayed and eaten alive by subordinates.
Capital is the second relatively good form of leverage.
Capital leverage is the use of money to expand the influence of decision-making. Capital is a more modern form of leverage, and utilizing it can be challenging and requires certain skills.
In the 20th century, people used capital leverage to obtain astonishing wealth. Capital leverage was the main form of leverage in the 20th century. If you look at the wealthiest people, you will find that the wealthiest people are bankers, politicians from corrupt countries, and they are essentially people who can use a large amount of money.

Looking at the executives of large companies, aside from technology companies, the vast majority of CEOs of established large companies are actually working in finance. The amplification effect of capital leverage is very obvious. Managing capital is easier than managing people, because as capital continues to grow, its management difficulty will be much lower than managing an expanding team.
The last type of leverage is the latest and most accessible to ordinary people. This lever is called “replicating products with zero marginal cost”.
This includes books, media, movies, and code. Among all the levers that can be used without permission from others, code can be said to be the most powerful – just one computer is enough.
Stop dividing people into wealthy and poor, white-collar and blue-collar workers. The modern dichotomy is between “people who have utilized leverage” and “people who have not utilized leverage”.
Copying products with zero marginal cost is the most worthwhile and important lever to study. This latest form of leverage has created new wealth and created all new billionaires.
For the previous generation, wealth was created by capital, and the people who made the most of it were investors like Warren Buffett. The wealth of the new generation of millionaires is created through code or media. For example, Jeff Bezos, Mark Zuckerberg, Larry Page, Sergey Brin, Bill Gates, and Steve Jobs.
One of the most important characteristics of new leverage is that it does not require permission from others to use or achieve success. To use labor leverage, someone must decide to follow you. To use capital leverage, someone must provide you with funds before you invest or develop products. Programming, writing books, recording podcasts, tweeting, and filming videos do not require anyone’s permission.
Human beings are constantly evolving. Once upon a time, there was no leverage in human society. If I help you cut firewood and fetch water, then 8 hours of labor will only produce 8 hours of results, and the input and output are equal.
Later, humans invented leverage, invented various means such as capital, cooperation, technology, productivity, and entered the era of leverage in human society.

In such an era, as a worker, only by maximizing leverage can one utilize limited time and physical strength to have a huge impact. Compared to a worker who has not utilized leverage, the output of a worker who has utilized leverage will increase by thousands of times.
For workers who utilize leverage, the importance of judgment far exceeds the length of time invested and the level of effort put into their work.

3、 Making Money with Judgment

I believe that everyone should aspire to master professional knowledge in certain fields and earn economic returns through it. If we can maximize the use of leverage in practical work, whether it’s robots, computers, or anyone else or technology, then we can all become masters of our time, because no one will assess how much time we have invested in our work, and we only need to be responsible for our own output.

It is crucial to have excellent judgment, a high sense of responsibility, and an excellent performance record. Ordinary people waste their time on short-term thinking and useless heavy work. Buffett will take a year to judge and then a day to take action. His actions in a day can affect the next few decades.

4、 Sense of responsibility: assuming commercial risks in the name of an individual

Cultivate a sense of responsibility and the courage to take on business risks in the name of individuals. Society will reward you based on the level of responsibility, equity, and leverage effect.
Take the real estate industry as an example. In the real estate industry, the lowest level of work is doing house maintenance. The maintenance technician, as requested by the boss, starts working at the customer’s house at 8 am and can earn $10 to $20 per hour.
There is no leverage effect here. Selling one’s skills and renting one’s time can only earn a slightly higher salary than the minimum wage.
The contractor who builds the house for the owner is on the upper floor. The contract amount for their contracted project may be $50000, and the wages offered to the workers are $15 per hour. They have put the difference in their pockets.
Being a contractor is obviously better than being a repairman. But how to measure good and bad? How do you know the difference? The reason why it is better to be a contractor is because the contractor needs to bear a certain amount of responsibility. Contractors are responsible for the results.
If the project doesn’t progress smoothly, they will be unable to sleep at night. The contractor hired workers to work and obtained labor leverage. They also have more expertise, such as how to organize teams, how to ensure that teams complete tasks on time, how to handle legal issues related to urban management, and so on.

On the next level, there are real estate developers. What developers do is buy real estate, hire contractors to improve the value of the property through renovation, and then sell the property for a profit.
They may initially need to buy real estate through loans or fundraising from investors, then demolish and rebuild it for sale. Workers can earn $15 per hour, contractors can earn $50000 per project, and developers earn far more than that.
They buy at low prices, sell at high prices, and can earn profits of $500000 or even $1 million, excluding construction costs. At this point, it is important to note: What do developers need to do? What they need to do is take on significant responsibilities.
Developers need to take on more risks and responsibilities, and while having greater leverage, they also need to have more expertise. They need to understand financing methods, laws and regulations related to urban management, the direction of the real estate market, etc., and also need to determine whether the risks are worth bearing. The difficulty of their work is much greater than that of contractors.
On the next level is the real estate fund manager. Real estate fund managers have enormous capital leverage. They dealt with many developers and hoarded a large number of houses.
Going one level further may be someone who wants to maximize leverage in the real estate market and has the most expertise. This person will say, “I understand all aspects of real estate, from basic housing construction to property and sales, to the operating laws and prosperity cycles of the real estate market. I also understand the technology industry, know how to recruit developers, how to write code, how to build a good product, I also know how to obtain venture capital, how to obtain returns, and know how technology and finance operate like the palm of my hand
But obviously, this is not realistic because no one has so much knowledge. To achieve the goal, talents with different skills can be brought together to form a team. In this way, team members work together to gain expertise in the fields of technology and real estate.
Such a high-risk and high return approach means that the company will take on enormous responsibility while also taking on significant risks, as entrepreneurs will invest all their time and energy in it.
The company will hire a large number of developers, which is a code leverage. The attracted investment and the initial capital invested by entrepreneurs constitute capital leverage. The company also employs top talents in the industry, such as excellent engineers, designers, and marketing experts, which is a labor leverage.
The ultimate result may be the creation of companies like Trulia, an internet real estate agency website Redfin, or Zillow, which have wealth creation potential of hundreds or even billions of dollars.
As the hierarchy continues to rise, the leverage effect becomes more apparent, the responsibility becomes more significant, and the expertise required is also increasing. By increasing capital leverage on the basis of labor leverage and code leverage on the basis of labor and capital leverage, the scale of entrepreneurship becomes larger and closer to having all the upward potential to achieve maximum value, rather than just receiving a salary.

The phrase ‘productize oneself’ has two key points, one is’ oneself ‘and the other is’ productization’.
‘oneself’ has unique characteristics, and ‘productization’ is to leverage the effect; Self has a sense of responsibility, and productization requires expertise. Therefore, these two key points can summarize all the concepts mentioned above. If you want to achieve your long-term goal of becoming rich, you need to first ask yourself, “Is this something or service that you have a need for but cannot obtain?
After obtaining a positive answer, ask yourself, “Have I achieved productization? Have I achieved scale? Do I choose to scale through labor, capital, code, or media
It is difficult to ‘productize oneself’, which may take decades, but it does not take decades to execute, but rather to spend most of the time thinking: What unique value can I provide? How much responsibility can I take on? What levers can I use to pry?

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