“Give me but one firm spot on which to stand …”
The rest of this quote from Archimedes goes “and I will move the earth.” He is referring to the phenomenon of leverage and claiming that with a long enough lever and somewhere to stand he could literally reposition the world. There are two main aspects of leverage that lend themselves to building the business of your dreams – financial leverage and operating leverage.
Most people have at least one ‘leveraged play’ in their financial life. They buy a house using a little of their own money and a lot of the bank’s. If the asset increases in value, as it has done over the long-term, then the profits gained go only to the borrower. Borrowers only have an obligation to the ...