· 8 min read

Why the Foundation of a Successful Life is Building a Leverage Stack

To become massively successful, you need to give massive value to the world. But if you think you can do that by hustling and grinding day and night, I’m sorry to say, you’re wrong. You see, playing with time is an inherently losing game: we all have only 24 hours a day---actually a lot less when you factor in that you need quality sleep, downtime and time to reward yourself. The trade for time is severely limited because there’s only so much you can trade in.

This post is about a better way to think about building a remarkable life. We’ll cover the thought framework and the principles to break through the limits imposed by the amount of time we all have. We’ll see how these principles form the basis for every productivity system, time management method and most businesses.

Thinking about time

The key realization in thinking about time is that it’s your most valuable asset, simply because it’s so scarce. Literally, right now, the clock is ticking and you’re a few seconds closer to death than you were just a moment ago---and there’s no way to get them back. Doesn’t it make sense then that you’d trade anything for even a little bit of time saved? There are just so many things that most of us do every day, that are pure wastes of time: scrolling through your social media feed, going to parties of friends you don’t really like that much, feeling bad or ruminating about something. See, Tony Robbins said “life is too short too suffer” and I tend to agree with that statement.

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Making this realization a core part of your thought process helps you make better decisions throughout the day. For example, I learned about how complicated my task management system should be. The goal is that it should save time, so you should put things in so the system can trigger you or help you remember, but don’t add tasks that are too detailed you’d know them anyways. Then the system is just slowing your time.

{{< figure src=“img/train-bird.jpg” caption=“Life is fast and will hit you. Your time is your most valuable asset.” >}}

Okay, you probably knew you’re going to die at some point. I just wanted to get to this conclusion: building a remarkable life is maximizing the value of your time. And leverage stacking is the foundation of this. This is not a “quick hacks” ot “10 tips” but it’s a framework that you can use for the rest of your life.

Leverage Stacking

Everyone has created a to-do list at some point. Whether you only make a list when you’re really overwhelmed or you live by your task management app, this is an example of what I call leverage. You’ve converted the time and effort needed to remember everything into a piece of paper, which you now can use and refer to over and over. You’ve transitioned from the domain of doing into the domain of having. The list is an asset, something you own and that is now helping you, thus making your time more valuable.

What I consider leverage is much broader than this, of course. The fact that you can go to the grocery store where they have all the vegetables you’d ever want in a single rack is leverage. When you use Facebook to connect with friends across the world, you’re using leverage.

This is what every productivity system does: it creates leverage. A system that helps you be more productive reduces the number of things you have to spend time on and converts them into an asset, something you have instead of do. And so, the most powerful thing you can do is producing things that produce leverage. Some examples are: setting up a morning routine, learning how to become an expert with the software you use daily (like your text editor or Excel) and creating playbooks and checklists for things you do often where you tend to miss steps.

{{< figure src=“img/showing-programming.jpg” caption=“Switch from doing to creating. Build assets that support you and increase your value. Photo from Delaware and Barco’s 2018 Software Study Trip” >}}

Leverage stacking is using the systems and tools you used previously to build new leverage-producing systems on top of them. This way you build up a collection of leverage-producing assets that make you more effective, valuable and thus wealthy1.

Ray Dalio understood this principle a long time ago and built his investment firm Bridgewater Associates around it. Every investment decision they make is codified and stored in an artificial intelligence. That means they can easily evaluate their decision processes later and use all the knowledge from their previous experiences in every new decision. Today, Bridgewater Associates is one of the most successful investment companies in the world and manages over 150 billion US dollars. Dalio understood this so well that he published a book with his life and work principles (which is a great read, by the way).

Getting Practical

Let’s go over some practical ways to get started building your leverage stack. Keep thinking of this as a collection of knowledge and systems that’ll stay with you for your lifetime. This is a long-term vision where the guiding question is “what can I create or do that will help me for the rest of my life?”

Step 1: Internal Leverage - Education

The first system we’re working with is you. Continuous education is and always will be the cornerstone of your personal growth. Learning something gets you from zero to producing valuable results and making smart decisions. You need to know what you’re doing before you can actually do something meaningful. Reading this, by the way, is building your internal leverage, so good job!

What are the best things to learn? I think you should have a grip on a broad range of subjects and then specialize in a narrow skill that is rare and valuable. At the same time, train yourself so you’re able to concentrate for a long time without getting distracted. If you’re interested in these topics, I recommend Cal Newport’s excellent books So Good They Can’t Ignore You (about why rare and valuable skills are a better idea than “finding your passion”) and Deep Work (about thriving in a world of distraction).

Step 2: External Leverage - Systemization

The core of your leverage stack is systemization. This is where you stop just doing things and start creating things. From now on, try to look at what you do and what happens around you---and notice that a lot of the things in this world are relatively simple repeated processes or a combination of processes. Once you formalize these processes, they become a system and you don’t have to think about doing it anymore. This formalization is not hard, a simple checklist can be a really good system. Now you’re free to start thinking about how to improve these processes instead. You might find a way to simplify some steps, make them run faster or delegate them. You’ve just created something that gives you leverage and thus increases the value of your time.

Because your systems don’t disappear, they can build on top of each other and their value grows exponentially. You can use this to keep building more powerful systems or gain freedom (in terms of time).

This is the stuff that generates wealth. This is what increases productivity in our society: things that reduce effort and increase the value of employees’ time. Use your time to create things that leverage your time forever. Change doing things into having things. Contrary to your ability to do, which is limited by the amount of time there is, your ability to have is practically limitless.

This is what makes businesses profitable. The beautiful thing is that the power of systemization is not limited to a set of industries or products—it’s actually fundamentally part of how work in a business is organized:

  1. Employees are paid for their time; they do work and produce assets
  2. These assets increase leverage and are owned by the company
  3. Employees use these assets to produce more value; the business profits from the extra value generated by the leverage

{{< figure src=“/img/chart-building-leverage.svg” >}}

Your value is determined by the time you spend doing things and the leverage you have. To make progress, you use that time to create assets that give you leverage, thus making your time more valuable and increasing your value.

Step 3: Passive Leverage - Automation

You saw it coming, the ultimate outcome is, of course, eliminating human effort (almost) completely and automating the job. Once you systematized and optimized a process, it is fairly straightforward to make it run automatically. This is where simple tools like IFTT or Zapier come in, or more advanced solutions like Robotic Process Automation tools and custom programming.

The more important takeaway, though, is that you don’t need automation to make processes run more efficiently. It’s okay if there’s still a human factor. People do better work if they know what to do and if you free them up so they can focus more on the creative tasks humans truly excel at.

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In Summary

  • Build systems that produce leverage, i.e., allow you to do more valuable work
  • Stack these systems, i.e., keep building new systems that make use of the previous ones
  • Use them to reduce effort and time spent, to focus on the creative tasks humans excel at

Footnotes

  1. I use the term wealthy not only in terms of money but also in health, energy, relationships etc. It’s about a complete life where everything is awesome.

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