“Give me a lever and a place to stand on, and I will move the world” attributed to Archimedes, over two millenniums ago. Without the lever or some other piece of equipment or technology no matter how hard one would try, with only one person and two bare hands, it’s not going to be possible to move the world. One would need some tool to even consider this task. The vast majority of people financially speaking are living in a linear world, and will only get sequential, arithmetic returns on their time spent working. No part of their lives contains any possibility of exponential, non-linear financial returns. And so 7 out of every 8 people working hate the jobs they work and will not be able to avoid this trap due to the lack of leverage.
A forewarning that leverage in terms of borrowing money can end up very costly, and can be extremely dangerous to do. For examples of that, go to the subreddit wallstreetbets and see the degeneracy taking place. That is how one could lead to financial ruin. But even looking outside financial leverage, we see the average person’s habits in a day not likely to lead to anything financially.
A small % of people are working in high paid corporate jobs, in management, executive, VP, partner levels. Some are running lucrative or steady small businesses. Those involve the leverage of people, other people’s time and other people’s expertise. So that would explain in one form how people in those positions earn more. Many people may not have the skills, values or willingness to get to those positions however. One psychological research study estimated that in positions where a person was charge of others in management or above, that 25% of these individuals were at least one of narcissistic, psychopathic, sociopathic, Machiavellian. Not exactly a great way to behave as an individual, selling one’s soul to try and gain the whole world. Even then, the majority of people are not and will never be in management positions. Thus, for the majority, the average joe, this type of labour leverage is not likely to occur. So the average person’s “Career”, aka job they wouldn’t work if they weren’t paid or if the lottery was won, has no financial leverage.
In that case, on an average weekday, the average person spends 8 hours working, maybe another 2 hours to prepare for work including commute, ~8 hours sleeping, leaving just 6 hours left. The average person now spends 6 hours a day on smartphones per day, all activities tracked. Maybe there is some overlap with driving or doing other tasks during the day. So that may leave a few hours left. And the average male spends 1500–2000 hours per year on digital entertainment; that is equivalent to a full-time job hour in a year. So that entertainment time with some exercise and perhaps complaining about life with friends, and the day is done. Then looking at the weekend, one day is essentially spent towards rest, errands, and entertainment, maybe the other day with family and friends to relax and have some fun. And maybe a vacation is taken once a year somewhere to be able to recharge the body and mind, leaving the average American to end up saving just 6% of net income. Professional sports such as for hockey, NHL and basketball, NBA have what’s called the lottery system, allowing the worst teams to compete for selecting the next generation of 18 year olds to lead the team. The poorer the team’s performance, the greater their chances become in the lottery selection for higher picks. So naturally, one would want more lottery balls as this gives a better chance of winning the lottery and selecting better players, leading to better team success, more ticket sales, more revenue, and thus, more money. In using this analogy for the average person financially, there is exactly zero winning lottery balls. The average person’s lifestyle will contribute zero to any form of financial leverage.
The average person’s investments consist of a home property, and maybe some stocks and/or 2nd property, commodities, perhaps a small amount in crypto, bonds, hard assets. While there are some ok assets here, nothing to lead to exponential gains. So, no real lottery balls in investment leverage, and there isn’t even much money allocated here, considering how the average retiree in the US only has $162,000 in savings.
The average person does not know how to code and would probably find it beyond boring even if they tried. I tried an intro to coding bootcamp and was bored out of my mind. In addition, a guy I know who graduated university in pharmacy tried a coding bootcamp but quit shortly after, citing it was “difficult to comprehend”. So I can attest to that with a sample size of 2 at 95% confidence in representation of the rest of the population. So, any artificial intelligence or coding-based leverage seems unlikely as well for the majority of people, as it is either too difficult to learn or too boring to learn.
This all paints a grim picture because it suggests the average person, which is the majority, has no real shot at finding a lever that will create any sort of financial leverage. As George Carlin said then, the American Dream, you would have to be asleep to see it, cause that’s the only time it shows up. So with limited savings, and a resistance to change lifestyle, what options does the average person have?
The best solution I can think of is the recent legislative changes in 2016 per the JOBS Act to allow equity crowdfunding to non-accredited investors to invest in private startups. Putting in $1,000 into a startup worth around $10-$50 million market capitalization with the chance of returning 100x-1000x your money. And 1% of startups end up reaching $1 billion market cap, unicorn status. Yes, low odds, 1/100 only. But that’s better than lottery tickets, and does add a genuine lottery ticket to your financial outcomes. Albeit each hit may not be life-changing, but goes a long way for your financial future. Let’s say you put $1,000 per company, and maybe you hit a small handful that go up from 5–50x. That’s enough for a downpayment on a good home. You hit on a few of these and it may well lead to a comfortable retirement, or better yet, money spent earlier in your life for enjoyment.
Disclaimer
This is not Financial Advice. This article is meant only for educational and perhaps entertainment purposes.