Patrick Schwerdtfeger is a motivational speaker who can speak about how to exploit business leverage and “get rich” in tomorrow’s economy at your next business event. Contact us to check availability. The full transcript of the above video is included below.


Full Video Transcript:

Hi and welcome to another edition of Strategic Business Insights. Today we’re going to talk about business leverage. And look, all the latest trends, all the things that we hear about so much in business today, it’s all leverage one way or another.

Like the Internet. The Internet is just leverage. You can reach the entire world from your living room if you use the Internet in an effective way. It’s a form of leverage. People who use it effectively benefit from leverage.

Automation – automation like robotics and even algorithms that can do people’s jobs for them without requiring any human beings. Like think about how the travel industry has completely been replaced with automated algorithms where you can make all your reservations online. That’s leverage. All that automation is leverage. Or if you can replace workers in a factory with robots that can do those same jobs for cheaper, that’s leverage.

And outsourcing is another example of leverage. So rather than replacing workers with robots, you can actually take that entire factory and move it off to Thailand and have lower wages, or Malaysia or something where the cost of living is much lower, so you can save money on staffing. That’s all leverage.

So the question I have for you is, which side of the leverage equation are you on? Are you someone who’s capitalizing on that leverage, benefitting from that leverage, or are you on the other side where you’re the one being leveraged, other people are leveraging you for more and more? And basically it just comes down to whether or not you’re either a business owner or a business investor, or if you’re someone who’s hired by a business or hired by let’s say a government, a W-2 wage earner, someone who’s just a regular employee. Those people are being leveraged more and more. All the public service unions like police, fire, teachers…

Let’s put it this way. In the leverage equation, you have people on this side, people on this side. People on this side that are being leveraged, there’s a downward pressure on wages, on income. People on this side, there’s an upward pressure on income. Since year 2000, the number of millionaires in our economy has doubled. The population hasn’t doubled, but the number of millionaires has doubled since year 2000. The same thing is true for people who are worth 10 million or 100 million. It’s even true for billionaires.

In other words, the high end of the market is doing extraordinarily well. Why? Because leverage is increasing. People have more ways to leverage their efforts using things like the Internet and automation and robosourcing and outsourcing and all the other… Even just financial leverage – people are finding ways to leverage their activities. You have to make sure that you’re on this side of the leverage equation because all the people over here, there’s a downward pressure on wages. It includes public service unions like fire, police, teachers. All those unions, all those contracts that were negotiated in the sixties and seventies, there’s pressure on all of them. And slowly but surely, like what happened to Wisconsin last year or two years ago, it’s going to filter through the entire economy. In any W-2 wage earner, any kind of employee, even high-end workers like doctors, dentists, lawyers, there are downward pressures on those providers.

And people say, like for example, right now the doctors are up in arms because they say that the amount of money they can collect under Obamacare is lower than what they’re used to, and so some of those existing doctors are saying, “All the doctors are just going to leave. There aren’t going to be any doctors.” It’s not true. We have elevated unemployment levels. Those roles are going to be filled. Those new doctors that come in might not make as much as the old doctors used to, but they’re still going to make a good income and those jobs are going to be filled.

We have elevated unemployment, which means that there’s—even here in San Francisco, a friend of mine is becoming a firefighter, and San Francisco had like a dozen openings open up for firefighter jobs, and like 4000 people applied. Something crazy, I don’t know the exact numbers, but it was astonishing the surplus of supply over the demand. In economics, supply and demand are supposed to be equal. But when you have 12 jobs or 20 jobs or whatever it was and you have 4000 applications, there’s a massive imbalance. So if they drop the salaries by 30,000 a year…let’s say it’s, I don’t know, I have no idea what the salaries are, but let’s say they started 70,000, if they dropped it to 40,000, I guarantee we’d still fill those positions. And this is going to unfold over the course of decades that this downward pressure is going to change income levels if you’re on this side of the leverage equation, whereas people on this side of the leverage equation are just going to make more and more and more.

So how can you exploit those leverage points? How can you exploit outsourcing and robosourcing and automation and the Internet and financial leverage? Any type of leverage you can find, make sure you’re always on the right side of that leverage equation. If you do, you’ve got a very bright future.

Unfortunately, inequality in our society has never been higher and that leads to a lot of tensions in society and social unrest, like the Occupy Wall Street movement and so on. But the reality is you can either be on this side or that side, and if you can take your pick, find a way to be on this side of the leverage equation because you’re going to have a much brighter future.

Thanks for watching this video. My name is Patrick, reminding you to think bigger about your business, think bigger about your life.

Patrick Schwerdtfeger is a keynote speaker who has spoken at business conferences in North America, South America, Europe, Africa, the Middle East and Asia.