🏗️ Career Strategy #10: Adding Leverage

Work smarter, instead of harder by adding leverage in one of four ways.

Oct 24, 2024

Welcome back to Fuzzy’s Career Strategy Series, where we share research-backed strategies & stories to help you realise your best career.

Part 1: 👋 Introducing the Career Strategy Series
Part 2: 🪜 Ladder Climbing as a Strategy
Part 3: 👩‍🎓 Controlled Supply as a Strategy
Part 4: 🥇 Excellence in a Power Law Field as a Strategy
Part 5: 🔍 Niche-ing as a Strategy
Part 6: 🧱 Skill-stacking as a Strategy
Part 7: 👷 Be A Generalist as a Strategy
Part 8: 📊 The Portfolio Career as a Strategy
Part 9: 📣 Building a Platform as a Strategy
Part 10: 🌊 Wave-surfing as a Strategy
Part 11: 🏗️ Adding Leverage as a Strategy
Part 12: 🌏 Proximity as a Strategy
Part 13: ⏱️ Sequencing as a Strategy
Part 14: 🧪 Optimising for Discovery as a Strategy
Part 15: ⚡ Do What Gives You Energy as a Strategy
Part 16: 💹 Arbitrage as a Strategy

There are thousands of possible pathways for your career, but our research found there are ~10-15 dominant career strategies, which can be layered together if needed - and we’ll be breaking those down for you in this series.

Give me a lever long enough and a fulcrum on which to place it, and I shall move the world. - Archimedes

🏗️ Introducing Strategy #10: Adding Leverage

We see laziness as a moral failing in our culture.

But when it comes to careers, laziness can be a very helpful impulse.

As Bill Gates says:

“I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it.”

And lazy people love this week’s strategy - adding leverage - because it’s ultimately about getting maximum results for minimum effort.

When you combine this strategy with actually working hard, like the luxury real estate agents who work on Selling Sunset & Luxe Listings, who we’ll profile later, it can truly supercharge your career 🚀

Welcome to the world of luxury real estate, friends.

So there’s no time to waste - let’s dive in!

💡 Defining leverage.

Some people have negative associations with the term ‘leverage’.

Whether it’s using leverage against someone to force them to do what you want, or leverage that conjures up financial crises & over-extended banks, it can produce an instant ‘ick’ reaction.

But we’ll adopt a more morally neutral definition here.

In the world of physics, leverage is simply using a tool (a lever and a fulcrum) to lift something.

With the right leverage and placement of a fulcrum, you can lift a heavy object which you could never have lifted on your own.

Leverage essentially acts as a multiplier of your efforts.

And in the world of careers, the principle of leverage operates as follows:

By working on higher value things, you can earn more value for yourself with the same amount of effort.

Or as Caterina Fake, the founder of Flickr, puts it:

“So often people are working hard at the wrong thing. Working on the right thing is probably more important than working hard.”

⚙️ How it works.

Careers with high leverage fall into at least three categories:

1 Commission 💰

How: Earning a percentage commission on transactions or assets, instead of a flat fee - meaning your commission scales in proportion with the value of the assets, rather than relying on greater effort from you.
Who: Luxury real estate agents, executive recruiters, investment bankers, fund managers with large AUM (assets under management).

2 Influence 👨🏻‍💼

How: Influencing the direction of, or decisions which affect, significant amounts of resources (large organisations of people, financial resources, etc) - where influencing a slightly better outcome creates a lot of value for your client or employer.
Who: Management consultants, barristers, mediators, corporate executives, etc.

3 Physical Assets 👷🏽

How: Doing manual work which unlocks or protects the value that comes from high-value physical assets allows you to charge more for your labour before it becomes un-economic for the owners to pay it.
Who: Longshoremen (or dockers/stevedores, who load & unload cargo from ships in ports), crane operators, luxury car repair specialists, haul truck drivers (operating large off-road trucks on mine sites), etc.

Leverage is for everyone - not just knowledge workers 📚

Some of the jobs mentioned above are office jobs with extremely high formal education requirements for undergraduate, graduate & post-graduate study.

But others are actually among some of the highest paying jobs that don’t require a university qualification, and take place everywhere from offices to construction sites - meaning that leverage can be a powerful tool for almost anyone, no matter your starting point or working preferences.

🙋‍♀️ Why you should use leverage, no matter what you do.

There is a broader principle which applies to all of us - beyond choosing to work directly in careers like the ones suggested above.

💭 Whatever effort you put in, ask yourself - can I get more leverage here?

If you’re doing a job, can you outsource, delegate or use tools to automate the low-value tasks you’re doing to focus on high-value ones?
If you’re working hard to get promoted, are you in the right place?
If you’re working hard to start a business, are you aiming high?
If you’re working hard to make a positive social impact, are you directing your energy to the most effective place?

Don’t just fall into the ‘hard work = great work’ trap: remember to be strategically lazy as well!

🎙️ Case Study: why is selling luxury real estate so lucrative?

In case you’ve been hiding under a rock (or for some reason don’t watch as much reality-TV-based-real-estate content as the Fuzzy team)…

The commissions you earn selling prestige real estate are hefty 💸💸💸

So hefty that they provoke intense competition between extremely glamorous people in beautiful locations…

Which has led to hit TV shows like Selling Sunset & Luxe Listings going behind the scenes of how multi-million-dollar property listings are sold in markets like LA & Sydney.

Highly recommended rainy day viewing, from the Fuzzy team

And even if you don’t watch these shows (what a shame), everyone can learn from how the protagonists use leverage to their advantage 🤓

Let’s do the maths on a $10 million home sold on Selling Sunset:

5% commission on $10 million = $500,000.
If the agent represents both buyer and seller (dual agency), they may receive the full 5%.
If only representing one side, the agent's share would be half: $250,000.
After brokerage fees (an individual agent operates under the licence of a broker, like the Oppenheim Group in Selling Sunset), the agent might take home 70-80% of their split, meaning around $175,000 to $200,000.
And an individual agent would hope to be making a number of similar sales across a given year (10-20 for a prominent agent, 5-10 for a mid-level agent, a few for a newer agent), meaning take-home commissions can easily reach the millions of dollars.

The most experienced agents also tend to receive higher-value properties, with some values up to $30-40 million, meaning commissions for a single sale can hit millions of dollars once you reach the top.

The bottom line? Being a luxury real estate agent or broker is one of the highest-earning professions that doesn’t require a university degree.

And it’s a great example of the power of leverage to influence your career 🏗️

Why?

Yes, you need to study & get a real estate licence.
Yes, you need to learn the craft.
Yes, you need to build a track record.

But so does every real estate agent - and the median real estate agent in the United States makes $60,000-80,000 per year.

Do the agents in top firms in luxury markets work hard? Absolutely.

But do they work 10, 20, or even 50 times harder than the median real estate agent in the United States? Probably not.

By getting to a position where they can apply their effort with the right leverage, they make a huge difference to their outcomes.

🧠 Keep in mind.

Adding leverage can be a powerful career strategy - but there are a few considerations to note before you jump in.

🤺 Increased returns can mean increased competition: As the cast of Selling Sunset and Luxe Listings know all too well, there’s always someone else waiting in the wings with their eye on your spot. Other people will spot the opportunity you’re taking advantage of, and without barriers to entry as strong as in other fields (see our post on controlled supply for examples), you will have to work hard to get to the top & stay there.
🪜 Earning the right to play with leverage: Most people don’t just get handed responsibility for huge transactions, decisions or asset pools. In many careers, this is a medium-term strategy - you need to understand what the path is to being in the position to enjoy leverage, like networking your way to the firm with the right relationships & brand.

🤔 How has this series changed your thinking so far?

A big thank you to everyone who completed our reader survey last week! 👏

We were particularly struck by how dramatically many readers have shifted their preferred career strategies as a result.

We saw interest in some strategies like platform-building & niche-ing increasing 200-300%, and traditional strategies like ladder-climbing dropping way down the list for most readers.

You can check out the full results below 👇

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