The game isn’t fair. 

Some people work 80 hours a week and barely scrape by. Others make more in a month than most do in a lifetime—without breaking a sweat. The difference? Leverage.

Naval Ravikant broke it down clearly: There are only four real forms of leverage—labor, capital, content, and code. The people who master them stop trading time for money and start making money work for them. Let’s break it down with a real-world example.

Meet Tony. Tony owns a barbershop. He’s been cutting hair for years, stacking clients, and grinding. But no matter how good he is, he’s trapped. He only makes money when he’s in the shop, cutting heads. He’s at max capacity—his income is limited by his time.

What Tony needs isn’t to work harder. It’s to apply leverage.

1. Labor: Other People’s Time (OPT)

The first form of leverage is hiring people to do the work for you. 

It’s simple, but it’s limited. You need to manage, train, and motivate people. And there’s only so much labor you can hire before complexity kills efficiency.

Tony’s Labor Play

Tony hires two junior barbers. He takes a cut from every head they shave. Now, he’s making money without having to cut every single head himself.

But here’s the problem: labor leverage doesn’t scale well. 

If Tony wants to make more money, he has to hire more barbers, open more locations, or increase prices. It’s leverage, but it’s slow. He needs something stronger.

2. Capital: Other People’s Money (OPM)

The second form of leverage is capital—using money to make money. Investors, loans, and assets that appreciate while you sleep.

Tony’s Capital Play

Instead of grinding to save up for another shop, Tony gets a business loan. He uses that money to launch a second location. Now, two shops are generating income. The loan is paid back with profits, and his empire expands.

But capital has limits. You need access to money, and if you don’t know how to deploy it wisely, you can lose everything. 

Tony is growing, but he’s still tied to managing physical businesses. He needs leverage that works 24/7—without his constant involvement.

3. Content: Infinite Scale with Zero Marginal Cost

Content is where leverage starts getting ridiculous. 

You create something once and it works forever. YouTube videos, online courses, newsletters, social media—it’s the modern printing press.

Tony’s Content Play

Tony starts a YouTube channel: The Barber Blueprint. He shares hair-cutting tutorials, business tips, and style guides. His videos rack up thousands of views. He monetizes with:

  • YouTube ad revenue
  • Affiliate marketing (selling clippers, razors, and styling products)
  • A digital course: “How to Start a 6-Figure Barbershop”

Now, Tony makes money while he sleeps. No employees. No rent. No stress. Every video is a digital soldier working 24/7, bringing in leads and cash.

4. Code: The Ultimate Force Multiplier

The final boss of leverage is code. 

Software doesn’t sleep, doesn’t complain, and doesn’t need breaks. If you own software, you have a money machine.

Tony’s Code Play

Tony partners with a developer and launches an app for barbers:

  • Booking system (clients schedule directly through the app)
  • Barber training portal (monthly subscription for barbers wanting to level up)
  • E-commerce store (selling Tony’s favorite hair products and tools)

Now, Tony has a full-stack business:

  • His shops make money (labor + capital)
  • His content generates passive income (YouTube + courses)
  • His software scales infinitely (subscriptions + product sales)

Tony isn’t just a barber anymore. He’s an entrepreneur with leverage.

The Wealth Pyramid: Where Are You?

Here’s the brutal truth: Most people are stuck at levels 1 and 2—trading time for money. The only way up is to stack leverage.

The Future Belongs to Those Who Leverage

If you’re still trading time for money, you’re playing the old game. The new game is about building assets that work for you. Whether it’s content, capital, or code, the key is getting out of the time-for-money trap.

Tony started as a barber. Now he’s a brand, an educator, and a tech entrepreneur. He doesn’t cut hair anymore—he owns the system that barbers use.

Your move: Which form of leverage are you building?