← Build with Leila Hormozi
Build with Leila Hormozi
Money Chases the Best, and Active Income Comes Before Passive | Ep. 377
00:08:54
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The next rule is that money always chases the best. When you're good, you chase money. When you're excellent, money chases you. I remember when I was first trying to make money as a personal trainer, I didn't know how to get clients. And I saw people that I was working with and I just saw that they had unending clients and I was like, how is it that they have so many clients and I don't? And I had a mentor at the time and he said something to me that really stuck with me. Focus on being the best and forget the rest. He was like, layla, focus on being the best trainer that exists. So I was like, how can I build up evidence that I'm the best? Because I was like, I need to get these stories that I can use to show people that if you work with me, these are the results I produce. So I was like, okay, I'm going to sign up for a fitness competition because I think that if I want to be the best trainer, I have to show people I didn't just lose weight. I then competed in a fitness competition. From doing those things and becoming so good, I couldn't even take on the amount of people that came to me. When you do your best, people notice. And when people notice, money and success will find you. But it starts with being the best. It doesn't start with trying to accumulate money. It starts with trying to be excellent. Because money is attracted to value. And excellence in any field creates value that people are willing to pay a lot of money for. If you are a celebrity personal trainer that has gotten, let's just say Kim Kardashian into tip top shape and you've shown a transformation where she's lost 30 pounds and gotten a six pack and ripped, versus a personal trainer that works at the YMCA and doesn't have any testimonials from clients, which one provides more value? This one. Which one gets more money? This one. Because they have demonstrated excellence, first you have to become the best. Then you have to make people aware that you're the best. And once you do that, money will come to you. Like, for me, I make a lot of money because I fucking love business. And so money is a consequence of me liking business. And by consequence, I create a lot of value, which then creates me a lot of money. But I don't ever think about making the money first. I think about creating value in my business and then the money comes. If you ask yourself how to be excellent, the money comes as a consequence of it. Find a game that you can be Number one at. And I only know that I can be number one at something when I'm fucking obsessed with it. And so ask yourself, like, what could I be number one and play that game? Because if you do that, the money will follow. The next rule is that learn how to make money while you're awake before you try to make money while you sleep. When I first started my business, Jim Launch, I had a guy come to me and he was like, layla, I see that you're making money. And, like, that's amazing. He's like, but you need to learn how to make money while you sleep. And I was like, make money while I sleep. That sounds fucking great. Because I'm out there, I'm fucking busting my ass every day. What's the secret? So this guy's like, yeah, let me tell you about real estate. And actually, I have this little business where, you know, I will essentially buy this real estate for you, and then you're just going to get passive money that it generates each month from the renters. I was like, sure, let's do it. We buy this rink a Dink house. I was all excited. I was like, this is it. Maybe instead of having, like, a real business, we're going to get into, like, real estate. Roomy real estate investors. Oh, man, was I fucking wrong. We buy this house. This fucking house is the bane of my fucking existence. This house was more work than I could have ever imagined because they didn't tell me I'm going to have to manage tenants. I was liable for all these things that were happening with the home. I didn't know that property management companies could drop your account and then you had to be the one to manage the property. All things that I didn't know. That house took me almost a year to get rid of, and it cost me $20,000. Just like building a business take skills, so does picking the right opportunities to invest in. Investing itself is a skill. So if you want to make money while you sleep, that is a skill of its own that you also have to learn. And I can tell you as somebody who has made not hundreds, but tens on tens of investments, because, like, I don't do tiny investments. I typically do sizable ones. That is a skill on its own. There are more transferable skills from learning how to actively make money into passively making money than there are passively into actively. Lots of people who know how to build a business and actively make money can learn eventually how to invest. And usually it goes in that order. Going from investing and only knowing how to invest into trying to actively make money. It's a harder transition to make. And so what I tried to do in that time is I tried to skip steps. Which activity? Investing versus actively making money. Do you have more skills already that set you up for success? And for me, at that point in time, I had already more skills in learning how to actively make money than I did in have to invest that money. And most people are there, they've had a job, maybe they have like somewhat of a business. And then they say, okay, I want to go learn how to invest. Completely different skill. You would probably have a shorter time to value of like learning how to make money if you just said, I'm going to learn how to actively make money in a more meaningful way. And so what I recognized is I was trying to skip steps in that situation. Because there's nothing passive about learning skills. You will learn active skills to make passive income. Even passive income requires skills. There's no way to make money or compound your money that doesn't require some level of skill. You can't have money work for you until you know how to work for money. If you want to learn how to make passive income, you first have to learn how to make active income. Warren Buffett said this. Before you can let money work for you, you have to put in the work yourself. Active learning and effort come first, Passive rewards come later. And that was said by the greatest investor of all time. Everybody that I know that has made it to the level where they are passively creating income and they're doing it in a really meaningful way, they have first fucking killed it at actively making income. And what I realized for myself was I am a decade into business and I am just now learning and getting proficient at investing money. And if you invest money properly, it does make you money in your sleep. But nobody talks to you about how much effort goes into selecting deals, negotiating deals. It is also active. You are actively learning how to do deals and negotiate and then getting money later. The next rule is that if money is the only goal, you will never have enough. When I sold my first company three years ago, I remember the moment where the big check hit my bank account. That has always been the goal. At least with my first company, it was like make a ton of money. I remember that moment. I felt nothing. I didn't even feel like super excited. If anything, I felt relief because I was done with the process and the process had been painful. I didn't feel like a different person. I didn't feel like better and What I realized is that if money's the goal, you just never have enough. Money is only a tool that you can use to then get other things. Once I realized that, the next thought I had is, what am I going to do with this money? What am I going to use it to build? And that is why I started acquisition.com literally the day after I sold my business, is because I said, I can use this to create this next thing that I envision in my head. It wasn't like money itself made me happy. The only reason that that money now was meaningful to me is because I was able to take it to invest in my next dream. And now I've been able to use that money to make my dream come to life. And that's meaningful to me. And that's a worthy goal. Money itself, it only is a means to an end. And so the question is, what's the end for you? See, time is a tool that used to make money. And so what precedes making money is learning how to manage time. Because if you cannot use your time to create money, then you won't have money. But most think it stops there, and that's. It doesn't stop there. Because then now that you have money, the question is, how do you manage money? Money is a great servant, but it is not a great master. Because as long as it's your master, you will never have enough of it. It is simply a tool that you use to reach your end goal. If you accumulate millions and millions and millions of dollars and it just sits in your bank account, what's that money doing for your life? Does anything about your life change? Do you feel happier? Do you accomplish your dreams? If you don't use money to create something else, you might as well not have it, because it will have no effect on your life. The only reason to make money is to do something with it. What are you going to build with the money you make? How are you going to use it to make your life and other people's lives better? You have to be romantic about the process, not the outcome. I want to build an amazing business. A consequence of that is that I make money. That money is useful in building an amazing business. And so money's like a hammer. It's only as useful as what you build with it. In building my business and accumulating all this money, I did not get happier having more money. I got happier through the process of who I became to create value that created money. If money's your end goal, and money is why you do things, you will make less than everybody else, because money is a very empty reason as to why to do things. And so ask yourself, why do I want the money? What do I want to do with it? You should spend money on yourself. Because if you're constantly suffering, trying to make other people's lives better, what's the point? On the other side, it's what do I want to build with the money? What do you want to have happen with the money that you accumulate? And those are questions to ask yourself, because once you get a certain amount of money, you'll stop if it's only about the money.