← The Game with Alex Hormozi
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Your money goals are too small, and I will prove it to you. My name is Alex Shamozi. I run a portfolio of companies@acquisite.com that generates over $250 million per year in revenue. I did a book launch 12 weeks ago that did $106 million in a weekend. And I broke a Guinness World record for the fastest selling nonfiction book of all time. So in this video, I'm going to explain how you need to rethink your income, your investments and savings goals and timelines. And so here's the problem. A lot of financial gurus, even people on this platform, right? And I have no, no shade, right? We'll tell you to save $100 a month. And they'll tell you that if you do that from the time you're 18 until the time you retire at 67, you'll retire with a million bucks at a 9% compounding rate. And that all sounds great until you realize that when you're 67, that $1 million is going to only be worth 170,000. So why is that? So just $1 in 1975, right. 50 years ago, has today's equivalent purchasing power of $6.02. That's a 6x difference in 50 years. The main reason, Inflation. The dollar, they don't make them like they used to. Right. And I'll give you a hint. It goes up. So this measurement is conservative. This is based on the last 50 years, not necessarily the next next 50. And so that's the problem. How do we solve it? So this is kind of the new way, I think, about your goal. Let's say that you had the goal to have a million dollars. Obviously, add or remove zeros as it suits you. Right? So some of you might be 10 or 100 or a billion or whatever you want, let your heart, you know, go wild. But let's say that you wanted a million dollars when you retire so you could live passively on 50,000 bucks a year from investing it into bonds or something. That's relatively $50,000 of passive income. Oh, yeah. That's only going to get you about $8,000 worth of stuff. Tough to live on that per year. So let's say that you were a little more ambitious and you said you wanted $4 million. If that was your goal, like it was for me, you might want to adjust it and take into account the inflationary reality. So if you want that 4 million bucks when you retire, you probably need 24 million. That's a big difference. Again, that's just because you're thinking in today's dollars, not future dollars. I want to give you some good news. Compounding is still a thing and it still matters. You probably just need to do more of it and do four important things. So think of this as your strategy to mitigate that so that you can actually get where you want in terms of your savings, your investment, and ultimately the freedom that you're looking for. So consider this the new strategy. So I'll give you the quick and obvious ones that you've probably heard, but in a new way, and then I'll wrap up with what I've actually done to achieve it. Okay, so number one is you have to increase your income. So a lot of people think about this in terms of savings. I think it's much more powerful to think about in terms of income because like if you're not making a lot right now, there's not a lot of room between zero and you. There's an infinite amount above that. Let me put this in real world terms. Even if you don't think that extra thousand bucks a month from, you know, flipping stuff online or making content and just getting some AdSense revenue or you know, promoting school and online platform to help people start communities and getting commissions from that, it won't matter, right? If you don't do anything with it, right? But if you take that extra thousand bucks a month, which might not seem like a lot depending on where you're at, that work might not seem worth it, but oh, that's a lot of hustle. I got to uber more, I got to doordash or whatever, right? If you invest that extra thousand dollars a month in that same equation, you get $10 million by the time you retire. This is me, Juicy. $1,000 today, if you're 18 years old, is $80,000 in 50 years. So the money that you make and spend now counts ADX. But we can't be one sided. We also need to realize that 80k in 50 years is only worth $13,000 today. So in reality, every $1 you save today is worth $13 when you retire. So for me, this makes making that extra $200 for a gig where you do a DJ thing, right, or helping your buddy move or whatever is actually a $2,600 investment. And it makes it far more worth it for me, or at least when I was thinking through my saving stuff when I was starting out. So number one, we got to increase income. Number two, in a kind of natural lead suit is that you got to stop spending so much Money. Now on the other hand, right, if you think the $500 belt you want to splurge on doesn't matter, just remember that it's 40 grand in 50 years, right? And in today's dollars, it's $6,500. That $500 belt with compounding reverse back to the present is 6,500 bucks. And so here's something that's even worse. A $500 a month car payment, that's a lease. That three year lease is 18 grand. That 18 grand in today's dollars when you retire is $234,000. Wild. 50 years, obviously, and that's just one lease. So even if you make less, it doesn't mean less when you're young. And this is the point that I think really discourages a lot of younger people is they're like, I'm not making as much money as I want, you know, I wish I could make more, blah, blah, blah. They wanna like, they wanna flex the small amount of money that they've got because they like, first off, never flex when you're young because everybody who's older has way more money. It's just like you just got more time to accumulate. You just do. Number one, you have more time to accumulate it. Number two, you earn more when you're older because you have more skills. But the thing that really matters that people who are older don't have is you have time. And so the value of the money that you make, even if it's half as much, the difference of that last 10 years of compounding when you start at 18 versus starting at 28, is the difference between a 30x33x and an 80x. Think about that for a second. A 33x and an 80x in terms of that 10 year difference. And so just because you make half as much or a third as much as you want to make right now, it doesn't mean that those dollars aren't worth more to you. And so I say this to encourage you to like make the extra few bucks here and there. Spend like, don't spend as much. You know, you go out to the club, just get the, like just pregame a little harder and get, get a soda with lime, all right? Like you don't have to go crazy with it. All right? So number one, increase income. Number two, stop spending as much. And then putting it in future dollars relative to today's dollars hopefully should soften that blow for you. The third is try and make it and save it faster, right? Because the money you make now versus the money you make when you're 10 years older hits harder. So there's obviously a time value to money. So three quick strategies. One, set a watermark. Invest the rest. So it's like I need to have $5,000 in my bank account. Everything about $5,000 I invest, period. Or an alternative way of doing it is say I have to invest $2,000 every month no matter what, and I got to make it happen, and then I'll live on the rest. I will tell you that the richest people I know think in terms of the second way more than the first way, all right? Which is like, I'm going to go make that money to get that thing or to make that investment rather than I'm going to take it out. What I got. Just something that I've noticed now. Either way, just pick a strategy. Now, the next one is that my examples assumed $1,000 per month didn't go up by 3% a year to adjust for inflation and an increase in earning power. So you can absolutely run a separate model for that with your own Excel sheet or your own, you know, whatever AI you use to run a model on that. So if you're like $1,000 a month, if I do that from 18 until I am 67 off 10 million bucks. So you could probably hit your goal or beyond that with just that tiny piece. Now, I gave you. I said I had three strategies. I gave you two of them. I said, invest the rest, right? Or invest first and then live on the rest. Either way works. Invest first and spend the rest, or invest the same amount every single month and then increase it over time. All three of those are fine, totally fine. And honestly, if you just pick any of them, you'll probably like. If you're literally the type of person. What's funny is that, like, I see entrepreneurs and see people all the time. Like, people want to know if they're going to be successful watching these videos and actually taking action 99% of the time. Like that. That's all that actually meant. Like, the fact that you care enough to actually change your behavior is the big green flag indicator. You're going to tweak over time, you're going to learn other stuff, but actually doing something about it is what will separate you from everyone else. Let me give you the fourth strategy, all right? Which is what I actually did, all right? So I'm obviously not 67, and I have more than $10 million. I made my living expenses as small as humanly possible. All right? So protein Shakes Chipotle. I split a bedroom, all right? So I lived in a house and I had six roommates. And then within one of the rooms, I split the room, like college style, like dorm style, because it was cheaper, right? And I was never there anyways. I was working all the time. I owned a used car that I paid. I paid for outright. So the only thing I had was my car insurance. That was it. But the actual. I had no car payments. I haven't had car payments in a very long time. Like, buy a used car that's ten years old, that's in good condition, pay ten grand for it, and then just like, never have a car payment again. And then I invested my money. Pause. In learning to make more money. You want to increase your income, right? But how do you really do that? Because when you factor in that it's one of the only things strong enough to break the cycle is that you just have to make more. So think about it like if you spend $2,000 having someone help you learn how to sell, ideally a place with some sort of, you know, placement assistance. I remember, for me, I spent $750 per hour for eight hours to have a guy who really knew how to do ads at a higher level. Because, remember, this is a guy who's gonna charge 750, not your buddy. You might be able to just buy him Chipotle and he'll do it for you, right? But to have somebody who actually taught me how to run ads at a high level, those eight hours, that tutoring, that skill that I was able to learn from that one on one tutoring, made me hundreds of millions. Not just hundreds of millions, literally. Now, let's take the other example I had a little further. Let's say you invest that $2,000 in learning that skill, and that $2,000 takes you from a $30,000 year income to a $90,000 year income. And post taxes, at least in the U.S. that's about $75,000 a year, assuming you live on, let's say, 2,500 bucks a month, because you're living lean. That's $35,000 per year after taxes, after expenses that you can invest on for the rest of your Life. So that $2,000 one time gave you a permanent $35,000 per year increase in investable income. That is how you get the absurd returns that can get you out of this cycle. And so put this in perspective. If you did nothing else and you invested the $3,000 a month, roughly, that alone would get you to $31 million in 50 years. And that's with zero races, zero new skills and zero increase in opportunity. You literally just doing the exact same thing for 50 years. And so the idea here is like you want to use compounding to your advantage. And the way to increase how much you can invest is to make more, spend less. And in the short term, where you will get the highest returns. Actually over the long term, where you get the highest returns in the short term is in skills. But people are so afraid of investing money in skills. And I really want to dive into this because I really, I truly want to help. So yes, you can absolutely achieve financial freedom if you live under your means. You invest the difference into increasing your income. And then once you have the amount that you need to compound to your number, you can just let the compounding work. You'll realize quickly that you get higher return on learning skills than anything else. So then you put as much as you possibly can into it. And so for many of you haven't had that reinforcing cycle that one time where you spent money and you made more money back. I was very fortunate that the first thing I ever spent money on, I made more back. And so I got very addicted to buying money, basically trading money for skills that I would immediately be able to make more money and increase my income. Because it does, don't get me wrong, I mean, a lot of places it's successful, it's still a cheaper alternative to learning realistic real world skills than like higher education. So if you were to spend $100,000 on courses and coaching, for example, or tutoring, which is how I prefer to do it by the way, after doing some research, as in like look online, like make sure people have good reputations, make sure they have testimonials that are people like you and they have many, many of them, they don't promise too much. Right. I'm convinced that your life would change far more than $100,000 of higher education. And I do think you can learn a lot of stuff your own, to be very clear, when I was coming up. But the thing is that this is me trying to provide whatever value I can in terms of my path is that I was just always willing to pay for speed. Speed and the time value of money is something that I think people just wildly underestimate. If you can increase your income, you get your five year increase in income in one year. The difference is the value of that learning. And I don't know why people don't get this. I think Charlie Munger and Warren Buffett had a little moment where he was like, if people weren't wrong so much, we wouldn't be so rich. And I think so. I'm trying to. Like, I've never really understood it, and so maybe you guys can help me understand it. I think the big reason is that people are afraid of spending money and not getting anything back. I think that's the big fear. I think another part of it is ego, saying, I don't need anyone's help. I can figure it out on my own. And here's the reality. It's like, you can figure it out on your own. The question is whether you want to figure it out in the amount of time it would take to figure out. Like, I'd rather just have somebody who already derived calculus to just teach me how to do it. Right. And the thing is, is that with good feedback, you can get to your goal significantly faster. You will always lose until you learn, then you win. That's how winning works. But you have to be willing to lose in order to win. And so I have a relatively extreme stance on this, which is that I will spend. When I was coming up, I lived on basically nothing, and I spent all of my money. And it essentially meant, like, almost had no savings for, like, years and years and years, because all my excess cash I just gave to people. And for sure, I had people who are like, that wasn't worth it. That wasn't worth it. But I tend to always come from the perspective of, like, how can this make me better? How can I get an ROI on this to, like, do the opposite of that? And so this is, like, you will make mistakes and you will buy things that don't immediately work. But I think of skill acquisition, like a bridge. So let's say that you're, you know, you're on this side and you're sad because that's how bridges work. You're always sad on one side, and then on this side, you have dollar signs, fries, which means you're happy because money brings happiness, obviously. All right? And so. And so here you're sad. Maybe we'll cross your arms because you're super sad. Right? Most people will look at this bridge and say, well, I bought this one, and I know how to do this one already. And this one. Why can't I get across? It's cause you got missing links. And so let's say you buy something else and you get some tutoring, and then it adds this brick. Was it a waste of money? Well, you still can't get across. It's a waste of money. No, just like your arithmetic teacher wasn't a waste of time before you learned calculus or before you learned algebra. You need one in order to get there. You need their stepping stones. And so what happens is, is that you get this other one from the sixth thing you buy, and then the seventh, and then the eighth, and then the ninth. And then what happens is you say, oh, this guy who taught me this ninth thing, that guy is the truth. But the reality is that the reason that some people get outcomes and some people don't by going through the same thing, is the skill gaps that exist in someone's skill set are what create different outcomes with the same education. And so the problem with an inexperienced teacher, and this is very common in the alternative education world, is that they will accept money no matter what. But if I were to teach you Spanish six and I'm very good at Spanish, but you've never taken Spanish 1 through 5, and am I a bad Spanish teacher or are you just not good at Spanish 1 through 5? What should have happened is I should have said, to buy Spanish 6, you gotta go through Spanish 1 through 5. But the thing is, many of these alternative education businesses only know Spanish 6. They don't even know how to teach Spanish 1 through 5. Or they never had before, never thought about it, because they get one out of five, people get a result. So they say, this is good enough. Everyone else didn't try. And to be clear, there's definitely people who don't try. I don't want to say that's not true for sure, but there are also people who do try, but just didn't have the missing links. And so part of the process of going through the alternative education world is having the perspective of a collector of skills. And as long as I see myself as the asset, I'm always going up. And once I have all the pieces together, guess what follows. The dollars start walking across the bridge and they keep going into your pocket. There's your pocket. There you go. And so to me, this is what I mean when I say, like, invest your money into income earning skills. If you can trade the skill for money and you can learn it, can you imagine something that's more valuable? We just did the math like getting $3,000 a month extra from one skill. Imagine adding 10 skills. Imagine that sales guy says, you know, with that $3,000 a month extra, instead of saying, I'm gonna invest that three, I'm gonna spend six, my next two months of It. And I'm gonna spend it on learning how to run ads. And you know what? And so I'm gonna spend another two months on learning how to do that. Like, I just always saw the money that was left over every month as, like, what skills at the store do I need to go buy? And then I would just go buy them. But one of the big unlocks that I had in my career was that I went to an event and there was a guy who was there. The event was for everybody who was doing over eight figures is what it was for. So everybody's 10 million and up. And at the time, Layla and I had just started making money. I'm talking, like within the last 12 weeks. And everything just started taking off, right? I finally got the last piece to connect. And so we were doing three or four hundred thousand dollars a month. I can't remember. But it was almost all take home because it was just me, Layla, and. And I had one assistant over a kitchen table. Like, that was the business. And we had just gotten married. I was like, living large. And when I say living large, I spent no money, but I just felt not poor anymore, which was great. So anyways, I go to this thing, I was like, I don't even know if I should be here. I'm definitely not making that. They're like, oh, no, you're gonna be way past that. And I was like, I'm glad one of us believes that. I was just trying to ride this rocket with both hands. And so anyways, everyone goes through their presentation, and the first guy who got up. Cause I remember he was, like, busy. And so he, like, he either wanted to go first or last. Doesn't matter. And he gets up there and he starts by saying, like, so we did $35 million in revenue last year. And I was like, what? $35 million? Like, I was like, one is dope. I was three months into making, you know, pacing higher than that. But I never actually, like, really had it happen, at least from an income perspective. He gets up there, and after he gives his whole presentation, he was in the E commerce world. Someone asked him, so where you're at now? Like, what are you doing to invest in your education? Like, what are you doing to invest in learning? And he said, I made a decision a long time ago that I would have a learning budget. And so every month, whatever percentage you're comfortable with, he's, maybe it's 1%, maybe it's 5%, maybe it's 10% of my income. He said, I force Myself to spend it. And I spend it in a way that's testing something that I think is cool. And so that might mean he's like, I'll test a new ad strategy, knowing that it probably won't work, but I'm willing to lose that money to continue to experiment, stay ahead. What's crazy is that I took. I went to that thing, I heard him, and then for me, I was like, okay, well, I'm going to go experiment with my income. And so remember, I wasn't spending much money, and I had a lot of income. And so I took like, you know, 10%. So I think it was like 300,000amonth. So 10% be 30,000. And so I was like, I'm going to increase our ad spend by $1000 a day. And we were spending like 400 at the time. So I went from like 400 to like 1400 a day in ad spend. And that is when Jim Launch went from 300 to 480 to 780 to a million to 1.2 to 1.5 to 1.7 something to 2 million 2.2. That was months because as soon as I saw that happen, it was like, oh, my God. And so part of me literally just being willing to lose the money unlocked my ability to spend more money, which scaled the company. And so once I had that, obviously a very reinforcing event for me, I was like, where else can I spend money like this? Like, where can I. Can I. Can I buy access to a room? Can I. Can I pay for somebody's time on one? Can I. Can I go to the event? Like, I did everything, because every time I went, I made more. And that's what I want for you. That's really. It is that, like, you're going to need to make more money than you think. It's going to take longer than you think, but you can make it happen significantly faster if you learn skills that pay today. And I'm willing to pull cash for my future forward. And even though I know that thousand dollars is worth $13,000 in 50 years, I know that that $2,000, if it can make me an extra $2,000 a month, will be worth something. Like, well, just, let's just say a lot. A lot of zeros. A lot more than 13x in 50 years. I think people don't want to spend money on skills because there's lots of pain on both sides. So it's like, I have to. I know what I'm giving up, so I'm giving up money. I am giving a certain money away that I have immediate utility for. For the hope that after I give up even more time and effort and go through failure to learn this thing, I will have something that I'm not sure of, will be better that I cannot define yet. So it's just a lot of uncertainty. And I will say this, that if you want to get in the entrepreneur game, like, you just gotta get comfortable with uncertainty. Because the game of entrepreneurship is risk and time. That is the game. So if you're like, where do I look to find these skills? All right, so I'm gonna just give you places. So number one is like, let's just start with, let's go up the money ladder here. All right, so at your base level, what stuff's free and only cost time? All right, this is where you've got school communities that are online that are free to join. You've got, you got forums online that you can go look through where people are teaching each other stuff. You've got YouTube videos like this where plenty of people have done deep dives, masterclasses, et cetera. Like if you wanna learn sales, you can probably go through my sales. I think it's like eight hours or something like that of just all my sales trainings. You just go through it, it's free. You will get more help and you will move faster if you have someone who can give you feedback. Effort plus feedback is the loop, right? Because if you have feedback only from the environment, you might take very little action because you're so unsure. But if you can take lots of action in an artificial environment and get feedback, you can go through a hundred loops rather than one a week. You can do 100 a day. And that's where you get so much better, so much faster. Like, the reason that I got so good at sales was because I started selling in the early days of Facebook ads. And so I was doing 20 plus in person consults per day. And I did that for years. And so that kind of exposure, that kind of feedback loop, like I got good. The first sales training I actually bought and purchased, I actually purchased from my team. Cause I was like, I don't know how to do teaches stuff right. And it took many years for me to get that. And then when I saw their teaching, I was like, I can make a better version of this. And then that's what got me into learning. Like basically learning how to teach. But that's the first tier here. The next year is like, I would say like the call it, call it you know, $10 to probably like $200 per month type programs. Again school has stuff on this programs out there that are kind of like, they call them like low ticket communities. These are great because like communities already aggregate a lot of the information for you. And so these are places to go. They usually have some education and some sort of feedback mechanism. And you might not be able to get individualized feedback but you will be able to see people getting feedback from the same position as you and you'll be able to extrapolate a lot of that information. The next is kind of like, I would say the next year is kind of in that, in that 500 to call it $2,000, maybe $3,000. This is where you're going to like typically go through a DIY or DIY plus some sort of feedback, right? So this is kind of like your lower level coaching ish type stuff that's there. This is the beginning of where things become a little bit more valuable. My preference, like when you get like at 5k and up, you know, 5k to call it, you know, 35k, this is where you're going to get the vast majority of kind of your in depth stuff. You're going to have some level of in person that'll typically be included in something like this where you actually like meet people. There's also going to be some sort of education plus feedback. And this is where honestly this is where I spent almost all of my money and so I spent up the ladder because I wanted to get there faster. And so I think in some ways my impatience decreased my action threshold enough that I was, I ended up being a high ticket buyer even though I wasn't, I didn't have high ticket money. But this is kind of just an idea of. And like these sometimes also come with like kind of like communities. And I think the big thing that really like what helped me more than anything when I spent this kind of money was getting around people who were way ahead of me. Like I just have this fundamental belief and maybe I can give it to you, that if another human can do something, I can do it. And so when I saw these people that was like, I don't think they work harder than me. I don't think they're like smarter than me from a. I mean sure there's plenty of people smarter than me, but like just like it's not like they're doing advanced calculus here. They might be smarter but the work that is required that they're doing to make more money than me does not require superior intellect. And so in seeing them and physically being like, these are real people, it took a lot of the magic away. And then I was like, okay, I just gotta learn more. I gotta figure out what these guys are doing. And then me being around them and me, I made more money from these experiences by serving everyone else in the community and trying to basically treat all of them as my teachers. And so I'd pay my 30 grand or whatever it is to get in. And again, this takes time to get there. But I paid 30 grand to get in. And I would just say, like, I'm good at sales. Let me review your sales scripts. Let me review your sales calls, and I'll show you, like, our sales process that might help. And I would just do that to everybody. I would do four, five, six hours of work. And people were like, dude, this is way too much. Like, that's what I wanted the reaction to be. I wanted people to be like, dude, this is way too much. You didn't have to do that. And I'm like, of course I didn't have to do that, But I want to learn what you have. So, like. But the thing is, I always knew that if I gave six hours, somebody might give me one. But the thing is, their one hour was still more valuable. I already know my stuff, so six hours to me is just like, okay, it's six hours, whatever. But if I get one hour of that guy's time and he could teach me one little thing that I could use, like, I was just a collector. I was just a little golem of skills. I was like, ooh, this guy does affiliate marketing. I was like, I don't even know what that is. Let me go learn about that, right? And that was the way that I approached these things. And so most people are too cheap with their time, even though they're poor. And so it's like, you aren't making any money. I'm like, what else are you doing, right? Like, what are you doing with your time? If you've got the time, give it to somebody else, and they'll probably give you something back. And the thing is, in that time they give you back, they're gonna compress a year of learning into an hour or two, right? Like, I had years and years of sales, and I was able to dramatically improve someone's sales process. Cause I could just apply that, and they would get the benefit, and it was free for them, so they loved it. But for me, when they took a year of adsense training and said, hey, this is how I would apply it to your business. I was like, thank you. Amazing. And then I could just skip and I could ask those people, hey, of all the different programs are out there, all the different courses, all the different. I was like, who's got the best stuff? And they're like, oh, well, this guy's thing's okay. This thing is a really good in person event. And so they would already sift through the mess for me. And I would just take. I'd be like, great, I'm gonna go to that guy and then I'll go learn that thing. And I think as long as you don't get disenfranchised with an early loss, or like, hey, you buy something and it doesn't work out the way you hoped it would, like, no one of these things will make you rich. But consistently choosing to invest in learning skills and giving first in those communities and getting as much out as you possibly can by giving more than everyone else is how I think you'll get whatever you want. My books are free on my podcast, so you don't have to spend any money. But if you want hardbacks, because these are meant as reference copies, you can have all three of my hardbacks for free. Because a lot of entrepreneurs at my book launch donated 3.6 million books, and so they donated these guys. I will match or double their donation of books to anybody who wants to learn. But that's for all three books. All right? So if you want that, that's my gift to you, so you can just go grab them while the supplies last. If you feel like spending dollars. If you don't, it's fine. Go watch the rest of my stuff. And the books are for free on my podcast, so you don't have to, like, spend anything. And if you are a business owner and you're more like, I'm stuck, I'm stuck. What do I do next? Like, that's the big skill deficiency. It's probably more complex than one thing or one tiny tactic. It might be a strategic thing that we have to do. And so looking at our portfolio companies and the companies we advised, we basically broke it into 10 stages of scaling across eight different functions. You got product marketing, sales, customer service, IT recruiting, HR and finance. And with each one of these levels, there's a clear problem and a clear way to solve it and what it needs to look like to graduate to the next level. And so our little system will take in your information and then basically match you to this and then give you the customized roadmap for your current level. This is free. This is a free gift. And if you want to have one of these kind of more in person experiences, you're welcome to come out to our headquarters and book on the thank you page. Because we're really good at what we do. Just look at the reviews online and I want to help. So that's that and rock and roll.