Wanna scale your business? Click here.Welcome to The Game w/ Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned and will learn on his path from $100M to $1B in net worth.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition Mentioned in this episode:Get access to the free $100M Scaling Roadmap at www.acquisition.com/roadmap
Chapter 1: What is the special gift for podcast listeners?
Real quick guys, I have a special, special gift for you for being loyal listeners of the podcast. Layla and I spent probably an entire quarter putting together our scaling roadmap. It's breaking scaling into 10 stages and across all eight functions of the business.
So you've got marketing, you've got sales, you've got product, you've got customer success, you've got IT, you've got recruiting, you've got HR, you've got finance. And we show the problems that emerge at every level of scale and how to graduate to the next level. It's all free and you can get it personalized to you. So it's about 30-ish pages for each of the stages.
Once you answer the questions, it will tell you exactly where you're at and what you need to do to grow. It's about 14 hours of stuff, but it's narrowed down so that you only have to watch the part that's relevant to you, which will probably be about 90 minutes. And so if that's at all interesting, you can go to acquisition.com forward slash roadmap, R-O-A-D map, roadmap.
If there's one thing that you get from money rules is that you'd be switching your metric towards what am I saving every month rather than what am I making every month? Because the profit, what you save is the thing that matters, not the top line. And it's one of the biggest mistakes. And so your PRs, your personal records should be around your savings amount, not your income.
Chapter 2: What should be the focus: savings or income?
Hey, this is one of the best podcasts that I've made. It was after multiple years of kind of investing our money, Layla and I got advice from a mentor to sit down and actually write down what our rules for money were, kind of like our decision-making algorithms, if this, then that, if this, then that. And so we wrote down about 42 rules of how we were going to manage money.
And this podcast breaks them down. I had a series of mentors that were both millionaires and billionaires that I won't name drop because you would know who they are, who recommended that I spend 12 to 18 months documenting all of my beliefs around money and the artifacts that have been created over the five years that led to that transaction.
Chapter 3: What are the 42 rules of money?
And so what I want to do is share the 42 beliefs that I have around money that helped me accumulate the material success that I had, and hopefully so that you can too. Number one, he who gives the money has the power, not the one who takes it. So a lot of times poor people think that they're always trying to get money, always trying to get money, trying to get money.
The thing is, is that the person who gives the money is the one who's in control. Like if you think about the biggest institutions in the world, where are they? Banks. What do they do all day? They give money. And because when you give someone money, you get to dictate the terms of the agreement. You actually now own them.
When a customer gives you money, you are the one who now has to deliver, right? They have control in the relationship. And so one of the biggest shifts that I had was that having the money, which is why I'm a buyer, not a seller in acquisition.com, which is what we do in private equity. Like we have control rather than the person who accepts the money.
Rule number one, the person who gives the money is in control, not the one who gets it. Number two, never trade reputation for money because you can get money back, but you can't get reputation back.
Chapter 4: Why is giving money more powerful than receiving it?
And so if you think about reputation as something that compounds over time, the longer you have it, the more you build it, the more it compounds unto itself, which becomes in and of itself a competitive advantage. Like it is your brand, which allows you to do more deals, do bigger deals, do them faster, get more deal flow to you. Deals being whatever that is for you.
So it could be deals in terms of like selling cars. It could be selling houses. It could be selling companies, right? The same concept remains. But the moment you lose the rep because you traded it for money in the short, you lose the long, which means you cut the compounding. And that's where all of the gains in life come from. Number three, money loves speed. Wealth loves time.
Poverty loves indecision. And so the big thing is macro, micro. Micro, money loves speed, right? You want to move quickly. You want to respond fast to customers. You want to follow up with your leads, et cetera, right? But when you think about building wealth, it's not about transacting. It's about letting that compounding happen.
happen and that takes time and it takes not interrupting it which is one of the biggest and hardest parts of compounding is you have to let it multiply unto itself like the size of the business that be creates wealth takes decades not days to make right but the thing is is that most people never achieve either of those things because they sit in decision and they continue to stay in indecision until they take action which is why poverty loves the person who cannot decide
Four, we can always make more money than we need. And so this is a belief that has served my wife and I really, really well because we look back on our lives and we've never not been able to eat, not had shelter, and we've continued to increase our skill set. And so a lot of times we have this desire or our animal brain wants to make us make decisions out of scarcity, out of fear, right?
And if we... give into that, then we're not following this, which is like, we don't need any of the money that's coming because we have always had enough. And so when you can operate from that perspective, then you have less need to make deals to do things. And then you can sit back and have a lot more leverage in the conversation, right? Because you don't need anything.
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Chapter 5: How does reputation affect financial success?
And that makes you hard to influence and gives you a lot of power. Fortunes are made by taking a lot of risk with a little bit of money and fortunes are maintained by taking a little bit of risk with a lot of money.
And so one of the interesting things that I've seen people do, especially when they start making money or start having money, is that they think that they need to replicate the high risk thing. Because if you think about fundamentally every business in the beginning, like somebody who's self-made had nothing. And so they risked everything in order to make it big.
But the thing is, when you have nothing, you're not risking a lot. You have basically no downside. You have nothing to lose, which makes you dangerous, which is one of the biggest advantages of having nothing. If you continue to do that when you do have something to lose, you can lose your fortunes. And no matter how big the number is, anything multiplied by zero is still zero.
And so fortunes are made by taking lots of risk in the beginning, but they are maintained and slowly grown by taking little bits of risk with lots of money. And so you have to change the behavior once you have the castle, once you have the empire. Six, money flows where attention goes.
And I'll hit on this one real quick, which is that if you spend time thinking about fashion all day, your attention is going towards buying clothes. If you think about cars all day, it's going towards your car. If you think about your business all day, it should be going towards your business.
And on a micro level within the business, if you have multiple product lines or you have multiple businesses or hustles, this is why I'm such a big proponent of pick one thing, go all in. That's it. One thing, all in. And when you do that, because you only have so much juju. And so think about it like a magnifying glass. So if you've got the sun and you're the sun in this instance, right?
And you've got to burn a hole to get through to the next level, right? If you're spread across too thin of an area, you never get enough concentrated heat. But the thing is, is that that sun, when it's concentrated enough, can blast through any barrier. But most people have the potential, but they don't have the focus, which is why they can never break through. So money flows where attention goes.
Seven, your home life and your business life have to be aligned money-wise. So you can't try to grow a business, right? And like reinvest everything here while you're living a super lavish lifestyle trying to flex, right? Like it has to be aligned. And so one of the things that we have is that all of our business rules around money are also our home rules around money.
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Chapter 6: What is the importance of speed and timing in wealth-building?
And so if we don't live with any debt, you know what I mean, personally, that are for liabilities within our personal lives, we do the same thing within our business lives. And so the values we have and how we treat money inside and outside of the business are the same. I see so many people who live like split lives, like they've got wives or spouses that want to spend like crazy, right?
But then they're trying to do these things in the business or the reverse, right? And so they have to be in alignment. Otherwise, long-term, you create conflict and then that's what breaks things. Eight, ignore money advice from poor people. This may sound ridiculous, but let me say it differently. Ignore money advice from your dad or mom who are poorer than you want to be.
Ignore money advice from your good friends who are poorer than you want to be. Ignore money advice from people who have smaller dreams for your life than you do. And so the big thing is just like their opinion does not matter because they have not been there, which is the lowest level of expertise is having been there, right?
The higher up the expertise is not only have you been there, but have you taken many people just like you to where you're trying to go, right? They probably don't have any of those things. And so what they're really doing is just regurgitating something that they may have heard from somebody else because they have no context. And then you somehow take that as truth.
And so what happens is you have people, it's the blind leading the blind. You have people who have no idea and who are ignorant leading also the ignorant. So if you want to get out of that situation, you have to stop consuming that information because it becomes the lens through which you see the world. And it's also wrong.
The reason that rich people can lose everything and then recreate it is because they see reality more accurately. The reason people can't make money is because they don't see reality the way it actually is. Because how is it that somebody else can make a lot of money really quickly and someone else can't? They see reality differently.
And so most of life is trying to pull these rocks out of our vision so that we can see more clearly. So stop listening to poor people about money. Nine, it's always easier to buy than to sell. So think about it. You want to get into a stock, you want to get into something, you can buy it instantly, right? You want to get into a real estate deal, you want to get into a business, whatever.
It's always easier to buy than it is to sell. And so because of that, you have to be extra careful. You want to put all the slow on the buy and you want to put all the lubricant on the sell, right? In terms of your thinking process. And so that's where we use discipline. 10, money is fickle. Money is jealous. It sticks and goes to the person who pays it the most attention.
And so if you think about this big, big, big macro picture, money comes into the system, but there are these grooves like rain grooves in the ground where it all eventually flows up to the few people who pay it the most attention, right? Like,
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Chapter 7: Why is it essential to align personal and business finances?
Learning how to make more than you spend. Learning how to increase your skill set so that you can actually provide value to other people. Solving other people's problems. These are the lessons that we have to learn in poverty to get out of poverty. And until you do that, you don't beat the level. 12, frugality drives innovation. Constrain, constrain, constrain.
And so even when you have money, one of the best things to do, in my opinion, is to constrain your resources, constrain time, because it'll force you to think creatively to solve problems without using money as the solution. Right. And if you have constraints right now on time and or money, don't see it as a disadvantage because it's what people who do have money try to get into to solve problems.
So it's actually an advantage. And the only thing that's the disadvantage is thinking it is. Thirteen, think once before investing, think twice before spending. So investing is something that you're putting money into that is going to give you a return of some kind.
It's either going to give you a skill that's going to increase your earning capacity or it's going to be something that's going to quite literally give you a return in terms of it's going to be yield or worth more in the future, right? Spending is something that's going to never be worth more in the future and it's going to be consumed.
And so think twice before you consume the money that you're spending.
think once before investing and so the idea here is that we want to put the discipline more around the spending than we do around the investing because most times in general especially when you're starting out the more you invest as a as a thought process it's like you're always investing some things will return more than others but overall you will see compounding returns
14, money flows to the person who needs it the least. And this is one of those unfortunate things about the world, right? The rich get richer. The rich get richer because they don't need it. And because they don't need it, they have leverage. And so the idea is you have to sell not from your own wallet, but from the person in front of you, right? You have to come to the table with other options.
And so it's the person who needs nothing who's the person who has the most power. And that's where the money will go. 15, we make money or money does not make us. And this was a belief that Layla and I had to write down because a lot of times you start tying your self-worth to your net worth, right?
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Chapter 8: What mistakes should we avoid when seeking money advice?
And so what happens is if you do that, then your net worth itself becomes a liability to your own self-esteem. And so I started noticing this within myself was that I started tying my self-worth to my net worth.
And so I had to create a different statement of belief that I had to choose to believe, which is that it is my ability to make money, which is what creates my value, not the money itself, because the money itself can be taken. Like, you don't know this, but my family was in the Iranian revolution and everything they had was taken.
And so that's why the idea of legacy to me is so silly, because all it takes is one government saying, oh, all that land, all those cars, all those homes, those are ours now. And that's it. And so a lot of people have this idea of legacy and permanence that's just an illusion. And so for that reason, the value is in you, not in the things that you make.
16.
It may be an amazing opportunity, but not our amazing opportunity. And so I think one of the things that I needed early on was permission to not do things. Because once you start to learn to take action, because in the beginning you don't know how to do anything. You're analysis paralysis and you just get scared and you're ignorant and you don't know what you're doing.
But once you get over that, which is the first lesson of poverty, you have to start taking action. Right. Once you get over that, then the problem is that your yes muscle becomes too flexed. Right. You start saying yes to everything. And so the idea was to be able to say, it's not that this thing is a bad opportunity. I recognize that it's a great opportunity. It's just not my great opportunity.
And it also gives you language to tell other people who are trying to present things to you. Hey, we should do this thing and we should do this thing together. You say, dude, I think it's amazing. I just don't think it's my amazing opportunity. And it's gotten me out of so many situations that I know long term wouldn't have been good for me. 17, we control the money flow wherever possible.
So if you think about the flow of money, whether you're like people who have a lot of control, payment processors, right? Like everybody thinks they're amazing until the day you can't process money, right? And so the idea is the further upstream you can go, the more leverage and control you have over the money. And so there's a reason that franchises in general take a percentage of top line.
There's a reason that insurance companies get paid before they put money out, right? Banks get the money and then they give it back later, right? So the idea is how, who's the person who's furthest upstream in the money? Those people, churches, God takes 10% of top line, right? The idea is that the people who like, they get it, this is old money, right? This is why we do this stuff.
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