How to get SO rich you question the meaning of making money

The Game w/ Alex Hormozi

5 Aug 202351:46

EducationalLearning

32 Likes 10 Comments

TLDRThe speaker shares his remarkable financial success at a young age, surpassing the annual earnings of CEOs from major companies like McDonald's, Ikea, Ford, Motorola, and Yahoo combined. He emphasizes that his achievements were not due to working harder but rather leveraging his efforts effectively. The presentation focuses on three key points: the true nature of work and how it equates to outputs and leverage, the detrimental effects of constantly seeking new ventures without mastering one, and the importance of improving existing business activities ('better' over 'new') to create leverage. The speaker illustrates the concept of leverage through an interactive exercise, demonstrating how enhancing an offer can significantly multiply the value derived from a single action. He concludes by encouraging the audience to focus on refining their current business practices and to resist the lure of distractions, which can hinder growth and financial success.

Takeaways

💰 **Leverage is Key**: The speaker emphasizes that making more money is about trading your time for more output, which is achieved through leverage.
🔄 **Redefine Work**: Work is not just about the number of hours or the effort but about outputs (what you produce) times leverage (the impact of your work).
🚫 **Avoid Uninformed Optimism**: Be aware of the pitfalls of jumping into new ventures without fully understanding the effort and challenges involved.
🔍 **Focus on One Thing**: To build a successful business, focus on one area and become the best at it rather than spreading yourself thin across multiple projects.
📈 **Compound Growth**: The power of compounding effects is highlighted as crucial for long-term success and wealth accumulation.
🤝 **Build a Team**: Having a team can exponentially increase your leverage and output, allowing you to achieve more with less direct effort.
🎯 **Do What You Know**: Often, the key to success is doing the things you already know you should be doing, but perhaps have been avoiding.
📚 **Continuous Improvement**: Small, consistent improvements in your business practices can lead to significant gains over time.
🚧 **The Power of 'No'**: Learning to say no to distractions and opportunities that don't align with your core business focus is vital for success.
📉 **Embrace the Boredom**: Success often comes from doing the mundane, repetitive tasks that lead to refinement and optimization of your business model.
⏳ **Patience and Persistence**: The speaker shares personal stories to illustrate the importance of sticking with a strategy through thick and thin to achieve long-term success.

Q & A

What is the speaker's claim about his financial success in comparison to CEOs of major companies?
-The speaker claims that as a young individual in his 20s, he was able to earn more in a year than the combined annual earnings of CEOs from companies like McDonald's, Ikea, Ford, Motorola, and Yahoo.
What does the speaker define as 'work' in the context of knowledge workers?
-The speaker defines 'work' for knowledge workers as 'outputs', which is a function of the volume of work done (number of times a task is performed) multiplied by the leverage (how much output is generated each time the task is performed).
How does the speaker suggest one can work faster?
-The speaker suggests that working faster can be achieved by increasing the work rate, which he defines as output per minute of time. This means increasing the amount of output one generates in a given period.
What is the speaker's view on the idea that anyone can outwork others?
-The speaker disagrees with the notion that one can outwork others by simply working harder or longer hours. He argues that this perspective is misguided and that leveraging one's work is a more effective approach to increasing output and, consequently, income.
What is the speaker's advice for individuals who want to shortcut their path to material success?
-The speaker advises focusing on increasing leverage in one's work rather than trying to outwork others. He emphasizes the importance of defining work in terms of outputs and leveraging those outputs to achieve more with less effort.
How does the speaker describe the process of achieving informed optimism in business?
-The speaker describes achieving informed optimism as a process that involves moving through stages of uninformed optimism, informed pessimism, a crisis of meaning or valley of despair, and finally, a breakthrough where one discovers a key strategy or tool that significantly improves their results.
What is the significance of the 'woman in the red dress' metaphor used by the speaker?
-The 'woman in the red dress' is a metaphor for distractions or shiny new opportunities that can divert one's focus from their core business. The speaker uses this metaphor to illustrate the importance of saying no to new distractions in order to maintain focus and leverage.
Why does the speaker emphasize the importance of focusing on a single business?
-The speaker emphasizes focusing on a single business to increase leverage and compound results over time. He argues that spreading oneself too thin across multiple ventures can lead to a lack of focus and hinder the potential for significant growth and success in any one area.
What is the speaker's opinion on the concept of passive income?
-The speaker suggests that the concept of passive income is misleading. He believes it is not a binary state of being either active or passive but rather a spectrum that depends on the level of activity required to maintain the income stream.
How does the speaker propose to increase the leverage of a book offer during his presentation?
-The speaker proposes to increase the leverage of a book offer by adding significant value to the purchase, such as autographing the book, offering personal sales call reviews, providing a funnel breakdown by his traffic expert, recruiting a key player for the buyer's company, and featuring the buyer on his channel.
What is the speaker's final promise to the audience?
-The speaker's final promise is that if the audience commits to doing the activities they already know they should be doing, better, and focusing on one thing for an extended period without distraction, they will see significant growth and financial success in their businesses.

Outlines

00:00

😀 Achieving Success Beyond Belief

The speaker begins by sharing an incredible achievement of earning more than the combined salaries of CEOs from major companies like McDonald's, Ikea, Ford, Motorola, and Yahoo. This success led to a portfolio revenue of 200 million dollars and crossing 100 million dollars by age 33. The speaker acknowledges the potential for envy, anger, skepticism, and confusion this may cause but aims to inspire a select few. The focus is on understanding the real dynamics of making money, debunking the myth of hard work equating to manual labor, and introducing the concept of work as 'outputs equal volume times leverage.'

05:02

💰 The Power of Leverage in Business

The speaker emphasizes the importance of leverage in business, explaining that it's not about the number of hours worked but the output achieved per unit of time. Using examples and analogies, the speaker illustrates how leveraging one's work can lead to higher enterprise value. The concept of 'work rate' is introduced as output per minute, and the speaker argues that leveraging work is a more effective strategy than simply working harder. The narrative includes a real-life example of Warren Buffet's dividends from Coca-Cola to demonstrate the principle of leverage.

10:02

🚧 Overcoming Uninformed Optimism and Finding Leverage

The speaker discusses the stages of change and how uninformed optimism can lead to a cycle of jumping from one opportunity to another without success. The pitfalls of constantly seeking new ventures without fully understanding or committing to them are highlighted. The speaker shares personal stories to illustrate the importance of informed optimism and the value of perseverance and focus in achieving success.

15:02

🔄 The Importance of Focus and Avoiding Distractions

The speaker stresses the significance of focusing on a single business venture to build something truly epic. They argue against the trap of diversification, using a story about a high school friend's roofing business as an example. The speaker points out that the most successful entrepreneurs, such as those on Forbes' self-made women list, have often built their wealth by focusing on a single industry.

20:04

📈 Growth Through Learning and Adaptation

The speaker defines learning as a change in behavior when faced with the same conditions. They emphasize that attending workshops and seminars is only beneficial if one's behavior changes afterward. The importance of focusing on a single business for an extended period, learning from others, and avoiding repeated mistakes are highlighted. The concept of compounding effects over time is introduced as a way to achieve extraordinary results.

25:04

🛑 Learning to Say No to Distractions

The speaker discusses the importance of saying no to distractions, symbolized by the 'woman in the red dress,' to maintain focus and leverage. They share personal experiences of starting a supplement company and the strategic mistake it represented. The message is to consistently improve and say no to less important opportunities to achieve greater success.

30:06

🎯 The Strategy of 'Better' Over 'New'

The speaker advocates for improving existing activities rather than constantly seeking new ones. They argue that 'better' leads to more leverage and increased returns for the same amount of work. The concept is illustrated through examples such as split testing, creating better content, and refining sales strategies. The speaker encourages the audience to focus on perfecting their current business activities to achieve growth and success.

35:08

💼 Applying the Principle of Leverage in Real Life

The speaker concludes with a real-world demonstration of leveraging a book offer. By progressively adding more value to the offer, such as autographs, sales call reviews, funnel breakdowns, and public exposure, the speaker shows how the perceived value of the same product can increase dramatically. This practical exercise reinforces the principle that improving and adding value to an offer can lead to significant leverage and financial success.

40:09

📚 Committing to a Path of Continuous Improvement

The speaker wraps up by emphasizing the importance of committing to a path of continuous improvement. They highlight the need to focus on one thing for an extended period without distraction. The speaker assures that by doing everything one knows should be done better, leveraging the business, and applying the lessons learned, one can achieve substantial growth and financial success. They also mention the availability of free courses at acquisition.com for further learning.

Mindmap

Keywords

💡Leverage

Leverage, in the context of the video, refers to the ability to gain more output or results from the same amount of input or effort. It is a core concept that the speaker emphasizes for achieving success and wealth. The video discusses how focusing on improving existing activities (like sales calls or marketing strategies) can create leverage, leading to increased revenue and business growth. For example, the speaker mentions that 'Leverage is the difference between what you put in and what you get out.'

💡Uninformed Optimism

Uninformed Optimism is a term used to describe the initial, often overly positive, attitude people have towards a new venture or opportunity without fully understanding the challenges involved. The speaker illustrates this concept as the first stage in the 'Stages of Change' model, where people are enthusiastic about a new business idea but haven't yet encountered the difficulties. This is evident when the speaker recounts how people feel envious of others' success stories and want to模仿 (copy) them without knowing the full picture.

💡Compounding

Compounding, in the video, is presented as the process by which success builds upon itself over time, leading to exponentially increasing returns. The concept is integral to the speaker's message about the importance of persistence and continuous improvement in a single area of focus. The speaker uses compounding to argue that sticking with one business and improving it over time can lead to significant wealth, as opposed to constantly starting new ventures. This is highlighted when the speaker says, 'Extraordinary time creates extraordinary results, compounding is the thing.'

💡Focus

Focus is a keyword that underscores the necessity of concentrating efforts on a single activity or business to achieve maximum results. The speaker argues against the common tendency of spreading oneself thin across multiple projects and emphasizes the power of deeply concentrating on one thing to build a successful business. The concept is brought to life in the script where the speaker says, 'the ability to say no is the thing that grows,' highlighting the importance of focus in decision-making and growth.

💡Better vs. New

The distinction between 'Better' and 'New' is a pivotal point in the video. The speaker advocates for improving existing strategies and products ('Better') rather than constantly seeking new ventures ('New'). This concept is tied to the idea of leverage, as making something better can increase its effectiveness and, consequently, one's revenue. The speaker uses this concept to caution against the allure of shiny new opportunities, which can distract from perfecting current endeavors. This is articulated when the speaker states, 'Better is better than new, better is leverage.'

💡Work

In the video, 'Work' is redefined by the speaker as 'outputs', which is a measure of the volume of work done multiplied by the leverage applied. This is a departure from the traditional understanding of work as force times distance or simply the number of hours worked. The speaker's definition is more applicable to knowledge workers and emphasizes efficiency and effectiveness over mere hours worked. This is clear when the speaker says, 'Work equals outputs,' and further explains that outputs equal volume times leverage.

💡Portfolio Revenue

Portfolio Revenue refers to the total revenue generated by an individual's or company's collective investments or businesses. The speaker uses this term to highlight their financial success, mentioning that their portfolio revenue crossed 200 million dollars. This term is significant as it reflects the aggregated financial performance and is indicative of the success achieved through leverage and focus on a single business area.

💡Effort

Effort, in the context of the video, is discussed in relation to work and the misconception that more effort or longer hours directly correlate with success. The speaker challenges this notion by introducing the concept of work rate, which is about output per minute of time rather than the sheer amount of effort or time expended. The term is used to pivot the conversation towards efficiency and leverage, as opposed to just hard work. This is evident when the speaker says, 'It's not the effort that we are expending or how hard we try, then what's work?'

💡Enterprise Value

Enterprise Value is the term used to describe the total value of a business, often used as a measure of how much an entire company is worth. The speaker uses this concept to discuss how increasing outputs can lead to increased enterprise value. It is tied to the idea of focusing on one business and leveraging it to increase its worth over time. The speaker's mention of enterprise value is in the context of discussing how outputs can be measured in terms of business success and wealth accumulation.

💡Knowledge Workers

Knowledge workers are individuals whose primary job duty is to work with information, think creatively, and solve problems using their intellect. The speaker differentiates knowledge work from manual labor and argues that the traditional definition of work does not apply effectively to this class of workers. Instead, the speaker proposes a new definition of work that is more relevant to knowledge workers, emphasizing outputs and leverage. This is clear when the speaker states, 'the science definition is work equals force times distance [but] it's not very useful for knowledge workers.'

💡Volume

Volume, in the context of the video, refers to the quantity or number of times an action is performed, which when multiplied by leverage, results in outputs. The speaker uses the term to explain how increasing the volume of work done can lead to greater outputs, assuming leverage remains constant. The concept is part of the speaker's formula for defining work and is used to illustrate how more can be achieved with focused effort. An example from the script is when the speaker says, 'Volume is the number of times you move the lever,' indicating the frequency of an action.

Highlights

The speaker achieved more annual earnings than the combined CEOs of McDonald's, Ikea, Ford, Motorola, and Yahoo in his 20s.

Accumulated a portfolio revenue of 200 million dollars and crossed 100 million dollars by age 33.

Expressing financial success can evoke a range of emotions in others, from envy to inspiration.

The presentation was changed last minute to better suit the audience's needs.

Disputing the notion that hard work is solely about the number of hours worked.

Introducing a new definition of work as 'outputs', which is a function of volume and leverage.

The world's 'hardest working man' in 2022 added 140 billion dollars in net worth, more than Bill Gates did in his entire career in one year.

To increase output, one must either increase activity or leverage, with leverage being uncapped.

Warren Buffet's example is used to illustrate the power of leverage through dividends from Coca-Cola.

The importance of focusing on one thing to build a successful business, rather than diversifying efforts.

The concept of 'uninformed optimism' and how it can lead to a lack of leverage and financial struggles.

The stages of change and how they apply to business success, including the 'crisis of meaning'.

The idea that learning from others' mistakes is crucial to avoid repeating them in one's own business endeavors.

The importance of compounding effects and sticking with a business model that allows for growth over time.

The demonstration of increasing leverage through improving an offer, showing how small improvements can lead to significant gains.

The commitment to daily activities, regardless of immediate outcomes, as a path to long-term success.

The final promise that focusing on doing known activities better, rather than seeking new activities, will lead to increased revenue.

Transcripts

Browse More Related Video

How to Get Rich [Full Interview with Dave Ramsey]

Revealing The 3 Best Businesses To Start In 2024 As A Beginner

How To Decide On A Career

Everyone is Smart: TEDEd Example

How to Use Google TRENDS To Find a Profitable NICHE (in Only 3 MINUTES!)

Why you feel what you feel | Alan Watkins | TEDxOxford

Related Tags

Business Growth Leverage Focus Entrepreneurship Productivity Sales Techniques Marketing Strategies Customer Success Strategic Planning Personal Development Efficient Scaling