From: alexhormozi

Many 20-year-olds remain poor because they prioritize earning money over learning new skills [00:00:00]. A survey found that 52% of high school seniors believe they will be millionaires by age 25, a belief described as “delusion” [00:00:04]. While there’s a slim chance of becoming a millionaire quickly, a guaranteed path to wealth in a decade involves prioritizing learning [00:00:15].

The “Earn vs. Learn” Dilemma

Choosing to earn early often halts the learning process. The moment learning stops, individuals declare that they have acquired enough knowledge [00:02:52]. Prioritizing short-term earnings can shortchange long-term earning potential [00:03:39].

Case Study: The “Earn” Guy

One individual, new to video editing, secured a 3,000 more, prioritizing immediate earnings over learning [00:00:54]. He then took a job as a lead video editor at a small business without mentors [00:01:08]. This choice meant he was in a position where the business extracted value from him, rather than him learning from more experienced individuals, which would have maximized his long-term net worth [00:01:21].

Case Study: The “Learn” Guy

Another individual, at 17 with no skills, sought mentorship for a sales role [00:01:43]. Advised to double the minimum activity quota, he made 200 calls a day instead of 100, compensating for his lack of skill with double the effort [00:01:54]. He spent extensive time learning from the top performer, eventually becoming number one on his team and then one of the top closers in the company [00:02:08]. Despite his success, he later took a job at a more prestigious company for less pay, prioritizing greater experience over immediate income [00:02:39].

The Dunning-Kruger Effect

When starting out, individuals often have limited knowledge but believe they know everything [00:01:31]. This phenomenon, known as the Dunning-Kruger effect, illustrates that the more one learns a specific skill, the more they realize how much they don’t know [00:01:35]. Socrates famously stated, “The more I know, the more I realize I know nothing,” highlighting this concept [00:04:40]. Humbling oneself to this reality is crucial for growth [00:04:33].

The Power of Compounding Skills

The ability to provide value compounds over time, especially when combining different skills [00:05:57]. If you have one skill, adding another doesn’t just linearly increase value; it compounds it [00:06:34]. For example, a person starting with math skills, then learning bookkeeping, accounting, taxes, insurance, mergers and acquisitions, and entity structures, can transform from an accountant into a “Rainmaker” – someone who can bring in and execute deals, with earning potential tens of millions of dollars higher annually [00:06:39]. This highlights the importance of skill acquisition and skill development throughout a career.

Historical Examples

Kobe Bryant

Kobe Bryant was renowned for his commitment to learning and practice. He would do two practices a day while others did one, believing he would improve faster [00:03:06]. This consistent, compounded effort made him “unbeatable” over five to ten years [00:03:37]. Applying this principle, whether in law, accounting, sales, or marketing, means doubling or quadrupling effort to accelerate improvement and “pay down ignorance debt” [00:03:40].

Warren Buffett

Despite graduating top of his class from Columbia Business School, Warren Buffett chose to work for free for Ben Graham, a legendary investor, rather than pursue a high-paying job [00:07:03]. Graham even remarked that Buffett was “overpriced” because the value of the skills and mentorship he would impart far exceeded any monetary compensation [00:07:30]. Buffett’s willingness to invest in himself by prioritizing learning over immediate earnings shaped his professional life [00:07:25].

An Employer’s Perspective

From an employer’s viewpoint, if a young person is in an “earning season,” the employer will extract maximum value for the compensation [00:04:50]. However, if an employee is in a “learning season,” an employer is often generous, willing to invest in their growth, provide mentorship, and even pay them to learn [00:04:56]. This is because the business owner understands the long-term value of an individual committed to growth [00:05:10].

Conclusion

True success and respect are earned through hustle and consistent effort, not entitlement [00:04:03]. Those who become “killers” in their 30s are often those who were “hungry as hell to learn and work” in their 20s [00:04:22]. Prioritizing investment in oneself and learning in the early stages of a career, even if it means foregoing higher immediate earnings, builds an undeniable track record of experience that commands respect and leads to greater long-term success [00:09:23].