From: alexhormozi
The speaker emphasizes that getting out of difficult financial situations requires taking personal responsibility and utilizing available resources, primarily time, to acquire skills through self-education and practical experience [01:36:19]. This approach contrasts with relying solely on traditional self-help advice, especially for those experiencing significant pain or anger [02:01:41].
Personal Journey of Learning by Doing
Having experienced financial hardship, including struggling to pay rent [00:00:01] and a past goal of making $10,000 a month income 13 years prior [00:19:00], the speaker missed his twenties in a traditional sense due to hard work [00:41:40]. He started his first brick-and-mortar business at 23 with almost no knowledge, not even aware he could hire employees [00:58:36]. This forced him to handle all aspects of the business himself, from cleaning to billing, sales, teaching, and equipment repair, due to lack of knowledge and money [01:19:24].
This hands-on experience taught crucial skills like dealing with difficult situations to secure sales, such as closing a deal while a child drew on the wall with permanent marker [04:27:04]. These practical skills are developed through direct action and necessity [04:37:60].
Time as the Primary Investment
For individuals with limited financial resources, time is their most significant asset [04:47:35]. Success requires “brute force” and a tremendous amount of “soul-driving energy” beyond normal daily activities [05:07:60]. This means living one person’s normal life plus an additional “workday” dedicated to getting ahead [05:21:40]. It’s about enduring pain today to get ahead tomorrow [05:35:86]. This difficult “glass period” of intense effort must be pushed through [05:57:90].
The speaker’s own experience reflects this: he moved across the country, knew no one, and dedicated his free time, particularly Saturdays after work, to learning how to sell and market his business [07:01:60]. This involved sacrificing leisure activities, like watching football, which represented a tie to home [07:20:20].
Prioritizing Skills Over Immediate Earnings
Wealthy individuals prioritize acquiring skills [29:16:11]. They view money as a means to gain more skills and, eventually, to buy other people’s time and expertise by hiring them [29:40:55]. This highlights the importance of learning over earning.
The first $100,000 is the hardest to earn, taking the speaker five years, and often involves saving dollar by dollar [11:23:66]. While there are smarter ways to make money, like selling high-value items, it’s difficult for someone broke to immediately achieve such sales, as it requires becoming a different person [12:05:81]. Many people seek complex money-making schemes online without mastering basic foundational skills like showing up on time [12:19:92]. The basics are simpler to understand but not necessarily simpler to do [12:41:26]. This connects to the approach to learning self-improvement and mastering skills.
The foundational steps for getting ahead involve:
- Acknowledging personal responsibility (“it’s my fault”) [25:48:98].
- Spending less than you make [25:51:77].
- Reinvesting all excess funds into making more money [25:54:33].
Saving your way to wealth is unlikely if you’re on minimum wage; instead, the focus should be on learning skills [26:41:40].
Learning Through “Experience Points”
The speaker emphasizes that money spent on self-education and experiments is not lost, even if it doesn’t immediately yield results [27:39:07]. Failed ventures provide “experience points” which are invaluable for leveling up and achieving desired income levels [27:57:95]. This perspective highlights the value of investing in self-education and skills development.
The ability to learn is crucial [10:41:87]. The speaker, who was good at school, treated business as another form of education [27:26:55]. This perspective aligns with lifelong learning.
Avenues for Making Money: Selling Stuff or Skills
Money is made by giving something valuable to someone else who voluntarily exchanges money for it [30:20:94]. This can involve selling:
- Stuff: Providing convenience by sourcing products and selling them at a margin [31:10:97]. Learning to sell someone else’s product through affiliate programs is a great starting point for acquiring the skill of selling [31:50:88].
- Skills/Outcomes: Developing expertise and selling the results of that expertise [32:07:07]. The speaker’s first paid experience was providing nutrition advice based on his personal fitness achievements [33:43:08].
The Progression of Skill Development
The speaker’s career trajectory illustrates a consistent pattern of self-education and skill development:
- Learn something, get good at it: E.g., getting in shape and achieving state records in powerlifting [33:51:77].
- Demonstrate evidence of mastery: People then ask for help in that area [33:55:68].
- Start a business around that skill: Transitioning from helping individuals to creating a business around fitness [33:59:75].
- Master the business aspect: As the business grows (e.g., from one gym to six [34:56:49]), others in the same industry seek advice [34:03:60].
- Expand expertise to broader business principles: As businesses grow to national scale, others inquire about scaling and general business acumen [34:15:69].
This iterative process shows that the path is revealed through taking steps, not by knowing the entire journey from the outset [35:21:40].
Foundational Mindset for Learning and Growth
The absolute first step to personal growth and financial improvement is accepting that “it’s my fault” [13:58:87]. This means owning all past pain, missed opportunities, and decisions, rather than blaming external factors like family, circumstances, or politics [14:23:44]. Blaming external factors gives away personal power [14:38:87]. Without this foundation of self-responsibility, any efforts to learn skills like sales or marketing will crumble [17:09:07]. This emphasizes the challenges of educational systems and personal responsibility and the need for personal accountability.
The next step is to “use what you have, not what you wish you had” [36:31:94]. This includes using emotions like anger, sadness, or pain as fuel for action [37:09:07]. Making money, even if driven by negative emotions, can significantly improve life by providing the ability to deal with inconveniences and challenges [37:26:93]. Money doesn’t buy happiness but helps avoid pain [37:34:91].
Finally, as one embarks on this path, external opinions, especially from those who aren’t on a similar journey, must be disregarded [47:10:48]. This includes being willing to “shed” friendships that decrease the possibility of reaching goals [42:42:25]. This period can be lonely, but loneliness provides the necessary time for learning and skill acquisition [45:51:19]. This aligns with the importance of starting personal growth and learning early and the role of long-term investment in personal growth.