From: alexhormozi
This article provides strategies for escaping poverty and wealth creation strategies for individuals starting from a difficult financial position, inspired by advice given to a young man working two jobs with a child. The core principle is to develop something of value that others desire [00:00:42].
Core Principles
For those with low skills, time is the primary asset [00:00:45]. The main objective is to dedicate time to learning a valuable skill while still providing for family [00:00:50]. This will require short-term sacrifice from the family, but it is presented as an investment in a better future [00:00:55]. This process demands extreme, unbalanced effort for a season to “get your head firmly above water” [00:05:21].
Strategies for Escaping Poverty
1. Drastically Cut All Costs
- Eliminate Dining Out: No eating out, deal with hunger if necessary [00:01:13].
- Smart Grocery Shopping: Only buy food from discount grocery stores [00:01:17].
- Minimize Clothing Expenses: Existing clothing is sufficient for the next two years. Reuse, trade, or shop at Goodwill [00:01:20]. Avoid buying new clothes when struggling financially [00:03:39].
- Reduce Housing Costs: Ideally, live with family members (parents, or other relatives with spare room/couch/basement) [00:01:31]. In the worst case, split costs with other families trying to save, even if it means many people in one space [00:01:35]. The goal is to make housing as cheap as possible [00:01:42].
- Personal Example: The speaker owned a car purchased with cash (6,000) and lived in a shared room with another person in a house with six other people, paying $400 a month in a nice neighborhood [00:05:47]. This saved money for courses, seminars, and workshops to learn new skills [00:06:09].
- Essential Spending Only: Restrict spending to only food and shelter, dropping all other expenses [00:06:19].
2. Increase Income and Improve Earning Capacity
- Seek Better Jobs: Dedicate free time to applying for jobs that align with desired career paths [00:01:46].
- Consider Remote Sales: Explore at-home phone sales jobs, as many offer starter roles requiring zero experience and can pay $40,000 a year or more [00:01:53]. Sales is a recommended starting point [00:02:47].
- Utilize Gig Economy: Drive for Uber if you have a car; if not, save up to purchase a cheap car with cash to eliminate payments [00:02:02]. A car provides more flexible hours [00:07:26].
- Become Undeniable:
- Learn a Skill: Dedicate 4 hours daily to learning a new skill. Use a timer to ensure focused, real work, stopping it if distracted [00:07:44]. After about 20 hours of foundational learning, focus on applying that skill [00:08:06].
- Aggressive Job Application: Don’t just apply for jobs; become the best possible candidate [00:08:22]. Address lack of experience by promising and demonstrating hustle [00:08:29].
- Personalized Outreach: Message multiple people at every target company on LinkedIn (HR, head of talent, director) with a personalized snippet for each [00:08:33]. Create a personalized cover letter for every resume submission, demonstrating understanding of the business and how you can contribute [00:08:56].
- In-Person Follow-up: For highly desired roles, visit the company after your shift to express excitement and willingness to work harder than any other candidate [00:09:40].
- Work Ethic: Once hired, work harder than everyone else, consistently for years, not just weeks or months [00:12:33]. Strive to do twice as much as the top performers [00:10:13]. When others clock out, that’s when your extra work begins [00:10:45].
- “Volume Negates Luck”: Success comes from consistent, high-volume effort, not luck [00:11:10]. Apply this to learning skills (volume of studying) and job applications (volume of personalized outreach) [00:11:16]. A single “yes” can change your entire life [00:14:17].
3. Learn to Sell (Eventually Your Own Products)
- Start with Others’ Products: The easiest way to begin selling is by selling someone else’s products [00:02:07].
- Develop Flipping Skills: Learn to buy items cheaply and resell them for a profit [00:02:10]. Start small (e.g., cards), then move to bigger items (e.g., furniture, then homes) to increase profit margins [00:02:11].
- Transition to Own Products: The ultimate goal is to eventually sell your own products or services [00:03:14]. The “game is just trading up over and over again” [00:03:16].
Mindset and Support System
- Shift Perspective on Sadness: View sadness not as hopelessness, but as “ignorance,” meaning a lack of knowledge that can be controlled and remedied [00:02:24].
- Information Diet: Actively ignore advice from poor people on how to get rich, as it’s the best way to stay poor [00:04:29]. Seek out and consume content that helps you learn and grow [00:04:35]. The speaker provides free books, courses, and content for this purpose [00:02:40].
- Curate Your Circle: Evaluate everyone in your life based on whether they are helping you achieve your goals [00:04:47]. Those who don’t have bigger dreams for you than you do for yourself should be ignored [00:07:02]. Be prepared for friends and family to discourage you or say “I told you so” when you experience setbacks, as they may be “right most of the time except” for the one time you succeed [00:03:50].
- Family Balance: While you dedicate time to your career, your partner might take on more childcare. This creates family balance, even if individual roles are temporarily unbalanced [00:06:24].
- Embrace Rejection: Being rejected repeatedly costs you nothing. Each “no” is an opportunity to learn, making you better for the next attempt. You either learn or you win [00:13:20]. There is significant money and opportunity on the other side of being willing to be rejected by strangers [00:13:23].
- Motivation: If you can’t find the willingness to fail for yourself, do it for your child and for the future story you’ll tell to inspire others in similar situations [00:15:00].