From: alexhormozi
The speaker’s understanding of wealth creation fundamentally shifted after observing that many wealthy individuals on the Forbes list resided in high-tax states like California, which initially seemed counterintuitive [00:00:00]. This led to a deeper understanding of what the speaker terms “wealth out” [00:00:07]. This approach is a key strategy for becoming a millionaire and a valuable personal finance strategy.
The “Wealth Out” Concept
The “wealth out” strategy addresses how to minimize tax liability while significantly increasing net worth [00:00:07].
Consider a scenario where an individual earns 1.5 million [00:00:17]. This typically leads to frustration over the government taking half of the earnings [00:00:25].
However, instead of taking the cash, if 120 million [00:00:31]. When combining this 3 million cash flow, and only paying 123 million becomes approximately 1.5% [00:00:42].
As long as wealth is continuously built within the business and not cashed out, the growth remains tax-free and compounds [00:00:54].
This realization fundamentally changed how the speaker approached building and maintaining wealth [00:01:01].