The Game with Alex Hormozi - Fear of Being Poor, Validation, and Wealth (w/ Lewis Howes) Pt. 2 - Oct. '22 | Ep 488

Episode Date: January 21, 2023

“Many of the people that I know who have tremendous amounts of money, have huge fears around being poor.” Today, join Alex (@AlexHormozi) as he guests on Lewis Howes’ Show to talk about what winning looks like from his perspective, how he views his self-worth then and now, and the steps he’d take if he were forced to be a billionaire ASAP. This is part 2 of the interview.Welcome to The Game w/Alex Hormozi, hosted by entrepreneur, founder, investor, author, public speaker, and content creator Alex Hormozi. On this podcast you’ll hear how to get more customers, make more profit per customer, how to keep them longer, and the many failures and lessons Alex has learned on his path from $100M to $1B in net worth.Check out the episode on Lewis Howes’ YouTube Channel!Timestamps:(0:28) - What would Alex do if he were forced to be a billionaire?(11:11) - Holding back and Alex’s view on his self-worth(17:50) - What does winning look like for Alex?(24:06) - Will getting wealthier become easier or harder?(32:34) - Alex’s “big exit” and what he expected to happen after(39:02) - When people come from a place of that intention of serviceFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

Business has only gotten easier to get into. It's gotten more competitive and easier to get into. And so I think that what happens is just the arena gets bigger. So you've got more gladiators. So it's more competitive, but more people can walk in. The wealthiest people in the world see business as a game. This podcast, The Game, is my attempt at documenting the lessons I've learned on my way to building Acquisition.com into a billion-dollar portfolio.

My hope is that you use the lessons to grow your business and maybe someday soon, partner with us to get to $100 million and beyond. I hope you share and enjoy. You said you want to be a billionaire in five to seven years, so you can see the math playing out that way. Yeah. Let's say you were forced to do it in half the time. Yeah. Three years, you were forced to be a billionaire.

Yeah. Or some catastrophic event would happen? Yeah. What would it take from you to reach the billion dollar goal in half the time? What would you need to do differently? And how would you need to think and act differently? I would probably onboard more operators faster. that being said, the current plan gets us there in like three years. I say five to seven publicly

because I want to give myself a little buffer. I tend to be that way because like I have probably a little bit different approach with goals. Like I want to hit every goal. Like I don't like missing goals. And so for me, I don't like teaching myself or teaching other people that if I say something's going to happen, it doesn't happen. Because some people are like shoot for the moon. I think really like, I think you absolutely should think really big. But then like, okay, how do I make a goal that like, and then once I have that goal, do the activities that make it unreasonable not to hit it.

Like, if I had to hit this goal, to your point, what level of activity would I have to do that it would be unreasonable? It would be unacceptable based on how I see reality that I would not achieve it. If you're like, I want to learn sales, I would say it's unreasonable that if you get on 10,000 sales calls, you will not be good at sales. It would be unreasonable. Okay, how long will take me get on 10,000 sales sales time? Right?

A lot of time. Yeah, a couple of years. A couple years you could do it. Okay. So then that's a goal. You know what I mean? And I can set that. And if I do the activities, it would be unreasonable that I'm not now.

Realistically, you probably get there and half the time. Right? Because you're probably pretty good at sales even after your first two, three thousand calls. Right? You're probably pretty good. And so, I mean, what we're doing now is the only thing I can probably do is take on bigger companies. That would be the shortest path. But I feel, I feel confidently, like in terms of how much we're stretching,

I feel good about it. Like, it would take, I would feel like I would be taking on more. risk to hit that, if that makes sense. If you had to do it and half the time with less risk, what would you need to do? That's a good question. What would need to happen? What would need to shift inside of you? Yeah. I would need more people faster. I mean, it would just be, how many people would you know? I would spend more aggressively on talent acquisition. So I would basically go into, like from the debt perspective, right? So rather than think of the businesses or like the portfolio companies as cash flowing towards me, I would probably take all of the excess that is there

and plow it into talent earlier. So right now I live on a certain amount of cash flow, et cetera, just from the portfolio companies. And I probably have gotten accustomed to that, and so I don't like cutting below that. So if I had to, then I would say all of that money rather than going to Alex is going to go into more talent, bigger, faster, yeah, exactly.

And then they would amplify, and then they would be able to, we would increase our rate. You would have less money in the short term over the couple years, but then you would have way more money in the long term. Totally. So it's a comfort level. Yeah, it is.

It is. It is. It is. You knowing that you like to have a certain amount of cash flow every month. But you've got a bunch of cash in the bank, too. I know. It's totally. It's a hundred percent illogical.

If you had to do it, though, let's say you had to do it in two and a half years. Say if we had to do it tomorrow. If you had to do it in two and a half years, because you need time too. Yeah, yeah. You know, five to seven years. You're doing two and a half. And you had to stretch and get extremely uncomfortable where you're not going broke. Obviously, you got money.

How many people would you need to hire? Yeah. And how much less cash flow would you need to have? I mean, I would eliminate my cash flow. All your cash flow. Yeah, I mean, if I was really going, I mean, I was going ham on it, I would just, I would have no cash flow to me. I mean, I don't need.

You have money, though. Yeah, I have money. Right, yeah. So I would eliminate all the cash flow to me. And it would, 100% of the money would go into the team. The only thing that would go faster than that is that I drain my own net worth to further. Fund. Yeah, exactly.

I would be incurring financial debt to more quickly build the enterprise value of the asset. So I'd be transferring more. money into the asset fast. It's like you incur different types of debt. Like if you incur no debt when you start a business, you do always incur debt. You incur management debt. You incur technical debt. Time debt. 100%. And so people like all businesses start with debt. It's just depends what type of debt you're dealing with. Right. And so if you don't have money, then that's fine. You just incur other debt. Like even when we think about how we built, how we're building the hold code right now at acquisition.com. Like I am building more fixed cost than the infrastructure right now

because of what I want it to be in a year, two years. And so if I wanted to run it, like we already do reinvest, obviously, a big percentage, but I would just reinvest more and be okay with it. Yeah, I've just grown accustomed to this. And it was funny because a buddy of mine had dinner with last night, sold his company for $250 million. And we were talking about how cash flow is a very regular reinforcer from a behavioral standpoint. Like you get this feedback directly every month of how you're doing, right?

And so you, as entrepreneurs, or at least for me, I've been always a high cash flow entrepreneur. Like I've never been like a reinvest every dollar into the business. I like making money from my businesses. But that has become a trait that I have learned to look at as my barometer every month. Like, how am I doing? How am I doing? How am I doing? And so it would have to, so to the question of like, what would have to change in me, I would have to change how I measure success. And then I'd have to reinforce the behavior in a different way. I'd have to measure it differently.

Right. And so was the cash flow coming from all the business. you guys are in partnership with. You get a percentage of cash flow. They get a percentage of the business as well. So you have a certain amount of cash flow every month that's coming in from all these businesses, right? Yeah.

But you also have a ton of money in the bank. Yeah. So one of them you could take some money out somewhere. You could still keep the cash flow coming and take the money from the savings. I'm so security driven. It's funny because I was having this conversation with this guy. And so the guy sold his company for $250 million.

For the last 10 years, he's lived on $70,000 a year. 70,000 a year. And so he was staying at the time. the Marriott and I was staying at a nicer hotel and I was like dude you got money now yeah you got money now and he's like I know he's like but I just isn't that funny for you for years for years I would sit middle seat you know back of the airplane cheapest flights for years even when I had seven figures and yeah a year coming in yeah but because I was so used to I was like I don't want to lose my mind you know it's like I want to make sure that I can live like this I was still sleeping up friends

couches, when I traveled to events. It was like, any way to save money. And it's not until the last couple of years, I was like, okay, my back hurts. I need to like have some like legworm, right? I'm a big guy. But for years, it was just like, how do I save and use that money to reinvest in going to the event, buying the ticket to the conference or investing in coaching that will accelerate the revenue long term? Yeah. It's so funny you say that because I think, and this, this is a bit off the cuff here, but many of the people that I know who have tremendous amounts of money have huge fears around being poor. And so, it's just as an interesting thought, like a lot of people who don't have money see people who have money as thinking differently, and they might in that, they are more

uncomfortable being poor than you are. Like, it is more painful for them than it is for you. It might be, I'm just being really real. It might be why some of them are more stingy, too, with the money. Of course. I'm not going to spend this $5. I'm going to keep it. You know, they're very stingy with all of it. Two nights ago, I was. we were out to dinner with a guy who just got valued at a billion, right? And it's all cash flow. It's not one of these software things. Like, it's off like he's getting, yeah, like, he's making real money, crazy money. And he's like, I'm not going to that gym. He's like for equal. I'm not paying $200 a month for gym membership. It's a different perspective. Now, I'm not saying

I'm that way. You don't know what I mean? Like, I'm okay spending on gym membership. Like, that's fine for me. But like, everyone has their own things. And like, there are these behaviors. Like, he got the other guy who had the 250. He got to that point. because he squeezed everything out of his business, which made the business so valuable, and then he was able to sell it. But the billion dollar guy was saying, he's like, you know what, they don't tell you

about when you sell your business because he's sitting next to the guy with the 250, right? And he's like, the moment you sell your business, he's like, you have no cash flow. And so he thought that too. He's like, what are you going to do? It's like, you're going to take the money, and what are you going to do?

You're going to try and buy more cash flow because you've got to replace the cash flow because you've got to get real estate assets. He's going to do something else. He's like, why bother? He's like, I'll just keep it. And so he doesn't have any intentions of selling. And so it was an interesting lesson for me, too, because we obviously got rid of our cashful asset when we sold all three last year.

You got a lot more money, but you don't have the money cash coming in. Right, because then it looks like this finite asset. The business goes on forever, in your mind at least. Right. And so it gives you this illusion of control, this illusion of security. And me personally, most people wouldn't believe this when I hear it, but like, I'm very risk-averse. And so I probably need, like, what's the core changes that I need to have? I probably need to be a little bit more of a risk-taker than I am.

I tend to always take the lowest risk path when I can't. Even the idea of like when I quit entrepreneurship, or sorry, when I quit my job to start entrepreneurship, it was because I knew that the path that I was on was guaranteed not to get to me where I want. So I had a zero outcome. So this one, even though it was lower, like I had a low chance of success. The other one had 100% failure guarantee. So it felt like the lower risk option for my long term goals to quit my job and become,

I'm an entrepreneur for that reason. And so, you know, people are like, I'm really risk-conversible. I'm like, so am I. Like, I afford money. Like, I'm, I do. You must spend any of the money from the exits. No, not at all. It's like just sitting in the bank.

Nothing. We started working the next day. We didn't even take it, we didn't take a day off. Yeah. We literally sold, wire hit, and we started work on Acquisition.com the next day. Let's say you had to start putting that cash flow every month into other things, team, resources, whatever it is. And that wasn't coming in.

And, you know, let's call it 100 grand a month, was coming in with cash flow. I don't know how much it is, but just to say that is going into hiring team and other things to support you getting to the billion in two and a half years. What would need to shift inside of you after three months of feeling no cash flow come in to stack your bank account in order for you to be okay with it to get to that billion quicker? I would just have to be more secure, just realistically. Like I use... What does that mean? Is that an internal... I use cash flow from businesses as evidence to the fact that I'm not a failure.

And so I use, I've always, like, it has been easier for me to change my conditions than to change who I am. And so I have used my material success and accolades to quiet the voices of not being good enough. And so for that, like, me having that, if I had that little voice that peeped up, it's like, hey, look at that. No, no, I'm okay. I'm not, I'm not that bad. This money just came in.

Yeah, no, I'm not that bad. Right. And so, so I'd have to, I'd really have to re-engineer the conversation I have with myself around how I value. myself because then people are like, well, if you, you know, if everything disappeared, you know, how would you feel about yourself? I like to think that I would be uncomfortable and then I would change my views, but I haven't needed to do that yet. And so my effort goes elsewhere. But that's what probably would have to happen in order for me to make that change. Is it a, what is the thing that is you're afraid of inside of yourself? Is it a self-worth thing?

Is it a self-love thing? Is it a belief that you're not good enough? Yeah, definitely be a good enough thing for sure. Yeah, it's just like maybe not as good as I think I am. Maybe maybe everything that I've been putting on media, maybe my book, maybe all these things are actually not true and I don't know what I'm talking about, right? Because clearly, I don't know what I'm talking about because I'm not making any money. Like so these things have been, that's why Acquisition.com is the other half, like the actual businesses of Acquisition.com compared to the media of Acquisition.com, it is the other half because it's the evidence of the fact that the things that I say are true. Because those are getting results.

100%. And they're growing. Right. And so that way I feel. I feel bulletproof when I make the content, when I make the book, when I write the stuff, like, you know, there's a zillion people who are like, you suck, none of this is true, whatever. And for me, it rolls off my back because I have evidence. Right. And I'm like, no, no, it is true. And here's how. But if I didn't have that, I would probably have to, it's, because I don't know what the right call is there.

Because if I didn't have the evidence, it would be hard for me to say, you're wrong. Because I don't have any proof that they're wrong. But you have evidence now. Right. And so I have this evidence. So how do you change the evidence? belief inside that you're good enough with the years of evidence now? The question is like, have I built a billion dollar thing yet?

You know what I mean? It'll be 10 billion. Yeah, yeah, of course. No, but like it's a fun, it's a, it's a fun convoy and it's great because I, it's, this was wonderful, Lewis, because I get to see my own limiting beliefs. And just for everyone who's listening, like, everyone deals with this. You know what I mean? Like at every level you're dealing with this of like feeling of inadequacy, you know,

feeling not good enough, feeling like you're not smart, feeling like you don't work hard, whatever it is, like I have that stuff all the time because you think that the external circumstance is going to solve that. And I would say that it does to a degree. It becomes a crutch. But then you have this crutch and then you just tie yourself worth to the acclater of the thing rather than still yourself. And maybe I need to do more work on that. Who knows? If you could overcome one thing or eliminate one thing internally to become a better leader to yourself, to quiet the noise or help you take a risk in a different way. Not talking about lose all your money, but take the risk to help you accelerate this.

Yeah. And you don't have to buy in a way, but I just believe that it's possible for you to do that. Yeah. I believe you can be a billionaire in two and a half years. I appreciate it. If you shift whatever inside of you is holding you back to get to that space, what would be that one thing to eliminate or overcome internally to make it happen?

Is need for external validation? 100%. The need for external validation. I do you start the question. Why do you need external validation? I mean, I think part of it's. so ingrained in us, if you think about us as kids, right? Like, how do you, how do you orient yourself of the world? You get reinforced or punished at all phases, directly, indirectly,

but you get reinforced or punished. And the things that you get reinforced, you do more of the things you get punished, you do less of, right? Like, that's just how we learn behavior, how we learn to function in society, right? Touch the thing. Ah, it hurts. It's, that's, we got punished. Okay, you know, your parent tells you to sit down and be quiet and eat, and you learn to sit down and shut up and eat. And then we wonder why adults don't move because we're told to sit when we're running around, right?

We learn. At school, sit down and be quiet. 100%. And we wonder why we eat so much when the reward for everything we did when we were a kid was food, right? We wonder these things. So the reason external validation is so hard,

at least for me, is because it's how I learned everything. It's because external validation gave me the directional guidance of what's good and what's not. And then as you get older, it's where am I going to get that validation from? And so I would say that my external validation is still 100% there, it just comes from different sources.

So I'm more selective on whose validation I want. So how much external validation do you need in order to overcome this belief to go all in and do it in half the time? I think I need to be able to validate myself. And that's fundamentally, I think Evictetus said this. He said, like, if you need someone else's, if you need, he has this quote. It's so good, but it's basically like you need to be able to give, you don't need to swear to somebody else.

You should be able to swear to yourself and bear witness to yourself because your word should be good enough. So you need to eliminate external validation from you feeling good enough. Probably. Yeah. It's probably that. Like obviously it's good to have feedback in life. You know what I mean? So I think that's why it's also difficult for some in general because it's not eliminate or have more of. It's to what degree and from home and about what? And so then it gets a little bit more complex. But even using those different lenses, I think it's good to unpack it for, anyone who's listening, which is like, okay, Layla said this, so this is not mine. But most times when we're afraid of something, it's not actually like this amorphous crowd that we're

afraid of. It's like one or two people's opinion. Like it's your dad or it's your whatever it is, right? And you're worried about what they're going to think. And they're not even thinking about you, but you think they're thinking about their dad. They're thinking about their dad. It's not thinking about whatever it is, right? And so she restated this earlier on to Mike, like when we were together five years ago. She was like, are you, and she, like, me. me name the person. It wasn't my dad. It was somebody else for this particular thing. She was like, are you going to let this guy stop us from getting what we want? Wow. And it was like, when I saw it, it was just like looking in the front of me. I was like, she's like, what if this guy hates you and

thinks you're terrible? Is that a worthy enough reason to still keep going? And I was like, yeah, she's like, let's go. You know what I mean? And so she was very good with that. What do you need to say to yourself every day to believe you're good enough? If you could say one thing to you, that no one else needed to hear, but you needed to hear it from you. What would that be? I don't know if it would be a saying thing. I don't think it'd be like an affirmation. I think it's just a belief. What would the belief be? Yeah. I mean, fundamentally the belief would just have to shift that the doingness is enough validation for me. Not the results. Right. And that's all, I mean, fundamentally, that's always the goal is that you can detach the doingness from the result. I think what

I've been able to do has been to extend the time horizon between the doingness and the result, but not necessarily fully eliminated. I'm patient in that I can continue to do things for very long periods of time before seeing a payoff. But if I were able to truly eliminate it, I think that would be kind of like a next step. Then again, it's that borderline on insanity because if you never get feedback on sometimes,

you're like, maybe I should change direction. You'll keep getting feedback, though, because you're creating, you're taking action. You know, the more you do that, you'll have more businesses you'll be acquiring, you'll be creating more content, and everything will be growing at the same time. Yeah, yeah, yeah, yeah, right?

100%. I love seeing you, you know, go through this process internally because I think... I'm open to it. I just want to win. You know what I mean? Like, I just want to be better. What does winning look like?

it's achieving the potential. It's taking all this raw potential. The line in the Bible that always scared me the most was to who much is given, much is expected. And so for me, I always felt like I was given a lot. You know what I mean? Like I was born in America right off the bat. It was born as a guy. I have insane genetics. Like from that perspective, I have a six-back when I was 15. I have a pretty high processing load. Like I can usually, I do okay with complex problems. I was bioling. I was bioling. I have a pretty high processing load. Like I can usually, I do okay with complex problems. I was bioling. at basically at birth because parents talked to me different language so that gave me good language abilities and so it's like these are all things that were given me right and and I was born into like a deep you know from a from a money standpoint a decently wealthy family right um not you know ultra-billion but like never worried about food or shelter anything like that right and so these are all the things that were given to me and so to me I'm like man much is expected right and not necessarily that's you know god whatever just I expect a lot of myself because I see so much potential By the time I die, I would like to have nothing left in my potential tank.

And it just all have been transformed into my reality. So that's what winning looks like. What do you feel like is missing in your life? Not a lot. I'm really right off the bill. Like, I'm really like, I'm amped right now. I'm super pumped. I love what we're doing.

I love the businesses that we're helping. I love the mission. I like doing this. Not a lot. I mean, if I got into things that were missing, it would be like super tactical. Like, I want, I want, these roles are ones that I won't build in the company. You know what I mean?

Like, it'd be stuff like that. It wouldn't have anything else. Right. Mosy Nation, real quick, if you are a business owner that has a big old business and wants to get to a much bigger business, going to $50 million plus, we would love to talk to you. And if you like that, we'd like to hear more about it. Go to acquisition.com. You can apply anywhere on the page and talk to one of our team and see if we can help you get there.

So what do you look for when you're acquiring a business or investing in a business that has cash flow and what businesses have the best cash flow. So this will be relevant for everybody in the audience and also hits on what we were talking about with the wealth thing like wealthy people choose higher leverage opportunities and we went over what leverage was earlier. The best businesses, especially in an inflationary period, are businesses that have low capital expenses. Okay. And that's because if you have some examples. Yeah. So I'll give you opposite examples to make and then I'll drive it. So something that does have high capital expense, which is what you would not want to get into, it would be like stuff that has lots of inventory. So that's that.

that has lots of supply chain, lots of manufacturing, heavy equipment, things where you have to constantly buy more stuff in order to increase capacity, right? A low capital expense business are things like services, right? Services, you know, digital businesses, software is mixed because sometimes the development team can be considered a capital expense. It really depends on how you build the dev team. But the idea is that if you can produce 10 times more units without phenomenally changing the cost basis, then you...

will have a business that has lower capital expenses. And so that's what you, like, and most of those types of businesses produce more cash flow, have more pricing power. And so, I mean, that's what Warren Buffett invests in. It's high, you know, like insurance, GEICO. Right. There's no capital.

It's risk. They're literally assessing risk. Air. It's math. Like, the business is math. Like, if you really think it's just math, is the entire business of insurance. And what's crazy, just a side note,

is that a great way of figuring out the highest leverage businesses that exist, is looking at the business has been here the longest. Insurance has been here since before the world wars. Banking. The banks have been around forever.

Right. J.P. Morgan was around the 1800s. Wow. Right? The biggest insurance companies, they're all 100 plus years old. They're found in the 1800s. And so when you have a business

that's lasted that long, to me, that's a great breadcrumb of like, this thing has to print money because it means that they were able to still keep making money through wars, through famines, depression, all of it. And they were still able to keep going.

And so I think that when people are like, when you look at all the, like many of the biggest businesses that exist, they have phenomenal gross margins. I don't want to get to like, you know, business term here, but like the gross margin is how much incremental cost it is to make a new, an extra widget, right? And so like a pill, for example, costs $100 million to make the first pill. And then every pill after that cost a penny. Sure. And so the gross margin on the pill is very high because if they sell each pill for $10, they

cost them a penny, those are great margins. And most people who are small business owners or people were trying to get into small business price like small business owners. They say, well, it costs me a dollar. I'll sell it for three or I'll sell it for two. But if you're already starting on like a 50% gross margin, it's very, very hard to make money.

Because think about it, like that's at 100, you're already at half. And then you have the rest of everyone else you have to pay off that extra 50. Very hard to do. And so like, I'll give a couple rules of thumb if anyone wants this. But like if you're building a service-based business for us,

by all means I have to get gross margins is above 80%, which means five times the cost of good. So if it costs me $100 a month, the minimum all charge is $500, right? And so that also gets you to think about business differently, which is not necessarily even how much can I charge, but how can I provide value and make it cost as little to me? How can I be as efficient as possible? And if you think about what technology does over time, is technology takes something that's valuable and makes the cost of delivering it less.

And so that's what happens is a lot of people are able to have access to things that we're once only for the wealthy, but now become for the common men because the cost basis decreases as a result of technology. And so technology, as we see it, you know, like we can create technology, but you can also have technological breakthroughs just through process in your own business. It's like, and that's where niching down and being very specific about the avatar becomes important, especially when you're starting, because then you can productize the service. Because if you're doing everything custom, which most people when they're starting out do, it becomes really difficult to become efficient. And it's really difficult to become efficient,

you have very little margin, right? Or you have to charge huge fees, which most people are too afraid to do. And so the flip side is, if I do the same thing over and over and over again, I will get better and more efficient at it and I will know how to do it faster and quicker and cheaper. And I specifically choose this type of customer so that I can have more margin because there are millions of even this one specific type of avatar. And then from there, I can take the gross margin, the extra cash that I have, and I can hire the best people. I can invest in marketing. But when you have such little margin to work off of, it's very difficult to make. Yeah, it's so hard to grow. That's interesting. Do you think it's going to be harder or easier to become wealthy and start businesses over the next few years with everything that's happened in the last couple years and where this whole great, you know, 20, 30 agendas coming and all these different things are happening. The war and all the, you know, there might be another pandemic, whatever it might be. Do you think it's going to be easier or harder to make money?

I think technology in general makes things easier for most people. I mean, because at the end of the day, it's just it's increased access for more people. Yeah. To reach more people at any moment. Yeah. If I were just to use history as a guide, business has only gotten easier to get into. It's gotten more competitive and easier to get into. And so I think that what happens is just the arena gets bigger. So you've got more gladiators, so it's more competitive, but more people can walk in.

And so I think, but for the world in general, the more people you have fighting to make amazing products and services, the better it is for society. Yeah. But the downstream effect of that is that, In a capitalist system, it is a winner-take-all for many, not all, but for many businesses. And just by the nature of it, that does create social disarray. And it's just, but the thing is, it's still the best system that we have.

We don't have a perfect system because the other systems remove incentive and humans are driven by incentive. Even the survivorship bias, like every MLM in the world exists off the fact that there's that one guy who makes $500,000 a month selling shake mix. And the other five million shake mix producers are like someday. That'll be me. get there, yeah. And it's just survivorship bias, right? But that's why the whole capitalist machine works. So I think they're like figuring out some sort of a, you know, creative way.

Like I put this in my on my YouTube channel. But like the idea of having 100% death tax, I thought it was like take down like the income taxes and all the stuff. But like the thing that creates the conglomerate at the top is that if let's say, let's say I have $100 billion. Right? That's interesting. And if I have $100 billion, I'm probably pretty good at managing it because that's why I have $100 billion. So let's say I gain 15%. You're holding it.

You're not using it yet. Yeah, let's say I gain 15% on my assets. So like $15 billion, right, on my assets. It is so hard for anyone to make that up in a lifetime with just the one. And like that might be my kid who gains 15 and the next year he gains 20. And so the compounding effect of the wealth is across generational is where I think it gets crazy. But if there were 100% death tax, because obviously this is. aligned with my belief that all of it disappears anyways.

So this is obviously Alex's two cents in the world. But it's just basically dramatically lower the income taxes. I think income taxes should be like as close to zero as possible. And then make the capital gains taxes higher because that's only going to really affect the well if you really want to think about it. Right. Because people who, if you make with your hands, awesome. Right.

If you make on your assets, that's just what that has no, has infinite leverage with time. So if you trade the most expensive thing for your money, then I feel like you should get tax less. And if you trade no time for your money. Just as a weird thought experiment. What do you think it would happen if it was 100% death tax? I think that billionaires would become far more giving. And as they approach the end, they know they can't keep it.

And I also think it would change the way the game has played. Because if you know, because this is the analogy that I haven't heard it anywhere else. I think it's mine. But if you were to imagine life as a poker game, right? Everybody grows up, they come 18 years old, they can go into the casino. They get a chip or 21, whatever age you can be. And then you get a chip and then you sit down to the table and you're dealt cards. There's all the other players around the table.

And depending on the cards are dealt and the skill you have, you begin to amass chips, right? And the difference between this fictitious casino and the casino of life is that in the real world, you can amass chips. You cash out, you have a big lot of money, you walk out the door. But in the casino of life, when the Green River taps you and tells you its time, you have to get out from the table, but your chips stay on the table. And they push them to the middle to be distributed by everybody else. and continue to get played for. And that's when you realize that it was a fake game with rules that never mattered to begin with.

And so I bought this piece of land in Austin. It was like a big, really, really nice lot. And I remember thinking to myself like, got me some land. Yeah, got me some land, right? I own this. Yeah, I have that trade to that thing on the horizon. It's mine, right?

And then I thought to myself, I was like, well, the guy before me thought the same thing, and the guy before him thought the same thing. And the guy before him thought the same thing. And I was like, and we've literally still been looking at the exact same piece of dirt. And it's just been cycled. Even if it was father to son, even if it was family to whatever, like death taxes everyone 100%. Like even if the government doesn't, death taxes everybody 100%.

And then time taxes your money to infinity because like people are like, I want to build a legacy. It's like that's even just within Americana. You know what I mean? Within the times of America. But like you go 1,000 years and there's never been the same superpower over a thousand year period. And so we're like, I'm going to leave a legacy. It's like, but that would be like, you know, let's say an ancient Greek saying, I'm going to leave a legacy for my kids when, like, they might change their currency by, you know, X, Y, Z, you or. And there's so many things.

And I've had real experience with this because my great, great grandfather was a ruler in Iran, which is where we're from. We got kicked out because we were a lot of the Shah back in the day, which is why my dad came to the U.S. And so despite that, my great-grandfather had like 400 wives ruler very, very, very well. Really? Yeah, very, very wealthy. Different time, different culture. Very, very well. He's a ruler, right? all the money, all the women, all the everything, literally, a ruler, right? And it doesn't matter. And here I am, I'm not even that many generations separated from him, right? Even that, still. You don't have all that wealth. I don't have that land. Yeah. And so like the idea that we're going to somehow, because the desire for legacy is the desire to cheat death. Like,

that's what it's true. So we don't want to die. We want to last forever. We want to make something that is impermanent. And so we fool ourselves into thinking that the accolades and the material success and the books you write, whatever, are going to last forever, and they're probably not. Right? And so, like, I mean, the sun's going to disappear at some point, right? So, like, if we don't do anything before then, like, at the very least, that's going to happen. And so if that is the inevitable outcome, I think it shifts the way people think, and I think that's when you start changing, I mean, Tony Robbins talks about, like, global belief systems. And that's why if someone, like, adopts a new religious belief, like, everything changes,

because the reasons they do and the way they believe the world works changes. And so I think that if they did do a 100% death tax, it would be a really interesting way to see the downstream effects of how it would change the way the players played the game. What do you think would happen if all the billionaires started distributing their wealth sooner? I think what happens. Or would they be as hungry to be and driven to push and build and innovate to generate the wealth if they knew, I got to give this away anyways, quickly. I think they would. I think it's because it's, I think I'm going to say something that may sound bad, but I think winners win because of who they are. are. And so I think it's like sales guys. You can have an incentive or a comp plan. They just want to win. But they are salespeople. And if I get on the phone, I want to sell because of who I am, not because the comp. The comp is the ticket to get me to say yes to the deal, but it will not change my activity. I will do it because I love to sell. Right. And so I think billionaires get there because they love the game. Like you don't get to a billion without just because you obviously don't need it for you. You stop needing it for you millions and millions ago. Right. And so you do it just because you love the game. What I do think, and the reason that I like that,

solution is because Elon must said this, private enterprise is 10 times as efficient a capital allocation compared to the government. Right. So every dollar that private enterprise spends, it's 10 times more efficient. And so it is like if we were to death tax 100%. So whatever you accumulate while you're alive, it just goes back. Like, and the thing is, it's not that it would go back into the system through the government. It would if you were lazy. But most people knowing the government was going to take it, the less efficient vehicle at the end of your life, you would then start thinking about how can I allocate this money efficiently. And so what I think what would happen is you'd create far more ingenuity and innovation around social enterprise before they die. Solving problems.

Knowing that the wealth would eventually disappear. So like it's more there's this backstop that no one wants to hit. And so I think what happened is they would change their behavior before hitting the backstop. I don't think a lot of people would just be dumping their billing to the government. I think just knowing that they had to would then distribute them to. Yeah, yeah. That would be, you know, hey, that's Alex's two cents of the world, which is obviously different. What's, you just had a big exit, right? Last year, what was that for? How much?

It was 46.0. 46 million. So when that enters your account, what did you expect what happened? What did happen? And what can you teach other people about what they should expect to happen when they have a big exit? So I will say that I did not feel the money. I did feel the loss of cash flow because I had this, you know, I measured myself off cash flow for since. Now you don't have any.

Right. You got a big chunk. But then no money coming in every month. So I actually felt, and I probably still feel poorer now that I did before the exit. That's interesting. Because the cash flow is going down. Now, I know that Acquisition.com is going to be, I think, significantly bigger than those companies were. But in the interim, I definitely did not feel any better after that.

I am happy that I did it because I do think I'm in the right vehicle doing what we're doing now, making the books, making the YouTube channels, the Twitters, the social media, all of them. But the cash flow is what I felt. And because I had taken dividends my whole life, the amount of money that we got out was pretty much about what we already had anyways. So it was not life-changing in any way. It didn't change how I lived at all. Like, not at all. We didn't have any big, like, what are you going to buy? I was like, well, I could, you know. I'm happy already. Yeah, I could buy 100 lamos before the sale. You know what I mean? Like, that wasn't, and I never bought them in. And I never did. And so like, you know, because I'd, you know,

because I don't get a lot out of that. What else was different? Losing the team is hard because when you sell a company, you sell the people. Like that's something that people will talk about. The connection. It sounds bad. Yeah. But you sell the organism.

You sell the system, the people, the processes, and everything. 100%. And so that was hard because there's definitely times now that we're building acquisition.com where I'm like, man, I wish I had sell and so. I already taught this person everything. I have to do it again. So there is a, but there's also some level of beauty to it. it because now that I'm doing Acquisition.com, I have a different appreciation for what I'm doing

because every other time that I've started something, it has been from a place of lack. It has been from a like, well, this is what's going to not make me bore. You know what I mean? Like the gyms was all about that and then I lost it all. So the second time was all about that again. Wow. So this time I'm starting not like that. And I know what it got like before we sold the companies last year. I spent basically 12 months not doing anything because I wasn't required. the business like it truly it ran and so I had a lot like it was very depressing exactly it was very depressing for me what happens if we don't have a purpose I mean you find one you know what I mean and so for me but you're in a depressed state even though you have I mean I'm sure you were fine but you

are emotionally mentally like what am I doing every day exactly I've never go to the gym for so long right can I go at to dinner yeah I mean like what else you can do it eat every meal I want I can travel okay now what after three months of that, you've got to have some mission, you've got to have some purpose, right? Even though you have the money, your safety, you have everything. Security, but it wasn't fulfilling. 100%. And so that was 12 straight months. And it was because we were going through a sales process.

So you can't start new initiatives because I'm in the middle of a sale. And you don't want to make any massive new hires. And so you just basically have to just like maintain. And the whole time you're wondering, I hope this deal goes through. Because if it doesn't, then you just wasted a year. you're just doing nothing, and then you might have to do it again. So it was one of the most emotionally tiring years of my life because it's always like, this is about to happen, it's not going to happen, the deal's on the table, the deal's off the table, like there's all of this

drama that's happening constantly. And I also, one of the things that sucked that I didn't like was as soon as I had made the decision to sell, or that I was going to entertain the idea of selling, and this is a mistake I made. Everything became about satisfying a fictitious overlord of like, what will they think about this move? Well, how will they value this? And I started thinking whatever acquirer, whatever private equity was going to buy the company, like, how are they going to see this?

Are they going to value this? Or is this a waste of it? And so what happened was I started making the private equity buyer of my customer. And that was a mistake. And so I think that like, and what happened was, interestingly, we started the sales process because my wife and I were beat down.

We were just very tired of, you know, we've been in gyms for almost 10 years, you know, at that point. Not to say that that's not a good thing, but like, whatever. We were ready. We were ready. But in order for us to sell it and make it a sellable business, we had to fix all the things that were wrong. And so we took a year before the year. So it took two years, basically, one year to fix everything and then one year to sell it.

The thing is, it's just like when you have a house that you like fix up before you get ready to sell it. By the time we're about to sell, you're like, I love this. This is amazing. I just fixed all the problems I fixed. I've got more cash flow. it's more efficient. You know, we got rid of the toxic people. Yeah, exactly.

And so it was, again, a very mind-trip experience where I'm like, well, maybe I should just hold it as an asset that just produces cash flow. Uncle Warren never sells anything. Like selling is what makes you rich. Keeping is what makes you wealthy. Like, you know, I'm like, I've got all these kind of things in the back of my mind. But I think ultimately, like, I think no matter what we had done, we would have been fine. But I think for me right now, I think the likelihood that the choice, if I had two

alternate realities, which I don't have to play in, I think that the choice will ultimately yield more impact for more people. I would not have the attention to do Acquisition.com and the media stuff that we're doing right now. I wouldn't be here. You'd be focused on your gyms. Yeah, exactly. On those companies that were in that portfolio.

And Acquisition.com would still be a side thing, but it probably wouldn't be the main thing. Whereas now it is 100% of my attention and the companies are killing it. And I feel renewed. When I launched School of Gradness 10 years ago, I remember saying, I'm going to do this for one year because I wish I had access to this. I wish this was a thing that I could go listen to in the world to teach me. And I'm not going to try to make money. Like I'm going to do it for a year all in, but I'm not going to try to make money. I don't want to make money. I mean, if the money

came, great. But it wasn't my intention. It was just to how can I create the best content to serve people on the things that I wish I would have learned in school growing up? Yes. The school of greatness. And after one year, I was like, man, this thing is really starting to take off. You know, but it wasn't based on how do I make as much money. It was how do I create something that can really make a lasting change. Yeah. And that intention is what's made me sustainable for 10 years loving the process. Totally.

So when people come from a place, when I'm hearing you say when they come from a place of that intention of service or because this needs to be in the world. It's art. Art exists not to do something. It exists to exist. Right. It's like no one says, why did you paint that? It's like. Because it needed to come out.

I needed to express it. Exactly. And so I think that if people chose their businesses that way, I think, and don't be wrong, I'm all about making money. Like, by all means, go get your back. Like as much as you can. Yeah, by all means. But I think that what it does is it ends up freeing you to then make your real impact because then you can start whatever the next thing. And hopefully your first thing is that thing. But realistically, it probably isn't.

And all I have to do is look at every entrepreneur that's really wealthy, the amount of graveyard businesses they have in their back. Right. And so like, right now, if you're listening and you're like, I'm not sure if this is the perfect business idea, let me just save you the time. It's not because look at every other person who has been ultra successful. They have 10 failed business ideas. So just like just start.

So you can just start notching off the bad business. But extending the time horizon, I think only happens if you do shift the intention through which you're building it. Or you're just unbelievably self-discipline. But I think it's easier to just start at it with the right heart. It's small tangent, but I think it'll be worth it. Is that the reason that most people aren't successful, in my opinion, is that they sacrifice global benefit for local benefit. And that happens in all areas of life. You eat the piece of cake because you have an acute local benefit versus the global benefit of a six-pack that lasts for a very long time or better health, etc. Right?

You mean the instant gratification as opposed to delayed gratification? Yes, exactly. And I just like saying global, I just like saying local versus global because it happens in an organization, for example, sales guys don't want to put the notes in the thing because it's a pain in the butt to put the notes in the CRM. But finance needs the notes, customer service needs the boats, success needs the notes, like all of these other departments need those notes for all the other things that we're going to do. And so it's a It's a local cost, but for a global benefit. And so I think if people were able to delay that immediate gratification,

which is like, this is the nature of success. I think there was- There was the study that was done. I can't remember it. It's the marshmallow test or the other? Okay. God, I can talk about the marshmallow test. Okay.

So fun one with that, with the marshmallow test, is measuring how long they delay for the marshmallow. So at what point does it not make sense? if they say you can get one, because everyone simplifies the experiment, which is like if I give you a marshmallow one now or you can get two later, right? But what if two is in a year? Yeah, you're like, I don't care. I'll take the one now.

Right. So then the next question I would have is like if you were to test kids and then say at what point the global versus local crosses would be a and then track the kids who had the longest marshmallow waiting period because then you could measure how long they're willing to work. They're going to be the most successful probably at life. Yeah. Really interesting. Just total side note.

But the three things that I think were in common of the ultra successful were inflated sense of self, as in they thought that they deserved big things, they wanted to go after big things. They believed in themselves, right? Inferiority, never being good enough, and impulse control. Those are the three factors of the most successful. They're like when they did a common factors analysis. These people think they believe that they can achieve all this amazing stuff. And then it's just, it's an amazing paradox because at the same time they think they're not good enough.

and they are insecure about whether they can achieve it. And they have impulse control. And so it's like if you have... And they stay focused on the thing. I'd say the biggest breakthroughs that I've had, I think that will create a lot of the wealth that we will have in the future is really a deep understanding of how long, long is.

And shooting with the intention of, like, I'm only bringing this up because my YouTube guy said it. He's like, I've never had somebody who actually started there. I was like, we'll see what we do in five years. I was like, we'll measure that. And he was like, no one has literally ever said that to me. I was like, as long as I see progress, I'm good.

Because they're a once results in like two months. Yeah, yeah. Like if we're going this way, I'm cool. I don't need to say like, that's good enough for most people. If they could extend the time rise, because like, I'll give you another hack. You can know how wealthy someone is based on the time horizons they speak in. Give me an example. So if someone's talking about how they're trying to make, you know, make money this today,

hey, let me hold 20 for today. You know how poor they are. I have to say poor. Like, you know how poor they are. Right? If someone's talking about what they're going to make this week or this month or this quarter or this year or this decade, how different the people are who are talking in those time horizons. And so I think that if we can shift the time horizon that we think in,

then we gain more leverage over our time, which we then know we will compound into money. Because I think if you can master the time, you master them. That's good.