The Game with Alex Hormozi - Mastering Wealth through Reciprocity, Time, & Sacrifice | Ep 434

Episode Date: September 13, 2022

Wealth is based on the fundamental unit of money. Money is a foundational unit of time. Today, Alex (@AlexHormozi) talks about how mastering wealth is rooted in how you master your time and money, the 3 traits that the ultra-successful share with one another, and how other factors such as reciprocity & sacrifice should matter in your journey to success.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.Timestamps:(0:43) - Reciprocity can't be forced; maintain consistent demand in business.(3:18) - Provide value exceeding payment; ask how to overdeliver consistently.(4:44) - Leverage in business is the ratio of inputs to outputs.(5:46) - Master time to master money; micro and macro perspectives.(10:04) - Success traits: Superiority complex, insecurity, fear of failure, impulse control.(12:59) - Question sacrifice: Why aren't people willing to sacrifice?Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

The biggest shift that I see in people who are wealthy is that they talk in decades, not days. And I can tell you based on the time period that someone talks in when they talk about their plans, how wealthy they are. Welcome to the game where we talk about how to sell more stuff to more people in more ways and build businesses worth owning. I'm trying to build a billion dollar thing with Acquisition.com. I always wish Bezos, Musk, and Buffett had documented their journey, so I'm doing it for the rest of us. Please share and enjoy. One of the strongest persuasive powers in existence is reciprocity. If people get something, they feel almost like it's like sick to their stomach,

they have to give something back. Right? It's just most people are like, not everyone. There are some crazy that. But most humans, because all of our civilization has been based on this concept of reciprocity. You can force reciprocity in your direction by just jamming so much goodwill and so much value down someone's throat that they just feel like they have to vomit back on you in terms of value because they're so full on value.

they're like getting drunk with the value that you're providing for them. And so when you do that, it results in a sale. And I'll tell you one of the lessons that I learned later, and this has just at least been true for me, is that the end of your value ladder of the ascensions that you can create for a customer is predicated on the last thing that you provided that was in excess of value from what you charged. So if you think about the first thing you do is your content is free, it's worth more than what you're giving because you're giving away everything.

And so then they purchased the first thing. And if that first thing, let's say it's $1,000, but it makes them $10,000, they're like well fuck yeah what else you got you know like I got a 10,000 thing and they're like I'm in and then they make a hundred grand and they're like dude what else you got you're like I got a hundred thousand dollar thing and this is the part where people fuck up is that at the hundred thousand dollar thing they get a hundred thousand dollars of value and then what they have done is that they have now completely squeezed the price to value discrepancy and what they have is not a raving customer but a satisfied customer and then that is where the customer relationship ends and so the idea of being able consistently and always have more demand than you can fulfill is predicated or is based on the ability to always provide not just a little bit more, but significantly more than you are charging for. And so there's two ways of doing that. One is you can decrease your price to the point where it's basically nothing. And so if you give anything over nothing, it seems more, which is what is kind of the premise

around free content. But the thing is that free content does have a cost. It's just not monetary. It's time and attention. How many people do you know who make content and they get no fucking engagement on it? It might be you. You might be that person. Why do you think that is?

Because the price of free is still not worth it. Real shit, right? And so the idea is like, if you are in that situation, you make this free content, you say content doesn't work, and so you keep putting out shittier and shittier content because you keep saying that it doesn't work. I think if you can flip the script and say,

hey, what if I made all of the stuff that I have that's free more valuable than what my competitors are currently charging for? What if I make my free stuff better than they're paid stuff? And if you really try, truly try and do that, not just like say that, but live that. Look at, think about all the deliverables that happen. Think about all the checklist and the, and the cheat sheets,

and the visuals, and the videos, and the in-depth trainings that you would provide if you were to try and get your course. And what if you just gave that away? What happens if someone makes $100,000 a month using your free stuff? They fucking want to give you money to buy more from you. Reciprocity. And so as long as the next thing that you have to provide even more value, because probably if you were able to help them make $100,000 off of your free stuff,

you probably have enough expertise to help them make a million. Right? And so that's the idea here. It's like, how can we provide so much value in excess they want to continue to buy from us over and over poverty? Right? That's the, that's the stick. I will talk about how I did something, not how to do something.

I will talk about what my clients did, not what you should do. And I will base that from our perspective of I will try and give away as much as humanly possible so much so that it makes me sick to my stomach and a lot. very afraid of the amount of value that I'm giving, because I know that based on reciprocity, if I get more value out there, I will get more in return because you can give at scale with content. So think about this. If it costs you the same amount to provide value in a video to one person as it does provide

value to a million people who watch a video, just think about it conceptually. It costs you no more efforts to do that. But the beautiful thing with technology is that there's still only one of you to receive from everything that you did on a multiple with leverage at scale. Like I don't know if you can see this visual, but you do one level of effort, one input, and technology amplifies it to everyone. But then it all has to come back into one, which is you.

And so this is how you can amass significant wealth. Like this is how it works. So Caleb asked me the other day, he's like, dude, people say leverage all the time. He's like, what does leverage even mean? This is what leverage means. leverage means the ratio between inputs to outputs in a system. And so if the input that we have is time or money, if we have something that has lots of leverage,

it means we get a huge multiplier effect. If I put one unit in, I get 10 units out. I get 100 units out. That is a high leverage activity or system. And so the aggregation of wealth for people who have money is a function of understanding time. because wealth is based on the fundamental unit of money. Money is a foundational unit of time.

Why? Because you can trade them back and forth. Everybody here can trade their time for money. It's an even exchange system. And so here's what's interesting. Everyone can trade time for money, but you can trade some time for more money, right? And so what we're doing when we gain leverage is we're looking at, and this is the people who are the wealthiest,

is that they have control over their time so that when they do give it, they get the most out of it. Right? And so the game of business to aggregate wealth is to play with higher and higher and higher amounts of leverage over the one thing that we all had the same amount, which is time. And so mastering that is the key to becoming wealthy. So you master your time in order to master your money. And so there's two components of mastering time. You have mastery of time, which comes down to the micro, which is the day to day, the speed of activity. And I can tell you right now, if you talk to somebody, you say, hey, we should do this thing, right?

And then boom, they've got this organized. They've already done two or three messages. And then like it's getting done tomorrow. I guarantee you that that person is going to be more wealthy because they have a micromastery of their time. So think about this from an organizational perspective. Imagine that the default time period that you use to get something done is, let's say a week. Let's say that's just the unspoken default. That's the cultural default of like, hey, we need to start this project.

Hey, can you get this thing to me? They say, cool, I'll get you by end a week. End a week. That's the default. It's okay with that, right? But let's say because you want to become a master of wealth and you understand that time is huge is one of the biggest components of wealth You then say no guys the new default is end of day for all activities unless stated otherwise That becomes the new norm and so let's say that this project that we had originally has seven it back and forth

Interactions they get something to you it takes a week you get them something back takes a week Take a week take a week take weeks the whole thing takes seven weeks right now imagine it was end of day the same output happens in one seventh of the time because we both get a dumb end of day, next day two things happen, next day two things happen, next day two things happen, next day two things happen, and then boom, the project's done. What took two months, it takes somebody else four days.

And when you multiply that effect over a year, over a decade, that is when you see the outsized returns in wealth and money because of mastery on the micro of time. The second component of time is the macro perspective of time, which is, are all of the activities acting in alignment with my overall goal? And do I believe that they can compound on one another? Are they directionally aligned over a decade, over three decades, so that I can have a combating effect, leverage in action,

over a longer period of time, so that my input is far less, or my output far outweighs the input that I did, because I let time work as an asset rather than a liability. Most people's plans when you add time, get worse. What you want to do is play games where if you wait and win. And so those are the games that we want to set up. And those are the games that the people who are truly wealthy understand. And so I can tell you, having dealt with people who make significantly more money than me,

their mastery of the micro of understanding how speed moves things forward, because on a macro scale of getting things done day, day, day, day, day, day, day, rather than week, week, week, week, week, week, means that at the end of the year, they have 40 times the output. And people are like, that's not fair. You said life was supposed to be. Right? And so this micro kind of exchange that happens there

gets enhanced and magnified and then people get upset about it. But the thing is, is you can either decry the system and hate on it, where you can accept it for what it is and just choose to play the game and win the way you want to, if that's what you want.

And so as the micro, and then from the macro perspective, like I was saying earlier, is that the biggest shift that I see in people who are well, is that they talk in decades, not days. And I can tell you based on the time period that someone talks in when they talk about their plans, how wealthy they are. Or, to be fair, how wealthy they will be.

And so if you have truly realistic plans that you're like, this is what's going to take me about 10 years. If you hear someone say that, I can tell you that they're going to be successful. And if you can shift your perspective to that where you actually start planning and like, okay, it would be unreasonable that if I did this for 10 straight years, that I wouldn't be significant. wealthy than I am today. So that's what I'm going to do. And then having the singularity of mine to not get distracted. 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, $100 million plus, we would love to talk

to you. to 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. There's three things that they found that made people who were ultra-successful. and ultra-successful.

I wish I had the definition for what they defined as ultra-successful, but we'll just leave it with that. They said they have a superiority complex and they think that they are in some way better than other people and deserve more than others. Number one.

Number two, they have massive insecurity and fear of failure. They never think that they'll measure up or be good enough. Interesting paradigms. And the number three is they have impulse control. And so think about this from a bigger picture perspective. They have the superiority conflicts, so they believe that

they can accomplish these amazing things. Like some people, if you tell them your goals, they'll say, how dare you think that way? How dare you believe that you can accomplish something like that? And so it takes a little bit of delusion in order to think, I'm going to make an iPhone, whatever the fuck that is. I'm going to put a computer in everyone's hand in the world. I'm going to do that. Right? Most people think it's hubris, and the only thing that separates genius and insanity is what happens, it's outcome, right? And so they have this this vision of where they want to go and they believe they can do big stuff. Number two, they have this fuel that they push away from,

from always feeling they'll never be good enough. Right? That's what drives them towards this outcome. And then number three, and this is the big one, this is the one that everyone messes up, is they have the impulse control to stay focused on it and not let shiny objects distract them. Even though there's another opportunity comes up two years in, they're like, no, if I keep doing what I'm doing and I follow the plan that I set, I will be, would be unreasonable

that I do not achieve the goal that I have. Could this help? Maybe. But even if I don't do that, I will still get there. And I would rather take the get rich for sure and get rich quick way every day. And most people, this is my finding at least, if you were to sit down with someone

and say, here's a contract, sign here and you're going to live on $30,000 a year for the next five years. But at the end of that five years, you'll be able to make a million dollars a year. Most people would sign that contract. but they don't live like they would sign that contract. And the reason that that contract works is because it delays the gratification.

It separates the, I'm going to have the cookie today from I want to have a six-pack for life. Right. It's the I will suffer for this long period of time. I will make the 100 dials. I will make the 100 pieces of content a week. I will spend the $100 today on advertising and sacrifice my lifestyle in order to learn not to get rich, but to learn the skills that will make me rich eventually. And I know that if I accumulate these skills because I'm dedicated to that and I'm willing to sacrifice more than other people to achieve my dreams.

And I'm going to put a pin on this real quick because I think this is real. How many of you to save humanity would sacrifice your life? Like how many of you guys would say like you give your life, or maybe even your country, right? A lot of people would do that, a lot of foreign military, we appreciate that you serve. Like how many people would do that or save your family? Why is it that that is more important than your dreams? why were you willing to sacrifice so much? And I feel like the better question is,

why are people not willing to sacrifice anything? It's like if you're willing to sacrifice your life, give the ultimate price for a country or for whatever. Why would you not give at least that much to realize the potential that you believe you have? And so that's for me why the sacrifices never felt like sacrifices. They felt like tradeoffs. And for me, they were tradeoffs.

They were prices I was willing to pay. And so it's like, if there was a pair of shoes that I wanted, it was $500 and I bought them. And someone's like, don't you feel guilty about spending $500? I would say, no, that was the price that I was willing to pay because I wanted the shoes. Period. And so there's a price tag that we can ascribe to our dreams or the potential that we believe that we have, which is what we want to pay down is regret in the future for not having it. If you read the price tag and it says, you know, football with the boys,

dodge ball during the week, you know, drinking a couple of nights, some a little bit broader. If that's the price tag, is that a price I'm willing to pay? And I think if you are, you'll get significantly closer what you're trying to do. And so that was the general gist of the chat that I had, not chat. But anyways, Moses Nation, I love you guys. You for some reason are new on here. We have a book that's 99 cents that a lot of people referencing anything is 5,000, five-store reviews on Amazon. It's 99 cents. If you want to check it out, a lot of people get value from it. We have a podcast that encapsulates a lot of this stuff, the higher level.

I don't sell anything. Like the whole reason Acquisition.com is this is because I'm trying to help businesses that are doing 3 million or more. And so if you are a business that's doing 3 million or more and you're on the internet, love to work with you. Hop on Acquisition.com. Fill out the form. We'd love to help you get to $30 million and beyond. We've done it six times already. So we're pretty good at it, especially for this type of business.

But if you're below $3 million and you're not in that industry or you're below $3 million and you're in that industry, that's what we make the book. We make YouTube. We make Twitter content. We make it's generic content. and we just, I'm just trying to give everybody the tools they need to, that I wish I had had earlier on. Not saying they're right, I'm just saying they work for me.