The Game with Alex Hormozi - My Process For Making Huge Decisions | Ep 535

Episode Date: May 11, 2023

Mistakes love rushed decisions. Today, Alex (@AlexHormozi) talks about his decision-making framework process, how rational decisions are incredibly convenient, and how each decision we make affects almost every aspect of our lives.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:(3:06) - Brain chemistry affects decisions; we are emotional decision-makers.(4:16) - Fight confirmation and conviction biases.(6:17) - Rest and eat before making decisions.(7:55) - Get space from day-to-day activities.(8:55) - Make rational decisions by not caring about the outcome.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition(This episode is a re-run. Original airdate was December 9, 2021)

What we're doing here is we're trying to decrease the anxieties and the stressors and the noise that normally will confound the decision-making process because they'll start triggering emotions that will then force you to start finding and nitpicking different data points to then make a supposedly rational decision that is wrong. 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. I've had to make a number of decisions that had a nine figure ramification on my personal net worth. And what I want to walk you through is the actual decision-making framework or process that I use to create those. So one of the important, I mean, the most important things that we have in our lives are our decisions, right?

And one of the sayings that I live by is that we're one decision away from changing our life forever, right? You're one decision away from drinking and getting killed in a car accident. You're one decision away from, you know, cheating your spouse and destroying your marriage. You know, you're one, one terrible comment away from destroying your child, right? And you're also one decision away from destroying your business, if you so chose. So decisions are the wellspring of life, or at least the train track splits of where we're going to end up, all right? And so learning to make the decisions is an important concept. But believe it or not, for this video, what I want to focus on is actually the environment under which to make the decision.

All right. And so during this process, one of the things that was very frustrating for me, and this decision took me about 12 months to make. And I'll make, I'll explain what the decision was in the future, but it's safe to say like it was a hugely impactful decision in my life, financially and otherwise. And one of the difficulties that I was having is that the information that I had was not changing and yet my decision of which way to go continued to falter. All right. So I kept ping pongy back and forth and back and forth and back and forth. And so I was like, it's not my decision-making process, right? And the data that I have to make this decision is unchanging. And yet, at different days, I would have different outcomes, which to me is big red flag

danger alert in terms of like a leading indicator of a bad decision, right? And so, mind you, as a quick caveat to this, this is not how you need to make all the decisions in your life. I would say that you should find and use this process for the most important decisions you make in your life. Who are you going to marry? Where are you going to live? What are you going to work on? Right? What are you going to like those are the decision? Are we going to make this big strategic change in our business? Those are big irreversible decisions. And that's the key for me is that if a decision is irreversible, comma and has downstream consequences, then those are the ones that it take more time to analyze. All right. Now here's the piece that I was missing in my equation for making

these decisions which I want to share with you. All right. One of the key pieces of how we decide is the brain chemistry that is going on. So whether you have lots of dopamine, lots of serotonin that are circling around in your brain will ultimately affect how you make decisions. Believe it or not, we are 100% emotional decision makers. The thing is, is what we want to do is control the extent to which the emotions control our decisions.

All right, that's the key point here. If you don't acknowledge that emotions weigh into all of your decisions, even your quote, rational ones, you are lost. all right so what you can do is first identify when you are feeling emotional and a lot of guys feel like this is like a foo-foo turn if you're angry it's emotional if you're insecure that's emotional like there are other emotions besides being a pansy right if you have emotions i have emotions right which for whatever reason anyways back to the point is if you have emotions it decreases the speed with which you make decisions and mistakes love a

rush decision. You can say it with me. Mistakes love a rush decision. It's one of the credos that Layla and I live by. So the environment under which we make this decision is important. Now, we have to acknowledge the biases that we have. Here is where emotions get even worse. You have two biases that you have to fight against. One is confirmation bias, which is your emotional soup in your brain is going to say, this is what I want because this is how I feel safe. Then your illogical brain will search out reasons or data to support that thing, right? It's like making an argument to yourself. The problem is you may change your argument, but it's not going to change reality, which means that the decision can be good or bad

based on the soup that we started as the predisposition towards how we were going to gather data. The second is conviction bias, which is how convicted am I in this thing or this decision? The more you believe in it, or the more you want the positive outcome to occur, the more you will purposefully blind yourself because you want to save your ego and how you feel. feel about yourself because it makes you feel good to think about this positive outcome. But it does not affect the percentage likelihood that it actually occurs in the real world, which is why you see other people, because you can be rationalable about others, right? You see other people make these terrible decisions and you think yourself,

why on God's earth would they make those decisions when in reality that person is you and it's other people who are looking at you, right? Real talk. Real quick, guys, you guys already know that I don't run any ads on this and I don't sell anything. And so the only ask that I can ever have of you guys that you help me spread the words so we can out more entrepreneurs, make more money, feed their families, make better products, and have better experiences for their employees and customers. And the only way we do that is if you can rate and review and share this podcast. So the single thing that I asked you do is you can just leave a review, but take you 10 seconds or one type of the thumb, it would mean the absolute world to me.

And more importantly, it may change the world with someone else. So this is how I have learned to help mitigate or decrease the emotional impact or the, you know, the, impact that my emotions have on my decision-making process so that I can at least be as rational as I can possibly be and operate from the stance that will benefit myself in the highest degree in the long run. All right. So here's what it is. Number one is that I make sure that I am well rested when I make the decision. So if I didn't have like a really good night's sleep, like everybody knows like there's like normal sleep, there's bad sleep, there's like decent sleep, but I'm talking like you wake up like a newborn child. I recognize those days.

And I joke with Layla about it because I'm like, man, I slept like a cherub last night. Like if you've got so many big decisions, I'm like, let's make them now because I feel completely clear. All right. So number one is very, very good sleep. Number two, and this may sound fucking obvious, but people don't do this, right? Number two is to be well fed. All right. When we are well fed, our serotonin levels, our dopamine levels, et cetera, all get elevated in our body.

All right? Like you feel better after you eat. and here's a fun one for you. Your body interprets stress both physical and emotional the same way. It's a cortisol response. And so you, in a very real way, when you eat more

are more stress tolerant. It's why people do it. It's why people stressy. Because you do cope and make yourself more resilient to stress when you eat more. So I'm not saying you do this all the time, but if you're going to make a big decision, you want to make sure that you are well fed and well rested.

And what we're doing here is we're trying to decrease the anxieties and the stressors and the noise that normally will confound the decision-making process because they'll start triggering emotions that will then force you to start finding and nitpicking different data points to then make a supposedly rational decision that is wrong, right, and that is there to protect your ego rather than what is going to serve you best in the long run. And the third piece of the environment that I try and create is if I can, I try and get space away from the day-to-day activities that I'm. have. So be that a vacation or literally just removing yourself from the normal space where you

operate. And because those spaces have anchors in your mind that you have made decisions in the past, you have emotional occurrences that have happened in the room or at the desk that you work at. Right. And so you have these anchorings that are around you and you want to remove yourself from those things so that you can have as few outside influences on the decision as you possibly can. All right. Now, here's the trip. Is that once you explain, Once you create this environment, right, you want to make the decision from a place of needing nothing. And so the definition of abundance is having everything you need, which the corollary, the reverse

of that is to need nothing else, is to have enough. And so when you have enough, you will not need this decision to get you anything at all. And so the key to make as rational of a decision as you possibly can is to not care about the outcome either way and to realize that you already have everything you need or want. Key point. And so if you have everything you want and you're well rested and you're well fed and you're surrounded by the people that you love and you realize the things that are important in life, right?

All of a sudden, it will help you appropriately weigh the decision that you are trying to make. And so I don't know if anyone here who is listening to this has an important decision that they must make. But these are the four steps. number one, rest. Number two, eat. Number three, separate. Number four, operate from a place of needing nothing.

And when you have those four frames that are stacked on top of each other, they can disinhibit to a great degree the extent to which your emotions will influence your decisions. They still will. But ideally, secondarily so, or at a lower percentage of influence. And so it gives us just enough room to peek our heads. to get above our emotional cloud and make a decision that's truly rational. And when we make more rational decisions, we live a much easier life. All right, and I'll say that firsthand.

A lot of the decisions I made in my past, they were based on emotions, ended up really budding me in the ass, especially when I had lots of emotions and I acted really quickly in large ways against irreversible decisions. Great recipe for a terrible life. And so the opposite of that, if we're trying to use Charlie Munger's inversion process, is how would I make a terrible decision? I wouldn't be well-rested, I'd be hungry, I would be rushed, right? I'd be anchored around all the things that stressed me out.

And I would make sure that it's operating from place of having to have the thing. So we look at those things and we reverse them all to stack in our favor so that we can have the best possible decision.