The Game with Alex Hormozi - The 20's Roadmap to Success | Ep 510

Episode Date: March 14, 2023

The broader the foundation, the bigger the peak. Today, Alex (@AlexHormozi) breaks down the phases of your twenties and how to maximize each phase for professional growth. He also emphasizes the importance of gaining general business skills through repetition and leveraging them for higher earnings. Lastly, he advises against making impulsive decisions and emphasizes the value of learning and taking advice from successful individuals in your industry.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) - The decisions you make in your 20s have a significant impact(1:20) - The success sequence for avoiding poverty(2:35) - Gain as many general skills as possible in your early years(7:45) - Repetition is key in the early stages of your career(10:34) - Look for opportunities to chunk up and get leverageFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

26 to 29 is the season of chunking up. So the reason your lifetime wages increase the most in the season is because you finally have a lay of the land. You have perspective from which to make a judgment on what next moves to make. You see where everything is. 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. 30 is the new 20 is complete BS. your 20s are the most important decade of your life, and I'm going to prove it to you. I mean, think about it. If you're growing a tree, the moment a trunk branches off, it's really hard to reach around the other side of the tree, right? Like, if the branches over here, it's very hard. It takes a lot of effort to go to the other side.

And so the early decisions you make in your life make a bigger impact downstream. And I know it's popular to tell people that everybody has time, but here are the facts. 50% of adults are with a person they're going to marry in their 20s. The median child is born in your 20s. Your brain finishes its last major growth birth in your 20s. your personality solidifies in your 20s. And the big cahuna, two-thirds of your lifetime wage growth happens in your 20s. So I'd say 20 is 20, and it's important. In my 20s, I accumulate over $20 million of earnings after taxes and set myself up for $100 million net worth by age 32.

And this is the definitive guide to crushing your 20s. And I'm going to break this down into seasons with the biggest dues and the biggest don'ts. So let's go high school to 20. These are the years of don't. Late teens are more about not messing up so bad. that it costs you years to recover later, it's like that branch that you have to grow all the way around. It's way better to just make the first right decision because you're at least already directionally going the right way. Then it is about making it all the way to the top of the tree by the time you're 20. All right. So like Charlie Munger says, figure out what you don't want in life and then avoid it like the plague. In fact, you have a 97% chance of avoiding poverty.

So just already being on the right side of the tree if you do three things. And so research has confirmed this a zillion times they call it the success sequence. Number one, finish high school. Number two, get full-time work. Number three, don't have a kid until you're married. Or as I would just say, don't have an unplanned child. Now, I'm not saying you should or shouldn't. Do whatever you want. But if you're in the camp that wants to avoid poverty, then that's step one. Take the highest percentage moves. And if for some reason you haven't, one of those three, that's fine. You just got to play the cards you're dealt. After all, Glenn Stearns, who's a billionaire, had a kid out of wedlock at 14 and dropped out of high school. But let's look at the types of mood he made to undo his bad teens in his 20s. So that brings us the next season. season, 20 to 23. This is the foundational season. Now, whether that's a job or a side hustle or the main hustle, you're going to build your foundations. And the interesting thing is, the stuff you do in your early 20s, like the tree branch, sets you off in a direction, all right? And changing course brings you back to square zero. Now, the way to guarantee that you never move back to zero, right, is to do

jobs that give you general skills. So if you do sales at one company, you learn a few things, industry knowledge, sales, working with the team, et cetera. Now, the industry knowledge won't transfer if you start something else, but everything else will. So my recommendation is not to try to make it in this season, but to learn as much as you can. This is where you work for free and below your earning capacity in order to get a higher learning opportunity. Because listen, you're compensated in two ways, learning and earning. And in your early years, you want to be compensated with as much learning as humanly possible because it'll set you up for far more earning later. So what you don't want is to learn one skill and immediately try and make as much

as you can off of it because you just shortchange your long-term earning. You cap yourself, right? It's like snipping off the branch of the tree. All right. And then that's it. There's no more growth. So the more adjacent skills you can rope together over time, the more money you make. In other words, the broader the foundation, the bigger the peak. And so let me give you a little example. So if you're like good at math and, okay, you get math skills. All right, well, then maybe you're like, I learned some bookkeeping. So you go to an accounting firm or you go to a company and you work in their financial department as a bookkeeper. It's a basic skill. Great. So now you added math to bookkeeping, now it's a little more valuable. Then you study your CPA. All right, now you're,

now you're an accountant. Fantastic. More valuable. And then you start learning about taxes. Wow, now you're an accountant who really understands taxes, significantly more valuable. And then you also understand insurance structures and trust structures, even more valuable. And then you start learning mergers and acquisitions, even more valuable. And so each of these things, these one plus one plus one skills compound and become significantly more value. But if you didn't have the foundational skills of just understanding basic accounting, then it'd be much more difficult to do M&A later. Right. And so we want to make sure that you maximize as much broad exposure to as many general skills

because you could do M&A in a company that does fishing supplies or you could do it for one that sells media. It doesn't really matter because all those foundational skills will translate over. And so when you're switching between opportunities, you want to make sure that part of it will transfer over. All right. So said differently, so if you're in banking, you could be on the retail side of banking, you could be a teller, you could be somebody who does wealth management. Like there's lots of different sectors within banking overall. just be in sales and transfer to the same function to a different company. And so you can either go within your industry in terms of changing direction or you could go within your function and change

industry. Either of those are good, smart career path jumps. Where you do get in trouble is where you make both jobs, where you go into a new industry and a completely new role because that is where you actually started zero. So you want to minimize the likelihood that you have to go back down to the beginning of the tree and just continue to branch off in one direction. So the point is you want to gain as many general business skills as you can because these are the things that will permanently, increase your earnings, as in you will never go below this level once you acquire these general skills. And so for me, I worked at a small boutique consulting firm during my 20 to 23 years. I worked directly under the CEO, more like a personal assistant than an analyst, which is my title.

They didn't do any training, but I did get exposure to big money. And that shifted my thinking. For me, that was really valuable. And since they didn't give me a lot of work, I read about two books a week, almost entirely self-help and entrepreneur books. YouTube wasn't even like really around that much that it was founded just a few years before that. Instagram literally hadn't even come out, like hadn't even been created yet, just to give you some context. So I felt like I wanted to be an entrepreneur. And when I thought I learned what I was going to do, I decided I actually didn't want to be in the defense contracting industry and had to decide between going to business school and starting my own business. So I made a big move. I kept the same idea of working under smart people,

but I wanted to switch industries. So I went into fitness because I liked that. Now, I didn't do what I'm telling you to do because I didn't have me to help me, right? But fitness was literally a different industry and a completely different skill set. But I did know fitness myself. So that was my kind of one end to being able to have at least a leg in the right direction because that's what I spent a lot of my free time doing. But what I did get right was that I went to the top of the industry each time. So with the consulting thing, I went to the top and with the fitness industry, I went to the top, or at least as far as I could reach, which was there was a seven-figure gym owner and I reached out to me and he said I could work for them. And my skills of consultant transferred. All right, so this is

where I did have some transfer over. Consultants have to learn stuff really fast. And the way they do that is they interview experts because experts already have sifted through the information. So experts buy you time. All right. And so I used my skills I learned as a consultant to approach fitness, which I liked as something to learn everything about. So I emailed 40 gym owners. One guy said I could pay him for an apprenticeship, but he quickly saw that I was good at writing and talking to people. So I had other general skills. And so he started paying me after that. I'll be at minimum wage, but he still paid me something. And I worked basically as his personal assistant too. And within 90 days, he offered a partner with me on a location.

and I'll tell you what happened next. Hey guys, real quick, if you're new to the podcast, I have a book on Amazon. It's called $100 million offers at over 8,000 five-star reviews and it has almost a perfect score. You can get it for 99 cents on Kindle. The reason I bring it up is that I put over 1,000 hours into writing that book. And it's my biggest gift to our community. So it's my very shameless way of trying to get you to like me more and ultimately make more

so that later on in your business career I can potentially partner with you. So that's my give. Go check it out, Amazon, and back to the show. So now we're talking the next season, 23 to 26, the season of repetition. All right. So after getting exposure to an industry, you'll decide whether you want to do more of that stuff in that industry or more stuff related to the skill you learned. And if you feel like you aren't getting either of those things, switch as soon as you can.

When you're picking industries, I'd recommend picking one where money is made. Main reason, it's my belief that you can fall in love with anything if you're good at it. And you get good at it by starting early and doing a lot of it. So if you short in real estate, you could be on the deal side. the broker side, the lending side, the development side. There are lots of different angles. Now, you might start on the broker side and then decide you like the lending side more, or your sales skills transfer and you'll be in the same industry, but just in a different sector. And one major caveat I have is that it costs a lot to change industries. So just be sure it wasn't

because you didn't like the six people you were working with and it was actually the industry overall. This is a mistake a lot of people make earlier on because they're like, I hated that place. I must hate media. When really you just hated the tiny six people that you talk to on a regular basis. and there's probably another media thing. So if you got into something because you liked it, unless you learned something fundamentally different about how the business worked, then it might just be the people.

And honestly, that's 90% of the time what your enjoyment comes from. But make no mistake, this is the season of repetition. This is where you start to hone your craft through reps. This is where you get 10,000 reps in. And as much as I say to myself, Alex, you should have gone out more and had more friends

and had more fun times in your 20s. I didn't. And it paid off. And so everything's a trade-off. what you want now for what you want most. And if you're not sure what reps you're gaining, you're doing the wrong thing. So you want to be in a major value ad lane.

And you want to know the skill you're learning. So product creation, advertising, media, outreach, sales, finance, coding, whatever it is, if you aren't sure about the thing that you're repeatedly doing that you're getting better at it, then you're not doing anything valuable. All right? But when you do that work, you give yourself and the world evidence of your skill. You build something valuable, a track record. For me, this is where I started my first business.

Honestly, I was a little young, but the guy who offered the partnership with me offered to advise me on the business. So he became a 10% owner of my business for free, and he helped me start it. And I still felt like I didn't know anything. So I ended up getting two more mentors to take a third of my business each, and I ended up with 33% for myself. But I learned a lot from each one of them. Different skills, all the meanwhile, every day, I was still working at the gym and selling, selling, selling, all day long. And I closed over 4,000 sales the next three years. That's four closes a day.

This was my rocky cutscene. And I knew a little bit about fitness, but I learned how to deal with employees, process money, make contracts, build out locations, pick location. And the main thing I got was the reps and sales and marketing. And I opened up five more locations in that period. But once I felt like I was getting really good at it, I made another big change. And this change was the one that really skyrocketed my income, which was the next season. 26 to 29 is the season of chunking up.

So the reason your lifetime wages increased the most in the season is because you finally have a lay of the land. You have perspective from which to make a judgment on what next moves to make. You see where everything is, right? You actually get how the money works, where it flows. You see who gets the most of it, and most of the time it's upstream. And this is where leverage begins to come in. You need to start getting more for your time. You either get more for your time by leveraging the time of others,

by being in charge of other people, leading, managing, etc. You tie yourself and you're compensated by a percentage of the total value of the team. And so that can either happen in a company where you're leading more people that are doing the thing that you learned how to do, or you start a business, et cetera, right? And so that's when you're starting to leverage other people. You can also leverage other people's money. This is where if you want to start your own shop, you could use your savings or get a loan from other people to start it. And people would give it to you if you had a track record. That's why it's so important. In fact, there was a successful gym owner that I knew who wanted to start a gym after he came

back from Afghanistan. He's a military guy. The bank told him that they would loan him the money after he had three years of experience working at a gym, which syncs with the seasons that I'm telling you right now. And so we ended up taking a job so they wouldn't loan a the money, so he won and he took a job at a local gym. And he worked his way up to general manager. He saved his money, and then he realized, three years later, once he really understood how the business worked, that he didn't even need the loan to begin with. So it ended up being the best advice he ever got, because once you start knowing the game, you make better moves. So when you're chunking up, you move upstream. You start your own shop, you own your own team,

you find the position that within your industry has the most leverage, and you pursue it. For me, this is when I went from owning a few shops of my own to seeing franchisors and the licenseors as the ones who had the most leverage. They could make a percentage of what everyone made, and that's when I started using everything that I learned during my rocky cutscene period at my own gyms at other people's gyms, and then eventually packaging and licensing it out

to thousands of gyms across the country. And that's when my earnings exploded. But for me, it wasn't until I was 27, that I became a millionaire. And the year that I made my first million in profit was also the year I made my second and third million dollars in profit. And basically, until that point,

I'd almost know money to my name. All my money kept going into my gyms into learning stuff. That was all the programs, all the workshops, all the courses, all the masterminds. And I told you, I gave away two-thirds of my company to three different people in the beginning because I just wanted to learn faster. All right? And so the thing is, it was very frustrating for those years, like the three years that I spent doing the consulting thing. And I really didn't feel like I was learning as much as I should. But what I didn't see

was that I was gaining access to people with significantly more money and it shifted my perspective of how much money could be made. And the next season was all about getting the repetition so I could build my skill stack, right? And that's where I learned lots of different things. And I knew what things I was getting the reps on. And then finally, once I had a lay of the land, I knew what moves I could make that would give me the most leverage. And so here's what I're going to do for the four phases of your 20s. First, don't dig yourself into a ditch you can avoid. Don't get addicted to druds. Don't have an unplanned kid. Don't get some crazy STD that you can never get rid of. All right. Second phase, get your foundational skills, work for free or minimum wage to get

access to the best people you can. Big caveat here. The best people you can't. If someone's willing to pay you twice, three times, four times more, but they're not going to teach you as much as the other people, don't take it because you're short-changing your long-term earnings. Don't make the trade. It's a bad trade. Third, rocky cutscene. Embrace the suck. Don't complain. Do the boring work. Don't believe you've earned something that you haven't hustled for. All right. It's the biggest pet peeve of everybody who's ahead of younger guys in the game is that they think they've earned something that they haven't. They're like, dude, I've been doing this for five years. We're like five years is a blink. It's nothing. Right. Like they talked about

the 10-year club and the 20-year club and the 30-year club and the 40-year club and the 40-year club, right, in terms of entrepreneurship, because most people can't hang that long. And so you're like five years in and you think you're the world and you're not. So find the best guy in the company and shadow them. Do twice the level of effort they are because you have to make up for not being as good as they are. All right. So do twice the work. Do everything you can get them to like you and give you their discretionary time. So if you can get them to talk to you out of work and hang out with you on the weekend and grab a coffee and grab a lunch and grab a dinner and grab some drinks, whatever it is, if you can get them to like you, they will cheat you even more. And this is the

micro stuff. This is the stuff that takes a 10x opportunity and turns into a 100x opportunity. That's why the learning is so important. If you go to this place to learn, make sure you fucking learn. And the best way to get them to actually do that and give you their discretionary time is to follow their advice ruthlessly. All right, people will always help someone if they see that person take massive action on their advice. But you know who they won't help? The person who asks for advice all the time and then does nothing or complains or bitches and gives excuses. All right. So fourth, once you have the Rocky Cutscene phase done, you have a skill. You now find the highest point of leverage within your respective opportunity. So you have to chunk up. You have to get leverage. Find it way to get more for your effort.

And if you can't see it yet, then you haven't done enough reps yet. And that's because people are going to get in six months into the Rocky Cutteam period to be like, this sucks. I need to find more leverage. But you haven't earned it yet. You don't have the track record. And if you can't see the opportunity, it's because you haven't done it yet. If you've done it enough times and you've put enough work in, you will very close. clearly see a lay of the land of where your next opportunity is. The path will always reveal itself to you as you keep walking. And if you still are an income poop and you've done 36 months of reps, then talk to people who make the most money in your industry. Ask them what the smart move is

and how they got to their position and then have the NADs to take the jump, whether that's gunning for the promotion, heading up a new division, moving companies, or starting your own. That's how you destroy your 20s or at least that's how I did.