The Game with Alex Hormozi - We Are Giving Away Our Money | Ep 331

Episode Date: September 28, 2021

What happens to our money when we’re gone? Today, Alex (@AlexHormozi) talks about the long-term plans he and Leila have set up in the event they pass away and why they’re giving to charity instead of simply passing the wealth to their next generation.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:(0:29) - Alex and Leila donate everything to charity, not to children.(4:43) - Give away things, share experiences, bring value to others.(7:08) - Entrepreneurship is like a casino, solving money problems.(10:37) - Giving descendants wealth deprives them of earning skills.Follow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

All the people that I know who were given money, it ended up ruining their lives. Welcome to the game where we talk about how to get more customers, how to make more per customer, and how to keep them longer, and the many failures and lessons we have learned along the way. I hope you enjoy and subscribe. Last week, Layla and I signed our wills donating our entire estate to charity, more or less. And that obviously happens after we die, so it's not now. But it was a really interesting experience for me to go through because it put a lot of things into perspective within life. And so I wanted to share some of the thoughts around that because I made an Instagram post about it and it's gotten the most like likes and comments and

Interaction out of any post I've made to date and so I figured it was a point of interest and The reasoning behind kind of that decision is is is is multifold and so I'll share that with you so the first is we are of the belief that I mean one we don't have kids and so we would have we have no like direct dissent we'd pass it to second even if we did have kids or have kids in the future I don't think that giving people a lot of money when they do not earn it is good for them. And so I would not wish that on any of the descendants that I have. Next piece is kind of the concept of legacy, which is like, why don't you want to do something like the Rockefellers and have some big trust and it feeds all your generations from here

and out? And I think for us, the reasoning behind that is I think there's these ideas that we all strive for of impermanence, or rather, excuse me, permanence. because we want to live on after we die. But I think it's just a human condition thing and it's just not reality. You know, if you think about like the Sumerians or, you know, you know, civilizations from 5,000 years ago, there's no one that we even know about. We just know that they existed.

And that's about it. And we don't know about the rich people and the poor people. And we don't know who started schools and who didn't. We just know that they existed. And I think that that may be the Americans in, you know, 5,000 years from now. And so there's the biological component of, all right, so when we die, our kids are going to marry people and they're going to have kids and those kids are going to marry people. And then you do that 100 times and it's taking a 50% and then raising it to the 100th power, or sorry, a half and then just doing it over and over and over again, right?

And so basically the amount of our genetic pool, if you want to look at it from a biological perspective, of what 10 or 100 generations from now is, is basically nothing, right? We're not really there. And then the other piece of it is like, will they know who we were or any of the character traits that we had will be passed on? unlikely. And so for us, it felt kind of like the right thing because we also feel like we've been given a lot and not just from being born in America and all that kind of stuff, but from a broader context, I've shifted my perspective on, I think, business success over time. And so, like, let me give you a visual example. If you were to look at Chiquel O'Neal versus, let's say, a tiny Asian lady, right? There's, you could see a huge,

amount of genetic diversity just in that visualization. And I think the same visualization appears mentally. It's just not visual. And so think about that for protection. So like it's like, why is he so good at basketball? Well, it's like if you look at him, you'd be like, well, geez, he's so naturally inclined for that. I'm not to say that every person who has his genetic makeup would be, you know, as good as he was, but they would have a inclination to be pretty good. Right. And so I think that the same exists within just, you're, you're, your mental capacity and your character traits, but predispiciousness for business. Like I wonder what if we were to look through that same visual lens, what Jeff Bezos would

look like mentally, or what Bill Gates would look like mentally, or what Warren Buffett would look like mentally. And all of a sudden, we might be like, well, it makes sense because he's seven, eight, you know what I mean? Of course he's good at investing or of course he's good at business or whatever. And so I think that my perspective on this has shifted because if you had asked me when I was younger, what made me, you know, successful or whatever. I'm using quotes here. I'm not saying we're the most successful people in the world or anything. or far from it. But I think that I would have said hard work, sacrifice, and all of that stuff. But I think as I've gotten more perspective, I think that we're just naturally good at it, you know.

And I think that obviously work and sacrifice and those things hone the skill, just like Shaquille Neal still has to go to practice. But I think some people get disproportionate returns on their time and effort. And so to give back after we are dead is not really asking that much. Beyond that, it also gave me another huge conclusion about what. my own life, which is if I'm going to be donating all of this stuff when I die anyways, then it makes more sense for me to start giving away while I am alive. And I think that, you know, the first level of giving is obviously you can give money. And Layla and I have probably donated about a million dollars a year the last few years

to various charities that we believe in. But I think what has, what is more valuable is the skills and the experiences and the the traits and the lessons that we have gathered along our journey that I think is more valuable and so the reasoning behind acquisition.com which for those you don't know is our portfolio holding company right now it holds seven companies or you know in entirety and then also percentage of and that does about $85 million a year which just so you're curious which is why I have nothing to sell you and the point behind you know this channel is to hopefully transfer those lessons while we are alive to other people because if we're going to give it all when we would die

why not start now? At least that's the thought process behind him. And so that's why for those of you ask questions like that's why we are writing the books. That's why I'm making the courses. That's why I'm doing all that stuff and we're giving them away for free. And what's interesting is that I think that there's a shift that occurs and I'm just, I guess, noting this because my first businesses were created out of scarcity. And so what I mean by that is they were created out of an insecurity. They were created out of a deficiency. They were created of a deficit, a need for something, right? One of my favorite quotes from Naval Ravicon is, desires a contract we make with ourselves to be unhappy until we'll get what we want. And I,

and I, candidly, us building those businesses was not like a happy experience for me. It was very like, grindy, dark, rage-filled, like just outwork, out-sacrifice type thing. And what's interesting is when I look at the people who make a lot more money than me now, they don't kind of act that way. And I think it's because the motivation has to shift. Because if you are, this, at least for me, it's like if I'm only trying to satisfy my own personal needs at 10 million or 20 million or 30 million, whatever it is, whatever your number is, you know what I mean? When you cross it, maybe it's a million, whatever it is. When you cross that number in the bank, all of a sudden, you'll feel the energy or the drive towards that, satisfying that goal will diminish because you somewhat do, right? And so I think at that point there are two directions that you can kind of go in. One direction is to make money the ultimate scorecard, which I'll give you an analogy of why I think that's silly. in a second. And the other is that you can change the driver. All right. And so for the first one, the reason that I've never really been a big, you know, I've never espoused that or never been a big believer in that one is that I see the entrepreneurial journey as a casino. And so bear with

me for a second. So imagine every one of us is given a token, right, as we, you know, come of age, whatever that age is. Maybe it's 12, maybe it's 14, whatever the age is that you decide that you want to get in the game, right? And so we get a token and we go into the casino. And we, you know, get a seat at the table and we continue to play and we continue to play and we have the other players, right? And what's interesting is that everyone's playing for the chips that are on the table, right? And the difference is that you might amass this big amount of chips, right? But the thing is that we don't get to cash out. We literally just have to leave the table and then someone else takes our seat and all of our chips get pushed back into the middle of the table for other people to

play with again. And so, and the other people you could say is your family. The other people you could say your competitors, the other people you can say it's just the marketplace or humanity as a whole. But either way, we don't get to leave the casino alive and we don't get to leave with our chips. 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 is that you help me spread the words. 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 ask to do is you can just leave it. 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. And so having that perspective for me just really reinforces that it's just a game because we don't get to keep any of it. And so once you satisfied, like, once you can eat steak dinners every single night and it doesn't change anything, and once you can buy private jets and once you can do all that stuff, like nothing changes. Like, more money changes literally nothing because money can only solve money problems. And that was one of the lessons that I've learned as we've, you know, gained more of

is that money only solves money problems. And once you've run out of problems for money to solve, there's really not a lot of utility for it. And so that's why, for me, the money scoreboard concept has never really resonated. Because, I mean, me dying, a billionaire, so what? You know what I mean?

Like, I'm just going to take this big lump of money and then it's just going to get handed to somebody else. And so that is also why I don't. think we want to give it to somebody else because you know an individual person because I think it would ruin them and one of my favorite cards in Magic the Gathering which is a game I played all the time when I was a kid it was burning wish and the the flavor text on that card was she wished for a weapon but not for the skill to wield it and that's very much how Layla and I both see money is that

it's just this raw power and the more of it you get the more skill you must have in order to wield it effectively. And so I think that that is why we wouldn't want to, quote, ruin our descendants in that way or ruin anyone in that way because I think it's too much for one person to have. And so that is why we're pushing it towards causes rather than individuals. Because I also think that when you give it to individuals, you rob them of the opportunity to earn for themselves. And you rob them of the opportunity to achieve in that way.

because I can tell you, I remember when I was a kid and I thought about this really deeply when I was in college, I thought to myself, if I won the Powerball, right? Because I bought a ticket because it got like, all, you know, all the guys that I knew all got one ticket because it was like a billion dollars or something at one point for the powerball. And it's more just for the conversation that that comes as a result of that, that we bought it. It's not because I thought there was like a chance or anything. But what was interesting is that I realized that during the drawing, I actually had this feeling of dread because I really didn't want to win because I really didn't want to win because I really that if I won, then it would kind of make everything that I was wanting to do meaningless, which was really weird for me to think about. I was like, if I just got a billion dollars, then it would mean that I never even got to play the game or get the credit for earning whatever I would end up having.

Because I wanted to have, and this is probably my ego or my insecurities, I wanted to have people give me status for having earned this, right? But I think, again, as I've gotten older, my thinking around that has changed because, like, there's so much many things that I've been fortunate with, you know, what I was born with genetically. You don't know what I mean? I think that I have decent reasoning powers and I don't know how much of that is, is learnable. You know what I mean? I think, you know, I was born in the United States. I was born a white male. I was born to, you know, a doctor as a parent. And so like there's lots of things that I have that already gave me a leg up. And so anyways, just to bring this home for you, The reason that we have Acquisition.com and the reason that we are pushing far more towards

giving away everything that we have is while we are alive and the most viable assets we have, which is the value that we can provide in terms of the lessons and skills, is because I just have no more marginal utility for money. Now, that being said, it would behoove me to kind of follow on Uncle Warren's footsteps, which is I think that I will be a better allocator and multiplier of capital so that when we die, we will be able to pass on and make a larger impact on, you know, whoever, you know, whatever causes we donate our stuff to than if I were to donate it now. And we do donate stuff now because I think about this where it's like I've given away $2 million in last two years. And I think about

$2 million in 40 years and how if I, you know, allocated it well, it would probably be like $100 million, right? And I'm giving away all that money now. But I think there's always the tradeoff between consumption and investment that, you know, kind of all entrepreneurs make. And The consumption and investment tradeoff happens kind of for everything. It's like investing in your relationship versus consuming your relationship, investing in the business versus consuming the benefits of the money. And that kind of happens with everything, right? And so that is kind of the thought process and the thinking behind the books and the courses and all that stuff behindac was just not gone for those of you asked. The big impetus behind this was donating what will, you know, just our current estate is probably valued between 60 and 80 million, depending on

who's valuing the equity slices we have in the businesses we own. And I know that if I were to do nothing and just wait, you know, 40 or 50 years, hopefully I live that long, it would be a very big number, right? Even at 10%, it'll be over a billion dollars at that point. And that's if we earn no more money between now and then. And so I think that it changes the game. And I'll leave you with this one quote from Naval Ravacompe that I think is really valuable. He said retirement is when you stop sacrificing today for a hypothetical tomorrow.

And I think that what that will gave me was the permission to stop doing that. Because if I know that I'm not going to be, I'm not going to be taking anything that I'm making now with me anyways. And I'm going to be giving it a while to begin with. It pretty much eliminates the desire to trade time for money in any meaningful way besides things that I, you know, enjoy and think that I can provide value with. And so for the many of you that reach out, I want to also say a couple of things real quick. One, we don't sell time, so I get probably like 100 DMs a day asking if we do one-on-one consulting. We do not. We take on companies that are, I say three to 10 million, but closer to like the five to 10 million plus mark, just FYI, unless you have something that's really interesting.

And so we invest and we take positions in those companies and help them grow. Four context at the time of this video, the smallest business that we have in the portfolio is $8 million a year. So just like I said, for context, it says three. three to ten, but we're really skewing towards the larger side of that. And that is why I don't consult for dollars. It's also why we're not selling courses. We're not selling masterminds. We're not selling coaching.

And if you see comments in the thread that are replies from fake Alex Hermosies, right now we have, we're getting like targeted. And it's probably because I think there's a lot of goodwill on the channel because we don't sell anything. I will never ask you for a WhatsApp. All right. So like please like do not respond to any of the comments that have a picture of me and like some weird decimals afterwards to make it look like it's me. I will never ask you for WhatsApp. I will never text you for money. All right. So please, please, please, please do not respond to this people. Do not feed that. But anyways, love you all. I hope you're amazing. This felt like the right time to make this video in the parking lot before I go to the gym and keep being awesome.

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