The Game with Alex Hormozi - Why You Should Live On $1500 a Month | Ep 471

Episode Date: December 13, 2022

It’s all about thinking smart, not hard. Today, Alex (@AlexHormozi) shares with us the three big costs of living, how you can make the most of your money with these costs (without getting bankrupt), and shares some advice about approaching opportunities presented to you.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:(1:56) - Making the most of your money with Food(5:34) - If you can get competitive with yourself at how little you can spend, the better(12:09) - If you know it doesn't cost you much to live, your risk tolerance goes up(18:46) - the people who make the most money treat it like a game(23:17) - Advice on how to approach opportunities ahead of youFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition

I'm telling you, if you actually look at it and most people get anxiety, so they avoid the things that they don't like, you've got to confront it. You're like, I'm fucking poor. I don't want to be poor. And so I'm going to look at this money until eventually it starts paying attention back to me. Because money sticks to the person who pays it the most attention. 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, part of the game.

with us to get to $100 million and beyond. I hope you share and enjoy. When I was a wee lad, a young man, I lived on $1,500 a month, and believe it or not, during that period of time while splitting a room, sleeping on the fore with another dude, I was taking home about $15,000, $20,000 a month. And the reason that I lived like that is because, A, I'm incredibly risk-averse, but B, because I wanted to have money to go on the offensive later. And it was never about the lifestyle that I wanted to prove now, because for me, making $20,000 a month was never an amount of money that I wanted to brag about or feel like I had made it. For me, I wanted to shoot really, really big. And so this was only stuff that was going to be stepping students for me to achieve what I wanted

to later. And so there are three big costs to living. Okay. And so what I want to do is I'm going to break down, how is able to live for so cheap. And this is for all the single guys, all the single ladies, all the people. And if you can live with your parents, even better for me, somebody would have died. And so it was for the best that I didn't have to live at home. But this is what I actually did in order to live at $1,500 a month or less. And I did that eating out every day. All right? So we're going to talk about that. We're going to talk about how I did transport, how I did living, all of that good stuff so that you can go on the offense later when you have money that has been stacked up. All right? Let's rock and roll. If you don't know I am,

my name is Oxymosey, ownacquisition.com. It's a portfolio of companies. It's over $200 million a year and I have nothing to sell you. I make these because I want you to make shitloads of money and make a big company so that someday we can partner together and take it to $100 million and beyond. Cool. So big picture. Number one cost of human beings is food, all right? Not in terms. of total money, but in terms of how important it is for you to stay alive. So you got to eat. The next thing after eating is you got to get places. The third thing is you got to have somewhere to get back too. All right. So let's break down each of those and those are in reverse order of cost typically or actually fuck it. All right. There's three big cost centers. You got transportation,

you got living and you got food. All right. Those are the big cost centers. So we're going to break down what I did for those things. And I did that while eating out. So food wise. Some of you I've seen Mosey meals, meal hacks, the things that I do at these chain restaurants. And I did it that way because I don't like cooking and I wanted to have more time to make money. And so it made more financial sense for me to not take eight hours on the Sunday to go grocery shopping and prep on my food versus me getting Jopole twice a day, which is what I did. All right.

And at the time then, it was closer to about $15 a day. If you would say today, it's probably closer to $20 a day when I was doing it. And if you did you have 30 days in a row, it's $600 a month. And you're like, you didn't do that every day week? I sure did. All right. Now, that being said, you can also go to Panda Express, which has a phenomenal 110 gram of protein hack

that you can get for, I think, under $10 today that we actually went and filmed ourselves getting. And that was with extra chicken, so you could have 200 grams of protein every day. Value stack was off the hook. Recommend it. Third, best option is Chick-fil-A is one of my favorites. They are on the price of your side.

But if you want, you can just go with 2 20 packs of chicken nuggets and getting close to 12 bucks, which is a shitload of meat or two sandwiches either way, you'll end up in that $10 to $12 range, and you'll be at that $600, $700 a month range. And if you're like, huh, did he really do that? I sure did. That's all I did. I picked between Chick-Flei, Panda Express, and Chipotle, and that's what I lived on, so much to this point that Layla didn't know that we were going on dates,

but for me, these were the fine establishments that I was frequenting on a regular basis. They knew me by name, and they knew that I knew how to work the menu. So, first step was Mosey Meals, and that for me, time to money wise was worth it. All right? So I could have because I measured this. When I would go to the grocery store and I would get all the fixings and all this stuff, I spent $150 in a week. And I ended up spending almost $600 a month as a single guy when I went grocery shopping and did all the prep and all the clean versus me just running or running out next door, grabbing the food, eating it and heading back. And it was a nice mental break for me. Cool. So number one, I ate cheap. And as crazy

as this may seem, it is easier to figure out how to get all of your calories in. based on eating out stuff ahead of time. All right? So if you, I said easier, not cheaper. If you want to go the absolute cheapest route, which I'll tell you right now, is loaves of bread, peanut butter. Cheapest thing in the world.

All right, like if you need calories, loaves of bread, peanut butter, and if you really want to make sure that you're covered on your basis, get a multi-itimate. All right, if you've got that, you can do that and you can live on it. If you want to add a third staple in there,

you can add lactate milk if you're dairy-sensitive. You'll get your protein, you'll get your carbs, you get your fat in. And I'm saying, if you want to be extreme on it, You can be extreme. And you can probably knock that down to $100 a month. So that's the range.

But for me, I didn't want to live on peanut butter sandwiches. I did eat them when I was trying to bulk up, but I did those in addition to my normal calorie intake. And to that degree, you might want to do one of those Mosey meals and then do peanut butter and milk is the other one, which is a nice cheap in between. So number one. And the reason we're doing this,

the reason this is so important, is that you got to know how to live cheap so that you can go offensive with the cash that you have so you can save up to build the business you want so that more realistically, so that you can invest in the skills and the experiences that are going to make you money. All right. So, number one is food. Number two is transportation.

This is where MoseyMobiles came in. Now, if you're thinking, huh, why there's all these M's? Well, it turns out there's lots of M's when it comes to mobiles, meals, and mansions. All right, so lots of Moms that we're going to cover today. So from the mobile standpoint, the most efficient way to own a vehicle is to purchase it in cash, a used vehicle that is ideally between five and 10 years old. So if you look on any place in America right now today, you can find a used four-door vehicle that is between five and ten years old for ten thousand dollars, all right? And a used parking lot Now, the reason this is important is that you don't want to have car payments. So then the only thing you really have to manage is car insurance, which is not too expensive.

And here's the cool part, the cheaper your car, less the insurance, all right, because they don't have to share too much. So if you are young and you're living on $600 a month for Mose Meals and you live on $100 a month after you've made your one-time capital expense of actually getting the car, which I recommend doing and not taking a loan for it, then all you have is your mansion, your chateau, where are you going to rest your head at night? And I'll tell you exactly what I did. So I lived in Southern California, one of, if not the most expensive markets in the United States. I was in Costa Mesa was where I lived. And after I slept on the floor of my gym, which is the first place, which technically was zero, but at the same time it was $5,000 a month because it was my actual rent for my business,

I then really splurged. And at I think month four or five or six or whatever it was, I ended up having a member at my gym say, are you really sleeping here? I said, I sure am. And he allowed me to, after another member was having me sleep at their place for free, I was able to move from the free place to my own place, which is really in quotes here, because we split a single bedroom in a seven-bedroom house. And guess what?

Every other bedroom had a couple. And there were three dogs in the house. So my roommate had a dog, another couple had a dog, and another couple had a dog. And one of the couples had two dogs, and they were both big. So there was marking of territory. There was shit and piss in the house every day. It was fucking horrible. And I lived there, and he and I were roommates, not housemates, roommates.

And I had one mattress that I got off Craigslist and put on the floor. Because I didn't want to buy betting. I didn't want to buy, or I bought, you know, sheets. But I didn't want to buy furniture, and I didn't buy one of those stands or anything. And so I had a fan next to my face, because it's really loud, by the way, so you can not have to hear what someone else is doing because he used to snore. And so I had a fan on my face and all you hear is the fan wind around you. I'd also wake up with dry as shit eyes.

And that was it. I would wake up. I'd go to work and I worked all day and I would come back at night because I didn't need anything fancy. And so my rent there, our rent for that room in Costa Mesa, I remember, this was expensive place, was $800 a month. That was what we had to split for that room. And so I, my half was $400 bucks a month. And so I had my rent for my Mosey Mansion. All the ladies loved it.

I'm kidding. I had no ladies. It's not my priority at the time. Was I had my Mosey meals for $600,700 bucks a month between Chick-Fleye, Panda Express, and Chip-Polay. And then I had my Mosey Mansion, which was $400 a month, me splitting with a roommate. And if you're like, man, couldn't you have opted for the extra $400 a month? I probably sure could, but I was obsessed about living with as little, it was almost became a game to me. It was how little money can I spend, which highly recommend, side note, brain hack. If you can get competitive with yourself at how little you can spend, recommend. Recommend heavily.

One of the other hacks that Dave Ramsey has that I'm a huge fan of is taking out the amount of money that you're going to spend for the entire month, putting in your wallet, and leaving it there. And then I would pay my rent. I would go to buy food every day. I would pay that. And then the insurance came out of a card, which is like $100 or whatever it was. And so between those three things, because you notice, I didn't even mention a car payment because I've really never had car payments because I've always bought every vehicle I've had in cash.

Always. And so, here we are. And so the big three for living for $1,500 a month or less, is number one, you got your $600 to $700 a month Mozy meal plan. You got your number two. You got your vehicle that you saved up for and then bought in cash and then only have $100 a month of insurance

that you've got to pay for, so let's bump that to $700. All right, and then you've got your rent, which is $400,500. Now, if you're in, like, North Carolina, or you're in Boise, Idaho, or you're in Wisconsin or something, you can probably get a room for $400 a month without having to split it. But if you really want to dial in and you're in a better market, which big picture here, I would recommend you go to the place where shit's happening, not just like that extra $200, $400 a month that you'd spend to be in an area where things are going on and people are doing things with their lives to get out of your

area of the world where nothing's happening and your friends are still in the same place and your parents, you know, don't encourage you and think this internet shit is weird and to tell you to stop watching videos on YouTube to try and better yourself and just tell you to get a job, whatever it is. Like, if you want to get out of that environment, it is worth the $200 to $400 month. Hardcore. So to be clear, I still think, like, there are exchanges in price and value. It is worth it there. But for me, the added benefit of having one room versus two for half the price was worth it for me to split it. Now, once we have that, now we can go on the offensive. And so if you have that car, and this is a big one, all right? This is big. If you are making less than

60 to 70,000 a year. This is a lot of the audience right now. If you're making less than 60 to 70,000 a year, I don't understand why you wouldn't take that car that you saved up for that's got four doors. It's 15 years or younger, right, in terms of car years and has no visible damage on it. If you got those three check marks, you can drive Uber.

I still to this day don't understand why you would not, like if you're below that and you're just trying to stack cash right now, it is the most flexible job. You can make money immediately. There's no risk besides the actual vehicle itself. You can work whatever hours you want. You can do it on separate apps. And when I say whatever hours, I said there's flexibility, but also how many hours you want.

You work 12 hours a day if you feel like it. And I've told this before. But my plan B was always strip at night, drive Uber during the day. And I'm dead serious. Because I knew that for my plan B, if my plan A didn't work, that's what I could fall back on. And knowing that I was living on $1,500 a month or less, after taxes, I could in a year, spend 20, make another 200, have, you know, whatever, one something saved up after taxes, so I could go on the offensive again.

And what happens is if you know that you live on cheap, and this is a big one, if you know it doesn't cost you much to live, your risk tolerance goes up because you don't have other shit to worry about. So what happens is, and this is the real cost of the shit that you can't afford or shouldn't be affording right now, is that you're paying for the car, but you're salary. sacrificing your dreams. You're paying for the neighborhood. You're paying for the way the house looks, right? You're paying for going out with the boys at the club, right? Buying a table, getting bottle service, buying girls drinks, right? All of a sudden, boom, 100 bucks, boom,

200 bucks in a night. Like, what just happened? That was half my rent, right? Is that the cost of those things is that now your lifestyle is higher and so you're actually less offensive. You become less dangerous because it's very hard to fight someone who has nothing to lose. And it's very to fight someone who can live on nothing because everything you have goes, boom, straight into your net worth so that you can go on the offensive later. All right? And so if we had to pick between living on $10,000 a month and making $10,000 a month or living on $1,500 a month and then spending the spread, if you spend $5,000 a month,

$3,000 a month, $2,000 a month on your education so that you can increase your earning capacity, it's hard to be stopped. Hey, guys, love that you're listening to the podcast. If you ever want to have the video version of this, which usually has more effects, more visuals, more graphs, you know, drawn out stuff. Sometimes it can help hit the brain centers in different ways. You can check on my YouTube channel.

It's absolutely free. Go check that out if that's what you are into. And if not, keep enjoying the show. So one of the things that I used to play with this game I had of like, how can I spend the least money, is one, you can either go to Dave Ramsey style, right? Which is don't buy shit you can't afford. Don't go into debt.

Take out the cash you're going to spend every month. then don't spend more than that. Period. That's it. That's all you get. The other way of doing this is getting competitive with your bank account. And so one of the habits that I highly encourage you do is that every morning, what's the first thing you check? Is it Instagram? Is it YouTube? Is it your texts? I will tell you the first thing that I checked the mornings when I was in this period of my life. It was my bank account. Every day I would wake up and I'll check my bank account. And what happens when you do that is you develop this muscle of kind of this understanding of the money flow. Right. And right now, depending on where you're at, it might be uneventful to check your your bank account every day. But if I can give you a habit that will make you a lot of money,

it's just like weight loss. So believe it or not, if you get on a scale every day and you're trying to lose weight and you don't do jack shit, but you literally just get on the scale every day, people lose weight. Drawing and putting awareness to the problem or the thing that you're trying to change improves it. If you're in a business and you want sales to go up, start tracking everything. If you just start reporting publicly on close rates and put a leaderboard up, sales go up. You want to start reporting on connection rates, how quickly people talk to other people, how quickly leads get followed up on, guess what happens? It gets faster, right? The moment you start putting attention to it, the moment you start tracking it, the moment start improving. So if you want to improve your money

situation, you got to check it. You got to look at it every day. And the first thing in the day, priority, it means it is happening prior. It's more important, right? So you wake up, you make money a priority, you check your bank out every day. You start get a pulse on what's going in and what's going out. What's going in? What's going out? You cancel all the fucking subscriptions that you know you shouldn't be doing. You cancel all those because, hey, that extra time that you're consuming these other things, you should be putting into education. You know that. If you're not happy with where you're at, these are the changes you make. All right? So with the game of money in the bank account, the idea is you look at all of the pluses that go in, you look at all the minuses, and next month

you try and make that column go up and that column go down. And you keep running that cycle. And I promise you, if you actually look at your bank account every single day, even for 90 days, 90 days. You will be amazed at what goes in there. You're like, huh, I didn't even know I still had that app. Oh, there was an app I signed up for a year ago that just did an annual billing. Right, oh, shoot, I should have canceled. I'm telling you, if you actually look at it and most people get anxiety, and so they avoid the things that they don't like, you've got to confront it.

You're like, I'm fucking poor. I don't want to be poor. And so I'm going to look at this money until eventually it starts paying attention back to me. Because money sticks to the person who pays it the most attention. Because I promise you, this is how the economy works. Think about money is water. All right? Money flows. All right. It's constantly emotion. But there are grooves in the economy that flow to the few. So it rains and then it flows into the reservoirs. And it rains and it flows into the reservoirs. And then these reservoirs get bigger and bigger and they sprinkle a little bit back in and then it flows. It's the way capitalism works. Because when you spend money at Walmart, every Walmart in America is flowing money back to the Walden's, right? You go on Amazon. You buy something, your friend buy something, someone else, but everything flows money back to Bezos.

Right? And so the idea is those guys paid more attention to the money early on, and then the money pays them attention back. The person in two parties who pays the most attention is where the money ends up. And so it starts by tracking it. And let me tell you a good stupid idea that you should not do. If you're one of these people who wants to credit card hack, right? He wants to, like, I get 2% here, and I get 1% here,

and I get 3% here, you're focusing on the wrong fucking percentage side. All right? You're focusing on the 2% and not the 98% which is where you're spending your goddamn money. All right. So recommendation, use debit cards. All right? Forget about the points because the thing is, is even subconsciously, if you feel like you can give yourself an excuse because you're getting points on it, you can try and make the argument to me, I'm not going to buy it. Well, I'm going to spend all the same amount of money I was going to before. I'm just going to get 1% back. I don't buy it. If you're trying to be financially disciplined, just fucking be disciplined. I promise. You think about this from a human behavior standpoint. You want to punish bad behavior with yourself as quickly as possible and you want to reward good behavior as fast as possible so you do more of it. That's why you check the bank account every day. So you start seeing it go up and you get this little ticker and it goes up and if you really want to be a G about it. This is how I did it. You check your bank count and you have a Google sheet on your phone. All right. And every day I'd put my balance in and I had it track. Just day number, day number, day number, day number. And you start to know when checks.

it, when deposits it, you start to predict these days. You know, oh, you know what, tomorrow I think I've got, I got check hitting. And I'm about, you know, a third higher than I was two Tuesdays ago at the same time of the month, boom. Then you start hitting bank account PRs. And if you can start getting addicted to getting personal records in your bank account, like if I can give you the one gift of this is to gamify it. And I will tell you one lesson that the people who make the most money all have in common,

they think about money as a game. And so you got to start small. You got to start playing one dollar hands, two dollar hands. You got to start playing the game. And the best way to do that is early on. So track two things. You check your bank account and you put it in. And what's nice there is that you can start seeing long-term trends.

And I'll tell you this much. When I would look at that trend, I got a tremendous amount of good feeling. I would look at it and be like, I fucking did that. And every month, get a little bit bigger, a little bit bigger, a little bit bigger. And you start feeling progress for the sacrifices that you make every day. because you look at where you're at this month versus last month, and you see progress. So I get asked a lot about the income to spending ratio, and I, believe it or not, never had one. And that's because I just try to maximize both sides.

And that might sound crazy. And some people like the percentage. That works for you, awesome. But for me, it was, how can I hack the game to spend as little as humanly possible, period? And then how can I hack the other side of the game, make as much money as I possibly can? and that was the game I played. So rather than saying, like, you know what, I'm going to give myself 20% of my income, blah, blah, blah.

I just saved every dollar that was it food, transportation, living. So I think the easiest thing to do is to connect with people online, join communities, join Discord groups, join Facebook groups, whatever it is, and then try and figure out where there are pockets of them, because people congregate. And so you can find pockets of people that have similar goals to you and get around them. That was the game.

Literally, every move for the first few years of my career was only to be around people. So I knew when I was going somewhere who I was trying to be around. So when I moved from Baltimore to California, I was trying to be around San Bakhtiar because he was the guy

that I was going to mentor under. So I moved cross-country because I knew I had someone there, and I figured he could make an interview. And he did. He introduced me another person. That guy introduced me other people. And so as long as you're a person

who's going to hustle and people see it, people will open doors for you. So when I was in so, I moved from SoCal to Puerto Rico briefly because I thought that I was going to do the tax thing. I've made a video about tax stuff, a different thing of what I learned about not doing that. But that was what I wanted. There was people there in Puerto Rico that I was going to be around and I wanted the tax situation. From there, we moved to Irvine and then Albuquerque, New Mexico, because I had people there that I wanted to learn from and be around.

And I didn't know anyone else besides this one couple, right? And so with each of these moves, there was a target person that I wanted to get around. And I wasn't being a creep about it, but I knew I was like, okay, maybe if I see them once or twice a month, if you just say, hey, do you know anybody else who lives in this area? And this is where, like, now the world's even more connected than it was a decade ago. And so you're in these pockets, you're in these communities, you're in these discord groups. Just be like, yo, I'm looking at moving, where you're all at? And people start sounding off. And then you'll see start seeing pockets. And believe it or not, people do coagulate. They congregate around the epicenters. You'll see a lot

in SoCal. You'll see a lot in Miami. You'll see a lot of New York, a lot of Chicago, right? And a big thing here is that if you see Cleveland rich is not the same as SoCal Rich, is not the same as New York Rich. And so what happens is your standard of excellence raises. And so in some ways, you feel worse about yourself, but to the same degree, it shows you what's possible. And so some people flip that into envy, right, which is not the recommendation. But my recommendation is to use that as inspiration. Be like, it is possible. They are made of the same flesh and bone as I am, so therefore I can too.

And when you get around people like that, they start talking to different time increments and different money increments. So if the people you're hanging out with are talking in terms of weeks, talking in terms of paychecks, talking in terms of $100,000, $1,000 investments, you've got to be talking to people who are talking about $100,000 investments. We're talking about years, talk about decades, right? You can judge how wealthy people will be by how they talk about how they allocate resources, time and money, and the increments that they measure those in. And I'll put one final point on this is that I've moved a lot faster in life through handshakes instead of hacks. All right.

Like it's who introduced me and opened way more doors than any what ever did. And so getting around the who a lot of times it's hard to measure. But when I look at all the big deals that I've done in my life, it's all been one or two degrees connected from people that I met randomly. And so this is one recommendation that I have for you. And there's something that I would say that I've been pretty good at, and that's what Layla's at least told me, is that number one rule that I have with networking is don't turn down the first invite. All right. So if you connect with somebody at a thing, it's like, hey, let's grab dinner. If you make that first one happen, the likely that you end up staying friends and connecting

is significantly higher. If you can't, if you turn down the first invite, the likely it shows that you're not as interested. And then they also turn down your counter invite and it becomes this whole thing. And I'm just saying like, One big move is just make it work on the first invite. All right. The second piece of advice that I have for you is that when you go to that meeting, whether you want to call it, meet up, hang out, whatever, do some prep work. All right.

Do 30 minutes of research on the person you're going to meet with and try to bring something valuable to the table. Now, it might be your skill and you just apply it to them. And this is the thing. This is a fucking hack, a life, all right, for helping people. is no one wants a free patio. All right? So the story of the free patio is like,

hey, you got a buddy who builds patios. You don't have a patio. You have a couple people bid for it. Your buddy's like, hey, I'll build it for you, right? And so he says he'll do it for free. And you say, sure, cool, I'll save some money. The other guy said they can do it in four weeks. He starts taking four weeks and it's, you know, a third of the way done.

He's like, sorry, I'm working some other jobs. He'll be around to work on it later this weekend. And now it's eight weeks and it's still, you know, halfway done. And at 12 weeks, now you start to fucking hate the guy. Right? And so the thing is, is that if you want to do somebody a favor, if you really want them to take it as a favor, blow them away. Make them feel awkward for the amount of work that you did. And if you've never had this experience, I can promise you, I've been on the receiving end and it is uncomfortable. And that's a good uncomfortable. Someone's like, fuck, I owe this guy something. Because, and the nice thing about this is that you just provide value. You go in and you don't just provide a little bit of value. You actually do what a full scope project would be for whatever it is that you're good at and you just set it up for the dude. Or you spent a whole day walking them through how you do this stuff? And you're like, well, how do you find the time for that? You work all the time. That's how you do it. This is work. And it's investing in the long-term relationships that are going to pay dividends

later. And that means, wait, does that mean that I'm going to give to somebody and I might not get anything back? Yes. Yes. Didn't you say you want to be an entrepreneur and make the world a better place? That's what it looks like at a micro level. Because the ultimate leverage that you can having a relationship is not needing anything back. And if you do that, you can be the guy that stacks IOUs, and then when you do need to make your move, because you are going to do the next thing, then you've got all these blank checks ready to cash in, and then that is how you can propel yourself way faster. And you just load the deck early when you don't need anything. The time to dig the well is not when you're thirsty, but when you have enough water so that when you are thirsty,

it's there.