The Game with Alex Hormozi - Why Your Feelings Are Killing Your Finances | Ep 662

Episode Date: March 6, 2024

It’s important to stay consistent and to make decisions logically and not based on feelings. Today, Alex (@AlexHormozi) discusses the importance of making business decisions without being swayed by emotion, and emphasizes the need for entrepreneurs to stay neutral and make decisions logically. He provides examples of successful business owners who have developed a thick skin and are able to manage their emotions to make difficult decisions.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:(1:46) - The impact of emotion on business decisions(2:24) - The journey to emotional neutrality(3:20) - The unexpected surprises in business(4:24) - The power of consistency and routine(5:43) - The role of math in decision making(8:30) - The importance of making hard choices(9:51) - The power of basics in businessFollow Alex Hormozi’s Socials:LinkedIn | Instagram | Facebook | YouTube | Twitter | Acquisition(This episode is a re-run. Original airdate was on April 23, 2019)

And if you cannot quiet your emotions, there's no way that you're going to be able to move to the next level. And so it does require this sort of deadening of your emotional reactions. 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. One of the fun quotes that I love about businesses, business is simply mass. mathematical decisions made within the context of human psychology, which essentially means that you need to do arithmetic and division and algebra in order to make business decisions and then overlay that on the people that they're going to affect.

Right. And so one of the fun things is that if you look at really, really high up CEOs, like you look at Elon Musk or you look at Mark Zuckerberg and you listen or Warren Buffett and you listen to them speak, right? They sound like computers like Bill Gates. They sound like robots. They sound devoid of any human emotion. And I think that there's the nature and nurture part of it, which is that there's some people who are CEOs who are, I don't want to say like sociopaths, but like basically who have a little bit less human affect than others.

And they're able to make mathematical decisions despite some of the emotions that may be around them, which actually make better business sense, even though they may be difficult. The thing is, is that once you get up to that level, that billionaire's status, and I'm not there, But I'm just saying if you observe the people who are there, it's a very common trend. And I think, this is my position, is that the reason that they're able to achieve that is because they're able to make decisions devoid of human emotion. And so the human, within the context of human psychology, the second part of that sentence, a lot of times comes into play when you're talking about sales and marketing and positioning,

because all of that is soft skills. But when it comes to the business model, monetization, and then in the, In some instances, making the difficult decisions around personnel, a lot of times your emotions are really only things that are going to get in your way. There are a lot of decisions right now that you may or may not be making because you have emotional charge around them. So you may have a firing decision or a hiring. Like somebody who you know is not best for that position.

And it is up to you as the business owner to be able to make the decision without the emotion. And so what happens is, and this is something that I've noticed is that I've become less and less reactive as we have gone higher and higher up in business because you have to be. And if you aren't, then you won't keep moving up. And so it's like if you see these people all the way up here and some part of you might say like, I don't know if I want to be that. And that's fair. But in order to get all the way up here, you basically in some ways have to become like a robot and be able to show up neutral in all situations. so that you can't get hot-headed so that you can show up consistently to your team and make decisions that they can have faith in that they are logical,

that they're based on math, they are based on reason and not based on like swings of emotion of feeling like, we're doing great. Oh, no, we suck. Because the reality is that usually it's in the middle. One of the lessons that I've learned has been that nothing is ever as good as you think it's going to be or as bad as you think it's going to be. The only things that are above those things are things that you don't think about.

So the only things that will be worse than you ever imagined are things that you didn't expect to come. Anything that, like, nothing is going to be better than you imagined, except for things that you didn't expect to have happened. Right. I did not expect Jim Watch to take off the way that it did because the original model that we had was not the model that we switched to. I did not have a huge anticipations for because I was actually getting out of the business when I made the decision to switch into a done with you model instead of a done for you model. And that's when everything took off. And so it's the things that we don't expect oftentimes that do the things. that are beyond that. And the reason I'm saying this is because we have so much emotion that's charged around the future, charge around our anxieties or our hopes. And a lot of times that

impairs our ability to function today. And a lot of times, whether it's good or bad, how you show up to the team in a positive way or negative way, like, if you're somebody who's like really cold or really hot, like, if you're like, I always want to be positive, like that also is not good because it just shows that you're not stable. And so the goal in my belief and what I observe with people who are doing much better than me is that I talk about this all the time that it's quiet. They keep their surroundings quiet. They always show up the same. That's why consistency is so key so that you have these routines in place that you can show up the same every single day, independent of the circumstances around you so that you can make the decisions using the same

frameworks and using logic and not feelings. And so one of the goals that Layla always has is as a leader and she puts this post it on her on her computer is be neutral. And so So the reason it's so hard is that the middle path is so difficult, right? It's the dichotomy of leadership. Like, you want to be really high when it's high and you want to be really low and it's low. And entrepreneurs by nature tend to be more emotional. That's what creates the creative spark. That creates the desire to innovate.

It's what is the initial thing that allows you to get that emotion going to take the risk to leave your job, to start the business, to do all these things. And then the moment you start it, you have to be the opposite of who you are, in order to succeed. And so it's very counterintuitive that you're like, wait, I have to be devoid of emotion. And so what happens is you have to start these things with practice. It's like, well, how do I do that? How to make emotions without feelings?

And the best way, at least in my experience, is to always break it down to math, right? Is to break it down to math and put as many decisions as I can through data and actually extrapolate out what this decision means data-wise. And so a lot of times, if you're looking at, okay, how much will it cost me to keep someone in a position that they are not suited for? And then I start breaking down. Okay, well, I have the cost that I'm actually paying. And that's the hard cost, right? And then I have the soft cost of the job that they're actually not doing.

So it's like there's money that's going out for them, right? And then there's the value that they're not added, which is actually a double burn. And then if there's someone who's in leadership, then it's all of the downstream effects of the decrease. effectiveness of the entire team, and then you have the hard cost for those members, and so you can see how these things extrapolate out. And so breaking it down to the numbers like that sometimes can give you the confidence to make the decisions that sometimes are difficult to make. And I think that what happens over time is that you just get used to it. Moise 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 who talk to you. And if 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. And so your skin gets thicker. And a lot of times, if you look at some of these interviews like I was referencing, if you watch these CEOs, these super high-level entrepreneurs, they're very deliberate with how they speak and what they say because they've done it so many times, it becomes second nature. And it's difficult to develop that type of thick skin without going through the fire pit and the gauntlet of having, you know, employees that you loved start trying to sue you and having it. But I'm saying that these things happen to you.

Elon Musk was on a podcast the other day. He's like, he has like 25 lawsuits ongoing at any time, like people suing him because the car didn't drive them to work every day. Like ridiculous things because he's elevated to that position. And if you cannot quiet your emotions, there's no way that you're going to be able to move to the next level. And so it does require this sort of deadening of your emotional reactions. And so that's my current chapter that I'm on right now of this little entrepreneurship journey is looking at all the things that create emotion in my life, both positive and negative and seeing how it affects me and how I show up on a daily basis. And then more importantly, how it affects the decisions that I'm able to make with Clared. And so my urge it to you is right now there probably are some decisions that you are not making because they're emotionally charged.

And what you need to do is look at it within the context of math and say, does this make sense and do it like? And you have to make the hard choice. And a lot of times the hard choice is not the popular. It's not the one that makes you everyone's best friend. But the thing is, is that it will either be you who makes the hard choice in the moment today or the hard choice would be made full. you by the marketplace because your business will not work. And so it's it's a constant like I feel like life a lot of times, man, this is a big broad statement. But life a lot of times is sacrificing your short term comfort for your long term benefit. And so when it comes to fitness, sacrificing

your short term comfort of eating what you want to eat for your long term benefit. Sleep for sacrificing your short term benefit of like, well, I want to watch one more episode. I want to stay up a little bit later. I want to waste time on my phone rather than going to sleep, right? But the long-term benefit is clear. I want to keep this person on because maybe they'll turn around, but they probably won't. You already know that. If you had to bet on it, you probably wouldn't bet on, right? I'm just using that as an example. There's a million other things that you have to do. Same thing with clients. If you have a client who is just consistently draining your attention, just get them out. You know what I mean? But it's hard. And the reason it's hard is the

reason that is why most people don't succeed. That's it. So like the advanced people don't do anything advanced, they just never don't do the basics. And so like this is something that I'm continuing to go back to, at least in the season that we're in entrepreneurial way, is it's consistently revisiting the basics of like, how can I do the basics better rather than how can I find advanced things? And I think that a lot of us, you know, and I say this a lot, but like we need to be reminded more than we need to be taught. Like if you've ever like Bruce Lee said, I don't fear a man who's done a thousand kicks one time, but the man who's done one kick a thousand times. right? Like we get better by doing the same things over and over again. And that's like, and it's

boring and that's what makes it hard. And that's why most people don't succeed is that they want something that's fun and exciting because that's what entrepreneurs want. But business requires consistency. And the business requires you to be everything that you weren't born to be. And that is why most people don't make it. So just food for thought. If you have some things that you need to do, just do them. Take out, take the math out, look at it from pure numbers and make the decision as though it were someone else's company. And then you'll be surprised at how easy and how clear some of those decisions can be. One other context or frame that I like to make some decisions on is if I were significantly smarter than myself, what would I tell myself to do? Or if I were

the smartest man in the world, what would that guy do? And if you think about things, I know it's silly, but a lot of times you think that guy would be a super genius and he would look at it purely like this, dollars and cents. And then you'd be amazed at the quality of the decisions that come out of that type of thought process.