The School of Greatness - Alex Hormozi On Becoming A Millionaire, Quieting Your Ego & Forgetting About Legacy EP 1278

Episode Date: June 10, 2022

Alex Hormozi is a first generation Iranian-American entrepreneur, investor, and philanthropist. In 2013, he started his first brick & mortar business, successfully scaling his business to six locations in three years. From there, he spent two years turning 32+ brick & mortar businesses around using the same model that made his privately owned locations successful. In total, He has scaled and exited 7 companies. His most notable exit was his majority sale of his licensing company for $46.2M in 2021. Concurrently in 2020, he transitioned from CEO to the owner/shareholder position in these companies and founded Acquisition.com as a way to invest his own wealth (both monetary and intellectual capital) into other businesses.Buy his book: $100M Offers: How To Make Offers So Good People Feel Stupid Saying NoIn this episode, you will learn:How to turn a No to a YesWhen to bring in price when sellingWhy diminishing your ego is so important to your success.The key habit to practice in order to bring in more abundance. The key difference between the rich and the poorFor more, go to: lewishowes.com/1278The Biggest Lies You've Been Told About Money, Debt & Building Wealth w/ Jaspreet Singh (Minority Mindset): https://link.chtbl.com/1257-podScooter Braun On Healing Past Trauma, Building A Business Empire & Finding Peace: https://link.chtbl.com/1244-podOvercome Your Beliefs Around Money & Begin Investing In Yourself w/Grant Cardone: https://link.chtbl.com/1229-pod

I think the single greatest differentiator between the poor and the middle class, middle class and rich, rich and the truly wealthy is... Welcome to the School of Greatness. My name is Lewis Howes, former pro athlete turned lifestyle entrepreneur. And each week we bring you an inspiring person or message to help you discover how to unlock your inner greatness. Thanks for spending some time with me today. Now let the class begin.

Now what's the difference between someone who's selling all the time and someone who's never selling and doing a disservice because they don't offer someone to buy something? When they know like, okay, I have this coaching program or this course or this thing where I know you can get value if you took action, but maybe they shy away from it because they want to focus on brand so much and not be the salesperson, but then it's actually doing a disservice

because they're not in your program. So I think it actually has less to do with the ratio of how much they're selling versus serving in their content, but more so the ratio of selling and serving overall. Because most times, because of this, like we were talking before this about the internet marketing space in general, is that most people's products are not serving. They're not good. Right. They're terrible. And so what happens is like, it is the most right hook of right hooks possible. Like you just lose a ton of goodwill with the thing. Apple doesn't lose

goodwill when they come out with an iPhone. Everyone's just excited about it. And they use the iPhone, they tell their friends. So the difference is in the goodwill that comes with the quality of the product. And so I think that's where the issue is. It's not like, do I sell or do I not sell? It's just, is the thing that I'm selling. And the vast majority of people who are pitching all the time are natural promoters, not product people. And so like most times the greatest product people, like Naval had this quote that I really like, he said, you're only selling because you don't know how to market.

And you only market because you don't know how to build a product. Because like the best products market and sell themselves. Now obviously if you're Steve Jobs or Elon Musk, it's like you build amazing products and then you back them with unbelievable marketing and then you have an army of salespeople that are selling for you. So it's like then you have them all and then you have them with unbelievable marketing. And then you have an army of salespeople that are selling for you.

So it's like, then you have them all. And then you have a trillion dollar company. But just being exceptional at any of those will make you money. But you get the multiplicative compounding effect if you're good at two or three of them. Right. Were you always good at making money? Or was there a time where you were like, man, I'm just broke, struggling, and trying figure this thing out? Depends on like how much we're defining, you know what I mean? Like right out of, I finished, I finished college in three years and then did the management

consulting path. And so like out of college, I was making like 50,000. Right. Right. And I lived in Baltimore. So like my cost of living was like $5. And so I was able to save a bunch of money. So I saved $50,000 in two years living there. And that's what I was able to start a bunch of money. So I saved $50,000 in two years living there. And that's what I was able to start my gym with. Did you understand money when you were in your teens or growing up? Or did you feel like you were scared of it or it was scarce? Or were you thinking, oh, I'm not really worried about money. It'll come when I'm ready.

I've always been a saver. I've always been a saver, not always been a saver not a huge spender I think part of that is because I don't get a lot of when I pay a dollar I feel something different and most times if I buy something I don't feel any different so I don't get a lot of utility I just don't get a lot from it I think I've been aware of that for a long time

if you don't spend a lot and you make even a normal amount of money for a decent amount of time you end up having a lot and my income went up I would say that there's definitely elements of scarcity that I believed in for a long time. Really? Yeah. I mean, around competition was one. Tell me about it. What was that about? So like when I had, you know, when I had my gyms, for example, this is, you know, almost a decade ago, you know, I was so concerned with the guy down the street was, well, who does marketing? Is he copying my ads? Like I used to get so obsessed with this guy down the street was, well, who does marketing? Is he copying my ads?

I used to get so obsessed with this stuff and it just so doesn't matter at all. He could copy and we could both have really big successful gyms. It's not like there's a lack of people who need to get a change. And then even then it's like we're only talking about a five mile radius, not like the rest of the world.

There's just orders of magnitude of thinking in terms of scale that I was just like completely like aloof to. What happens when we focus on competition so much? What happens to our ability to scale, grow, our creativity, our money making abilities? I think you become emotionally reactive to the activities of the other person. And so you're truly focused on nothing that adds value. And so it's because of it's not the competition, like competitors don't put you out of business, but you obsessing over competitors does. Right. What should people be doing instead of obsessing over competition? It's all customers. It's all just being, because like, if you can get,

you know, there's a billionaire in my, in my building who, he was asked on interviews, if you had one thing that you could tell someone if they wanted to build, you know, a company like yours. And he said, your customer must absolutely love your product. A lot of people just underestimate the amount of effort it takes to go from good to great in a product or a service. It's like, if you've ever been to like, the difference between a five-star restaurant and a four-star restaurant, you know, looks like 20%, but it's 10 times the effort. You know what I mean? The difference between like a one Michelin star and a two Michelin star restaurant is an ocean. Right. And so I think like I use the book as example

because it's an easy one to reference. Most people try and just write a book. And then once the final word is done, they're like, send it to the editor, edit it, cool, and let's ship it out. But like that book, I rewrote five times, end to end, the whole thing. And each time, the goal was to make it shorter. It's like, how can I say this in fewer words? How can I say this in less words? And in doing that, and the same thing happened with Jim Luntz with that product, is that every time we created a 2.0 or a 3.0 or a 4.0, we made it shorter.

How can we make it easier to consume? And that was the reason we wrote the book about the value equation. It's like, what is value? How do we define that? And so if we're customer focused, we can obsess on value and then have a very iterative approach. And I think that you came from the internet marketing world. And I've given this in a couple of closed door masterminds where I'm like, guys, you all say that your product's amazing. And I'm like, what's your CRC? What's your CHS? What's your NPS scores? What are your TTVs? And they're like, huh? I'm like, well, if I asked you your CPM, your CPL, your, your, your cost per book call, your cost of acquisition, like all of these things, you could rather lose off in two seconds. I'm like, so you

guys say that your product's amazing and yet you don't measure a single metric around product. Wow. It's like focusing on that more. Right. So the thing is, if we can get that part right, then you get so much... Because if we can just get each customer to get one more customer, then we get... Our return on ad spend doubles. Right. But then if you think about what your contribution margin is on that extra customer, if you don't have to spend the cost of acquisition, so much of that drops to the bottom line and

then the company just becomes so much more profitable. Yeah. Just by like tiny levers that we do here. Like how can we take, you know, with, I think we were talking earlier about our publishing business. We're like, okay, publishing is something that takes a long time to do. How can we figure out TTV is time to value? So how can we figure out some sort of experience or some sort of win someone can have in the

first seven days? Like how can we get them a dollar? Is there anything that we can do to prove? Of launching their book. Yeah, exactly. Like something, some proof of concept. And we were able to figure out how to, we're talking about mini book, get that going in a very short period of time so that people could just, and we're like, hey guys, this is an MVP. This isn't your perfect product. We just want to prove to you that it works. And so then they get $1 in their account. They're like, and we're like, you are now an entrepreneur. It gets the momentum. Yeah. And now you have that identity shift that happens.

It's like, I just made money on the internet. Like, yeah, you did. Now let's do a real book that's like really good. Like, this is not the product, but this is proof of concept. And so that was like a more creative one we had to do. But like in other businesses, it's like, how can we always drag forward at least some sort of big win so we get the emotional buy-in to then fall through? Like when we had the gyms way back in the day, I would run people through like a six week, really aggressive diet in the beginning.

And that was because even though the sustainable weight loss is, it takes a much longer period of time, you know, et cetera, the slower you lose it, the longer it sticks off. But the faster you lose in the beginning, the more likely you are to stick with it. So you get this emotional buy--in and you're like cool. Okay. We just did a lot of weight loss in six weeks I need you to chill for six right and then they're like but now they believed us because we had just delivered You know a big win kind of results exactly quickly Yeah, and so it's like we know how to do it But now we're like you can trust that we do know how but now let's just maintain for six weeks get your hormones back Make sure everything's good

Hunky-dory, but a little more just maintain for six weeks, get your hormones back, make sure everything's good, hunky dory, but a little more muscle, because you lost some during this kind of aggressive cut, and then we'll get into a more sustainable phase. So it's just how can we drag that forward, and I think that level of obsession, the way people obsess about promotion, if they obsess the same way about product,

the amount of profit they would make as a result of that is just like, it's huge, and those are sellable businesses. The marketing-driven businesses do not have nearly the enterprise value that the product driven businesses do. So would you say the key to going from good to great is obsessing on product, great product greatness? 100%. What if someone, you know, they have any product, a physical product, digital product, coaching, a software, and they're watching or listening, what should they be thinking about to making the product that much better?

They've put a lot of time and energy launching it, building it, they've got sales, maybe they've had it for a year or two. How do they break it all down? And it says, is it 20 different factors? Is it like just do these three things and it's going to improve the quality of your product? What should they think about? It's a really good question.

So there's like three different angles I want to take this stuff. So one is like what I talked about in the book, which is like the value equation. So what is that? So there's four variables in the value equation. The first one is the dream outcome, which is, is the thing that I'm delivering fundamentally valuable? And this is especially for people probably more so who are trying like starting out in their, in their like entrepreneurial career. You want to map, draw it out for me too, if you want to. Sure. I'll hold it up for people. Yeah. So you've got, you've got your dream outcome. So I'll just put dream here, right? You've got dream outcome, which is the first variable. The second variable is the perceived likelihood of achievement. And so the idea is, and I'll give

you an example of this. If you have, let's say you wanted to get plastic surgery, whatever. Is that what you did with your calves? That's exactly what I did. If you wanted to get plastic surgery and you had the option of two guys who are going to do the surgery, one guy has done 10,000 surgeries and one guy is fresh out of medical school, this is his first surgery, which guy would you go with? Probably 10,000. It might even take this guy half the time to do the surgery as this guy. And double the price.

Right. So we might. And it's double the price, why? Because of the perceived likelihood of achievement. We believe that when we pay this man, we are more likely to achieve what we want, even though the work is the same, probably longer on this side. But our perception of what we're going to get in a real way increases prior to purchase, which is the same reason that if you have like 20 people who told you that this restaurant is amazing, you're willing to pay way more, even though you haven't experienced it yet. It's the perceived likelihood of getting the outcome.

To rewind on the dream outcome, this is more a commentary that, how is it that you have a 50,000, you can solve the same problem, let's say weight loss, because everybody understands that one. If I'm trying to help somebody lose weight, there's $50,000 solutions and there's $5 solutions. There's free solutions, right?

$50,000 solutions, you can get liposuction, right? And get a full body lift and whatever. Got it in a day. Right. Or you can get an ebook, you know, for five bucks. So the question is, why are these two things, you know, more valuable? And that again goes to perceived achievement. But if I went from the weight loss to let's say making money, if I had two things, in general, all the things in the making money category will be priced higher because there's a more direct ROI. So that's why between categories, dream outcome as a category can be higher or lower. But then once you're within a category, it's the other three variables.

So perceived likelihood of achievement is number one of the other three variables. The next variable is underneath, which is the time delay. So between when I pay and when I get, what's my delay there? time delay. So between when I pay and when I get, what's my delay there, right? So if I were to say, using the weight loss example, if you swipe your credit card and you look down at your stomach and you just have abs, how valuable- People pay a lot for that. Exactly. And all we did was just decrease the time delay. And so if, let's say in a B2B example, if you had a marketing agency, for example, and normally it's like, okay, you guys need to send me all this creative and we got to get everything spun up and it's going to take us, you know, 45 days to really get everything, you know, ramp. We got to

build a funnel and handle that, blah, blah, blah. Right. And then let's do a different example. We're on the same call. The guy says, cool, we're going to get you going. And you hang up the phone and your phone rings with a prospect. That's pretty big. Even if it's the exact same thing, 45 days from now, your phone rings with the 45 days from now your phone rings with the prospect, today your phone rings with the prospect. How different is the perception of value? Phenomenally different, which is why the time delay is such a huge piece, which is why time to value, we're referencing earlier,

is such a huge part of increasing the perceived value of the product. And so that's the time delay. That's the third. Yep. And then the fourth one is effort and sacrifice. And so effort and sacrifice are two sides of the same coin. So effort, as I define it, are things that you must begin doing that you do not want to do, that you did not have to do prior to the purchase. Give me an example. If I have to wake up early to go to the gym, that would be effort. That is something that I now have to do. And so sacrifice I use as the equal opposite, which is what do I have to stop doing that I want to do that I would continue to do if I didn't have to.

I have to stop eating milkshakes at midnight. Yes. And even in the B2B example with the marketing agency. Well, now what do I have to do? I have to start making this content. I have to start hopping on meetings every week. We have to start looking over these metrics. To hire new people.

Right. And so oftentimes, especially like businesses, they think that their price is the most expensive thing that they have in the cost. And it's not. So think about this. If you've ever asked someone, hey, I'll give you my service for free. And they said, no, it's because there are other costs that you're not taking into consideration, which also means a lot of times your price has far more wiggle room in it than you think it does. has far more wiggle room in it than you think it does and if you can decrease a much bigger hidden cost by asking for more money and you can solve a hidden cost you can make more money and improve their experience at the same time right and that's when you just make oodles and oodles of money when does someone know

so this is a good to great concept right what we should be focusing on is kind of these this main analogy and factor. When does someone understand, a lot of people talk about their worth, like I'm worth this, I deserve this, whether they're an employee or they're an entrepreneur and they want to price something. When should they be thinking about their worth and increasing their rates, whether as an employee or as an entrepreneur, how do they know? Because you only worth what people are willing to pay.

So how do you get people to pay what you believe you're worth? So I think there's three variables that come into like how much you can charge, right? The first one is value or perceived value from the prospect. Perceived value, yeah. So perceived value. The second one is how good you are at negotiating, which I put that, or persuading, you could

probably put that as just persuasion in general. Right. That's a good- Because if it's a job, you might be negotiating. Sure. If it's a customer, you might be negotiating too, but it's persuasion in general. And that's a whole skill to develop on its own. 100%.

And the third one is how unique it is. So that there's no easy alternative. Right. And so if like, for example, let's say I provide something that's really valuable, unbelievable at selling. Rare. And then another guy is willing to just do all the same stuff for just less. Right. Right. And so it's being decommoditized, what we talk about in the book too, is that people have to be able to, they cannot, and the goal should be with our services that we have, that no one can hold up our service and somebody else's and say, these two are similar enough, I'll pick the cheaper one. And so the goal is how can we differentiate ourselves in enough

ways by looking at the value equation and thinking, what are all the things that are making this take longer and how can I remove them? What are all the efforts and sacrifices, even these micro things, these nuances that make things more difficult? And so like the kings of this, if you look at like Amazon, right? Like the biggest companies in the world, I'll reverse, the small companies that are out there, they always focus on the first two things. Let me promise something really big. Let me show you all these testimonials. And that's all they do. Just promote these things. It's amazing. Listen to Sammy. It's amazing. Listen to Tommy, right? That's all they do. But the biggest companies in the world focus on the bottom side of the equation, which

is how can we make things faster and how can we make things more effortless? Like Netflix destroyed Blockbuster, not because they fundamentally changed the product at all. All they did was they made it happen immediately and from the comfort of your home, right? And so they just dramatically decreased the cost and effort that was associated with watching movies and boom boom they blew up all right, and so like Jason Fladley and his a friend he said, you know

One of the easiest business models in the world is just look at what everyone else is doing and do it in half the time Right like that. It's just like people like what do I do for business? Just look what like if someone could you know? Like can cut your lawn in whatever month hours you clean houses So you can clean houses in less time because it's just less inconvenience when when people when you're there in their house less time and less money or same money same money yeah or more money you know like it depends on what are the what are the hidden costs so like probably like with cleaning what are the hidden what are all the things that people hate scheduling is probably a pain right uh hearing the noise is probably a pain like silent cleaners

right right like what are like you you list this out and that's, we outlined that in the book of like the process of thinking through this, but like, what are all the pains and problems that your customers complain to you about? And so like the goal is always in the support tickets. So when you're talking about like obsessing about a customer, right? It's, let's go through all the comments on the videos, right? Let's go through all of the support tickets that are coming in and those complaints inside of the complaints. Sure. Like what you don't want to do is say like, well, these guys are all victims because then you lose all the power as a business owner by just blaming them. Let's see if we can figure it out. Maybe no one else has figured out how to do this, but we might as well try.

Right? And so I think if you can approach it with very open hands of when you accept the feedback, it gives you the gold to really create huge breakthroughs in products and services. Were you always open to the feedback from customers? Or when did you learn to be like, okay, this sounds like a victim conversation, but there's something here where this person's struggling and if I can make it more effortless, it's going to be a better product for that person. I think it's just taking time.

And I think it's, because I think a lot of it, I think is really beating down your ego. And I think like in a lot of ways with business, in my opinion, ego is the enemy because it gives us too much confidence when we don't deserve it. When did you start beating down your ego? I mean, I've been trying to do it since I was 19.

It's just been a very slow process. I just realized that it was the root of all the unhappiness that I had. And like everything that I had was in comparison to other people with for no reason. And like, you know, I've obviously adopted some perspectives we'll probably get into later, but that are contrary in nature in terms of like how we live. But not just, there's no benefit to ego. There's just none. And then I have a different thing that I've been thinking about recently. I'm excited to share it with you. So there's, you've probably heard this, but there's a lot of evidence

that points to with mitochondrial DNA that we go back to like one woman birth, like the mitochondrial DNA of all humans is comes like tracks back to one woman, right?, like the mitochondrial DNA of all humans, this comes, like, tracks back to one woman, right? And so I think that that's interesting within the context of legacy, because people talk about legacy and they want to like leave something for their progeny. And we love our sideways family members, right? What do you mean? Like, oh, yeah, like your family.

Yeah, yeah, exactly. right what do you mean like oh yeah yeah like your current family yeah yeah exactly but like if we all came from the same mitochondrial dna right then then we like not to be like weird and huggy huggy lovey but like family members 100 yeah of course i find that really fascinating it's just like it's like a super distant cousin and and this is why this is why when i met you for the first time yeah what did i do when i met you deep long hug deep long hug oh yeah and i do this it was a triple hug it was a triple because you you broke it i broke it twice i was like bring it in bro and then you have to surrender there's a reason i do that is because um oh that's the thing i didn't know well i mean i i mean that's just a unless it's somewhere where it's like maybe someone who's older that doesn't want to be hugged or, you know, your wife, I'm going to give a quicker hug.

I'm not going to be grabbing. So, yeah. But it's, you know, it's a respectful, you know, understanding the human being in front of you, doing your best to respect it. But with you, I knew I could just hug you and it's going to make you uncomfortable. And it's going to make you uncomfortable. But for me, I don't know if I'm ever going to see you again. I don't know if I'm going to see you tomorrow or anyone tomorrow. And so why not embrace people with, you know, a three to five, 10 second awkward hug and let people know that you really appreciate the moment and your present. That's what I try to do. It's

what I try to focus on. But, um, you know, and if we're all distant cousins, then why not treat each other that way? The best way possible, you know? And I didn't mean to launch all the way there because I'll go right back to ego. So I can scoot us back. Otherwise, we'll go in that direction. But, yeah, so I think because all this comparison, I was like, well, if I were comparing myself to a family member, would I feel the same way? And if all these people were on the same side as me because we're all family, would I still feel like I would? Because I've just tried to attack it from a logical perspective of like, how many different

ways can I try and defuse this bomb? And I think there's a lot of keys and you just unlock tiny pieces of it and you can just try, you know, piece by piece. And I don't think anyone ever conquers it, but, you know, just hopefully I can over time. Get better. I used to be very competitive as well as an athlete. That's all I thought about was winning. It's like I had to win to feel like I was worthy or I was good enough or I was talented enough. And if I didn't win, then I wasn't reaching my goal of winning the championship or the prize or whatever it was. And I took that into business for many years and I felt like I needed to compete with other people. And then it's funny when I started this show almost 10 years ago, I was like,

it can't be about me. It needs to be about collaboration in order for this to really grow and scale and change lives and impact people. It can't just be the Lewis house show all day long. One, I'm not smart enough. I don't have all the answers. I'm not as talented as you shorter guys are way smarter. That's why you're so much more brilliant. know and I was like I gotta bring on the smart people and create a safe space I got all the tall guys on right now just catch it right like everything all my audience will get taller as a result But it's funny because when I started to shift that the ego goes back into still comparing and ranking some nice things and I was Like okay when it when I started to shift that It's when I you know the platform

and the community started to expand because I made it about shining the light on others yeah you know and doing my best to shine the light on others and when you do that when you shine the light on an idea or a mentor that taught you something usually good things come back so yeah that's interesting so when did you start to shed this ego mentality? I mean, I started attacking when I was 19. 19. And how old are you now? 32. 32, yeah. And I think I have like 40% less ego than I did then.

That's good, yeah. And how do you diminish the ego as you continue to scale and exit these big companies and build your brand and get more and more attention and known? How do you bring it back down to the humility? I think it's linking the two. So it's trying to link these good things are happening because I'm decreasing this thing. That's smart. And so that way I can have a positive reinforcing association

with the success that actually, that would normally amplify in the wrong character traits. What do you think would happen if your ego? Was at the highest level right now? I think a lot of people would I mean a lot more people would not like it Like I mean, I don't think the message would get across because to be fair. I think the message would stop it would the spread would happen much slower or not at all because

The message would change because the message wouldn't be about the message It would be about me and I think that I think that probably the reason that this has grown so much is because you've you've tried to quiet yourself in so that the message and the idea can spread to as many people as possible and you put the message on the pedestal rather than lewis on the pedestal and i think your audience realizes yeah that's interesting so what do you think you were making 50k the first couple years out of college you you saved 50K within two years, which is amazing. So you were disciplined. What was the habit or the switch from one year to the next that started to bring in more abundance financially? Not in an incremental 20%, but it was like, boom, this was 5X, 10X. What was that habit or mindset shift for you that started to develop more income? So there's like the science and the art kind of both sides. So like the science side is just the leverage. So the amount of money you make is proportional

to the amount of leverage you employ in your life. And so, you know, four types of leverage. This is not mine. This is Naval Ravikant's, but I'll just say that. So you've got labor. I call it, I use four C's because it's easier for me to remember. He says labor. I say collaboration. So funny that you said that earlier. But it's just getting other people to basically use their time for your cause. The second level of leverage is other people's money, is getting people to invest in your thing. And then the next two are, so these two are permissionless, the first ones. You need to get someone's permission to work for you and you get someone's permission to give you their money. The other two

are permissionless. So you can do them on your own. One is media, which is what you have here, because the cost of making one video and having one person see it versus a million people see it is the same cost. Right. And then the other is code. Right. So I say content and code. So those are my four C's. So collaboration, capital, content, code. And both of those are not binaries. It's not, am I using other people? Am I not using other people? It's to what extent am I using other people? Do I use other people's money? Yes or no? No. It's how much of other people's money am I using? And so each of these are continuums, not binaries. So somebody could just use other people's money and be a billionaire because of the extent they use it. But those are the types

of leverage that exist. And so as my income went up, it was by proportion of the amount of leverage I was employing. Really? How are you, what of these four were you leveraging the most? So in the beginning, I had no leverage because I was an employee, right?

I was using my own time. The next thing that I started doing was I became self-employed, right? So I had a little online training business that I started in between my quitting my job and starting the gym. And so when I started the gym, I started getting labor was the first.

Other people, yeah. Not a lot of it, but I got some of it. And so that gave me that first next tier. I went from making- To the part-time interns. Yeah, yeah, yeah. I went from $5,000 a month to I think about $30,000 a month.

So that was the big jump. It was just, I had a team. I made a small team, but I had a team, right? Now that's overall in revenue. That's not your take on that. That's in sales. You might've been losing money or whatever. Yeah, right.

I was probably making 20,000 a month at that point. For yourself? Yes, for me. After expenses and team and everything. Yeah, that was then. What did that feel like going from five to 20? Did that make you feel something different? Was there a shift inside of you when you took that action?

Because for me, when I started this, it was all about vanquishing my father. So it was all about, I was Middle Eastern father, only child. So like I was raised by a single dad. It was just me and him. That was it for the vast majority of my life. And so he's Middle Eastern, came here with a thousand dollars, became a doctor. He was a doctor, came here, learned English from watching television. You know what I mean? Has the American success story. Absolutely. That's amazing. And so I was born here though. Speaking another language too? French was my first actually. There's a whole story around it, but anyways, but yeah. French is your, how many languages do you speak?

That's the best one. I'll just leave it at that. But all of it was about making him proud, right? So that's what you did. You set out to do that. That's what I was trying to do. And then I think that throughout my like adolescence, I realized that it was something that was always going to be withheld from me. So it didn't matter what it was. The goalpost would always move so that it would never be proud enough. Right. And it was just, and it was because he wanted the most out of me. And so like, if I got, let's say, you know, a 99 on a test, it wasn't congratulations. It's what'd you get wrong. Oh man. Right. And that was always what it was. That's okay. Like I'm, we're cool. I'm very happy with my life. Yeah.

And I realized that. And so this desire to gain approval turned into a very deep anger. And so. Towards the world, him, yourself, other people. Mostly him. Mostly him. And most like him and myself probably split. Probably 50, 50.

You know what I mean? like him and myself probably split probably 50 50 you know what i mean like and um and so it was like my earlier i'll say quote success was purely fueled by rage like it wasn't it wasn't like it was it was rage you know what i mean i was in the same boat yeah yeah and it was like and i but there was probably some element of me that's like almost enjoyed the suffering because like i just would get in the space when, when you ask like, how did I feel by getting the extra 20,000 a month? First, my goal was to make as much as my dad. And then it was to make more than my dad. And then it was to make more than my dad had ever made his whole life. And so once I had done that, the wanted the success to be unquestionable.

Like it couldn't, there couldn't be a but, there couldn't be an asterisk. It had to be so undeniable that vanquishing was the word, right? And so for a five-year period after I quit my job, my dad did not support, he didn't support me quitting my job. Why not? Even though you were off making money and building a business. Because he didn't, he's like, you're, what are you, a gym owner? Like, he's like, you went to Vanderbilt. You were on a management consulting career. He's like, you got, you know, you got above Harvard's mid score for your,

you could have had a credible career. Of course. Right. Right. Gym owner doesn't sell well on cocktail parties. Right. What are you, what are you, you know, he's, he's figuring himself out. Yeah. He's doing this little gym as a side thing. Yeah, yeah, yeah, he'll snap out, right? And so, I mean, I made plenty of mistakes too when I had the gym. So it wasn't like all, you know,

sunshine and rainbows for me. Like I had a lot of mess ups that I did. I got in bad partnerships. I mean, like all the things that you could possibly do. And over that five year period of me scaling to six locations with my facilities, at the end of that whole thing, I ended up losing it all. Really?

Yeah, lost everything. Six locations, lost the whole business. Yeah, well, I sold five of them. I shut one of them down because I wanted to start doing this gym launch thing, which would be like flying around doing turnarounds. Because I started doing it. That's when I met Layla. You find a gym that's kind of like not succeeding.

And you fly in. And you do a makeover. Yeah, exactly. Bar rescue, same thing. Like a gym. same right like same exact thing she's done a tv show with it believe me the many regrets i have right that would have been an awesome one we did 32 turnarounds wow it was almost two years yeah and so um we we started doing that and anyways i lost everything um because i took all the sale money and i put it into my last location and then the partner that i had there siphoned the money out um because i was like yeah like well i'll put all the sale money and I put it into my last location and then the partner that I had there siphoned the money out because I was like yeah like well I'll put all the money from the sale of these gyms into this thing like it doesn't matter it was my own mistake it was on me

but it was even then it was you know we'll see you know we'll see how long like this isn't real like we'll see and then once I started once gym watch really started taking off it wasn't until i think we did like 17 million in ebita like profit take home um in one year in one year that my dad i was 27 that's crazy yeah my my dad my dad called me and he's like are you sitting down i remember like at this point like we were like not talking too much you know maybe every few months it'd be like a five-minute phone call. And so I was like, sure, yeah, I got time. What's up?

And he's like, you're going to want to hear this. And I was like, okay, what? And he's like, I'm sorry. And it was the first time he'd ever apologized to me in my life. And what's interesting to me, though, is that it didn't feel like anything. I didn't care. Why not? Because I had stopped caring about what he thought about me a long time ago

and it was like when I quit my job was the day that like I accepted dying to my father because because very much to me at that point was I was I was really really sad at that point in my life when I Had the job because I had really done everything that he had wanted me to finish Vanderbilt in three years as president fraternity I had won writing awards. I'd done like a bunch of like, I'd done everything. You know what I mean? I was in, I was vice president of powerlifting team. Like all this stuff I could possibly do while, while still being president and did it in three years. Right. And got a management consulting job that was like a good job, had all the credibility

and it just, I knew it wasn't enough. And I knew that. And so I knew that the choice for me was that I either had to die to him or I had to die to myself. Wow. And that was ultimately like the choice that I put in front of myself. And that was whenever I was like, maybe I should just get, I was like, die to him or die to you. And so that was what gave me the confidence to break that. And then I physically moved because I couldn't be in the same area. Wow.

So I actually- You were 23 at this point or 20? So I called my dad when I was like in Ohio and I'm from Baltimore. So I'm like, how's from from? It was for you. I called him when I was there and I was like, hey, by the way, I'm doing the gym thing.

He was like, okay. He's like, why don't you come over? We'll talk about it. Cause he knew that like, if he came over with enough battering i would be like fine i know this is smart thing i'll take the you know i'll apply to you know booth and harvard whatever and i'll get the i'll do that whole thing and that because that was a cycle i just kept doing that and i was just like no i'm not going to do it so i was like well i can't i'm in ohio he's like what do you mean and then the tone totally shifted and he was like you always do always do these crazy things. And you're always like, he's like,

you're never balanced. It's always extreme with you. There's no middle path, blah, blah, blah. And so, um, anyways, I, you know, I did that five years, Jim's lost it all anyways. And then started gym lunch. And then that's when, and then that really took off. And then, um, but when he called me and he apologized, um, and this is where I like, you know, I'm ashamed of myself, but like, I could have just let it lie and been like, thanks. Appreciate it. You know, what do you do instead? Instead, I said, I was like, you know, when people get up on stage and they're like, hey, you know, they get awards and they're like, hey, mom and dad, I just want to say thanks so much for always believing me.

I was like, I won't say that. Oh, my gosh. I was like, because you never did. I was like, the only time you accepted me, I was like, was once every other person on this planet had accepted it too. Oh my gosh, man. And so that's, so I said that. That's intense. On the phone, he said that? Yeah. What do you say to that? He said, well, we'll see how long it lasts. Oh my gosh. So that was. So he's still kind of in competition with you. Yeah. And to be fair, when he apologized, he said, you know, I'm sorry. He said, but in my defense, if it had been in my time, I would have been right. And so, you know, um, but all that to

say, like, I should have just said, like, appreciate the apology, you know, thank you. Cause you know, Tony Robbins said something that I thought was really impactful was like, for the vast majority of my life, it's been like how my father shaped me or whatever. But rather than thinking like, what, what can I use from this dynamic? Like what gift do I have? Yeah. Like from his mother kind of like beating him or whatever. Yeah, exactly. Like, what do I, like, what do I, you know, they're blaming for the good. Right. And so like, I have so many things to blame for good from that. And I'm very, very happy with my life. That is why $20,000 a month didn't feel significant to me because the goal that I had, my expectations weren't to make money. My expectation was that I had to make more than he

had ever made. And so I had a very big vacuum to drive towards, which I think in a lot of ways was a gift because like I blew past a hundred thousand a month, 500,000 a month, million a month. Like I blew past those things because like it was never about having enough money for me. It was about feeding this monster. But once I got there, I realized that what I had done was set up a game to win by my father's rules. And you could never win. Right. And to be fair, would I want to win a game that wasn't for me? And it was making you suffer.

Sure. You're playing the wrong game. I'm playing his game. And so I did win. But I won at his game, not mine. Right, right. And so that was kind of what I think making that realization was kind of the slow shift that happened from there. So when you won the financial game or the game of like I've made more than you in a month or a year than you've made your whole lifetime, how did that make you feel?

And when did you realize you needed to start playing a different game and what would that game become? Okay. There was three questions there. What was the first one? How did it make you feel the moment you crossed the finish line of the game of making so much more than he'd ever made in a short amount of time? Relief because we actually got our relationship back. Not like, you know, I wouldn't say we have like sunshine and rain, but like we have a functioning relationship. I would say it's role based.

Like I'm a, you know. Yes. But what happened was we are both very like strong personalities. And it wasn't until I think that he accepted me as off in our relationship that we were able to kind of like move forward again. Because before that, my, because my dad's, he's a doctor. So he's always had, you know, like decent money. And I wanted to be beholden to no one. You know what I mean? Including him, like I didn't want his money. I didn't want anything, you know? And so I think I had to establish my own, I had to like really plant my

own flag to be seen as a man in his eyes. And so I think once that happened, I think I thought there was some level of like, there's no conflict here anymore. Like this is undeniable. This is beyond reproach. I have an attractive wife who's really nice and awesome. I have a business mix. I'm in good shape. And if you think about it, like the way, I mean, I'm just being really real with you. I blame my father for the many things that I have become in a lot of ways, right? Because everything that was not perfect was criticized, right?

And so like I've had a six pack since I was 15. Wow. And it was because he used to always criticize everyone who was overweight and being that they're undisciplined and they don't, they don't try hard. Right. And then I've, you know, like, and then it was like about having pretty good, nice, everything, perfect women, right. Not just pretty, but like everything has to be perfect. Right. And then, and then making lots and lots of money. And so it's like all of these elements I had to max out to again, win at that game. But my whole life was designed to be bulletproof.

Was that so that I just wouldn't be criticized. And so that was, cause that was what I just, I knew that if I could criticize myself harder than anyone could, then if they did say anything, it was never as mean as what I would say to me. What's the meanest thing you say to yourself? Oh, like, it's all around just not being good enough.

Right now? Oh, not now, not now. But I was saying, yeah, 100%. And it was about being, to be fair, the actual thing would just be being weak. And so it was all about strength. Mentally, emotionally, physically weak, financially weak, everything.

Just weak. That's how you felt? Just powerless, yes. You felt powerless for most of Just weak. That's how you felt? Yes. You felt powerless for most of your teens and 20s? Yeah, for sure. And so everything that I did was to counteract that, right? Like, what can I do? To get as big and strong as I can get, yeah.

I'm going to make as much money as possible, have all the women I can get, yeah. Exactly, 100%. And so I pushed against that to try and quell that, you know, that need or that desire, that feeling. Did it satiate that need when you had all those things? Yes and no. Yes, because when I got there, it forced me to change my perspective. The perspective is what changed the way I felt. Basically realizing that those things were never going to solve anything is what allowed me to. we're never going to solve anything is what allowed me to. But, and Les Brown, I think,

says this, where he says, like, everyone knows that money doesn't, money doesn't make happiness, but everyone's like, I'll see for myself. You know what I mean? And so I think it was one of those, like, I had to cross all the, like, and I say this not as a, as a slight to anyone else, but like, I had to check off the easy ones from the list, which is like from getting in shape, getting the good wife, getting the money in the business, all that stuff. Those are circumstantial. That means I can push with enough effort. I can change my conditions. I can change my surroundings and my environment. And if I can change those things, will they make me feel better? And so I think once I knew, beyond a shadow of a doubt, that that didn't work. Maybe they helped in some ways, but not the internal ways. So what did you have to shift your perspective or

what was that shift where you could still have it all and then have it all internally as well? I think that the whole ego death concept that we were talking about at the very beginning, I try not to talk about this too much because I think it's, it's, um, a lot of people find, take offense to it. And I don't mean it that way. I, I share this as just what worked for me and not as a criticism of any anyone else's beliefs for me the idea that there was no such thing as legacy that when i died eventually everything that i had would become dust and that anything expanded over a long enough time horizon disappears right which if you are like christian for example it's the whole book of ecclesiastes

It's the whole book of Ecclesiastes. If you, and I think the realization of that allowed me to quiet my ego a lot so that I could be more present in the idea that like this moment will only be here in my mind and anything that I do here will not last. And so it shifted how I worked. It shifted how I saw relationships. and a lot of my thinking is around like my 85 year old self I feel like my number one mentor is like my fictitious 85 year old self because it's the only person that I really believe has my best interest at heart and it's no ulterior motive and so there's this there's this tweet that I had that went pretty

viral but it was like listening to a billionaire or a millionaire I'll just use that like when I was in my 20s I wanted to be a millionaire and when I was a millionaire I wanted to be in my 20s mmm and so the idea that my future self would trade all the money he had to be poor in 20 again made me really reanalyze how I saw living life in the moment. If I literally in the future will value my present moment more than the achievement of the thing that I'm seeking right now in the present, then something's off. Because even my future self knows that. Because right now I would pay all the money I have to get 10 years back. Not even thinking about it.

And so then all of what I'm going to achieve in the next 10 years, I would happily give up to be right where I am right now. And so I think thinking about that really shifted a lot for me because it helped me quiet. I'm not saying eliminate, but quiet some of the thoughts that are more ego driven. Because the ego always wants to like separate and isolate from others and prove that it's better. And if I know that it will all be dust, there is no better because we're all going to be dust. And so in that same way, if like,

if we're all going to be dust and we're all siblings, like two very strong frames for me, at least it helped me quiet that aspect. And I think in that way, I was able, I think, ask my people, but like,

I think I was able to show up better as a leader. I think I was able to show up better as a husband, show up better, like to i think i was able to show up better as a husband um show up better like to make content things like that like i don't think i could have made the stuff we make now five years ago because i still think it would have been more it would have been to proving something yes perfect numbers proving 100 of improving proving someone proving a fictitious foe wrong right Right. Right. They're all talking about, right. No one cares. Exactly. And so that was really, and it's like, I had to shift from like, no one cares about you to like, I really want to have a shirt that says no lives matter, but I feel like it would get away too. No one cares about you. But I feel, but I think there's

like a lot of like meat to that where it's like, if we can, because in that way we are all equal. And so I think it's almost the most egalitarian perspective is that like in the end we will all be dust. And so I think in that way that's like we have these exchanges that we have. And in some ways it makes it more beautiful. Why do you think so many people care about power and respect so much? It usually was withheld from them, I think. I think the things that were withheld from us are the things that usually we seek the most, I think. How many really successful guys have daddy issues?

You know what I mean? So many. And so it's like, okay, well, I didn't get his respect, so I'm going to have to compensate with my circumstances, with my environment, so that everyone respects me. And some people do that through fear. Some people do that for violence. Some people do that through success. It really just depends what vehicle you choose. But I feel like the deep need is the same. Yeah. There's something like, I can't remember the statistic, but a number of US presidents, a big number of them grew up without a father, or their father died early in their life. And I can't remember the stat.

It's like 30% or 40% or something of the U.S. presidents lost their father or didn't have a father or something like that early on. And it's like, well, now they're going to go prove something or go to be something. What about the habits that you learned of the wealthy people once you started to really earn and scale your wealth? Were you studying wealth or were you just fixated on like, how do I get one more customer and increase my prices and make better product?

What did you learn about the habits of the rich? I haven't learned much about the habits of the rich at all, to be very candid with you. I think that maybe there are some beliefs that, because like my dad was a doctor, I wouldn't say he was like, you know, ultra wealthy, but like we lived in upper middle class, you know, lifestyle. But in terms of like wealth as I think you and I would probably understand it, I didn't know anything about that. And I don't think I've ever really studied it very much. I would say that my heroes now, like I started studying wealth after I became wealthy. So like- What did you learn about it afterwards? And what do wealthy people do that you think poor people don't do?

They pick higher leverage opportunities in a sentence. So like rich dad, poor dad, like poor dad says get a job. Poor dad says get a higher paying job. Like rich dad says like, and the thing is there's so many innate beliefs that seem commonplace. Like, well, of course, you know what I mean? Like, well, of course, you know, and you know, you buy some real estate and you know, it'll appreciate over time before you invest in some stocks. Like, yeah, of course. But like poor dads just don't say that. And so you have to like learn that, I think. And I didn't, so I'm grateful in that I didn't have

to learn that because I heard that just was a, of course, yeah. Once you have some money, like, of course you don't spend your whole income. Of course you don't. And so there's a lot of, of course you don'ts that I think I inherited just by being in like a saving father, but there's also some upper middle-class people who don't save anything. So like, but I think my dad did a lot of, I think he helped a lot with like money hygiene. I think I've had a lot of really good money hygiene from my dad. The big, the big breakthrough that I had for me was when I stopped focusing on, and this is gonna sound backwards, but when I started my gyms, I was all about building the business, right?

And when I built the biggest companies that I've had and now recently sold and now we have our portfolio, it was about how do we make the most money? And I know that sounds completely backwards, but the only way that you can make the most money is to provide an exceptional valued service and charge a ton of money for it. And because I optimized around making money, I started going for low capital expense businesses because I had lost everything after that five-year stint. And so I was like, never again am I going to reinvest every dollar

from the business back into the business because I've lost it before. So when I started the next business and every business I've had thereafter, like we take dividends every month. And we do that because- You don't wait till there's an exit 10 years later and put all your money in. I'd love to do both. Yeah, yeah.

Why not both? Sure. Right? And so that was- Take a dividend and get a bigger deal. Of course. Yeah. But not just put money in and wait

and get no money back. A hundred percent. And the thing is, and this was a fallacy I had, because people always talk about reinvesting in their business. But I realized that that just meant that they weren't making profit. And so the vast majority of businesses, even the software world is somewhat shifting in this, but they want to see profit.

And then even better is if you have net free cash flow, which is just a fancy word for the amount of money that you can take out every month after making necessary investments in the business. And so I wanted to have businesses that pumped cash flow because I'd lost it all before. And so I think there's a lot of, like every one of my business seasons, I would say I've had three business seasons. I had my gym ownership period. I had my turnaround and early gym launch day period. And then I had Prestigious Labs, the licensing business, and Allen. That was like my last season. Where you exited all of them. Yeah.

And then I'd say like now we're in our third season, I guess. So brick and mortar gyms, licensing, supplements, and software. And then, you know, third season is what we have now. And each of those has a huge magnitude of leverage that was added to it. And so this was like gym launch was started on accident in that I was like, this might be a way that I can make money. Because people were like, hey, you're doing this pretty well for your own gyms. Can you help me turn mine around? Exactly what it was.

Yeah, you're like, can you teach me what you've done? It was exactly that. All right, let me go in here and, oh, I just helped them double their revenue in 60 days. Maybe I'm good at this. People pay me more for that than they'll pay me to help them lose 20 pounds. And so that was the big, that was when I went from B to C to B to B. And then from there, to be honest, it was just going up another order of magnitude because now instead of just building the one business, now we're building lots of businesses at the same time. And so that's kind of like why acquisition.com,

I think has a much higher, you know, has bigger feet for lack of a better term. Right. And so what do you look for when you're acquiring a business or investing in a business that has cash flow and what businesses have the best cash flow? So this will be relevant for everybody in the audience and also hits on what we were talking about with the wealth thing, like wealthy people choose higher leverage opportunities. And we went over what leverage was earlier. The best businesses, especially in an inflationary period, are businesses that have low capital expenses. Okay.

And that's because- Can you give us some examples? Yeah, yeah. So I'll give you opposite examples to make, and then I'll drive it. So something that does have high capital expense, which is what you would not want to get into, would be like stuff that has lots of inventory,

stuff that has lots of supply chain, lots of manufacturing, heavy equipment, things where you have to constantly buy more stuff in order to increase capacity, right? A low capital expense business are things like services, right? Services, you know, digital businesses, software is mixed because sometimes the development team can be considered a capital expense. It really depends on how you build the dev team. But the idea is that if you can produce 10 times more units without phenomenally changing the cost basis, then you will have a business that has lower capital expenses. And so that's what you...

And most of those types of businesses produce more cash flow, have more pricing power. And so, I mean, that's what Warren Buffett invests in. It's high... Like insurance, Geico. There's no capital. It's risk. They're literally assessing risk. It's math. Like the business is math. Like if you really think it's just math, it's the entire business of insurance. And what's crazy, just as a side note, is that a great way of figuring out the highest leverage businesses that exist is looking at the business that's been here the longest. Insurance has been here since before the World Wars.

Banking. The banks have been around forever. J.P. Morgan was around the 1800s. The biggest insurance companies, they're all 100 plus years old. They were founded in the 1800s. And so when you have a business that's lasted that long, to me that's a great breadcrumb of like, this thing has to print money. Because it means that they were able to still keep making money through wars, through famines, through depressions, all of it, and they were still able to keep going. And so I think that when people are like, when you look at all the, like many of the

biggest businesses that exist, they have phenomenal gross margins. I don't want to get too like, you know, business termyy here, but the gross margin is how much incremental cost it is to make an extra widget, right? And so a pill, for example, costs $100 million to make the first pill. And then every pill after that costs a penny, right? And so the gross margin on the pill is very high because if they sell each pill for $10 and it costs them a penny, those are great margins. And most people who are small business owners or people who are trying to get into small business price like small business owners. They say, well, it costs me a dollar. I'll sell it for three or I'll sell it for two. But if you're already

starting on like a 50% gross margin, it's very, very hard to make money. Because think about it, like that's at a hundred, you're already at half. And then you have the rest of everyone else you have to pay off that extra 50. Very hard to do. And so like, I'll give a couple of rules of thumb if anyone wants this, but like if you're, if you're building a service-based business for us, I would, I, by all means, I have to get gross margins above 80%, which means five times the cost of goods. So if it costs me a hundred dollars a month, the minimum I'll charge is 500. Right. And so that also gets you to think about business differently, which is not necessarily even how much can I charge, but how can I provide value and make it cost as little to me? How can I be as efficient

as possible? And if you think about what technology does over time, it's technology takes something that's valuable and makes the cost of delivering it less. And so that's what happens is a lot of people are able to have access to things that were once only for the wealthy, but now become for the common man because the cost basis decreases as a result of technology. And so technology as we see it, you know, like we can create technology, but you can also have technological breakthroughs just through process in your own business. It's like, and that's where niching down and being very specific about the avatar becomes important, especially when you're starting, because then you can productize the service. Because if you're

doing everything custom, which most people when they're starting out do, it becomes really difficult to become efficient. And it becomes really difficult to become efficient. And it's really difficult to become efficient if you have very little margin, right? Or you have to charge huge fees, which most people are too afraid to do. And so the flip side is, if I do the same thing over and over and over again,

I will get better and more efficient at it and I will know how to do it faster and quicker and cheaper. And I specifically choose this type of customer so that I can have more margin because there are millions of, even this one specific type of customer so that I can have more margin because there are millions of even this one specific type of avatar and Then from there I can take the gross margin the extra cash that I have and I can hire the best people I can invest In marketing but when you have such little margin to work off of it's very difficult to make money. Yeah, it's so hard to grow

That's interesting. What do you think it's going to be harder or easier to become wealthy and start businesses over the next few years with everything that's happened in the last couple of years and where this whole great, you know, 2030 agenda is coming. All these different things are happening. The war and all the, you know, there might be another pandemic, whatever it might be. Do you think it's going to be easier or harder to make money? I think technology in general makes things easier for most people. I mean, because at the end of the day, it's increased access for more people. And so I think- To reach more people at any moment.

Yeah. If I were just to use history as a guide, business has only gotten easier to get into. It's gotten more competitive and easier to get into. And so I think that what happens is just the arena gets bigger. So you got more gladiators. So it's more competitive, but more people can walk in.

And so I think, but for the world in general, the more people you have fighting to make amazing products and services, the better it is for society. But the downstream effect of that is that in a capitalist system, it is a winner-take-all for most, for many, not all, but for many businesses. And just by the nature of it, that does create social disarray. And it's just, but the thing is, is like it's still the best system that we have. We don't have a perfect system. Because the other systems remove incentive and humans are driven by incentive.

Even the survivorship bias, like every MLM in the world exists off the fact that there's that one guy who makes $500,000 a month selling ShakeMix and the other five million ShakeMix producers are like, someday, that'll be me. And it's just survivorship bias, right? But that's why the whole capitalist machine works. So I think they're figuring out some sort of a creative way.

I put this on my YouTube channel. But the idea of having 100% death tax, I thought was like, take down like the income taxes and all this stuff. But like the thing that creates the conglomerate at the top is that if let's say, let's say I have a hundred billion dollars, right? That's interesting. And if I have a hundred billion, I'm probably pretty good at managing it because that's why I have a hundred billion. So let's say I gain 15%. You're holding it. You're not using it yet. Yeah. Let's say I gain 15% on my assets. So I make $15 billion, right, on my assets. It is so hard for anyone to make that up in a lifetime. And that might be my kid who gains 15, and the next year he gains 20.

And so the compounding effect of the wealth is cross-generational is where I think it gets crazy. is across generational is where I think it gets crazy. But if there were 100% death tax, because obviously this is aligned with my belief that all of it disappears anyways. So this is obviously Alex's two cents in the world. But it's just basically dramatically lower the income taxes. I think income taxes should be like as close to zero as possible. And then make the capital gains taxes higher, because that's only going to really affect the wealth if you really want to think about it, right? Because people who, if you make with your hands, awesome. If you make on your assets, that's just what that has infinite leverage with time.

So if you trade the most expensive thing for your money, then I feel like you should get taxed less than if you trade no time for your money. Sure. This is like a weird thought experiment. What do you think would happen if it was 100% death tax? I think that billionaires would become far more giving. And as they approach the end,

they know they can't keep it. And I also think it would change the way the game is played. Because if you know, because this is the analogy that I, like, I haven't heard it anywhere else, so I think it's mine. But if you were to imagine life

as a poker game, right? And we, everybody, you know, grows up, they become 18 years old, they can go into the casino, they get a chip, or 21, whatever age you can be. And then you get a chip, and then you sit down at the table, and you're dealt cards, right? And there's all the other players around the table.

And depending on the cards you're dealt and the skill you have, you begin to amass chips, right? And the difference between this fictitious casino and the casino of life is that in the real world, you can amass chips, you cash out, you have a big wad of money, you walk out the door. But in the casino of life, when the green reaper taps you and tells you it's time, you have to get out from the table, but your chips stay on the table and they push them to the middle to be distributed by everybody else and continue to get played for. And that's when you realize that it was a fake game with rules that never mattered to begin with. And so I bought this piece of land in Austin. It was like a big, really, really nice lot. And I remember thinking to myself, like,

got me some land, right? I own this. Yeah, I got that tree to that thing on the rise. It's mine. And then I thought to myself, I was like, well, the guy before me thought the same thing. And the guy before him thought the same thing. And the guy before him thought the same thing and the guy before him thought the same thing and i was like and we've literally still been looking at the exact same piece of dirt and it's just been cycled even if it was father to son even if it was family to whatever like the like death taxes everyone 100 like even if the government doesn't death taxes everybody 100 and then time taxes your money to infinity because like people are like, I want to build a legacy. It's like, that's even just with like within Americana, you know what I mean? Within

the times of America, but like you go a thousand years and there's never been the same superpower over a thousand year period. And so we're like, I'm going to leave a legacy. It's like, but that would be like, you know, let's say an ancient Greek saying, I'm going to leave a legacy for my kids when like they might change their currency by, you Y, Z, or, and there's so many things, and I've had real experience with this because my great-great-grandfather was a ruler in Iran, which is where we're from. We got kicked out because we were loyal to the Shah

back in the day, which is why my dad came to the US. And so, despite that, my great-great-grandfather had like 400 wives, ruler, very, very wealthy. Yeah, very, very wealthy. Different time, different culture. Very, very wealthy. He was a ruler, right? Yeah, yeah. All the money, all the women, all the everything. Everything. Literally, a ruler, right? And it doesn't matter. And here I am. I'm not even that many

generations separated from him, right? Even that. You don't have all that wealth. You don't have that land. Right. And so the idea that we're going to somehow, because the desire for legacy is the desire to cheat death. Like that's what it stems from. It's like we don't want to die. We want to last forever. And so we want to make something that is impermanent.

And so we fool ourselves into thinking that the accolades and the material success and the books we write, whatever, are going to last forever. And they're probably not. Right. And so like, I mean, the sun's going to last forever. And they're probably not. Right. And so like, I mean, the sun's going to disappear at some point, right? So like, if we don't do anything before then, like at the very least that's going to happen. And so if that is the inevitable outcome, I think it shifts the way people think. And I think that's when you start changing. I mean, Tony Robbins talks about like global, global belief systems. And that's why if someone like

adopts a new religious belief, like everything changes because the reasons they do and the way they believe the world works changes. And so I think that if they did do 100% death tax, it would be a really interesting way to see the downstream effects of how it would change the way the players played the game. What do you think would happen if all the billionaires started distributing their wealth sooner? I think what would happen is- Or would they be as hungry to be and driven to push and build and innovate to generate the wealth if they knew, I got to give this away anyways quickly? I think they would. Why? I think it's because it's, I think it's, I think, I'm going to say something that may sound bad, but I think winners win because of who they are.

And so I think it's like sales guys. Like you can have an incentive or a comp plan. They just want to win. But they are salespeople. And if I get on the phone, I want to sell because of who I am, not because of the comp. The comp has the ticket to get me to say yes to the deal, but it will not change my activity. I will do it because I love to sell. Right. And so I think billionaires get there because they love the game. Like you don't get to a billion without just because you obviously don't need it for you. You stop needing it for you millions and millions ago. ago. And so you do it just because you love the game.

What I do think, and the reason that I like that solution, is because, Elon Musk said this, but private enterprise is 10 times as efficient at capital allocation compared to the government. So every dollar that private enterprise spends is 10 times more efficient. And so it is like if we were to death tax 100%. So whatever you accumulate while you're alive, it just goes back. And the thing is, it's not that it would go back into the system through the government. It would if you were lazy. But most people, knowing the government was going to take it, the less efficient vehicle at the end of your life, you would then start thinking about how can I allocate this money efficiently? And so I think what would happen is you'd create far more ingenuity and innovation around social enterprise before they die.

Solving problems. Knowing that the wealth would eventually disappear. So, like, it's more there's this backstop that no one wants to hit. And so I think what would happen is they would change their behavior before hitting the backstop. I don't think a lot of people would just be dumping their billion to the government. I think just knowing that they had to would then trigger them to, yeah, yeah. That would be, you know, that's Alex's two cents of the world, which is obviously different. And you just had a big exit, right? Last year,

what was that for? How much? It was 46.6. 46 million. So when that enters your account, what did you expect would happen? What did happen? And what can you teach other people about what they should expect to happen when they have a big exit? can you teach other people about what they should expect to happen when they have a big exit? So I will say that I did not feel the money. I did feel the loss of cashflow because I had this, you know, I measured myself off cashflow for since. Now you don't have any. Right. You got a big chunk, but then no money coming in every month.

So I actually felt, and I probably still feel poorer now than I did before the exit. That's interesting. Because the cash flow is going down. Now, I know that acquisition.com is going to be, I think, significantly bigger than those companies were. But in the interim, I definitely did not feel any better after that. I am happy that I did it because I do think I'm in the right vehicle doing what we're doing now, making the books, making the YouTube channels, the Twitters, the social medias, all of them. But the cash flow is what I felt.

And because I had taken dividends my whole life, the amount of money that we got out was pretty much about what we already had anyways. So it was not life-changing in any way. It didn't change how I lived at all. Like, not at all. We didn't, we didn't have any big, like, what are you going to buy? I was like, well, I could, you know, I'm happy already. Yeah. I could buy a hundred Lambos before the sale. You know what I mean? Like that wasn't good. And I'd never bought them in and I never did. So like, you know, cause I, I don't get a lot of out of that. Um, what else was different? Losing, losing the team

is hard. Um, because when you sell a company, you sell a company you sell the you sell the people I guess something that people connection that sounds bad yeah but you sell you sell the organism you sell the the system the people processes and everything 100% and so that was that was hard because there's definitely times now that we're building acquisition comm where I'm like man I wish I had so and so oh I already taught this person everything I'd like to have to do it again so there is, but there's also some level of beauty to it because now that I'm doing acquisition.com, um, I have a different appreciation for what I'm doing because every other time that I've started something, it has been from a place of lack. It has been from a like, well, this is

what's going to not make me poor. You know what I mean? Like the gyms was all about that. And then I lost it all. So the second time was all about that again. So this time I'm starting not like that. And I know what it got like before we sold the companies last year, I spent basically 12 months not doing anything because I wasn't required in the business. Like it truly, it ran. And so I had a lot, like it was very depressing. Exactly exactly it was very depressing for me what happens if we don't have a purpose i mean you you find one you know what i mean and so for me but you're in a depressed state even though you have i mean i'm sure you were fine but you were emotionally mentally like what am i doing every day exactly i've never gone to the gym for so long

right can i go out to dinner yeah i mean like what going to do? I can eat every meal I want. I can travel. Okay, now what? After three months of that, you've got to have some mission. You've got to have some purpose, right? Even though you have the money, your safety, you have everything. Yeah. Security, but it wasn't fulfilling.

A hundred percent. And so that was 12 straight months. And it was because we were going through a sales process. So you can't start new initiatives because I'm in the middle of a sale And you don't want to like make any massive new hires And so you just basically have to just like maintain and the whole time you're wondering I hope this deal goes through because if it doesn't then you just wasted a year just doing nothing and then you might have to Do it again. So it was this it was it was a super

Super it was one of the most emotionally tiring years of my life because it's always like, this is about to happen. It's not going to happen. The deal's on the table. The deal's off the table. There's all of this drama that's happening constantly. And I also, one of the things that sucked that I didn't like was as soon as I had made the decision to sell or that I was going to entertain the idea of selling. And this is a mistake I made. Everything became about satisfying a fictitious overlord of like, what will they think about this move? Well, how will they value this?

And I started thinking, whatever acquirer, whatever private equity was going to buy the company, I'm like, how are they going to see this? Are they going to value this? Or is this a waste? And so what happened was I started making the private equity buyer my customer. And that was a mistake.

And so I think that at the end of the day, and what happened was, interestingly, we started the sales process because my wife and I were beat down. We were just very tired. We'd been in gyms for almost 10 years at that point. Not to say that that's not a good thing, but whatever. You wanted the course. We were ready, we were ready, but in order for us to sell it and make it a sellable business, we had to fix all the things that were wrong. Right. And so we took a year before the year. So it took two years. So it took two years, basically one year to like fix everything. And then one year to sell it. But the thing is, it's just like when you have a house that you like

fix up before you get ready to sell it, by the time you're about to sell it. But the thing is, it's just like when you have a house that you like fix up before you get ready to sell it. By the time you're about to sell it, you're like, I love this house. This is amazing. I just fixed all the problems I fixed. Now I've got more cashflow. It's more efficient. You know, I got rid of the toxic people.

Yeah, exactly. And so it was, again, a very like mind trip experience where I'm like, well, maybe I should just hold it as an asset that just produces cashflow. You know, Uncle Warren never sells anything. Like selling is what makes you rich. Keeping is what makes you wealthy. I've got all these kind of things in the back of my mind.

But I think ultimately, I think no matter what we had done, we would have been fine. But I think for me right now, I think the likelihood that the choice, if I had two alternate realities, which I don't have to play in, I think that the choice will ultimately yield

more impact for more people. I would not have the attention to do acquisition.com and the media stuff that we're doing right now. I wouldn't be here. You'd be focused on your gyms. Yeah, exactly. On those companies that were in that portfolio. And acquisition.com would still be a side thing, but it probably wouldn't be the main thing. Whereas now it is 100% of my attention and the companies are killing it. And I feel renewed. Thank you so much for listening. I hope you enjoyed today's episode and it inspired you on your journey towards greatness. Make sure to check out the show notes in the description

for a full rundown of today's show with all the important links. And also make sure to share this with a friend and subscribe over on Apple Podcasts as well. I really love hearing feedback from you guys. So share a review over on Apple and let me know what part of this episode resonated with you the most. And if no one's told you lately, I want to remind you that you are loved, you are worthy, and you matter.

And now it's time to go out there and do something great.