Alex Hormozi Shares it ALLMar 30, 2022
emails. Don't check email if anyone ever emails me. I won't read it so let me know and I literally said a proposal so I was thinking so I set the price on marketing.com and then I thought we could also get acquisition.com which is 400 grand. She says, well that seems a lot more reasonable because I pinned 5.6, but that was smart, but sometimes I still think about marketing.com because I like that domain. but the thing is, the reason I ended up doing acquisitions wasn't even because of the money, it's because the type of people and portfolio companies I'm looking for use the word acquisition as people who don't know the businesses that I know.
I don't know, but since everyone knows what the word marketing means or thinks they know what the word marketing means, it's a little more general, people who are trying to scale their companies talk about acquisition cost, so it also had the double meaning of We, you know, take minority stakes in companies, as well as help with the acquisition, so I like that component, although yeah, 400 grand, I mean, it seems like a stamp because I think it makes Five or six years ago Zuckerberg bought Facebook. com for like 8 million or something, probably a great deal in hindsight too, yeah, yeah, interesting, okay, I have a couple more jokes, um, I'm telling you I could, I could sit, uh, I could sit for hours um, I think a lot of people want to know this, the answer to the next question, what is the fastest path to financial freedom, you talk about everything you are doing on YouTube, I have nothing to sell, I do it to help the people you know. bankrupt, yeah, you got uh, assuming there's over 10 million dollars in the bank today, maybe thanks to Layla, who's closer to 15, I guess oh, a lot more than that in cash, a lot more than that, okay, and let's talk about that too like why because because I.
I think everything is very fluffy right now, yeah, I mean, I sold three companies last year and a house and two cars, so I sold everything last year, okay, yeah, so you're looking at what's happening predicting that there's inflated prices, that is, many. People are very afraid of inflation and I think that is very justified. Don't know. I think it's purely like that. It's like watching Uncle Warren. He has 150 billion in cash right now. He's not worried about that. It's like I've seen more cycles than I have, so you have 25 of the total value of your company in cash like you're waiting, and that means I want to make it clear that it's not working for you, you're not earning, I mean, You are earning a small amount. amount of interest compared to what you could have in stocks or investment properties, so a little inflation isn't going to kill me, but like when you look at the Nasdaq during the crash in whatever 01or whatever it was the year um it was down 78 so it would be significant it would be significant yeah um so I think given the timing I'm willing to wait a little bit and see what's happening um. and I'm also very close to a transaction, so I wouldn't want to immediately allocate all the money, that sounds like a bad idea, and that's why I have more cash than I probably would normally have, yeah, do you see yourself coming like that?
You see yourself, they talk about this scarcity mentality. Do you think that has its roots perhaps in your family history? Know? Your father basically had to reinvent himself as the doctor who comes from a different country. I think he has a scarcity mentality. I don't. I think so, I mean, wasn't that the reason I was worried about you choosing this path? It's because I don't know if it was a shortage, I think it was fear. I don't think they're necessarily the same thing, fear of losing. anything like fear of not being able to provide or not being successful, I mean I think my dad was afraid that the fact that I was a failure would reflect on him, I don't think it had anything to do with scarcity, I think which is like that.
I was afraid it would look bad on him, I understand you, so we got back on the quickest path to financial freedom mm-hmm, I guess I think I'm referring to the first answer that came like a bullet, as if the quick answer was to meet yourself, which is a lot of people because right now entrepreneurship is great, but it won't be in a few years when everyone loses everything, and that will probably be calibrated a little bit, um, so I think that's the only thing that you can always protect. yourself with that and this is something I have learned from my Iranian family, you know, when the revolution happened in Iran, we talked about inherited lands, buildings, houses, bank accounts, the government says those are ours now, that's all, your legacy is gone, that's why I'm like and people said: I want to build a legacy.
I'm like we might not even be the superpower in 500 years. Your children. Your children could be in Bangladesh. Who knows? India could be the hot spot. 500. Nobody knows. And that was a touch to the legacy, but the skills are the one thing that will always be appreciated over time and they will work in a compound compound together, so when they work together, if you know how to do math, then you can learn how to do accounting if you learn . how to do accounting, you can learn how to do tax work, learn how to do tax work and how insurance works for your insurance, and suddenly you are a CFO and you can prepare companies for sale as the skills accumulate.
Specialized skills on top of each other are valuable regardless of the currency or economic climate, so if you are good you will always have a place to offer value because people want good things. The prices may vary. Currencies may vary, but people will want the things you have. If you are good and the only way to improve is to work, then I think a lot of people spend a lot of time paralyzed trying to figure out what would be the ideal opportunity to list when you don't know what the ideal opportunity is because you don't have a baseline and I think that research is done through practice and you learn a lot more by doing things in action and then you will get information about where the opportunities are, that's why the combinator arises.
Again, what they look for in past founders, one of their criteria for a successful business is past experience in the industry, so I just wrote a little blurb about this in the book I'm writing that may be tangential, like If your dad owned a garage or was a mechanic, you probably know a lot more about cars than you do, so you like it, it seems obvious to you, but I don't know anything about cars, nothing and I don't really have any interest, but like you want to. Enter the space, you probably have some level of knowledge.
Some people look at the whole world and say I don't know anything, but this is maybe a good taste, but I think it's better to have some level because we usually have. We learned things in our lives whether we like it or not, and starting in all the industries that your parents, your cousins worked in was a great opportunity, it just depends on how you structure it correctly, so let's say my first job was me. blender tender at Smoothie King, first job. I got blender, not a very good opportunity, right, probably not going to scale, manage there, probably not own the location either, a little more influence because now I have influence in the workforce. being a franchise owner is much more correct and like all industries if you get high enough and this is the general rule for anyone, if you want to see where opportunities exist, look at the companies that have been here the longest because they generate tons of money the only reason they would exist is because they can exist during recessions the only way to exist during recessions is to make tons of profits all the time so you can weather it like J.P.
Morgan would have been here longer than anyone. True, some of the big insurance companies, why is insurance profitable? Because you pay them for nothing. assess the risk assess the risk excuse me and it's a wonderful business, sure right, um, and the point is that now I've learned to look at this like when I see big companies, the bigger the business, the more I realize that there's probably a very high gross margin opportunity, so if you look at the largest companies in the stock market, look at what they're doing, the base unit that they sell usually has tremendous, like the largest company in the world right now, in In terms of profits, it's like Exxon, that's the number. one in terms of the net free cash flow that is created and they are crazy like people are like Facebook, no, it's great, because they drill water out of the ground and sell it for hundreds of dollars right, it's not water, it's oil, but it works the same way, right, and that's a huge generalization, but you get the idea, Facebook sells eyeballs that cost them basically nothing.
Google sells eyes that cost them basically nothing, so all these types of businesses and this is where people. get into the ethics around capitalism and all that, but sell for what the market values at the time and your goal as a company is to reduce your costs as much as you can as long as you remain greedy in the long run, which is If you lower them too much or don't pay people long enough, you introduce new levels of risk that then in the long run you actually lose money, so that's when you get into the long run, the short run, like the CEO. of publicly traded companies and stuff. which we don't need to get into, but if you were just the owner of the company and you could never get out and you made your decisions with long-term greed in mind, then you would generally make the right decisions and I'll say one last thing on how to get freedom.
The biggest mistake I see in young people or people who are young in the game is that they want to become a millionaire in 90 days and when most of the time you can guarantee that you could become a millionaire in a decade but you have to be willing to not be a millionaire for nine of those 10 years and if everyone had signed a contract that said that when they were 20 everyone could be a millionaire by the time they were 30. but no one is willing to do that and what happens is that for the rest of their Lives keep chasing the shiny object over and over and keep fighting the same boss and losing so you're talking about taking a thousand dollar check and taking 300 and putting it into savings and living on less living below your means yeah for nine years and that compounds and you know, I mean, there's the investing side and I'm not, I'm not uh despite having a high net worth I'm not a super investor, I've made money from companies, I haven't made money investing etc., for people who are just starting to know their own piece, will I be someone who has entrepreneurial tendencies and can potentially be a business owner?
It's the best way to create wealth, it's also the best way to lose wealth, which I hope to illustrate at the beginning of this, so it's high risk, high reward, and yes, it's the path to the greatest wealth. It may not necessarily be the path to quickest wealth, so if you're like I think most people who have entrepreneurial tendencies could make 200,000 a year 300,000 a year and become great at sales if you just learn that skill and That skill translates into all aspects of life, right? Anyone who is in the majority of people who are in business know how to sell at some level, they know how to sell to investors, they know how to sell their equipment, they know how to sell someone to recruit and bring in like you have to sell and then , I think for most people who get it, I think those entry level jobs are undervalued for your ability to learn, so a lot of guys are just looking for the perfect job when the perfect job is setting up maybe you have three or four jobs where you have to gain skills in different areas and I think Warren Buffett said it best, that's probably a good summary: whenever you're working, you have to learn or make money, so you're either working. for the paycheck because it's important to you or you're working because the incremental increase in knowledge is important to you, but you have to check one of those two boxes so this shows what's called behind the tick, which one do you think It's what the definition of a brand is and how a brand is built, so I see brand as reputation and I see reputation as what people say about you when you're not there, so that's your brand.
I think a lot of people take a lot of time to try to build their brand um, but I think you build your brand from the inside out so what is Alex Ramose's brand? Well, I mean, I would say it's aligned with the values that we have, you know, it's impeccable character, sincere candor, I try to be honest with him. As much as possible, I try to do the right thing as much as possible, um, and competitive greatness, within the rules, we will play and we will play to win and I don't need to know your current network.
It's worth it, I'm sure, I'm sure you shared it, uh, yeah,we are done, yes, and very good, do you have your sites with a particular objective? Are you trying to get to a billion or so, so I have two? two two goals on the horizon um the first goal is to get Layla on the Forbes 100 for the richest self-made women um so we just have to have 250 million together there so that's the immediate goal okay um, how far is it? That's 150. I mean, it's a year away, right? I think I believe that realistically. I think we'll get there in 36 months, yeah, um, yeah, I think we'll get there in 36 months. the next goal would be a billion and that's just because if you look at what's behind it, this is really funny for anyone who's curious, the way the net worth is divided is you have a high, very high, very high net worth . the value is one to five million in assets investable assets uh a very high net worth is five to 30 million investable assets and then 30 to a billion a large range is an ultra high net worth and then above one billion he's a billionaire those are the four those are the four categories of net worth that exist so, to me, it's like we're all trying to work now, so you know, getting to a billion, I guess that's next. , but at the same time we realize that we are doing it for no real reason other than for the love of the game and because of the mission of the company, that's why, if you talk about brand, I told you about our values, but the mission is Document and share best practices for building the world. class companies and that's why we make the books that's why we make YouTube that's why we make the courses that's why education will be at the core of everything we do because that's what we're doing also what matters most to us let me ask Do you have a follow up question Why is that Forbes 100 list important to you or her goal?
I think it's more, it's definitely Michael. Why is it so important to you? I think it's great, I think there really is no other like me. I think it's cool, yeah, I mean, it's a vanity metric, sure, yeah, I think it's a trophy, yeah, why not be awesome like that? It would be cool, yeah, yeah, and I think that's good, that's a good enough reason because it would be cool, okay, okay, um end. parting advice dan sullivan said something i really like he said wanting something is reason enough a lot of people try to ask you to justify why why you want that why you want to date that girl why you want to start that business because i want to like it that's the reason why I want yes or maybe because you can yes what was the last question you said final parting tips oh party tips um you're writing this new book maybe let's get into it that way, the last book you know that you left where some of your latest videos are gives us a preview of what the next chapter will be, what the next book is about, so the next book is tentatively titled one hundred million dollars, huh, because most people had to fix their offers, what was the title of which 100 Offers was the first book, what are you actually going to present to a client to get them to give you money, the second thing that happens after people have that and the people to start giving them money is that they want more and that's why they want more people to come forward and that's why they need more potential clients and that's why the theme of that is.
The title of the book is potential clients, but the theme of the book is advertising, which by definition is to make known, then, how to make it known. You've made a change recently, and you know that you used to buy leads or buy advertising. advertising by definition is spending money to make known the right thing by definition is making the right thing known not spending money just because it is an important point that is fair uh my interpretation is that there are two paths, there is direct marketing or direct response advertising and then there's branding and I think I heard you say that you're more if you used to have 80 20 advertising or direct marketing, now you flip the script and you're more interested in branding, why did you do that and why do you think? that's better now it's because you're more established you have the money in the bank you've done the business I think having the money to make allows for better branding and that's why I think branding is a greater return on advertising compared to a Me Too I have a longer time horizon so it takes longer to come to fruition and if you are patient and have money it is by far the superior strategy but when you don't have money you need to make money today to pay forever for your advertising in general, whatever those efforts are to get the word out, they have to have a direct response, so I think people end up changing over time, like seth godin is famous for being a direct response marketer and then Focus on the Garyvee brand now.
Know? A more direct answer based on creating Google's ppc wine library is all about branding and I feel like I made a similar transition, but I think you should like it, it's almost like you have to discover it yourself. Instead of being told it like it's not that way, it has to become real to you and then it has to click, so for me I feel like the brand has clicked in terms of my understanding of its overall value. It's harder to measure, but it's absolutely like when you look at Louis Vuitton and you know that Bernard, who owns it, right, he's worth 150 billion or whatever, he's now the only one that's not a tech guy that's out. from the top of that list and it's because it's built. a brand, he is able to sell a bag that cost him a hundred dollars for eight thousand dollars simply because of a brand and that's it, what is his return on advertising?
It's probably higher than people who are into unconditional direct response, you know, they channel you. you know sell more syllables like records, you know, buy two bags for one, so it's a direct answer, whereas it could just be, you know, brandon could just be a picture of lebron with a lebron with a louis vuitton bag or whatever. , yeah, I mean, so your opinion. You're, you're aligned with what I've heard from everyone else and I had this conversation with Seth many times, yeah, and he said, he said a lot of good things, he said well, I said the straight answer is kind. like the tortoise and the hare, so it's the race for the hair, it's the advertising or the direct response and you're right, sometimes you need to fill the funnel, uh, because you have to keep the lights on or you know.
You're spending three thousand dollars a day and you have to get those leads that turn into sales and then if you can do branding, it's like the turtles run slow and steady, but he ends up winning the race and he said, "You know if you want ". you know if you have a brand or not, you know that people will pay an extra premium for a brand, he said, if you go to most hotels and you know, don't look at the marquis, look at the carpet around the walls if you don't know where you're, you can't smell it, you can't see it, you can't taste it, so you don't have a brand, you have a logo and a brand, you know, he used the Nike example in the goes to the store, you know, if Nike built a hotel, you could imagine what it would look like or smell like or feel like, and you know, the same goes for our personal brands, but our personal brands are also okay if we're building empires like Gary.
Can you imagine what Gary's next would be like? You know, or Alex's next thing will probably be having the arm sleeves cut off so there's room for the arms or at least the legs to go. Are you a legs guy? Yes I think so. I mean we were sitting around, you know, cutting it down, remembering the good old days and everything you know, tracing my roots.
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