Get Rich While You Are Young | Ep 1001

Alex Hormozi (0:00)

I'm making this for people who want to get rich. And if that is not you, that is totally fine. There's no judgment, you can skip this. But this is for people who are trying to call it money max for the short period. So if you want to max, you have to min, and you have to be willing to do that for a period of time. And so I'm going to give you an argument that I think is very compelling for why you should do it sooner. And so if you want to get rich, then you should try and get rich as young as possible. And I will break down very logical reasons for why.

So number one, first and foremost, one of the most underrated reasons is the math behind getting wealthy, all right? So money compounds at three to four times the rate in the beginning as it does later, meaning your increase in compounding on the excess cash you have in the earlier parts of your career will outpace the increase in earning power. And so for example, if you have $1 extra when you're 25, it might be $90 by the time you're 70, right? Whereas if that same dollar at 35 would only be a third as much, and that same dollar at 45 would be a ninth as much, right? And so the idea is the dollars that you make, even though they may be smaller by proportion, when you allow compounding to compound, actually results in more money later. Now, my argument there is not that you must take 100 percent of the dollars and put it into the S&P 500 That's never been my argument. But that the dollars you do choose to put into investments of any kind at an earlier part in your career do get disproportionate returns. So that's thing one. The second thing is that your skills will also compound disproportionately that you acquired a younger age, right? Like there's a certain amount of repetitions that are required in order for you to become good. Bill Gates was able to get those repetitions early because he started coding early, and then as a result, he was able to build software first, and basically was able to keep this kind of sustained advantage. Like I talked to a guy yesterday, not yesterday, two days ago, Mehdi, who had $700,000 by the time he was 19, that saved up. That was very interesting. Now, imagine that that was a 65-year-old guy. We wouldn't be as impressed, right? And so time has a very real impact on the scope or scale of your accomplishments as it relates to your reputation. Meaning, when I was younger and a millionaire early, it meant a lot more, and so you actually get more reputational gravitas, right? And so you can leverage a smaller win when you are younger for your reputation because you are younger, right? And I'll give you a secret that I only found out later, is that you basically have until you're 30 to be considered young. The moment I turned 30, I was just a white dude.

Before that, I was a young white dude.

Then I was just white dude, and then no one cared after that, right? So in other words, youth is a multiplier on every win that you have, whether that be press, network, mentors, capital access.

I just made an investment this last week. I wrote a $500,000 check to a kid who was 18 years old, and he had just done $30 million a year in e-commerce business and wanted to develop a tool to help e-commerce stores. So I was like, I knew he had the avatar, I knew he'd able to do it. But the fact that he was 18 and had accomplished that, made me think, okay, this guy is really sharp. Now, he got into my stuff at age 15 So it took him three years to get there, right? But in other words, that multiplier decays around 30, right? But so you have this period of time, we're going all in, yields higher returns even for the same outcome. Now, number three, you leverage early success into bigger, later success. So his $30 million business, obviously everything's different in terms of what your scale of success is, right? But you can ladder on top of their stepping stones.

So for example, me, when I went through the beginning, it was like I was able to get in shape really early, and I was able to leverage that into personal training and online training clients, and I was able to leverage into a gym. And then from gym, I got into multiple gyms, and then from multiple gyms, I was able to start GymLaunch. And so the thing is that every part of my career has been going back and basically taking a stepping stone on what I learned from the enterprise I did before. And then obviously the sale of GymLaunch basically gave us our cash for acquisition.com, so our family office. And so everything builds on itself. And so if you're going to have these steps, it's like the steps are set. It's just how soon do you want to get to this step? It's just how late you want to start, right? So next one is that I'll just rapid fire some reasons why I think it's better to get rich while you're young, which is that you also have more energy, right? So think about it like this, you have to play the cards you're dealt.