If I Wanted to Become a Millionaire In 2024, This is What I'd Do [FULL BLUEPRINT]

Ah, this is the blueprint to becoming a millionaire, and I'm going to walk you through the levels to becoming one. Level one is the fundamentals of wealth creation, and we're going to start with what even is a millionaire. It's someone whose net worth, excluding their primary residence, is in excess of a million. Do assets minus liabilities. For example, let's say you own a $1 million house and you owe $500,000 on it. If you had nothing else saved up in your bank account, which we would hope that you did, but let's just say you had

nothing else saved up in your bank account, then your net worth would be 500k. In this instance, you would not be a millionaire. Right now, let's call this a $1 million house. And then you owed nothing on it, your net worth would be a million dollars. Now, there's a difference between having a liquid net worth versus a net worth. A liquid net worth is assets that you can trade in and out of. So, if I had a million dollars in cash in my bank account versus owning assets that were worth a million dollars, those are

different things. And you might be wondering, how does Alex have any authority to speak on the subject? I'll tell you why. I became a millionaire in my early 20s. I had my first cash million in my bank account when I was 27, and I crossed $100 million in net worth by age 31. So, I became a millionaire a hundred times in a row. So, I can tell you how to do it at least once. And I've helped over a hundred other people create million-dollar plus net worths over my career. And those are just the ones

that I know about, let alone all the people in our community who have done a lot better than that. And so, we go to step two in this little journey of ours, which is equity. Because there are two ways that you can become a millionaire. You can earn your way there or you can own your way there. And the faster way is to own your way there. And that's what I'm going to walk you through. So, I'm going to walk you through both examples of earning your way there, which is how I first thought it

was versus owning. So, if I want to earn my way to a million, then I'm going to need to make $2 million over X period of time and then divide that by two because of taxes to get to my $1 million. Let's say making $200,000 a year and I make $200,000 a year for a decade. That's assuming that you saved 100% of your income. You'd be able to earn your way to $1 million in liquid net worth. On the other hand, you can own your way, meaning that you own assets, either, you know, which could

be businesses or real estate, which are probably the two most common assets that people own that are trying to invest. When I say invest, when you are an entrepreneur, you are investing, you're just heavily indexed on one stock, which is your own. Let's say that I create a business that gets to $250,000 per year. In some instances, I might be able to sell this company. If it was truly automated and had a team of people that worked without me needing it, I could sell this at probably a four times multiple. And this, again, that would

be a very good multiple for a business that is doing that kind of profit because this is actually a small amount of profit for when we're talking business sales. But that would get us to a $1 million net worth. Alright, because we own 100% of this business that makes $250,000 a year in profit without us working at all and we could sell that for $1 million. And so you can see the difference here. It's like, okay, well one of these takes 10 years. This one is just how long does it take me to automate the

creation of $250,000 a year? And so what's interesting here is that almost the actual income between the two is almost identical. But as soon as you achieve it, you almost already have the net worth. Because here, time is working against you because you have taxes and you have your living expenses that are cutting out of this every single year, whereas here you get the multiplier without your living expenses, with time being an ally for you. Which takes us to the next step on our journey: Don't diversify. Diversification is for weenies. Diversification, to quote Uncle Warren,

is a hedge against ignorance. You only diversify if you don't know what you're doing. The more you know, the less risky it is. I actually am approaching diversification from a focus perspective, which is, what's the one thing that you're going to invest your most valuable resource? Because when you're early on, you don't have that much money. So your most valuable resource isn't your money, it's your time and your attention. There's two ways we can allocate it. Option one, we do little allocations like this: I'm going to look at crypto, I'm going to look at day

trading, I'm going to look at forex, I'm going to look at flipping houses, I'm going to look at long-term investing in real estate, I'm going to look into Airbnb, I'm going to look into starting an ATM business. I'm going to look at, you get the idea, right? So let's say this is you and this is your time and attention that you have to pursue any new opportunity. So you say, I need seven income streams because the average millionaire has seven income streams. So I'm going to spread myself thin between seven different opportunities. And while. I

do that. I'm going to be multitasking, trying to fill different cups at the same time with different colors. And I'm somehow going to wait until one of these things takes off, right? I have to see which one of these will work. But the reality is, it's not which of these ones will work, any of them could work if you put the work in. But you have to reach a threshold, once you get to the top, the extra cash starts spilling over, and you actually have a profitable opportunity. Which one of these cups is closer to

spilling over, you going in on one thing, or you spreading yourself between seven? And the reason that this myth continues to proliferate is because it's absolutely true that people who are the wealthiest have multiple income streams. But what's not true is about how they got there. The wealthiest people in the world go all in on one income stream, and they keep adding it up over and over and over again until it overflows. And then once it overflows because they're making so much money from their one opportunity, they then start diversifying back between the other different

ways, but they made their wealth focusing on one thing and then they maintain their wealth by distributing it. You don't make money by splitting your attention up, you make it by focusing on the one thing that matters most. B2 you say, what do I really like? Well, I do have experience doing this one thing, and so I'm going to ignore all of these other opportunities and just go all in on one thing. The reason I'm such a big advocate of focusing your attention on one thing is that this is where you get disproportionate returns, because

I think it's very arrogant to think that your 10% of your attention where you're not even that good at business to begin with spread between 10 things is somehow going to compete against somebody who's putting all of their effort on one thing. But here's the fallacy that most people who are starting out don't get. They think I'm going to try all of them and see which one works out, or rather I'm going to try to start multiple things and see which one takes off. But the reality is that all of them could take off or

none of them could take off, but it's solely based on which one you work on. So it's not which one will work, it's which one will you work on. You want to go as fast as possible through the I have no idea what I'm doing phase so you can get to the I do know what I'm doing phase. And I understand the risks that are associated with this and that's why I don't want to diversify because I actually get outsize returns here. There's five stages that you go through as an entrepreneur when you're considering a

new opportunity. Phase one is called uninformed optimism. This is where you are uninformed but you're like man, this opportunity sounds so great, look at all these people making all this money. And so then you dive in and then you get to something called informed pessimism. You're like oh wow, this isn't as easy as I thought, there's all these other things that they didn't talk about in this ad or in this highlight reel that they show me on this YouTube short about this person that made $1,000 a day going from nothing from her home. So then

what happens next is you keep working on it and then you get into the valley of Despair 😥😥. This is where most people quit and this is what most people do now..................... they find another one of these things to get into and they go all the way over back here because they think, oh no, this one has doo on this side of the fence so I'm going to go to the other side of the fence where the grass is green. But what they don't realize is when they get into that side, it's completely made of

manure and that's why the grass is so green, there's poo on both sides, you just didn't know about it until you got there. All right, and so what happens is people keep repeating the cycle over and over and over again and they never make progress. And so here's the thing, when you do find something that you're like, you know what, I kind of like this, okay, this is harder than I originally thought, I need to keep learning, wow, this is actually really hard, there's a lot more pieces to this than I understood at the beginning,

I guess this is why everyone isn't rich. And then something magic happens, you then start to have informed optimism. You now start to realize you've wrapped your arms around whatever the opportunity is or whatever thing you're pursuing and you're like, okay, I haven't gotten there yet, but I understand the math, I understand the process of getting where I am to where I'm trying to go. And ultimately this is what I'm trying to do with this blueprint for you, is if I can help you tackle as much of this or at least compress the time that

it takes you get here, that's a big victory for me. And then you finally get to the Final Phase, which is achievement, which is you actually accomplish externally what you set out to. And most newbies fall out between here and here, and then start this process over again. So most people only relive this over and over and over again without ever making it to here, which then naturally leads you to here because then you have no desire. To diversify, because you now get it. What do you do when your hair you reset the Target? You

reset the Target and you say, "This is where I want to go next." Because you've been through this process once, you understand that you know what? Me going after this 10 times bigger girl sounds amazing. I'm going to find out, there's some stuff that sucks. There's going to be a period where it's going to really suck, and it's going to feel hopeless cause I don't see how to get through it. I'm going to keep chugging, and then understand how to get there, and then, I'm going to get there. I'm going to repeat the process. So

now we go to the last part of level one of becoming a millionaire, the long game. If I told you to build the tallest tower you possibly could in 10 seconds, here's what you might do: boom 5 4 3 2 one time. Right now, imagine I told you to build the tallest building you possibly could in 10 days. You would probably say, "You know what? I can probably get some more boxes. How flimsy is this, right? Like how stable is this? Do you think this is going to last a long time? Probably not. So I

might build it piece by piece from the ground up with more stable bricks from day one, and I would keep doing it this way, right? And I'd keep adding, and keep adding, and keep adding, and then when 10 days came I might be five stories high. So the reason this is such an important frame shift for people is that the fact that they're in a rush causes them to build the thing they want to build differently. The fastest way to get to this tall is to build it the exact way I did earlier, stack it

end to end up to this point. But if I then said, I need you to build something that's 10 stories tall, you would never get there. And what happens is people get stuck, right? They get stuck at this level and they can't add another one on top, and they stay here and they're like, "Why can't I get my million-doll business to $10 million?" And it's because you built it wrong to begin with. And so, as much as this sounds painful, sometimes the fastest way to get to 10 million is to start back at zero and

build it right to begin with. I talk so much about long game, about making sure that you're building it the right way because this thing is never going to last. And so the hardest thing about building something right is that in the beginning you need to have something to sell, need your amazing valuable thing. And then that's megaphone, it's terrible, but then you need to advertise it to let people know about stuff, and then you start making sales. But the problem is that people get to this point and then think, "Oh, I need to do

more marketing and sales, right?" Because that's what made me money. But the problem is the more you market and sale, the more people actually find out that this is not a gift and this is actually a big pile of. And so what happens is now you've got people who buy this thing and tell their friends this thing stinks. And then over time, it becomes more and more expensive for you to advertise because your reputation stinks. And so, the right way to build it is to understand that you have to build the thing first, and then

you got to let people know about it, but then you don't crank on this, you keep fixing this thing until this guy becomes a happy camper and tells his friends. And until that happens, you keep making this thing better. And this is the same thing as if I did this and just kept gassing it, that's me vertically building the tower and then reaching a max that I can't go past anymore versus building it so that I get people to say, "Wow, this thing's amazing." And so then they also tell people for me so that when

I get to that point, I actually built it with a huge base of foundation and I can keep stacking on top of it. And that's the difference in terms of mindset and perspective of how you actually build something that's going to last. And then along the way, with your team and the people that you hire, rather than saying, "Hey, I just need a body in the seat, I just need a person to do this thing." You're like, "Who here has talent?" And I might interview 20 people for one role rather than three so I get

the right person. If you feel stuck all the time and you can't make progress, you usually need to go back to the beginning and realize that you built a vertical business that had no foundation to begin with. And now we have our foundation built for level one of wealth creation. Level two is all about the actual tactics of getting to making your first million. And it starts with finding a hungry crowd. Let me explain what I mean by find a hungry crowd. This guy started a business selling hot dogs, and he was given one wish

from a genie of what competitive advantage he would be able to have. The first thought he had was like maybe I'll make my hot dogs cheaper. The genie shook his head and was like no. He's like hm, what if I made my hot dogs taste better. Then genie said no, don't waste your wish on that. Maybe I'll just make mine the fastest cooking so I can serve the hot. "Dogs faster," the genie said. "That's not what you want to waste your wish on." The genie looked at him, holding the hot dogs in buns in hand,

and said, "It's not about the hot dogs. If you want to build an amazing business, you want to put your hot dog stand on the best corner, in front of a starving crowd. Because if your hot dog stand is on the corner, it doesn't matter how cheap they are, how good they taste, how fast they cook. The moment that hungry crowd walks out and sees your hot dog stand, you're going to sell it every time. So right off the bat, I want to talk about two key concepts when it comes to finding a hungry crowd.

One is that we have to understand that the market is always going to be the strongest variable in how much money you make. If you're selling toilet paper during Covid, you're going to sell out because it didn't matter how good your toilet paper was. There was a starving crowd. Supply and demand, which is one of the reasons that we have it as our logo, is the strongest force in all of economics and business. It is the core thing that everything else is built on. So you have to understand that the market is number one. If

I was trying to sell services to newspaper companies, well, newspaper companies are decreasing by 25% per year, compounding negatively in the wrong direction. The next lever on this is the offer that you give people. If you have a superior offer, then if you're in a normal market, that'll be the next lever that you have. If I say, 'Hey, start for free and I only get paid if you get some sort of result,' and it's a truly free, low-risk, amazing value and you get results tomorrow offer, then you're going to sell 10 times, 100 times more

than someone who just has a 'you pay me and maybe you get results and maybe you don't' type of service or product. The final thing is your ability to persuade. Ideally, go after a really big market with an amazing offer and be a hell of a persuader. But the thing is, you can be terrible at persuading and have a terrible offer and say, 'You can only buy my toilet paper in 80 roll chunks or I'm not going to sell it to you,' and still sell out during Covid. But if it's not Covid, then it's, 'How

can I make the toilet paper offer that I have significantly more compelling?' And if all the toilet paper offers look the same, then it just comes down to how well I can persuade people to buy mine. That's concept one when it comes to finding a hungry crowd. Concept two is the four things that I look for when I'm actually trying to find that market. Number one is I want people who are in pain. You want to make sure that the people that you're selling to are in desperate need. They don't want, but must have the

thing that you're selling. The second is that they must have the ability to buy, so purchasing power. The third factor that I look for is easy to target. Because at the end of the day, even if you have somebody in lots of pain who can buy your thing, if you can never find them, it doesn't matter. The fourth point you want to have is that you have a growing market. Now, I gave the example earlier about the newspapers. So believe it or not, a good friend of mine actually had a business that sold a revenue

share model to newspapers. So he was an amazingly persuasive guy, he had an amazing offer offer, which is zero risk. He just said, 'Let me get a percentage of the revenue that I bring to you.' <|ipynb_marker|> Markdown All you have to do is find one person that you want to help. It's just making sure you're very clear on the one very specific person that you are going to help. That is the. Avatar, the next thing is you want to give them one product. The reason I say it's one product is that a lot of people

overcomplicate their businesses too early. They're like "Man, if I want to double my business, I should sell them three things, right? And then I'll get them to buy more stuff." But the thing is, if you're under a million dollars, you're just adding a ton of complexity when you don't even have that many customers. So most times, you'd be better served sticking with the one thing that you're selling and saying, "How can I sell three times as many of the exact same person?" And that becomes the problem that you solve. But most people get confronted with

these issues and then go for the easy route. And again, this is like that building where you can add something on top really quickly, but it doesn't create the skyscraper that you want. Instead, you want to think, "How can I do more?" The third variable here is channel. Now, it doesn't matter what channel you're currently acquiring customers on. You can hit a million dollars plus on literally any channel that you advertise on without going onto new channels. So if you do outreach, then you reach out to people 10 to one to get customers, whether that's

cold calls, cold emails, DMS. You can expand and continue to get more customers with that one channel. If you post content, you can keep posting content on whatever channel you're on and just do it better. Post more content, post better content. And by doing so, you increase the amount of customers still with only one money-making product. Or let's say you're running ads. Obviously, if you're running ads, you can just spend more money on the ads provided you're doing it profitably. And if you can't expand past a million dollars a year profitably with paid ads, you

have a business problem or you have a pricing problem. You don't actually need to add another channel because then it again complicates your business. Because you're like, "Okay, well I'm currently doing 500,000 a year on YouTube. You know what, I'm going to start doing cold emails right as my next way of getting customers." Well, that majorly complicates your business when you're this early on. Now you might be thinking, wait, shouldn't I have a diversity of how you acquire customers? I thought you said that was a good idea. It is, but you're so small it doesn't

matter yet because you're not looking at a potential acquirer who's going to try and look to decrease risk for you. You just need to get better at doing the one thing that you do well, because you're probably not that good yet. As terrible as that may sound, it's probably real. So the fastest way to get to a million is to build it right from the get-go and not overcomplicate your business. Which means you pick one Avatar, one product, and one channel that you focus on until you get there. Now we go back to our tactics

of building our first million dollars. The next thing at level two is our offer. Now I wrote an entire book on this thing, "$100 Million Offers." It answers the question, "What should I sell?" And it's because that's the most common question that I get asked every single day from people who are trying to start a business. Which makes sense, what am I supposed to sell? So I call this the value equation. Now fundamentally, you've probably heard all over the Internet, you need to provide value, you've got to give value, right? But the question is, what

is value? After doing a lot of studying and figuring this out between our portfolio companies, it actually comes down to four variables. Variable number one is the dream outcome. What the dream outcome is for whoever the prospect that you pick is. The way that you can compare two different dream outcomes is how much more valuable they think one outcome is versus another. If I were to talk to a 30-year-old man and say, "Hey, I can help you lose weight or I can make you a millionaire." Most guys would value being a millionaire more than, let's

say, being handsome. There are different outcomes that people will ascribe different values to. And that's just a very extreme example. Well, let's use the weight loss example and let's switch it to women. If I have one eBook that helps someone lose weight and then I've got a one-on-one personal training program that helps someone lose weight. It's the same dream outcome. So then what determines which one is more valuable? Because the eBook might be $50 and be overpriced and the personal training might be $5,000 and be underpriced. How can you make that discrepancy? Because there's more

value. Let me explain. The next one is perceived likelihood of achievement. Meaning, when I buy, how likely do I think I will get what I want through buying? If I buy a $50 eBook on good meals that I can cook that are healthy, maybe I'll get some food that I might like in here and I can feel a little better about myself. But realistically, I don't think that I'm going to all of a sudden transform my entire body from a $50 eBook. Now, if you sign up for personal training for a year, you probably have

a way bigger perceived likelihood of achievement and so you value it higher. Now, both of these elements, the dream outcome and the perceived likelihood of achievement, are the things that you want to increase in your communication with a prospect. You're saying, "It's really, really likely that..." You're going to get this thing that you really, really want. The next two variables of the equation are the painful side of the equation, which is what does someone have to give up in order to get it. So, the first thing that we have is time. There are two elements

of time: micro and macro. Micro is how long is this going to take every day. There's a certain amount of time that's going to take on the micro for them to experience the result, right? So, if I'm talking about the lady who's doing personal training, she might have to go to the gym three times a week; that's going to take time. She might have to prepare food; that's going to take time. That's on the micro level. On the macro level, how long is she going to have to do these micro commitments in order to get

the macro result that she wants? She might have to lose 50 lbs and it might take her 18 months. So, macro, the goal is I want this to be as little as possible. Micro, time, I want this to be as short as possible on the macro. So, that when I say, "Hey, you're going to get the dream body you want," you absolutely know that you're going to get it and it's going to happen really, really fast. The next thing is effort and sacrifice. Effort is what you have to start doing that you weren't doing that

you don't want to do as a result of the purchase. Sacrifice are things that you have to stop doing that you wish you could do but can't do anymore as a result of the purchase. And so, for our lovely young lady, she's going to have to sacrifice Margarita Mondays and Taco Tuesdays; she's no longer going to be able to get to do that, even though she wants to do that. She's going to have to sacrifice sleeping in on the weekends. She's going to have to start waking up early and working out and eating food that

she doesn't like. So, effort and sacrifice tend to be dual sides of the same coin. Whatever you have to start doing, you typically have to stop doing something else. The top side, we try and increase; the bottom side, we try and decrease. We want to get it to zero because if you think about this in a hypothetical extreme, the perfect offer that would have the absolute most value would be the biggest, most compelling dream you can possibly imagine that you're absolutely guaranteed to get instantly with no effort. So, if I said, "You can click a

button on my website and then look down at your abs and have a six-pack," that would be the hypothetical extreme value. Now, people can get that through personal training, changing their diet, and waiting 12 months, but because of this, the value is significantly decreased because there are costs associated. Understanding all four of these variables is how you craft offers that get people to say yes and give you money. Because oftentimes, the most expensive part of the offer that you have isn't the money; it's the other things that they have to start doing as a result

of the purchase. Those are called hidden costs. If I have a marketing agency, okay, and I do content for people, alright, and when I start doing content I say, "Okay,It's going to take us 60 days to ramp up, we're going to start having two calls a week for an hour, you're going to have to fly out to my studio and we're going to record, and it's going to take 60 days before you're going to start seeing any kind of traction," imagine that offer compared to somebody who says, "You don't need to do anything, I can

just draw stuff on my own, immediately start posting, and your phone's going to ring today. Which one's more valuable? It's still the same core services, but how we wrap them make them probably 10 times more valuable than they were before. And that's why understanding these variables and making the right offer is so compelling on your road to your first million. The reason this was my first book is that offers are about strategy. Offers are one of the largest levers that you can pull with any business because it actually affects all departments. When you change the

offer, it changes how you market. When you change the offer, it changes the sales script, the sales process. When you change the offer, it changes what you deliver. It literally affects everything. And so, for us, we always try and nail this with our portfolio companies at acquisition. Com. To be clear, we don't sell coaching, we invest in businesses and buy them. For context, our average portfolio company, over the first 12 months, grows 1.8x its revenue and 3.01 X its profit. Over their first 24 months, they 2.88X revenue and 4.7x profit, meaning that they disproportionately drop

the increase in revenue to their bottom line because we make sure that the thing that we are selling is as valuable as humanly possible. The next on our journey of wealth and riches and glory and status and all things amazing is marketing and sales. And if you think about this from a sequence perspective, you have to make the thing and then you have to promote the thing. Now the making the thing is $100 million offers, which should I sell. The next question is, who should I sell it to? AKA getting leads. And you get leads

through advertising, which is the concept of my second book $100 million leads, and then you get them to buy. But the thing that people mess up is that they... Then think, "Okay, I'm going to do more of that." But what you actually need to do next is you go back to here and fix the product, keep making it better, and then promote it more. Then you come back, fix the product, and make it better. It becomes this virtuous cycle. So, if we need to understand how to market and sell, then it means that you have

to have one advertising method. There are eight ways you can advertise. There's four that you can do, and then there's four that other people can do for you. You can do warm Outreach, which is reaching out one to one to your friends. You can post content one to many, but to people who know you. You can run paid ads, which is doing one to many to strangers, or you can do one to one to strangers, which is cold Outreach. And if you're like, "Man, no one's buying my thing," I can guarantee you that you're not

doing enough of these core four. That's it, because these are the only four things that you can do to advertise. The next thing is that you can get referrals from customers, which are lead Getters. Next, you can have employees who help do the core 4 for you. You can have agencies who run the core 4 for you, make content for you, do Outreach for you, all of those things you can hire another business to help you with. And then, finally, you've got Affiliates, which some people call influencers, some people call endorsements, but it's somebody who

already has an audience, already has a business, and that you compensate in some way to do the advertising for you, the core 4 to let other people know about your stuff. These are the eight ways that you can advertise anything to anyone. And the nice thing is, when you're starting out for your first million, just pick one. Once you pick the advertising method that you want, let's say you're using lead Getters, you have to learn one of the core 4 to then get lead Getters. And that's okay, that's fine, that's part of business. These will

always give you more leverage than the first four, and that's okay. But you have to start with these first. So let's assume that you're just going to stick to the core 4 in the beginning because you're like, "I don't want to involve other parties," which I recommend, especially if you're starting out. And you're like, "You know what, I'm going to post content, that's what you're going to do, that's your method." All right, now you're going to have all these people who like your posts, comment on your posts, DM you personally when you make content that

they find compelling or interesting and say, "Hey, I love your help on whatever this thing is." Then you transition into sales. Now, it's so important for Founders who are starting a company to be integrally involved in both of these processes. The reason you want the founder to be integrally involved in the beginning is, one, it's cheaper, and especially when you have less cash, that makes sense. Two, these are skills that are going to be required for you to succeed over the long. So, you're going to want to understand them at a tactical level because when

you bring someone else in in the future, these lead Getters, whether it's employees, agencies, Affiliates, or whatever, you can teach them the right way to do it. And when they say, "Hey, that's not possible," you can be like, "No, it is, let me show you how." And then you have a litmus test of who's legit and who's not, who's going to help you on your journey, whether you're hiring them or you're incentivizing them. It works the same when it comes to the sales side. We want to get into a choreographed process, knowing what step one

through letter Z of the process looks like to get someone from "I think this might be interesting" to giving you money. But if you don't know what you're doing first, you have to throw stuff on the wall and see what sticks. And a lot of it's just going to be your gut in the beginning and figure out, "Whoop, that didn't work. Whoop, that didn't. Oh, that one actually got a response. All right, that's step two." And you keep trying until you get to step three. And then you keep trying until you get to step four,

until eventually somebody gives you money. And then you backtrack and say, "What happened to this person that did these steps? Great, now I'm going to try and recreate that as many times as I can." And then that becomes your process and that process repeats at each micro level too because that might be three or four steps to get to the conversation where someone might give you money. And then, what do you do in that conversation? Well, when I ask this question first and this question second and this question third, it's more likely that they ultimately

buy. And so, if you don't follow a script in the beginning, you better make one. Because if you're going to eventually get out of sales, which you should if you want to scale, then you're going to be able to teach somebody else how to sell too. And one of the biggest issues early on is that the founder is the most convicted about the product, and you should be, it's your company. But people who come after you are never going to be as charismatic or as convicted in the thing that you have as you are, which

means you need to follow a process to maximize the likelihood that the prospects that they speak. With ultimately, purchase the next level in our blueprint or journey to wealth. The mountain of Mordor, and by Mordor I mean more money, is paying yourself. How much should you pay yourself? When should you pay yourself? Of all the topics we're going to talk about today, this is probably the most subjective. The reason for that is because it underlines one key concept that is 100% personal, which is risk tolerance. How much risk are you willing to take individually? One

of the regrets that I have earlier on as I continued to double down on my gym chain was that I took all the profit from each gym and kept putting it into the next gym. I basically took nothing out for the entire time. Now, that's super risky. I was living on nothing, living cheap. I was eating cheap. I had a cash car that I owned outright, and I just put everything I had, spending every hour of my day growing my business. Eventually, though, I ended up losing all the money from selling all my gyms and

was left with nothing. If I had taken out some cash during that period of time, I would have had two benefits. Benefit number one is that when you really try and take out cash flow from the business, you'd be amazed at how much cash flow just magically appears. So, I like having bank account PRS be a good personal goal for every entrepreneur, even if the increment that increasing is small. It does two things. One, it forces you to take cash out of the business, so it forces cash flow. The second is that it forces you

to decrease your spending personally. I have a strong belief that as you're coming up, learning the discipline to spend less if you increase the cash flow that you take out of the business and you spend less over time, then your bank account has nowhere to go but up. And I can promise you that when you have a very full bank account, business decisions become less stressful, and when you make less stressed decisions, you make better decisions. I do believe in taking some money out of the business along the way because let's be real, you're going

to live a long life, and then you're going to die. And if you double down every single minute until the day that you died, you'd build the most enterprise value. You live a really crappy life. So, at some point, you have to balance the investment versus consumption of life itself or the fruit of your labor. That is why I'm a believer in at least allocating a certain percentage of the cash flow from the business to you personally. A healthy way of thinking about this that we have for some of our heavy capital intensive businesses, meaning

like brick and mortar chains, which is one of the biggest parts of our portfolio. This is one back of napkin way that you can use. 33% goes to you, 30% goes to growth, which is new locations, and then the remainder is divided for rainy day reserves for the business, your cash reserves, and for new locations. Another way of doing it is something called a watermark. We know that we need to grow two locations, and this is a proxy, it doesn't have to be two locations, you could be hiring two people, hiring two reps, it doesn't

matter, two more developers if you're a software company, it works the same. Two moves per month cost $X, we have Y profit. So all we do is we say whatever the profit is at the end of the month, we subtract this, and then we have a watermark above which we always leave in the account, and then everything else we distribute as cash flow. That's a different way of doing it. This is a little bit more aggressive if you want to maintain a certain growth rate, this one is a little bit more flexible. It really depends

on you and your tolerance for risk. That's one thing that I pride myself on in terms of our ability to help portfolio companies and newer founders who are creating their first kind of generational wealth. These are hard conversations to have, and a really important conversation to have. You want somebody who isn't a financial adviser who's trying to get you to take as much cash out so that they can invest and get their 1% fee. You want somebody who's on the same side of the table. You'd be like I get where you're at, I can see

where your wealth is, and also see over the next 24, 36, 60 months what it looks like for us to just have that one big blop, so you never have to work again. We're now approaching the second level, the pinnacle of our second level, which is setting goals. I think this is a really misunderstood topic. Most people think like oh, I need smart goals or specific goals. I'll show you how I do that. Alright, so rather than focusing on outcomes, we focus on activities. So the goal shouldn't be what happens, but the goal should be

what we do. I had a buddy of mine, they started doing 10 grand a month, 20 grand a month, 30 grand a month, and then he would fall off. I asked why do you keep falling off, and he said, well, I make the money and I hit my goal so then I ease off the gas. I said it's because you're defining your goals the wrong way. I see you as not hitting your goal every time you're not doing the activities, and so I said make the... Activities, the goal, and then you'll hit it every time

and more. And so, then he flipped how he saw his own success into simply, "at the end of the day, did he do all the things that he said he was going to do at the beginning of the day?" And then you can actually control your inputs because inputs are what drive outputs. Don't make the goal outputs. Say, "What am I going to do that would be unreasonable that I don't hit these outputs?" So, for example, my inputs might be, and this is one of my favorite ways we're thinking about like advertising, is something that

I call the rule of 100. So, the rule of 100 simply states that if you do 100 primary actions over 100 days, you'll usually get the first result that you ultimately want. Now, you hook people by saying you're going to get the first result you want, but the key point is that you're doing 100 actions. And one of my little mantras that I would share with you is count in hundreds. Alright, so when a lot of people are like, "Man, I did the thing," how many hundreds did you do? If I was doing more reach

outs, I'd say, "Cool, reach out to 100 friends a day." If I'm doing cold reach outs, I'd say, "Cool, reach out to 100 people a day." If I'm making content, cool, make 100 minutes of content every day. If I'm running ads, I'd say, "Run $100 a day." And each of those are activities that we can say these things will drive these outputs. They make that the goal, and so at the end of the day, you can say yes, I did it, or no, I didn't do it. Not did I make a sale, because no matter

what, even if you didn't make a sale today, you should still do your 100 inputs so that you can make two sales tomorrow. So, the second con I'm going to talk to you about when it comes to goals is how we actually set goals for portfolio companies. And it's not the way that you think, but it is something that you're going to recognize because we actually use the scientific method. And here's how it works: four simple boxes. One is: what problem are we trying to solve? A lot of times we spend the most time on

this part of this because a lot of times people are like, "Oh, I think we need to redo our logo." Why? What is that going to accomplish? What constraint are we alleviating, right? Because for us, we back our goals into the constraints of the business. Because let's say that conversion rate on our homepage is not a problem. Well then, why do we need to redesign the logo? Oh, we don't. One of my favorite ways to solve problems is to decide they're not a problem to begin with. So this is column number one, which is: what

problem are we solving? The second is: what's our hypothesis? Which is an if-then statement. X, then Y. So, what that means is I say my hypothesis is, if our website is low conversion, that's the problem that we're solving. My hypothesis is that if we redesign the website, we will then get increased conversions. And then all we have to do is say how we measure X and Y. How do I measure that we redesign it? I could say yes or no. I did it. Or I could say that we hold a split test every Monday that

we run over the quarter. That would be the X. That's something I can say yes or no we did. And then the Y, my conversion rate. Let's say we're at 10%. And then I would say, is it greater than 10%? Yes or no. And then finally, the last thing is: did we do it? And then did it work? We figure out the problem we're solving, we figure out what our hypothesis is to solve it, we determine how we're going to measure whether or not we did, or whether or not it happened. And then we say,

did we do the thing? And then did it happen? Because we could not do the thing and then it wouldn't matter, and we'd have to repeat it later and solve the problem. Why are we not doing this thing? But if we did do the thing, then either it improved it or maybe we redesigned the website and the conversion rate didn't improve. So either that might not be the constraint, or our hypothesis was wrong. And so this allows you to iteratively improve the business. We covered the fundamentals of wealth creation and we talked about how to

create our first mil. And now we've got it. And now, level three, we're going to talk about stay rich and get even richer. Getting rich once. So, one of my mentors was ex Goldman Sachs, and one of his mentors at Goldman Sachs told him, "You should only have to get rich once." And I heard that saying, it's really stuck with me. If you play the game right, you should only have to play it once, and then after that, you should be playing with house money the whole time, and never take bets that you would lose

the farm over. In other words, never bet the empire on a pot of gold. If this is the very first pass in $100 million offers outside returns, often come from betting against conventional wisdom. And conventional wisdom is usually right. Given a 10% chance of a 100 times payoff, you should take that bet every time, for you're still going to be wrong 9 times out of 10. We all know that if you swing for the fences, you're going to strike out a lot. A lot, but you're also going to hit some home runs. The difference between

baseball and business, however, is that baseball has a truncated outcome distribution. When you Want to be clear, you can absolutely get to a million a year in profit with not a lot of people or even just on your own, because with the increase of AI and Automation and things like that, we're going to see more big companies with fewer and fewer head count. But until the day General AI comes in and crushes everyone, people are still required to get to where you want to go. So, if you want to not just make a million bucks

or a couple million bucks, and you want to get to $10, $20, $50, $100 million and beyond, you need to get the people side right. Now, we go to the reputation side. Ooh, a fun one! Imagine all these flowers as different life experiences that you've gone through. If you look at them all here, this isn't a bouquet, this is just a lot of things put together. Now, when we do this and combine them all, we now have something much closer to a bouquet. When you put all of your personal life experiences, your skills, and your

character traits together, you create a bouquet, or in other words, you create a reputation. But a bouquet doesn't really exist, all we did was associate things that were separate and put them together. You can strengthen your reputation by putting more and similar types of experiences together. So, you're like, "Oh, he's got a strong interest in this thing". Now, if every single one of these were different and some of these were weeds, it would be a lot harder to understand the point of this thing. Let's say you had a drunk driving accident, all of a sudden,

how different does this bouquet look? This shows you how one negative experience in your life can actually affect how people see the rest of everything else. When we're thinking about building a brand or reputation, I like to think of it as what flowers do I want in my bouquet and which things am I ultimately trying to emphasize or not include at all. What associations are going to strengthen this and which are going to break it apart? Reputation is a different word for saying what a brand is, and a brand is simply an association between something

you know and something you don't know. When we're building a brand, you want to associate all the things that you want someone to think about you with the thing that they don't know yet, which is you. For me, the more my personal brand has grown, the more I have transposed acquisition.com association with me. Now, when my team goes out wearing a hat that says acquisition.com, people are like, "Dude, can I buy that hat from you?" because they've gotten value from my videos and books. They see an association with that value and want to pay for

it. If this happened once, my director of HR at the airport and a random person came up and offered $100 for the hat, she said no because that's not how our brand works. You have to earn it. The idea is that's fundamentally how branding works. For example, if I'm Louis Vuitton, what do I do? I get Kim Kardashian to wear my clothing or carry my purse. Then, a lady who doesn't have status says, "Man, I want to be like her, but I can't buy Kim." So, I buy the thing associated with Kim, and when I

wear it, I have the status by proxy from her. That's fundamentally how the luxury market works, but it's also how every market works. Why do brands drop celebrities when they make a racial slur, get into an accident, or get arrested for fraud? Because that becomes an association that people know but don't like, so they say, "I don't want to associate with that." So, they break that association. When you're building a brand, be very particular about what and who you want to associate with. If I have a porn star next to me, you're going to think

very different things about me, even if the material is the same. Welcome to humanity and psychology, right? When you're building a reputation, especially in the BDB or BC space, you want to provide value. You want to give things that people want, a fast and easy way for them to consume that's risk-free. When you do that, you compound customer surplus, or what we like to call Goodwill. If I paid a dollar for something and feel like I got $5 worth of value, everything between the two lines is customer surplus. But, these things aren't additive, they're multiplicative.

If you keep providing something good, it's hard. As a brand, when do I want to monetize something? Because the thing is, the next time you provide even more value, when people think that you're going to monetize, they love you that much more, and you get that much more reach and more goodwill. So, the next time, it's basically reinvesting. But rather than reinvesting capital, you're reinvesting goodwill, because what I can tell you is that goodwill compounds faster than revenue. You can build a $100 million brand in 3 years, and to build $100 million in revenue might

take you way longer than that. And that's because if you just focus on providing goodwill at scale, you get a disproportionate return. The Rock was able to overnight build Teramana into a $6 billion dollar company simply based on his brand, and KKW beauty built her beauty line into a billion-dollar brand. Conor McGregor with Proper 12, billion-dollar brand. George Clooney, billion-dollar brand. And so, they understood this concept, which is that this will grow faster, so they disproportionately invest early into this so that later they can monetize and do the right hook, the big bloop, to the

audience. And to quote Uncle Warren, it doesn't matter how much goodwill you have, any number, no matter how big it is, multiplied by 0 equals z. So, if you make a bet in the investing world that you then lose all the money, and you had 30 years of good investing, and you go all in on one bet and you lose, you undo 30 years of good decisions with one bad decision. And that's the thing a lot of people calculate when they think about their personal brand. If we're going back to these flowers like I had

earlier, if I have this one broken flower, it forever affects the way this bouquet looks. Imagine you gave this to your wife or your girlfriend and you said, "Hey, here you go." You'd be like it's such an eyesore that it distracts from all the other flowers that you have. And so, that's why making sure that you never risk your reputation to make the short money so that you can let the goodwill keep compounding, let the party keep going, is one of the smartest and hardest long-term business decisions. Because believe me, if I start an OnlyFans

tomorrow, I'll bet you probably make a lot of money, but it would be like this broken flower, and it would permanently affect how people perceive it and the brand that I also want to build. Now we finished reputation and we're going to talk about compounding, one of those big fancy words for investing about how to get rich and stay richer. Compounding is when something multiplies unto itself. Alright, so If I have $100 and it compounds at 10% a year, next year it'll be at $110, the year after that, I add 10% of this number, which

is 121. And then the next year 133 and so forth. And you notice that even though the time between these intervals remain the same, the actual amount that we're growing continues to rise proportionally to how much we have, which is how Uncle Warren can have a $1 billion and still make another $15 billion this coming year, right? It's because he understands the power of compounding, and they call it the eighth wonder of the world. And in the last decade, Warren Buffet has made more money than he made over the rest of his career, and that's

because the longer you do it, the better it gets, which is why some of these early wealth building fundamentals are so important. Compounding only unlocks if you have a long-term perspective because this early first four years, I mean decent, but not bad. But if you do that over 30 years, it becomes unbelievable. And it's also why you have to not diversify because if we were then splitting this up and saying you know what maybe I'm going to stop this, we're interrupting the compounding process. And equity is one of the single greatest compounding vehicles because you

can reallocate capital within the same vehicle. A simple example of that would be like if I have 10 locations, and I can grow by 10% every month, then I go from 10 locations to 11 locations, and the next month I get 12 locations, and next month I get 13, and by my 20th month, I can open two locations, I get to 22 then 24. And it compounds because by that time you'll built out the infrastructure to sustain a faster pace. So, Panda Express added 600 locations this year, they had 2,000 at the beginning of the

year, that took them 45 years to get to. This is one year they grew more in this one year than they did in any prior year before that. And that's why you just have to stick with it for a long period of time. This is one of the things that people don't realize about restarting when you go from year 10 to year 11, you might be incredibly bored with your business, but if you go from 100 million to 110 million, you grew by 10 million, and even though this new thing might sound more exciting in

year 1, the likely you go from 0 to 10 million in year 1 is really unlikely. And so, this is where all of the compounding is unlocked, even though it's incredibly boring. But if there's one thing I can have you write down, boring is what makes you rich. One of my favorite quotes from Charlie Munger is that the money isn't made in the buy or the sell, it's made in the wait. And the wait is the hardest. . Part, because you have to sit with your hands in your pockets and decide that the original plan

that you had was a good plan. The hard part of the plan is sticking with the plan, not doing the plan. Like deciding that you're going to work out isn't hard. Deciding that it's going to be 3 days a week for the year is it hard. It's continuing to do it for that entire time is what makes it hard. I wanted to find a term for you that has been really helpful for me, which is patience, right? A lot of people like "be patient, be patient," what does that actually mean? Being patient simply means needs

figuring out what to do in the meantime. As I make this video, I'm being patient for my stocks that are growing right now. While I'm making this video, I'm being patient for the cup that I want to lose some fat. While I'm making this video, right now, I'm being patient for some of our portfolio companies to capitalize on the reinvestments that we're making right now. But I'm making a video and so what you have to do is that when you stick to the plan. Sometimes, the best thing you can do is ignore and let it

be. Which means that you don't interrupt the compounding process. There's a famous study that studied patient and impulse control. There's a one big learning that I think all of us can learn from. So, there was a test called the marshmallow test. They took little kids and they can put a marshmallow in front of them and they wait 30 minutes and then they can eat the marshmallow. Now, if they eat the marshmallow during the 30 minutes, they didn't get a second marshmallow. If they able to wait 30 minutes and not eat the marshmallow, then they would

give them a second marshmallow at the end. So, they got double the reward simply for waiting 30 minutes. Now, what was interesting is that they studied the difference between the kids who could resist and the ones who could. Obviously, long term, they figured out to the people who could wait and delay gratifications, the ones who were more successful. But the strategies that they used to delay was not that they stared at the marshmallow and used their Whow. The kids who were successful did a number of different things. Some of them went to a different side

of the room, they just distanced themselves from the marshmallow itself. Some of them started singing songs to themselves, other of them took the marshmallow and put it in their pocket so they couldn't see it anymore. So, the big thing is that they had the skills to figure out what to do in the meantime. The more skilled you are, the more ways you can win. That's why building skills is so important. It's so important because it allows you to be patient, it gives you something to do in the meantime while you allow your master plan to

come to fruition without thinking that you're smarter than you are to begin with. This concludes almost the get rich for Die Trying sex AK level three of wealth building. So, let's oh wait, Alex, you laugh, that b box, excellent observation that brings us to the very last level, which could even be above the levels, the level above the levels, on the business, not in the business, you know what I'm saying, enjoy your W, let's talk about it. In my opinion, there are really just two levels of w, level one is that you have all of

your personal needs taken care of. The second level of wealth is the unlimited level of wealth, which is that you just always want to keep using money to make more money. That means that you've progressed from solving your personal needs to playing a game. I think what a lot of people is they can never figure out what enough is for them. There was a period in my life earlier on where I was like, okay, let me figure out all these rich people things. I bought a Bentley, I was like, let's go out to all the

nicest restaurants every single night. But the thing is is that to live like the 1%, it's actually not that expensive. If you fly private and it cost about $50,000 per month. If you want to eat out every night of the week at the nicest restaurants of you know $500 dinners every single night, it's 15,000 a month. If you wanted to let's say lease a Lamborghini or something, payments are probably 5 grand a month, right. On top of that, let's say you want to go and buy designer clothing, so that's another $15,000 per month. Let's say

you spend $5,000 a month on a nutritionist and another $5,000 a month on therapy and performance coach, whatever, all right. Let's just call it a cool $100,000 per month of expenses. Oh, we forgot to where we live, let's live something of ball, let's put another 50 Grand a month on here, so $150,000 a month is just under $2 million a year in income. Now, that's after tax, right, so maybe close to 4 million a year in income. Now, that's a good amount of money. It's actually not a lot in the massive scheme of things. What

I mean is that you can ball out all the way balls to the wall for the rest of your life on this level of income. What I would encourage you to do is actually figure out what is good for me. Maybe it's worth it to taste these things and see which of them you actually enjoy. I think it was really. Doubtable for me to buy the belly and realize I didn't care. And then just, I gave it back. 6 months later, I sold it back at a loss. So I think the big TLDR here is

that you need to figure out what your personal dream list is. A lot of people have these huge goals like "I want to be a billionaire." It's like, why? Because you can just make this for the rest of your life and ball out. But real, real, you can probably live incredibly comfortably on $50,000 a month. Like still 1% living unbelievable wealth looking stuff for $50,000 a month after taxes. So I think if you put - what does food look like, right? What does travel look like? What does clothing look like? What does experiences look like?

What does health look like? And you start putting an actual number to it, you realize that what you actually need to satisfy your personal needs just to give you less than you originally thought. And so that brings me to the next level of this, which is the game itself. Now, there's a reason that my podcast is called "The Game." And it's because at this point, I play the game because I enjoy the game. And so, the whole concept of enjoying your wealth is not about not working. And I think this is one of the big

myths. You might feel that way now because you hate what you do. And the fact that you hate what you do is one of the reasons you might not ever get the wealth you want. And so it's not about not working, it's about getting addicted to freedom. And freedom again doesn't mean you don't work, it means you have the option to work. And so I believe that humans are at our best when we do work that's worth doing, when we have purpose that we derive from the effort and the toil that we put in every

day. And you get weaker when you don't have an opposing force that's as strong as you. If you lift weights and you never lift even close to your maximum, you eventually start losing muscle. And I think it's the same thing with mental strength. Unless you're continually raising the bar, you eventually atrophy – use it or lose it. And so most of us want to become the best versions of ourselves. And in order to become the best versions of ourselves, we have to increase the difficulty of the level that we're playing on. Imagine playing a game

that you've beaten 100 times and then you put it on the easiest level. It gets boring. We think we want easier, but we don't. We want to do things that we enjoy more. And enjoyment and easy are not necessarily the same thing. And so if we're trying to enjoy our wealth, it's finding the things that we can lose ourselves in for the rest of our lives and being okay with the fact that that thing may shift over time in terms of what it looks like or what it feels like. And if you fast forward all

the way to the end of the movie – as a reminder – you die. And you can't take any of it with you. And so even if you finish your life with this big pile of money at the end, you still have to push it over the edge of the cliff where it just falls off to other people whose hands are here. Reminding myself of that fact every single day reminds me that the whole point of the game is to play the game. And by playing the game, we win the game. Because the best games

in life – and I'll finish with this – the best games in life are infinite games, not finite games. And I'll tell you the difference. The point isn't to get married, the point is to stay married. When it comes to business, the point isn't to win at business, the point is to stay in business and literally keep playing. And so when we think about the greatest games that we play as humans, we have to take this infinite frame or we fool ourselves into a false finite prison that we keep wondering why we don't feel like

we're winning when we get to the finish line because we never realized that there was no finish line to begin with. And the fact that we were playing the game secured our victory by its very nature. And so this realization helped me reframe how I thought about spending my time so that I could enjoy my wealth. The point for me is to stay in business and see who I can become in this process. The point is for me to see what it looks like at 20 years of marriage with health. It's not that like, cool,

I've been training for 20 years, I'm in decent shape. I wonder what it looks like when I'm healthy at 50. Because if you're only in shape for 6 weeks of your life, or 6 months of your life, or even 6 years of your life, who cares? If you only have a good marriage for a few years of your life, who cares? If you only in business and then go out of business really quickly and you get out of the game, who cares? And which is why the biggest highway that you can have - and this

is from Winston Churchill - you win as long as you never quit. And so, that's how you enjoy your life and your wealth. And there's your blueprint.