What the Wealthy Actually Teach Their Kids | Ep 910

Alex Hormozi provides insights into how attitudes toward money and wealth can influence financial success. He discusses the importance of ethical wealth creation, the mindset behind value exchange, debunking passive income myths, and maximizing active income.

Do Not Despise Wealth; Ethical Creation Is Possible, and Money Is a Tool For Growth

Hormozi quotes Naval Ravikant's idea that wealth can be ethically created and that despising wealth will only keep it at bay. He contrasts the attitudes toward money taught by poor and wealthy parents, noting how poor parents often depict money as scarce and rich people as greedy, while wealthy parents view money as abundant and a reward for creating value. Money, according to Hormozi, is a tool for facilitating exchanges, and its presence amplifies underlying individual behavior. Wealthy parents impart to their children the need to target high-value markets and solve problems with superior skills. Hormozi indicates that building wealth is about providing solutions for money, which rewards value creation.

Furthermore, Hormozi touches on the influences of perception and reputation regarding wealth. He stresses the importance of maintaining a good reputation and making choices that benefit it permanently. The rich buy time, reallocating it to higher return activities, thereby fostering wealth growth. He illustrates this by recounting personal experiences and stories from others, like a kitchen remodeler who invested in business analysis and Paul McCartney, who wrote a song to afford a swimming pool. Hormozi urges the use of money to pursue happiness and fulfill desires, not just accumulate wealth for its own sake.

Debunk the Passive Income Wealth Myth

Hormozi emphasizes that significant active income often precedes passive income. He advises focusing on increasing active income and leveraging time and skills, rather than purely seeking passive income. He counters the notion that trading time for money is inherently bad, explaining that active income can be used as a means to eventually establish passive income sources. ...

Alex Hormozi provides insights on adopting an ownership mentality to address financial challenges and the strategic targeting of affluent markets to accelerate wealth creation.

Adopt an Ownership Mindset to Solve Your Own Challenges

Hormozi uses the example of a remodeler who takes on a design project, a departure from her usual work, to create additional income. This story illustrates the importance of adopting an ownership mindset when dealing with financial challenges, seeing them as opportunities for growth.

Problems May Not Be Your Fault, but They Are Your Responsibility

Hormozi emphasizes that while your problems may not be your fault, they are still your responsibility. By accepting ownership of your problems, you become "dangerous"—capable of resolving them. He advocates for a practical approach to problem-solving by using available resources, like money, to eliminate time-consuming but non-valuable tasks.

Develop Skills and Strategies to Overcome Obstacles

Hormozi discusses the concept of using time effectively to elevate one's financial status through skill development. For example, he mentions getting a phlebotomist certification as a quick and affordable way to triple earnings. He outlines steps like using YouTube for self-teaching, learning from colleagues, asking employers for learning opportunities, and eventually obtaining a certification. Developing the ability to value time and strategically use money to offload less valuable tasks are essential skills in Hormozi's methodology for wealth creation.

Prioritize Solving Problems for High-Value, Wealthy Markets

Hormozi underscores the significance of targeting and providing solutions for the problems of affluent clients because they can afford to pay more for services.

Charge Premium Prices By Targeting and Catering To Valuable Markets

He advises solving the pro ...

Alex Hormozi advises on the importance of carefully curating social circles and reference groups, emphasizing their influence on one’s reputation, standards, and approach to wealth and success.

Carefully Curate Your Social Circle and Reference Group

Hormozi stresses the significance of who you associate with and how it affects your reputation, suggesting being willing to leave money on the table in favor of maintaining a good reputation. He shares how he has turned down deals because the association could have harmed his reputation, emphasizing the need to be selective with business and social connections if they conflict with the values of other business associates.

Surround Yourself With Positive, Successful Influences

Putting yourself in rooms with people who understand how wealth works is crucial, according to Hormozi. He underscores the need to surround yourself with successful influences, recounting a story where he was judged by his vehicle—a Prius with a cracked windshield—by a gym owner who questioned his wealth. This story reflects the importance of perceptions and implies that one should surround themselves with individuals who have a more accurate understanding of wealth and success.

Cut Ties With 'Friends' Impeding Your Goals

Hormozi discusses the importance of having friends who root for you and contribute positively to your goals. He states that individuals who hinder your chance of achieving your goals should not be considered friends. "If I feel like you're anything but stoked when I win, I don't need you," Hormozi asserts, indicating the potential need to disassociate from negative influences on one's financial goals.

Adopt a Higher Minimum Standard

"Hormozi remarks that poor people often know many poor people and are not poor relative to them, which could affect motivation since they lack comparison with wealthier individuals." Rich kids, however, are generally taught by their parents to pursue high standards.

Wealthy Parents Teach Children to Pursue High Standards Only

Hormozi suggests that rich parents instill the principle of pursuing high standards in their children and teaches them to ruthlessly curate their social circle. He notes that his own wealthy friends ensured that he was spending money and living to a higher standard than he might have naturally chosen, helping to shift his mindset towards gr ...