$100k is the Hardest Amount to Make Ep 264

In this episode, the host discusses the challenges of earning the first $100,000 and how it sets the foundation for future financial success. He emphasizes that setting a goal for $100,000 often limits individuals to time-for-money opportunities, which are inherently constraining. He shares personal anecdotes to illustrate the significance of the initial financial milestone and the sense of security it provides. The host also highlights the importance of leverage and skill-building, explaining that once the initial sum is earned, one can invest in advertising, pay for help, and focus on higher-value tasks. He advises listeners to seek opportunities for skill acquisition, such as certifications, which can increase earning potential. The host concludes by stressing that acquiring a robust skill set allows for the identification and pursuit of larger financial opportunities, and that the journey of entrepreneurship is about skill set stacking and learning from experiences.

• Earning the first $100,000 is a crucial milestone and is often the most meaningful financial achievement for entrepreneurs.
• The difficulty in earning the first $100,000 lies in the limitation of thinking in terms of $100,000 opportunities, which typically involve trading time for money.
• Overcoming the challenge of earning the first $100,000 provides a sense of security and relief, as it can represent a substantial financial buffer.
• The impact of the first $100,000 is proportionally greater than subsequent financial milestones, such as reaching $10 million.

"Most people who've made millions started with something that got them a hundred grand. And I will tell you personally, the first hundred thousand dollars that I put in my bank account was by far the most meaningful. That of all the money that I've made in my life."

This quote emphasizes the foundational importance of the first $100,000 earned, highlighting it as a stepping stone to greater wealth and as the most impactful in terms of personal significance.

"The first hundred grand is a bitch."

This quote, attributed to Charlie Munger, succinctly captures the difficulty faced by entrepreneurs in earning their first $100,000, indicating that it is a common challenge in the business world.

"I remember when I looked at Layla and I had $100,000 in my bank account, after everything, I remember looking at her and saying, it's going to be okay. We've got three and a half years of money now that if we mess up for three and a half years, we'll still be all right."

The speaker reflects on the emotional relief and sense of security that came with reaching the $100,000 mark, illustrating the personal impact beyond the financial achievement.

"For me to have that same 100 x increase, I'd have to go from 100,000 to 10 million in my bank account to have the same proportional increase in terms of security."

This quote compares the relative significance of financial milestones, indicating that the initial $100,000 has a more profound effect on one's sense of financial security than even a substantial increase to $10 million.

• Setting a goal for $100,000 can inadvertently confine an individual's thinking to smaller-scale opportunities, which often involve direct exchanges of time for money.
• To achieve larger financial goals, such as $10 million, one must adopt a different way of operating and thinking, moving away from time-bound income sources.
• The shift in mindset is necessary to scale beyond the constraints of selling time, which is not feasible for higher financial targets.

"When you set the goal at $100,000, you only think of $100,000 opportunities, right? And what I mean by that is, if I were to say, hey, you need to make $10 million. You can't 100 grand your way times 100 to get there, right? You have to think of a different way of operating, of doing business in order to make $10 million, right?"

This quote highlights the limitation of setting a $100,000 goal, as it can lead to a narrow focus on smaller opportunities and the need to shift one's business approach to reach higher financial achievements.

"Because at that point, you know, you can't sell your time like, it's not going to work, right? You have to do something else."

The speaker points out the impracticality of scaling income through time-bound methods when aiming for multi-million dollar goals, emphasizing the need for alternative business strategies.

• The speaker acknowledges the inherent difficulty in earning the first $100,000, affirming that it is a normal part of the entrepreneurial journey.
• Struggles and challenges are to be expected when starting a business and working towards the first major financial milestone.
• The speaker provides reassurance to those who are currently finding the process difficult, normalizing the experience of hardship in the early stages of business growth.

"And so it doesn't matter where you're at. I'll tell you if it's hard right now, it's normal. It's supposed to be hard, b"

This incomplete quote suggests that the struggle of earning the first $100,000 is a universal experience for entrepreneurs and is an expected part of the process, offering encouragement to persevere through the challenges.

• The initial struggle in business is exchanging time for money.
• Without capital, individuals must perform all tasks themselves, leading to inefficiency.
• Learning every aspect of a business is time-consuming and requires significant effort.
• The first $100,000 is difficult to earn because it requires constant repetition of actions without leverage.

"First is you think of time vehicles, time for money vehicles. The second is that you have no leverage."

This quote highlights the two primary challenges faced when starting a business: the reliance on direct time investment (time for money) and the absence of leverage due to limited resources.

• Businesses operate on the principle of arbitrage, buying and selling with a margin.
• Service businesses, for example, sell labor at a higher price than the cost of acquisition.
• The goal is to create a system where the collective output is greater than the sum of individual efforts.

"Inherently, all businesses arbitrage, right? You're buying and selling things at less, and you're making the difference."

The quote explains the fundamental concept of business arbitrage, which is the process of capitalizing on the price difference between buying and selling goods or services to generate profit.

• After earning the first $100,000, one can start investing in people and marketing.
• Financial leverage allows for scaling up operations and increasing efficiency.
• With more resources, tasks can be delegated, leading to faster business growth.

"But once you have that, you can start paying people to do things. You can start paying for advertising."

This quote emphasizes the importance of reaching a financial milestone that enables the business owner to invest in growth and leverage through hiring and marketing.

• Business owners should outsource low-value tasks and focus on high-value activities.
• It's crucial to replace the time spent on outsourced tasks with more profitable work.
• The mistake some make is outsourcing without effectively utilizing the freed-up time.

"So let me dive into that for a second. So let's say that in your business, you might be doing 15 different things, but you might find out that the administrative work of scheduling and answering the phone might be the least valuable."

The quote discusses the strategy of identifying low-value tasks within a business that can be outsourced, allowing the business owner to focus on more profitable activities.

• Outsourcing without reallocating time to higher-value tasks can lead to stagnant profits.
• The key to successful outsourcing is ensuring the time saved is used more productively.

"I see this one as a mistake, too, is people will outsource certain work that they're doing, but they will not replace the time with higher value skill."

This quote points out a common error in outsourcing, where the benefit of freeing up time is lost because the time is not then spent on activities that generate higher returns.

• Business growth requires continuous work and engaging in higher value, more leveraged activities.
• To achieve specific income goals, like making a million dollars, one must consider various vehicles to reach that target.
• Existing vehicles for income generation should be researched and utilized to maximize earning potential.
• Certifications can be a quick way to increase hourly wages significantly, such as becoming a phlebotomist to earn $25 an hour.
• Lack of awareness about these opportunities is a common reason people don't pursue them.

"But if you want to grow, then you're going to need to continue to work and just do higher and higher and higher value, higher leveraged time in the time that you buy back."

This quote emphasizes the importance of investing time in activities that offer higher value and leverage as a means to grow a business.

"What would it take for me to make a million dollars? What would it take for me to make $10 million? You think of different vehicles in order to get there."

The speaker suggests setting clear financial targets and then strategically planning which methods or 'vehicles' can be used to achieve those targets.

"There's no reason for anyone in the United States to make less than $25 an hour. Why? Because in one day, you can go through a certification and become a phlebotomist and make $25 an hour."

This quote presents a specific example of how obtaining a certification, in this case for phlebotomy, can quickly increase one's hourly wage, demonstrating the value of certifications in enhancing income.

• Small opportunities and certifications can qualify individuals for better-paying jobs.
• It's essential to seek certifications that are required and valuable rather than collecting unnecessary ones.
• The speaker shares a personal backup plan involving driving Uber and stripping to ensure a minimum annual income based on his skill set.

"So if you're working a job and you're not making that well, then go find small opportunities. Go find little mini certifications that you can get that qualify you."

The speaker encourages seeking out opportunities for certifications that can qualify one for better-paying jobs, emphasizing the importance of being proactive in improving one's financial situation.

• As one's skill set increases, the minimum income level they can expect to earn also rises.
• Learning valuable skills like sales ensures a higher base income level.
• Pairing complementary skills, such as sales and marketing, can significantly increase earning potential.

"And so the level that you can fall down to continues to go be higher and higher year, right?"

This quote suggests that as you gain more skills, the minimum income level you can earn increases, providing a safety net for financial security.

"And that means that from this point going forward with my life, I'll never make less than that, right? But then I learned how to market, and then as soon as I learned how to market, I knew that that was going to be my."

The speaker reflects on the impact of learning new skills on their earning potential, illustrating how each new skill can set a new baseline for minimum income.

• The journey of an entrepreneur is likened to accumulating skills that add value to oneself.
• Failures are reframed as lessons that contribute to personal development.
• The work done by an entrepreneur is seen as a means of self-improvement.
• The focus is on developing foundational skills that increase one's baseline earning potential.
• As skills are acquired, the rate of progress and income can increase.

"And the thing is that if you think about your journey as an entrepreneur in terms of, as a skill set stacking, all you're doing is acquiring skills and putting them in your back pocket, putting in your toolkit, right?"

This quote emphasizes the concept of "skill set stacking," where an entrepreneur's journey is about continually acquiring new skills that enhance their capabilities and value.

• Work is personified as having an active role in shaping the individual.
• The value of work extends beyond financial gain; it is also about personal transformation.
• The progress made is not solely measured in monetary terms but also in the skills and experiences gained.

"Your work works on you more than you work on it."

This quote suggests that the influence of one's work on personal growth and development is more significant than the effort put into the work itself.

• Volume of work and deliberate effort are key to improving one's skill set.
• The speed of learning a skill can vary, but the necessity of learning through volume remains constant.
• Deliberate practice and seeking mentorship can accelerate skill acquisition.
• Investing in learning from experts is a strategy to gain skills more quickly.

"Volume of work for a specific skill with deliberate effort, will improve your skill set."

This quote highlights the importance of practicing a skill extensively and with focused effort to master it.

• The trade-off between time and money is a fundamental aspect of entrepreneurial growth.
• Being busy should correlate with earning money, and having time suggests an opportunity to earn money.
• The concept of not being able to be both busy and broke is introduced as a principle.
• Time can be leveraged to earn money when starting out, and money can later be used to buy time.

"You can't be busy and broke, right? You can't be both."

This quote introduces the principle that one's level of busyness should be directly related to their income, implying that if someone is busy yet not earning, they may be mismanaging their time.

• The initial $100,000 is presented as a significant hurdle for many entrepreneurs.
• This challenge is often due to the perception of money being tied to time.
• Overcoming this initial hurdle is necessary to advance to higher levels of skill and income.
• After earning the initial money, one can invest in skills, outsource lower-value work, and scale their business.

"$100,000 is by far one of the hardest amounts of money to make because we think about it only in time vehicles."

This quote discusses the difficulty of earning the first $100,000, attributing it to the common mindset of equating money with time spent working.

• Developing a strong foundation of skills is compared to building a skyscraper.
• With a solid skill set, an entrepreneur can identify and capitalize on significant opportunities.
• The narrative suggests that the skills and experience gained will equip one to pursue multimillion or billion-dollar ventures.

"And then you'll have the perspective to identify the 10 million, the 100 million, the billion dollar opportunities and go all in on them, because at this point, you'll have the skill set to make it happen."

This quote conveys the idea that a robust skill set, developed over time, will enable an entrepreneur to recognize and seize major business opportunities.