Breaking The Poor Mindset (w Lewis Howes) Pt. 1 Oct. '22 Ep 486

In this in-depth conversation, Alex Hermosi, founder of acquisition.com, discusses the power of leveraging existing business models and honing skills to achieve wealth. He emphasizes that becoming a billionaire doesn't require a groundbreaking idea; rather, mastering sales, consistent delivery, and leadership can propel any traditional business to success. Alex also highlights the importance of reallocating time and money resources effectively, suggesting that the poor often waste time on low-leverage activities instead of investing in skill development. By contrast, acquiring skills can exponentially increase earnings without initial capital, as skills provide leverage. Furthermore, Alex touches on the significance of education and mentorship in breaking the 'broke mindset' and the transformative impact of learning by doing. He advocates for investing in oneself, even through debt, if it leads to valuable education and skill acquisition. Lastly, Alex and the host discuss the mental shift from competition to legacy, where helping others succeed becomes a marker of one's impact, and the importance of having a clear, ambitious vision to avoid stagnation and maintain progress.

• People often believe they need a novel idea to be successful in business.
• Success can be achieved in traditional businesses, such as cleaning, lawn care, or roofing, by excelling in execution.
• Key to success: learn to sell, deliver consistently, and lead effectively.
• Wealthiest individuals view business as a strategic game.
• The speaker's podcast aims to share lessons learned from building a billion-dollar portfolio, with the hope that listeners can apply these lessons to grow their own businesses.

"A big misnomer, I think, is that people think they need to have a new thing. You can start a cleaning business, become a billionaire."

This quote underlines the idea that innovation isn't necessary for business success; rather, mastering the fundamentals can lead to significant wealth.

• Society often perpetuates a cycle of debt, trapping people in a "broke mindset."
• Speaker B inquires about strategies to escape this mindset and achieve financial success.

"I feel like a lot of society keeps people kind of trapped in this broke mindset."

Speaker B suggests that societal norms contribute to a cycle of debt and financial stagnation, questioning how one can break free from this pattern.

• People have two key resources: time and money.
• Analyzing someone's bank statement and calendar can reveal their life priorities and predict future outcomes.
• Changing one's life trajectory requires reallocating these resources to more productive activities.

"I think people have two sets of resources that they allocate. So they've got time, they've got money."

The speaker emphasizes the importance of how individuals allocate their time and money, which can determine their life's direction.

• Poor individuals often spend time on distractions rather than productive activities.
• Low leverage activities yield minimal returns, regardless of effort.
• High leverage opportunities, like real estate, can be lucrative and often require skill rather than capital.
• Skills provide leverage, allowing for greater output per unit of time.
• Investing in one's skill set can dramatically increase earning potential and efficiency.

"People are not doing stuff with the time that they have or they're doing low leverage activities with the time they have, and then they're not trying to increase their output per unit time, which means investing in their skill set."

This quote discusses the common pitfalls in time management and the importance of engaging in high leverage activities and skill development to enhance productivity and success.

• Education is a crucial investment for increasing time leverage.
• Formal education systems promote the concept of borrowing money for education, which can be beneficial if there is a return on investment.
• Practical experience is often more valuable than theoretical knowledge.
• Investing in education, whether through formal systems or real-world experiences, can lead to significant financial gains.

"Education is supposed to work? Yes. This is the simplest example that I have."

The speaker provides an example to illustrate how investing in education, such as obtaining a certification, can lead to a higher hourly wage and better financial outcomes.

• Mentors provide guidance and feedback, which is most effective when the mentee takes action and learns from experience.
• Paying for mentorship can accelerate learning and provide access to valuable perspectives.
• Investing in mentorship and coaching often yields a higher return on investment than traditional financial investments.

"The single highest return on investment thing I've ever done."

Speaker A shares a personal testament to the value of investing in mentorship and coaching, suggesting it has provided a greater return than conventional investments.

• Learning multiple skills can compound one's earning power.
• The speaker encourages learning from various sources and combining different skills to become more versatile and successful.
• Examples of successful individuals, like Jay Z, show how accumulating and combining diverse skills can lead to exponential success.

"You just learn cold calling, but you didn't also learn copywriting and email marketing or speaking on stage. It's the combination of multiple skills that make your earning power so much greater."

The speaker stresses the importance of acquiring a range of skills, which together can significantly enhance one's ability to earn and succeed.

• Understanding the concept of skill stacking and how it leads to career evolution and higher income potential.
• Starting with a fundamental skill and progressively building upon it to achieve expertise in a field.
• The journey from basic skills to high-level expertise illustrated through the example of evolving from bookkeeping to a CFO role.
• The importance of continuous learning and adding new skills to enhance prior knowledge and experience.

"If someone's good at math, they can learn accounting or bookkeeping first, right? It's like, okay, that's a level one skill. Then you learn accounting. Okay, now you're making more. And then you learn how insurance works, and you're like, oh, okay, now you can start to see this person evolve. And then you learn how tax and tax efficiencies work. And you're like, oh. And then you learn how to package and sell businesses and negotiate those deals with private equity and things like that, all of a sudden, that's a CFO."

This quote explains the process of skill stacking, starting with a basic skill and advancing through learning related skills, leading to a high-level position such as a CFO.

• The necessity of lifelong learning and personal development for success.
• Learning from various sources, including courses, programs, and experiences.
• The value of learning from different teachers, communities, and perspectives.
• The compound effect of knowledge and skills over time.

"Because each one of them, you will learn things, and there's going to be either different ways that someone's teaching. They'll have different communities, they'll have different beliefs. You'll learn from all of them."

This quote emphasizes the benefits of learning from diverse sources, as each offers unique insights and methods that contribute to personal growth.

• The three main skills necessary for business success: selling, building, and leading.
• Selling: the ability to convince customers to pay for products or services.
• Building: the development of products, services, or solutions that deliver value.
• Leading: the capability to manage and inspire a team to achieve common goals.
• The interrelation of these skills and the concept of becoming "unbeatable" by mastering all three.

"In my opinion, there's three main skills in business in general. You got to learn how to sell, got to learn how to build. You got to learn how to lead."

This quote outlines the three fundamental skills critical for business success and high earning potential.

• The story of a dog walker who scaled his business to earn $3,000 a day by applying the skills of selling, building, and leading.
• Identifying and solving common problems as a pathway to business success.
• The dog walker's progression from working alone to managing a team, illustrating the application of the three essential skills.

"It's like, what's the problem that they're solving? It's like people don't have time to work their dogs."

This quote highlights the importance of problem-solving in entrepreneurship and how addressing a simple need can lead to significant business opportunities.

• Leading as a skill that enhances and leverages other skills.
• The ability to inspire and recruit others to work towards a shared vision.
• The concept of selling through leadership by enrolling others in a vision.
• Overcoming personal limitations and building confidence as part of effective leadership.

"And it's also the one that's almost a meta skill in that it actually can layer on top of the other two."

This quote describes how leadership can amplify the effectiveness of other skills, such as selling and building.

• The importance of reducing the time between waking up and starting work.
• The value of focused work and the avoidance of distractions.
• The significance of having dedicated time for work, especially for entrepreneurs.
• The relevance of setting intentions and acting purposefully rather than reacting to external stimuli.

"Most important lessons that I've learned in my life have come from doing and mentors. And so on a day to day basis, it's reducing the time between when you wake up and when you begin working, right?"

This quote stresses the importance of mentorship and immediate action upon waking as key factors for success and productivity.

• The initial 20 hours of learning a new skill are critical and most impactful.
• People often procrastinate starting something new due to various reasons.
• The speaker emphasizes the value of reducing the delay between deciding to learn something and actually beginning the process.
• The speaker shares a personal anecdote about learning to build a website which highlights the difference between prolonged procrastination and decisive action.

"In the first 20 hours, you can learn almost any skill. Playing guitar, running an ad, doing a call, you will learn more in that first hour than any other time."

This quote underscores the efficiency of the initial hours spent learning a skill and the importance of starting the learning process without delay.

"It took me four years to learn how to build a website and it took me one day to actually learn crazy."

The speaker reflects on their own experience of delaying learning and the surprising efficiency with which they eventually learned to build a website, emphasizing the unnecessary nature of their prior procrastination.

• The first hour of learning is about overcoming fear and uncertainty.
• People fear starting something new because of the possibility of feeling inadequate or making mistakes.
• The speaker advises listeners to accept that they will not be perfect at first and to focus on the process of learning rather than the fear of judgment.

"That first hour is you paying down the fear of uncertainty. It's all these fears of not being enough."

This quote highlights the emotional barriers that prevent people from starting to learn new things and the importance of confronting these fears head-on.

• Many people delay starting projects like podcasts, YouTube channels, or books because they overestimate the complexity and time required.
• The speaker suggests starting with small steps to demystify the process and reduce fear.
• It's acceptable for initial attempts to be imperfect; improvement can happen over time.

"You may not be good at it right away. Your website probably wasn't perfect, but you got the website up within 4 hours and then you can make it better over time."

This quote encourages listeners to take the first step in their projects, accepting that perfection is not required from the outset and that there is always room for improvement.

• The speaker discusses the mental and psychological barriers to making money, particularly reaching the seven-figure mark.
• They suggest simplifying the process by breaking it down into first principles and math.
• The conversation shifts to practical strategies for achieving sales goals and scaling a business to reach higher revenue milestones.

"And so we just have to boil it down to the first principles of the math. Like, what math is required to make a million dollars, right?"

This quote emphasizes the importance of understanding the fundamental math behind earning a certain amount of money, which can demystify the process of achieving financial goals.

• The speaker provides a step-by-step breakdown of how to reach sales goals, using the example of a dog walking business.
• They outline various strategies for acquiring customers, such as referrals, affiliates, direct outreach, content creation, and paid ads.
• The speaker advises listeners to reverse engineer the process to determine the necessary actions to achieve their sales targets.

"So it's like, okay, I need six appointments a day. I have those six different ways that I can get them. Which of them do I feel most comfortable with?"

This quote demonstrates a methodical approach to achieving sales goals by identifying the number of required daily appointments and exploring various strategies to secure those appointments.

• The speaker discusses the concept of front-end and back-end funnels for customer acquisition and team building, respectively.
• They talk about the importance of advertising and leading as essential skills for business growth.
• The conversation covers the challenges of overcoming limiting beliefs and applying sales skills to internal team leadership.

"Every business has two funnels. You have the front end funnel that gets you customers and the back end funnel that gets your team."

This quote introduces the idea that a successful business must focus on both acquiring customers and building a strong team, each requiring a different strategic approach.

• The speakers delve into the difficulty of overcoming limiting beliefs around money, which are often rooted in false assumptions and ingrained from childhood.
• They discuss the need for individuals to challenge and change their deep-seated beliefs to achieve financial success.

"A lot of people were told things about the world that were not true, and they take them as fact, and so they're making their decision calculus off of something that is not true."

This quote addresses the issue of basing decisions on false beliefs, which can hinder one's ability to see opportunities and achieve financial goals.

• Personal beliefs can be altered by reality or through stories and evidence from others.
• The speaker's experience at a mastermind event highlighted how witnessing someone else's success can reshape one's perception of what's possible.
• The story of a seemingly unremarkable individual making $3,000 a month was a pivotal moment for the speaker, as it made them believe in their own potential for success.

"at the biggest beliefs have been broken for me have been one of two ways. Reality proves me wrong or someone tells me a story and gives me evidence from their lives."

This quote emphasizes how beliefs can be changed through direct experiences or through the experiences of others.

• Observing others can prevent personal hardships by learning from their mistakes and successes.
• The speaker's position as the youngest of four allowed them to learn from their siblings' experiences.
• Coaches and mentors are valuable for breaking limiting beliefs and providing guidance.

"There's certain things I think we need to learn on our own and fail and make mistakes on our own, but there's a lot of things we can learn from other people."

This quote highlights the balance between personal experience and learning from others to avoid making the same mistakes.

• Competition can be a motivator, but it's important to recognize the advantages provided by predecessors.
• The speaker reflects on the idea that if they are successful in their mission, it should naturally make it easier for the next generation to surpass them.
• The concept of being the greatest is reframed; success is measured by the ability to empower others to achieve greater things.
• Legacy is about contributing to the progress of the field, rather than personal accolades.

"But making the world a better place, what that looks like is it being easier for the next generation."

This quote encapsulates the speaker's realization that their mission should facilitate the success of future generations.

• Documenting and sharing knowledge is crucial for the advancement of any field.
• The speaker admires individuals who have shared their expertise to elevate others, citing Steve Young and his contribution to football as an example.
• The speaker aspires to document and share their journey to help others learn and grow faster.

"How cool would it be if Jeff Bezos and Warren Buffett and Elon Musk? And all those guys had documented everything that they learned throughout that path."

The quote reflects the speaker's desire for successful individuals to share their knowledge to benefit others.

• The speaker has experienced a personal evolution, leading to a more relaxed and purpose-driven approach.
• Acquisition.com is the speaker's vehicle for proving their business acumen and impacting the world through education.
• The speaker's vision for their business includes reaching a billion-dollar valuation and beyond.
• The speaker finds fulfillment in the success stories of others who have benefited from their teachings.

"But the thing that really drives me, though, is acquisition.com is the wealth machine that is behind Alex and Layla's media."

This quote explains the speaker's underlying motivation and the connection between their personal success and their ability to educate others.

• A vision provides direction and hope for the future.
• Lack of vision can lead to less progress and a sense of aimlessness.
• The speaker believes that having a large, unattainable goal keeps them motivated and engaged.

"I think you have less direction, and so you make less progress because you can't make progress unless you have direction, because otherwise you're just moving."

The quote emphasizes the necessity of having a clear vision to make meaningful progress in life.