How to Identify How Wealthy Someone is Going to Be Ep 393

Summary Notes


Alex Hormozi discusses the critical factors influencing wealth accumulation and success based on a conversation with a friend who sold his company for nearly half a billion dollars. He highlights the importance of the units of measurement individuals use for money and time. Wealthier individuals think in larger monetary units, avoiding activities that don't align with these higher values, and thus pursue more lucrative opportunities. Additionally, they optimize their use of time by acting quickly on a micro-scale and planning with a long-term, macro-scale perspective, often thinking in terms of decades rather than days. Hormozi suggests that emulating these traits can significantly accelerate one's progress toward goals.

Summary Notes

Introduction to Wealth Building Principles

  • Alex Hormozi introduces the topic of wealth building by discussing the lessons rich and poor dads teach their children.
  • He emphasizes the importance of seeking high leverage opportunities and thinking in larger base units of money.
  • Hormozi sets the stage for discussing how to predict someone's future wealth and align with certain character traits.

The difference between rich dads and poor dads and what they teach their kids is that rich dads in general will teach their kids to go after higher leverage opportunities. They'll go after opportunities that have bigger base units of measurement, bigger base units of money that they can compile together.

The quote explains the initial wealth-building principle of seeking larger opportunities with more significant financial potential, as taught by "rich dads."

Leveraging Time and Money

  • Hormozi talks about the importance of time and money in achieving success.
  • He introduces the concept of "measuring sticks" as a mental shorthand for evaluating opportunities and wealth.
  • He shares his personal experience from high school, where he measured value in terms of Chipotle burritos, which represented a tangible unit of value for him at that time.

And so if you followed any of my stuff, I talk a lot about time. I talk a lot about money. And so it's unsurprising that the two traits have to do one with time and the other with money.

This quote summarizes the two critical factors Hormozi believes are essential to future wealth: time and money management.

The Concept of Measuring Sticks

  • Hormozi elaborates on how individuals use different "measuring sticks" or base units to assess value.
  • He suggests that the unit of measurement for value increases with the financial status of the company one keeps.
  • He encourages gradually increasing the base unit of measurement to align with higher wealth levels.

And so one of the things that's interesting about this is the concept of measuring sticks. And so a lot of us have these base units that we measure things in, and it's kind of like shorthand that you use in your brain.

The quote introduces the concept of "measuring sticks," which are the base units people use to quickly evaluate the value of something in their minds.

Personal Growth and Wealth Expansion

  • Hormozi recommends aiming to measure value in larger units over time, such as tens of thousands, cars, or houses.
  • He implies that as one's wealth grows, their perspective on value and measurement should also expand.

So you want to start measuring things like how many ten k units there are, how many cars is this, how many houses is this, how

This quote suggests a strategy for personal growth in wealth by adjusting the mental base unit of measurement to reflect larger values and assets.

Understanding Units of Measurement in Wealth Accumulation

  • The concept of 'units of measurement' is crucial in understanding how people perceive and interact with money.
  • Individuals who associate with larger units of measurement tend to aim for higher financial opportunities.
  • The 'stick' is a term from Wall Street referring to a million dollars as a base unit of measurement.
  • Being around people who think in larger monetary units can influence one's own financial aspirations and actions.
  • Wealthier individuals typically engage in activities that yield returns in their accustomed unit of measurement.
  • A person's unit of measurement for money can indicate their wealth level and potential for becoming wealthier.
  • Rich parents often teach their children to seek high leverage opportunities with larger monetary units.

"And a stick is their measuring unit, which is a million dollars."

This quote explains the term 'stick' used in Wall Street to denote a million dollars, illustrating how financial professionals use larger monetary units as a baseline for thinking and transactions.

"So if you can hang around people whose base unit of measurement, around money, is far greater than yours, then you will start chunking up and thinking about money in those greater terms."

This quote emphasizes the influence of social circles on an individual's financial mindset, suggesting that exposure to people who think in larger monetary units can elevate one's own financial ambitions.

"The difference between rich dads and poor dads and what they teach their kids is that rich dads in general will teach their kids to go after higher leverage opportunities."

This quote contrasts the financial teachings of wealthy versus less wealthy parents, highlighting that wealthier parents encourage their children to pursue opportunities that can yield higher financial returns.

Time Management and Wealth Accumulation

  • Wealthy individuals tend to use their time more efficiently, acting quickly and seeking to maximize the value of every moment.
  • Time management is analyzed on two scales: micro (day-to-day actions) and macro (long-term planning and execution).
  • Part A of the concept involves immediate, efficient action and utilization of time.
  • Part B involves a broader perspective on time management, likely referring to strategic long-term planning.

"So part a is that on a micro scale, within day to day, they are going to act faster, they're going to be better utilizers of their time in general."

This quote highlights the importance of immediate, efficient action in day-to-day activities as a characteristic of wealthy individuals, suggesting that they value and optimize their time on a smaller scale.

(Note: The transcript provided was incomplete and did not contain the full context for Part B of the time management theme, nor did it contain a verbatim quote for that part. Therefore, an explanation for Part B and its associated quote cannot be given.)

Execution Speed and Activity Level

  • Rapid communication indicates a person's high level of activity and efficiency.
  • Quick turnaround times in interactions can significantly reduce the time needed to complete tasks and projects.
  • Speed of execution can lead to accomplishing more in a shorter period, effectively compressing time.
  • Increased action and communication speed allows for future goals to be achieved more quickly, bringing the future into the present.

If you start interacting with somebody and their speed of communication is rapid in terms of their turnaround time, in terms of when they communicate with you, in terms of how they respond to things, you can be sure that that person is far more active.

This quote emphasizes the correlation between rapid communication and a person's activity level, suggesting that those who respond quickly are likely to be more proactive and efficient.

And this is how you compress time. And you can drag your future into the present by increasing the speed with which you take action and you communicate with other people.

The quote highlights the concept of time compression through swift action and communication, suggesting that by doing so, one can achieve future goals more rapidly.

Micro Time Management

  • Shifting the default expectation for task completion from the end of the week to the end of the day or even sooner encourages a culture of urgency and efficiency.
  • Establishing a new default time frame for tasks can help in accelerating the pace of work within a company.
  • The goal is to create a mindset where tasks are pushed forward quickly on a micro scale.

I made a video about this. But it's the idea of switching from end of week being your default to switching to end of day or right now being your default.

This quote conveys the concept of adjusting time expectations for task completion to a much shorter timeframe, promoting a sense of immediacy and urgency in work habits.

Macro Time Management

  • On a larger scale, successful individuals and companies think in terms of decades, not just days.
  • Long-term thinking is crucial for substantial growth and progress.
  • The macro perspective involves setting and achieving goals that span over longer periods, such as years or decades.

On the macros perspective, it's when people are talking about decades and not days, right?

This quote emphasizes the importance of long-term vision and planning, suggesting that a macro perspective is characterized by considering the impact of actions over decades rather than just focusing on immediate or daily outcomes.

Perspective on Time and Wealth

  • Wealth can be gauged by a person's perspective on time and their patience to achieve goals.
  • The willingness to delay gratification is linked to future success and wealth.
  • The marshmallow test serves as a metaphor for impulse control and its impact on long-term success.
  • The ability to wait longer for a reward correlates with greater success and wealth.
  • Immediate gratification can hinder one's ability to build significant achievements over time.
  • The quote "Rome wasn't built in a day" exemplifies the importance of patience and long-term perspective.

tell how wealthy someone is by their perspective on time in terms of how long they are willing to wait to see something through.

This quote highlights the idea that a person's wealth can often be inferred from their patience and long-term outlook on their goals and projects.

And so this is kind of like a very extrapolated version of the marshmallow test.

Alex Hormozi compares the concept of time perspective and wealth to an extended version of the marshmallow test, suggesting that the ability to delay gratification is a predictor of success.

Impulse Control as a Key Driver of Success

  • Impulse control, or self-restraint, is crucial for achieving long-term goals.
  • Success often requires a macro perspective and the ability to work towards a distant future.
  • People who are able to delay gratification and work with a long-term view tend to be more successful.

And that is because impulse control or self restraint is one of the key drivers of success, because you can see where you're trying to go.

Alex Hormozi explains that self-restraint is essential for success because it allows individuals to maintain focus on their long-term objectives.

Surrounding Yourself with Successful People

  • Associating with people who have larger financial goals and shorter time units for tasks can be beneficial.
  • Successful people tend to get things done more quickly and efficiently.
  • They measure their goals in decades, not days, weeks, or months, which can influence one's own perspective and success.

And so if you surround yourself with people who use measuring sticks of money that are significantly larger than yours, they have micro units of time that are significantly shorter than yours.

This quote emphasizes the advantage of being around people who think in larger financial terms and operate on shorter time frames for completing tasks, as it can accelerate one's own success.

Measuring Goals Over Longer Periods

  • Setting goals over longer periods, like decades, rather than in shorter spans, can lead to greater achievements.
  • Adopting the time perspectives of successful individuals can help one progress more rapidly towards their own goals.

they measure in decades instead of days or weeks or months.

Alex Hormozi points out that successful people set their goals over much longer timescales, suggesting that adopting a similar approach can be beneficial.

Conclusion and Gratitude

  • The conversation with a friend led to these insights, which Alex Hormozi wanted to share with his audience.
  • He expresses gratitude to his audience for their interest and engagement with his content.
  • Alex Hormozi encourages feedback and interaction from his audience, emphasizing that he has nothing to sell them.

Thought I would share it with you guys because you guys are awesome and I'm just so grateful that you guys enjoy this stuff.

In this quote, Alex Hormozi expresses his appreciation for his audience and their appreciation of the content he shares.

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