Money, Happiness and High Prospects in Entrepreneurship (with Lewis Howes) Pt.1 Nov. '23 Ep 658

Summary Notes


In this insightful conversation, the host and Alex Hormozi explore the entrepreneurial journey, emphasizing that success often follows a series of failures and the importance of persistence. Alex stresses that wealth does not equate to happiness, noting that self-earned wealth may contribute to contentment by alleviating pain, not necessarily by increasing joy. He also rejects expectations from others, advocating for merit-based decisions in business and personal relationships. Moreover, Alex delves into the misconceptions of rapid wealth accumulation, particularly among young entrepreneurs, highlighting that acquiring skills and experience is crucial. He shares his own path to becoming a millionaire by reinvesting in education and advises aspiring entrepreneurs to focus on learning over earning. The discussion also touches on the importance of taking action and seeking mentorship, as well as the internal fulfillment derived from maximal effort, regardless of the outcome.

Summary Notes

Entrepreneurship and Skill Development

  • Continuous practice is essential for mastery in any field.
  • Initial failure is common and should be expected.
  • Many successful entrepreneurs have experienced numerous failures before achieving success.
  • The journey to success is often misunderstood as finding the perfect fit from the start.

"The only way to get good at something is to do a lot of it. And when you start, you suck." This quote emphasizes the importance of persistence and practice in the process of becoming skilled at something. It suggests that starting out with poor performance is a natural part of the learning curve.

"Almost every entrepreneur that I know has had many, many businesses and mostly many failures before they had their success." The quote highlights the commonality of failure among entrepreneurs and suggests that failure is a stepping stone to eventual success.

Wealth and Happiness

  • The source of wealth can influence happiness; inherited wealth often correlates with less happiness.
  • Earned wealth can provide a slight increase in overall happiness due to the reduction of pain, rather than the direct purchase of joy.
  • Money can help avoid life's pains but doesn't guarantee a state of happiness or health.
  • The relationship between wealth and happiness is complex and not linear.

"Money cannot buy happiness, but it can help you avoid pain." This quote discusses the limitations of money in achieving happiness, stating that while it can alleviate certain hardships, it does not directly create happiness.

"Removing pain versus gaining joy, I think are two completely different journeys." The quote distinguishes between the negative aspect of alleviating pain and the positive aspect of gaining joy, suggesting that wealth is more effective at the former than the latter.

Managing Expectations and Relationships

  • Rejecting external expectations is crucial, especially when dealing with wealth.
  • Establishing clear, objective criteria for business decisions helps maintain fairness and avoid relational bias.
  • Relationships should not influence professional decisions; deals should make sense independently of personal connections.
  • Clear communication of expectations and standards is necessary to avoid misunderstandings and resentment.

"I wholeheartedly reject all of it. Any expectations of me." This quote shows a firm stance on not allowing others' expectations to dictate one's actions, especially regarding financial matters and personal relationships.

"Would I give somebody with your mom's experience the bookkeeping job? ... Would you pay the bookkeeper $200,000 a year?" The quote encourages objective evaluation of professional opportunities based on merit and experience rather than relationships, ensuring fairness and avoiding nepotism.

Wealth Aspiration in Youth

  • Young people often have unrealistic expectations about the speed of acquiring wealth.
  • Becoming wealthy usually requires a significant amount of time, effort, and skill acquisition.
  • Investing in education and knowledge can accelerate the path to financial success.
  • Technological advancements and access to education are creating younger millionaires and billionaires.
  • The competitive advantage of being technologically savvy is increasing with the rapid pace of technological change.

"The accumulation of knowledge, because I spent almost all of my excess income on education and so I wanted to pay down my ignorance tax as fast as I possibly could." This quote underscores the importance of investing in self-education and knowledge to reduce the 'ignorance tax' and hasten financial success.

"The level of competition will continue to rise. I think young people are more tech savvy and so will, in general, have a continuously improving competitive advantage over older people." The quote predicts that younger generations will continue to have a competitive edge due to their technological proficiency and the increasing pace of technological innovation.

Readiness for Wealth

  • Speaker C reflects on advice about money readiness received from a mentor.
  • The mentor suggested that money comes when you're emotionally ready to handle it.
  • The risk of losing money due to a lack of emotional preparedness is highlighted.

"Money comes to you when you're ready for it."

The quote emphasizes the idea that financial success is not just about having money, but also about being emotionally and mentally prepared to manage it effectively.

"Maybe you get it and you're not ready, and you lose it all because you're not emotionally ready."

This quote underscores the potential consequences of acquiring wealth without the necessary emotional maturity, which can lead to losing the wealth as quickly as it was gained.

Trainability of Skills

  • Speaker A asserts that handling money is a skill that can be trained.
  • The importance of perseverance and learning from past experiences is discussed.
  • The analogy of the 's curve' in entrepreneurship is used to describe the journey of skill acquisition.

"Everything is trainable."

Speaker A suggests that any skill, including financial management, can be learned and improved upon with training and experience.

The Entrepreneurial Journey

  • Speaker A outlines the five stages of the entrepreneurial journey.
  • The stages are: uninformed optimism, informed pessimism, the valley of despair, informed optimism, and success.
  • The journey is characterized by learning from failures and persistence.

"If you were somebody who continues to hop from thing to thing to thing... it's usually because you don't have the skill of sticking with something."

This quote emphasizes the importance of commitment and the need to develop the skill of perseverance to succeed in entrepreneurial endeavors.

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

Speaker A highlights the personal growth that occurs as a result of the entrepreneurial process, regardless of the immediate outcomes of the work itself.

"But the reality is that the outcome isn't the thing that you're building. The person you are is the person that you're building."

This quote reinforces the idea that entrepreneurship is as much about personal development as it is about building a business or product.

The Value of Experience

  • Speaker A shares a personal story of losing everything but retaining skills and beliefs.
  • The story illustrates the value of experience and skills over material success.
  • The concept of 'ignorance debt' is introduced, referring to the knowledge one gains through experience.

"I lost everything five years into my entrepreneurial journey, but I still had all the skills and beliefs that I have from before then."

Speaker A reflects on the resilience gained through experience, which allowed for a comeback after a significant loss.

Patterns of Success and Failure

  • Speaker A discusses the tendency to abandon a difficult path for seemingly easier alternatives.
  • The importance of recognizing patterns and learning from them is emphasized.
  • The metaphor of 'grass being greener on the other side' is critiqued.

"Most people go step one, two, three, and then they jump back to step one with something new, right?"

This quote highlights the common mistake of giving up when faced with challenges instead of pushing through to reach success.

Real-World Application of Skills

  • Speaker A recounts the story of a young neighbor who aspired to be an entrepreneur.
  • The neighbor's journey from college student to successful salesperson is shared.
  • The importance of going all-in and gaining practical experience is emphasized.

"You are afraid of going all in on entrepreneurship because staying in college is safe from an approval perspective."

Speaker A challenges the neighbor to commit fully to entrepreneurship rather than taking the perceived safer route of staying in school.

"You sound horrible. You can't sell anything on the skill, of course."

Speaker A provides blunt feedback to the neighbor, emphasizing the need for skill development in sales.

Success Through Skill Development

  • The neighbor's progression through different sales roles is described.
  • The story demonstrates the value of starting at the bottom and working up through skill acquisition.
  • The financial success achieved through dedication and learning is highlighted.

"He became the top salesman on the setting team... then he became the top closer."

Speaker A describes the neighbor's ascent through the ranks of the sales team, showcasing the rewards of skill development and hard work.

"19, making 250. That's life changing, of course."

The quote illustrates the transformative impact that developing sales skills and achieving success at a young age can have on an individual's life.

Learning vs. Earning

  • Emphasizes the importance of prioritizing learning over earning in the early stages of a career.
  • Discusses the concept of "getting paid to learn" as an alternative to the traditional model of paying to learn.
  • Suggests working at a company as a practical way to get paid while learning and choosing a career path.

"When you're starting out, you need to focus on learning rather than earning." This quote highlights the speaker's advice for beginners to prioritize gaining knowledge and skills over immediate financial gain.

"One of the biggest hacks in the world is getting paid to learn." The speaker is suggesting that finding opportunities where one can learn while earning money is a strategic approach to career development.

The Value of Meta Skills

  • Introduces the concept of meta skills, which are transferable and valuable in various industries.
  • Examples of meta skills include sales, marketing, and human resources (HR).
  • Encourages taking action and starting somewhere to develop skills and interests.

"If you learn how to sell, it'll work in any company you're in." Sales is highlighted as a versatile skill that is applicable across different companies and industries.

"We usually only like things that we're good at, and we usually aren't good at things [at the] start." This quote underscores the idea that proficiency and enjoyment in a skill often come with practice and experience.

The Entrepreneurial Journey

  • Discusses the commonality of failures before success among entrepreneurs.
  • Stresses the importance of taking action and learning from each experience.
  • Mentions the speaker's personal experience of starting a gym at a young age and learning from a mentor.

"Almost every entrepreneur that I know has had many, many businesses and mostly many failures before they had their success." The speaker is reflecting on the typical path of entrepreneurs, which often includes multiple attempts and failures before achieving success.

"I started a gym when I was 22 years old, like brick and mortar signed a lease. It was stupid. I had no idea what I was doing." The speaker shares a personal anecdote to illustrate the learning curve and risks involved in starting a new business.

Seeking Advice and Taking Action

  • Highlights the value of actively seeking advice and learning from others.
  • Points out the willingness of experienced individuals to help those who show initiative.
  • Emphasizes the importance of preparation and demonstrating effort when seeking opportunities.

"People usually want to give advice and support and say, hey, why don't you come check out and go out for lunch, whatever it is." This quote illustrates the speaker's observation that people are generally eager to offer advice to those who are proactively seeking guidance and taking steps towards their goals.

"Luck favors the prepared." The speaker shares a saying that suggests success is more likely for those who are well-prepared and proactive.

The Importance of Taking Initiative

  • Discusses the positive impact of taking initiative on receiving support and opportunities.
  • Reflects on the speaker's own experiences of being proactive and gaining access to influential circles.
  • Notes the reciprocal nature of teaching and learning, where advice is valued when it leads to action and change.

"Everyone loves to help people who help themselves always." The speaker is emphasizing that self-initiative is a key factor in garnering support and assistance from others.

"You only teach if they change their behavior. If they change their behavior, they learned." This quote highlights the speaker's belief that the true measure of effective teaching is the observable change in the learner's behavior.

Reflections on Speed and Success

  • Encourages reflection on the reasons behind the desire for rapid success.
  • Contemplates the value of patience and the potential benefits of a longer, more gradual journey to success.
  • Discusses the importance of focusing on controllable actions and being detached from outcomes.

"Why do you want to go faster? Be like, why? Why can't it take ten times as long?" The speaker is questioning the rush towards success and suggesting that a slower pace could still lead to the desired outcome.

"Patience is a big one. Focus is a big one. Sticking with what I committed to focusing on the controllables of, like, what are the activities, what are the actions that I have to take?" The speaker is sharing personal insights from their older self, emphasizing the importance of patience, focus, and control over one's actions.

Theme: The Value of Effort Over Outcome

  • Effort is considered more valuable than the actual outcome.
  • Personal satisfaction comes from knowing you've given your all, regardless of whether you win or lose.
  • The internal standards one sets for oneself are higher when focusing on the effort rather than the outcome.
  • Fulfillment is derived from exhausting every possibility and leaving nothing on the table.
  • There's a sense of pride in knowing you couldn't have done more, even if the results don't show for it.

"If you really measured yourself by the actions you take, then you might be embarrassed. So you really hope to measure yourself on the outcome, because you can get by on sometimes winning when you don't deserve it."

This quote emphasizes the importance of measuring oneself by the effort and actions taken rather than the outcome, as outcomes can sometimes be misleading.

"I would rather lose, but know I gave my all than win and be like, I just kind of just barely showed up today."

Speaker C values the effort put into the process more than the outcome, preferring to lose with dignity than win without full effort.

"I think it's a. Both the journey matters and the outcomes matter. The outcomes also give credibility. They give more context, they give more experience."

Speaker C acknowledges that while effort is important, outcomes also provide valuable lessons and credibility.

"I believe that truly giving your all, actually not like, try your best. That's just like, it's repeated so many times that it's lost its meaning, but leaving everything on the field, having the tank on zero or empty when you walk off and truly knowing and looking at yourself in the mirror like, I could not have done anything more."

Speaker A discusses the significance of exerting maximum effort to the point of having nothing left to give, which provides a sense of true fulfillment.

Theme: Reflecting on Personal Achievements and Regrets

  • Personal achievements can be overshadowed by the regret of not winning or achieving more.
  • Even record-breaking performances may not provide solace if the team loses.
  • The drive to perform better is often heightened when faced with adversity or the likelihood of losing.
  • Reflection on past experiences can lead to a better understanding of one's capabilities and the importance of effort.

"You broke a world record today. And I go, what? And I go, what do you mean? And he goes, yeah. You had 17 catches for 418 yards. No one's ever done that in the history of a football game. You're a new NCAA all record holder."

Speaker C recalls a significant personal achievement of breaking a world record, which was bittersweet due to the team's loss.

"But I know because we were behind, I had to give so much more than I was capable of. And if we were winning, I wouldn't have gotten that effort out of myself."

Speaker C reflects on how the challenge of being behind in a game pushed him to exert more effort than he thought he was capable of.

Theme: The Role of Standards and Internal Measurement

  • Setting high standards for oneself can be more challenging but leads to greater self-satisfaction.
  • One's internal measurement of success is crucial for personal fulfillment.
  • The idea of 'no shortcuts' embodies the commitment to high personal standards.
  • Hard work and effort are seen as ends in themselves, not just means to an outcome.

"There's no shortcuts for you, goggins. And I just really love that he doesn't even look for them because he said, you don't get those, you don't get shortcuts. There are no corners to cut."

Speaker A admires the ethos of not taking shortcuts, which aligns with his belief in maintaining high personal standards.

"But we're naturally built to conserve effort. Right. And so you really have to push and overcome the internal mechanisms that you have that say, don't sprint the last 20."

Speaker A discusses the natural tendency to conserve effort and the importance of overcoming it to truly meet one's high standards.

"I am able to work harder and therefore am more proud of the effort that I put into it. Because at least for me, I feel like I know in the mirror, did I give it my all."

Speaker A takes pride in his ability to work hard and the knowledge that he has given his all, which is an important measure of success for him.

Theme: Coping with Failure and Defining Success

  • Even in the face of failure, one can find pride in the effort expended.
  • Defining success by one's own standards can insulate from external pressures.
  • The experience of losing everything can reinforce the value of effort over results.
  • Ultimately, the pride in one's effort and the process is what brings fulfillment, not just the results.

"I think at the end of your life, you would still be more proud of the man that did his everything, gave it his all, left it all on the guild, even if he didn't win."

Speaker A contemplates the long-term perspective on success, suggesting that effort and dedication are more important than winning when reflecting on one's life.

"This is what has been allowed me to keep my internal temperature separate from the external temperature to the greatest degree possible, is knowing that I'm using my internal thermometer to gauge my success."

Speaker A explains how using an internal measure of success helps maintain emotional stability and personal satisfaction, regardless of external circumstances.

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