Why You Should Stay Poor to Succeed Ep 503

Alex Hormozi, owner of acquisition.com and host of a business-focused podcast, shares his unconventional approach to financial success through "inversion thinking," a method inspired by Charlie Munger. Hormozi suggests that by actively seeking to avoid 28 common behaviors that keep people poor, such as procrastination, taking poor advice, fearing discomfort, and prioritizing appearances over actual wealth, individuals can inadvertently achieve success. He emphasizes the importance of learning from failures, making and keeping promises, seeking discomfort, and spending less than one earns. Hormozi argues that success is a choice and a process, advocating for a mindset shift that values personal standards and continuous improvement over societal opinions and superficial benchmarks.

• Being rich requires spending less and valuing one's own opinion over that of others.
• It's essential to seek self-approval rather than external validation.
• Willingness to disregard others' opinions is crucial for personal financial growth.

"You have to prioritize being rich, which means spending less, because you are not valuing the opinion of other people over your own, which, because you respect your own approval more than that of other people, you have to be willing to die to the opinion of others rather than dying to the opinion of yourself."

This quote emphasizes the importance of prioritizing personal financial goals and self-approval over seeking the approval of others, which is a fundamental mindset for achieving wealth.

• Inversion thinking involves solving problems by considering how to achieve the opposite outcome.
• This approach leverages the brain's natural tendency to identify problems rather than solutions.
• Alex Ramosi applies inversion thinking to various aspects of life, including business and marriage.

"Charlie Munger, my personal hero, had a seminal talk that he gave multiple times on how to live a miserable life. And the reason he gives it that way is that he believes in a process called inversion thinking, which is where you solve problems in reverse."

Alex Ramosi references Charlie Munger's use of inversion thinking as a strategy for problem-solving, which involves contemplating how to create negative outcomes to better understand how to achieve positive ones.

• Alex Ramosi owns acquisition.com, a portfolio of companies generating over $100 million a year.
• He creates content without the intent to sell, aiming to share knowledge and enjoy the process.

"And if you don't know who I am, my name is Alex Ramosi. I own acquisition.com. It's a portfolio of companies that is over $100 million a year, and I have nothing to sell you."

The quote provides context about Alex Ramosi's professional background and clarifies that his content is meant to be informative and enjoyable rather than a sales pitch.

• Ramosi introduces a list of behaviors and mindsets that contribute to financial stagnation.
• The list is intended to highlight common pitfalls and encourage listeners to do the opposite.

"I'm going to talk to you about the 28 ways to stay poor."

This quote sets the stage for a discussion on behaviors that hinder financial success, with the aim of encouraging listeners to avoid these pitfalls.

• Starting important tasks "tomorrow" is a surefire way to remain stagnant.
• Immediate action is key to achieving goals and financial success.

"So the first and best way to stay poor is to start tomorrow."

The quote identifies procrastination as a primary obstacle to financial success, suggesting that deferring action is detrimental to achieving one's goals.

• Reading extensively without applying knowledge is ineffective for progress.
• Taking action on a single book's teachings can be more beneficial than reading many books without implementation.

"The next one is to read lots of books and then do nothing."

This quote criticizes the common practice of acquiring knowledge without subsequent action, which can lead to a lack of progress despite being well-read.

• Taking financial advice from those who are not financially successful is counterproductive.
• It's important to consider the source of advice when making financial decisions.

"Number three, take advice from poor people on how to be rich."

Alex Ramosi points out the irony and ineffectiveness of seeking financial wisdom from those who have not achieved financial success themselves.

• Selecting a partner who makes you feel guilty for working can undermine your aspirations.
• A supportive spouse is crucial for pursuing and achieving one's dreams.

"Number four, pick a spouse who will make you feel guilty for working."

The quote highlights the importance of having a supportive partner who encourages rather than hinders one's professional and financial efforts.

• Viewing failure as a permanent state rather than a learning opportunity can halt progress.
• Adopting a mindset that embraces failure as a necessary step towards success is essential.

"Number five, fail once, quit forever."

Alex Ramosi describes how misinterpreting failure as a sign to give up can prevent one from pursuing success, emphasizing the importance of resilience.

• The belief in a fair world can lead to unproductive complaining.
• Acknowledging life's inherent unfairness and acting accordingly is more pragmatic.

"Number six is think that the world is fair."

This quote challenges the notion that the world is just and suggests that accepting its unfairness is a more practical approach to life and financial success.

• Blaming one's circumstances and complaining are ineffective strategies.
• Gratitude for one's circumstances and the character built through adversity is more productive.

"Number seven of how to stay poor is blame your circumstances and complain."

The quote advises against blaming external factors for one's situation, advocating for a proactive and appreciative stance instead.

• Relying on the government or others to save you financially is unrealistic.
• Self-reliance is key to overcoming poverty and achieving financial independence.

"Number nine, expect the government to save you."

Alex Ramosi criticizes the expectation that external entities will provide financial rescue, emphasizing the importance of self-sufficiency.

• Giving more weight to others' opinions than to one's own can hinder financial progress.
• Recognizing personal success is a matter of self-declaration and belief.

"Number ten, value the opinion of others over your own."

The quote encourages listeners to trust their own judgment and beliefs over external opinions, particularly in the context of defining personal success.

• Success is subjective and can be defined by the individual.
• People with varying levels of wealth can both consider themselves successful.
• Success should be seen as a process and living by one's values can be a form of success.
• Comparison to those in less fortunate circumstances can help one appreciate their own success.

"There are people who are billionaires who don't feel like they are successful, and there are people who have almost no money and absolutely think that they're an amazing success."

This quote highlights the subjectivity of success and how it varies from person to person, regardless of their financial status.

"Success is a process rather than an outcome. And so you can be successful in that you are living your values of pursuit."

Alex Ramosi emphasizes that success is not just about the end result, but about the journey and living according to one's values.

• Avoiding discomfort is a common reason people stay poor.
• Learning new things and taking risks is uncomfortable but necessary for growth.
• Self-judgment about not being skilled in something new is irrational and counterproductive.

"Avoid discomfort, all right? A lot of us, we have new things. You have to take risks, you have to learn things."

Alex Ramosi points out that avoiding discomfort, which is necessary for learning and taking risks, can lead to stagnation.

"The discomfort that they're feeling is the judgment they impose upon themselves about not being good at something they've never done before."

The quote explains that the discomfort often comes from self-judgment rather than the actual task at hand.

• Accepting mediocrity from oneself or others can lead to a cycle of underachievement.
• Successful leaders and CEOs do not tolerate mediocrity and instead hold themselves and others to high standards.
• Raising personal standards is key to setting an example for others.

"Tolerate mediocrity from yourself and others. [...] If you tolerate mediocrity from others, you will beget more mediocrity."

Alex Ramosi warns that accepting mediocrity leads to a culture of low performance and further mediocrity.

"They themselves stay above, which means you must raise your own standard so that you can model what it looks like for other people around you to hold themselves."

This quote underscores the importance of leading by example and maintaining high personal standards to inspire others.

• Keeping promises to oneself and others is essential for maintaining respect and reputation.
• Breaking self-promises can lead to a loss of self-respect, which is difficult to regain.
• Upholding promises is a reflection of one's integrity and commitment to personal goals.

"Make promises, break promises. [...] But the one that's the hardest one to fix is the reputation you have with yourself."

Alex Ramosi discusses the damaging effects of breaking promises, particularly to oneself, and how it can erode self-respect.

• Waiting for the perfect moment to act can prevent success.
• Perfect conditions do not exist, and waiting for them can halt progress.
• Starting under imperfect conditions can prepare one for future challenges.

"Wait for perfect conditions. [...] There are never going to be perfect conditions."

This quote by Alex Ramosi expresses the futility of waiting for perfect conditions, as they will never occur.

"If you can prove success when things get bad, when they get bad again, which is guaranteed, you will still remain successful because you have learned how to do it in this time, in this circumstance."

Alex Ramosi explains that success achieved under difficult conditions is more resilient to future challenges.

• Focusing on appearing rich instead of being financially secure is a mistake.
• True wealth involves spending less and prioritizing one's own approval over others.
• Respecting oneself and one's financial goals is more important than external perceptions.

"Prioritize looking rich over being rich. [...] You have to prioritize being rich, which means spending less for a long period of time."

Alex Ramosi criticizes the emphasis on appearances and stresses the importance of genuine wealth accumulation through frugality.

"Be willing to die to the opinion of others rather than dying to the opinion of yourself."

This quote highlights the significance of valuing one's own opinion and goals above those of others when it comes to financial success.

• Focusing on unimportant tasks can prevent progress towards significant goals.
• Wealthy individuals prioritize tasks that have the most impact.
• Eliminating distractions and procrastination on key tasks is crucial for success.

"Avoid working on what matters most, all right? [...] They're doing the right stuff and they're making sure, better stated, making sure the right stuff gets done in general, whether or not it's them or someone else."

Alex Ramosi emphasizes the importance of focusing on tasks that truly matter and have the greatest impact on one's goals.

• Making promises and not following through is equated with breaking promises to oneself.
• Trustworthiness and reliability are undermined when promises are not kept.

Say you're going to do something and then don't do it. This is just like making and breaking promises to others himself.

This quote emphasizes the importance of keeping one's word, and how failing to do so is akin to breaking a promise to oneself, affecting personal integrity.

• Doing what everyone else does is a common way to stay within the majority, which is not the 1%.
• Seeking approval from the majority, who may not be wealthy, can hinder financial success.

Great way to stay poor is do what everyone else is doing, right? Because if you're doing what everyone else is doing, most people are not in the 1%.

The quote suggests that to achieve exceptional financial success, one must diverge from the common path taken by the majority.

• The podcast does not run ads or sell products.
• Listeners are asked to help spread the word by rating, reviewing, and sharing the podcast.

Real quick, guys, you guys already know that I don't run any ads on this and I don't sell anything.

The quote indicates that the podcast's growth relies on listener support rather than traditional monetization methods like ads or product sales.

• Simply doing one's best may not be enough if it falls short of what's required.
• It's crucial to understand what's necessary and improve oneself to meet or exceed those requirements.

Do your best, not what it takes. Because the reality is a lot of times your best may suck and what is required is what is required.

This quote highlights the difference between putting in effort and achieving the actual requirements; one must strive to exceed just "doing their best" to succeed.

• Talking about goals and affirmations without action is ineffective.
• Action should be prioritized over preparation and routines.

Talk more, do less. Post about your goals. Post about your affirmations.

The quote criticizes the tendency to focus on talking about work rather than engaging in the actual work needed to achieve goals.

• Continuously starting new projects without finishing them leads to a cycle of incomplete efforts.
• This pattern of behavior is associated with initial uninformed optimism followed by informed pessimism and eventual abandonment.

Start something new today, start something new tomorrow. Repeat.

The quote describes a pattern of behavior where individuals perpetually start new endeavors without seeing them through, leading to a lack of completion and success.

• Believing in others' perceptions more than one's self-belief can be detrimental to personal growth and success.

Believe what other people think about you more than what you think about you.

This quote warns against allowing the opinions of others to dictate one's self-worth or actions, suggesting it can lead to poor outcomes.

• Repeating the same mistakes without learning from them results in stagnation and lack of progress.
• Recognizing and correcting repeated errors is crucial for growth and improvement.

Make a mistake, then wait, repeat the mistake.

The quote points out the counterproductive nature of repeating mistakes and the importance of learning from them to avoid staying in a state of poverty or failure.

• Being replaceable in a job or skill set can limit financial success and job security.
• Learning unique skills makes an individual less replaceable and more valuable.

Be replaceable. All right? This is a great way. Just poor.

The quote implies that being easily replaceable is a surefire way to limit one's financial potential and remain in a lower economic status.

• Finding a successful strategy and then abandoning it is a common mistake that prevents sustained success.
• Consistency in successful methods is key to continued financial stability and growth.

Find something that works. Dear God, find something that works and then stop doing it.

This quote underscores the folly of discontinuing a proven successful strategy, which can lead to financial instability or failure.

• People commonly understand what actions are needed to achieve their goals but often fail to act on that knowledge.
• Taking simple, consistent actions is key to reaching goals, such as making calls to earn money or exercising and eating well to lose weight.
• Complexity is not a requirement for success; rather, the willingness to do what is necessary is crucial.

"Most people know what to do to achieve their goals. Most people do know what to do."

This quote underscores the idea that knowledge of the steps to achieve goals is widespread, but the gap lies in the execution of that knowledge.

• Hiring incompetent individuals is a surefire way to maintain a poor and dysfunctional business or work environment.
• Surrounding oneself with less capable people may temporarily boost one's ego but is detrimental to financial and professional success.

"Hire dumb people. Excellent way to stay poor and have a bad business."

Alex Ramosi sarcastically recommends hiring incompetent people as a strategy for failure, highlighting the importance of smart hiring decisions for business success.

• Assuming one is always correct is a common trait among unsuccessful individuals.
• Successful people often have a strong desire to learn from every possible source and acknowledge that others may have knowledge they lack.
• Being closed off to learning from others is likened to self-imposed ignorance and is a significant barrier to success.

"Assume you are always right. How many people here you're watching this know someone who always just think they're right and they're not successful?"

This quote points out the flawed mindset of always believing oneself to be right, which can hinder learning and growth.

• Spending more money than one earns, regardless of income level, is a reliable way to remain in poverty.
• People often prioritize the appearance of wealth over actual financial stability, influenced by the opinions of others.
• The concept of inversion thinking is introduced, suggesting that identifying and avoiding common pitfalls can lead to success.

"Make money, period. Spend more than you make."

Alex Ramosi emphasizes the simple yet destructive habit of spending more than one earns as a path to poverty, regardless of one's income.

• Inversion thinking focuses on identifying threats and avoiding them rather than directly seeking solutions.
• By considering ways to fail and then doing the opposite, one can succeed "by accident" by steering clear of common mistakes.
• Alex Ramosi presents a list of inverted rules for success, derived from common behaviors that lead to poverty.

"Think about the ways to destroy it. I just gave you 28 different ways that you can be poor, right? When you reverse them and you make those the rules for living that you have, then what happens is you succeed by accident because you avoid the pitfalls."

The quote explains how inversion thinking can be applied to various aspects of life, such as business or personal finance, to achieve success by avoiding failure.

• Alex Ramosi lists behaviors typically associated with failure and then inverts them to create a set of rules for success.
• The rules cover a range of topics, including personal development, work ethic, learning, financial management, and social interactions.
• The overarching theme is to take proactive, positive actions contrary to those that lead to poverty.

"Start today. Read books. Do the stuff that's in the books. Take advice from rich people on how to be rich. Pick a spouse who makes you feel awesome about working. Fail once, try again."

This quote is part of a longer list where Alex Ramosi flips the script on behaviors that lead to poverty, offering a comprehensive set of guidelines for achieving success and wealth.