Alex Hormozi: How To Retire Early (and be in the top 1%)

The video is about how to retire early and be in the top 1% by living below your means and understanding the different levels of wealth in the top 1%.

This video by Alex Hormozi was published on Mar 2, 2021.
Video length: 18:17.

In this video, Alex Hormozi talks about how to retire early and be in the top 1% by living below your means.

He shares a personal story about how he was a millionaire but drove a $6,000 car and emphasizes the importance of understanding the relative cost of things. He also presents a pyramid of the top 1% and explains that being a high net worth individual with one to five million dollars in assets is not even in the top tier.

He encourages viewers to lower their expenses to reduce anxiety and increase their chances of success.

• Living below your means is key to retiring early and being in the top 1%.
• Understanding the different levels of wealth in the top 1% is important.
• Investing in assets that appreciate in value and investing in yourself and your education is important.
• Having a plan and sticking to it is important.
• Lowering your anxieties by lowering how much you spend is important.
• To get above five million dollars, you need to live on a lot less than you make.
• Your net income should be your income minus your expenses.
• The percentage of your income that you spend is what dictates how quickly you can retire, not how much you make.
• Retiring early can help you impact humanity in a meaningful way.

How To Retire Early (and be in the top 1%) - YouTube

Living Below Your Means

• People in the top 1% live a different way and don't live the way they did to get there.
• People outlive their means and this is not a new message but still doesn't resonate with people.
• Living on less than 5% of what you make is important to understand the relative cost of anything you have.
• Living on less than 5% of what you make means that until you make a million dollars a year or more, you live on $30,000 a year.
• Comfort is nice but there's not that much more enjoyment you get out of driving an expensive car versus a normal car.

The Top 1% Pyramid

• The bottom layer of the pyramid is people who have one to five million dollars in assets and are considered high net worth individuals.
• In the United States, 1 in 69 people have between one and five million dollars.
• The second layer of the pyramid is people who have five to ten million dollars in assets and are considered very high net worth individuals.
• In the United States, 1 in 1,000 people have between five and ten million dollars.
• The third layer of the pyramid is people who have ten to thirty million dollars in assets and are considered ultra-high net worth individuals.
• In the United States, 1 in 10,000 people have between ten and thirty million dollars.

How to Retire Early

• Living below your means is the key to retiring early.
• Understand the different levels of wealth in the top 1% and where you fit in.
• Investing in assets that appreciate in value is important.
• Investing in yourself and your education is important.
• Having a plan and sticking to it is important.

How To Retire Early (and be in the top 1%) - YouTube

Conclusion

• Living below your means is the key to retiring early and being in the top 1%.
• Understanding the different levels of wealth in the top 1% is important.
• Investing in assets that appreciate in value and investing in yourself and your education is important.
• Having a plan and sticking to it is important.
• Lowering your anxieties by lowering how much you spend is important.

Understanding the Different Levels of Wealth in the Top 1%

• Having one million dollars in assets doesn't necessarily mean you're in the top 1%.
• The top 1% in assets is only a million or a million and a half dollars.
• People spend all their money, which is why they don't have a lot of assets.
• If you have a top 1% income, you should be way above the top 1% in assets.
• People always want to show off and can't think long term.

The Different Levels of Wealth in the Top 1%

• The top 1.5% of the US is one to five million in assets, which is one in 69 people.
• Very high net worth individuals are worth between five and thirty million dollars, which is one in 338 people.
• Ultra high net worth individuals are worth over thirty million dollars, which is one in 1,383 people.
• Billionaires are worth over a billion dollars, which is one in 468,000 people.
• The range between the third and fourth stage is so large because everyone between 30 and a billion dollars is in the next level.

How to Retire Early and Be in the Top 1%

• To get above five million dollars, you need to live on a lot less than you make.
• If you're in the top 1% income earners, you should be in the five to thirty million dollar range within not a ton of time.
• You need to save around 15 grand a year for 30 years, assuming just nine percent returns.
• If you make four hundred thousand dollars a year, you can put ten thousand dollars a month and be at the top end of the range.
• Everyone spends too much money, which is why they don't have a lot of assets.

Income and Time

• To save twelve hundred dollars a month, you need to focus on income and time.
• You need to increase your income and decrease your expenses.
• You need to invest your money wisely and be patient.
• You need to think long term and not focus on short term pleasures.
• You need to live below your means and avoid lifestyle inflation.

Living Below Your Means

• Your net income should be your income minus your expenses.
• Make more money and spend less money.
• Live on less than 5% of what you make.
• Live on 30-40k a year.
• Spending more money does not make you happier.

Selling a Product or Service

• Sell someone else's product or your own product or service.
• If you make 100k a year and live on 30k, you can retire early.
• You can get into the top 0.3% by living below your means.
• Don't yearn for more if you're already satisfied.
• Decrease your anxiety by decreasing your spending.

The World's Simplest Retirement Calculator

• The percentage of your income that you spend is what dictates how quickly you can retire, not how much you make.
• If you make 400k a year and save 10%, versus making 100k a year and saving 80%, you can retire earlier by saving more.
• For every year you save, you can add four years of retirement.
• Assuming you have 800k saved up after 10 years, you can have 40 years of living.
• Decreasing your spending can help you retire earlier.

Retiring Early to Impact Humanity

• Retiring early can help you impact humanity in a meaningful way.
• Living below your means can help you decrease your anxiety and increase your happiness.
• Don't be dissatisfied if you haven't achieved your goal.
• Use your retirement to do what you love and impact humanity.
• Retiring early is possible for anyone who lives below their means.

Living Below Your Means

• You have to spend less than you make.
• It's sometimes simple that people don't want to do.
• You can either have your ego and how you look to everyone or you can have your ego based on the freedom that you feel.
• To be in the top 1%, you don't need to make a million dollars a year.
• You can get in the top 0.3% by being reasonable.
• Most people are irrational with their behavior and expenditures.

Understanding Different Levels of Wealth in the Top 1%

• If you live on 10% of what you make and your money grows at 10%, then in one year, you could retire.
• It means that literally one year, 15 months, whatever, but you get the idea.
• It's poverty levels in your mind based on your perception, not based on the reality of the fact that you're going to be stockpiling money that will continue to feed you forever along you want.
• Spend less than you make.
• The greater you can create that disparity, the faster you can retire or get to a point where you choose to work on the things that only you want to work on.
• Getting into the top 1% is literally a matter of saving a thousand, fifteen hundred bucks a month and putting in the S&P 500.

Watch the video on YouTube:
How To Retire Early (and be in the top 1%) - YouTube