Alex Hormozi: Why The First $100k is the Toughest | Charlie Munger Secrets

The video discusses why the first $100k is the hardest to make and the reasons behind it, including the limited thinking of only pursuing time-for-money opportunities and the lack of leverage when starting out.

This video by Alex Hormozi was published on Jan 14, 2021.
Video length: 10:46.

In this video, Alex Hormozi discusses why the first $100k is the toughest to make, citing Charlie Munger's quote that the first $100k is the hardest amount of money to make.

Hormozi explains that setting the goal at $100k limits opportunities to time-for-money vehicles and lacks leverage, making it inefficient and requiring a lot of effort. However, once the first $100k is made, it becomes easier to delegate tasks and have leverage, allowing for faster growth.

Hormozi also shares his personal experience of the first $100k being the most meaningful and impactful.

• Setting the goal at $100k limits opportunities to time-for-money vehicles.
• Starting out with no leverage makes it inefficient and time-consuming.
• Once the first $100k is made, leverage can be gained by paying others to do tasks.
• The first $100k is the most impactful because it provides a sense of security.
• Thinking differently is necessary to make more than $100k.
• Leverage is the key to scaling a business beyond the first $100k.
• The first $100k provides a sense of security and stability.
• People often limit themselves to time-for-money opportunities.
• Acquiring skills and putting them in your toolkit makes you inherently more valuable.
• You can't be busy and broke at the same time.
• After making the first $100k, you can start leveling up your skill set.

Why The First $100k is the Toughest | Charlie Munger Secrets - YouTube

Why the First $100k is the Toughest

• Setting the goal at $100k limits opportunities to time-for-money vehicles.
• Starting out with no leverage makes it inefficient and time-consuming.
• Once the first $100k is made, leverage can be gained by paying others to do tasks.
• The first $100k is the most impactful because it provides a sense of security.
• Most successful people started with something that got them to $100k.

Thinking Differently

• Thinking differently is necessary to make more than $100k.
• Thinking differently means finding ways to operate and do business that don't rely on selling time for money.
• Thinking differently means finding ways to leverage resources and people to scale the business.
• Thinking differently means being open to new opportunities and not limiting oneself to a specific goal.
• Thinking differently means being willing to take risks and try new things.

The Importance of Leverage

• Leverage is the key to scaling a business beyond the first $100k.
• Leverage can be gained by paying others to do tasks and freeing up time.
• Leverage can be gained by investing in advertising and marketing to reach a wider audience.
• Leverage can be gained by creating systems and processes that can be replicated and scaled.
• Leverage allows for faster growth and more efficient use of resources.

Why The First $100k is the Toughest | Charlie Munger Secrets - YouTube

The Value of Security

• The first $100k provides a sense of security and stability.
• Having a financial cushion allows for more freedom and less stress.
• The value of security is not just financial, but also emotional and mental.
• Security allows for more focus on growth and expansion rather than survival.
• Security can be a motivator to continue pushing and striving for success.

The Difficulty of Making the First $100k

• People often limit themselves to time-for-money opportunities.
• Outsourcing work without replacing it with higher value skills is a mistake.
• Thinking about your business in terms of what it would take to make a million or 10 million dollars can help you identify different vehicles to get there.
• There are many opportunities to immediately get more leverage on your time.
• Acquiring skills and putting them in your toolkit makes you inherently more valuable.

Acquiring Skills and Building Your Skill Set

• Think of your journey as an entrepreneur in terms of skill set stacking.
• Acquiring skills and putting them in your toolkit makes you inherently more valuable.
• As your skill set increases, the base level of your building rises, and the level you can fall down to continues to be higher.
• Volume of work for a specific skill with deliberate effort will improve your skill set.
• Some people acquire skills faster than others by being more deliberate with their practice or getting mentors and experts to feed into them.

Trading Time for Money and Avoiding Being Busy and Broke

• You can't be busy and broke at the same time.
• If you're busy, you should be making money.
• If you're broke, you're not busy, which means you've got time.
• You can always trade back and forth time for money.
• If you feel like you are busy and broke, you're wasting a lot of your time.

Leveling Up Your Skill Set and Identifying Opportunities

• After making the first $100k, you can start leveling up your skill set.
• You can pay for skills and pay for things to happen faster.
• You can pay for other people to do some of the lower value work that you're doing.
• Building the foundation of your skills eventually becomes a skyscraper.
• You'll have the perspective to identify the 10 million, 100 million, and billion dollar opportunities and go all in on them.

Watch the video on YouTube:
Why The First $100k is the Toughest | Charlie Munger Secrets - YouTube