If I Wanted to Become a Millionaire In 2024, This is What I'd Do [FULL BLUEPRINT]

Brief Summary

Alright, so, this video by Alex Hormozi is basically a blueprint on how to become a millionaire. He breaks it down into levels, starting with the fundamentals of wealth creation, then moving into the tactics of making your first million, staying rich, and finally, enjoying your wealth. Key takeaways include:

• Focus on owning equity rather than just earning income.
• Don't diversify too early; focus on one thing until it overflows.
• Build a strong foundation for long-term success rather than quick, unsustainable gains.
• Find a hungry market and craft an irresistible offer.
• Prioritize providing value and building goodwill.
• Understand that wealth is a game to be enjoyed, not just a destination.

Fundamentals of Wealth Creation

So, first things first, what even is a millionaire? It's someone whose net worth, excluding their primary residence, is over a million bucks. Alex shares his own journey, becoming a millionaire in his early 20s and crossing $100 million by 31, to establish his credibility. He talks about two ways to get there: earning and owning. Earning your way means making double the amount due to taxes, while owning involves acquiring assets like businesses or real estate. Owning is the faster route, as you get a multiplier effect without the constant drain of living expenses and taxes.

Equity: Own vs. Earn

Alex explains the difference between earning and owning your way to a million. Earning requires making $2 million over time to net $1 million after taxes. For example, earning $200,000 a year for a decade, saving every penny, would get you there. Owning, on the other hand, involves building a business or acquiring assets. A business making $250,000 a year could be sold for a multiple, say four times, resulting in a $1 million net worth. The key difference is that owning provides a multiplier effect, and time works in your favour, unlike earning where taxes and expenses eat away at your progress.

Don't Diversify

Alex strongly advises against early diversification. He quotes Warren Buffett, saying diversification is a hedge against ignorance. Instead, focus your time and attention on one thing. He illustrates this with the analogy of filling cups: spreading yourself thin across multiple opportunities versus pouring all your effort into one. Wealthy people typically go all-in on one income stream until it overflows, then diversify. He also talks about the five stages entrepreneurs go through: uninformed optimism, informed pessimism, the valley of despair (where most quit), informed optimism, and finally, achievement.

The Long Game

Alex stresses the importance of building a solid foundation for long-term success. He uses the analogy of building a tower quickly versus building it with stable bricks from the ground up. Rushing leads to a flimsy structure that can't be scaled. He emphasizes building the "thing" (your product or service) first, then letting people know about it, and continuously improving it based on feedback. He also highlights the importance of hiring talented people who fit the long-term vision.

Finding a Hungry Crowd

Moving into the tactics of making your first million, Alex emphasizes finding a "hungry crowd." He shares a story about a hot dog vendor to illustrate that the market is the strongest variable. It's better to have a hot dog stand on the best corner in front of a starving crowd than to have the cheapest, best-tasting hot dogs in a bad location. He outlines four key factors for finding a hungry market: people in pain, purchasing power, easy to target, and a growing market.

One Avatar, One Product, One Channel

Alex lays out a simple formula for getting to $1 million: one avatar, one product, one channel. Focus on helping one specific person, offering them one product, and using one channel to reach them. Avoid overcomplicating your business too early by adding more products or channels. Instead, concentrate on selling more of the same product to the same person through the same channel.

The Offer

Alex introduces the value equation from his book "$100M Offers," which consists of four variables: dream outcome, perceived likelihood of achievement, time, and effort/sacrifice. He explains that value is increased by maximizing the dream outcome and perceived likelihood of achievement, while minimizing time and effort/sacrifice. He uses the example of weight loss to illustrate how these variables affect the perceived value of an offer.

Marketing and Sales

Alex emphasizes the importance of marketing and sales. He outlines eight ways to advertise: warm outreach, content posting, paid ads, cold outreach, referrals, employees, agencies, and affiliates. He recommends starting with one advertising method and mastering it. He also stresses the importance of the founder being integrally involved in both marketing and sales in the beginning to understand the process and train future team members.

Paying Yourself

Alex discusses the subjective topic of how much and when to pay yourself. He shares his regret of not taking enough cash out of his early businesses. He suggests aiming for personal bank account PRs (personal records) to force cash flow and decrease personal spending. He presents two methods for allocating profits: a 33/33/33 split between personal income, growth, and cash reserves, or a "watermark" approach where you subtract growth costs and maintain a minimum balance before distributing the rest.

Setting Goals

Alex advises focusing on activities rather than outcomes when setting goals. Make the activities the goal, and the results will follow. He introduces the "rule of 100," which states that doing 100 primary actions over 100 days will usually get you the first result you want. He also shares how they use the scientific method to set goals for portfolio companies: identify the problem, form a hypothesis, measure the variables, and then analyze the results.

Stay Rich

Moving into level three, Alex talks about staying rich. He emphasizes that you should only have to get rich once. Fortunes are created through taking huge risks with small amounts of money, but preserved by taking small risks with lots of money. He introduces the concept of the quad marketing calendar, which involves marketing internally and externally to prospects, customers, candidates, and employees.

People

Alex highlights the importance of building an enterprise rather than just being a "genius with 1,000 hands." He explains that a business with enterprise value can be sold, increasing your net worth. He emphasizes the need to build reliable systems and processes that don't rely solely on your expertise.

Reputation

Alex discusses the importance of reputation and brand building. He uses the analogy of a bouquet of flowers to illustrate how different life experiences and associations contribute to your reputation. He emphasizes the need to be particular about what and who you associate with. He also introduces the concept of customer surplus or goodwill, which is the amount of value someone gets in excess of what they paid for. He advises reinvesting in goodwill to build a strong brand.

Compounding

Alex explains the power of compounding, where something multiplies unto itself over time. He emphasizes the importance of a long-term perspective and avoiding diversification to allow compounding to work its magic. He also highlights the importance of patience, which he defines as figuring out what to do in the meantime while you allow your master plan to come to fruition. He references the marshmallow test to illustrate the importance of impulse control and building skills to be patient.

Enjoy Your Wealth

Finally, Alex discusses enjoying your wealth. He suggests figuring out what your personal dream list is and realizing that you may not need as much money as you originally thought to satisfy your personal needs. He emphasizes that the point is to play the game and enjoy the process, not just reach a certain financial goal. He concludes by stating that the best games in life are infinite games, not finite games, and that the key is to never quit.