Better to invest in Yourself First: You are the Best Returning Asset

I learned so much from Alex Hormozi. Like many insights, this is stuff I wish I learned WAY earlier in my career and life. 

I want to share some of his great tweets: 

https://mobile.twitter.com/AlexHormozi/status/1486192337638150144

https://mobile.twitter.com/AlexHormozi/status/1535609572869607424

https://mobile.twitter.com/AlexHormozi/status/1524419122745864193

The idea is for the first 5 or so years, you should prioritize investing in your ability to increase cash flow and earning capacity. You invest in yourself first. You are your business and hopefully it starts to generate massive cash flow. Only then do you invest in other assets such as real estate, startups, stocks etc. 

You do this by paying for classes, masterminds, conferences and access. Basically for as much learning and access to amazing people and networks as possible. 

If you do this, you have way more money to invest in these other assets. I can attest because I did this exactly the opposite and wrong way. 

What’s the point of putting in a few hundred or thousand bucks into the stock market? Or what I did, which was sell a bunch of my Yahoo! options and put it into illiquid real estate. The issue is that when I had the inevitable tenant and vacancy issues, it came back to wreck my cash flow. Cashflow which was severely constrained by a stupidly extravagant lifestyle at that time & one I’ve since fixed. And then on top of that being a very illiquid asset as well. 

It’s about scale and leverage. More money in, the higher the level of money you get back if you get returns. Less money in, lower level of possible returns. It’s that simple. Yes, I know that whole thing about compound interest over time. But over a small amount, it actually does not matter nor is it impactful.

So net net: invest in yourself, build massive cash flow. And only then, invest that cash flow into financial assets. This is the framework for financial independence and wealth. Simple but not easy.