I increased my wealth EXPONENTIALLY using the power of INVERSE thinking…

Summary

• To make more money, focus on the variables that influence pay: the value provided, negotiation skills, supply and demand dynamics, and the customer you serve.
• If you want to earn as little as possible, provide little value, ask for a small percentage of the value being created, and make sure your skills are easily replaceable.
• Reverse this process to earn more money by creating significant value, asking for a higher percentage of the value you create, and becoming less replaceable or a “category of one.”
• Crafting a compelling offer can involve providing lots of value, pricing high, and standing out to decrease competition.
• As an employee, use your unique skills and experiences to impact the bottom line and seek variable compensation tied to the value you provide.
• If you're a business owner, understanding how to articulate the value to customers can be key to setting higher prices and making more money.
• Differentiate your skills or services to make it harder for competitors to replicate, allowing you to command higher prices or salaries.
• Consider working in larger business opportunity vehicles that allow you to grow and make more money, as your potential income will always be a subset of the business you operate within.
• To negotiate effectively, come to the table with options, which increases your leverage whether you're an employee or a business owner.
• Understand that making obscene amounts of money involves mastering the interplay between creating value, negotiating your share of it, and being in an irreplaceable position or industry.
• Focus on the type of opportunity and ensure you're in the right environment to be learning or earning, ideally both.
• Your ability to make more money is tied to not just the value you create but also to your ability to negotiate and the scarcity of your skill set.
• Always strive to provide value that is directly associated with revenue generation to maximize compensation opportunities.

Video

How To Take Action

I would suggest first establishing what unique value you can provide, whether you're an employee or a business owner. Think about what you offer that others can't easily replace. This could be special skills you've learned or a unique experience you have.

A good way of doing this is to look at how to directly impact the bottom line of a company or the revenue of your business. If you're an employee, find ways to tie your skills to revenue generation and ask for variable compensation based on your contribution.

Next, if you're a business owner, consider how to articulate the value you deliver to justify higher prices. This means really understanding how your service or product meets a specific need and how much people are willing to pay for it.

Focus on becoming a “category of one.” Make your service or skills harder to replicate. This could mean getting more specialized in a specific area or adding unique features to your services.

Also, work on negotiation skills. Always come prepared with options to increase your leverage. This applies whether you're negotiating your salary or setting prices for your services.

Finally, choose the right environment to ensure you're continually learning or earning. You may need to look for larger opportunities that allow for growth. Your income potential is linked to the size of the company or industry you are in.

Remember, provide value, ask for a fair share of that value, and differentiate to become irreplaceable. If you do these things, you can make more money.

Quotes by Alex Hormozi

"He who has the most options wins the circumstance"

– Alex Hormozi

"If you're not learning and you're not earning, you should stop working wherever you're working"

– Alex Hormozi

"The value that someone will give you is not necessarily just a result of the vehicle of who you are but who you are talking to"

– Alex Hormozi

"Your ability to get other customers, your ability to have other jobs… will give you all the leverage you need"

– Alex Hormozi

"If you can shift your thinking around this, it will pay dividends"

– Alex Hormozi

Full Transcript

alex hormozy your host and uh most legit youtuber with the best setup in existence including my mom's basement i'm kidding this is a 5 million condo and i just happen to not like windows where i work that being said the purpose of this video is to blow up some of the things that i saw online with relation to how to make more money when it comes to getting a raise if you are an employee number one or number two getting a raise from your customers as a business owner because at the end of the day all of us are still beholden to our customers that we serve and so if you don't know who i am my name's alex from mozzie on acquisition.com it's a portfolio of companies that's over 100 million a year and i make these videos because i think it's fun so let's rock and roll so i think the easiest way to solve this dilemma or this problem for not getting paid enough is to understand what are the variables that influence pay right right damn right and so i think a fun process is to go through this and think about it using inversion thinking all right which is something that charlie munger champions and a lot of other great thinkers and so if we wanted to and this would be the problem that we're solving for if we wanted to make as little money as humanly possible and we were employees and or business owners what would we do well number one we would provide very little value all right that'll be the first thing that we do is we'd have we'd have skill set that that just does not provide a significant amount of value to a business and or to a customer all right that's first off is what we would do the second thing that we would do is we would not ask for very much of that of that value that we were creating so hopefully we're creating some level of value which is why we're getting employed or where why we're asked to solve some problem for a customer right we're solving a problem there's a job to be done that is the value that is the potential amount of money that we can earn the amount of that potential money that we earn is did is predicated based on our ability to negotiate and so we ask for a very small amount of that money all right so low value and then of that small number we ask even for a smaller percentage of that number because of our ability to negotiate that would normally be the only two things that you'd think okay well this is my potential and this is how much i ask for and so those are the only two variables that that would create how much i'm getting paid ah but there's a third all right and i'm going to get to the three and how you can flip this at the end of the video all right but the third one that we're going to look at is supply demand dynamics meaning how easily replaceable is the value that we're providing and so in an unideal world in bizarro land where we want to get paid as little as possible using inversion thinking we would one have low value two ask for very little of it and three have a line of people standing behind us the opposite of scarcity right uh working against us we are commoditized our skill is easily found and easily replaced by other willing people who want to do it for less money right because they hate us they hate the economy they hate capitalism and they hate generally moving up in life okay so if you are an employee or you are a business owner and you are trying to get paid more then we can invert this process and think to ourselves what are the ways that we can number one create more value which i wrote a whole book about all right 100 offers 99 cents if you want it number two is how do we negotiate now we have a high potential value that we are creating right so we've now we've flipped the equation we're creating we're creating tremendous amount of value for the person now one of the keys in communicating value is using multiple lenses through it to see it all right so it's not just about and the easiest one is just the quantitative number value in terms of how much money uh are we are we creating right how much money are we helping to produce all right so that is monetary value there are other forms of value right there's lots of services out there that exist that especially consumer services where there is no direct amount of value but there's indirect value so if you help someone lose weight the amount that you can charge on that will depend on who you serve right which would then actually get into a fourth bucket which is picking the right customers right and i'll tell you a quick story about this before i dive back in i think you'll like the tangent so there's a boy and he's 16 years old and he's you know looking to get his first car and his father one day surprises him with the vehicle right so he's super excited he sees the car but it's a little bit of a clunker it's an old you know it's an old car right but he's fine with it and the dad says hey if you want you can go cash this in um and then get you know and then use the money to get something else if you want and he says okay so he says hey why don't you just go down to the you know the the car lot and see uh see what they'll give you for it so he goes over the car a lot you know excited to see what they'll trade trade the car in for and they said you know what uh we'll give you five thousand dollars for the car and he was like okay so he goes back to his dad tells him the story he says okay son well why don't you why don't you try the pawn shop see what see what they'll give you for like the scrap yard so he goes over to the pawn shop scrap yard right it goes there and uh and and he asks the same question he says you know this is the car how much can i get for it they're like ah we'll probably give you a thousand bucks just for like the parts in the metal and he's like so he walks back defeatedly to his dad and he's like you know it's only worth a thousand dollars to those guys his dad says hmm why don't you go down to that antique dealership see what they say so he goes to the antique dealership shows them the car and they say oh my god this is a historic xyz car there's only this many of them ever made this is a 200 000 vehicle the kid blown out of his mind runs back home he's like dad you won't believe it and the dad smiles and he's like what he's like they say this car is unbelievably valuable it's historic it's like one of a kind blah blah blah and so the dad pauses and says so listen son what i want you to see from this is that the value that someone will give you is not necessarily just a result of the vehicle of who you are but who you are talking to and so a hidden bonus of this video that i'm going to give you right now is that there are three is what i said but the fourth one is who we are serving right so the amount that you can charge if you are a business owner will be also predicated on who you serve right if you can help a billionaire lose weight he will probably pay you more than somebody who's on who's on unemployment right just the nature of like that problem to that person is more valuable to solve right and that's because indirectly for them if that helps the billionaire right get his wife which he might value more right or he might be able to seal a deal because people respect him or whatever it is right then there is more indirect value that you can ascribe to the the services that are being provided okay so i said there were three but there's actually four because i'm trying to keep you interested in the video right keep keep going keep it keep you guessing all right but so i said number one was value okay so values can be predicated on who we're serving and also how much value we can provide which is going to come into what's the dream outcome we're providing them how likely do they think that they're going to get that with you as an employee and or as a business they're hiring because all of us are doing jobs all of us are employees right in one way or another how quickly we can get that done and then how much work they have to do as a result of that which you can translate in a couple ways if you're an employee and someone always has to check up on you and always has to give you direct instructions that is less valuable of employee than somebody an employee who's coming with the ideas can get things done quickly i have a large amount of confidence that someone's going to do the job and the perceived outcome that i that i want to create that employee can duplicate quickly awesome so that's you can reverse the value equation that i talk about in the book whether you're working for a customer or you're working for a boss either of those things and i'll get to how you can make more money as an employee in a second okay so one we're flipping the inversion to we create lots of value number two is going to be how much we ask for all right so how much we negotiate and so as a business we do this by setting our prices right that is that is fundamentally the negotiation that occurs so we set our prices and a lot of times you'd be amazed that just asking for more you get more right because most people sell from their own wallet as in they think this is a lot of money and therefore they ask for what they believe is a lot of money and here's the fundamental fallacy with this problem what comes easy to you is typically not easy for other people and so i'll give you a simple example personally i am not a car guy i am not a fix-it guy i i just don't care and so if i went to a mechanic shop and they said hey we've gotta you know change your oil and actually you know do xyz in your car it's gonna be you know 100 bucks if they say 100 bucks or 300 bucks it's it really isn't gonna like i'm not gonna notice i'm not gonna care but if you talk to another mechanic they're like you charge that guy 200 to change his oil that's crazy it only takes two seconds and all you have to do is turn the knob and the oil comes out and then pour it back in whatever right and it's because to them to a mechanic changing oil seems like a very easy thing to do and it probably is but to me it's something that is going to take me time to learn that i don't care and so what is easy to one person because you have been doing it for so long might not necessarily be easy to other people and so your perception of the value is actually skewed which is why you should not be the one necessarily setting your prices you allow the market to set the prices for your services and or the pay that you get so number one we provide lots of value number two you negotiate or ask for a higher amount okay and if you're an employee an easy way to do that is create some sort of variable compensation for yourself and say hey these are ways that i think i can tie into the revenue of the business would it be fair would it be unreasonable for me to ask for a percentage of that not for the necessarily the whole company but at least in this way so that i can drive towards those goals which will also make the company more money which is exactly what we're doing as a you know when we serve uh customers right especially if you're in b2b services you say listen i think that this thing will yield this amount of results and i would like a percentage of that right and it's variable compensation so the best way and the highest people who make the most money have variable compensation business owners have variable compensation depends on how well your business does and how how much you serve your customers the business itself is variable compensation right the enterprise value all right so if you can shift your thinking around this it will pay dividends so value negotiations go and the third one which is competitive landscape competitive dynamics or supply demand for the job to be done all right so think about this way if i have lots of people who can do the job if i have somebody who comes up to me let's say they're an employee and they say hey i'm providing lots of value and i would like to ask for more i would not have leverage on this situation if there was 20 other people who were lined up who could do the job and were willing to accept less which is why this applies for both labor as it does for owning a business it's both sides right if i want to provide xyz service and there's another guy who's willing to provide xyz service for less and there's nothing that really differentiates us then most consumers will just go to the one that costs less which brings up the important lesson of how do you invert this how do we solve this problem which is we have to be in a category of one all right and so we do this by trying to niche down and create more specialized services because then we decreased the pool of people that we were competing against now as you scale up in a business i'm going to answer this as a business and also for employees as you scale up in a business you do in general go broader but usually you can use the experience the depth of knowledge you have and then be able to be better at that stuff at a larger scale and so the easiest thing to do which is why i talk about this in the book is is is niche down at first right so that we can get really really good at delivering one very specific high amount of value to a very specific customer right and so when we do that we basically fall into creating lots of value we price high so we're asking for a bigger percentage of the value that we know we're creating and we're doing it as a category of one in that there's no other people who can do it and so we add other features and bells and whistles and bonuses and guarantees to create offers that are more compelling to a customer that are one of a kind which make it more difficult for other people to compete against us and thereby allow us to capture a larger percentage of the value that we are creating that's the idea that's the point now if you're an employee and you walk through this process then the idea is how can i use my unique unique being the key skills and experiences to make the business that i'm working for more money right because ultimately that is i mean that's where you're getting compensated it's a percentage of the revenue that you're responsible for right indirectly or directly and the more directly you can be associated with it the more you will get compensated because the more clearly you can point to the value that you are creating right because the more direct it is the less argumentation or discount that will be applied to the value that you're creating for the business right does that make sense hopefully it makes sense okay so if we are an employee and we want to make more money then we're going to use our unique skills and experiences and we're going to try and quantify to the highest degree possible how we can directly impact the bottom line of the business we're going to ask for variable compensation around the value that we are providing for the business which just works the same if you're if you're a business and we're going to be able to get it and this is the the third piece here the reason that we're going to be able to get it is because no one else can do it all right and that's the idea and so this also kind of brings in that part that the bonus number four which is the type of opportunity that you are pursuing in terms of the overarching umbrella of business that you were working for will also dictate how much you get paid right like if you work at a dry cleaning business it will be very difficult for you to make a million dollars a year and that's because the business doesn't make a million dollars a year in all likelihood right and so your opportunity vehicle will always be a subset of the business opportunity that you're working underneath of and i think this is a good thing to to hit on because uh what it takes which is a great book by stuart uh stuart schwartzman stephen schwartzman start the guy started blackstone okay anyways that guy all right he's worth 37 billion dollars today so he's pretty rich he's pretty good and what he talks about is the idea and i think many other visionaries have said this but you need to have a vision that is big enough for your business that others people's visions fit inside of it and so what that really means is that you need to have a pie that's big enough that everyone can get wealthy and if you're operating in an opportunity vehicle that does not allow other people to get wealthy then you will probably not attract 10 out of 10 talent and if you are 10 out of 10 talent then maybe you should be looking for bigger visions bigger visionaries bigger companies who have bigger goals and bigger dreams so that you can learn unique expertise while working at those businesses because listening to uncle warren there's only two things you should be working for whether you're learning or you're earning right so you should get paid you should get paid in one or two or ideally both ways when you work which you should be learning all the time and you should be earning right and it should definitely at least be one of those two things and if you're not learning and you're not earning you should stop working wherever you're working all right which is why we're seeing a precipitous drop in i would say frontline retail very generic workers last uh two months i think we have eight million people quit their jobs in those kind of frontline sectors because the opportunity was not big enough right and so for us we can think about this as business owners when we're thinking about our employees we can think we have as business owners as we're communicating value to our customers which is how can i create the value how can i how can i capture the value through my pricing and my ability to negotiate and then how can i create a category once i'm not competing it's everyone else's shitty prices and so as the employee we do the exact same thing except our prices are the wages that we charge and so in that way being a business business owner or an employee actually is very similar it's just that we are just one degree separated from the customer right so the business owner is closer to the customer than the employee that works for the business from a value creation standpoint business serves the customer employee search the business right and they do that i say that as a from a big picture perspective even though the employee may directly be uh servicing the customer they do it within the overarching infrastructure of the business that exists all right and so right now if you want to make more money you want to get paid more whether you are a business owner or an employee think about how you measure up in each of those three dynamics and if you're like how do i create more value i wrote a book about it it's 99 cents you can grab it if you want it's on amazon it's 4 000 five-star reviews i think people like it at least or at least they just like leaving five-star reviews for it so either way i'm cool with it um ideally they like it though but that's about the the value creation your ability to negotiate honestly like you could have all the tips in the world but i'll tell you the simple simplest law of negotiation is this he who has the most options wins the circumstance and so your ability to get other customers your ability to have other jobs if you're an employee those that you that you bring to the table prior to your negotiation will give you all the leverage you need if you have a hundred girls who are lined up to date you or a hundred guys who are lined up to date you you have more leverage in the quote negotiation if you have if hundreds of other businesses who want you you have far more ability to negotiate which is why people are like how does the ceo make 50 million bonus or whatever from his publicly traded companies like well do you know the amount of guys who can do that specific job you can count on one hand in the entire planet right and so that is why because the supply demand dynamics for that specific role right and the value that's being created and the percentage that they negotiate that's how that kind of money gets created you can make obscene amounts of money as both a business owner and or an employee as long as you understand those three dynamics all right and as again the added bonded caveat to that is that those guys can make that kind of money because they're operating within a business that has a massive dream that is really to impact humanity overall and lots of people can get wealthy in that both the owners and the employees because in a lot of ways the compensation structures the bonuses options things like that they structure are based on variable compensation on the overall production of the business all right so um lots of love everyone if you're new to mozination welcome and i will see you guys in the next video