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

What's going on, Mosy Nation? This is Alex Hormoszi, 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 uh 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 Alexi on acquisition. com. It's a portfolio of companies that's over hund00 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. 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 andor business owners, what would we do? Well, number one, we would provide very little value. All right, that would be the first thing that we do is we'd have skill set 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 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 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 un ideal 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 right $100 million 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 tremendous amount of value for the person now one of the keys in communicating value is using multiple lenses through to see it. All right? So it's not just about um and the easiest one is just the quantitative number value in terms of how much money uh 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 a 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 car lot and see uh see what they'll give you for it. " So he goes over to the car lot, you know, excited to see what they'll trade the car in for. And they said, "You know what? Uh we'll give you $5,000 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 try the pawn shop? see what they'll give you for like the scrapyard. So he goes over to the pawn shop scrap slashscrapard, right? Goes there and uh and he asks the same question. He says, you know, this is the car. How much can I get for it? And they're like, we probably give you a thousand bucks just for like the parts and the metal. And he's like, so he walks back defeatedly to his dad and he's like, you know, it's only worth $1,000 to those guys. His dad says, hm, 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 and 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 unemployment, right? It's 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 services that are being provided. Okay? So, I said there were three, but there's actually four cuz I'm trying to keep you interested in the video, right? Keep you

going, keep you guessing. All right? But so, I said number one was value. Okay? So, value is going to 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 that they're hiring? Because all of us are doing jobs. employees, right? In one way or another. How quickly we can get that done. And then uh 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 an employee than somebody than 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 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 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 fundamentally the negotiation that occurs is that 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. fix it guy. I just don't care. And so if I went to a mechanic shop and they said, "Hey, we've got to, you know, change your oil and ex, you know, do XYZ in your car. " It's going to be, you know, a hundred bucks. If they say 100 bucks or 300 bucks, it's it really isn't going to like I'm not going to notice. 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 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 andor 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 whole necessarily the whole company, but at least in this way so that I can drive towards those goals, which will ultimately 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 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 negotiation skill and the third one which is competitive landscape or 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 decrease the pool of people that we are 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 niche down at first, right? Is so that we can get 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 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 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 are 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 Schwarz uh Steuart Schwarzman, Steven Schwarzman start the

guy started Blackstone. Okay. Anyways, that guy, all right, he's worth $37 billion 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 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 e 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 8 million people quit their jobs in those kind of uh 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 about this as business owners as we're communicating value to our customers, which is how can I create the value? How can I capture the value through my pricing and my ability to negotiate? And then how can I create a category of one so I'm not competing against 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 serves 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. Has 4,000 fivestar 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 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 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 100 guys you, you have more leverage in the quote negotiation. If you have hundreds of other businesses who want you, you have far more ability to negotiate, which is why people are like, how does a CEO make $50 million bonus or whatever from his publicly traded companies? It's 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 andor an employee as long as you understand those three dynamics. All right? And as again the added boned 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 structure, 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 Mosy Nation, welcome and I will see you guys in the next video. Bye.