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If You Want To Create Wealth In 2026, Watch This (4 Paths)

Alex Hormozi reveals four proven paths to wealth in 2026, emphasizing long-term commitment over shortcuts.

Key Takeaways

  • Wealth is built by choosing and committing to one of four paths for a decade or more.
  • No external factor like presidents or the economy will make you rich; self-driven effort is essential.
  • Bootstrapping is the slowest but safest way to start and maintain control over your business.
  • Raising capital accelerates growth but involves trade-offs in control and equity.
  • Investing and fund management require experience and capital but can generate significant returns.

What the video covers

  • Many people fail to build wealth because they seek quick riches rather than committing to proven paths.
  • There are four main paths to mega money: bootstrapped businesses, raising capital for your business, investing your money in other businesses, and fund management using other people's money and businesses.
  • Top billionaires like Mark Zuckerberg, Jeff Bezos, and Larry Page raised capital, while others like Steve Ballmer and the Waltons bootstrapped their businesses.
  • Bootstrapping means funding your business from your own savings and reinvesting profits without outside investors.
  • Each path involves trade-offs between risk, control, speed, and capital requirements.
  • Bootstrapping is slower but offers more control and equity retention, making it ideal for first-time entrepreneurs.
  • Raising capital allows faster growth but requires giving up some control and equity.
  • Investing your own money in other businesses is a path many wealthy individuals take after building active income.
  • Fund management involves managing other people's money and businesses but is less common among the ultra-rich.
  • Alex shares personal examples of using all four paths in his entrepreneurial journey.

Answers

Questions about this video

What are the four paths to wealth according to Alex Hormozi?

The four paths are: bootstrapped businesses (using your own money), raising capital for your business (using other people's money), investing your money in other people's businesses, and fund management (using other people's money and businesses).

Why does Alex Hormozi recommend bootstrapping for first-time entrepreneurs?

Bootstrapping helps first-time entrepreneurs pay off ignorance by starting small, keeping costs low, and maintaining control and equity, although it is typically slower than other paths.

Is raising capital always the best way to grow a business?

Raising capital can accelerate growth but involves trade-offs such as giving up some control and equity, and it may not be suitable for everyone, especially first-time founders without experience.

Full Transcript — Download SRT & Markdown

00:00
Speaker A
Poor people stay poor because they want a fast way to get rich, and instead, the richest people that I know pick one of these four paths, play it for a decade, and then end up with more money than everyone else that is just chasing shortcuts.
00:09
Speaker A
everyone else that is just chasing for shortcuts. And just as a fun reminder for you, no president, no economy is going to make you rich. You have to do that for yourself. So in this video I'm going to show you the four paths to mega
00:19
Speaker A
And just as a fun reminder for you, no president, no economy is going to make you rich. You have to do that for yourself.
00:22
Speaker A
Let's get into them. You've got your money and your business, you've got other people's money and other people's businesses and then permutations of those. And so your money, your business right, is a bootstrapped business. If you have other people's money and your
00:35
Speaker A
So in this video, I'm going to show you the four paths to mega money, and I'll show you how to pick the right path at the right time for you.
00:44
Speaker A
And then finally you have other people's money and other people's businesses, which is fund management. Now to give you some proof points around this, I actually looked up the top 11 richest people currently on the Forbes list and I'm going to tell
00:57
Speaker A
Let's get into them. You've got your money and your business, you've got other people's money and other people's businesses, and then permutations of those.
01:06
Speaker A
capital. Mark Zuckerberg, raised capital. Jeff Bezos, raised capital. Larry Page, raised capital. Sergey Brin, raised capital. Steve Ballmer, bootstrapped. Microsoft is bootstrapped.
01:14
Speaker A
And so your money, your business, right, is a bootstrapped business. If you have other people's money and your business, now you're raising capital. If you have your money and other people's businesses, now you're investing.
01:20
Speaker A
The Waltons, as in Walmart, bootstrapped. And so that's the top 11 wealthiest people in the world. Now you might have noticed that fund management wasn't there. If I go like six deeper, you'll find people who did fund management. Now one of the interesting
01:32
Speaker A
And then finally, you have other people's money and other people's businesses, which is fund management.
01:41
Speaker A
And so I'll actually walk you through my own examples and which one's right for you. So let's start with number one, bootstrapped.
01:48
Speaker A
Now to give you some proof points around this, I actually looked up the top 11 richest people currently on the Forbes list, and I'm going to tell you where they are.
01:59
Speaker A
you've got skills, and you start trading one for the other, get a little excess money, take that excess money, and then continue to build. Now, typical examples for this are usually low-cost businesses to start. A lot of times that's
02:09
Speaker A
So you've got Elon Musk, he's a raised capital guy. Almost every single company he's had, he's raised outside capital, and then he's continued to fund it and grow it.
02:21
Speaker A
drop shipping. If you don't do drop shipping, you have to front some capital in order to get the you know, first inventory started. Local businesses.
02:28
Speaker A
Larry Ellison, who's number two, raised capital. Mark Zuckerberg, raised capital. Jeff Bezos, raised capital. Larry Page, raised capital. Sergey Brin, raised capital. Steve Ballmer, bootstrapped. Microsoft is bootstrapped.
02:40
Speaker A
used the profits from that to start Prestige Labs, which was a supplement company, which was bootstrapped. I started Allen, which was a software company, which was bootstrapped. And so, all these companies were bootstrapped.
02:49
Speaker A
A lot of people don't know that. Underneath that, you got Jensen Huang, raised capital. Warren Buffett, investing. Michael Dell, bootstrapped.
03:03
Speaker A
can see how some of these these these boxes merge. Now, who is this right for?
03:07
Speaker A
The Waltons, as in Walmart, bootstrapped. And so that's the top 11 wealthiest people in the world.
03:15
Speaker A
and then lose it cuz you don't know what you're doing. That's my opinion. Everyone, you know, your results may vary. You can take your Of the names on that list that I mentioned, Jeff Bezos, the people that he knew invested, Bill
03:24
Speaker A
Now you might have noticed that fund management wasn't there. If I go like six deeper, you'll find people who did fund management.
03:34
Speaker A
thing here is that like I don't think you're going to want to go raise a ton of capital from everyone you know, maybe even VCs, if it's your first shot.
03:40
Speaker A
Now one of the interesting things about each of these constructs is there's a little bit of risk and there's a little bit of trade-off with each of them. And I personally have done one, two, three, and four, believe it or not.
03:51
Speaker A
to grow, it's almost like having a car factory built inside of the car. It's very difficult to do. Humans do it. We have human factories inside of our humans, weird stuff, right? Um but in in in business design, it's much much more
04:04
Speaker A
And so I'll actually walk you through my own examples and which one's right for you. So let's start with number one, bootstrapped.
04:14
Speaker A
the equity, so you have a whole, you know, bigger slice of the pie. You decide the pace, the strategy, and ultimately you can exit on your own time or never exit at all, right? And the goal is that you design a compounding
04:24
Speaker A
Bootstrapped just means that you fund the business from your own savings and cash flow. You have no outside investors, and you grow through reinvesting your own profit. You have a website, and you've got a cell phone, and you've got skills, and you start trading one for the other, get a little excess money, take that excess money, and then continue to build.
04:31
Speaker A
That's the end goal. Now, a lot of first businesses don't have any of those things, but you, you know, buy a dollar sell for two and you make money. There's nothing wrong with that. Here's some of the tradeoffs.
04:39
Speaker A
Now, typical examples for this are usually low-cost businesses to start. A lot of times, that's services. So, agencies, home service businesses, B2B services, professional services, things like that.
04:53
Speaker A
other type of debt is harder to pay off than money is. So, what do I mean? If you're starting with your own cash, it's very difficult for you to attract like a star talent team of 10 people that all
05:03
Speaker A
Sometimes nowadays you can actually do this with software. It didn't used to be that way, but now it kind of is. Education businesses, e-comm brands, if you do drop shipping. If you don't do drop shipping, you have to front some capital in order to get the, you know, first inventory started. Local businesses.
05:14
Speaker A
management and leadership debt. If you like can't get the high enough level of the softwares that you need in order to build your software company or whatever, if you start low, you're going to have some technical debt that might incur as
05:28
Speaker A
Most normal companies. Now, to be fair, that scope has continued to broaden because the cost of entering business has going to continue to drop.
05:38
Speaker A
and cons there. Like the pro is that you can stay alive a lot longer because you typically keep your cost basis a lot lower. Uh the the downside is is that it goes slower. And so, your capital constraint will oftentimes limit the
05:51
Speaker A
Now, for me personally, my first brick-and-mortar business was a gym, and so that was bootstrapped. I used the profits from that to start Prestige Labs, which was a supplement company, which was bootstrapped. I started Allen, which was a software company, which was bootstrapped. And so, all these companies were bootstrapped.
06:05
Speaker A
robot, let alone many robots as you scale, and then you functionally probably lose money on building that first robot. And then after you lost money on that first robot, you somehow have to get more money to then build
06:15
Speaker A
Today, acquisition.com is taking some of that capital, investing it into other people's businesses, while also having some companies that we start de novo from our hold co, which is kind of semi-bootstrapped and also kind of reinvesting our own capital. So, you can see how some of these, these, these boxes merge.
06:26
Speaker A
here. Which is a perfect segue to, okay, so what is other people's money into your business? This is raising capital, right?
06:33
Speaker A
Now, who is this right for? So, if this is your first business, I recommend starting with bootstrapping. And the main reason is just that you want to pay off ignorance.
06:44
Speaker A
and years and years to get a drug past them and then it makes money. Typically, anything that has huge amounts of upfront costs, then increasing margins or gross margins later and or winner-take-all dynamics, meaning you have to lose money for a long time to
06:56
Speaker A
That the last thing you want to do is take your, you know, your friends' and family's money and then lose it because you don't know what you're doing. That's my opinion. Everyone, you know, your results may vary.
07:06
Speaker A
a long time, but they were mapping networks. So, who should take this path? If you have a very big dream of what you want to build, and there's functionally no way to make your thing profitable without using other people's money, like
07:20
Speaker A
You can take your... Of the names on that list that I mentioned, Jeff Bezos, the people that he knew invested, Bill Gates, the people I think he had rich parents. I'm sure they helped him out in the beginning. I don't know the actual public documentation of that, but I think he had a little bit of help in the beginning there.
07:28
Speaker A
have experience with this because School is venture-backed, right? And so, we raise capital at School to continue to grow the company, and we're able to give pricing, which is absolutely absurd, like $9 a month, which by the way is
07:41
Speaker A
But the thing here is that, like, I don't think you're going to want to go raise a ton of capital from everyone you know, maybe even VCs, if it's your first shot.
07:52
Speaker A
can hire the top talent, you can outspend competitors, you can be negative in your acquisition cost. I mean, you can lose money getting customers, right? Uh you can build infrastructure faster than you could with your own cash alone. And on a
08:03
Speaker A
Again, you know, your results will vary. Your life is unique. But the main thing is that bootstrapped will typically be the slowest of the four paths.
08:08
Speaker A
Now, if you can, if you're already rich, then you can take on raising capital style big opportunities and then fund it with your own cash, and that's really an amazing combination, but not available to most people. But, this allows you to
08:20
Speaker A
And that is usually because it takes money to grow. And if you have to make the money to grow, it's almost like having a car factory built inside of the car. It's very difficult to do.
08:29
Speaker A
people pursue are high-risk, high-return opportunities. But, there's typically far fewer competitors. And so, you know, you can count the number of competitors who are well-funded even in a space maybe on two hands. If I said, "How many social media marketing agencies are
08:43
Speaker A
Humans do it. We have human factories inside of our humans, weird stuff, right? But in business design, it's much, much more difficult.
08:53
Speaker A
built, you know that every single car you're going to make X dollars of profit, right? And that is how you end up recouping it and justifying the return to the investors. Some of the tradeoffs here are significant. You now
09:01
Speaker A
It's slower to build the capital reallocation machine while also building the machine that makes the capital to begin with. You kind of have to have both.
09:14
Speaker A
And so, that's one element is that I have to serve two masters, which can oftentimes be at odds, which is a bit of a pain.
09:21
Speaker A
Now, the main advantage of this is that you keep the control and the equity, so you have a whole, you know, bigger slice of the pie. You decide the pace, the strategy, and ultimately you can exit on your own time or never exit at all, right?
09:25
Speaker A
Here, you have 100% of the pie, right? Whatever you make is yours, and that's your pie. Now, you can give profit shares, you can give equity slices to key teammates or partners or whatever, um but they're usually in the business.
09:34
Speaker A
And the goal is that you design a compounding vehicle, which is either recurring or reoccurring within the business. And then you let that over time do the heavy lifting.
09:46
Speaker A
very large exit in his first company that he started in his teens that then I think he exited around age 25. It was many tens of millions of dollars, but because there were liquidation preferences and ratchets on those liquidation
09:58
Speaker A
That's the end goal. Now, a lot of first businesses don't have any of those things, but you, you know, buy a dollar, sell for two, and you make money. There's nothing wrong with that.
10:07
Speaker A
but it was less than what he thought he was going to get. Now, as you continue to scale this, typically if you do multiple rounds, each person who's going to put money in also wants a seat at the
10:16
Speaker A
Here's some of the tradeoffs. When you bootstrap, you incur more debt than any other vehicle.
10:26
Speaker A
of your own company. And a lot of this is going to depend on the terms of other people's money. If someone gives you a trillion dollars for 1% equity in your business, that's an amazing thing. If someone gives you $10 for 90% equity,
10:36
Speaker A
Now, you're like, "Wait a second. I thought I was, you know, using my own money to start this thing." Yes, but you incur every other type of debt.
10:46
Speaker A
size of the opportunity that the investors believe you're going after and the likelihood that they believe that you can actually hit it. And I'll say the last downside here is that typically venture money is kind of grand slam money. It's like
10:57
Speaker A
And oftentimes every other type of debt is harder to pay off than money is. So, what do I mean? If you're starting with your own cash, it's very difficult for you to attract like a star talent team of 10 people that all need a million dollars plus per year to work and actually grow this thing.
11:07
Speaker A
person who takes the loss and n equals one as in it's a 100% of your life, that is where the there's a sea of tombstones of failed ventures and founders who gave five, 10 plus years of their life and
11:19
Speaker A
If you are venture-backed, you can do that with some stock and then also decent cash compensation. And so that becomes harder to do.
11:30
Speaker A
this is actually far more common than the big headlines that we see. And the reason those things make big headlines is because they're rare. Which brings me the third way of making mega money, which is investing. Now, this is the one
11:40
Speaker A
So, you incur lots of management and leadership debt. If you can't get the high enough level of the software that you need in order to build your software company or whatever, if you start low, you're going to have some technical debt that might incur along the way.
11:50
Speaker A
other people's companies. Kind of the equal opposite of raising capital. Now, you don't have to buy into venture type uh products. You can just buy cash flowing businesses, you can buy public stocks, uh you can buy real estate.
12:00
Speaker A
Same thing with your data debt. So, you're going to have lots of debts that money could have otherwise solved for you, but you don't have money as one of the things that you're in debt for.
12:09
Speaker A
have Acquisition Ventures, which is our venture arm, so that's where we we are basically the raising capital partners for SMB tech. And so, that's exclusively where we invest in because we understand it well. And then on the other side, we
12:19
Speaker A
Now, to be clear, there are pros and cons there. Like the pro is that you can stay alive a lot longer because you typically keep your cost basis a lot lower.
12:29
Speaker A
enterprise value. And so, who should take this path? Real quick, I'm going to show you the exact 10-stage roadmap from zero to 100 million plus that less than 1% of companies finish I've now done multiple times. And so, I can say with a
12:40
Speaker A
The downside is that it goes slower. And so, your capital constraint will oftentimes limit the size of what you can pursue from day one.
12:51
Speaker A
of it when you're going through it, and then what steps we actually took to graduate. And we've done this across software, physical products, uh service businesses, brick and mortar, all of this and it works. And it's my gift to
13:02
Speaker A
If you wanted to start an AI robotics business to go global, it would be incredibly unlikely that you would succeed because the amount of capital it would cost to just build one robot, let alone many robots as you scale, and then you functionally probably lose money on building that first robot.
13:06
Speaker A
Just enter your info and it'll spit it right back to you, all free. Well, once you have meaningful excess cash and you want the upside without the day-to-day operational responsibility, then this is an interesting path. And so, the main
13:17
Speaker A
And then after you lost money on that first robot, you somehow have to get more money to then build more robots. It's very hard to do without outside injections of cash.
13:27
Speaker A
Dale Carnegie had a famous quote, which is "Put all your eggs in one basket and then watch the basket." And so, that's him talking about this, right?
13:34
Speaker A
And so, this box does constrain to a degree.
13:45
Speaker A
they typically aren't nearly as diversified. They're typically way more concentrated, which then allows them to make maybe make five, seven, eight significant bets that they believe they have alpha or or upside on above the market. And so, with
13:59
Speaker A
investing, I think that of the four of these, arguably the easiest lifestyle kind of decision because you have no boss and you're technically other people's boss. And so, you just write checks. You can inform what you want the person to
14:13
Speaker A
do. To be clear, you might not have a majority, that's going to depend on the terms.
14:17
Speaker A
But, when Leila and I sold the company and we were just a family office, this is all we did. And I'll say, of my entire life, the most chill period. And sometimes I think to myself like, what was I doing? Why am I back doing this
14:28
Speaker A
when I don't need to do it anymore? Um but, I want to make a key point here is that this is by far the slowest, number one. And number two, almost no one makes their money this way. They have already
14:39
Speaker A
have a high active income and then they begin investing. And if you're like, "Well, I'm going to be like Warren Buffett." Well, did you buy your first stock 2 weeks after Pearl Harbor when you were age 7?
14:48
Speaker A
No? And did you do it in a world where there wasn't a Robinhood and you actually had to figure out how to do mail-in ballots and call someone as a 7-year-old or their 11-year-old whatever it was to make your first bet? Probably
14:58
Speaker A
not. Because you're like, "Oh, I want to be like Mozart." You're age 30 and you want to start investing. It's like, "Well, he already had like 19 concertos by this point because he started age 7." So, I wouldn't say, "Oh, let me look at
15:08
Speaker A
what the top person in this field did if you're not that person." And so, the whole point of this video is to figure out what path is right for you. And to be clear, Warren Buffett is very famous
15:16
Speaker A
now, but like until he was 60, I don't think many people even knew his name.
15:20
Speaker A
60. Right? And he's made the vast majority of his wealth from like age 80 to 95.
15:26
Speaker A
Think how crazy that is. So, if you're like, "I'm in this for the very, very, very, very, very, very, very, very long haul, then this is a good path for you." And especially if you're somebody who wants a little bit more of a lifestyle,
15:37
Speaker A
um where you're like, "Okay, I just have to get my my passive to exceed my active costs." Then it's like, "Great." And if you get better and better at that game, you'll have more and more, and then you'll have nothing else to do, and
15:45
Speaker A
you'll just keep playing the game just for the love of the game. But it does take time. It's unlikely that you're going to get these 50, you know, 50% 100% plus annual returns. Even Warren, for a very long time, didn't get those
15:55
Speaker A
types of returns. And even in the beginning, he was still compounding, I think, 50-ish percent. Um but he was the best in the world. And then once he had more capital, the his returns decreased.
16:03
Speaker A
And a great note on this is that in in I would say Main Street, real estate is the number one most common path for creating millionaires, but not the most common path for creating billionaires.
16:14
Speaker A
And to me, that is kind of like a great kind of cherry on top for this little bucket, which is that it is a great way to build and store wealth. It's being smart with your money and allocating it
16:24
Speaker A
appropriately. It's unlikely to be the thing that gets you all the way to the top unless you have a very, very long time horizon. And let's be real, you have to live to 95 like Warren Buffett to hit the list. Like, that's real.
16:34
Speaker A
Like, Charlie Munger was 99 when he died. And so, like, in a very real way, like, they had like, if they had died at 74, I don't know if we talk about them as much because they wouldn't have had all
16:45
Speaker A
the compounding that happened after. So, like, this is a long, long game. Finally, that leads us to number four, which is fund management.
16:54
Speaker A
So, this is you take other people's money and you invest in other people's businesses. You raise a pool of capital for investors, which the fancy word for that is LPs or limited partners, and then you use that money to buy pieces or
17:04
Speaker A
control of other people's businesses. Now, depending on the way that you do it, you can also use debt there, too.
17:10
Speaker A
So, let me give you a visual of like, this is potentially one of the highest leverage scenarios. It's like this on steroids, basically. And so, let's say that you want to you want to raise $100 million. Now, I'm going to use big
17:22
Speaker A
numbers cuz I want you to think bigger anyways rather than thinking in small numbers. All right? So, in order for you to raise a fund with $100 million, it's typical that the person who raises the fund puts about 5% of the total funds
17:33
Speaker A
raised in. So, you put $5 million in. You raise $95 million of LP capital.
17:39
Speaker A
That means limited partner capital. So, other people put their money in. And then, this is where it gets even crazier. So, this is $100 million in total right?
17:48
Speaker A
But then you say, "You know what? We're going to go buy I don't have enough space on this thing, so just bear with me. Uh we're going to buy $300 million of businesses because we're going to use $200 million
18:02
Speaker A
in debt to buy these businesses. And so, think about the leverage that you get from your 5 million able to buy $300 million worth of stuff.
18:12
Speaker A
Now, when this $300 million, let's say it just grows at 10% a year. Let's say you're not amazing. You're just matching the S&P. All right? In 7 years, you'll double, right? So, this is now $600 million 7 years later.
18:26
Speaker A
Now, if you had a 10% return for private equity, that'd be bad. But, I'm just going to give you like the base case of like you're not that good at this. Okay?
18:34
Speaker A
So, that means that you have a $300 million delta. So, we got to pay back, right? We got to pay back the debt. So, we have to take our $200 million out cuz you got to pay the debtors back. Now,
18:42
Speaker A
they have some interest and some other stuff there, too, right? Then we got to pay our LPs back, right? I'm just making the box a little bit smaller so I can throw the rest of it. All right? So, we
18:49
Speaker A
got to take we got to take this back. Now, sometimes there's a hurdle rate, which is a minimum return you give these guys saying, "I don't get paid until X happens." That depends, but typically in private equity, it's 6 to 8% somewhere
19:00
Speaker A
in there. And then whatever is left over here, you then have a split with them, LPs, and then GP, you. So, let's see what happens when you actually invest this money and then wait 5 to 7 years. Now,
19:11
Speaker A
let's say because you're in private equity and you're investing in non-public markets, you get a better than public market return, which is basically the baseline. Like no one wants to get a public equity return and then have their money locked up for, you
19:23
Speaker A
know, 5 to 7 years. So, if you got a 20% annualized return for 6 years, you would have 2.98 on the money. So, functionally, your 300 million, right, that you bought, now becomes 900 million. Ooh.
19:39
Speaker A
More. All right. So, we got to pay back our debt. So, we have our 200 million that we got to pay back in debt. Now, there's going to be some interest on that. Let's say that we got to pay them back
19:49
Speaker A
um 100 million dollars in debt payments. Okay. So, we have that debt, too. Now, we also have our LPs' 95 million dollars that they put in. So, we got to pay them back that. And then there's some minimum return that we
20:01
Speaker A
promised them before we participate, which for us is going to be about 40 million dollars if we have a 6% pref or hurdle that goes back to them. So, that is all guaranteed to them. Now, after that, it just depends purely on the
20:15
Speaker A
nature of the the asset class and what you're investing in and your kind of proprietary blend of whatever. There's going to be some split of the profits here that goes to you, the GP, the general partner, that's the
20:27
Speaker A
operating partner, the person who runs the whole fund, and then some that goes to the LP or limited partner. And so, let's say that you had a 50/50 split here. Let's just call it, okay? That means that after we add all
20:39
Speaker A
of this stuff up, this slice here is 465 million dollars. Remember we started with 5 million?
20:52
Speaker A
This is how you get mega rich. Now, to be clear, all of this isn't yours. Maybe 2/3 of that isn't yours.
20:59
Speaker A
But either way, even if you had 10% of that and you got 46.5 million dollars, you did pretty good on your $5 million investment, right? If you got 20% now you're looking at $90 million. Even better on your $5 million investment.
21:16
Speaker A
You see how this stuff adds up? And that's because this is leverage. Now when we look back at our original kind of sheet here, with each of these four paths, you have to decide on what's best for you. If you
21:27
Speaker A
have some proprietary way that you know how to source deals and you have a good way of finding capital, which by the way, if you're like, "I don't know how to raise capital." You absolutely do know how to raise capital if you have
21:37
Speaker A
good deals. One of the best piece of advice I got from a mentor of mine is that there is no lack of capital in the world, only a lack of good deals. And so if you find a good deal, capital will
21:46
Speaker A
appear. Right? If you come to me and say, "I have a guaranteed way," which of course don't use those words, uh because that's a great way to get get good money to run away. But if you were like,
21:54
Speaker A
"There's an incredibly high likelihood chance that I have of 5x-ing money in this way and here's the six different ways that I've mitigated the risk." And let's say those are believable.
22:03
Speaker A
And if we have that, then I'd be like, "Okay, well, how much money do you need?" And that's how any good investor's going to ask the question because when you do identify good opportunities, you just want to back up the truck. Now in that
22:13
Speaker A
setting, the higher, believe it or not, the higher the return and the more private the type of deal that you're doing that's more niche and specific to what you know, typically the better the splits that you can negotiate on the GP
22:26
Speaker A
LP split of the profits after some certain point. And so who should do this? I think the best like version of this is where you build a track record.
22:35
Speaker A
You figure out proprietary deal flows and deal flows that only come to you that no one else has. And you have some sort of real edge in picking and improving those companies. So oftentimes funds are are organized around a a
22:44
Speaker A
singular thesis. So for example, in the very beginning of acquisition.com, I got approached by a walnut tree fund. I was like, "I don't even know this exists." But they explained how it worked, which is like it takes 30 years to grow a
22:56
Speaker A
black walnut tree all the way to like full size, but every year after year three, it creates walnuts and so it cash flows every single year. And then at the end of the 30 years, you cut the walnut
23:06
Speaker A
tree down, and you get this amazing walnut wood that you can then sell. And then the cost is really just the seed and the time. And that was their entire business model. They've done this a number of times, and they had these kind
23:15
Speaker A
of staggered uh tree vintages, if you will. I'm using the wrong word, but like the vintage of trees. Every year they'd another cohort. And I was like, "This is a really interesting business." And they had a fund around it. Because I don't
23:26
Speaker A
want to know where the Venezuelan tree farmers are. I don't have those connections. I don't know how to sell walnuts at scale. Could I figure it out?
23:32
Speaker A
Maybe. Is it worth my time? Probably not. Is it worth my money if it doesn't take my time? Maybe. And so the beauty of this one is that you have maximum leverage, and you can have the smallest personal checks. You have huge
23:43
Speaker A
potentials for upside. Um there's also fees that you can put onto this. Typically, uh the better and the more track record you have, more you can add fees in. I'd say your first time often times you're less fees uh just cuz you
23:53
Speaker A
want people to come in and not think you're going to get rich on the fees.
23:56
Speaker A
They want to have as as aligned incentives as possible with the investor. Now, often times the GP ends up richer than any single LP. Obviously, depends on how much capital gets put in um that they that they take from. Now,
24:08
Speaker A
the risks. You have enormous responsibility and a very long feedback loop. And you're accountable to the LPs and to regulators and to the entrepreneurs who are running the businesses and to some degree the customers that those businesses serve.
24:21
Speaker A
And so you have a lot of masters to serve in this time period. Um and you can be rich on paper, but the entire time you almost feel like a slave, which sucks. And so your job becomes managing risk and reputation and
24:32
Speaker A
people and portfolios, not just building one company. And if anything, you're almost building the company of the fund.
24:37
Speaker A
So I got rich bootstrapping my companies. I took some of my cash and invested in other people's companies.
24:43
Speaker A
That cash continued to compound, um and I was able to invest and then co-found School, where we raise capital. I obviously promote School as well. And then finally, it's in fund management.
24:53
Speaker A
So uh we've raised capital for some of the real estate deals that we've done when we buy big buildings, uh which we do through ACQ uh real estate. We've only done that privately some of our high-level clients and portfolio
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Speaker A
companies. We are functionally general partners in some big real estate buildings, which you can check out acquisition.com real estate. But yeah, these are the four ways to make mega money. Pick the path that's right for you, and may the odds be ever in your
25:12
Speaker A
favor.
Topics:wealth creationbootstrappingraising capitalinvestingfund managementAlex Hormozientrepreneurshipbusiness growthfinancial independence2026 wealth strategies

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