Money mastery- Alex Hermosa’s key principles for growing your net worth

Alex Hormozi is a successful serial entrepreneur and real estate investor known for co-founding the empresa Gym Launch, which helps entrepreneurs start profitable gyms. Through his various business ventures, Hormozi has amassed substantial wealth and experience when it comes to generating income, saving money, and building net worth. 

Live below your means

The core tenet of Hormozi’s money management philosophy is to spend less than you earn. This creates room for saving and investing- the essential ingredients for building wealth.  Hormozi recommends tracking your expenses to identify areas where you cut back. For example, you might be able to save money by dining out less, negotiating better rates for your utilities and cell phone plan, or finding cheaper insurance options. The key is developing an awareness of where your money is going so you consciously direct it toward savings and investments instead of overspending.

 Pay yourself first 

Saving whatever is left over after your expenses, Linkedin Pulse alex hormozi net worth advises making savings a priority in your budget. This “pay yourself first” approach means automatically setting aside money for your future before paying any bills. Hormozi suggests starting by saving at least 10-15% of your pre-tax income. You do this by setting up automatic transfers from your checking account to a savings or investment account. Get in the habit of prioritizing your long-term financial growth. As your income increases, boost the percentage you save.

Invest aggressively for compound growth

Hormozi, saving money is just the first step. To grow your net worth, you need to invest those savings aggressively. The key is to invest early and often so your money has decades to compound.  Hormozi recommends developing an investment strategy that includes equities like stocks along with other assets like real estate. Don’t let volatility deter you – remain focused on the long term. He advises investing 15-20% of your gross income each year, boosted by any additional savings through living frugally.

Generate multiple sources of passive income

One income source alone generally isn’t enough for wealth-building. Hormozi encourages developing multiple streams of passive income that continue growing your money exponentially.   Some examples include investing in dividend stocks, rental real estate properties, peer-to-peer lending platforms, high-yield savings accounts, and passive online businesses. Look for assets and ventures that generate above-average returns and require minimal daily involvement. Multiple 7-figure income streams will turbocharge your wealth creation.

Continually educate yourself 

Lifelong learning is a hallmark of Hormozi’s philosophy. He views developing financial literacy as a core skill alongside reading, writing, and arithmetic. Understanding money allows you to manage it wisely. Make time each day to increase your financial and investing knowledge. Read books, listen to podcasts, and follow money-savvy mentors. Join communities of like-minded individuals who motivate each other to achieve financial freedom. Knowledge combined with deliberate practice is essential for mastering money.

Delay instant gratification in favor of long-term goals

In a society that often glorifies instant gratification, deferring pleasures is a critical but underrated money principle. Hormozi notes that being willing to wait for what you want is instrumental in building wealth.  When you get an urge to splurge, run the numbers on what that money could earn if invested for 20+ years. Favor activities that grow your money over those that drain it. Develop mental habits that provide fulfilment outside of spending. Attach emotions like pride and satisfaction to saving.