How to Buy Anything Without Touching Your Savings

Summary

• Always consider four types of money: past money (savings), income money (monthly earnings), debt money (future earnings), and new money (new revenue from unused resources).
• Wealthy people often choose bigger, more ambitious purchases and challenge themselves to find ways to pay for them without dipping into their existing assets or incurring long-term debt.
• When buying something significant, think about how it can generate new income or savings, thus paying for itself. For example, owning a venue can replace the cost of renting event spaces.
• Use "sawdust money," which leverages underutilized existing resources, to fund new desires or projects rather than using savings or going into debt.
• If you want something costly, find ways to earn extra money rather than using current income or savings. Like Paul McCartney, write a song (or find an equivalent in your capacity) to fund your desires.
• Pushing yourself to find new money can create a motivational vacuum, increasing your drive to earn more to meet your financial goals.
• Living below means increasing new money for desired purchases while maintaining a modest lifestyle.
• When you want to buy something extra, work beyond your normal limits for a temporary period to afford it, ensuring it does not affect your main cash flows or create liabilities.
• Enjoy your money by viewing it as a tool rather than hoarding it or being afraid to spend. Create defined periods of extra work for pleasure purchases if they don’t contribute to your long-term financial growth.
• This behavior of earning extra for wants has served many wealthy individuals well and can be a joyful process, making spending money more satisfying.
• Never regret using extra hustle for something desired, as it allows you to minimize regret by not affecting your main financial goals.

Video

How To Take Action

I suggest starting by identifying your current financial resources: past money (savings), income (monthly earnings), debt (future earnings), and new money (revenue from unused resources). Focus on finding "new money" by using what you have but don't fully utilize.

A good way to do this is by leveraging your existing skills or resources for additional projects. For example, if you want something costly, work a little extra without touching your savings or incurring debt. This could mean freelance work, picking up an extra job, or offering new services temporarily.

If there's a purchase you really want, think of it as motivation to find ways to pay for it without affecting your main income streams. For instance, take on a project with a clear goal of covering the cost of the desired item. This mindset can increase your drive and make the process enjoyable.

Consider building or investing in assets that save money in the long run, like buying a venue over renting spaces. This way, your purchase can pay for itself.

Remember, living below your means while boosting earnings for specific purchases is key. It’s not about cutting back but about using your resources smartly to gain more without jeopardizing your main cash flows.

Ultimately, view money as a tool to enable experiences and acquisitions, not something to hoard. Enjoy the process of earning for your desires, ensuring you're not sacrificing your core financial goals.

Quotes

"The richest people I know use an expense they know they're going to consume to motivate them to find other resources."

– Alex Hormozi

"I want this thing and so I’m going to go make the money to buy the thing."

– Alex Hormozi

"I promise if we buy this building, I will make sure that it makes us more money than it has cost us."

– Alex Hormozi

"The weirdest thing happens is that I get almost more excited about making that money than the money that I make every single day because I know that that money is going towards this specific thing."

– Alex Hormozi

"If you’re broke, just focus on the new money stuff, right?"

– Alex Hormozi