OPPORTUNITY COST…How I went from $200k to $30M a year
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Summary
- I created a decision-making framework that has earned me between $20 and $30 million annually for the past four years.
- In 2016, although successful in fitness, I realized my work did not align with my values, involving too much vanity and leaving me with no time to enjoy life.
- While making good money as a fitness expert, I had no time for myself and couldn't focus on my true passion: helping people.
- Encountering daily stress and exhaustion, I realized a change was necessary when I found myself crying before work every day.
- An opportunity to start a company called Gym Launch with a man I met on Bumble, Alex, challenged my belief in sticking with things long-term.
- A friend introduced me to the concept of sunk costs vs opportunity costs, sparking the realization that I was overly focused on my past investments in fitness.
- I compared my current position with my new business opportunity, including time and money invested (sunk cost) in fitness against the potential earnings of Gym Launch.
- I concluded that continuing fitness training might net $190k yearly, while Gym Launch presented a potential $2.8 million annual upside.
- The decision to pursue Gym Launch, based on facts and numbers rather than emotions, brought me over $100 million in ROI over five years.
- I learned that you shouldn't let past investments hold you back from new opportunities, and making a well-analyzed decision can change your life's course dramatically.
Video
How To Take Action
I would suggest implementing a decision-making framework that focuses on facts and numbers instead of emotions. Here's how to do it:
- Identify what you're currently investing your time and money in, which is your sunk cost. This could be a job or project that's taking up all your time.
- Consider the opportunity cost, what you might miss out on by sticking to your sunk cost. This could be a new business idea or job opportunity.
- Compare the two paths factually. Write down the time and money you've spent on your sunk cost, and the potential earnings from the new opportunity.
- Look at the numbers to see which option has a higher potential upside. Remember, the past investments shouldn't hold you back.
- Make a decision based on the potential gains of the new opportunity, not the fear of losing what you've already put in.
For example, if you are working a job that pays well, but leaves no time for personal life or passions, and you have an opportunity to start a new business, do the math. Write down how much you're earning now and the time invested. Then, calculate the potential income and time freedom from the business. If the new opportunity offers better long-term benefits, consider making the switch.
This is how you can make well-analyzed decisions that can change the course of your life, without letting emotions or past investments cloud your judgment. Remember, it's all about what the future holds and maximizing your value.
Quotes
"I believe that most humans want to help people inherently"
– Leila Hormozi
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"Emotions don't necessarily demand action, but facts do"
– Leila Hormozi
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"It's always just looking at the evidence"
– Leila Hormozi
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"Paper doesn't lie, your feelings are going to keep you stuck and miserable"
– Leila Hormozi
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"The sunk cost is irrelevant; the past does not exist"
– Leila Hormozi
