The 4 Sources of Cash (and why I bought a $10M building) | Ep 869

April 11, 2025 by Alex Hormozi

"It's a different way of thinking about money."

"I think there's something to be said for creating a vacuum, about creating space."

"If money isn't your goal, then the people that I've seen that are the happiest that I think spend money well, they use money like a tool."

In this episode, the host shares insights about the behaviors that separate wealthy individuals from those who are not financially well-off. He argues that many discussions around money focus too much on beliefs, but that real distinction comes from behaviors. Wealthy people approach purchases differently; they aim to make money specifically for desired items rather than using savings or going into debt.

The host shares personal anecdotes about a sizable building project he undertook, explaining how he assessed the financial implications and developed a plan to ensure that the purchase would ultimately generate new revenue. He categorizes sources of cash into 'past money,' 'income,' 'debt money,' and 'new money,' emphasizing that the latter is essential for ethical financial growth.

He illustrates how wealthy individuals can buy luxuries by using their resources creatively to generate that wealth instead of draining their existing savings or income. He recalls a conversation with a friend about choosing office space, emphasizing that one should aspire to purchase what they want but ensure it's financially sustainable. The concept of 'sawdust money'—utilizing underused resources to drive new income—is central to his approach.

The host advises on making purchases while avoiding financial risk, suggesting individuals look for innovative ways to produce 'new money' rather than depleting existing resources. He gives practical examples, such as taking on extra work or leveraging current assets to afford luxuries. The discussion concludes with the reminder that wealth should not just be a status symbol but a means to enjoy life, thereby encouraging listeners to view money as a tool for fulfillment.

Key Takeaways

Shift your focus from money beliefs to money behaviors.
Wealthy individuals create new income streams to fund significant purchases rather than using savings or existing income.
Identify underutilized resources to generate new wealth ('sawdust money').
Be financially strategic in purchases; ensure they can be financed through new income without impacting savings.