My Investment Thesis | Ep 479

Investment Phases

Alex Hormozi shares his three-phase investment strategy, emphasizing the importance of leveraging personal expertise. Initially, he advocates for investing in oneself to build skills and knowledge, which can later be applied to business ventures. As Alex explains, "Phase one, learn shit. Phase two, when you have earnings but not enough to really get into the big investing world, you can plow it into the S&P and diversify your risk because you still don't know what you're doing yet" 1. The final phase involves focusing on areas where one has significant expertise, allowing for greater returns and reduced risk 2.

   

Treasuries & Deals

Alex prefers Treasuries and private deals over traditional banking and real estate due to their liquidity and favorable risk-reward balance. He highlights the advantage of Treasuries being as liquid as a bank account, allowing for easy access to funds and better returns 3. Alex states, "I will be divesting from the very small percentage of my net worth that's in real estate, I will hold the equities that I have in ETFs. And everything else that I have goes straight into Treasuries" 4. This approach aligns with his strategy of investing in what he knows best.

   

Cash Recycling

The cash recycling strategy involves investing in short-term bonds to create a continuous cycle of cash flow and investment returns. Alex describes how buying bonds with staggered maturity dates allows for regular cash influxes, which can be reinvested for consistent returns 5. He explains, "Every six months I get a pop back of cash plus interest and then I put it back to another 24 months. And so it becomes this cash recycling machine in the meantime." This method provides a safer alternative to traditional bank accounts while ensuring liquidity and profitability.