The 6 Levels of Making Money

Name: The 6 Levels of Making Money
Uploaded: 2026-03-09T12:00:00.000Z
Duration: 17 min 28 s
Channel: Alex Hormozi

Alex HormoziMarch 9, 202617m

Topics9

Four Ways to Get Money and Trading Stuff for Money0:00 Level 1: I Work Then You Pay (W2 Employment)1:00 Level 2: You Pay as We Go (Contractors and Vendors)2:00 Level 3: You Pay, Then I Work (Business Owner Leverage)3:00 Level 4: When X Happens, You Pay Me (Outcome-Based)6:00 Risk-Reward Principle8:00 Level 5: Buy and Sell Risk (Insurance)10:00 Level 6: No Matter What, You Pay Me (Tax Collector/Government)11:31 How to Move Up Levels as Business Owner/Solopreneur12:30

In a Nutshell

There are four ways to get money—steal, inherit, marry into it, or trade stuff for it—with trading being the viable option for most. Within trading, six levels escalate from worst (Level 1: W2 employment, trading risk for reliable pay) to best (Level 6: government/tax collection, paid no matter what via monopoly on violence), with higher levels commanding upfront/outcome-based payments, risk-selling (e.g., insurance/warranties), or royalties by shifting perceived risk onto others. Move up by leveraging business ownership for "pay first" structures like retainers/layaway, outcome ties (e.g., rev share), and mispriced bets where upside far exceeds downside, as big winners subsidize failures.

AI-Generated Notes

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There are only four ways to get money: steal, inherit, marry into it, trade for it. If you have morals, you probably don't want to steal it. If you're watching this, you probably aren't going to inherit it, and even if you are, you probably don't want to wait until your parents die to get it. If you're a guy, you're probably not going to marry into it, and even if you do, do you really want to be owned by your wife's family? This means, if you're watching this video, you're likely left with one option: trade stuff for money. I made a million dollars 106 times in a row in a weekend. I also own a portfolio of companies at acquisition.com that trade stuff for money and did over $250 million in revenue last year.

Within trading stuff for money, there are six ways to structure those trades, broken down from worst to best (in reverse order of bestness). The last two are god tier setups that only work in very specific circumstances.

Scheme number one is I work then you pay. This is a classic W2 employment agreement. The trade is: no matter what happens (outside of getting fired), I get paid. I trade risk for reliability. Being an employee is not riskier than owning a business, because if it were, everyone would own businesses and be rich, which is not the case. Fun fact: almost half of business owners don't make any money at all—they work the whole year and end up poorer than they started. The median business owner income is about the same as minimum wage in California. This is the lowest risk but most reliable way of making money.

Number two is you pay as we go. Work and payment happen in parallel: half now, half later, or paid along milestones. Typical for independent contractors and vendors. Pros: frontloads some money. Cons: people fire vendors way faster than employees. Employees have a 3.9-year average tenure (US Bureau of Labor Statistics) vs. 3-12 months for independent contractors and 1-3 months for temp gigs—five times the annual turnover for vendors compared to employees.

Third tier: you pay, then I work. Example: surgeons get paid in full upfront, then do the surgery—never the reverse. You can only do this when you own a business. The more leverage you have, the further up the pyramid you go, commanding better terms (if you know what you're doing).

Layaway: start payments now, begin work once paid up. Offers unlimited payment structure—e.g., "$600 service, $50/month takes a year, then we start." People often upgrade to faster payments like $300 now, $300 next month. People pay for speed; layaway forces this. If they fall off after partial payment, you lose nothing—you got paid. No risk. Third-party financing works similarly. Use all as tools.

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The 6 Levels of Making Money

Four Ways to Get Money and Trading Stuff for Money00:00

Level 1: I Work Then You Pay (W2 Employment)01:00

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