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Here’s What to Do If You Have Less than $100,000 in Your Bank Account

by | Jul 25, 2023 | Money, Personal Finance

The feeling of financial ruin is one I’ll never forget.

You feel stupid. You’re afraid. You don’t know if you’ll ever recover. It sounds easy to come up with a plan or #pivot.

It’s not. You can’t think straight.

That’s why it pays to have a plan in case you ever lose the lot. Alex Hormozi gave a few tips for anyone that has less than $100k in their bank account.

While we can argue whether $100k is too much or not, it’s more helpful to focus on what to do if you’re in trouble financially.

Before we get to the how, let’s cover the why…

Why you need to take massive action and stop the money leaks

When your money identity goes from good to bad, it’s hard to let go of what once was.

It feels like a mini-death.

But if you don’t recover from a bad financial situation, then you’ll do what many in society do: struggle for the next 3–4 decades.

Alex Hormozi says, “Suffering for 36 months to get a financial foothold is way better than spending 36 years trying to turn a corner that never comes.”

When I had to walk away from a business I loved it hurt like hell. I had to stop buying the fancy clothes, going to luxurious nightclubs, and paying for everyone’s drinks. Most of my friends abandoned me.

They wanted Rich Tim back. But he was dead. It was an accident. And they wouldn’t wait for me to make a comeback. Ohhh well. When it comes to a bad financial situation….

Rip off the band-aid. Do what hurts. Understand it’s temporary. Let go.

Here’s how:

Stop eating out

Alex recommends you stop eating out.

That’s exactly what I did. It took more time to cook my own food but it was 10x cheaper. I found I ate healthier too. Most takeaway food is flavored with either sugar, salt, oil, or the whole trifecta.

Yes, it tastes yummy. Yes, it’s nice to reward yourself. But that’s short-term thinking. If you want to bounce back it’s time to make some harsh decisions.

What I found is when I gave up eating at restaurants, and eventually recovered financially and ate out again, I appreciated it much more.

I didn’t take a burger and chips or a few cheeky wines with friends for granted anymore.

Eating out may not sound that expensive. But it’s the little expenses that add up. And it’s the mindset of being frugal for a while that’ll get you through to the other side.

Alex goes one step further and says to buy discount groceries only. I didn’t go quite that far but I did buy canned soup for every lunch and only buy it if it was 50% off.

Only go to these types of events

Friends are important during rough financial times.

Alex suggests we still go to friend events but we stick to the free ones. If it’s a walk in the park or a visit to their home, then great. If it’s a luxury cruise along the harbor and costs $200 to attend then say “No, I can’t go.”

If a friend complains or distances themselves from you, then it’s a sign they don’t support your goals and probably shouldn’t be a friend anyway.

Quit the fast fashion epidemic

I’d never heard this phrase until a few years back.

Fast fashion is a fancy term for clothes that get replaced every season. You know the feeling. The one where you don’t want friends, work colleagues, or families to notice you wore the same t-shirt twice.

It’s ridiculous.

We can’t even remember what we had for dinner a week ago, let alone what you wore in June last year.

Fast fashion is the ultimate consumer trap. It’s how we flex status as humans. But we don’t need new clothes all the time. If bad money problems exist in your life, what you wear is the least of your problems.

Dress nice. But dress new? No need.

Alex goes a step further and says to get clothes from goodwill only. I didn’t do that when I hit the wall financially because I still wanted to dress good enough to be given new career opportunities.

If I showed up to coffees with hiring managers or job interviews in skyscrapers with a $2 suit from goodwill, that smelt like a dead cat, I’m not sure I would’ve got the break I did in banking.


The rest of your time should be spent in these areas:

1. Apply for jobs that pay more

What I love here is that Alex understands that hourly work and 9–5 jobs are fine if you need to rebuild.

I saw my comeback as a transition. I took the lowest call center job I could find and committed to working my way up. When I got one job I started looking for my next job.

I always had a career opportunity on the go that paid more. In the state I was in, entrepreneurship wasn’t an option. Here’s why…

If you can’t make a good job work then you probably can’t start a business from nothing and employ 100 people. The gurus don’t tell you that.

2. Start a side hustle

Part-time pursuits are what grow into ideas that can replace a job.

But if you’ve got no money in your bank account then a business can become a distraction. A business can eat up more of your time and lead to frustration followed by desperation. That’s not what you want.

I began to write online after hours. I built a few digital products and experimented with websites. As my savings increased it made it easier to make small bets.

3. Proactively learn new skills

Many of us stop learning as soon as college is done.

But our annual salary is determined by the skills we have. As we add new skills, we can trade them for higher hourly rates at a job. Multi-disciplined people at work are rare.

Most know one thing and that’s all they can do.

4. Meet new people

Alex didn’t suggest this one .. but I found it crucial.

Skills are nice. But who you know also has a big impact on how much money you make. Most of the new jobs and promotions I got were as a result of friends I’d made in my career.

They’d put in a good word for me. They’d send me jobs that weren’t advertised. They’d make suggestions on new career paths I could take.

Some of them even hired me directly.

To meet new people I went to startup events. I also made it a habit to have coffee with one new person each day next to the office I worked at.

5. The controversial strategy I disagree with

Alex says “Find the hardest worker in the room, and 2x their level of input.”

The problem with this is it leads to hustle culture. Most people burn out when they follow this approach.

I found the hardest workers were often the dumbest. They used brute force to try and make more money instead of more clever tactics.

Naval Ravikant says:

“Trade money for time, not time for money.
You’re going to run out of time first.”

He’s spot on. What’s smarter than working harder is to build leverage. It’s where you do something that multiplies the force of your inputs.

I started writing online to scale the people I could reach. I started investing in financial assets to make my money make more money without any effort. I eventually made enough money to hire another person.

They then took what I knew and helped it reach more people, which increased the number of opportunities I got, without me having to do anything. Then I built repeatable systems in software like Notion so I scaled my playbook further.

Leverage is “work harder not smarter” but on steroids.

It’s the greatest mental model you can ever learn and it makes hard work look stupid (sorry Alex). Productivity expert Shane Parrish says a good thing to do is stay away from any activity that makes time work against you.

Atomic Habits author James Clear gives more practical advice:

“Do one thing per day that compounds.”

Leverage unlocks the magic of compounding. That leads to exponential growth. And that will help you have more than $100k in your savings account if you stick with it for 36 months.

Leverage > Burnout

Bringing it all together

Alex suggests the key is to decrease the money leaving your bank account, and increase the money hitting it.

The cost of this trade is a sacrifice worth making if you want to bounce back and plug the financial leaks.

What’s 36 months of financial discipline for a lifetime of wealth?

Not much. And the plan may create the outcome sooner than that — especially if you apply leverage.

This is not the advice you may want to hear. But it’s the advice you must hear if financial hardship is blowing up your life.

This article is for informational purposes only, it should not be considered financial, tax or legal advice. Consult a financial professional before making any major financial decisions.

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