Codie Sanchez: How to Make Money if You Don’t Have Money (4 Step Process to Make Money Today) AI transcript and summary - episode of podcast On Purpose with Jay Shetty

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Episode: Codie Sanchez: How to Make Money if You Don’t Have Money (4 Step Process to Make Money Today)

Author: iHeartPodcasts
Duration: 01:31:57

Episode Shownotes

What’s the first step to making money with no savings? How do you choose which opportunities to start with? Today, Jay sits down with Codie Sanchez, author of “Main Street Millionaire”. Codie is a powerhouse entrepreneur, investor, and the mind behind Contrarian Thinking, a platform dedicated to empowering people to

build real wealth through unconventional investments and small business ownership. Codie’s journey is anything but typical: she went from a middle-class background to finance jobs at Goldman Sachs and Vanguard, then pivoted into journalism, and finally found her calling by building wealth through owning small businesses. Codie breaks down the idea that you don’t need groundbreaking ideas or tons of cash to get started, just a willingness to look beyond the obvious. From laundromats to vending machines, she explains how these “boring” businesses can actually be gold mines, offering steady and substantial returns that often get overlooked in today’s flashy, social media-driven vision of success. Together, Jay and Codie dive into practical steps for starting your journey in business ownership. They discuss the essentials, how to make deals, manage risk, and recognize the right opportunities. Along the way, they debunk the myth that you need to be rich or have a finance degree to succeed. Instead, they focus on the importance of learning the language of money, cultivating grit, and keeping a curious mindset. In this interview, you'll learn: How to Take Control of Your Financial Future How to Start Building Wealth Without a Big Idea How to Identify Profitable Small Businesses How to Build a Strong Relationship with Money How to Turn Curiosity into Cash How to Leverage Ownership for Financial Freedom How to Find Under-the-Radar Investment Opportunities You have the ability to create meaningful change, not only for yourself but for those around you, by building something that truly matters. Keep moving forward, and believe that financial freedom is within your reach. With Love and Gratitude, Jay Shetty What We Discuss: 00:00 Intro 01:57 What Makes Rich People Rich? 04:40 The Reason Why People Don’t Talk About Money 06:30 Where Are We At Financially? 09:50 Misconceptions About What Makes Money 13:00 4-Step Process to Consistently Make Money 14:47 Academic Skills Don’t Translate to a Stable Career 17:44 Do You Need Money to Make Money? 23:06 The Key to Wealth is Taking Risks 26:48 We Can All Get Rich Together 32:52 Focus on the Foundation, not Tactics 35:28 You’ll Make Less Money if You Think You Will 36:57 Learn To Ask the Right Questions 43:57 The Best Mentorship Advice 49:06 You Can Make Money From Anything 52:33 The Richest People Started Small 54:19 What Core Business Skills You Should Invest In 01:00:16 Recognize Your Value to Get Better Deals 01:10:21 Every Business has a Value 01:13:49 Are You Bad at Math 01:17:47 Codie on Final Five Episode Resources: Codie Sanchez | Website Codie Sanchez | YouTube Codie Sanchez | Instagram Codie Sanchez | Facebook Codie Sanchez | TikTok Codie Sanchez | LinkedIn Main Street Millionaire: How to Make Extraordinary Wealth Buying Ordinary Businesses See omnystudio.com/listener for privacy information.

Summary

In this episode of 'On Purpose with Jay Shetty,' Codie Sanchez discusses how to achieve financial freedom through ownership and a data-driven approach to wealth generation. She emphasizes that true financial success isn't necessarily tied to having innovative ideas or substantial capital, but rather to recognizing and seizing unconventional business opportunities such as laundromats and vending machines. Codie outlines a four-step process focused on learning, skill enhancement, income increase, and investment, highlighting the power of negotiation and risk-taking. The episode encourages listeners to adopt a proactive mindset towards money management and underscores the importance of building financial literacy to break free from the stigma surrounding discussions about finances.

Go to PodExtra AI's episode page (Codie Sanchez: How to Make Money if You Don’t Have Money (4 Step Process to Make Money Today)) to play and view complete AI-processed content: summary, mindmap, topics, takeaways, transcript, keywords and highlights.

Full Transcript

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70% of millionaires are self-made. If you want to make money, you've got to follow the math. People that have money have one thing.

00:02:05 Speaker_03
Entrepreneur, investor. She's bought over 26 businesses. Cody Sanchez. I have no money. I don't really know too much about money. Where do I start? What do I do?

00:02:14 Speaker_07
Most often, we're told things like, follow our passion. I think that's pretty bad advice. If you don't have ownership, you're probably never going to be free financially.

00:02:21 Speaker_03
You're literally opening up a whole new doorway for people.

00:02:27 Speaker_06
The number one health and wellness podcast. Jay Shetty.

00:02:30 Speaker_03
Jay Shetty. The one, the only, Jay Shetty. Hey everyone, welcome back to On Purpose, the place you come to become happier, healthier, and more healed.

00:02:42 Speaker_03
I'm fascinated by our relationships with things that we grew up with, how they've changed, how they've evolved, or how they've stayed the same. I believe that our relationship with money

00:02:52 Speaker_03
is probably one of the most underestimated relationships that we have. And it's probably one of the relationships that we pay the least attention to. We don't treat it like a relationship. We don't think of it like a relationship.

00:03:04 Speaker_03
And therefore, it falls into the binary category of I'm either good at it or I'm bad at it. Today's guest has some incredible insights for each and every one of us. Wherever you are in your financial journey, this episode is for you.

00:03:18 Speaker_03
Today's guest is Cody Sanchez. Thank you. I'm blushing. I'm excited to be here. I want to start with a question that I know you probably get a million times and I get all the time. Jay, I have no money. I don't really know too much about money.

00:03:31 Speaker_03
Where do I start? What do I do?

00:03:33 Speaker_07
There's two things in life that I wish we were told earlier. And one is, if you want to make money, you've got to follow the math. And I think most often we're told things like, follow our passion. Do what I did to make money. I made real estate money.

00:03:47 Speaker_07
You should make real estate money. And I think that's pretty bad advice. I think instead we should look to where are most people rich? What makes most people rich? So I kind of go to the data.

00:03:57 Speaker_07
I came from really middle class, kind of we didn't have money all the time. I remember what it was like to not have money. I remember what it was like when my debit card, you know, I was a little worried stuff wouldn't go through at the grocery store.

00:04:11 Speaker_07
And I didn't like that feeling. And so I kind of started looking around, and I was like, wait a second, where do people have money?

00:04:17 Speaker_07
And after being in finance for whatever it is, 15 years, I'm going to give away my age, I realized people that have money have one thing, ownership. So the data is really clear on this. 70% of millionaires are self-made, which is interesting.

00:04:32 Speaker_07
I used to think maybe you just inherit it. Did they just get lucky? And then 68% of millionaires have some form of ownership. They have actually bought a business or have equity in a business or built a business.

00:04:45 Speaker_07
And so when I realized that, I was like, the problem is I don't have a brilliant idea. Like I don't know how to make money. I don't have any money to make money.

00:04:52 Speaker_07
But at least you have step one, which is if you don't have ownership, you're probably never going to be free financially. You got to get some skin in the game. That doesn't mean that you have to become an entrepreneur. It's really hard to do that.

00:05:03 Speaker_07
It sucks many days. You know this very well. There's Fridays when you're never going to make payroll, and that is like a deep, terrible, dark hurt, actually.

00:05:10 Speaker_07
But if you realize ownership is the name of the game, then you should probably obsess on one thing more than anything else, which is learn the language of money. And back when I was young, I was a journalist originally, made $0.

00:05:22 Speaker_07
And I realized that I had no idea why

00:05:27 Speaker_07
I had opportunities and ability to make some money and let's say the women I was covering at the time in Juarez, they call it la ciudad de muerte, the city of death, which is where women are mutilated and raped and brutalized and found murdered all over the city every single day, thousands of women a year.

00:05:48 Speaker_07
There were many that had the last name Sanchez. My last name happens to be Sanchez. I was like, what's the difference between us? Is it that I'm American? No, that's not it alone. I think it's also that I had some financial tools.

00:06:00 Speaker_07
And money is a pushback against other people's architecture of your life. And it makes people care about you one way or the other, which is sad. But the truth of the matter is, if you are poor, you have no power.

00:06:12 Speaker_07
And anybody who's been poor before knows that is true. You got to go where the game is playing. So the first thing I tell you, if you don't have any cash, you need to find a way to figure out how to speak the language of money.

00:06:23 Speaker_07
And that probably means you maybe go work in finance like I did.

00:06:27 Speaker_07
You get with a company that has smart leaders like Jay, where you can actually go and learn from them and you obsess on, can I become fluent in the thing that nobody talks about in the US because money is supposed to be the root of all evil.

00:06:40 Speaker_03
Yeah, you shared a statistic with me that I thought was mind blowing that 62% of Americans don't want to talk about money.

00:06:47 Speaker_04
Yeah.

00:06:48 Speaker_03
That is so scary, but it's also not surprising because like you just said, we've created this narrative that money is the root of all evil.

00:06:56 Speaker_03
And it was so fascinating because someone actually said this to me where if you look up the actual reference, it says love of money is the root of all evil.

00:07:06 Speaker_07
I never knew that. I do wonder sometimes, how do we get programmed these ways? Because if you think about it, it's like, what are the three things you're not supposed to talk about? Politics, religion, money.

00:07:16 Speaker_07
Now, politics and religion, maybe I could understand. You could offend somebody. I believe this religion. You believe this political slant. And if we collide, that could be bad. But when it comes to money, Who's like, no, I wish everybody was poor?

00:07:32 Speaker_07
Like why wouldn't we be able to talk about it? And the only thing that I can determine from that is that every time we get a little bit more ownership, a little bit more money, we become harder to control. And when you're harder to control,

00:07:46 Speaker_07
big institutions and largely our governments, they don't like that. You know, you want a controllable populace by and large. And I think that is a big reason why people don't talk about money.

00:07:56 Speaker_07
It's actually that we have been programmed to be more malleable sheep in many ways, not because people are evil at the top, but because once we get power, we humans are a little funny, we don't like to give it up.

00:08:07 Speaker_07
No matter who we are, I would probably be the same. And so that centralization of power, we start to think, I know better. you poor person, let me give you some charity. You can't figure it out.

00:08:18 Speaker_07
And instead we should be saying, you are just as capable as I am. And I would probably be you if I lived your life. And so instead, why don't I transfer some knowledge? Because that's where money starts.

00:08:27 Speaker_03
Yeah. What about people right now who are looking at the situation and just like, the economy is in a bad place. We're super worried. Paint us a picture of where America is right now.

00:08:36 Speaker_07
Well, I mean, let's talk first. We'll talk about how it's tough, and I'll be honest. And then we can talk about solutions. So I promise I won't leave you in a doom scroll. But here's the truth of what's happening in the world right now.

00:08:48 Speaker_07
If you're young, young people today are upset about what's happening in the world around them. And I understand why. You have wage stagnation. So we basically have not made any more money.

00:08:57 Speaker_07
And in fact, this generation, Gen Z, is the first generation where at their same age as their parents, they're making less money, not more. The problem is their university degrees are 3 to 4x more expensive. Oh, by the way, so is housing.

00:09:09 Speaker_07
Wait a second. Inflation is at a degree in which my dollar today is worth even substantially less than even five years ago. On top of that, yeah, we have all these jobs open.

00:09:19 Speaker_07
Seven million working-age men supposedly are unemployed at this moment right now, even though The jobs report says that there's so many jobs. Are the jobs real? Well, largely not. They're not private sector. They're public sector. They're government jobs.

00:09:35 Speaker_07
And so young people are like, wait a second. I can't live. I can't eat. Grocery is more expensive. And that's real, actually.

00:09:41 Speaker_07
And so the people that are making fun of young people on TikToks when they cry about their job being difficult, I don't really vibe with that. Because the math says it's hard right now.

00:09:52 Speaker_07
And not just for young people, but I think it's important to talk about them. And the truth of the matter is, though, that in any market we can make money.

00:09:59 Speaker_07
And so although it's really difficult out there, there's like one silver lining that I've kind of been screaming from the rooftops for the past three years, and people I think are starting to see it, which is that

00:10:11 Speaker_07
We are, thankfully, I think, going to have a marriage between baby boomers and young people that would be very unexpected. So right now, and historically, young people have said, okay, boomer, you messed up our economy, boomer.

00:10:25 Speaker_07
You're not employing me, boomer. You don't understand my life. You listen to the music that young people like. They don't like that generation in a lot of ways. Then the baby boomers are like, you guys are quiet quitting. You're not working very hard.

00:10:36 Speaker_07
Get out of my basement. And so these two generations have been at war in some ways, like a quiet war.

00:10:43 Speaker_07
And now, I think, with the transfer of ownership that we're seeing, and we can talk about the great wealth transfer, I think we have an opportunity where the baby boomer generation, the richest generation that we have ever seen in the US, which has mimicked in all other countries around the world, by the way, that are developed countries,

00:11:02 Speaker_07
This generation is about to sunset. They're getting ready to retire. They're ready to move on, but they own $68 trillion in wealth in just the US. The interesting part is the young people think, well, that money must get transferred somehow, right?

00:11:18 Speaker_07
Does that mean I get a house? Does that mean I get a car? Does that mean I get inheritance? The problem is that money is not tied up in just assets. It's not tied up in houses and bank accounts.

00:11:29 Speaker_07
it by and large is tied up in small businesses, because baby boomers own 60% of all small businesses.

00:11:35 Speaker_07
And so I think we've got to find a way for the young people to take over these baby boomer businesses, because otherwise, then we're in a really bad spot. Then we're Japan.

00:11:45 Speaker_03
Yeah. What are some of the mistakes that you think we think about what makes money? Like, what are we thinking makes money right now where we're being distracted? We're actually small businesses where you're pointing the spotlight.

00:11:57 Speaker_07
Yeah.

00:11:58 Speaker_03
But what are we distracted by?

00:11:59 Speaker_07
I think a lot of young people today chase the shiny object, right? And think about this for a second. I remember like many years ago, I had an opportunity to invest in Robinhood. And I could kick myself financially because I didn't.

00:12:11 Speaker_07
But at the time, why I didn't is I was like day trading stocks as amateurs and then gamifying it so we get like adrenal response every time a balloon pops because we placed a trade. Might be a bad idea.

00:12:24 Speaker_07
Like I don't think we should probably gamify our finances that way. And I think that's what's happened to young people. They're being told, I mean, put it in the stock market and day trade. They're being told NFTs and playing with crypto monkeys.

00:12:38 Speaker_07
They're being told price speculation on crypto or even Bitcoin. They're taking margin calls out on their stock portfolios. And with the little amount of money that they have, they're trying for this get-rich-scheme speculation.

00:12:51 Speaker_07
And the shitty part is that just never works. You know, the one sure thing I know about money is that you're never going to make it if your solution is, hey, I'm going to win at money because that guy's going to lose.

00:13:03 Speaker_07
If you think that there is a lose-win scenario and you are the one that's going to win, I hate to tell you, you're the one holding the bag.

00:13:10 Speaker_04
Well said.

00:13:11 Speaker_07
Yeah. And I wish people told us that more, that actually making money doesn't have to be lose-win, it could be win-win. And that is when you know you've actually found a good opportunity is when you go, okay, Why would I make money on this deal?

00:13:24 Speaker_07
Oh, because I am solving a pain point that adds value to another human's life and I've properly valued what my own skill set is. The problem is most of us don't even know what we're good at or how you'd value that skill.

00:13:36 Speaker_07
And we could play around with some exercises so that any human could figure out, okay, I, Cody, know how to market something.

00:13:42 Speaker_07
How do I figure out how much is that is worth and how could I transfer some of that to get a percentage of equity in somebody's company just for the skill that I have? And the last thing I want to say there is like,

00:13:53 Speaker_07
More than anything, I think one, we think money's bad, and then two, money's scary.

00:13:58 Speaker_07
Like, I don't really know why, but I think we're scared of it, and we're scared that we might not be able to make it, and we're scared what if we lose it, and what if our self-worth is tied up in it, and should we actually ask for it?

00:14:10 Speaker_07
So we have all these fears surrounding money, which is probably why we don't talk about it, too. And we've got to kind of work through that, because money is just a tool.

00:14:18 Speaker_07
So it's just like if you want to build a house, do you want to use, uh, you know, a bunch of tiny little nails and your own hammer, or do you want to have a screw gun? And like in this instance, I want to have the bigger gun.

00:14:28 Speaker_03
Yeah. I want to look at three scenarios of our audience and where they sit and look at what your advice would be for them at that point. So let's say we have a listener who just graduated from college. What should they be doing first?

00:14:42 Speaker_03
What should they be thinking about right now?

00:14:43 Speaker_07
Yeah. Well, here's how I think about making money. We have a four-step process that I think if you don't have money now, here is how you make it consistently over time and you have your money go out and bring back friends with it.

00:14:55 Speaker_07
The first is you've got to learn. We've got to obsess in the beginning about one thing only. It's not what your salary is.

00:15:00 Speaker_07
It's how can I cram as much information as humanly possible in my brain in order for me to then do the next thing, which is increase my skill stack.

00:15:08 Speaker_07
After I learn, can I increase my skills so that my skills are more valuable today than they were yesterday? And the third is, how can I increase my income?

00:15:17 Speaker_07
So before you go thinking about investing in things overall, how can I just make more money currently with what I'm doing? And then finally, we can get to invest.

00:15:25 Speaker_07
So after we do these three steps, the final one is, how do I take my money and make my money work for me? But in the beginning, you don't have money. You don't really have skills. You probably don't have a ton of connections.

00:15:35 Speaker_07
And so what you actually want to do is use your sweat equity and your experience and time as a really maybe hungry individual to get money to eventually be able to invest the money.

00:15:47 Speaker_07
And I think that's the other thing young people are told that's a lie is that you can go out as a young person and, you know, Fendi, Gucci, Prada, Lamborghini on the internet, make a bunch of fast cash and Airbnb arbitrage or whatever.

00:16:01 Speaker_07
Man, I wish somebody had told me earlier on that's a terrible thing to do.

00:16:03 Speaker_03
Yeah, and I think what's really interesting, though, is when you're talking about improving of skills, I think when we graduate college, you think that that was the skill, like that your degree was the investment in the skill, but really what you're talking about are high-value skills, talents, abilities that actually make an impact in a workplace, and those are really different.

00:16:25 Speaker_03
And so I'd meet a lot of young people who, sadly, have spent so much money on their degree, are really smart academically,

00:16:32 Speaker_03
But then that skill doesn't translate into knowing how to make their company more money, knowing how to lead people really well, knowing how to build functions, systems, processes.

00:16:42 Speaker_03
And therefore, it's like, well, wait a minute, I just studied all these years, but it doesn't translate.

00:16:46 Speaker_07
Yeah, I think you're exactly right. I mean, for a long time, we employed people from the top universities and financial firms.

00:16:53 Speaker_07
We would go out and we would hand select them because that would be an indicator of their grit, perseverance, and potentially their intellect, their IQ. Now, by and large, you're starting to see a lot of the top institutions bypass that.

00:17:05 Speaker_07
You know, Google doesn't mandate that you have a college degree if you're going into an engineering degree, actually. And I think that should be really liberating for us.

00:17:12 Speaker_07
It's basically breaking down this barrier that's a six-figure barrier that allowed for the few, the elites, to stair-step over everybody else. And now it's actually saying, how bad do you want it? And don't tell me what you learned.

00:17:26 Speaker_07
Show me what you can do. Or even better, show me what you did. And so I think the resume of the future is actually, if somebody came to you, Jay, and they were like, I just graduated from Wharton. I am very smart.

00:17:37 Speaker_07
You know, I also did my undergraduate degree at Harvard. I now want to come work for you. You'd be like, What do you know how to do? Do you know how to market? Do you know how to grow a beverage company? Do you know how to increase our investment return?

00:17:53 Speaker_07
Oh, you kind of like theoretically have looked about how to do that in a case study. That's probably less interesting to you than somebody that goes, you know what?

00:18:00 Speaker_07
I was part of the beverage team at Erewhon and Whole Foods, and I figured out sort of across the country how they buy different pieces of inventory.

00:18:09 Speaker_03
Yeah, you got my attention already.

00:18:10 Speaker_07
Right, exactly. And maybe because I want to help you grow this individual business, which I know you care about because I see it on your socials, I put together this little spreadsheet for you. Here's the things they care about.

00:18:21 Speaker_07
Could I come work for you for free for three or six months? And if that works out, could we do something better and bigger? The problem that people usually have on the internet when I throw out the word work for free,

00:18:32 Speaker_07
These young people are like, remember that part where you told us that we were broke and we don't have any money? So I'm not trying to dismiss that at all.

00:18:39 Speaker_07
But I do think we have to be honest about the fact that when we're young, you're going to have to work harder than you think, longer than you think, doing stuff you don't like with people you probably don't like until eventually you get the right to do something really interesting.

00:18:51 Speaker_07
But like you don't die in your first job from it being really hard and challenging. You die from the absolute monotony and the low level tasks you have to do for basically pennies on the dollar.

00:19:01 Speaker_03
Yeah, definitely. Definitely. Absolutely. I fully agree. Let's say someone's 30 years old. Yeah. Or 30 to 35. They worked 10, 15 years after graduating. They've been at the same company. Maybe they've moved once. Yeah.

00:19:13 Speaker_03
I was actually talking to someone like this yesterday. She's been at this one company for six years. It's a great company. Great on her resume. But she's like, I don't really want to be here. I don't think this is where I see my future.

00:19:23 Speaker_03
But I'm so scared of quitting. I don't know how to invest. I probably didn't save that much anywhere. Now I feel bad about it. I'm probably feeling a bit of shame and guilt that I didn't save that much over the last 10 years. What would I do, Cody?

00:19:40 Speaker_03
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00:19:50 Speaker_03
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00:20:01 Speaker_03
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00:20:15 Speaker_03
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00:20:26 Speaker_07
Well, one, I would say these days you do not have to have money to make money, which is incredibly powerful. So when I think about it, if I'm 30 and I am at a company like that, what would I do today?

00:20:37 Speaker_07
Well, I would actually probably sit down and figure out what am I actually skilled at that somebody else would pay me for. Once you know what somebody else would pay you for, which is really just like, do people ask for your opinion on this?

00:20:48 Speaker_07
Could you actually get jobs in this space? If it was me, because I'm kind of unemployable, like you don't want me to work for you. Like I got my own ideas. I want to do things this way.

00:20:58 Speaker_07
If she's like that, then what you want to do is you want to try to partner with somebody where you can be the solution to their problem.

00:21:04 Speaker_07
And because you understand what I call deal-making, which is really the language of money, you can negotiate an ability for you to own part of a thing in order for you to have one of three outcomes.

00:21:14 Speaker_07
If she can figure out if she can help a business grow its revenue, make more money, if she can help a business cut its costs, or if she can help decrease the pain of a business owner, you can negotiate your way into a business and have equity in it and upside.

00:21:31 Speaker_07
And I wish somebody had taught me that earlier, because this is what consultants do, this is what private equity firms do, this is what some of the largest institutions in the world do. I call it expertise to equity.

00:21:41 Speaker_07
But if I was her, I'd say, don't go find another job. And if you don't have a brilliant idea that you're like, I would die for the want of creating this thing in the world, if you have that, please go do it.

00:21:51 Speaker_07
But if you're like, I don't have that, I just want to make money, and I wanna feel respected, and I wanna feel like my skills fit somewhere, and I'm able to have an outsized income. If that's you, then I think you should try to value your skill set.

00:22:05 Speaker_07
Then you should try to negotiate for an upside deal with somebody. And you should try your hand at this game called ownership, which is where you say, hey, small business, I know how to market.

00:22:15 Speaker_07
Can I help you market at the side while I'm working on this company? And because I help you grow your revenue by 50%, could I keep 10% of the 50% I grow? Do you think a small business owner would say yes to that?

00:22:27 Speaker_07
Of course they would, because there's no downside.

00:22:31 Speaker_07
And I think more often than not, we think that the only risk you can take in making money in business is putting your own cash down, that's a risk, or starting a business, aka dedicating your life to something.

00:22:42 Speaker_07
The last part I'll get a little statistic on us is 90% of startups fail inside any rolling 10-year period. We know that statistic. Most startups make zero dollars for the first three years.

00:22:52 Speaker_07
And after that, the average entrepreneur makes about $46,000 a year, which is great, but not when you've been making zero for three years.

00:22:59 Speaker_07
And then on top of that, we've got this nation of people who have all these bills to pay, and they are betting on hopes and dreams as opposed to realities.

00:23:07 Speaker_07
And so my commentary is, can you figure out how to value your skills so you can negotiate a little bit more upside for that day where you can't work anymore?

00:23:16 Speaker_03
Yeah, definitely, yeah. I'm so happy to hear such, like, smart, honest advice because I do think you're so right.

00:23:24 Speaker_03
For so long, we keep telling everyone, like, follow your passion, like, just quit your job, like, jump over and, you know, it's hard because, like you said, that business may not work, your skills may be better off here.

00:23:36 Speaker_03
You might not be an entrepreneur, you might be someone who's going to work with an entrepreneur and build. I wanted to address something, though. I do find a lot of leaders

00:23:44 Speaker_03
And a lot of founders of small businesses or up and coming businesses to also be quite resistant to recognizing the value of sharing. So I'll give an example of what I mean by this.

00:23:57 Speaker_03
Like when I was starting out, I remember speaking to people who were much more established than I was. And I said, Hey, I've got a person I'm going to work with. I'm going to split things 75-25 and, and they're going to get 25% of profits.

00:24:11 Speaker_03
I'm going to keep 75 because they have a skill set I don't have, and it will be complimentary. And I remember everyone telling me it was a really bad idea. because they're like, Jay, like, no, you, you're building a platform.

00:24:20 Speaker_03
You should own a hundred percent of it. And I was like, but no, they're going to manage stress for me. They're going to manage teams. I want to see them grow. I want them to feel like they've got skin in the game.

00:24:30 Speaker_03
And now, you know, eight years later since that decision, I'm so much happier and I have a great relationship with my, one of my business partners. We have a great relationship. He's as invested as he is, as he was then. Things have grown really well.

00:24:44 Speaker_03
And I'm like, the people that were trying to hold on to that last five to 10% actually haven't grown.

00:24:51 Speaker_03
And so it was really interesting to me though, that I see that again and again and again, where even founders and new leaders are actually scared of parting with something. How would you encourage them to think about that differently?

00:25:03 Speaker_07
Well, I actually would say be scared of partnerships.

00:25:07 Speaker_03
Oh, great.

00:25:07 Speaker_07
Because 50% of marriages end divorce, but 100% of business marriages typically end, because no business lasts forever, right? And so at some point, you're going to have a rift with your business partner, by and large.

00:25:18 Speaker_07
And probably you'll have a few rifts with them. So I would actually say it's cool to be scared about that. You should be.

00:25:23 Speaker_07
The thing that I want people to think about is I want to make risk a non-four-letter word because I think the key to wealth is actually risk, taking some of it. The question is, if you're like me, I'm kind of a wuss.

00:25:36 Speaker_07
I stayed in a corporate job for 12 years because I was too scared to do things by myself. Even though I was pretty highly skilled, I had a decent amount of cash, I was like, I'm definitely not going to make it.

00:25:45 Speaker_07
I don't think I'm, I don't think I'm capable. Like it took me a long time to get there.

00:25:48 Speaker_07
And so what I did is I'm all about risk mitigation, which is like a fancy, you know, finance-y word to say, how can I just make the outcome so in my favor that even if I'm not as smart as I think I am, it's almost like a win-win no matter what.

00:26:04 Speaker_07
And so in that instance, I would probably say, Make the founder a deal so good that they would feel dumb saying no to it. And so if I was coming to you, Jay, and Jay was just starting out, I wouldn't do this to somebody who has a big platform.

00:26:18 Speaker_07
They have way too many resources. You need to go with somebody that's more accessible to you, that doesn't have a lot of resources, that's more on your level. But when you find that person, you go, hey, win-win deal.

00:26:29 Speaker_07
Don't give me a cent unless I provide x value, like literally nothing. Don't give me a percentage of the company right away. I never give a percentage of my companies right away anymore. I did once. It cost me a million bucks. I was pissed.

00:26:41 Speaker_07
I didn't do it again. So you can do what's called an earn-in or milestone-based deliverables, which I know sounds like a little maybe boring if people are listening to this.

00:26:50 Speaker_03
No, no, no. It's the right way to do it. I'm so glad you're giving this advice. It's great.

00:26:53 Speaker_07
Yeah, I mean, what you want to do is say, hey, I love you. You love me. We're going to be together forever. In the off chance that you see a hot little side piece and you run off with them, I want an ability to get the business back, right?

00:27:05 Speaker_07
And so in that way, I am going to instead say, hey, I'm taking all the risk in this business for the most part. I'm putting in the capital. Unless you're going to put in money that is equal to me,

00:27:16 Speaker_07
you only get the equity in the business or the upside in the business if it's either duration or it's execution.

00:27:23 Speaker_07
So either you're here for one, two, three years, which is called cliff-based investing, or you're here for the first million that you helped me get in, and then the second million, and the third million.

00:27:34 Speaker_07
And if you help me hit those milestones, you get the equity. If you don't, I wish you well, you wish me well, but we've already signed a prenup, and this is how it works. And so I think we need to start thinking like that. And it's very non-American.

00:27:46 Speaker_07
We're not so used to negotiating. Probably non-British, too. Actually, Indians, incredible at negotiation. Same with a lot of people in the Middle East. But British and American people not so good at negotiating.

00:27:58 Speaker_07
We think that it's like a low-level signal. on average. So like when I was young, my mom, we call her the pipple. She's amazing. And she would always negotiate everything.

00:28:09 Speaker_07
My dad's an incredible businessman, like totally pull himself up by his own bootstraps, but my mom would go negotiate.

00:28:14 Speaker_07
And I don't know if you ever felt like this, but I remember sometimes, you know, my mom would be like negotiating for a different price. I'd be like, mom, mom, like, please stop. You just pay it. And she would look at me and she would say like,

00:28:26 Speaker_07
Once it's your money, you pay it. But it's my money. So like, get out of here if you don't want to deal with this. And I used to think it was so embarrassing. And now I realize, oh, that's very smart.

00:28:36 Speaker_07
And it's actually the thing the wealthy do more than anything else that the poor do not, which is the wealthy negotiate everything. And the poor take price while the rich set price.

00:28:48 Speaker_03
Well, I've never thought about it like that. Set price versus taking a price. And, and I love your mindful habits on mitigating risk in a business relationship, both sides.

00:28:59 Speaker_03
I think it's, I'm glad that you laid it out that way because I completely agree with you. The amount of business relationships that have challenges and issues and everything.

00:29:07 Speaker_03
I want to go back a few moments to when you were saying you were stuck for 12 years.

00:29:12 Speaker_03
And the reason I want to talk about that is because now when I see you and whether someone sees you online or writing your book or, you know, you're on all these awesome podcasts and you're talking so confidently and you're so clear, but to hear that you had doubt and it took you a long time to get over it.

00:29:28 Speaker_03
Walk me through what was going on in your mind during that 24-month period, 12-month period before you actually managed to quit. What was going inside Cody's head?

00:29:37 Speaker_07
Oh, yeah. I think I would have stayed an employee forever, Jay.

00:29:41 Speaker_03
Me too. That's why I'm asking.

00:29:43 Speaker_07
And I also think if you're listening right now and you ever feel less than for being an employee, you tell that person to pound sand. Because, I guarantee you, Sheryl Sandberg is worth a lot more than many entrepreneurs. And she was an entrepreneur.

00:29:55 Speaker_07
She worked inside of a business and amassed massive wealth, prestige, status, and impact from it. And so, I don't like when people make employees feel less than.

00:30:04 Speaker_07
You and I couldn't do what we do if we didn't have people who also wanted to build a vision with a team as opposed to an individual. So one, you can make a ton of money whether you're an employee or whether you are the founder of the business.

00:30:15 Speaker_07
You just got to get a little skin in the game and upside. And you get skin in the game and upside when you have more value. You don't just ask for it. You've got to be able to earn it.

00:30:24 Speaker_07
And so when I was thinking those last two years in the business, I was running a business in Latin America. I had taken the business from zero to a billion dollars in asset center management.

00:30:37 Speaker_07
I had done it in a place that I had never lived, Mexico, Chile, Colombia, Peru. I didn't have contacts there, but I'd built something from nothing. I was really proud of that, but I wasn't very good at doing deals back then.

00:30:50 Speaker_07
Maybe that's why I'm obsessed with it now, because I did a shitty deal. with a guy that I respect a lot, but he was just better than me.

00:30:56 Speaker_07
And he ran the company and it built up this huge thing, but basically I had no way to take the assets of the business with me. The only thing that I could do is stay at that business and continue to get partnership until they eventually sold.

00:31:09 Speaker_07
I was like, gosh, I don't want to be here for 30 years. And at the time, again, I respected the CEO a lot, but we didn't believe in the same world. Like, I believe in a world in which we can all get rich together.

00:31:21 Speaker_07
He believed in a world in which he told me we get rich quietly. And he believed that if you told people that you were rich, they came after you, which sometimes they do. And because of that, he wanted to protect himself and be quiet.

00:31:34 Speaker_07
And I said, bah, I don't want to live in that world. And so we fought about that. I thought we should run the business this way. He thought we should run the business that way.

00:31:41 Speaker_07
And so for those last two years, if he hadn't finally taken me on a beach for a walk, him and I went. He runs a multi, hundreds, hundreds, hundreds of billions of dollar company. We're still friends to this day. But he essentially gave me an ultimatum.

00:31:53 Speaker_07
He said, listen, I want to row left. You want to row right. The problem is you need to get your own ships. You got to get your own boat. You're on my boat and you're trying to row this way. We're going this way. So you got to make a decision.

00:32:05 Speaker_07
And at the time, I was so mad. I was like, I built this from nothing. You guys can't even speak Spanish. I'm down here, do it. I was mad. I was super entitled. Then I realized, Cody, did you put any of the money on the table to build this business? No.

00:32:18 Speaker_07
Did you take the risk? No. Besides coming here, that was his. And so he was right. And I couldn't take anything with me. I did put my old number two in charge of that business, which is cool. She still runs it to this day.

00:32:32 Speaker_07
But I was really mad at myself and sad. And so before I left there, I had done a lot of little investments. I called them throwing out my chips. So once you start to make a little money, I think it's really

00:32:44 Speaker_07
helpful to start investing in the things that you want to eventually earn from. So I knew I wanted to get into some venture capital-like things. So I started investing in some venture capital firms.

00:32:55 Speaker_07
And so when he finally gave me that ultimatum, I jumped ship, went to another company, and I didn't even have the balls to do it by myself then. I partnered up with a few other people.

00:33:05 Speaker_07
And man, like, a lot of terrible things can happen to you when you don't believe in yourself. And I think the universe, like, it will tell you kind of what you need to do. And then if you don't listen, it'll ignore you for a while.

00:33:17 Speaker_07
And then at some point, it'll just kick you in the face. Like, that's my experience.

00:33:20 Speaker_04
You probably have a nicer experience with the universe.

00:33:23 Speaker_07
But it's kind of like, come on, we should do this, we should do this. And it just pushes you off the cliff. And so with me, I raised a ton of money for this company. I had these couple of partners. And at the end, like, it didn't work out between us.

00:33:35 Speaker_07
And again, unemployable. I wanted to go left. They wanted to go right. And I didn't really do that good of a deal. And so twice this happened. But that last time, I did a better deal. And so I said, you guys have to pay me out for what I did.

00:33:47 Speaker_07
And I'm going to go do this new business. And I want to take some of our investors. And so

00:33:53 Speaker_07
If somebody hadn't pushed me out of a company, and if somebody else hadn't also said, no, we don't want to do this with you, I never would have done it by myself.

00:34:01 Speaker_07
And so I think it's OK if somebody is listening and you're stuck in a corporate job, quote unquote, stuck for a long time. That's OK. And it's also OK if it takes you a few tries.

00:34:10 Speaker_07
And I don't think that the only way to make money is to go be an entrepreneur and founder and do it all by yourself and never work in corporate America. I'm very grateful for the money that they spent on me for decades.

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00:37:49 Speaker_00
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00:37:52 Speaker_03
Yeah, absolutely. And I think there's plenty of good examples, as you said, of entrepreneurs. And I think it's more a mindset thing. What I'm hearing from you is it's getting skin in the game, it's negotiating well, it's being an owner, right?

00:38:05 Speaker_03
Like that's really what I'm hearing. And I think if people take those three things away from what we've talked about so far, that's what you want to put your attention to rather than this idea of, oh, I've got to start a business.

00:38:16 Speaker_03
I've got to become an entrepreneur. I've got to learn how to invest. It's like, no, no, no, this is it. This is what it is.

00:38:21 Speaker_07
You're right. Lots of people focus on the tactics, they don't focus on the foundation.

00:38:25 Speaker_07
The foundation is, do you believe that you have ownership and responsibility for the things you spend more time doing than anything besides sleeping, which is working. And if you have what we call an owner's mindset, so the type of human that's like,

00:38:39 Speaker_07
I'm putting like respect and dignity into what I do every day to the point that I start to value my own worth and I understand why I'm valued. Then you will finally be able to negotiate for the only thing that nobody can take from you.

00:38:52 Speaker_07
Somebody can take a job, somebody can take a salary, nobody can take contractual ownership in a business. And I think that's really important in today's world because it really allows you.

00:39:00 Speaker_07
Then when somebody that you work for does something you don't like, you just go, Yeah, I'm not doing that, you know?

00:39:05 Speaker_07
And you become, it's what I call my Q fund in my ladylike fashion, which is like, hey, I have a certain amount of money and because I have it, I will never compromise on a few things. But the owner's mindset is kind of rare, you know?

00:39:20 Speaker_07
And so I think for young people today, so often, and I was one, it's like, My boss is bad. My job sucks. You know, I don't have upward mobility.

00:39:30 Speaker_07
And if I could tell young Cody one thing differently, it would be like, what would the opposite side of that story say? And which one do you think would make you more money?

00:39:37 Speaker_07
And I'd be like, probably the one in which you're like, hey, this is all kind of in my control. And if I make some serious changes in my life, I bet I could be richer than I am today. And I wish more people thought that way.

00:39:49 Speaker_03
Yeah. How do you have that conversation with your boss?

00:39:52 Speaker_07
I remember once I was at an event and I was just listening in the crowd and it was actually a finance event for women. So it was a bunch of like kind of well-off ladies.

00:40:03 Speaker_07
And we were in the audience and the person in front asked everybody to close their eyes. So we all closed our eyes. And then they said, nobody's looking.

00:40:09 Speaker_07
I want you to have your body have a physical representation of what you feel when you think of money. So I was like, this is weird hippies. Like, what are we doing?

00:40:18 Speaker_07
So I was like, I don't know, you know, and you can't see me, but like, I was like throwing up my hands. I'm like, okay, money. I like it. Like, give it to me. Keep it going. You know, these are like my internal monologues, right? I'll take some.

00:40:30 Speaker_07
And so anyway, I'm chilling. I'm like this, nobody's looking. And then they're like, now don't move, but open your eyes. When I looked out, I was like, whoa, because the rest of the audience, not the rest, but let's call it 80%, were like this.

00:40:42 Speaker_07
They were tight to the chest. They were kind of like maybe small arms to the side. In some instances, I was like, it looked like they had been hit. They had been harmed. And I thought that was so fascinating, and then they let us shake it off.

00:40:55 Speaker_07
And I was like, oh, man, if your representation of money that you feel in your body is closed off, you know, kind of scared, whatever, I don't know, it might be hard for you to earn it. So I think for some reason,

00:41:09 Speaker_07
being in finance helped me realize, hey, you guys, if you met some of the guys who were worth $100 million that I did in finance, you'd go, I could do that too. Like that guy did it? Really?

00:41:19 Speaker_07
And so I think once you meet a bunch of those people, you go, oh, like this isn't as impossible as people say it is. And so I learn a lot from not seeing people achieve it and going, how could they? How could they?

00:41:34 Speaker_07
It's instead going, wow, that guy didn't want to think if he could do it, I could do it too. And that taught me to keep going, okay, he did it, he did it. And it's like, arms would raise, arms would raise, arms would raise.

00:41:43 Speaker_07
And so maybe that's what I would try to tell people. It's like, every time you see somebody that has a lot of money and you see the humanity in them, just remember like, we're all kind of the same.

00:41:52 Speaker_04
Yeah, definitely.

00:41:54 Speaker_07
And you can, now don't get me wrong, intelligence levels, network, how you're born, where you're born, real things. But if you're living in a first world country,

00:42:05 Speaker_07
In today's day and age, with the internet and what we have at our fingertips, I think you're in a better position than you've ever been in order to make a lot of money today.

00:42:12 Speaker_07
And I promise you only one thing, which is you'll make less money if you think you will.

00:42:18 Speaker_03
Yeah. I wanted you to talk about the difference between what you just said and how we cultivate that mindset because you're so right.

00:42:26 Speaker_03
I know a lot of people, a lot of friends as well, they'll look at someone who's doing well for themselves and they'll be like, that guy's so dumb. Like I could do that.

00:42:32 Speaker_03
I could do that with my eyes closed, but it's actually in a condescending way to that person rather than like, that guy can do it. Oh, great, okay, well, I've got this skill, I can do it, you know, and so what is that mindset shift?

00:42:44 Speaker_03
Because I think we're good at looking at other people, but often we either fall prey to being envious instead of studious of them, like instead of studying them, we envy them, or we end up being condescending of them of like, oh, well, you know, he's not even that smart, or they're not even, it's not even that great, right?

00:43:02 Speaker_03
We kind of justify that. So how do you shift that? Because I think that's at the core of what you're saying.

00:43:07 Speaker_07
Yeah, and don't get me wrong, I fall prey to all of these things, too. I still, to this day, play the game of comparison. Like, oh, they're doing that? Come on, team, where are we going? You know, I do it, too.

00:43:16 Speaker_03
Me, too.

00:43:16 Speaker_07
Yeah. And I wish I didn't, but I still do. But I do think Cash loves curiosity. If you remember anything else, it's that money is really attracted to the type of human that keeps asking questions.

00:43:28 Speaker_07
You don't actually have to know the answers often to make money, you need to ask the right questions.

00:43:31 Speaker_07
So I kind of trained myself every time I saw somebody with money or I got to know somebody with money, I didn't need to know anything else besides like, can I just ask them a lot of questions continuously?

00:43:42 Speaker_07
And it was funny because I was talking to, I think another mutual friend of ours, Jesse Eitzler the other day, and Jesse talks about how he used to go to a hotel here And he would just ask questions in the lobby or at the lunch table.

00:43:53 Speaker_07
He was like living not in a nice place. He had no cash whatsoever. But when he saw people that he thought looked rich or interesting, he would just ask them questions. And I think with the internet sometimes, we—

00:44:04 Speaker_07
we think that questions don't matter anymore. And we go to the internet to get answers. And if instead you can make a human connection and get curious about them, they'll give things to you.

00:44:13 Speaker_07
And so one of my, I played a game when I was really young, which is I kind of started collecting mentors who never knew they were my mentor. And I think this is a really clever thing to do.

00:44:24 Speaker_07
And I remember one in particular, Bob Kendall, and BK is what we call him. He was super high up at I don't know if it was Goldman or Credit Suisse at the time, one of the companies. And he was so out of my range.

00:44:36 Speaker_07
You know when somebody else is in a company and I was basically the intern and he was the big dog. But I got a couple chances to interact with him. And I would just ask him questions, very simple ones.

00:44:45 Speaker_07
Like, oh, you just took over this area of the business. What did you see there as opposed to this other area where a lot of people are going? I would just kind of be curious.

00:44:53 Speaker_07
And then I would do a thing that I think probably helped me make more mentors than anything else. I would get their contact information. I would never ask them for anything.

00:45:03 Speaker_07
I would largely just say, hey, that piece of advice that you gave me the other day, that was really useful and I applied it this way. Thank you for doing that. Or I'd see if his name was written somewhere. He had done a research paper or something.

00:45:14 Speaker_07
I might send it to him like with a couple highlighted things like these lines were incredible. Thank you for doing that. Then after I had done that a few times, I might give them one question like, hey, um,

00:45:24 Speaker_07
You know, I'm thinking about going into marketing or sales and I'm trying to figure out how do you decide which career path is more interesting to you?

00:45:34 Speaker_07
Do you have just like a one sentence about it or do you have one book that you'd like to read, like really short? And I remember I sat down with BK years later, and he was like, you know the funny thing about you? And I was like, oh, what?

00:45:45 Speaker_07
And he was like, you somehow made me your mentor, but you never asked. And then I started caring about what happened to your career, but I kind of never meant to, which is like a very Asperger's-y finance thing to do.

00:45:57 Speaker_07
And he's like, did you do that on purpose? And I was like, I don't know. I was young then, so I don't know, but maybe.

00:46:03 Speaker_07
That tiny transfer of, hey, I have advice and somebody actually takes it, uses it continuously, wants nothing from me for it, and then gives me a positive feedback loop that I'm making change on their life is so rare.

00:46:18 Speaker_03
So smart.

00:46:19 Speaker_07
Right?

00:46:20 Speaker_03
That's genius. That's actually the best mentorship advice I think I've ever heard. Because I think so many of us, when we want someone to be our mentor, the first mistake is we ask them to be our mentor.

00:46:29 Speaker_07
Oh, don't do that. That also makes me die on the inside. If somebody asks me that, I'm like, that's such a huge responsibility. What if I fuck you up?

00:46:34 Speaker_03
Exactly, or what if I don't have time, what if I can't respond, like that's the natural reaction. And same with me, I've always had mentors that don't know they're my mentors, it's the only way.

00:46:44 Speaker_03
But what I love about your advice, which I've never ever heard before, is also how you asked for advice. I think the second mistake, so the first mistake we say is, can you be my mentor? The second mistake we make is, we send a whole life story.

00:46:56 Speaker_03
with one really big, profound question. So it's like, I went from this, then I did this, then I dropped out, then I did this, then I did this. How do I discover my purpose?

00:47:06 Speaker_03
And it's like the person on the other side has no idea how to compute all of that algorithmically and give you a really profound answer back that they genuinely believe will help you, which means they probably won't respond.

00:47:19 Speaker_03
Or if they do respond, it will be extremely short. And then you feel disgruntled and upset that they didn't value your whole life story. And then now you probably lose touch.

00:47:29 Speaker_03
Whereas your advice was just so perfect because the idea that you were sending them their own work with a couple of highlights, one sentence question, one piece of insight, and then that person, like you said, becomes invested in your life.

00:47:41 Speaker_03
That is such great advice, Cody. I really, really mean that. I've never heard mentorship advice better than that.

00:47:46 Speaker_07
Yeah, I think it worked for me. And I also think the other piece of advice that was useful, I never went for like the top dog.

00:47:52 Speaker_04
Yeah.

00:47:53 Speaker_07
You know, I would never go to the president of Goldman, Lloyd Blankfein back in the day and be like, Lloyd, the thing is, talk to me. Can I have your email? Of course not. I would go to like one or two levels past what was comfortable for me.

00:48:05 Speaker_04
Right.

00:48:05 Speaker_07
So it was like, I could still get to the person. Yes. And then you can use it as like a leapfrog.

00:48:10 Speaker_07
And the last thing I'll say is I totally disagree with the advice today that a lot of like kind of well-known people give, which is once you outgrow people, leave them behind you.

00:48:21 Speaker_07
And a lot of people say like, well, they were my mentor, but I've superseded all my mentors. Yeah. And I hear that often from the business community.

00:48:29 Speaker_07
It's like, you're the average of the five people you surround yourself with, so make sure they're awesome. And it's like, yeah, but also don't forget how you got there. Because you never know. Mentorship has multi-layers to it.

00:48:38 Speaker_07
You can get mentored from above, but also below. I mean, your team was teaching us beforehand how to not sound like boomers, right? So there's that. You can also have somebody that's a hire that, for instance, I think a lot about the idea that

00:48:54 Speaker_07
Peter Thiel, whether you like him or not, really rich guy, gives money to Mark Zuckerberg, right? Whether you like him or not, Mark Zuckerberg then goes to become richer than Peter Thiel. Now, is Peter mad because Mark made more money than him?

00:49:07 Speaker_07
I highly doubt it because Mark made Peter a ton of money. And at one point, you know, the imbalance was Peter was way up here and Mark was down here and now it's probably flipped. And how cool is that?

00:49:17 Speaker_07
That like somebody who used to be sort of below you, you've helped in some way get above you. And then you get to like value transfer the other way. So I will say like, maybe if I gave one other piece of advice on mentorship, it would be,

00:49:31 Speaker_07
Collect and keep with you the people even after you've superseded them.

00:49:35 Speaker_03
That's beautiful advice, yeah.

00:49:37 Speaker_07
And try to be their best mentor.

00:49:39 Speaker_03
Absolutely.

00:49:39 Speaker_07
Like, I mean, mentee. I always try to, like, have them, I want them to be able to brag about me.

00:49:44 Speaker_04
Yeah.

00:49:44 Speaker_07
Like, no matter what you teach me, I want to be the best mentee to the point that they're like, hey, look how smart I am because of that.

00:49:52 Speaker_04
Yes.

00:49:52 Speaker_07
And I want to give them all the credit on it.

00:49:54 Speaker_03
Yeah.

00:49:55 Speaker_07
And when you do that, then they introduce you to their really successful friends too, so it's a twofer.

00:49:59 Speaker_03
Yeah, definitely. And I want to add what you were saying earlier as well, this idea of you have to act on the advice. And I think there's a lot of requesting of advice.

00:50:07 Speaker_03
There's a lot of looking for answers, but being a great mentee is taking the advice, putting it into action, and then reporting the result and saying, hey, I took your advice. This is as you were saying.

00:50:19 Speaker_03
And I think that's so core to what was different about mentorship, where like you're saying now in this TikTok, Instagram world, I think there's just so much advice everywhere.

00:50:28 Speaker_03
that we're not really getting the opportunity to digest it, put it into practice, and then report on it as well. And I love your idea of gratitude.

00:50:36 Speaker_03
I mean, I remember when I joined a company as an intern years ago, and I was only there for like a summer internship, but they put up the pictures of the founders of the company. And then they were like, yeah, but we don't care about them.

00:50:49 Speaker_03
They're old guys anyway. And I remember really like, I was just like, wow, that's really ungrateful because none of us would be here right now if it wasn't for them. And yes, they're not alive anymore.

00:51:00 Speaker_03
And yes, that was a long time ago, but I fully agree with you that, and also you just don't know when you're on the way up, when you're on the way down.

00:51:07 Speaker_03
your mentors generally, if they're older than you in the beginning, even if you become more successful than them materially, I believe they have so much more spiritual wisdom to give you over time.

00:51:17 Speaker_03
Like I've got mentors same way who helped me out when I was in my late twenties and Today they're so much more helpful when they talk to me about what it feels like being a dad.

00:51:27 Speaker_03
Like I'm not a dad right now, but he's been a dad and his kids are in their mid twenties and he has a great relationship with them. I'm like, I'm not there at that level.

00:51:34 Speaker_03
So mentorship also takes across not just financial, but relationships, you know, emotionally, mentally, there's so many other areas.

00:51:43 Speaker_07
Oh yeah.

00:51:43 Speaker_03
So leaving someone behind is terrible advice.

00:51:46 Speaker_07
Yeah, I agree. And you know, it's one thing if somebody's negative or they're unhelpful, which I still believe very much so, like Arthur Brooks, who I just think so highly of. And I remember back before I knew him as a friend and I was just a fan.

00:52:00 Speaker_07
Last time I was in New York with him, he, I was having like, you know when somebody's mean to you online? Does that ever happen to you? Probably sometimes. Of course. Well, there was one person that was like really mean and I don't know why.

00:52:10 Speaker_07
It got to me somehow. It bothered me. And you know, this was a while ago and I remember telling him for some reason. And often it only bothers me if I feel like there's a kernel of truth to it.

00:52:20 Speaker_07
So if they like really nail my imposter syndrome or they really nail like Is she as smart as she thinks she is? Something that I worry about too. If they get that, I'm like, dang it, I'm paying attention now. That's not good.

00:52:32 Speaker_07
But I remember I said to him, I'm just bothered and I want to do something about it. And he was like, are you going to listen to me? And I was like, maybe. What are you going to tell me to do? And he's like, I want you.

00:52:42 Speaker_07
Two, picture this guy having all the success in the world. I want you to wish him so much well, it becomes like a bit bizarre. And I want you to actually feel it. And again, I'm not that touchy-feely. I'm pretty spreadsheety.

00:52:54 Speaker_07
So when he told me that, I'm like, fine. But like, I don't think there's going to be an outcome here like that. And he's a wonky, very smart guy. So it's not... Anyway, so I did it and I like really thought about it.

00:53:08 Speaker_07
I was like walking in New York and I was like, you know what? I do wish this guy well because I bet it is sad if you are like, if you're in a place where all you're doing is hating on somebody online all the time, I bet you are kind of sad.

00:53:17 Speaker_07
So I started like empathizing with him and thinking about it. Anyway, not two weeks later, the guy does a public apology for like, and does this long DM to me. You know, my husband has like a long memory. So it's like, no, you know, let's get that guy.

00:53:30 Speaker_07
But I was like, I just learned such a lesson. And maybe it doesn't always work like that, and maybe they're still mean to you later. But I really think sometimes you learn just as much from your haters as you do from your mentors.

00:53:42 Speaker_07
And so don't underestimate not only the saying where we kind of get all hot and bothered, like, you know, if you don't got hate, you're not doing anything, maybe.

00:53:51 Speaker_07
But also, wow, you can learn a lot from the type of feelings you get when people doubt you. And I think that's just as important. And I wouldn't be where I was today if I didn't have some big haters that I felt like I needed to prove wrong.

00:54:05 Speaker_03
Yeah, well said. I want to dive into the heart of this book because what made it so unique for me is I don't think I've ever heard anyone really talk about buying ordinary businesses.

00:54:16 Speaker_03
And that's the crux of so much of your work and why it's different and how you're getting people to think differently about ownership.

00:54:23 Speaker_03
You had this video that I remember watching that got like 11 million views talking about this vending machine business. Like, what are some of the most unusual businesses you've seen people make money from?

00:54:33 Speaker_03
Because I think it goes back to what we were speaking about earlier. We're all after this sexy, shiny money. And most people are making loads of money through really unsexy, random things. Vending machines being a case in point.

00:54:47 Speaker_03
Walk us through some of the most unusual businesses you've discovered people making money.

00:54:50 Speaker_07
Yes, let's do it. And also realize first, like most of the people who are really shiny on the internet, don't actually make much money. In fact, a lot of celebrities make no money, and you know this all too well being here.

00:55:01 Speaker_07
There's a lot of show, and it's actually quite hard to make money in the shiny things. The richest guy you know probably started a landscaping or sprinkler head company. In fact, that was the case for my family.

00:55:10 Speaker_07
When I was growing up, I interned for a woman who was my brother's friend's mom. And they were worth what I thought was a bajillion dollars back then. And it was from an equipment rental company.

00:55:23 Speaker_07
So this guy was worth somewhere near $50 million from one idea. I buy some landscaping equipment, some tractors, et cetera. And I don't sell them. I don't flip them. But I realized that construction companies only want to use them part time.

00:55:39 Speaker_07
So I actually rent them out. And so this guy would make the cost of a piece of equipment back inside of 90 days.

00:55:47 Speaker_07
And so instead of getting whatever differences between him buying the equipment and selling it for a little bit more, he would make the entire purchase price over every 90 day cycle.

00:55:57 Speaker_07
And I remember thinking back in the day when I saw that, you can make money doing anything. And in fact, you probably make it more often in the things that nobody thinks about because you have less competition because it also sounds really boring.

00:56:09 Speaker_07
And, you know, the Mark Zuckerbergs and brilliant minds of the world, they don't want to mess around with equipment rental. But people like me, who are maybe like kind of smart, but not that smart, could make a lot of money doing it.

00:56:20 Speaker_07
And so there are three types of businesses that I obsess about. I call them overarchingly Main Street businesses. So the idea is basically, what if all the money is actually made in community businesses that we use every single day?

00:56:31 Speaker_07
Your roofing company, your podcast production company you send outsourced editing clips to. You know, the cobbler that actually cleans up shoes on the corner store.

00:56:42 Speaker_07
All of these businesses, when you see that they've been in business for 30 years, it's not because they were making money or because they were losing money, and it's not because they got venture capital, because they didn't.

00:56:51 Speaker_07
So these things actually are profitable, which is kind of rare. So main street businesses, and then underneath it, I call them three different types.

00:56:59 Speaker_07
The first one is the gateway drug business, which basically I use that as a little bit of a joke, but it's like a vending machine. Well, everybody understands how a vending machine works, right?

00:57:08 Speaker_07
You get the machine, you take the cash out, you input the things. It's a straightforward business. It doesn't need a lot of people. And I think it's a great place for like young people to start because you learn the game of business.

00:57:18 Speaker_07
A similar one might be what I call a people light business, which might be like a laundromat. So a laundromat is like, in some ways, a slightly bigger vending machine, right?

00:57:27 Speaker_07
You put clothes in, the clothes get washed, you take the clothes out, you put coins in and return, right? And that doesn't have a lot of employees and they're not super, super expensive on the scale of it.

00:57:37 Speaker_07
And so you go, okay, we've got gateway drug businesses, we've got people light businesses, And then finally, we get into what I call the trades businesses overall, or boring businesses.

00:57:48 Speaker_07
And these are things like we own a company called Resy Brands that has a window cleaning company called Pinks, a roofing company, a painting company called That One Painter.

00:57:58 Speaker_07
And what's wild is with these businesses, if you were to look right now, Jay, at like the Forbes 100 list of the richest people in the world, and you were to see what they made their money from, They're not celebrities. They're not singing songs.

00:58:14 Speaker_07
They're not doing YouTube. Like we're not even touching the amount of wealth they have. What do most of them have in common more than anything else? Finance and business ownership. And the businesses they own are largely boring businesses.

00:58:28 Speaker_07
Richest woman in the world, Kim Kardashian? No. roofing magnet, literally the richest woman in the world. This was as of 2022, so we should see if the numbers are updated, but is a woman who started a very large roofing company.

00:58:42 Speaker_07
And so, you know, I wish somebody told us this when we were younger, because instead, you know who knows this? The private equity guys. And I don't mean to villainize anybody. I was in private equity. I know plenty of good people in that industry.

00:58:56 Speaker_07
But again, centralization of power. Private equity companies in 2000 owned 4% of the companies in the U.S. Now they own 20%. That's almost one out of every four companies in the U.S. is owned by private equity. You know what they're buying like crazy?

00:59:10 Speaker_07
The trades, the service businesses, the boring businesses that print money, that service our community. And I think this is our chance to take those things back.

00:59:20 Speaker_03
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01:03:15 Speaker_03
ever even thought about it. It's so far off from what I think we were all trained to believe would make us successful, safe, stable, wealthy. You're not thinking about these areas. And therefore, like you said, they're not very competitive.

01:03:31 Speaker_03
There's not a lot of new entrants in there. When I hear you say that, the thing that comes to my mind is, what skills and talents do people need to be able to run those businesses? How much industry knowledge do they need?

01:03:46 Speaker_03
What business skills are core and important? Because I think the mistake is, again, with the kind of world we live in right now, it's someone goes, I love what Cody's saying. I get it. I'm going to go buy vending machines.

01:03:55 Speaker_03
And then all of a sudden, you've got a garage full of, like, 20 vending machines, and you don't know what to do with them because you don't understand business.

01:04:02 Speaker_03
So what core business skills are needed and what should we be developing in order to run any of these businesses? How much industry knowledge doing it?

01:04:11 Speaker_07
Yeah, it's a great question. Well, first of all, what I would think about is there's two different things we need to know in buying businesses or growing businesses.

01:04:18 Speaker_07
And the first thing is, you've got to learn how to do deal making and how to actually speak the language of money, which is what we talk about in the book, before you buy a business. So please don't just hear me and go buy a business.

01:04:29 Speaker_07
Read the book or go to our free newsletter online, but spend a decent amount of upfront time learning. I promise you'll make more money that way.

01:04:37 Speaker_07
You know, I kind of think about sometimes people go, well, why don't I use X amount of dollars I have instead of learning, just buying the business? And I go, does that ever work out well?

01:04:46 Speaker_07
Where we like don't know what we're doing, but we plow a bunch of money into it because we want to just go do the thing. It doesn't work out. So spend your time learning how to execute first. Now, that said, I really think there's just three

01:04:58 Speaker_07
key skills that we need to learn to grow a business. The first one is deal making. We got to understand how to do a deal. The second one is really a mixture of grit and endurance. So it's actually not tactics. It's how hard am I willing to work?

01:05:13 Speaker_07
What am I willing to sacrifice for the things that I want? And for how long am I willing to do that? And so Angela Duckworth famously, University of Pennsylvania, popularized grit as the most important thing to measure success.

01:05:26 Speaker_07
So it's basically like how much pain can you tolerate? And if you can tolerate a lot of pain, turns out you have a higher likelihood of making money. Business is really just like elongated periods of low-level pain.

01:05:37 Speaker_07
Sometimes you have like what's called an acute or like a big jump in pain. But for the most part, you know this. It's like, what is running a business or starting a business? It's like, well, you're looking at your statements pretty much often.

01:05:49 Speaker_07
You're like messing around with marketing. It's kind of like a low-level pain. And so that's the second point. And the third point is actually maybe a little rare too, which is just a lot of people obsess on how.

01:06:01 Speaker_07
So what skills do I have to have exactly? How do I start a business? How do I tax structure the business? How do I get my first customers? All important and good questions, but the real pros now You don't ask how, you ask who.

01:06:17 Speaker_07
Who can I go to who already has 10,000 hours where I can steal their homework? So now in business, if I go, hey, I don't know how to do our taxes, I go find somebody else who has done taxes for us. And it doesn't mean you have to pay for them.

01:06:29 Speaker_07
It just means you have to talk to them, and often people will help you. And so I find my who second. And then the third tier is buy. So the really, really rich, when they have a problem, they don't think, how do I fix it?

01:06:40 Speaker_07
They don't think, who can fix it? They think, how do I buy the solution to my problem? Because if I can buy the business, if I can buy the solution, then it's a higher guarantee of winning. And so that last one is really about your connections.

01:06:54 Speaker_07
And so I think if you understand deal making, you are honest with yourself about how much work you're willing to do one way or the other, and you are willing to ask people for help, I think just about anybody can run a business.

01:07:09 Speaker_07
Now, can anybody run Amazon? No, of course not. Could anybody run your businesses, which are quite big? No, of course not. It's really like the level of skill to the level you're at.

01:07:19 Speaker_07
But we don't say to people, you know, well, not anybody could buy an individual apartment and live in them. We ask like, what do you want? And how are you willing to work in order to get it? So I think the same thing with businesses.

01:07:35 Speaker_07
It's like, okay, we have what's called the deal box, which is a little slightly technical, but basically the idea is Oracle of Delphi says, know thyself, right? Most important thing we can do.

01:07:45 Speaker_07
And in business, you basically want to have your little deal box of what you want. So do you want income of X amount? Do you want it to be located in LA? Do you want it to scratch an artistic itch and make you money? And you sort of fill out this box.

01:07:59 Speaker_07
You know what you want. And then again, you know, the universe, I think a lot of times wants to help us out, but we don't know what we want. So how is it going to help us? Cause we can't tell it one way or the other.

01:08:09 Speaker_07
And I think it's the same with business, you know, cause we could go 15 ways from sideways. I'm like, we have something called the nine P's, which are like the nine ways you scale a business to nine figures. But I don't want to stop people.

01:08:22 Speaker_07
I want them to start small and reasonable and know that the biggest thing in between you and the thing that you want is the knowledge on learning the language of money, on getting after it kind of intensely, and then on asking for help.

01:08:36 Speaker_07
Like, if you have those three things, you can at least start. And I don't want people to stop because they don't have XYZ leadership skill. Like, I believe in your ability to figure it out.

01:08:45 Speaker_03
Yeah. Yeah. And you might make some mistakes along the way. Oh, you will. Yeah, exactly.

01:08:50 Speaker_07
Just don't make mistakes. Like the only rule that I really have is don't do a deal so big that it can wipe you out.

01:08:56 Speaker_04
Yeah.

01:08:56 Speaker_07
Make sure your first deal is reasonable or you help other people bring on risk to level it out. So like if I'm young and I have no cash, should I go buy a million dollar business? Of course not. What would I do?

01:09:07 Speaker_07
I might go, and I might partner with a couple friends, and I might say, hey, do you want to pool our capital together? Let's buy this little business together. If it doesn't work out, it's not going to murder us. It's going to hurt.

01:09:17 Speaker_07
But we're going to learn a lot, and we're going to diversify our risk amongst us, and we're going to do it together. Or maybe you partner with your dad, or maybe you partner with your dad's friends, or your mom's friends, or whatever.

01:09:26 Speaker_07
And so don't think that you have to do this game of entrepreneurship and acquisition by yourself. You don't. The big boys in private equity don't. You don't have to either.

01:09:35 Speaker_03
How do you find someone who wants to sell a business? Because, yeah, I feel like that would be my next question of like, how do I even know someone? How do I find someone? Because it must be going great for them. Why would they sell it to me?

01:09:47 Speaker_03
Especially when I maybe know nothing about owning a hair salon or vending machines or whatever it may be.

01:09:54 Speaker_07
Right. Well, you probably already know this. How many people offer you businesses or stakes in businesses now?

01:09:58 Speaker_04
Yeah.

01:09:59 Speaker_07
I bet a lot.

01:09:59 Speaker_04
A lot.

01:10:00 Speaker_07
Why? Because you have a very high value skill stack that's very evident. People can directly attribute if I partnered with Jay Shetty, then he's probably going to market my stuff. He's going to give me brand recognition. There's a high level of trust.

01:10:14 Speaker_07
So there's what's called a trust transference. So the higher level of skill you have, the easier it is for you to find businesses. In fact, they'll often come to you.

01:10:22 Speaker_07
The thing is, though, even when we have a higher level of skill, we often don't really know what to do when it comes to us. We don't know how to do zero risk deals to us.

01:10:31 Speaker_07
And so I like learning dealmaking, even if you have a ton of skills and a ton of money, because you can do a deal that seems unfair, but because you recognize your value, the deal is incredibly fair.

01:10:42 Speaker_07
In fact, the richer you are and the more audience you have, money you have, which I call capital, the more coding ability you have, aka like tech Jeff Bezos engineering capability, or labor you have access to, so employees or people that will work with you, the better deals you can do.

01:11:01 Speaker_07
And that's like the 202, 303 level. And anybody who's listening who actually has access to money and capital, you are crazy if you're not thinking about doing deals and learning it because it is the ultimate positive form of leverage.

01:11:14 Speaker_07
So I wish that we learned this earlier. This is how so many celebrities get screwed, by the way. And, you know, they get screwed because they do a deal. They don't understand the terms they signed. Their agent understands the terms they signed.

01:11:28 Speaker_07
Their agent isn't actually incentive aligned with them long term. And so they end up getting screwed. Like it broke my heart when I watched that documentary with Val Kilmer.

01:11:37 Speaker_03
I haven't seen it.

01:11:38 Speaker_07
First of all, you would love it. It's beautiful. The documentary is beautiful. He wrote it, produced it, and directed it, and starred in it. And it's just a beautiful piece of art. But also, he lost everything. I mean, he has basically no money now.

01:11:50 Speaker_03
No way.

01:11:50 Speaker_07
Uh-huh. And the reason why is because of a series of deals that he did where other people made it and he didn't. Wow. And so even if you have a ton of money, you've got to be really careful about how you structure things in order to keep it.

01:12:01 Speaker_07
And the bigger that you get, the bigger target you have. And so it's important to think about that.

01:12:07 Speaker_07
And like the Russian proverb, trust but verify, which is like trust nobody, I'm sorry, trust everybody, but verify that they are actually on your best terms, which is why it always doesn't count unless you've signed on the line that is dotted, in the words of Alec Baldwin.

01:12:21 Speaker_07
So if you don't have deals coming at you because you don't have massive, you know, fame or money or whatever, like a normal person, then the easiest ways to find deals, it's called origination and private equity.

01:12:34 Speaker_07
So in private equity, if you think about what they do, they go around and they cold call small businesses. So they literally will cold call a plumbing company up all over the Midwest and ask like, Hey, you guys want to sell?

01:12:45 Speaker_07
Or I get them all the time because I own these. So our small businesses, Hey, can we buy your landscaping company? So one, one way you find deals is called on off-market deal searching.

01:12:54 Speaker_07
So you basically turn on what I call your reticular activating system, which is basically just a system inside of your brain that is trained from the African savannah to say, if I keep repeating this thing brain, it means it's important and I might die if I don't pay attention to it.

01:13:11 Speaker_07
And so in real life, what happens to you is once you play the game of business enough, then once you like deals, like have you ever gone into somebody else's podcast studio and because you probably are obsessed with podcasting, you walk in and you're like,

01:13:23 Speaker_07
Hmm, that's an interesting way to do that setup. I don't think I would do that. Oh, I like that they did that. Let's steal that, right?

01:13:29 Speaker_07
Your reticular activating system is so turned on to podcasts that you can't help but notice all around you things you would do differently or that you like. The same thing happens with business and deals.

01:13:38 Speaker_07
So now when I go into like a corner store or when I go into a restaurant, I go, Or Jim. Jim's get me for some reason. It's like, you have me. You have my credit card. You have recurring revenue. I come in here every single day. Sell me more shit.

01:13:51 Speaker_07
Why don't you sell me more things? You definitely should. And so one, I will say, as you learn dealmaking, I can promise you only really one thing when it comes to you becoming a better dealmaker, your reticular activating system comes on.

01:14:04 Speaker_07
So what's going to happen in deal finding, yes, you could cold call, just like private equity. But instead, kind of steep yourself in the type of deal you are looking for.

01:14:13 Speaker_07
Steep yourself in what skills you actually have, and then you're going to see them all around. You won't be able to turn it off. It'll be like when you buy a car, all of a sudden the car's all over the place after you bought it.

01:14:23 Speaker_07
You're like, did everybody? Was it a sale? No. Your brain starts making you notice it. And so the best way to find deals is you start just having conversations with guys, because again, cash loves curiosity.

01:14:35 Speaker_07
Every time you go into a small business, you just go like, Oh, amazing. I mean, LA is full of them. You walk into a cool retail shop. Oh, that's cool, man. This is your store? Oh, it is? I mean, probably 50% of the time it's theirs.

01:14:47 Speaker_07
And then you say to the guy, like, how long have you been doing this? A while? Do you want to keep doing this? Like, how's business going? You guys make a lot of money. How long have you been around? Is the kid going to take over?

01:14:56 Speaker_07
Are you going to keep going? Oh, this is so cool. I love this. Maybe I buy a little something. And then maybe I decide I want to own one of these businesses with them.

01:15:04 Speaker_07
all of a sudden I get to know the owner and I start getting into the curiosity where I get them to maybe consider that a young hustler who is really aggressive might be good for their business.

01:15:14 Speaker_03
Absolutely. Yeah, no, I had a really interesting experience of this last, maybe a couple of years ago. I was in a store that curates beautiful sets of books and that's not what they do professionally.

01:15:25 Speaker_03
They sell clothes, but they also have books in the store. And I walked in there and I was,

01:15:32 Speaker_03
I love I really enjoy books and I enjoy collecting and so I was looking around and these were all like new books they're all newly published they're beautiful and I bought a ton and they were just like and then one person at that store just said to me oh by the way like do you love books I was like yeah and I was like I'm really looking for vintage books though be cool to own some like antique books and things like that.

01:15:49 Speaker_03
And she said, well, oh, there's this random store around the corner. And it's like a printing press, like an old school binding book. But I've seen books in there before. Why don't you go check it out? So I literally go walk into this book.

01:16:01 Speaker_03
And basically, actually, first of all, I walk outside. It looks like no one operates it. It looks completely run down. You wouldn't walk past it and think, oh, cool shop. You'd walk past it and not even, you'd think no one's inside it.

01:16:14 Speaker_03
So I'm kind of looking around, I'm like knocking on the door just to see, I do see some books.

01:16:19 Speaker_03
And this lady opens the door and she's got like an old school binding press in there, an old school, you know, all the old school tools that how books were bound in the past.

01:16:28 Speaker_03
And then she's got this bookshop and I said, oh, I heard you might sell books. Like, could I take a look? And she was like, oh no, I just have these books because I got divorced a few years back. My husband owned a bookstore.

01:16:40 Speaker_03
He left me with like 50,000 books or something crazy. And she goes, most of them are at home, but there's probably like, I don't know, a thousand here or whatever it is. You can take whatever you want. And I was like, I'm happy to pay you, but sure.

01:16:52 Speaker_03
So I spent like two, three hours and I was like getting really, you know, I loved it. It was like, it was literally like being inside of a secret cave of books. And I was like finding all this stuff.

01:17:02 Speaker_03
So I got a stack of maybe like 20 books and I was like, Hey, look, I'd love to pay you for them. Like, you know, I'm good for it. And I'm grateful that you've even allowed me in. And I forced her a little bit, she finally took some money.

01:17:13 Speaker_03
And then there was one book while she was going through and she was like, I've been looking for this book for like five years. And she goes, I can't sell this one to you. And I was like, sure, like, I'm never gonna, you know, have it, whatever.

01:17:25 Speaker_03
Anyway, I come home and I started checking all these books out online. They were all worth like at least $100 each. I probably paid like five to $10 each for them. And it was just a really good example to me of like this random place

01:17:39 Speaker_03
And I wanted the books, so I kept them. But it was just this random place that was like this treasure trove of all of this great material.

01:17:47 Speaker_03
And had someone wanted to go in and buy 50,000 books and sell them online or sell them anywhere, there was a real business there. And it was a very simple example of just how easy it was to come across something that I wasn't even looking for it.

01:18:02 Speaker_07
Well, yeah. And, you know, it's a funny thing I do sometimes. One, it's so lovely. And also, how happy was she probably at the value you found in it?

01:18:10 Speaker_04
Yeah.

01:18:11 Speaker_07
Like, did you feel like you were taking advantage of her or did she feel like, wow, are you sure? Like, I'm glad you're spending time with me.

01:18:18 Speaker_03
Absolutely, absolutely. She was so happy.

01:18:20 Speaker_07
And I think this is something we don't realize because our generation is highly transactional.

01:18:25 Speaker_07
We're a highly transactional generation with immediate feedback loops, AKA social media, with a high status game that we play with a lot of attention on us because you get a lot of attention when you're young and hungry and moving.

01:18:38 Speaker_07
But as we get older, I mean, women will tell you this all the time. They'll warn you that as you get older, you become invisible. Like a middle-aged woman will say, often nobody sees me. And one of our copywriters, she was so lovely.

01:18:49 Speaker_07
She said a thing to me. I was like, oh, she dyed her hair blue. And I was like, Marcelle, it looks great. She's an older woman, probably mid-50s. And I was like, it looks great. What was the impetus?

01:18:57 Speaker_07
And she's like, you know, as you get older, I realized that nobody would talk to me, and I feel like they were looking through me. And she's like, so.

01:19:04 Speaker_07
She's like, so I was with one of my little nieces and we dyed our hair little strips of it pink together. And she was like, and I was walking across the street and this young man kind of yelled over to me and he was like, hey mama, like the hair.

01:19:16 Speaker_07
And she's like, I can't remember the last time a young man talked to me. She's like, so anytime I now feel a little out of it, I dye my hair blue. And to be fair, like in the past, sometimes when I saw people do that, I was like, really?

01:19:29 Speaker_07
What's going on here? Like, what's the move? And then I realized, oh, like just because we value something one way doesn't mean that everybody else values it the other way.

01:19:39 Speaker_07
And so in order to break your frame and to see businesses all around you, don't assume that the same things you value other people do. It's like, I've never really believed in the golden rule, which is treat others how you want to be treated.

01:19:50 Speaker_07
It's like, by and large, treat them how they want to be treated, unless that breaks how you want to be treated. And I think that's the same with business owners.

01:19:57 Speaker_07
I mean, my Uncle Eb, which is one of the main reasons I started publicly talking about businesses online, he had a business, did a couple million dollars a year in revenue. And it's called Eb Homes Plumbing. It was in Phoenix, Arizona.

01:20:11 Speaker_07
And he got sick with cancer and decided he wanted to shut the business down. You know, he's in his 70s and was like, you know, I'm ready to be done.

01:20:22 Speaker_07
And what he didn't know at the time is that a business that is doing a couple of millions of dollars in revenue and a couple of millions of dollars in profit is worth millions of dollars.

01:20:30 Speaker_07
And so this man who spent his life building up a plumbing company that probably would have thought, honestly, like if he was here, he would say, Cody, I couldn't have sold that thing.

01:20:40 Speaker_07
Like that wasn't really, you know, it was, it was sort of, and, and this is what most baby boomer business owners think. They're like, who's going to buy this? Because how many times have you had a business where you didn't want to be in it before?

01:20:51 Speaker_07
Have you ever had that before? Yeah, absolutely.

01:20:54 Speaker_07
If you're in a room, sometimes I go out to speaking stages and just for shits and giggles, because people will always go, if a business was profitable and it was going to continue to be profitable, nobody would sell it.

01:21:05 Speaker_07
And I go, okay, let's play a game. Business owners, raise your hand. Everybody raises their hand that's a business owner. I go, cool. Keep them up.

01:21:12 Speaker_07
If you would sell your business at the right price and the right terms, if it came along, keep your hand up. What happens? Everybody's up. Not one. If you go down and I go, liars.

01:21:21 Speaker_04
And I laugh.

01:21:23 Speaker_07
Because the truth of the matter is you haven't been in the game long enough if you put your hand down. But if you've been in the game long enough, you go, absolutely. Now I wouldn't sell every one of my businesses.

01:21:32 Speaker_07
But there is at some point one business, and if you call me on the right day, maybe I would. So I think we have to like change our programming to realize all around us every business has a value. That book selling business that shut down,

01:21:47 Speaker_07
I bet there was a value in the lease that they had. It might have been in California. Sometimes they have leases that are locked in. There could have been value in just the lease contract to transfer it.

01:21:56 Speaker_07
There could have been value in the assets, the books. There could have been value in the employees because you can do an ACWA hire. There could have been value in the website listing. What about the Yelp and Google reviews?

01:22:06 Speaker_07
There could have been value in the IP. What about the logos and the brand and the name? What if they had one of those old school, original, you know, Cody.com websites before, like, we now have to have websites that are like 452 words, right?

01:22:19 Speaker_07
And so every single business has some value. And if you can find the business where the value to the owner is not as much as the value is to you, then you got a really good deal.

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01:25:56 Speaker_03
So well said. Cody, I'm just like, you know, I'm so happy that you're breaking this down for everyone because I think it's such a It's just not what I'm hearing. It's not what people are talking about.

01:26:07 Speaker_03
It's not the, it's not the, and I'm glad, because it's not the get rich quick solution either. It's not the, hey, you can be really rich in 12 months and not worry about anything, and that kind of feeling. I wish. Yeah, yeah, you wish.

01:26:21 Speaker_03
And I think, I really appreciate you nailing it by just saying it's grit, right? That's what's required. That's deeply required. What's a skill that you think

01:26:30 Speaker_03
you wish you'd known you had to develop at the beginning of the journey that you learned too late?

01:26:35 Speaker_07
I wish that I didn't have stories to myself about me being bad at math and money. I think most people have a story when they're younger about how bad they are at math. I have one that I think really messed me up.

01:26:47 Speaker_07
I was in middle, no, no, it was high school. I was at Arcadia High and I had a math teacher. And I wasn't very good at math. I struggled. I think I might have a little bit of dyslexia. I'm not sure.

01:27:00 Speaker_07
But I just couldn't get the numbers to stay in my head correctly. And so I was sort of struggling. And I remember one day the teacher was getting really frustrated with me. And teaching is a hard job, so I get it.

01:27:10 Speaker_07
But he looked at me in front of the class and he said, man, I think Helen Keller would have a better shot at winning an archery contest than you would at winning in finance.

01:27:19 Speaker_07
And at the time I was like heartbroken about this and like embarrassed, you know, and did it in the way teenagers do. I don't care, whatever." But I was very sad about it.

01:27:29 Speaker_07
And then I love my parents deeply, but my parents always used to say to my brother, you're so smart. You're so smart. You're so smart. You're so smart. And to me, they would always say, you work so hard. You work so hard. You work so hard.

01:27:42 Speaker_07
And at the time, I was kind of mad. I'm like, I'm also smart. What about me? And they would always be like, well, Cody's not very good at math in the same way that they would say I'm not very good at singing. The singing is true. I'm not good at that one.

01:27:52 Speaker_07
But that math thing stuck with me for a long time. And so I always thought that it was big and hard and scary to be quote-unquote good at math. And when it comes to making money, the math is really simple, guys.

01:28:04 Speaker_07
And I'm bad at making math, so bad that Helen Keller would be better at archery than I am. And so if any part of this skill is scaring you, I think it often starts with like, oh my God, I look at a spreadsheet and I panic.

01:28:17 Speaker_07
You know, I have to calculate something and I panic. I look at a calculator and I panic. And I would say just like lean into that slightly.

01:28:24 Speaker_07
Because I think in finance we do a very sneaky thing, which is I think we try to make it seem really scary and hard for the average person to become rich. Why? Because if it's scary and hard for you to do it, guess what I get to do?

01:28:38 Speaker_07
I get to charge a lot of money for it. And so that's why most of us take our money and like think about it for a second. We take our money and we give it to other people to take care of.

01:28:48 Speaker_07
Now, when you give your kids to other people to take care of 100%, there are opinions about that. People say, no, you've got to take care of your kids. You've got to grow your kids. But with wealth, we can just say, no, no, I don't understand anything.

01:28:59 Speaker_07
I just give it to this guy over here and he figures it out. That's really not how we should treat money. And so the main skill that I think you should think about is one of my mentors said to me, Money is a cruel mistress.

01:29:10 Speaker_07
She'll leave you if you don't pay attention to her." And I think about that a lot. Like, just give the money a little attention. Give the math a little attention. You're more capable than you think you are.

01:29:20 Speaker_07
And it's really not possible to be bad at this type of math. So if in your head you think, I'm bad at math, I'm bad at spreadsheets, it's really not possible. I'm bad at calculus, but you can figure this stuff out.

01:29:32 Speaker_03
Cody you are awesome and i love that advice and i think everyone who's listened and watch this episode now has a game plan of how to negotiate something at their workplace figure out how to invest in a company or a small business.

01:29:48 Speaker_03
recognize if you're at that place if i just want to get over the fear that i'm bad at math or that money is bad and i can't wait for everyone to dive into mainstream millionaire this is the book that cody's got out right now i want you to go grab a copy if you've enjoyed today's discussion this is one of those books that i hope you read with your friends share insights maybe you invest in something together build something together it's a great book to pass on to a family member or a friend who's been struggling with money thinking about it please do not

01:30:17 Speaker_03
hesitate with this because it's so easy to keep pushing money off and keep having it be a source of anxiety in your life.

01:30:24 Speaker_03
And I think Cody's broken it down and make it really simple based on how to overcome your fears and go create something brilliant. So Cody, thank you for putting your heart and soul into this work.

01:30:33 Speaker_03
And we end every episode of On Purpose with a final five. These are a fast five where you have to answer each question in one word to one sentence maximum. So Cody Sanchez, these are your final five.

01:30:46 Speaker_03
The first question is, what is the best financial advice you've ever heard or received?

01:30:51 Speaker_07
that other people's money is actually feasible. People think that passive income is a lie, that getting other people's money is a lie, but they tell you that because they are usually the ones on the other side of the coin.

01:31:04 Speaker_07
So if you want to see about other people's money, look to private equity and mimic it.

01:31:09 Speaker_03
Let's, let's go off piece for a second on that because I think we didn't touch on that. If you want to raise investment for people who want to gain investment, maybe you've got a cool new idea. Maybe you've been tinkering something, got a deck.

01:31:21 Speaker_03
What, what, what should you have if you're going to go and ask for someone's money?

01:31:24 Speaker_07
Oh, yeah, that's a really good point. It's really simple. A couple tactical things. One, something called a tear sheet or a one sheet.

01:31:31 Speaker_07
So this is basically like, think about it like a baseball card with all the stats on the baseball card, but for the deal that you're going to put. So it's like, here's why I think it's good. Here's why I think we'll make money.

01:31:41 Speaker_07
Here's what that's based off of. Here's what a summary it is. Here's why I'm good at it, too, and you should invest in me. And here's why I think you should be the one to invest. That's called a one sheet or a tear sheet. The second one is a pitch deck.

01:31:55 Speaker_07
From Goldman, I learned something called the three Ps, which is people, process, performance. So I do that in all my pitch decks, which basically is like, why us? Why should you bet on us?

01:32:04 Speaker_07
Because at the end of the day, if you're asking for somebody's money, it's about the opportunity for sure. But it's really like, do I want to invest in J? Do I believe in J? And then second is process. So like, what is the opportunity?

01:32:16 Speaker_07
What is the way we're structuring this? What are we investing in? What is the process by which you're going to take our money and go bring it back with friends? And then lastly is performance.

01:32:25 Speaker_07
So if I give you this, why do you think that I'm going to make money? How much money am I going to make? And why should I invest in you instead of all these other things?

01:32:35 Speaker_07
So if you have those two things, that is the like typical one-on-one for raising money.

01:32:40 Speaker_03
Great answer. No, I think it's really important for people to know because I think so many times we just kind of turn up and hope.

01:32:45 Speaker_07
A hundred percent. And I wish people would have told me that. It's like sometimes when you have those little easy tactics, you're like, okay, now I feel good.

01:32:50 Speaker_07
You know, there's more to it than that, but at least, you know, like, hey, if I want to drive a car, I need the car and I need some gas. And so now you guys got that.

01:32:57 Speaker_03
Yeah. And I think sometimes we're so focused on convincing someone that we have the best idea and not focused on convincing someone we understand how to execute it.

01:33:06 Speaker_03
And I think anyone who's looking to give you money is looking to whether they think you can execute it. Because I hear good ideas all the time. The best investors in the world hear amazing ideas all the time.

01:33:18 Speaker_03
And ideas are just not the thing that works. Like, you know, you always talk about like Google was like the 21st search engine. Like they weren't the first search engine. It wasn't a unique idea.

01:33:28 Speaker_03
It was just that they had a great way of executing and why they've evolved into this mega, mega, mega business now.

01:33:35 Speaker_07
Yeah, exactly. Best predictor of future behavior is past behavior.

01:33:38 Speaker_07
So if you can show them you have a history of winning and even show them some instances where you didn't win, why and how you're never going to replicate that again, people are going to bet on the hustler who is on a winning streak.

01:33:49 Speaker_07
You know, oftentimes, right, you know this, if you go to gamble on a game in sports, you don't gamble on the person that's have a losing streak. Why? Because it's actually quite hard to break.

01:33:59 Speaker_07
And so I think also if you can show a history of winning and that's a narrative you can frame, you're more likely to get cash too.

01:34:05 Speaker_03
That's great. Second question, what is the worst financial advice you've ever heard or received?

01:34:10 Speaker_07
That money is scarce and hard to get. If you think money's hard and scarce, then you're probably not going to get it. And I think people want you to think that, and that does not serve you at all.

01:34:24 Speaker_03
Question number three, the best $500 investment you ever made.

01:34:30 Speaker_07
Or 2,000, 500 or 2,000? I think this is a little cliche, but health and wealth are super tied. the best money I've ever spent are probably two things, a sauna and a cold plunge.

01:34:48 Speaker_07
And I know that sounds like super tech bro Twitter, but the truth of the matter is, is that if I can get a little bit more energy in the beginning of the day, it seems to carry through the rest of my day and make me more money.

01:34:59 Speaker_07
So whatever your sauna and cold plunge is, and I think I bought mine on Amazon for literally like a thousand bucks each, then that's money well spent.

01:35:11 Speaker_03
Great. Question number four, the biggest waste of money you've ever spent. Not the amount, but like something that was all complete waste.

01:35:18 Speaker_07
The biggest mistakes I've ever made are always not things I did or bought, but people I chose. It was, it's always about the people, the good things and the best things.

01:35:28 Speaker_07
So be careful those you partner with, spend time with and invest in and know that those will often be the things that give you the most heartache or make you the most money.

01:35:38 Speaker_03
Let's side note on that too. How does, we talked a bit about it before too, but for someone who's like thinking about finding the right business partner, knowing whether you can trust someone, obviously you never know anything. We talked about it.

01:35:52 Speaker_03
How do you set yourself up for success beyond the negotiation that we discussed?

01:35:56 Speaker_07
I have a couple different rules. One rule is, um, you don't get married on the first date. Don't do a deal or start a business on the first date, which means I have a one year rule.

01:36:05 Speaker_07
I do not get into a longterm partnership with anybody that I haven't known for at least a year in business. A lot of times there's this, you know, that rosy phase you have when you're first dating with somebody.

01:36:15 Speaker_07
You're like, the thing is we're in love and we were meant to be. And then about six months later, you're like, also no. And so same thing with business partners. Give yourself a nice 12 month window. It's hard to hide who you are for a year.

01:36:27 Speaker_07
The second thing when doing business deals is when you partner with somebody, You don't actually want to partner with somebody that's just like you. It's the same with marriage. It's why dating apps are so tough.

01:36:38 Speaker_07
I mean, I was talking to Sean Rad about that, the founder of Tinder, the other day. I was like, the thing is, you don't realize what you did, but you allowed people to self-select for people that are just like them, and it turns out

01:36:49 Speaker_07
The statistics all show that we do not last in marriages as long or relationships as long when our person is just like us. We actually have to have this like creative difference between the two of us.

01:36:59 Speaker_07
There's a yin to the yang in everything in the universe. And so the studies tell us you need two different types in order to succeed long term. Some overlap is necessary, obviously, but you don't actually want to date yourself.

01:37:10 Speaker_07
It's the same with a partner. Make sure that if you're a great salesperson, you're not pairing with another salesperson. You've got a great operational person and a great salesperson, maybe that works.

01:37:20 Speaker_07
And the last thing about great partnerships is everything else is figureoutable if there is enough drive. But my father says, you can lead a horse to water, but you can't make him drink. And so I always over-optimize on this idea of desire.

01:37:35 Speaker_07
Like, why do you want to partner with me? And do I believe that that why is so big that we can overcome anyhow?

01:37:41 Speaker_07
And if your why is like, I kind of want to make a couple dollars on the side, but I might do this, but I might do this, but I might do this. I call you a toe tepper. You're actually not all the way in. You're not fully in with me.

01:37:51 Speaker_07
And so at our company, we just had one of these people the other day, a young kid, he's a stud, but he came to us and he was like, yeah, I want to do this job with you, but I also have these other things.

01:38:01 Speaker_07
you know, once you've interviewed, I've interviewed thousands and thousands of people by now. So, you know, I can kind of get to the heart of it.

01:38:05 Speaker_07
And I remember Tanner was sitting in the interview with me and Tanner's face was just falling as he was listening to it because I was kind of ferreting out a few things.

01:38:12 Speaker_07
And the young, the young guy was like, well, I have this channel and I want to grow this and I want to do that. And I was like, why do you want to be here then?

01:38:20 Speaker_07
Like, if you want to do all those other things, like, no, no, no, I want to do this too and we can do it all together.

01:38:23 Speaker_07
And I said, the thing in life that I wish somebody had told me earlier is when you're starting out, you can never be excellent at multiple things at once. Eventually, you can have excellence in multiple things because you can attract top talent.

01:38:34 Speaker_07
But in the beginning, you're either all in or you are a barely concealed series of distractions. And so a partnership, make sure they are all in and their why is super, super big. Otherwise, they should go find their why and it's not you.

01:38:48 Speaker_03
Yeah, well said. Fifth and final question. If you could create one law that everyone in the world had to follow, what would it be?

01:38:56 Speaker_07
Oh God, that's a hard one. Just one. One law in the world that everybody in the world had to follow.

01:39:02 Speaker_03
Take your time.

01:39:03 Speaker_07
How would we ... We'd have to think legally about some of the caveats to this. We'd want to make sure we crafted the language correctly in order to not have perverse incentives or second and third order effects.

01:39:13 Speaker_07
But it would be something to the tune of like ... It would probably be something about taxes. It'd be like, don't allow centralization of tax power above a certain amount. And the reason why is ...

01:39:26 Speaker_07
kind of technical, but basically we want to give as much money as possible back to you, the builders. The only way that money and thus freedom is created is from individual humans who build things. Governments cannot build things.

01:39:41 Speaker_07
Governments can take capital from somewhere else and they can allocate it to other things and equalize. And that is great and wonderful and necessary. But I would be really careful about what I see as like

01:39:53 Speaker_07
core to our society today, which is, are we allowing too few of people to control too much of us? And it starts with our money. And I know there are lots of other things we could care about when it comes to politics, and that's very important too.

01:40:07 Speaker_07
But I was in Argentina when they closed my business and made it illegal overnight because they nationalized it. And I have seen countries fall apart at the floor of taxation and nationalization.

01:40:19 Speaker_07
And so I guess it would be a government is never allowed to nationalize and a government is never allowed to overly tax. And every chance we get, let's believe in the builder and the individual and not the big, huge entity.

01:40:32 Speaker_07
Like you guys can figure out, you don't need them all the time.

01:40:35 Speaker_03
I love it. Cody Sanchez, the book's called Main Street Millionaire. Everyone, make sure you follow Cody on social media. If you don't already, subscribe on YouTube, follow on Instagram, TikTok, get the book.

01:40:46 Speaker_03
Cody, I hope you'll come on many, many more times. It was amazing talking to you. Honestly, you've opened my mind. I'm sure you've blown everyone else's mind.

01:40:54 Speaker_03
And I want to thank you for doing the work you do and really appreciate how practical, tactical, and accessible that you're making this world of money that's been so hidden and kept aside. So thank you so much.

01:41:06 Speaker_07
Well, thank you. And maybe the only thing, can I add one thing to the audience? Of course you can. The only thing I would add is like, um, anybody who is out there building right now, I hope you know how important you are.

01:41:17 Speaker_07
You know, it is, it is so critical to have builders in this world and it is so hard and you're never alone and you are so necessary and without you the world literally stops. And so 3% of Americans own a business. 3%. We need more of you builders out there in the world.

01:41:31 Speaker_07
And so everything we do is to try to create more humans who have skin in the game, who are creating things with your beautiful brains and your hands. And I'm in awe of you.

01:41:45 Speaker_07
So every time I meet the laundromat owner, the car wash owner, the entrepreneur that's building something inside of a business, I just hope you know there's so much dignity in the world. And it's because of the work you do.

01:41:56 Speaker_07
And without you, you know, it's actually not good to go back to the Stone Age. Like we have all the things we have today because of each of you. And that includes you and building this business. So thank you for having me.

01:42:05 Speaker_03
I just want to say that I've appreciated you so deeply offline. And your work online, of course, speaks for itself. It's been so successful and congratulations.

01:42:14 Speaker_03
And so to be able to dive into this theme with you that I think is so important for the world right now is a real blessing. So thank you.

01:42:22 Speaker_07
Well, thank you. I think, you know, you meet a lot of people in real life that you kind of know online. And so at a certain point, I think you can kind of tell when the human is going to match the human. And that's what I felt with you.

01:42:32 Speaker_07
So it's cool for the people listening too. You got to question everything. And sometimes you meet people that you look up to and you're like, dang it, you know, not quite what I thought it was going to be. And so, um, like real respect to, for that.

01:42:44 Speaker_03
Love it. Thanks, Cody. Yay. That was awesome. Thank you so much for listening to this conversation. If you enjoyed it, you'll love my chat with Adam Grant on why discomfort is the key to growth and the strategies for unlocking your hidden potential.

01:43:01 Speaker_03
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