0:00 money equals Freedom so the more money you can make the more decisions that you can make by yourself if you understand what attracts money then you probably will never have to work again in your life everybody can make hundreds of thousands of dollars a year over time if they focus on earning it the rich actually know how to use debt intelligently they understand that money is simply a tool and a toolkit every single way to make money is sort of like a game CU you never get rich investing the only people who are going to tell you to go invest first to make your first million or people that are trying to sell you something it's the best way to make money is just [Music] to you built a business around acquiring
0:48 other businesses and enhancing them where did this all get started for you and what have been the key moments over that journey I stole it all from private Equity so I you know I never would have thought about buying businesses and it seemed too big and scary and I didn't go up a lot of money or cash or understanding of money and so if you would have told like 20-year-old Cody you would be buying businesses and then buying more businesses and building on top of them I would have thought I had to win the lottery or something and uh but thankfully I got into finance and I and I kind of hated finance and I didn't want to be anybody in any of the companies uh even the people at the top I finally realized that after after like 12 years but I was like wow they really
1:33 understand this language of money and they know how to buy assets that make money leave and bring back more friends and so I was like I want to learn how to do that and I just don't want to have to do it in a suit and I want to be able to do it in businesses that I want to be able to do it and I want to be able to hold the businesses forever as opposed to buy them you know split them up for parts and then sell them off and so it got started because I'm a pretty good copycat you know I was just like oh here's a model that works can I do the same thing but a lot smaller cuz I don't have that much cash and then if it keeps working can I scale up to be like the big boys and so that's where it started I think sometimes the best way to make money is just to follow other people who are really good at making it try to mimic the same thing and then add a little bit of your own sprinkle to it talk to me more about that language of
2:20 money what does that mean yeah most important language I've ever learned this money so growing up I didn't understand anything except how to save maybe how to spend less right and you know my parents were my mom was just a 30-year special education teacher my dad uh came from an immig immigrant family to the US and so they didn't have any money and their biggest concern was like don't fall into debt kind of like Dave Ramsey right no debt um save everything you possibly can don't use credit cards the typical things we learned but when I went into Finance I realized that's not how the rich think the rich actually know how to use debt intelligently they understand that money is simply a tool and a toolkit there's no emotional value to it and that if you understand what attracts money then you
3:07 probably will never have to work again in your life because you will just be able to take money and like a magnet sit it next to more money and it'll bring it over and uh it took me a long time to figure out how to do that since I was a journalism major but once I realized oh you know you can people say it on the internet and sort of like a kitchy way now you know get other people's money you know passive income I've never earned a dollar passively you know that's always been active but once you have a decent chunk of change then you can put it into other people spending their active time to make more money for you and that's what I wish I learned early on and and the algorithm that taught me that the most was you know every single way to make money is sort of like a game and there are some games that are low-level games
3:54 so think about it like pickle ball let's say if you want to become a top paid athlete get all the chicks you're probably not going to go play pickle ball right it is a game that people play it's not a highly paid game and maybe it's not that high of a status game as opposed to football you know soccer internationally oh well some of the highest paid athletes in the world also you get lots of checks if that's what you're into and so if you're going to think about where do you spend your time if you want to be an athlete you think about what your skills are but also what's like the best indicator of future success other people who have future success and so with money I realized oh wow if I want to make more of it I probably don't want to be a teacher because that's just not a highly paid job and probably I want to be in the industry in which more people than anywhere else are on the Forbes let's
4:40 say 100 list and that would be Finance so the number one category of people on the Forbes 100 list is some version of Finance whether that's buying and selling companies whether that's being an active investor uh in equities whether that's um being in in hedge funds but that's the number one way and so I realized oh okay well I'm going to go learn Finance because they seem to understand how to attract money is that like was it a freedom thing to get out of that like you felt like your time with somebody else's um it was more a curiosity thing in the beginning I love I love the ability to go deep into a subject matter that uh that I think is rare and so you know if you look at skill sets the way we determine if
5:26 something's rare or valuable these days is typically monetarily right it's not always the best way maybe spiritually it doesn't make a lot of sense but our society seems to say your skill set is ranked on how much money it makes and so when I thought about it that way um I just wanted to go win the game I wanted to play the game and I wanted to win and the highest game I could see was one in which you you go and get Financial Freedom and then with Financial Freedom it wasn't that I wanted to work less it was that I don't want other people to assert their will on me and so when I was a journalist I saw a lot of people along the US Mexico border who they had a last name lick Sanchez just like me but they were being human trafficked I mean I was in Wares where women were getting mutilated along the yeah I mean I saw I've cross crossed
6:13 the border hundreds of times illegally documenting sort of what happens in Conflict zones and um and after a while I was like what's the difference between them and me it really wasn't that I was American it was they just didn't have any money they had no resources whatsoever so the world asserted its will on them and I didn't never want that to happen to me I would rather try to architect my own world and I think the key to that is money yeah you have to have a little bit of money to create the opportunity how do how do you go about doing that like do you work at a nine-to-five job and save out money and build these income streams or is there another approach to this yeah well anytime you hear advice from somebody on the internet I always think you should look at their biases right so mine is
6:59 that I was a I was risk based I didn't want to go out and become an entrepreneur and sleep on a couch or a floor and make zero dollars and have some crazy idea I didn't have any of that I was kind of scared and I didn't know what my big move could be so for me the best way to do it was I went and worked at 9 to5 in the industry that paid me more than anywhere else which is finance which wasn't really 9 to5 I'm guessing oh God not at all no no it was quite long um but when you're young you have an incredible ability to withstand pain and it's much easier to do it when you're in your 20s than it is in your 40s or 50s so I was like well I could either have short-term pain in the form of long hours uh and long-term gains or I could have short-term fun and in the future I will probably be sacrificing
7:46 things for that so I'm like no when I'm young and hungry let's go hard let's work 10 11h hour days and let's let's be voracious in knowledge accumulation and then once I have some skill set that is valuable enough enough then I can assert my will on my hours Etc but to begin with it was just let's go to finance because they pay really well I want to understand the game of money and after you do that then you can go and build whatever you want but I think starting with a 9 to-5 is super underrated today I think so too like you can learn so much somebody else is paying you to learn if you have the right mindset and approach but not many people seem to have that approach oh yeah I I mean I I totally agree so they when I started at Vanguard they said that they put up $100,000 uh a year into their new hires
8:33 and so we had it was called Vanguard University and they trained us on Securities and bonds and I think I have four or five licenses in the Securities industry from my days of Vanguard and then I went to Goldman Sachs where I think to get into Goldman as like a little peon analyst which is what I was um I think I had to do like 13 interviews and like PowerPoint presentations and this and at the time I was like this is very annoying but actually what an Incredible Gift all that training lths and uh and you go to a startup there's no way they're putting you through a training program there's no way they're critiquing your PowerPoint skills um you know everybody's just barely treading water and so I think if you have a chance to go to a big Corporation where you get well paid they train you a lot and then you put an exit clock on two years from now I'm going to leave at the moment in
9:20 which they won't pay me more or I'm not learning and because I did that I accumulated Millions before I ever ran my own business and so a lot of people ask me like how do you have all this money to invest I'm like well you know you're in finance for 11 12 13 15 years you learn to invest the entire time you're doing it you're making a lot of money while you're doing it and you're putting the money back into the stock market and into deals and so I didn't have to risk a lot of my own Capital except in the beginning not being paid very much because you know I was brand new and I didn't know what I was doing imagine I'm a novice and I've never invested a scent and I have five minutes with you like what's the single biggest lesson that I need to take away lesson number one is you never get rich investing you get rich earning so the
10:05 only people who are going to tell you to go invest first to make your first million or people that are trying to sell you something because it's just really hard to make money investing without money that's rle number one your biggest Roi is on you and your time and then rule number two would be once you understand that it's how can you make your time your best investment possible and so that's why you have to obsess on increasing your earnings potential and a lot of times people hear this and then they go well I negotiated with my boss and you know they didn't give me arrays and I'm like no no no that's not the play the play is you understand how a business actually makes money and how you make money for a business and how every action you make makes a business more or less money and then you try to negotiate a percentage of the money you make the business and like if you are a
10:52 employee right now you would be incredibly rare and Incredibly valuable if you went to your boss or the CEO of the company depending on size and said something like hey I want to make more money at this company but I would never want to take more money just because I want it of course I understand how business Works instead I was thinking if I hit this goal which is 25% above the goal that you set for me I'd love to make 5% of that additional 25% I brought in you get to keep the extra 20% you beat your goals I look good compared to all the rest of everybody else and I make money if you make money would you be open to something like that and they might say no and life will be littered with series of rejections continuously
11:37 if you want to have any success whatsoever but they might also say yes or HM we can't do it that way but we could do it this way and then you learn how the business makes money and most people will never do that because they just say I want an extra 25k or I want to raise or I'm going to leave and that just pisses your boss off I think most people don't have that mindset like you're either directly contributing to revenue or you're helping somebody contribute to revenue or you're a cost 100% And if you're a cost then what are you doing there if you're not contributing in one way or another to revenue yeah it's the best way to make more money is to figure out one are you a cost center or a profit Center and then two how much of a profit Center or cost center are you and if you can do that it's not just that you're helping your boss in the company you are now
12:24 thinking like an owner for the first time ever and you don't have to own a business outright to think like an owner and get a piece of a business it's called partial acquisition and you know a way that you can get part of a company for your work or Sweat Equity is simply by saying I understand what the business's goals are and I understand the next level we want to get to and if I help us get there could I get some sort of participation for that that is how really rich people think and anybody that goes no that's not possible sadly you will never be rich if you think that way I think like an big organization I could see them saying no to that proposal but if your small business owner was saying no to that proposal I'd be starting to look for a new job you'd be shocked yeah I mean think about it for you too if they were like Hey listen
13:11 Shane what if I brought in these three Partnerships and you like them you sign off on them they're on brand for you they bring an extra X dollars for you would I be able to take a cut of the extra Partnerships I brought in even though I'm just your producer you'd be like yeah sure dude yeah great 100% you know and if you do work in a big company then the only question you need to ask is instead of saying if I do this could I make more it's in what part of the company if I work more and if I hit my goals can I make more money what jobs do we have at this company like that they're typically sales jobs right maybe a leadership or recruiting job um but you want to get on the side of the profit Center and that's how you earn more is is there different
13:58 sort of phases to our career when you think about it like is it like 20 to 30 we should not be worried about money at all just learning as much as we can and then switch over yeah or how do you how do you think about that yeah I we talk about it like uh learn earn invest repeat so I think when you're in your 20s you're in your learning phase you still want to try to increase your earnings but if I had to choose between earning more or learning in that period i' optimized for learning because learning has unlimited up side potential like you're never going to go in your 20s from making 30k a year to 300K a year per year because you negotiated a better salary that's a very UNH likelihood what you very well could if
14:43 you learn something additional and that onee compound that over 30 years to multiple millions or more and so I obsess on learning first and then as I get into my later 20s and early 30s I start thinking more about earning so how can I make more money like my first job I made $37,000 a year when I was at Vanguard I thought that was a bajillion dollars and uh and then I realized quickly it wasn't especially after taxes but that first job in Vanguard set me up for you know jobs at four the biggest financial institutions out there and an ability to earn more um when I didn't want to be in the world of Finance anymore and like you said they invested $100,000 in your education Oh Yeah from being there totally and then if I think back even further
15:29 you know there was a really interesting study and I wonder if you saw it it's called um economic interconnectedness and so basically the idea is this if there's two groups of uh two neighborhoods with two different groups of people in them where on average the average salary is the same in both neighborhoods right so I don't know average person in both neighborhoods makes 50k it's a lower income neighborhood on both of them but in neighborhood b as opposed to Neighborhood a they have a few people who make a million dollar a year so they just have a few rich people in this neighborhood that interact with some of the poorer people as opposed to this neighborhood they really don't have any if you are in this neighborhood and even if your family is in that $50,000 a year bucket but you interact with some of
16:14 those rich people AKA you have more economic inur connectedness this group of people has a 30% higher earnings over the course of their life through the same skill set and experience and what I thought was really interesting about that is that it really just goes to show you kind of want two things you want somewhere you can learn as much as humanly possible and you want to be somewhere where you around people who have more money than you do by orders of magnitude if at all possible and we don't really know if it's causation or correlation but we do know that if you are around people who are wealthier on average you tend to be wealthier even if that's not your background or Skillet and that I think is kind of liberating why why do you think that that is I have a gap but my guess would be you realize
17:01 that other things are possible you're not you don't have this ceiling of these like false rules that we learn and then all of a sudden it's like I can do more I can get out of the situation I can aspire to more yeah I mean I think I think there's a couple that one seems the most likely to me it's just W it's like the um H where was it it was like somewhere in the Nordic countries where they had mostly had female um heads of state I don't remember what they call them there if they're the head of parliament or but mostly female heads of state and so there was a small school uh program where the uh boys and girls in the school were asked you know How likely are are you to be the next I don't know head of parliament or whatever and in the Nordic countries uh all the little girls raised their hands because they had seen that example so much whereas in the US and this I think
17:48 this study was done more than 20 years ago so in the US it was all the little boys that raised their hand like I could be president right and it was just had you seen an example that looked like you previously so I think think that's probably the the driving Factor it could also be um you know you have a conversation with these individuals and you get networking opportunities you have a conversation with these individuals and you just ask them advice so you have advice from people who have already done a thing that you want to do which is an unfair equalizer and it could also be that you know maybe they hire you I mean I I know for young people like me when I was coming up and we had no money I got really lucky to I don't even know what you would call me I was kind of like a [ __ ] I just was like a little assistant for one of my brother's friends in high school his mom
18:34 and they had a lot of money and so I would drive their fancy cars to the car wash I would pick up their dry cleaning I would take their dog to the vet all this stuff for basically no money and uh just watching them I learned in ton how do you organize what do you guys do for a living they sold um they sold equipment rentals like big tractor equipment rentals I was like that's so interesting and that's when I first heard about buying businesses because he sold his equipment uh tractor business and then that it went kind of under went a little sideways and he bought it back for pennies on the dollar and I was like I didn't know you could do that and then that same family was one of my First Investors back when I had a fund in the private Equity space and so that was 20 years later um and I think when rich people see hungry driven competent
19:21 humans buy and large they want to help because it's rare and you are somehow a mirror for them they're like oh I remember when I was like you totally H how so if our 20s are about learning how do we get in front of the people that we are most likely to learn the most from be it call them wealthy or high performers whatever you want like how do we put ourselves in that because odds are it's probably not our bws no no and so like how do we seek this if we're going to spend a decade sort of like learning and trying to increase our income we should be methodical about how we approach those yeah well a couple things I was thinking about this today like we have a company here contrarian thinking which is our media company and then underneath it we have contrarian Capital which is our Venture fund and
20:06 the Main Street holding company which is where we own a bunch of small businesses inside of it and um we get a lot of applications for jobs and you know I was looking around at our team today you just met two of two of my employees and the reason that both of them came was because they wanted to be around other people who were high performing so one of the nice things about the internet today is yeah maybe you can't get to Shane as much because you're well known on the internet and you might not have time to Mentor people but how often could you see somebody you liked on the internet and then go I want to work for them you can do that a lot now and a lot of people who are on the internet are hiring like crazy and so you can't go and just slide into somebody's DMS and say I want to work for you what could I do lazy but instead you could keep on job applications continuously for people
20:53 that you think are high performing and companies that you think are high performing and uh there was another study that I thought was fascinating about underperformers and high performers and the study basically showed it was hundreds of employees at many different companies and uh it was about proximity so the if you sat next to a high performer 15% increase in productivity if you sat next to a low performer 30% decrease in productivity and so I don't think people realize that if you just look at it like numbers let's say you make a 100 Grand a year Well if you sit next to Shane or a high performer I make 115k it's a gross generalization but an easy way to think about it if I sit next to Cody who sucks wow what if I only make 70k because my
21:39 performance has actually dropped and so I think about that a lot I think the best way to get mentors today is go work for them you know don't don't ask to do stuff one off go to the highest performing companies you think you can get into and if they're not that switch to another one because you get paid to get mentored what a crazy idea and that really didn't exist for like my parents generation so taking all the knowledge you have now how would you go about getting in front you're 22 how would you go about getting in front of Cody yeah um a couple things one um at the risk of blowing up your inbox no not at all um I mean every single company that is growing has a careers page on it and you
22:24 will be shocked how often those are not applied to across multiple companies and then how seldom they are chased I think the number one problem if you can't find a job right now and you want one and you can't find a high performing job right now is are you applying like a shotgun or like a sniper rifle and you know I remember for instance one of my employees that came to work for me she really wanted the job so she applied for I think the job of the time was like maybe my chief of staff she applied for my chief of staff normally you know you fill out the resume you fill it out you that's all most people do but that wasn't going to be her she also was like hey um I imagine you need a lot of newsletter writers this was in the beginning so she wrote an entire newsletter for me kind of in my voice
23:09 and just sent it to me like you know didn't ask for anything else then she said I also see you're hiring for these other roles here's a couple other candidates I thought might be interesting I kind of pulled some profiles for you then she said you know I imagine you're really busy you're hiring this Chief of Staff role I just read these two books on um on assistance and I wish I could remember the name of the one book cuz now I give it to some of my employees but basically on making a top performer a higher performer so she was like you're already great but here's a couple books I'm reading to figure out how do I make great people even greater one she's giving me a compliment little ego stroke and then two she's saying I think I understand what you need which is like you don't have enough time and what if I just solve problems for you so of course I hired her I'm like yeah this is great
23:56 and so most people don't even when I tell a lot of people in my email inbox they'll ask me for something sometimes an email really stands out and so I'll respond and say hey you want to learn about fundraising okay great read I don't know Venture style or something if you want to learn fundraising and then come back to me and you know tell me what you think how many people do that nobody reads nobody and so it's like if you really want a thing be obstinate in getting it you will be shocked how few people go to that level and I would say I've done this multiple times in my life so when I I wanted a job I wanted to head the Latin America business at credit swe back in the day which was a big finance company I was totally um I I
24:42 I really was not credential enough for that job it was a private Equity job I was going to be building out the region and um I went ham I think I traveled to I went to Europe I went to LA I went to New York where the headquarters was to interview in three different places on my own dime I heckled the head guy there Ryan who I'm still friends with to this day with all these different ideas for the business with contacts I gave him leads from people I already knew down there until finally you know I was in the final running with one other woman she ended up beating me out I was sad but Ryan came back to me about six months later and was like she's not working out do you want it but by that CH time I had already gotten a position heading another business in Latin America so it was cool but that's also how I got my first job at State Street I
25:27 think I did like eight inter interviews and sent custom gifts to a bunch of the the corporate heads then um because just a little bit of effort shows your such a decrease of risk as a new hire I mean most of the reasons that people don't work out when you hire them is is not capability it's effort and so if you can decrease the likelihood that you won't work hard for them even much higher likelihood of get in the gig I used to test people because I would get these inbounds being like I want to work for you I want to I'm like no problem like let's grab lunch they're like oh I'm not in Ottawa and I'm like oh well if you're ever here let me know do you know how many people ever showed up how many none not one not one person was ever like I will hop on a plane and I'll grab lunch
26:12 with you and I just thought it was like this excellent filter which is like well if you're not willing to do that why should I invest my time that is a great filter yeah yeah otta was useful and now yeah because it's so hard to get to right this look so inconvenient nobody ever flies there how do you think is it effort is it followup is it determination is it result like what is it because certain people seem to have it and certain people don't but I also think it's totally learnable winning is probably one of the most learnable skill sets out there when it comes to business because the only thing that really differentiates most businesses from winning and losing is giving up you know and we go and invest out don't know and 20 or 30 startups a year in our in our uh Venture fund um the research shows by
26:59 and large the reason why Silicon Valley wants two Founders is because the number one risk for investing in a company is that a Founder gives up number one and so if you know that it is really just grit like Angela Duckworth's study on grit then that is what you want to test for you need to have a good idea you need to have the foundation but we really want to try to figure out how much pain can you tolerate and the more pain you can tolerate in business the higher likelihood you'll succeed over time it's just shots on goal and so I think people should be really liberated by that I was you know I'm like well you know I don't really have to be smarter than anybody else I don't have to be richer than anybody else I don't have to be better connected I just have to be a little bit aggressively Relentless and that is something anybody can do it's not comfortable in the beginning but you
27:44 you can do it so when we go out and we look at okay should I give a couple hundred thousand dollars to this company or this company the number one thing we screen are the founders so how do you screen them I want best of future Behavior's past Behavior I think so um I want to see a history of winning in some way shape or form so uh also hard to beat a losing streak as you know in sports um so a lot of times I want to see yeah I came to this startup the startup was growing really fast I outre the position and I was ready for my next adventure as opposed to I came to this position the company kind of failed I was bored you know it didn't work out so I want that um the second thing I want is I really want we do a specific type of interviewing with uh Founders it's basically just takes them
28:31 through every single company they've ever been at and you ask them why they went to that company and why they left and those two questions at least seem to tell us a lot about do they give up do they chase things do they allow things to come to them and easy enough system to gam you'd probably be smarter at coming up with fancy questions but I imagine like you also people D like I love questions where you unintentionally get people to dulge things this case one of the things that strikes me people would diol is like I didn't like my boss it was like they hours were too long they wanted me to work on we like they'll just passively slip up in some of these things and you're like red flag red flag well and the Beautiful part is I think with having a brand on the internet um
29:18 now kind of people know what they're getting into you know and I I tell people listen if you want to go work 9 to 5 have probably little to no stress whatsoever outside of work um not have to work a ton be able to take vacation days have a low likelihood of getting fired go work for Vanguard like they're great at that like they love people to stay forever they pay bottom of the the pyramid um but because they do that uh people stay there for a long time and there's not as much exterior stress now I was never more stressed than when I worked at Vanguard because I hate being held back by arbitrary rules like no you can't make more money until the threeyear Mark it's like what why I don't like that but I magically have the
30:03 skills at you know two years and 364 days I don't have them but then all of a sudden yeah and they they just have a very militaristic way of at least when I worked there how they hired and so I didn't like that I liked to the gold men you go eat what you kill and if you suck you're fired and if you're good you're going to make more money and I was like okay well at least I kind of can get benefit from working harder um but I think a lot of people um these days in particular like the hustle culture thing that'll like it um which I get but I don't think you have to do it forever but you should do it when you're young and um if anybody's getting triggered thinking about well I wouldn't want to work for Cody because she's super tough and she's going to make me work really hard I think it's a tragedy actually I
30:50 think I think there's something sort of spiritual about working hard on something you're obsessed with with a group of humans all working towards a goal of getting better like where else can you get constant feedback in business be with a team of high performers and figure out what you're really made of did you see that Tom Brady Baker Mayfield thing where Baker came in he's like well you know he implied that Brady he was there to like lighten up the locker room and Brady sort of replied this isn't kindergarten winning championships is fine exactly and I was like oh man like that's crazy winning is fun it is fun and you know once you figure out the game you you want to win and if you lose you want to learn a lot um and you don't ever want to not win because you didn't go hard
31:38 and you know what's fascinating too is you know it's never fun to fire an employee I've had to to do that many times over my life less fun to get fired for sure um but one of the things I've realized is most often people self- select like they kind of know when they're just not a culture fit yeah and when maybe they don't want to run so hard anymore and when it's not their Obsession and when the thing you do is no longer your obsession and you're no longer learning I think it's perfectly cool to go move on to the next thing and that's happened to me multiple times when I was working at Big corporations and I just but I did it with hopefully a good amount of Grace I think what goes sideways is when um you turn yourself into a victim you know they didn't promote me the company sucked blah blah
32:23 blah instead it's like listen you've taught me so much thank you for letting me work here for this period of time I hope I've been high value to you I'm ready for my next Evolution and I want to make sure you have a smooth transition like how can we do that and if you'll do that like I'm pretty much friends with every single boss I ever had back in the day minus minus two I did I did burn a few Bridges but um for the most part I'm friends with most of them even ones where I really disagreed with like what they were doing in the business and I thought I should do it my way but it wasn't my chips so I had to go get my own if you're a boss manager owner how do you determine if somebody's interested or obsessed that's such a good question um I always think about what can you not sleep for the want of doing you know again I I find business
33:10 to be sort of spiritual and so I think when you felt that flow state in business before it could be writing emails for me like when I am writing a really good email and I am in the zone and I am focused it's maybe the most beautiful thing I do it's my favorite thing in the world and I'd rather do it than go and drink beers at the bar and so um I like to ask people a couple questions one of my favorite questions is when was the last time you you pulled an all nighter you stayed up all night working on something that you loved and a lot of times you can tell if somebody is an interested vers obsessed person by the fact that they're like [ __ ] I've never done that you know yeah um or they might say the opposite you know what I don't I don't work as well at night but God I remember like a couple weeks ago we had this problem and I was just up at
33:56 3:00 a.m. thinking about it so like got up and I just got the chalkboard out and what I figured out is this and so I really like that question um the second one is thinking about I'll ask something like um when do you when was the last time that you really believed X was the decision for the business but one of your colleagues or or somebody else wanted to do why and I just want to see how passionate they are about end now a lot of times the answer for that is something like um you know I I wanted to get a raise and I didn't get get arrays or something like that but a good answer sounds like um well they wanted to launch a new product focused on Argentina and I told them that was a terrible idea because right now the government in Argentina was XYZ and if
34:43 we focused on an Argentinian bond fund we were going to get slaughtered and I put together this PowerPoint that kind of explained why and I thought through these Frameworks and I looked at these historical models and like that was the reason why and you know and it turned out you know I was right and I I either I wish I would have presented it more um convincingly or I realized that my opinion you know wasn't going to carry weight there and so I wanted to go somewhere and take my own risk like that's what a great answer looks like and whether you're right or wrong it's a great answer right like because if you say I was wrong yeah but I did all the steps that I was supposed to do I learned from that now all of the sudden you get a different sort of tell yeah that's true because a lot of times it's just I want to understand how your mind works because we what we're always searching for is like examples where we're the hero right where we're sort of
35:28 like saving the day but it's it's really um I think interesting when people point out I wasn't a hero yeah I was totally wrong in this situation but I did make an argument I did sort of like outline my thinking and maybe we were lucky or unlucky um because nobody corrected my thinking or maybe I learned because I missed this huge thing yeah and like what did you do after that like I remember I ran a business where we sold money market funds um to Big pensions and Sovereign wealth funds and uh overnight my business was eviscerated I mean I'm talking about billions and billions of dollars in assets under management it was at State Street so it wasn't like all my money it was their money but uh overnight it was totally killed and it was because of government regulation that did this
36:15 silly technical thing um called they took away stable nav um I won't get into what that is but they basically changed the way accounting for this type of of product worked and that meant that the pensions and Sovereign wealth funds couldn't use anymore so I went from selling billions and billions of dollars of this stuff to oh my God massive redemptions they were like give me all my money back I was like oh this isn't great and um and in that moment I realized we had built a business that was technically pretty great like incredible sales team great customer support great brand great product great team and we didn't think of like our biggest risk which was the government regulation and so that business basically became like unprofitable overnight and uh and my next decision
37:02 was I went to Georgetown and I got an international MBA and I went to Georgetown in particular because I realized I didn't understand anything about government regulation and oversight like nothing I was so Finance markets investing and I didn't realize that the government is probably one of your biggest risks often and so um so I ended up doing that Executive MBA for two years while working at the company and opening up a Latin am American Investment business that was a different type of investment but like that would be a great example of like I lost awfully and so then what do I do about it you know do I go curl up and die or do I go learn again so I don't make the same lesson twice hopefully you had another mistake that stands out for me which was you lost $12 million on a cannabis deal oh yeah in like three
37:48 months what happened there yeah well that one we didn't scream the founder very well I mean this was a this one was a scary deal because we didn't have that big of a fund I think our fund was like 60 or 100 million bucks back then and uh cannabis was raging you know it was like straight up like hockey stick like growth and the fund before that this was our second fund so the fund before that we killed it it was like 3 to 5x return uh over a pretty short period of time investors got their money back we looked really smart well the second fund uh was really happening during Co and uh Co almost Creed a bunch of cannabis businesses and uh and the Market started drying up so no more Capital to fund cannabis businesses and capital is the lifeblood of businesses and especially
38:34 for these businesses they were almost like Venture businesses where if they didn't keep getting more cash they weren't profitable so they weren't sustainable so this business we had put in like12 million into this business and it was like a it was a products business located out of California and um basically like I can't remember but it felt like two weeks later after we put the money into this uh business we get a phone call from the founder and the founder is like we're basically out of money we don't know what we're going to do next and we need more cash and we were like excuse us like we just did this huge analysis you told us these numbers we confirmed in the bank account well it turns out he had all these historical payments that he was paying through you know massive
39:19 fraud you know total malfeasant across the company that we just completely missed and sometimes that happens um we were like well [ __ ] you know is this company going to fold and so thankfully we have uh on our team A guy by the name of Joe who's our turnaround guy and he had to fly out to Oakland and basically over the course of the next four weeks do massive cuts and restructuring and some some smart turnaround stuff in order to save the company but uh I thought we were going to go under and that was one of our murky Investments that we had made like two weeks prior and um and my biggest lesson learning from there is well two things really I remember when I met the guy and now I have learned to really trust my gut on the first interaction with somebody I'm an invest in I just didn't really trust him he said a couple things
40:06 that were a little flashy um he drove a flashy car which is always to me a red sign a red red flag when uh the company's not yet profitable and um a little too excitable a little too L fair but my partners loved him and so I didn't really raise my hand and I didn't put my foot in the sand so that was my fault that was the first red flag and that's happened to me multiple times of Partnerships it took me like three times of having sort of bad Partnerships like that happened start listening to you yeah if if I don't like it on the first go then we're waiting a year is our new rule so if I feel any sort of anything doesn't mean I'll never do a deal with a person but I'm going to watch them for a year it's kind of hard to fool somebody for a full year so that was one and then the second thing was uh we now do forensic audits on most of
40:51 these businesses which basically means you get somebody to get in there and you get really deep into the numbers because even if they not committing fraud a lot of entrepreneurs aren't the cleanest with their books and so you know you can commit fraud on purpose or by accident both suck and so uh I never wanted that to happen again it's almost like people don't realiz like you're you're the only shareholder yeah you can sort of like do what you want that's legal but if you're not the only shareholder and now all of a sudden you're spending other people's money 100% And so there's a huge difference between the expense accounts I would imagine yeah yeah and a lot of times they they've never before raised Capital so they get a bunch of money in and just like I would if if I had Ever Raised capital for my independent businesses you're like okay now let's grow but you
41:38 don't really know how to look into the future with that kind of money and say if I do this action will it make me more money because you've never done that game before right and so I think a lot of times that's a danger point in startups I also Joe could anytime you see a a startup founder who takes capital from third parties and they start like doing Twitter threads and writing blog posts it's like a red flag unless they're like unless they're a media company it's like no no no stay focused you know how do you think about focus when you when you see somebody one of the intuition things I'm imagining is sort of like they're distracted they got like 20 things going on when you're investing I would imagine you want 100% yeah well I it really depends first is this their first rodeo if it's the first rodeo and the first time you've ever run a business do one thing really well
42:24 until that thing is profitable self- sustainable and you don't have to focus on it 100% of the time that's my rule if it's not your first rodeo and you've already had a successful exit or two then I think you can get better at layering and so you know one of the things I'd want to see if I was investing in Founders a good example would be like Brett Adcock who started figure the robotics company so he um had before had a company that was uh drones that company did really well they exited that company Big Exit then he started figure he raised a ton of cash now the company's worth more than a billion dollars well Brett also started another company after that and that company is focused on like security inside of schools and public areas and typically if Brett was a first-time entrepreneur I
43:09 would be like red flag you know we should watch why he's starting these two companies since he's a multi-time Founder less concerned um and then the third thing to think about is are they a creative or not like does 1 plus 1 equal three and so if um Kim Kardashian would be a great example so Kim Kardashian has her big media Empire right you could say just stay focused on that Kim well she's looking for better ways to monetize that audience so she has skims right plus she has Sky her um her private Equity portfolio right you know plus she has um whatever Kim calls her Cosmetics company but they're all sort of a creative because they use her media platform and she gets to sell similar things to her audience and increase her overall basket
43:55 size and so um that's how I think about our businesses today I'm like Cody you're not allowed to start a beauty company because that's not a creative it has to be like bis Scout which is our business buying and selling Marketplace it has to be resi Brands which is our small business trade franchises it needs to be like right now we're focused a lot on Happ helping our businesses scale not just people buy a business but okay you bought it now let's get it to 10 million instead of 1 million and so it has to really Ladder into the same portfolio otherwise you're distracting yourself what are some of the biggest lies or misconceptions that you hear about money one that it's hard to make I do not actually think money is hard to make I think it is hard to get a skill set that
44:41 is valuable and once you get a skill set that is valuable money can be very easy to make and people confuse the two they say like money's hard and it's like no no you just haven't obsessed yet on having a skill set that people will pay enough money for but you you can do that and then money can become easier um I also think it's a very freeing idea like if you keep telling yourself making money is hard making money is hard making money is hard well it's going to be hard but if you keep telling yourself no it's actually not hard I just haven't done what is necessary yet to get what I want um that would be first and then the second is that I think money is a cruel mistress so I always say money likes attention just like a mistress does and if you don't pay attention to her somebody else will and so um you know I
45:28 think there's a lot of benefit early on in your career to sort of obsessing on Race to your first 500k and feel no shame about that shows that happiness increases post 500k in income uh or up to 500k in income after 500k they're sort of these plateaus and it's not really materially different um and then the second thing on it is really obsessing on money on a daily basis like are you looking at your bank account are you looking at the bank account of your business are you looking at how much you make or sell in products are you taking one action every single day to make more money a money related action and I think if you do those things you'll kind of be surprised at how you can compound over time are there different skill sets between acquiring and sort of
46:15 maintaining or keeping your money oh yeah I mean uh it's always in my opinion easier in the beginning to save but easier in the long term to earn so you can only save save your way to zero you you know there's very there's limited downside but there's unlimited upside and so I do think that what do they call that they call that like um spending creep lifestyle creep and so there's certainly that the more money you make the more you spend and then all of a sudden you realize that you've totally outspent your income that is a big problem for many people um but I I think on average we've been told that we need to save a lot more and here's why um one if saving consistently what does that mean it means that we're putting money
47:00 into third- party investment products um it means that we have money sitting at Banks like if we save we are helping a lot of other individuals make money if we earn and invest money in our individual businesses we are actually giving money back to employees we are giving money back to local economies like this benefits a few really big guys saving uh earning benefits a lot of little guys and so I I understand why Society has pushed us to save more as opposed to earn more um I also think by and large money equals Freedom so the more money you can make the more decisions that you can make by yourself and most people um they don't want free people you know the the the people on
47:45 high really want us to follow rules and to think in terms of safety not opportunity and so I think we should obsess on making money and you should obsess on making money because then you get to push back when people tell you things that you don't want to do and then you have freedom yeah 100% ultimate freedom in terms of you call it [ __ ] you money call it whatever you want but it's like no I don't want to do this thing yeah 100% now I can opt in or opt it yeah I mean and and you know in society today it's totally doable I think it is it's very hard these days to make a profitable business I think there's never been a harder time to make a profitable business never been an easier time to start a business that's kind of why I obsess I'm buying businesses because you just know it's already
48:31 making money it has a history of past performance so best predictor future behavior is past Behavior it's not a guarantee but it is a higher indicator and so because of that I like buying businesses because then you can operationalize them you can increase the growth um and so you know I I also think people listening you know before I made quote unquote a lot of money um if you would have told me that I would have a 9 figure holding company or that I would have all of these small businesses I would have thought you were crazy and it just wasn't part of my psyche that that was possible for a normal human being and even though I get [ __ ] about it on the internet I like to push upon people that it's it's actually very possible for you to have a lot of wealth you know
49:16 now I don't think you most people want a nine figureure holding company actually it's there's always something going wrong there's always challenges there's always mistakes it's lost stress um but but I do think everybody can make hundreds of thousands of dollars a year over time if they focus on earning it I do think that's largely possible it's almost like people they want the Oken but they don't want the trade-offs to come with the Oken we look at the gold medal but we don't see the training days that are like 400 a.m. constantly the injuries the recovery the lack of family time we don't see everything that goes into making that possible and if we do see it we often don't want it yeah I think that's true is there a difference between like a rich mindset and then a broke mindset then many things I think couple things rich people
50:03 overall they really don't believe in that word impossible you know they're not like if you said to a really rich person um hey it it's just not possible for you to start this next business and execute on it kind of doesn't in their psyche so they have what I've always thought of as like an armor of NOS so rich people have gotten told no so many times they've been rejected so many times that it almost just bounces off of them they kind of go yeah I'm going to do it anyway thanks for the feedback I'm going to try it I think poor people they have confirmation bias of no so when stuff has happened to them that's bad or when stuff hasn't worked out instead of an armor of no they're wearing a coat of no they're like yep just let it in let's just build some more on this coat let's make this cape longer and I think if you
50:50 can kind of visualize it like that a deflection versus an accumulation of nose that's the difference between rich people and BR broke people and in my career for a very long time I think you want to be around people who often tell you do more go harder keep going as opposed to people who say that's not possible it worked for you but it wouldn't work for me and I think that's the difference also between allies those are people who want you to win and friends who are people that want you to stay with them whatever level they're at go deeper on that so um I think most friendships if you just think about human nature like I saw this cool thing I wish I had like a uh it's kind of like this so um there's a monk by the name of Dand pondi sorry if I [ __ ] that up but
51:36 something like that and he talks about how as you get rich um you sort of and I'm going to hold it like this you sort of rise up like this and let's say your friends your family you know your colleagues your husband or or girlfriend or boyfriend or something they're sort of these corners and as you start rising in wealth or success what happens they're like wait a second you're leaving me behind I love you I don't want you to leave me you seem to be superseding me this is scary natural response but what they don't realize is right now as you're Rising they're not really Rising you're just getting further away from them but as you get higher you pull the rest of them along with you and so with most friends all they see is this bottom part of your journey they don't actually realize forward looking you're going to take
52:22 them with you now the people who do see this are your allies those those are the people who want you to win no matter what and those are the people who see oh okay if Shane keeps winning and then he takes us you know with him to some of these events and we meet these people too and I share his podcast and he kind of shares my new newsletter we're all gonna win this is oh man Shane did it I can do it that's an ally oh man Shane's gotten kind of too big for his britches oh man Shane thinks that he's better than us I never hear from Shane I miss you Shane friend and um and I think in our life as we're in our growth Journey obsessing on a few more allies is helpful do you lose friends as you go up what like what's your experience with that yes I think uh I think that success
53:11 bying of itself these days is sort of a lonely Pursuit and that when you are focused on building something you know you're not boring you're building but you are in an era where if you don't have Focus you won't win it is it is definitely a Relentless grind in order to build something completely new for yourself and so I mean I had a like I remember I had a a series of girlfriends in college that I was quite close with I think very highly of them still to this day um but I remember you know I posted this one picture on Instagram really sort of like flippantly I didn't think anything of it and in the picture um we'd all been drinking so we kind of looked goofy we were these young college girls you know so we're like I think they look cute I look a little crazy
53:57 and uh and I I posted it like something like you know I I've been there partying just like you have too you know you can you can do both something like that and and I remember one of them you know texted me and was sort of like how dare you you know you think so little of us we're just your partying you know [ __ ] drunk friends um and we were never the same again after that so I apologized profusely I was like I don't know how you could seen that that is not at all what I meant by it in fact never even entered my Consciousness and of course I'll take it down if it makes you feel uncomfortable and uh and from that moment we've never been friends again and this group of girls and I have never been friends again and at first I really couldn't wrap my head around it but I do
54:43 think what happens is when you become really successful you are a mirror on the things somebody else could have been and so you are a reflection of every decision that they made that was shortterm as opposed to longterm and so I've lost many a friend by the mirror and I think that is I always openly welcome them back and wish them well um but I I do think that you won't succeed very far if you stay around the same people that you started with I never thought of it like air before that's a really interesting way to frame it yeah do do men and women think about money differently I want to add one other thing so one thing I I don't like actually is I have noticed a lot of people on the internet saying things like you know if they're not above you
55:30 if they're not in front of you you've got to leave them behind and if if you know they're not moving as fast as you are then you know they will you don't need to be friends with them anymore and I totally disagree with that and in fact the research really shows the opposite Arthur Brooks does an incredible series of studies about having um what he calls worthless friends and worthless friends are the friends that you have no transactional you want from you don't want anything from them they don't want anything from you they want to hang out with you they want to go on a walk with you they don't want your email list they don't want access to your money they just want to have a beer on a Friday night and these friendships end up materially increasing our happiness these worthless friends whereas these transactional friendships actually end up in many ways decreasing our happiness
56:18 and so I think when people say hey if they're not on your level ditch them they don't actually understand the research and I I had a a friend here actually who I saw get really really successful on the internet and and I saw the most fascinating thing um which was I I just started meeting people who had done business with this person before and every one of those people as this person superseded them had sort of a negative story to tell about them oh interesting you know and it was like yeah the second that you know they got bigger than I did I became irrelevant you know the second that I was no longer useful I was after five or six of these stories I thought wow I don't think that people realize the repercussions of not
57:04 allowing other people to rise with you and in fact your reputation is one of your most valuable assets and people often think about the reputation online is like to the masses am I a good person it's like nah to the guy at the grocery store are you a good person to the person that you did a deal with who was your last employee or partner didn't work out are you a good person and if you're not to those people who are worthless to you then it will come around and I truly believe that and so I just want to say that because I've thought it before too like hey if they're not on your level keep going I don't actually think that's true and I think it will catch up to you and I've seen it firsthand one of Buffett's filters I think if I remember my reading correctly is that uh he was super friendly with people but if they asked him for a favor it was an indication
57:50 that they weren't necessarily friends in the other person's eye and I thought that was like an interesting sort of not like the common favors you would do with your friends like oh my husband needs a job or my wife needs a job those kind of favors yeah um I thought that was an interesting thing and I never thought about it again till this moment I think I've had a lot of screens over mind I've only been on the internet for like three years or something like that you've been playing this game a lot longer so you know you're just your spectrum is so much wider and more Vivid than mine is oh you play it better you have millions of followers well do I play better I like game of Ying things and I think you like deeply understanding things is sort of how I perceive you at least and so I find growth to be really fun that's like one of my favorite games so I obsess on
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