0:00 Why do you think most people don't ever reach financial freedom in their lives? This is where people get it so wrong. One of the secrets to success is Cody Sanchez. He's an entrepreneur who's invested in over 100 companies, turning over millions a year. After spending 15 years on Wall Street, he's now sharing her secrets to the world on how to make money. I think that is the question everyone's asking themselves. I think every human should understand the language of money. It's not that complex. We just make it sound complex because the less people speak our language, the more we can charge them. For the first time in 25 years, the richest 1% will control more than half of the world's wealth by next year. The gap is huge. This is why only 1 in 10 people dies wealthy. If you understand the language, you can become an expert in it. And expertise leads to a bunch of cash. But what
0:47 have you come to learn about what holds us back in that moment? The people who love you, they want what's best for them, which is that you're safe, you're secure, everything's okay. My loved ones were super supportive, but they were always saying things like, "Is the grass always greener, Cody?" And so we've become a generation of vitamin D deficient, alternative milk drinking softies. So I had a job I shouldn't have been at, a guy I shouldn't have been with, and a place I shouldn't live. But I was too scared. I'm not one of those entrepreneurs that just burn the bridges or sleep on the couch. And so I needed something where I could stair-step my way out of a corporate job. And then I realized this could be way bigger than what anybody else could pay me. We zoom in on that moment. What would you recommend my first step be, Cody? First, you have to... Before this episode starts, I have a small favor to ask from you. Two months ago, 74% of people
1:37 that watched this channel didn't subscribe. We're now down to 69%. My goal is 50%. So if you've ever liked any of the videos we've posted, if you like this channel, can you do me a quick favor and hit the subscribe button? It helps this channel more than you know, and the bigger the channel gets, as you've seen, the bigger the guests get. Thank you and enjoy this episode. Cody. Who are you speaking to and what is the message that you're trying to send them? The every man and woman, maybe people like you and I when we were younger, before we had any zeros or businesses. And the message is very simple. It's that I think by and large, and maybe they could feel this inside them too,
2:26 we've slowly gone from a nation of owners or a country of owners or a world of owners to a nation of renters or serfs in another word. and the idea is what if we could take that back and that's the whole premise of everything we do is getting people into the owner's chair into ownership as opposed to letting other people be the architects of their lives. And it took me way too long to do that. And so I'm hoping that it will take other people less time if we share. Give me the persona then of someone that you believe will find value in this conversation. Like where are they? Are they in their life? What are they thinking day to day? What are their aspirations? Yeah, I think there's sort of three humans that I picture. There's one that I call working John. and he is basically, or she, but I just have a male avatar for this one, is
3:15 sitting at a job right now that they don't really like, doing things they don't want to do for people they don't like and building their dream and their castle. And they're mad about it, although your choice to be there, but they're mad about that decision. And they want to weigh out, but they have either golden handcuffs where they make too much money, or they have responsibility, bills that have to be paid. And so they don't really feel like they have a solution except going to find like the next best but kind of still worst company. And then the second avatar is there's an aging population that by and large in the workforce we say, "You're over 50 or 60, you're not getting as many job looks as you were before, but now we live until we're 90. So what are they supposed to do for 30, 40 years?" And I think their evolution can be also buying a business, taking
4:04 over something, becoming an owner and maybe something not aggressive, as aggressive as they were before. And then I think the third avatar are humans who kind of got sold pipe dreams over the last couple of years. Like, if I buy 472 houses that pay me $100 a month profit, I'll finally become financially free. Well, it takes a lot of cash to do that. Or, you know, if I have NFTs on the side, or if I go into the stock market on the side, all of which aren't rigged games exactly, but are meant to just beat inflation. And so that third group of people might like what they're doing. They just need something else on the side that's a little bit of a safety net, because I don't think our safety nets will be around by the time we need them. And you've been through your
4:49 own journey from the corporate world to working in finance, working as a journalist, where you are now. Which one of those avatars did you represent? Well, I was definitely a working John. So that would have been the first one. When I was in finance, I was doing well, but I definitely felt trapped. I was all those things. I was, should have been happy and content with where I was, but felt like the 60 hour work weeks were too much. And I didn't really like the culture of the company that I was working for. I had a lot of respect for the CEO, but I didn't really fit. But I was too scared. I'm like a little bit of a scaredy cat. I'm not one of those entrepreneurs like our mutual friend Alex who just was like, "Burn the bridges. I'll sleep on the couch. I'll sell it all." That's just not me. It's too scary. And so I needed something
5:36 where I could have like a soft landing. I could stair step my way out of a corporate job. So I started buying these small businesses with the idea that maybe one day they could just meet my costs. And then I realized, oh God, I'm thinking so small. This could be way bigger than what anybody else could pay me. But I was a working John for sure. We zoom in on that moment because I think most people listening to this now can relate to that moment of maybe hearing you speak and hearing your content online or hearing an Alex Amozi or whatever, hearing Gary Vaynerchuk, whoever it might be, talk about starting that business, pursuing that side hustle. But there's this psychological... barrier to overcome, which most of us can't overcome. We call it fear. We say, you know, I'm waiting for the perfect time. I don't have the confidence. If you zoom in on that, now you've started this new
6:24 journey in your life where you're creating content and you're advising people on how they can pursue the paths that you've pursued it yourself. What have you come to learn about what holds us back in that moment? And the, and the, maybe the falseness of the stories we tell ourselves, you described it as being a scaredy cat. Yeah. I, at least for myself, what I'll say is, you know, daughter of immigrants who thought that what I had achieved was the pinnacle, you know? People that I love more than anybody in the world, and maybe that's similar for a lot of people listening, the people who love you, they want what's best for them, typically, which is that you're safe, you're secure, everything's okay. They don't really want what's quote unquote best for you because that's actually the scary thing. Real growth happens when you take huge risks and you potentially fail and you realize that you're not going to die. And
7:11 so I realized that my loved ones were some of the reasons that were actually holding me back. Super supportive, but they were always saying things like, is the grass always greener, Cody? You know, what about this next thing? Is that really going to make you happy? You know, are you sure it's not you? Is it them? And in some cases they're right. I just have that ridiculous urge to keep growing and doing more. But that... That made me jump from one, two, three, four, five, five finance companies in like 10 years or something like that because I thought it was each, it was the individual company and I didn't realize, oh no, I'm just like unemployable. I want to work for myself. I'm not going to be great at being at somebody else's employee. But it was the stories that I heard again and again
7:57 from my family because they wanted to keep me safe. Very kind, but not right for me. So in your life, there comes a moment where you make this kind of peculiar decision. And I say peculiar because most people don't make the decision to start off ramping from the corporate world, essentially. Yeah. You buy your first business, right? So you're in a job. Yep. And while you're in the job, you decide to buy a business. Did you have loads of cash when you did that? No, no, no, no. In fact... And why did you do it? What was the thought process that made you go, "Do you know what? That's a good idea." I think it's usually triggered from some sort of pain. Like at that time, I was fighting a little bit with the CEO of the company that I was working in. And they
8:45 really wanted me to run this business that I'd taken from zero to a couple billion in assets under management. and they wanted me to continue running it, but I started getting press and stuff started happening because we had had this growth, and they wanted me to do it really quietly. And not as much the CEO, but some of the other managing directors. I was by far the youngest. I was the only female. And, you know, that company was wild. But they basically, in many ways, were like, um you need to do it our way and i was like well your way didn't get you to this couple billion dollars under management works great for you guys over here but it didn't over there so no i'm going to run the business this way and and so we were kind of arguing a little bit and i think i saw the writing on the wall that it wasn't my casino they
9:33 weren't my chips i was working for somebody else and at the end of the day they were writing the rules as is fair it was their business and i knew that at some point i was either going to get pushed out or leave And so at that point, I started buying these businesses on the side because I wasn't sure I wanted to work for somebody ever again. I'm fascinated by the first step people take because the first step seems to be the hardest. That first step to buying that first business and you're stepping out into uncertainty and the unknown there. And that's really like the hardest. you know if i could give one thing to the audiences that have listened to me for the last 10 years on social media and on this podcast it would just be the answer to taking that first step like out into like you did at 29 30 to buy that first business talk
10:20 me talk to me about specifically that first one what were you looking for what was your thesis and um i guess how did you learn how did you learn about buying as you call them, boring businesses? - Yeah, well, I had a benefit, which is as a journalist, I sort of infiltrated finance. I'm not technically as intelligent, I'm not a financial modeling guru, I'm not a lot of things that people are in finance, but I'm pretty decent at asking questions and then figuring out who are the right people that could get me the answers. And so what I realized pretty quickly is we were doing a bunch of deals. I was doing deals that were tens of millions, hundreds of millions and billion dollar deals. And I don't know why it took me so long, but I realized there's no difference, like materially, between a billion dollar, a hundred million dollar, a ten million dollar deal, and a one million
11:07 dollar deal. And if that's the case, then I bet if I have a couple hundred thousand or ten thousand dollars, I could do a much smaller deal. Wouldn't I be able to do the exact same thing? So I saw behind the curtain, like at the Wizard of Oz, and realized that the Wizard was actually pretty short. And because I saw that, then I just said, "Well, now we just work backwards." And just like you would buy, you know, a $100 million condo unit or, you know, condo building, you could see how you could go all the way back and buy your first studio, right? It's the same thing with businesses. It's just stair-stepping real estate. And so I, at the time, my biggest constraint was not knowledge. I knew how to do deals. It was time. You know, I was working 60, 70 hours a week. And so, One of the first deals I did was a laundromat deal because
11:57 I figured, well, you don't need somebody to run it full time. And it was a 100K transaction. And so that wouldn't bankrupt me. And I could buy a little business like this and that business could keep running even while I wasn't there. And I could have an operator that could probably help me with anything that went sideways. Where did you find a laundry mat to buy for 100K? Was that a website? Did you know the guy or the woman? No, didn't know the guy. So basically what happened for my first deals, I didn't have a framework. So it was just, "Hey, I do these really big deals. Could I do a smaller deal? And if I could do a smaller deal, what would be the easiest small deal to do that would be the least risk?" And so at the time, I knew a guy that was running a couple of laundromats. So I basically said to him, "Hey, if I find one for you, will you help me operate it?" And he knew how
12:43 to do that. So the very first one we had was in California. And that's one of the secrets to this is two things. First, you have to learn how to do deals, which is not really that complex. We just make it sound complex in finance because financial lingo is like the moat around how we make money, right? The less people speak our language, the more we can charge them, which is the secret. And then the second aspect was how to run a laundromat, right? Like, I don't know, machine breaks. What am I going to do? And so then I had this guy who knew how to run these. And I could just find the deal for him, close the deal for him, and be the cash for him. Why did they sell to you? These are 68-year-old owners of a business that have been running this laundromat plus a bunch of other small businesses in the vicinity for 20, 30 years. And so can you imagine running your podcast for 30 years? It would probably
13:31 be fun, but by the end you might be open to selling. Now imagine you had a laundromat for 30 years. You're dealing with broken machines or there's somebody who's homeless messing around with some stuff. At a certain point, you don't even want to continue with a profitable business. And this is where people get it so wrong. All the time on the internet, people love to tell me, no way would anybody sell a business. That business made $67,000 in profit. So I bought it for 100K a year, did 67,000. And people on the internet do one of two things to that. They go, no fucking way it didn't happen. And why would somebody sell? And like, did you give them a bad deal? And the second group of people go, that's a terrible deal. I'd never do that deal because you don't have enough profit in that for that to be a business, not a job. So those are the two
14:17 things. And to the first one I'd say, in the US right now, there are tens of millions of small businesses for sale that will never sell. And I tell a story about my Uncle Eb, who had a small business that was exactly that, that he closed down, which by the way costs you money, as opposed to selling because he had no idea his business was sellable. Like many businesses that I had before I did this, I shut down instead of selling them. I didn't even realize that even though I was in finance. And then to the second group, I'd say, you start with a small business that probably isn't the greatest business for you to own long term, but businesses are like real estate. You can turn around and sell them after you get in the game. But I think of these businesses, I call them gateway drug businesses. Once you learn how to do a deal, you'll never see the world the same again. It will change your entire perspective on everything. You will
15:05 walk in everywhere and you will realize that business is full of masochists like you and me who do this despite it being awful many times, but we love it in some way. But at some point, we're going to want to sell our thing and move on to the next. And so everywhere around you right now, wherever you are, somebody sitting next to you wants to sell their business. And what if you could figure out how to buy that business, put in an operator in it, and then do it again and again and again? And that's the only difference between you and Warren Buffett or Blackstone or these big, huge companies. Is it important to have competence in the area and the industry that you're trying to buy these small businesses in, in your point of view? Not really, no. Not at all. But it helps, right? Oh, of course it helps. More important than anything is it's sort of like
15:51 real estate. It's really about the deal. Can you understand, can you read a balance sheet? Can you understand profit and loss, which is not that difficult to understand? And then can you figure out how to get to the person that can get you answers? So for instance, I didn't know anything about laundromats, but I knew a guy who knew laundromats. Often what I tell people these days is I'm more old school, like I would go knock on doors and I would shake business owners hands. But you could also go to Reddit where there are platforms with 100,000 electricians on them. And so if you wanted to buy an HVAC company, which is like heating, air conditioning, and often electricity, I would go on there and I would try to find electricians in my local area and I would ask them questions and I would pay them for an hour consult to figure out how to run this business. I think
16:40 we forget in this day and age how easy it is to get the information that we want. And so we listen to the fear of the fact that we don't know what we're doing. And I actually think that's irrational. It's really easy for somebody to tell you why things won't work. It's actually quite hard to convince somebody that they're capable of doing something. What if I don't have 100K? You had 100K, right? Yeah. Say I'm working a job I've saved up only $5,000. Yeah. Well, I've bought a business for $3,000. I've bought a business for $8,000 and I've bought many, many, many businesses for $0. And I'm not saying this in a way that's clickbaity. Will you go out right now, talk to somebody tomorrow and be able to buy a business for zero dollars? Like you're going to need to do a little work. Just on the structuring of the deal, right? Just on the structuring of the deal.
17:29 So they get paid on performance. Exactly. Or they get paid on what's called seller financing. So these, you know, you can go and most businesses, most small businesses below $10 million in revenue, 60% of them sell with some component of seller financing, which just means if, let's say, somebody manages your property here. Let's say that that property manager makes 100K a year profit. They want to sell their business. You're a terrible tenant. They can't handle it anymore. They want to sell that business typically for 2 to 5x profit. That's what these small businesses go for. the typically there aren't enough buyers. Like there's not a bunch of people running around trying to buy property management companies. So what do they do instead? Well, you would come to them and say, all right, I'll buy out your property management company, but you're going to be my
18:17 loan. I'm going to pay you a percent interest rate, plus I'm going to defer your tax burden, so you pay less in taxes, nobody likes that, and I'm going to buy the business by giving you $300,000 with, you know, over five years, right? So I'm going to keep a percentage of the profits and I'm going to give the rest to you. And it's not really that complex. It's really what happened in real estate before we had Zillow and Redfin and all of these sites that made it super normalized to sell real estate. As you said a second ago, the real key here is knowing the art of the possible as it relates to deals. The way you construct your deals so that you win. - Yeah, 100%. - Basically. - Well, and I think the truth of deal making that people forget about is that it is one of the very few things where it's never a zero sum game.
19:03 So if I go to sell a stock, I hope that when I sold the stock, I sold it the right time and you bought it the wrong time, right? Like that's what we hope. In buying and selling small businesses, that doesn't have to be the case. You know, I could buy, I could sell my property management company to you. You could pay me three X profits. And I could say, but if the company increases revenue by X amount, which I think it will with these tweaks, and I kind of help you a little bit, how about you pay me $400,000 instead of $300,000? And you would go, great, if you hit those metrics, no problem. That'd be an awesome deal for me. So there's plenty of ways to make sure it's a win-win. But to your point, this is why people are poor, because nobody teaches us the language of deals. And if somebody taught us not how to negotiate our salary, that's fine, but how to negotiate for equity and ownership, the world would
19:51 look a whole lot different. But that's not in the big picture's incentive. It's really good for the little guy, not so good for the big guy. The other thing when you're approaching a business and trying to get them to knowing how to structure a deal is one thing, but then there's an element of persuasion and sales womanship involved in this. How important is learning to sell and how can we be better salespeople in your view? What is the key to being a great salesperson? Because you must be to be buying businesses. You must be able to figure out what someone wants and present it to them. I truly believe that sales is a fallacy. I don't think sales exists. I think you find people who are already
20:36 predisposed to want what you are quote unquote selling. and i learned that very early on from one of my mentors actually at goldman though you don't sell anybody on anything you're never going to change somebody's mind and if you think i'm wrong go try to convince a republican to become a democrat right or a tory to become i don't know what's the other side okay it doesn't really go very well usually and so um my belief is actually what you're looking for is just who are the people who are you're finding trigger moments like If I was to have a conversation with Steven about selling your business, I would be asking questions like, "How's it going running, wow, 20 years? "That's a long time." If their answer is, "Fucking love this business. "I am never selling. "This is amazing." You're like, "Cool, awesome, no problem. "So lovely meeting you." But if you meet the person that's like, "Yeah, I'm ready.
21:26 I'm ready to retire. I've got this vision of a ranch in my head out in the countryside, but my kid doesn't want to take over the business." You're not going to get them to think something different. You're purely discovering what they truly feel. And then you are going to be the person that enables them to have a retirement in a way that no government can. Like you are the retirement plan. And so that's maybe what you need to learn is just curiosity for another human. And then you need to understand what a motivated seller looks like. And a motivated seller looks like somebody who's ready for their next adventure, whatever that may be. And if you can find those two things, then you find the people that actually, yes, they want what you're selling. Now, what you actually do have to convince somebody of, and I hope you're true about it, is that you are going to be a good
22:14 shepherd. If you are going to be their retirement plan, you better not go broke, right? You better actually be able to take this business and run with it. And so that is one part where you have to convince, like, why should I sell this business to you, Steven? How are you going to take care of my business? And that part really, again, comes down to curiosity, making sure that you're setting yourself up and the seller for success, not rocket science. If I'm going to play I'm going to play the role of a 25 year old. I'm working in a job. I've got a little bit of disposable income, but not a ton. I'm listening to you, Cody, and I'm going, I want some of that. You've got a holding company, right? You've got a fund as well? Yeah. How much roughly the revenue of the
22:59 holding company? 70 million. 70 million. So your holding company does about 70 million revenue. You've got a fund as well? Yep. How big is the fund? Small, 10. Okay. So 80 million combined. I want to get to where you are, but I'm currently working in a job. I'm 25 years old. I've got, I don't know, $7,000 in the bank, 7,000 pounds in the bank, whatever. What would you recommend my first step be, Cody? How do I get out of this job? Yeah. Well, the first step, if you're going to do it like a pro, I'd say this, which is tell me what you do for a living. I do content. Perfect. so if you do content for living what i'd say is don't buy a laundromat i talk about laundromats i actually need to change that i need to like tell somebody i bought a
23:47 different first business because it's a terrible business to buy it just was my first one and it's very easy to understand so i'm like if you can't understand quarter machine clothes clean don't buy a business any business just forget you heard me talk about anything and so that's why i talk about laundromats But if I was going to do it the pro way, I would say you should use your unfair advantage. And if you're in the content business, don't buy a boring business in the traditional sense. Look around you. It's something I call my personal P&L review. So I'd basically look at What do I spend money on already? If you're in content, you probably spend money on ad purchasing, right? You probably spend money on video production. You probably spend money on maybe you rent a set space. You have all these expenses around you. And what if you could turn one or two of those expenses into an
24:35 asset, not a liability? A thing that makes you money, not a thing that costs you money. And so, you know, I did a deal back when I was doing more video production in my last company where I bought a podcast and video production company. And I did that deal basically for $0. I think I put $10,000 down for that deal that ended up doing about $300,000, $400,000 a year because I just said, I know like five or six other people that could use your service. I'm going to like double your revenue by introducing you to these people. and I pay you, let's say, $3,000 a month now, what if we're just going to wipe that out if I can hire these other people and you're going to give me 25% of the company or whatever percentage it was? That's what I would do if I was you. So if you're young and hungry, look around you and see what you
25:21 pay for and what you currently utilize already and then try to get a percentage of that business if not buying the whole thing. And that's sort of the pro way to do it, as opposed to car wash, need to go learn, totally different market. You can do the second, it's just a little bit riskier. So I'm working in content, 25 years old, $7,000 in the bank. I realize what you've just said. And I go, you know, I'm a marketing agency. We book a lot of studios. So what I'm going to do is I'm going to approach a studio space, try and do a deal with them. And then I'm going to send clients their way. You could totally do that. That'd be a sweat equity deal or a revenue equity deal. For a studio space, I mean, I think the probably pro way to do
26:09 that would be, one, you'd approach them and you'd kind of get an understanding for their business. You'd be like, how much revenue do you make? Like, how big is this? You'd figure out if you were material to their business. So me doing 3K a year with my video production guy, I was material to his business. He was only doing, I don't know, you know, $100,000 a year or something like that. And so if my 3K went away, that was, you know, that's like 20% of his business right there over a yearly basis. So if you go to a studio production company and they're like, yeah, we're doing $7 million a year and you're paying them 3K, you're like, all right, cool. Anyway, nice to chat with you. Or you could say, you know, who's the owner? How long have you been doing this? And you could dive into it. And the other side of the coin is you might find out that the owner is 70 and you become buds with the owner. And the
26:54 owner loves when you come in because you're kind of like young and you learn about what he does. And then you ask who's going to take over the business. And then you might say, hey, you know, I do this other thing. But I would love to sort of be an apprentice to you in a way and potentially buy your business using future profits. And you can sort of like stay on and we can stair step our way into this. But would you be open to that, like leaving your legacy to somebody like me? And so you could do it that way too. Yeah. but i think it is learn it goes back to kind of the smart question you asked which is like the two avatars are who's listening to this right now and then that's the same question to the people listening that you're going to ask the owner what sort of avatar is the owner and how can you become the solution to what that avatar is looking for how can you become
27:41 the son to the father you know how can you become the buyer to a really anxious seller and then you can get your deal done why do you think most people don't ever reach financial freedom in their lives? Do you think it's a psychology thing, a mindset thing? Obviously, let's take, you know, the very practical elements out of the equation. So, you know, severe hardship, poverty, all of those kinds of things. But people that are in that sort of middle layer that are comfortable, why do they never, some of those people never really reach a point of financial freedom? I think humans defer to the paths they've seen before them. I think so often we follow in our father's or our mother's footsteps. And that's why I
28:29 think the internet's really powerful is you have an opportunity to now choose the family footsteps you want to follow into. So one, I used to think it was just a knowledge gap, but then I went to this event and I was talking to my friend about it and she said that the facilitators did something really cool. It was a group of women, imagine like 40 women a room, right? and they're there to talk about finances. And in this room they said, "Okay, everybody close your eyes, "and I want you to picture money, picture money right now, "and then I want you to turn your body into the shape "you feel when you hear the word money." Right? 30 women, all eyes closed, they take whatever shape. And she goes, now open your eyes and look around. And, you know, my friend was explaining to me
29:17 how most people in the room were like fetal position. They were like holding, they were like really close somewhere on the ground, you know, somewhere covering their eyes. So in a room of 30 relatively successful women, their reaction was like, attack, shame, guilt for money. And she was like, you know, she was standing there with her arms open wide, like, you know, give me the money. And when I think about my relationship with money, it's the same thing. I'm like, if I think about money, I'm like, yeah, it's over here. Like my hands are up. Like I am here for it. But most people have this weird emotional attachment to money. And so I used to think that people on the internet like, not I like Tony Robbins, but like Tony Robbins or whatever, who do a lot of the motivational stuff, I kind of didn't get it. I'm like, just give me the tactics, skip the other thing. And then I realized that most people have really bad stories that they tell themselves about
30:05 money. And you could tell. I mean, it'd be interesting, your next speech, you could try it. I tried it at one of mine, same thing. Men and women holding each other like they're being beaten when somebody talks about money. The average human feels that way. And so I think it all comes down to what we believe, which is hard for somebody in finance like me to say. Typically, I would think, well, if you knew what to do, you could just do it. but that's not the case it's you have to believe that you can do it and the only way i can figure out to get more people to believe that they can do it is to show more people who are super normal or in fact below average doing the damn thing but if i had the answer to that that'd be the million dollar question i read a a stat in the us that Only one in ten
30:50 people dies wealthy in the US. That most people die broke and young. And I thought that was fascinating because we're at economic high times, like lower poverty levels than ever before. But still, most people die at least without extra cash to pass on to the next generation. Why do you think people don't reach financial freedom? Or most people die without a lot of cash. I think, obviously, it's a very complex topic, but I think I really resonate with the emotional, psychological side of things that you described. You know, it's the same reason why most people don't go to the gym or eat healthy. Money is inherently emotional. When I had
31:37 no money, I was reckless with money. All the gambling shops are in the areas where people don't have money. there's something deeply psychological about money. So I would, if I, when I was working in those call centers, if I got paid a thousand pounds at the end of the month, I would the same day go and buy a TV or an Xbox, like a PlayStation, for about six, 700 pounds. I would not pay my rent to go and buy that PlayStation. And sometimes I'd buy the PlayStation without having a TV. There was just something psychologically attached to the, I don't know, the dopamine rush or the sense of self worth that I got from owning the shiny thing. When I got money, my relationship with money became amazing. I stopped buying designer things. I stopped wasting it. I didn't feel the need to show off
32:25 or buy, you know, Rolexes or whatever. So I was able to preserve wealth more. There's a really interesting relationship with money on both ends of the spectrum. When you have less of it, it's harder. It's often because of certain psychological things and certain people, I was one of them. It's harder to hold onto. And when you have more of it, it feels easier to hoard and people, you know, and more broadly on the, on the subject of, um, why people don't reach financial freedom. I think the modern world tells us that we can get rich quick. And when you think about how people build wealth, we think about the Warren Buffetts of the world, it's so boring and slow. And who's gonna buy that book? You know, be a billionaire at 87. Fuck what? I'm not going to be able to, you know, dance
33:14 in the nightclub at 87. So why do I want a billion then? That's why the NFT thing and the crypto scam, this whatever, is also appealing to people. Yeah. Because it's quick. Yeah, it's true. Well, you know what's... I actually was reading somewhere a story about in South Africa, in the slums, they have the highest concentration of the largest televisions per square foot of the house. So if you've been there, and I've actually never been, so I can't validate, but you will see very small little rooms with huge televisions. And I thought that was interesting, but it actually makes sense because maybe it comes down to a belief that people don't think they're ever going to get out. And so they think the only chance of getting out is going into whatever the short-term pleasure is it's like if you never think you're going to
34:03 escape your everyday reality which is actually kind of miserable then you're going to buy the PlayStation because why wouldn't you why would you save and try to get out when you've never seen anybody else get out but what does the plate the PlayStation means so much more to you in that moment than PlayStation it means it's your it's self-worth it's one tiny token that you are successful, that you can show your friends or that you can just even fear and self-esteem. It's so much more than a PlayStation. the thing that invalidates you, in this case money, will be the thing that has the greatest chance of making you feel valid. And so if in my house the lack of money was always the thing that caused my shame. So the minute I got any of it, I would overcompensate by trying to buy some shit
34:49 to show people. And then when I had loads of it, he gave a fuck. Yeah, that's true. That void was almost filled. Yeah, it's true. I also think it's hard. I mean, I remember many times where I remember checking accounts always being overdrawn and seeing the little negative pin on my email and cell phone that you couldn't, there was nothing else in there when I was in college and trying to figure it out before I made any money. I think I made like 37K in my first job out of college. So I definitely remember all that. But I think if you can have this belief and you can get around other humans who have, had success or are striving for success, your aperture just opens in a different way. And then maybe the commercials and the ads and the things that make you feel like
35:36 you want to buy all the everyday stuff go away. Like I don't really like, I kind of viscerally get mad when I see people who have wealth showing images of them in their Bentleys or Rolls Royces or I mean, I have a nice watch, but like you don't see me show that shit anywhere. Like when people are showing themselves in their private planes or whatever, I just think they're missing the whole boat. And then what they're doing is they're perpetuating the PlayStation situation. They're doing it again and again, and they're doing it because it doesn't make them happy anymore to have it. That's not enough. I have to show a bunch of people I got it. And what they should actually be showing is Man, I just invested in my first stock. That's fucking cool. Look at my – I mean, if you look at my stuff, it's like I have laundromats and car washes behind me all the time in them because that's the stuff that you should try to strive for. You can
36:23 actually pass it down. It can pay you back. You can buy as many PlayStations as you want. But I think to your point, the other thing is we are all – have you ever felt – like when you're around other people and they're sort of negative or they want to talk about people the whole time and like how that energy feels, that's like it's draining, right? Even if you kind of get caught up in it, it's fun for a second, at the end you're like, "That was a-- I feel kind of gross for having that combo." I think it's the same with ads and stuff that we take into us. And so they're basically creating our stories for us in social media by showing all this fancy stuff. And then we start to have this mimetic desire, this external desire and belief that we actually, that we want it, that we need it. But we don't. We're just becoming a replica of the people that we're surrounding ourselves with, which are now social media. There's
37:10 no, even growing up, there's no laundry mats and 50 cents videos. Yeah, there should be. It's all sports cars and mansions and stuff. So that was my North Star as a young black man. It was like, how do I get a mansion and a sports car? And in the first page of my diary at 18 years old, it says four things I want to achieve before I'm 25. Bear in mind, I was shoplifting pizzas at the time and I was a university dropout, not speaking to my parents with two CCJs, which is like when the court is coming for you for debts. I wrote, a Range Rover Sport will be my first car. I didn't have a driving license until I was 23. I'll make a million pounds. I'll work on my body image again, because I'm a very small kid. And I'll get a girlfriend. Those are my four goals in life. And they were totally influenced by the outside world. That's why my book is called Happy Sexy Millionaire, because I thought if
37:56 I became a sexy millionaire, then I would become everything I needed to be. And I was so wrong. I mean, I don't regret the decisions I made because you can't really in hindsight, but I wish I had better influences to say the least. Yeah. I mean, I think that's why content is so important. You know, I think about Warren Buffett's annual shareholders meeting, right? Which you can go and attend if you own stock and you don't have to own much of it. And I think, you know, people made fun of me when I started creating content online because they were like, oh, big, successful private equity person. Now you're taking your own money. And if you really had companies that made $80 million in revenue, that means they're, you know, you're worth a couple hundred million bucks. And if that's the case, why would you be making Instagrams and TikToks? And that doesn't make much sense, right? And my reaction
38:45 at the time was, I think we should make it just as entertaining talking about stuff that makes us money as we do stuff that costs us money. I think probably that'd be good. And if we could do that, that'd be a worthy mission. And also it'd be fun to try to do it. I don't know if we could do it, but, um, Yeah, maybe the next rap videos. I mean, and now, now, honestly, my favorite deals to break down are the celebrity deals because they're fascinating. Like The Rock. Have you ever looked at The Rock's content from a product perspective? Brilliant. So The Rock, if you look at his content, so let's just talk Instagram. If you go to The Rock's Instagram, I want you to count how many pieces of content he has that have product placement in them of companies he owns. And the answer is close to 80%. So almost every single post The Rock does is
39:34 an ad. But what do we really see? We see sexy tequila, we see abs, we see him with his beautiful wife. We see these other things, but we don't realize that every single one of them is an ad. And so what if we could flip that around? Wouldn't it be cool if The Rock talked about the deals he did too and how he did that? Now he goes back and he talks about how he stole stickers bars similar to you with pizza. But I think even for celebrities, they don't wanna talk about the deals that they did. They just wanna talk about all the money that they have. It almost seems like faux pas somehow to talk about the deals and how good at deal making they are. Like Reese Witherspoon, billionaire now. Why? Because Reese Witherspoon, little sweet Susie Sunshine in pink, basically took a book club and said to authors, I'll give you part of my platform for
40:23 you to talk about your book. Because I'm lovely. It's free. You're gonna sell a bunch of books. It's tiny insignificant detail. I'd like the future rights to turn your book into a movie and I'll pay you some sum or I'll have a right of first refusal aka I get the right to buy it before anybody else and I'll pay you then for it. The author goes, amazing, Reese, of course, perfect. They come on, Reese basically A/B tests, so tests out which books do best. And depending on which books do best, Reese buys their movie rights and makes movies that create tens of millions or hundreds of millions of dollars in revenue. But Reese doesn't tell that story. Reese tells the Suzy Sunshine story of her selling the books. I think the other story is more interesting and more people can learn from it. So when
41:11 I hear these deals and when I see these big success stories. We've got Kylie, we've got the Rihannas of the world. We've got Ryan Reynolds, The Rock, Reese Witherspoon. The question that we must always be asking ourselves, I certainly ask it, is was that them? Or did they just have a great advisor? A financial advisor that came along at some point and went, by the way, you do it like this and you'll make fucking shit loads. Yeah. Well, my question is, who cares? I still want to know the secret sauce. Yeah. And so she's, none of them are that dumb where they don't know what the deal was. Right? Like even if somebody was smarter than them, which could be, Reese may have a genius behind her, The Rock too, probably Danny Garcia, his wife, his manager. Kylie. Yeah. The goat, you know, which is weird to say about the Kardashians. But, you know, behind them, the mom, for sure.
41:58 But they're, you know, they're smart enough. When you create that much wealth and you do it continuously multiple times, like Reese has done with Draper James too, you definitely know what's going on. So I think like sharing those secrets would be cool. But that's usually where people go. People go, well, they're famous, so it's easy for them. Or, you know, who did the deal? And I'm like, yeah, maybe it's Scooter Braun behind the scenes. But I'd like to know how they structured that. The reason they don't tell you though is because it feels like it's the opposite of the authenticity that they're trying to maintain. So if they came out and went, "Listen, the way we did you on that whiskey deal, I got 50%. My job was to post it with the abs every week and you guys fucking bought it and now it's worth a billion dollars. Here's the how to." They can't do that deal again because
42:44 everything they touch, I'm going to think, "Oh, it's a deal." Well, I think you could do it in a way that was real. Like you could be like, we did this business and maybe you could give some of it away. Like you could be like, you know, if The Rock makes a billion dollars off of Terramana, couldn't he then say we would never have done a billion dollar deal unless you guys bought it and because you bought it we're going to give you some equity we're going to allow people to buy into equity at the company at a lower valuation and have access to it i mean that's kind of what venture capital and crowdfunding does right so i mean they can do whatever they want to do but i think there's so many ways to get around it and maybe there's nothing but downside because people these days get mad when people make money and so maybe people would hate that but god i think it'd make a lot more humans rich for people
43:31 to be honest about how they got there you know i reflect as you were speaking on a conversation i had with a cab driver in the uk he said to me you know you're that diary of a ceo guy i listen to your podcast in the cabs and you know i'm i'm working three jobs this is one of them and i'm trying to What he was saying was, I'm trying to find financial freedom. I'm working this cab job. I'm doing this other little thing on the side, but I'm trying to find the way. I'm trying to find the way to get out of this life. And he was scrambling around. He was saying to me, you know, my friend does some stuff in Africa and in Ethiopia, and he's got some thing there with property. So I might go there. And there's this other thing I might do. Those people, those are the ones that I'm trying to speak to today. Those ones that are like looking for the way out. Well, first of all,
44:17 cab drivers and Uber drivers are my people. Yeah. I always... I love them. Yeah, I always chat with them. Well, and they always listen to my stuff because they know small business. Like they have a friend that owns a laundromat or they have a friend that works inside of a car wash or owns a car wash. These are like blue collar businesses, right? But usually what I would say to them is something I actually said to one of the guys that's with me today. I'd say try to break your frame entirely. Most people look for individual next tactics. So they're like, what can I do over the next one, two or three years to get here? One thing I think is really helpful to do is say, okay, you have a three-year goal, break the frame. How could you achieve that goal in six months? What would be something so different so out of the box, so big, that the
45:02 goal that was gonna take you three to six years is now gonna take you six months. And I want you to spend some time on that. Spend a week, spend a weekend deeply thinking about that idea. Because what you're gonna do is you're gonna come up with ideas for the person that could be the impetus for your financial freedom or for the business risk that's super smart but you haven't been wanting to take it. And I think most people, they like, they wade in the shallows of life and you cannot have massive change by going shallow. And so, I like to say when people want an answer, I like to ask them a question because I think they know. I think they know deep down inside, but they get scared just like I did. And so they wait years to do the thing that they knew they should have done earlier. And I don't think you need a guru or
45:49 a podcast to tell you that. I think you've got to break your frame and say, I'm super capable. If I was going to do this crazy thing in six months, if anything was possible, if I really believed in myself, what could I do, who could I go to that could make an unfair advantage for me? And I do think that book, Who Not How?, People usually read it as leaders because it's a lot about hiring, but I think it's actually about life. And I think usually your answer to freedom is a who, not a how. Because often for hustlers and people who are going to work hard, you know one or two people who are very wealthy or who run big businesses. There are a few people in your ecosystem that you could go to and become their hustler for them, and that can lead to fantastic financial reward because most people are not relentless in the pursuit of the
46:35 things that they want. If you can be relentless, you can accomplish way more than the average person. And most of us, you used a phrase earlier on in this conversation, which really stuck with me because I've used this phrase with my friends over and over again. You said you got to see behind the curtain. And I remember the first moment in my life where I really felt like I got to see behind a curtain that I didn't even know was there. For anyone listening to this podcast, there's a curtain on my right. For anyone watching, you can see the curtain on my right. Behind that curtain, there is actually a room in there. And there's actually another studio in there where we record some content. It's kind of like a standing up studio. We've got some backdrops and stuff like that. But the analogy that I'd give you is in life, you never know how many other rooms there are behind the wall. And there was a point in my life where I started understanding
47:24 deals and the public markets and how certain high net worth individuals were playing what I call money games. They were basically not doing much work, but they understood the laws of money so they could buy things at an arbitrage or flip things at an arbitrage and put them on the public markets and all of these crazy money games that no one had ever told me about in life. I thought the way you build wealth is by working. And these fuckers, the richest people I know do very little working and they do a lot of money games and they live behind the curtain that I didn't even know was there. And I was thinking about the cab driver there. There's so many, what is behind the curtain? Behind the curtain is a bunch of information. That's essentially what it is. A bunch of people that have a bunch of information What I might say to that cab driver is like, who
48:11 can take you behind the curtain? Even if you have to go get a shit job for six months. Like you were alluding to it there. Like, is there a guy or a woman that I could go just shadow, just make the fucking tea and get behind the curtain and figure out how they do it? Like if you wanted to be the best podcast in the world or you wanted to be a good podcaster, come, go Hoster Rogan if you can go clean the floors. A hundred percent. You know what I mean? A lot of people don't want to do that. They want to work their way there, but... So much in life is about information, right? And the information you don't even know that you don't have. Oh, yeah. When did you see behind the curtain? Well, you worked in finance. That's unfair. Yeah, I think it is a hack. I saw behind the curtain for the first time when I had managers and bosses who are making tens of millions of dollars a year.
49:01 And I realized... how little they worked, like you said, but also how average they were. You know, I saw these largely middle-aged dudes who were no more impressive than I was and they were crushing it. And instead of having envy or hate for that, I was super curious. I'm like, "Ah, this guy can do it. That means I can do it." And I think that's a huge unlock actually. I was talking with another friend the other week and I think one of the secrets to success might be when you see somebody who has more, who is doing better, who has more money, realizing that means that you can get it as opposed to I hate them because they have it. If you can flip that mindset, on
49:46 the other side of that lives nothing but opportunity. And it keeps, I keep finding new rooms in the house, new curtains behind it. And I'm not sure that will ever stop. I mean, I was talking to my friend Bill Perkins the other day, who's a hedge fund manager. And Bill is very successful, huge, you know, compound house we're walking around at. I'm like, this place is pretty nice. And he said to me, "Cody, you know, do you think that you, because you've been around small business for so long, small has infected your thinking?" And I was like, you know, I don't fuck, I don't know. But then I realized to him it had because he's got way more zeros than I do. And so like those zeros become unlocks
50:35 to the curtain. I mean, the other day I was flying home yesterday or flying here yesterday and I sat next to Jeffrey Kent, the CEO and founder of Abercrombie & Kent. And he built that business up to multiple billions of dollars before selling it. He played polo with the king, is quite close with King Charles, and also has traveled the world, came from nothing in South Africa, was in a town in South Africa where there are only 100 white people, which is fascinating. Like mostly was barefoot all throughout his childhood and created the luxury travel market, essentially. And I was just sitting next to him on the airplane and I kind of looked at his watch and I was like, "That's a nice watch." And I sort of looked at his mannerisms and I was like, "I just have a feeling this guy is worth
51:22 a lot of money." And so I started chatting with him. I just said, you know, "Hi, I'm Cody. Why were you in town? What were you doing in Cannes?" He lives now in Monaco. And what I thought was so interesting is when I talked to him, I said, "What do you think the secret is? Like, you're a billionaire. Like, what is that? How do you become that?" And he said, "There's really one ingredient to success. And that ingredient is the thing that everybody has, but everybody wastes. Time." he's like i ran my company for 61 years 61 years running one company he goes can you imagine what the compounding looks like in 61 years focused on one thing he goes this generation cannot imagine and and then we went a little deeper and i said you know what do you think is the biggest difference
52:10 between entrepreneurs today and entrepreneurs when you were really in the game because he's in his 80s now and he said well back then we We were explorers of the only frontier that still existed, which was business. You know, they were the privateers asking money for the king and queen to buy a ship to go to the new land, right? Except he was doing it in a business sense. He went to China in '76 and was the first person to open up the Chinese market to travel. He broke so many bones playing polo that he had to retire at a young age. They were hard men. And I think about it with us today. I think that we've
52:58 become a generation of vitamin D deficient, all birds wearing, computer programming, alternative milk drinking softies in many ways. And some of my most successful friends who are worth so much monetarily, their health is not very strong, they don't adventure, and they don't have true difficulty. And I think that's the difference between his generation and ours and between true success and not, is this idea that I'm sort of playing with like a third degree human, somebody who has a strong mind, a strong bank account, a strong body, those three things all together. and where we don't just take other people's risk, meaning take other people's money to run our business, but we take the risk ourselves. And I think his generation really did many things wrong. I don't want to glorify it, but I think they did that right. And how much
53:47 more interesting is it to do these big, huge things? And maybe if you do that, you break the frame entirely. And every time I meet with a billionaire, my mind just kind of it expands a little bit more. And I think it's the same way like the first time you met, like my parents weren't millionaires when I was growing up. So the first time I met a millionaire, I thought, whoa, like this is, what is this magic land? You know, this person has so much money, they don't know what to do with it. And then you meet the first decamillionaire and then you meet the first hundred millionaire. And at each level, not that we want to worship money or that money is all there is, but it is a scoreboard for a game that a lot of people are playing in this society. And I think it's interesting to try to get in those rooms. And these days, those rooms are open. Back when we were first doing our businesses, a billionaire didn't write
54:35 a book. - Or do a podcast. - Or do a podcast. - Or tweet. - Or go shake your hand at a conference. That was unheard of. And now they're all around. What have you noticed in billionaires? What's the trend? You know, people, I've met quite a lot of billionaires now and there tends to be some similarities. They all get there by different routes and different paths, but similarities in character and philosophy. Yeah. One is I've found most billionaires I've met have a mission so big it dwarfs the pain that comes with building. Because I do think it's more comfortable by and large. It's more, it's like the low, dull pain is being in a job. You know, that's
55:23 like kind of like having a little ache constantly being in a job. Being an owner, an entrepreneur, or trying to strive for billionaire status is a roller coaster ride of extreme pain at some points, or maybe you'd say extreme pain at some points, extreme pleasure. And you kind of go like this, right? You have to be able to wade through that. And so I find that most of them are the opposite of what I thought they'd be. I thought they'd just be like Scrooge McDuck, like swimming around in their riches. They'd be kind of shallow. Maybe they'd be super self-interested. They'd only be focused on their own thing. They wouldn't be nice. I wouldn't want to meet them. And actually what I find, this is going to sound like a gross generalization, but most of them really want to help you up when they realize that you're hungry. Like when they see the hunger paired with the ability and willingness to take action, They want to help you. It's so rare. Like if you're listening
56:12 and you have that desire, but you actually do the hard things, you're rare. You're actually really rare. Because everybody says they want it, but nobody really wants to do it. I mean, I knew I had to fire one of my employees back in the day, which made me really sad. The second that that person told me that they had a bunch of debt, they were working in the business, with me, obviously. They had a bunch of upside in the business, but they decided to take some of their cash and they were going to invest in a day trading thing in the stock market. And I said, I really don't think you should do that. I think if you want to take that cash and buy a business, we should talk about that. I can help you if you want to focus more on a secondary business that increases your income. But if you want to day trade, what you're telling me is that you want to get rich fast and you want to speculate, that
57:00 you want to get lucky, you don't want to earn it. Anyway, they kind of laughed and then they did the thing. That was in that moment I knew you don't have what it takes at this level. Maybe you could change, but if you're going to make that decision now, you're telling me you're a short-term player. Long-term games
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