The Money Expert: 5 Businesses That Can Make You RICH (Without a 9-to-5!) ft. Codie Sanchez

21:09And so I was like, I want to make this and I want this percentage of the company. And I came in kind of with a hard offer that was ludicrous and like made no sense actually. But I didn't know how to negotiate yet. I was very young. I didn't have any mentors in this. And he said, I'm going to do you a solid. I want you to realize what you're actually worth to me in this company, in this role right now. He goes, here's your market rate. So here's what I could hire a replacement of you for right now. The market rate was a little bit less than he was paying me. So that was interesting. And then he said, here's how we make money off of your job.

21:41So for every, I don't remember what it was, but for every$2 that you, that I pay you, the company makes three and a half or whatever. Okay. And then he goes, what's the profit margin of the business? I'm like, I have no idea. And the profit margin is pretty slow, small. And he goes, what's a good revenue per employee in this position? I'm like, oh God, I have no idea. And so I'm realizing that if you're going to negotiate for more, you better know what you're worth to the company. You better actually know how much you make for the company. And then simultaneously, you better know what your skill is worth in the market.

22:14And if your skill is not worth a lot, amazing, because he goes, all you need to do, you can get every piece of equity you want, all the upside in the world you want. You just go become more valuable and you acquire skills. And I think in this day and age, we don't really think about all the skills we're acquiring, especially I don't know about your generation, but my generation would say things like, it's very annoying to me as a leader, but they'll be like, well, that's not in my job description, which is really fast way to get fired by me. But I like will reframe them once and say something like, every time I give you something that you can learn as a new skill set in this company, that is a huge win for you.

22:54Because that means you get to go take that skill and apply it somewhere else. And if I don't give it to you, you should actually be concerned. Because that means that I don't think that you're going to grow here with me. And every time I give that skill to a vendor and not an employee, that's actually terrible too. Because that means that that vendor is going to learn a skill that you'll never get. And so I think we have to push back on this. I don't think you should do work forever that is boring, doesn't teach you anything, doesn't help you learn. But you should take on more work in the beginning because you'll become more valuable with every skill you stack.

23:25It's actually really smart because I would say that a pitfall that I've seen is a lot of people sit and wait around to be told what to do. And they don't realize that it takes so much cognitive load for your manager to actually have to sit and create ample work for you when your job really should be to identify problems proactively and come up with solutions that are better than whatever would actually be requiring micromanaging on your manager's behalf. And so kind of like through that lens, I'm curious for you, what do you think are some of the best decisions that you made early in your career that helped you basically descend to a position of leadership at Goldman Sachs in such a short period of time?

24:07And if you want to make more money, help your boss make more money. Rule number one. And this is like if we did a video on this on the internet, we get like three views. Because it sounds so uninteresting to people. They're like, fuck my boss, fuck his boss, fuck the company. It's about me. It's about me. And it seems uninteresting to like help your boss. You know, that's just so anti-culture right now. And I get it. But often the thing that doesn't make a ton of sense is the thing that is most often true because it's the rarest thing to do. And so in the beginning, I told myself I will be the most valuable employee to every boss and every mentor that I have.

24:40And so if you guys were to mentor me in something, I would have no worries that you were younger than me. I would have no worries that I had done something longer than you. I'd be like, okay, what can I learn even in this situation? I'm like, we were talking like, hmm, candle, interesting, merch. I like that. Huh, you did this. What's that? I'm like, I want to be this constant student. and the way you become a constant student is you help the other person a lot and when you help the other person a lot especially your boss they value you more they don't want to lose you I would never you know when I was young I would never say I'm not going to do that I was like give me everything I can handle it I'm young like I don't have to sleep that much when I'm older I don't want to work so hard now I'm gonna work like a workhorse and so I did that like crazy and what's fascinating is the bar is actually set so low today maybe even lower than what it was when I was coming up Most people don't actually want anything they say they want as bad as they say they want it.

25:33And so they're not willing to do the hard thing, which is actually amazing, because that means we can. You know, I think I had a lot of people tooth and nail clawing with me in 2008. That's when I graduated. The market was awful. Getting a job was really difficult. Entrepreneurship was not as normalized back then. And now I'm like, Lord, you know, I see people. I've hired every single person who's reached out to me on the internet with a really in-depth strategic brief about why they wanted to work for me. Because there's been like five. And most of the time, you spray and pray. You send your resume 472 places.

26:08You pray that they pick you as opposed to sniper rifle them. So if you want to make your money, make your boss make more money. And then you get better at stacking your skills. And then you get to negotiate more money. And then if your boss still doesn't pay you more, then you go find a new job. It's so funny you said that because I was just talking to Marco about this yesterday, but I had randomly had this thought where we do a lot of hiring through DMs because in the same way, I felt like the best way to assess whether or not someone really wanted something was how badly they were going to pitch themselves for the opportunity.

26:42And I got so many bad DMs that were just clearly Chachapiti slop that was just 10 buzzwords. And so I made a post about it just because I thought it was funny on LinkedIn where I was like, listen, most of your guys' DMs are horrible. And I'm saying this from a place of love. I I've sent so many horrible DMs in my life. Here's how I would fix your DMs. Literally, please make it two sentences. Send me your resume and explain to me how you're going to help me. Asking for my time is the most valuable thing that you can do. Telling me how you can help me and why you're qualified helps me to sift through garbage, basically.

27:14And so many people who had DM me really bad DMs, re DM'd me a much better version of their DM. A lot of them were still not amazing, but actually less bad version.

27:26Sophia:I'd give it a C, but I was like, that's good that they're, they're learning and being proactive. But actually this one girl sent an amazing DM so much better than her other one. And then I checked her profile. I was actually really interested. And now we're talking to her, like we're, we have a scheduled call. I have no idea where it's going to end up, but it was such a good learning in my opinion, that kind of people's goal should be to be sponges when they're young and learn as much as possible and understand how they can help others to get further in their career. Um, so I'm curious, like any other pieces of advice you would give to someone who is trying to kind of make the most of their time and opportunity at a company, like what other ways can you add value?

28:06Yeah. Well, I mean, I think when you're young and you're looking to get rich and change your life, you should also almost ignore all famous people, including us. Because, and I wouldn't even say we're famous, but like, whatever, people who have notoriety on the internet, ignore famous people, go after rich, older people to be your mentors. The guy who started the sprinkler company who lives down the street from you that has a really big house, you know, he must do something interesting. He's 65 plus, nobody gives a fuck about the sprinkler company, he has zero DMs. If you DMed him, the worst DM that they DMed you, he would probably reply.

28:36And so I think a lot of times people go after fame. They don't go after wealth. And so the people who already have money, but they don't have anybody asking for their advice, what do you start to think about when you're 65 plus and you have a bunch of money? Legacy. You're like, what do I do next? Did it matter that I was here? Maybe their kids don't even like them because they weren't around much. They were working like crazy. They might need a replacement kiddo, right? This is your shot. And so I see it every day with the business owners that we help sell their business or that we buy businesses from, their kids don't want to take over their business because they want to be dancing on TikTok, right?

29:10Even if it's a plumbing company making millions of dollars, they're like, no, not for me. And so if I was you, I would start looking for people who do not maybe have the fame that you want, the aesthetic that you want, the outward life that you want, but their bank account is big, their business is big, bigger than you are at this stage, and you can go and learn from them and help them. And I think people too often assume, one, that people who are pretty prominent have a lot of money. I mean, I was with a friend of mine, James Sexton, last night, who's a divorce attorney for like celebrities. He's incredible.

29:44And we were talking about, he's like, let me take you through the tiers. He's like, the best tier, really rich, nobody knows you. Second best tier, rich, also famous. Worst tier, famous, not rich. He goes, the worst thing in the world you could be would be famous, but not rich. Because you have no privacy, plus you have all these expectations on you, plus you have all these people pinging you. And I think a lot of people who are on the internet and well known are not very famous. I mean, go look at Zuckerberg's number of followers versus, I don't know, Kim Kardashian. Kim Kardashian has a lot less money than Zuckerberg does, but way more followers and way more DMs.

30:25So like don't optimize for fame in the beginning for sure, or maybe ever.

30:29Sophia:Fair enough. For our listeners who don't know like your career trajectory, can you walk through like Arizona State, going to Goldman, leaving Goldman, starting your newsletter and content channel, scaling that to a million readers? Can you go through that timeline a little bit, your work in journalism, winning a huge award? Well, I think, you know, if anybody was listening, I was like, I was a corporate girlie forever. I mean, I worked for corporations for 12 years. I did like not dissimilar to you both. I had a more institutional path. So, you know, I was like, okay, well, I went to Arizona State because that's really, I didn't, I was too scared even to apply to nice schools.

31:04I was so scared of failure that I was like, I'm just not going to do it because if I don't get in, And what does that mean about me? I'm not smart enough. I had a lot of confidence issues when I was younger. And my parents were like, who do you think you are in many ways? Like, you're going to stay home. You know, we're Latino. So they're like, you're going to stay home. You're going to be close to the family. Don't think about stepping outside. And so I didn't apply to any of those schools. I went to a local, my local college, Arizona State. And I did the really traditional thing, which is I got a career job right out of there.

31:32I worked for a company called Vanguard. And I climbed this finance corporate ladder for many, many years. And I was just too scared and risk averse to go take a jump like you guys did. I mean, it took me, I think I was 30 before I stopped taking somebody else's paycheck. And that was by that time I was making, you know, I was making millions of dollars and I was still scared to leave for whatever reason. So if you're scared, that's okay. And like, you can also make millions of dollars working for companies. There is nothing wrong with having a job. You just increase your skill set and you get equity or you invest.

32:07It's totally fine. I'm always yelling at my employees because they want to do these ads about like, do you hate your job? Like, go buy a business. I'm like, stop it. Jobs are great. Like Sheryl Sandberg had an incredible job, made a ton of money and a huge impact and didn't start businesses, you know, totally fine. So anyway, so I climbed, you know, a bunch of rungs at financial firms and, you know, it was Vanguard and then I went to Goldman Sachs and then I went to State Street and then I went to First Trust, and then I went to a company called the EEC, all in asset management, building up different businesses.

32:40But at each stage, and like, I think a lot of people find this, like Tony Robbins has become a buddy. And like, he says a line often that I love that I'll steal, which is like, there's two of the most important days of your life, the day that you were born and the day you figure out why. And so for me, I kept hating what I was doing. I like, and I thought it was the company, I was like, must be the company and boss. So two years in, I would leave the job. Must be the company boss again and again. And so when I left Goldman, I didn't really like my boss. I didn't like what I was doing at the time.

33:10I went to another finance company. But at some point, if you are entrepreneurial, you just have to take the risk. And so I got to a stage that you guys talk about the burnouts where I call it my fuck you thermometer. There's some thermometer level at which I think all of us are like, I can't handle this anymore. I'm way too hot.

33:31Sophia:Tell me about a time you hit your fuck you thermometer. Yeah, God, which one? But probably the one that made me leave was, you know, eventually you'll get enough confidence and you'll win enough where people who are small will try to keep you down. And I always I started to say myself pretty early in finance that I will never make myself small because of small men. And so I had a small man who literally and figuratively was actually a small man. And I don't like to name names, but his name is Dan. And Dan was at first dress. small man. Oh, that's fun. I never thought about that. We got to make shirts.

34:07And anyway, I had, I wasn't public on the internet anywhere. But I was really young to be a managing director. And I was a Latina. And so those were that was rare. And a woman.

34:17Sophia:Yeah. And so I got a couple like news articles, awards, little covers in our finance industry. And one of them came out. And it kind of like went on my social in a bigger way. And that must have pissed him off. And he was another managing director. And he wrote me an email that I keep to this day that said, I hope you gain some followers today, because you have dumbed down our company. And I was like, this motherfucker. And I just remember thinking he was really close with the CEO. And I remember going to the CEO about it, because I worked for him directly. And it was, this is a big company. And he was like, well, he was just drunk, and he didn't mean anything by it.

34:58and whatever, finance is a fucked up culture. And I remember thinking, I don't ever want to work somewhere where I have to play small because it offends other people's egos. I'm out. I'm out. And so that was my fuck you thermometer that I went for a walk with my CEO at the time, who I actually really like the CEO. His name's Jim. But him and I went for a walk and he said, listen, he goes, at this company, like you're on our boat and we're rowing left and you seem to want to row right. And so if you want to go right, you got to get your own boat. And I was really pissed at the time. I'm like, we have a billion dollars in assets under management.

35:31I built this big company. What do you mean? But it was his chips. So he gets to play them how he wants at the casino. And so I said, okay, I'm going to leave. And so I left the right way. I set him up correctly and the rest of the business. But I'm really thankful now for like, whenever you come across those FU thermometers, I actually think it's such a gift. Because that gift of me being really pissed off is what finally pushed me over the edge. Otherwise, I probably would have been an employee for somebody else forever.

35:58Sophia:I'm curious, you talk a lot about your successes investing in these alternative businesses, like laundromats and stuff. What's an investment opportunity you missed? Is there any that keeps you up where you're like, oh, shit, I should have invested in that or I should have seen this? So there's a couple that were really big. I had a chance to invest in Robinhood super early. And that would have been, I remember looking at a couple of years ago, and I think it was like 11 million or$21 million or something like that, if I put in 100K. And now it's probably much more than that. I also had a chance to invest in, what was the other company that we looked at?

36:34Well, maybe I won't say that. But basically, I became comfortable with the fact that we missed on Robinhood, because the reason I didn't do it at that time, I stand by, which is, I don't think you should gamify stock market investing. I don't think it's a good idea to get us addicted to day trading. I don't think any statistics say that that's good. And that's similar to like, I think it's a badass that the, you know, we have like one of the youngest self-made women billionaires now with, with poly market or whatever that's called. But like, is that good for society? And so I think one of the cool things we get to ask yourself is, you know, the companies that I missed the most money on weren't actually because I didn't see the opportunity.

37:15It was because I thought that's not a way I want to make money. It's why I got out of private equity. It's why I got out of cannabis. I'm really flawed in many ways, but I think money is everywhere. You can make it doing fucking anything. I've seen people make money in the craziest things, in the most boring of things. So if that's true, then why don't you make it doing something good that isn't actually bad for society? And I want to push that on young people because I think there's a lot of YOLOing or fast, quick money schemes. And give yourself a little bit more credit than that. You're probably more competent and you could make money doing things that are actually good for the world as opposed shitty for me.

37:51Sophia:I'm curious how you think about learning from past investments that actually affect future investments. I love the Warren Buffett line where he says, I never worry about the deals I didn't do. I worry about the ones that I did do. And so that tends to be my thesis. The ones that hurt are the ones I did that were fucking stupid. That's what I remember. I don't really like, okay, I didn't take that swing. Fine. But when you take a swing and then you slap yourself in the face. That sucks. And so I've definitely done that. I told you guys one, when I was walking in, we put, oof, I don't remember how many millions of dollars in a company.

38:27This was in the cannabis space back in the day. And it was a cool company. I loved the idea. I liked the product. I only really invested at that stage after a product already existed. But one day the CEO calls me up, there's just a weird tone to his voice. And he's like, I need some more cash. And, you know, we're going really fast. It kind of didn't make sense what he was telling me. So I'm like, I'm going to fly out. I need to see what's going on. And so I get to Drake's office and I walk in the office and I hadn't been to their new office. And we have millions in this company and I'm walking down the hallway and it's like picture of him and somebody famous, picture of him and somebody, and this whole like fame wall.

39:06And I turned to my partner and I'm like, we're fucked. This company is going to zero. And I didn't want to be right, but I was. So I went back there and we went through it. And ego is like the enemy of all money, basically. And so that one hurt because I bet on the idea, not the person. That was the first time I learned, fuck the idea. It's all about the human. So that one hurt. And then the other one that hurt, it always hurts when you get defrauded. That one, he just was bad. He just made bad decisions. He wasn't a fraud, maybe a little egotistical. But I had another one where we put$25 million into a company.

39:37Great company still exists, thankfully. But that company then called us, I don't remember how many weeks exactly, but let's call it six weeks later. So you give somebody 25 million bucks, six months later, they call their three weeks out of cash. I'm like, the fuck just happened with our 25? It wasn't a big enough. Maybe it was 25. When they build the Taj Mahal. Like, what did you do with all this money in this time? So we fly out. We're like, what's going on? And we basically find massive fraud. I mean, almost impressive. Like he had not one mistress, but three. I'm like, you probably did have to spend a lot of money.

40:07This is like this chick's way too hot for what's happening there. And so anyway, we have to go and turn the company around. But that one was a real that's when I really learned. It's called quality of earnings and a real deep dive into due diligence. And so now when I look at a company, we go really deep into them because I think the Russian proverb like trust but verify is very important.

40:28Sophia:I mean, 8.3 per mistress. That's a lot of money on a mistress. That's more than a top notch ML engineer these days. My goodness. I mean, it's impressive.

40:41And I want to go back to something that you said, and I want to play out the scenario of, okay, I now understand. Let's avoid famous, but not rich people like the plague. And I need to go find someone who is very wealthy, but low key, and maybe doesn't have a lot of infrastructure. I can help them. Where do you go to find wealthy people that you can work with? I was reading something that you said that you were talking about golfing and all these different opportunities to network, but what would be your advice? I want to find someone wealthy that I want to add value to. How do I find them? Yeah.

41:16Well, actually, I mean, so we teach this. So I think you don't actually have to have a network to find these boring business owners, which is really lovely because they're not in the most high demand. What you have to do is be human, walk outside often, and try to meet every small business owner in your vicinity. And so the cool part about small businesses, and you can even do this in New York, most small businesses, only 10 % of businesses will ever get to a million dollars in revenue. Like less than 1 % will get to 10. Above 10 is like 0.01 % or something wild. And so all around you are businesses where the person who's at the front desk is the owner, everywhere, all around you.

41:53So in the beginning, I want you to just go try to talk to a bunch of business owners every single day. Go to your local ice cream shop, go to your coffee shop, go to the hardware shop. When you're driving down industrial districts, go try to knock on the front door and talk to them. Because I think what we don't realize is like, what's the worst that's going to happen? They're like, get out of here, kid. What are you doing? On the other hand, if you're like, listen, I live in the neighborhood. This is a super interesting business. I'm trying to learn more about business. What do you do here? Like, can I take you to coffee for five minutes?

42:21Can you imagine the last time an industrial owner of a business, had a young, curious, competent kid say, what you're doing is really interesting. I'd love to take you to coffee. He might not go to coffee with you, but we might be like, I don't know, come inside, work with me for an hour. And so it's really not that difficult. I just want you to knock on doors. And this is just a great life lesson because now we only want to do DMs. We don't actually want to knock on doors. So if you're willing, like I've realized in life, there's this moat for like anything you want to do. If you can go one step further than the average other person who is your age, you will have an asymmetric upside and like a huge upside comparatively.

42:58So instead of DMs, don't do DMs. Send a written note. Instead of a written note, go knock on a door. Instead of knocking on a door, go to the door with a written note and a little strategy plan for them. Just like layer up your level of difficulty. And I think that is often the way to get things without having to be smarter, richer, faster, better than anybody else. Interesting. And what would you say is the way that you learned all of these things? Wow. I mean, the best teacher is life. I didn't have opportunity. My dad is an incredibly hard worker, but he didn't go to college. He was an entrepreneur, but he never would have said that word.

43:40He was like a small business owner. He built businesses himself. He worked in a slaughterhouse. He was a carpenter. My mom was a 30-year special education teacher. They didn't have opportunities He's waiting for me. And so if I wanted them, I had to go get them. And the couple things that they did were incredible, though, is, you know, my dad would always say, well, you could be a princess or the president. You know, you pick. It doesn't matter. You can do whatever you want to do. And so they had this unreasonable belief in, like, what I was capable of. And I do think the other thing that helps a lot when you're young is I took a lot of reps.

44:17So I got to watch my dad build his business and I got to be next to him a lot. And then when I was in school, I took every single opportunity. I was never allowed to not work. So it really helps to have as many internships as possible. It helps to have as many difficult conversations as possible. I think there's a reason most of the top CEOs that we've ever invested in, they're salespeople. They're not product people. And I don't think people like that story very much because if you are a really smart product person, obviously you could be a top one percenter. But most people don't have to be this incredible brain or engineer.

44:52They could just be quite good at distribution and sales. And that's what most of them are. And so, I mean, you know, you even look at jobs. Not the best engineer in the world. Really good at selling you a dream. And so I learned a lot from doing sales super early on. And so if you don't have a lot of money right now, get into sales because you will learn how to sell a dream. What's your best sales advice? Get told no as many times as possible. Don't talk about how many like don't there's two types of dashboards, right? And two types of way to set up your life to see if you're succeeding or not.

45:21One dashboard is if you're trying to lose weight, you might go and say, well, I want to lose five pounds. Did I lose five pounds today? Did I lose five pounds today? That's an outcome based dashboard or activity. An input based dashboard or activity is what did you do that is in your control? So I want to lose five pounds. OK, I walked 20 ,000 steps today. I went to the gym. I didn't eat processed foods. I didn't drink. Right. You can't control the outcome. you can control the input. And so as a salesperson, the best thing that I did in the beginning, one of my mentors told me every single day, I want you to keep a little tick sheet next to you.

45:51And this was back when I was at Goldman, actually. And I would do a little line for every time I got told no. So every single day, and he's like, I don't want you to try to hit a million dollars in sales or whatever our goal was. I want you to try to get told no 50 times today. You don't leave until you get told no 50 times today. And what does that do? It gets you excited for every no. So you're like, fucking don't care, whatever. You know, I remember I would pick up the phone at Goldman to try to sell them. I think I was in the private equity group then at the time, a pep product, this private equity product.

46:21And they would be like, don't ever call me again. How did you get this number? Fuck you. And I'd be like, okay, two, you know, and then I just go to the next call. And so you can kind of build this armor of like, it's really hard to get to me now because I've been told no so many times. Who cares? So go chase no. And how do you turn a no into a yes or kind of more tangibly? I'm curious when you started to understand, okay, all these people are telling me no, did you have this lesson of here's why and here's how you can kind of be the most convincing version of yourself? Good question. You know, in the beginning, no, I just was taking pain, which is okay.

46:59You know, I was like, I think I will get better if I just swing the bat more, which is true. Like you gotta to be pretty dumb to keep doing the same thing continuously and have no ability to get better. I also do believe actually that you really don't sell anybody anything. You find the people who are already predisposed to want what you're selling. And so you're much better off figuring out who is running in the desert, about to die from heat exhaustion and really needs a water than you are trying to go and sell water to a bunch of people who are in a swimming pool. And so I kind of, that's why I think it's really sexy.

47:34People on the internet will be like, let me tell you this clothes that works 472 % of the time, right? It's very hot in the entrepreneurial space. I think it's kind of bullshit. Because how many times, like, if you guys go to buy a car and they give you a hot dog, law of reciprocity, right? They give you a Coca-Cola. They give you something because the law says you want to give them something back in return. Does that mean you're going to buy a car? Of course not. If they give you a special close on it and they try to pressure sale you into a car, does that mean you're going to buy a car? No. It means you just kind of think the guy's a dick.

48:04Or if you do, like, oh, yeah, please give me that paperwork all, and then you're going to refund later. So I think hard pressure sales tactics are short-term focused and really bad to do. They ruin your reputation. They don't work long-term. And business right now is too transparent, and we have too many options. So I don't think that's a good way to do it. Instead, what I would say is we have something called the trust framework. work. And so if you want to sell somebody something, all you're trying to do is get them to trust you. And by that trust you, what does that really mean? It's what Dale Carnegie always says, which is a sell is never about what they know about you.

48:39It is about what they think you know about them. And so if you really want to sell somebody something, we just talked about it with your DMs, then if they want to sell you, they don't really need to talk about themselves. You're like, whatever, long ass resume. Instead, what do you want? Hey, I looked at your podcast, The Burnouts. There's three spelling errors on the website. I saw this video. I think if you change this thumbnail, did you guys see these 15 topics I think would be perfect? Here in the next couple guests, look at their outlier videos. Here's an Instagram. I think you should do it with this topic.

49:09They're showing you that they know you while also showing they're really good at strategy. So obsess on getting them to trust you by show, don't tell what you know about them as opposed to the other way around. I mean, I'm going to clip that, put that on my LinkedIn and I hope that

49:26Sophia:I hope everyone takes your advice. Everybody will yell at me and tell me I suck. A million percent. No, no, they definitely won't. And I kind of want to switch gears a little bit and focus more on kind of what we've been talking about around this idea of like making money, but more specifically, I want to talk about investing. So I'm curious. So let's say we followed your advice to a T. I'm now working for a rich old man who has no social media. I'm starting to make my first paychecks. What do I do with that money? How do I make my money work for me? Yeah. Well, there's a couple tried and true rules that I think everybody should use.

50:04The first is the 50-30-20 rule. And so when you come into finance, they teach you something immediately, which is you want to take 50 % of your paycheck. You want to put that towards needs. That's your rent. That's your car. That's stuff you have to have. You're going to take the next 30 % towards your wants. That's going out to dinner. That's cool pants. That's nice outfits, whatever. The last 20 % you're going to put towards investing. So that is saving first to your, I typically like always to have a three month emergency fund. Six month, I think is ideal. Anything further than that, I think it's not really necessary unless maybe you have a family.

50:38Then every dollar past that, I want to start investing. In the very beginning when you're investing, I believe you're investing to learn, not necessarily to make a ton of money. And so I like to start really simply. So that would be put it towards your 401k if you have a corporate job, your IRA, if you're self-employed. I want you to just put it in the stock market. See what that looks like. Do we understand stocks? Do we understand bonds? Can we put it in a 60-40 vehicle that is just managed by somebody else? We want to have as much income that we are not responsible for, but we can watch and learn from.

51:09And by not responsible for, you're not picking individual stocks. I think that's really hard to beat the smartest guys in the world doing it. And so if you do that 50-30-20 rule and you pay yourself first, we believe this in business too, it's actually not very common. So only about 30 % of employees pull aside their first, let's call it 20 % of their paycheck and save it. 30%. So what does that mean? That means you have to have more willpower than you have discipline, which means that willpower is actually a depleting resource. So every time you use it, you have less of it, right? That's why famously jobs is like I wear one outfit a day.

51:49Barack Obama says the same thing. I don't want to deal with my outfits because that's a silly decision. I'm going to have decision fatigue by the end of the day. So with your money, you should take that 20 % and pretend like you don't have it. Put it in a savings account. Put it in an investing account automatically. You can do that the second that you get paid in your paycheck. And I did that my very first one. So a lot of times people are like, how did you get all this money? And how did you make all this money and do all these deals so early? It's because I kind of forgot that I had that money somewhere.

52:14And so allow yourself to be disciplined instead of willpowered. That's what I would do. Interesting. And then at what point would you get into what you've now done today, which is finding kind of these business opportunities, acquiring an unsexy business and making that kind of a career? At what point would you switch gears or kind of shift your focus in other areas? Well, one, I think you need to learn today right now how to do deals. And the reason why is because you won't know how to negotiate equity. You won't know how to negotiate your salary. You won't understand how a business makes money.

52:47You won't understand your P &L unless you understand how to do deal making or what we call acquisitions. I think it is the number one skill that I wish I would have learned when I was in school. That's why we made an education business about it. Because sure, you should learn savings and budgeting. But like I just taught you everything you need to know about saving and budgeting. Don't read another fucking book. Don't do anything else. 50, 30, 20, apply it every day. That's literally it. Yeah, you could mess around with points. Yeah, you could like do something specific with your IRA or your 401k.

53:17That's so iterative. It's never going to change your life. That's all on the margin. So if that's all you need to know about budgeting, then what's the next step? Well, you cannot negotiate more if you don't know what you're worth and you don't know how to understand what a business is worth. And so I think you need to learn dealmaking and acquisitions really early. Now, I don't think that means you should go buy a business. So this is something that's been like hard to teach people broadly. A lot of people come to us and they're like, I want to learn how to buy a business in one year. I'm in debt.

53:46I don't know anything about business. I've never run a business. I'm like, listen, you should learn how to do this right now, but you probably shouldn't execute on it in a year. What you should do is take this knowledge and go apply it and get like a little part of a business. And so here's when you should not buy a business. Do not buy a business. Just learn acquisitions, But don't take action if you're in debt. Don't do it if you have a family and a lot of people to take care of overarching and you don't understand a profit and loss statement if you can't read a profit and loss statement. If you don't understand how to read a financial statement and if you don't understand what good versus bad debt is, you're not ready.

54:20You're ready to learn those things, but you've got to learn those before you should go buy a business. And the only way that I think that's not necessary is if you are, for instance, you guys right now, we're on your podcast. Let's say this young woman, I don't know your name, but let's say, what's your name? Brenda. Okay, Brenda, what's up? Let's say Brenda runs the production for your podcast and she actually edits and produces and she's a third party vendor. And you guys pay her$3 ,000 a month. And that's what she does. She has a lot of other clients. You're one of them. You guys don't necessarily have to understand SBA loans, good versus bad debt, any of that to be like, huh, we pay her$3 ,000 a month.

55:04And I bet if we talked about her on the podcast, Brenda would get like five or seven more clients. Hey, Brenda, how big's your business? Oh, we do about$100 ,000 a year. Huh. So if I was able to get her three more clients at 3K a month. Well, now, did I just double her business? Yeah, I did. Okay, with only three clients that she keeps for a year? Cool. Hey, Brenda, you want to do a deal where I take 25 % of your company? You do distributing equity. So if you take money out, I get money out. But I only get my 25 % if I double your business. So I increase it by 50 % because that's only three clients.

55:39Brenda would be like, yeah, actually, that's a great fucking deal. Okay, fine. Then you could do a deal. And so those are called partial acquisitions. And I really like those. That's no debt transfer and is only done through milestones and earnouts. And I think more business owners should do those deals. Like I think you guys and anybody in almost any business position should be looking at all the things you pay for and saying like, should we own any of these? Because guess what sucks? How fun is it? Do you guys do like sponsorship deals, ad readouts?

56:08Sophia:Sometimes, yeah. Okay. Some of them are great. Some of them are not great. She shakes her head, sadly looks down, Right. So there's like, so the problem with doing ad reads for other people is like they capture most of the upside. They're very specific. Oftentimes they forget that the reason they want you to do it is because you're good at it, but they give you all these restrictions about what you're allowed to say. It's kind of crazy. And so if instead you're like, what if I just make my ad reads only companies we own part of? And I get to decide what we do. And then we make money off of that.

56:37And that's contrarian thinking. I own almost all the companies we talk about or we have equity in them. And so like those deals are really interesting for business owners. And I think more people, you guys could learn everything you needed to know in 90 days in doing a deal. And then every time you see a vendor or you pay somebody something, you're just going to be like, oh, okay, I'm going to try to do something there. And then the cool part is if you're not paying a lot for them and it doesn't work out and Brenda's like, hey, I'm enjoying my business. I don't want to grow that much. Now we're doing$500 ,000 a year.

57:08You helped us get there. I'm kind of cool. and you're like, we have a$20 million company now. This is too small for us. Brenda, you just go, Brenda, buy me out. Over the course of the next three years, do it at a reasonable price. The company's all yours again. Like there's so many ways to trade these businesses as assets, but we were never taught that. And so private equity steals our lunch. That's fascinating because I think you're really right in the sense that most people don't think this way because they're so trained in such rigid ways of thinking that are like one plus one equals two, that they don't understand there's all this opportunity for upside in a way that to your point requires this level of contrary and thinking.

57:51And actually one of the things I was really interested about when I was looking at some of your recent videos was you said that you would highly recommend in 2026 investing in your appearance and things like that. So I'm curious, what are other places where you would say investing money in like your appearance, for example, is something that people should do. Yeah, well, I mean, you go to the math and you guys like, you can send this to your boyfriends, all the ladies listening online, but like there's really fascinating studies on appearance, vanity, and making more money. And so, you know, I looked at three series of studies and the studies across gender, age, and industry, so what the person did for a living, all had similar readouts.

58:35And the readouts is essentially this. Women on average make about 30 % more money with makeup as opposed to without makeup, regardless of whether you're good looking or not. About 30 % more when you're dolled up. Men, obviously they didn't do one on makeup for men, but they did one on being well-groomed. Women, again, make somewhere between 33 % and 40 % more money when they're well-groomed. So that is well-attired, makeup, outfits that are appropriate for whatever it is you're doing. And men make 15 % more money. And so the data just seems to prove, which makes sense, that when we dress well and when we look good, we make more money.

59:11And if you think about it, we know this to be true. Pretty privilege is very real. And you can either say, that's not fair, so I'm not doing it. Or you can win. And I think you either try to be right or you win. And if you're interested in winning, then who cares? Put on some makeup. I always joke, my joke is then people in the crowd sometimes get mad at me about this. And there's always a woman that's like, it's not fair. Why do we have to do this? And I'm like, honey, it's also not fair that we have to tear open our lower parts to have a baby and a man just gets to shoot a seed once. Not fair, but real.

59:44So if it's going to make me more money to paint my face, clown me up, motherfucker. Why do we care about that? Remove this patriarchal da-da-da, whatever. Just win. And then you can change the rules once you've already won. That's fine. And so that does appear to be true. And I'm sure you guys have felt it like even this morning where I'm staying. I don't typically dress like this. We were talking about it before. I don't really like to get ready. I don't wear makeup typically. I'm actually not that into clothes. Could care less. But I found these studies. So like when I leave the hotel every morning, I'm pretty glammed up compared to what people look like normally.

1:00:20And so every morning, what happens? I get like three or five compliments. Like you look beautiful today. I'm like, stop, you know, walking out. And do I really look that different? I don't know. But it's like this effort level. And so I think we got to ask ourselves, like, if all we have to do is put a little attention or intention to our appearance, why aren't we doing it? And like, play the game. I like that idea of don't complain, just win. I'm taking that motto with me. And there was another podcast you went on where you said if you had$1 ,000, you would invest it in a cold plunge or something like that.

1:00:57I don't remember. But I'm curious for other kind of recommendations you would have when it comes to investing in your health or your appearance. What else do you think people should pay attention to? Yeah, I sound like such a tech bro now from Austin, don't I? um you know um my husband taught me this but um i i have found that life is hard and so you get to choose your heart i think it's hard to be employed it's hard to be an owner it's hard to be rich it's hard to be poor like all of it's actually hard it's hard to get rich it's not easy it's hard to stay poor so like no matter what you do life is going to be hard and then you die it's very existentialist or nihilist, but it just is true.

1:01:35And so if that's the case, I think you should do more things that are difficult early on in the morning. Mark Twain famously said, if you're going to eat a frog, eat it first thing in the morning. If you got to eat two, eat the big one first. And so my husband and I do hard things every morning. And that is a cold plunge. I hate it. I think it's miserable. I don't like it. I don't like being cold. He calls me coldy. We talked about it. I'm like, get me out of New York. It's too cold here, you crazy people. And so I do a cold punch because I don't like it. And I don't know about the science. We can leave that to Brian Johnson.

1:02:07But like I go and I do it. I don't like working out. I really don't. I almost bitch about it every time. So I go do it early in the morning. And if like you go do a really hard workout, especially for women where you lift weights, and I don't, maybe the science says something totally different. But in my experience, lifting a very heavy thing early in the morning, like throwing around the weight physically, you just feel tougher. And so after I've gone in a freezing cold pool, after I've lifted a bunch of weight, I've broken some nails, I've gotten a little dirty. I'm like, what are you gonna do to me today?

1:02:40Like, oh, the email was rude. I'm fine. You know, so like, I think if you could just like front load your pain, then the rest of the day has a lot more pleasure.

1:02:51Sophia:Yeah, I'm down. I think that's actually a great conclusion. Holy shit. I love that clip. I mean, we need to start doing that. We need to do more boxing classes together. We need to get back into exercising. That's, that's what this has, has taught me a little bit. I think you were right. I kept being like, no, that's not important. We don't need to do it. I think we, we need to do boxing in the morning. Post it on Instagram. Tell me and tag me in your ice bath challenges. Next time I come into town, we can all do an ice bath. I'm going to tag me myself in my abs. Hopefully you already have them though.

1:03:20Well, that is the other thing with women is we can be really skinny and look beautiful as you both do, but are you as strong as you want to be? Exactly. No, definitely not. And by the way, I'm like pointing the finger right back at me. I'm the same way. I want to be stronger than I am. And so my dear friend, Gabrielle Lyon, you should have her on at some point. She's my doctor. She's incredible. She's like this psychopathically strong woman and she's 5 '1". We call her the tiny tornado. And I think that more women need to get comfortable with being strong because life's tough. Well, it's like, you look good, but do you feel good?

1:03:52And usually the answer is no for so many of my female friends. And that's honestly really sad to me because it's hard to do your best work when you also don't feel good personally. Oh, yeah. I mean, the last thing I'll say, she has this incredible video that I'm like, so good. But basically, she's doing this back and forth between her and a friend. And I'm sure we've all heard our friends say this, like, working out should feel good, right? It should be easy. I want to be in flow. You know, that doesn't feel my body doesn't feel right. It's my follicular phase. Like, we've heard all these things.

1:04:24And I think they're excuses that we've given ourselves as women. We don't have to be always in, like, push state. But I do think we should get comfortable with it. we're like highly, highly capable and our bodies are incredibly resilient and you can do hard things. And so I don't think we should feel bad going and lifting the heavy weight and doing the awful, terrible workout every now and then. Like it doesn't always have to be Pilates and yoga, you know, although they're great too.

1:04:49Sophia:Cody, thank you so, so much for coming on today. It's funny to have you here because me and Sophia have been watching your content since we were literally roommates in college and it's been a dream to have you on. So thank you again. I've learned personally so much today. Yay. Well, thank you for having me. This was a pleasure. Can't wait to see it come out.