Codie Sanchez, 7 Boring Businesses to Replace Your Income | Entrepreneurship | YAPClassic

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24:17So let's talk about this idea of having multiple income streams. I've been running this podcast for five years and I always see like trends in and out, right? So like when I first started, everyone was like multiple income streams. And then lately, lots of talk about focus on one thing, like just had Alex Hermose on, Leila Hermose, their whole thing is like focus on one thing. Matt Higgins, former Shark, also said the same thing, like really just focus on one thing. Later on, once you're rich, you can diversify your portfolio. But in the beginning, focus on one thing and get really good at it and get rich from it.

24:50So I know that you suggest you have multiple income streams. Do you want to give your perspective on what you think about this topic? Yeah. Well, I'm friends with Alex and Layla, so I love them. I think there's multiple things. One, I just don't like risk. I want to never have a likelihood where I can't pay my mortgage or pay my rent. I don't want you to sit there wondering if you're going to have to pack up and move the kids out because you have taken one huge swing and you have fallen down short. What we forget is what the numbers tell us. I go back to the numbers and the numbers tell us that most small businesses fail, that most startups never even make it to their first million dollars.

25:29For every case on Twitter, showing you how easy it is to start something, if you go to the numbers, it tells you that that is an anomaly by and large. And so for me, somebody asked me the other day in one of our groups where we talk about buying businesses, they were like, I have a$250 ,000 job, I'm working at a company, but I really want to focus on buying a small business. I don't know if I can do both at once. Should I quit my job? I was like, absolutely not. Absolutely not. You should keep that income and take a small incremental risk that allows you to get to the next step. The hard work is like, yeah, why don't you work two jobs for a period?

26:07I'm not saying there's like a free lunch thing, but don't put yourself in a position where you're not able to feed your family or yourself. I don't think that's necessary. Now, to their point, there's something called the 80-20 rule, right? or Pareto's Law, which is basically that 80 % of your outcomes will come from the 20 % of the things that you do and almost everything in life. And so I do think they're right in that focus is critical. In my business right now, I own 26 businesses, but 80 % of my time goes to one business. And the rest of those businesses are operating with independent operators like a private equity model.

26:42If I had to split focus between 26 businesses, I wouldn't be here. And so there's this balance where two things can be true and have nuance, which is if you feel something so strongly that you couldn't sleep for the want of it, you have to build it, then do it and focus on that thing exclusively. But for a lot of people, they're like, man, I just want to spend three more weeks this summer with my kids, or I just want to go on one more vacation than I can. Or like, I'd like to just not have to worry about the price of guacamole and avocados on the side. And so for me, wouldn't it be nice if I could just have this little extra?

27:17And so anytime anybody's listening to anyone, including me, I think you should be asking yourself, do I just want this because that's what she is saying, as that's what he is saying, or do I actually want this myself? And where can I question everything and find the truth for me? Because there is no one truth. There is just what is appropriate for you. Exactly. We talk about that a lot on this show, like defining your rich life. We had Ramit Sadie on and he was talking about defining your rich life, what that means to you. Okay. Unconventional acquisitions. So you have this program and by the end of it, you hope that these people have 12 different income streams after one year.

27:55And I read that the average millionaire has seven to 10 income streams. So it's no wonder why you want people to have these multiple income streams. Can you help us understand what this might look like having 12 different income streams? How is that manageable? I know you mentioned some things previously in terms of having operators for some of them, but can you just walk us through how that's manageable and give us an example of what that looks like? Yeah, so what I really want people to do is learn the framework. So I want you to be able to buy your first business that either supplements your salary if you wanna exit your company or supplements your expenses.

28:30And so I want to teach people, how do you buy a small business that can either replace what I'm making right now or that can replace my expenses so that I can continue to do the work if I want to at my job, but I never have to. I can have my fuck you fund that's funded from something else. And so that's the first step. And then what you'll quickly realize is once you buy a business and the average person who goes through our program buys a business typically in 11 months and that business is somewhere between$100 ,000 to$10 million in total revenue. And we screen people because not everybody should do this.

29:04And so we screen them to kind of make sure, are you sure you're ready for this? And what I found is what happens is you'll buy your first business and then you'll spend anywhere from 90 days to a year, a year and a half, kind of stabilizing that business running through it. But then you're going to add different, what I call revenue lines that could be income lines to an individual through your business. So you're going to say, all right, I bought a laundromat and now I want to increase the revenue of the laundromat. So I'm going to add vending machines as another revenue line. And then because I see how that works, I'm going to add vending machines for soap.

29:40And then because I see how that works, I'm going to add a wash and fold service. And then I'm going to add a delivery service. And what you're basically doing is you're diversifying your revenue streams through one business. So there is a focus or a through line to your business, but you're being really smart in acquiring your new profit centers. That's something I wish I learned earlier because I always thought you had to grow organically. Like I've got to go and I've got to get this one customer or this one client. But what if instead you could acquire the clients and wrap them up inside of your business?

30:10And that's what I tend to do again and again. But the only caveat I would say there is that I do think you need to focus on skills early as opposed to income. So I have a model that says, learn, earn, invest. Most people go, I want to invest. I want to invest and make money. But really what you have to do is first, you have to, let's say, let's say you wanted to buy a boring business. You need to spend a minute learning about buying a boring business. 90 days, some people take a year, but let's say that one year trial period of really learning how to execute on dealmaking. And while you're doing that I want you to earn money and I want you to learn how to increase your earnings potential.

30:49So whether that's negotiating for a higher salary or whether that's getting a better job with a better salary or whether that's doing commissions. And after you've done those two things, then I want you to use that money and I want you to invest it in something or invest your time or expertise. That's kind of how I push people to start thinking about diversification of revenue lines. That seems like a really, really smart framework. Something that I want to follow up on is you mentioned that you're screening people and making sure they're ready for this. So what is a typical profile of someone who might be ready to have a boring business look like?

31:22I was counting them the other day. I think there's six paths to buy a business with$0. So let me share that with you first. And then it'll kind of tell you what type of person can do what, because it differs. So if you want to buy a business with$0, you can buy a business basically by using seller financing. so you can say, hey, I'd really love to buy your podcast. You don't want to do it anymore. How about I take over the business, your business makes 100K a year, I'll pay you 300K for the business over the next three years. You take all the profits, I'll grow the business, anything that's the delta is mine, and I own the business at the end of the year.

31:58So that's called seller financing, super common. Then you have revenue share. So you might say, hey, your podcast is doing awesome, but I bet you could monetize it better. What if I came on board and whatever your podcast is making right now, I don't want any of that. But if your podcast, if I could make you an extra 20 % or an extra$200 ,000 a year, I'd like 25 % of that in perpetuity. And maybe we could negotiate for a percentage of your business, like 5 % of your business. And so I don't have to put any money in, but I've just given you$200 ,000 more for just my sweat equity and revenue share.

32:33and you could do that same thing with profit share. You could be like, I'm not gonna do it from top line revenue. Instead, only when you put dollars in your actual pocket will I take 20 % of the profits that I grow you and I'd like to take a small piece of equity in the business too so I get to continue to be paid in perpetuity. And then you could also say, okay, what about if you are a business right now and you have assets? So let's say you have a trucking company or something, you have a bunch of trucks. Why don't I go get a loan on the trucks? And because I do a loan on the trucks, I can buy your business with this capital.

33:09And then the fifth way would be like, I go raise money. I hear Cody's got some money. I hear Alex and Layla are flush with cash. So I'm gonna go ask them for some money. I'm gonna buy your business. They're gonna take a part of it. I'm gonna take a part of it. And then the last one is like an asset sale. So like, oh man, a bunch of businesses are going under with COVID. What if I reached out to my other podcast friends that aren't gonna do their podcasts anymore and they actually had some sponsors and info products that they're just shutting down. What if instead I kept those going and I just paid them a commission on that?

33:41So I'm gonna let them have 10 % of those products for the next three years and the rest goes to me and I'll run it all, don't worry about it. And so we could do an asset purchase. And so when the people come into the group, what I say to them is it really depends on what type of purchase you're gonna do. You could buy a business tomorrow with very little risk if you do a revenue share, a profit share, an asset sale. There's no skin in the game. And if you go bankrupt or the company fails or anything, you're not gonna go bankrupt. You're gonna be fine. Now, if you're gonna put your own money on the line or get a loan, we need to make sure that you have enough money and understanding of running a business so you're not gonna go under.

34:20And those are the things that I try to talk people into. Typically, if you've run a business before, you should be able to buy a business. If you've been an exec at a company before, you should be able to buy a business. If you've done real estate before, you should be able to buy a business. And if you have some excess cash so that no deal can ever go sideways enough and ruin what your momentum you already have, you could buy a business. But I'm really conservative, again, because I hate risk. So I'm always like, please, dear Lord, just don't come over even and talk to me if you're not ready to do the work, because it does take some.

34:52Yeah. And I know that a lot of my listeners are entrepreneurs. And as an entrepreneur and a founder of a company, you can also use some of these strategies to your advantage. So for example, all of my executive team, they've just put in sweat equity or have taken a reduced salary and they've got equity in my company. But as a result, I have, you know, four other really smart people helping me build my company. And I go so much further with my team members. So it's like a win-win for both parties. Exactly. And then what you want them to do, this is where it's fun. And we can always talk about this later in case this is too technical for all your people.

35:24But what's really fun is for somebody like you, you also have a different type of purchase you can do, which is audience. So lots of people like you do sponsorship deals or ad deals. And that's great. You have a high level of integrity. So you only do things that are great for your audience. But you know what a better play would be is you look for a few companies that you really like and you say, I want to do distributing equity deal with you. I'm not going to take any cash up front or I'm going to take a decreased cash rate. And instead, I don't know, I love this this notebook company. And so notebook company, I want to put you as the sponsor for all of our podcasts or for some of our podcasts.

36:03And that would typically cost you$100 ,000 in ad spend. Instead of that, you're going to give me$100 ,000 in value in the company as I drive XYZ metric. And I want a percentage payout every quarter based on the ownership percentage I have in the company. So I want a profit share or a rev share. Because you don't really want to do just an equity deal because then you end up not making any money and you still got to pay your employees and everything. You need some cash to come in. And so distributing equity is a really cool way to do a deal if you have an audience. Oh, that's really creative. And I have a podcast network, so I will definitely keep that in mind.

36:41Can you give us some insight into how much money it actually costs to start one of these boring business? What does this investment typically look like for some of the popular ones? Really varies. I mean, the cool thing about businesses is you can go as big as you want. I mean, I was doing deals when I was in private equity and running my own funds that were hundreds of millions of dollars. And I've been a part of billion dollar deals, although I didn't lead that deal. So it can totally vary. What I would say is if you want to use your own cash, it's a good metric to think, I'm probably going to have to put something like at least 10 to 25K down to buy a small business?

37:17Can I put 10 to 25K down? Then I can use my cash and I can buy a small business using seller finance. You can do that for sure. If you want to get creative and not use any of your own cash, which I was just talking to Alex and Layla about, how do we do more transactions without a bunch of cash up front? Then technically you don't have to have cash. You could just do a deal using sweat equity, rev share, or the fact there are these 11 million small businesses and they're looking for homes. These people need to sell. We had a guy the other day, actually, who was in unconventional acquisitions. It was so cool.

37:53So he worked in Phoenix, Arizona, and he was a general contractor. He was in the construction trade. I can't remember if he was general contractor or not. And he worked for a guy. And he'd worked for a guy for 10 years in this construction business. but the gentleman who headed the company was getting old. And he listened to one of my things. And then on our next Monday call, because we do a call every Monday, he got on. And he's like, you know, I went to my boss, essentially, and I sat him down and I said, hey, I don't know if you were ever thinking about this, but if you ever were gonna retire from the business or think about selling the business, I'd love to talk to you about it because I would love to buy this business from you.

38:31And I'd have to figure out a creative way to get cash to do it because I don't have a lot. But if you're ever looking for somebody to take over your business, I'd love to have that conversation. And his boss basically was like, oh, this is great. I'm ready to retire. I just, none of my kids wanted this. I didn't really have any idea. Would you want to start figuring out a plan inside the next 30 days? He's like, I only really, I want to work like two days a week, but I don't want to work five. You could just use the profits from the business to buy it from me. I can watch and make sure you're doing a good job.

38:59And if you hit all your metrics within 90 days, we start to transition over. He literally had the whole plan for his employee. And that doesn't happen every time, but you'd be so surprised or actually you wouldn't probably, but people listening would be surprised how often running a business is so tiring after 10, 20, 30, 40 years. They're like, please, dear God, take the thing. But I don't want to just shut it because it's my baby too. Yeah. Seller financing is something that we really don't think about often. So it's very interesting. And something else to your point right now is finding a highly motivated person who wants to sell their business.

39:35So talk to us about what we should look for and why it's so important to find somebody who's actually highly motivated to sell their business. It's so true. I think you never sell anyone at anything. You only find people who are already predisposed to want what you're selling. You find people who are ready to sell. You don't teach people that they need to sell. In that case, they kind of look like this. There's two archetypes, if you could think about it. There's you. You are young entrepreneur. You've only been doing it for five years or less. You're excited. Your business is growing. It's in a cool industry.

40:08Your brand's associated with it. There's all this optionality. You might take some cash as investment if you wanted to accelerate your company, but you're probably not ready to sell your business because you're still excited and there's all this room for growth and you have a cool curve. The opposite and what we're looking for is somebody who's probably over 50. They've run the business for five years or more. The business has very marginal growth, three to 5 % growth a year. They've been running this business in an area that's pretty commoditized. Think roofing companies, landscaping, accounting, and they don't have a big growth plan for the business.

40:45They work a lot typically, or they're looking for change because of death, divorce, adverse, disease, unhappiness. There's a different word for it, but I always forget the D for it. And also disaster. They call them like the five D's of selling. And if one of those is happening, then you are primed and ready as a motivated seller. And then once we find a motivated seller and we're evaluating their business, I'm assuming we need to look at like profit and loss statements, but what other things should we look at? I think there's three things you need to get 80 % of the way to a deal. And the devil is in the 20%.

41:23But if you want to get 80 % of the way to figuring out what a business is worth, and maybe should you buy it, you need these three things. And they are first, you need a profit and loss statement. So what does the business make and what does the business spend each month? And typically, you want that to be expanded. So you can look at it weekly and monthly. You don't just want an annual one because some businesses have a lot of what's called seasonality. So variability in their sales or expenses. Then the second thing you want is their tax return, because they put together the P &L, but the IRS puts together the tax return.

41:56And so very seldom is a small business owner going to pay the IRS more because they lied about their business making more than it really did. So you wanna match those two up. And then the third thing that you typically need is there's, in almost all businesses, there is some, there's that 80-20 rule again. There's like the 20 % that really matter. So let's do an example of like a car wash. Your lease really matters or the cost of the real estate really matters because that's one of your biggest expenses. The utilities really matter because electricity and water are one of your biggest expenses.

42:30So you want to find out what is the other 20 % that is going to drive 80 % of the success of your purchase. That makes total sense. I heard you say before that you should really only consider businesses that are easy to understand or that you already understand. Why is that so important? We're learning a new skill as is here, right? We're learning dealmaking, how to buy a business, how to do a deal. If we don't have to layer on another skill, which is an industry specific skill and an industry that's hyper complicated, that's a win. Keeping deals simple wins deals. I think the worst thing that you can do is allow a really fancy PowerPoint to come into the mix here and give you a bunch of false hope and projections about what could be as opposed to what is.

43:17And so I like really simple businesses because then it's easy for me to understand. I think most deals go wrong because if the deal doesn't make sense on the back of a piece of paper or on a napkin, then the deal probably doesn't make sense in general. So most people in our world in finance, you know this too, you know, people in finance want things to seem complicated so they can charge you a lot of money for them to solve it. But the truth of it is, it's usually a lot simpler than we talk about. Nobody's curing cancer here. You can understand how a laundromat works, how a car wash works, how a roofing company works.

43:52It just takes some work to understand it. So that's why I don't like anything that says proprietary on it or bioengineering or complex patents or even complex attorney companies because there's too much ability for me to not understand what's happening. Keep it stupid simple. Yeah, that makes a lot of sense. We'll be right back after a quick break from our sponsors.

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49:07Something else that I've heard you say before is you've got to really look at the profitability and not just at potential for growth because everybody could say like, Like, you know, we're projected to do this or we've got, you know, it's such a fast growing space or whatever it is. Why do we actually have to look at the actual profitability and only really consider that? I believe in buying companies based on reality is not hopes and dreams. That's the difference. Really, if you think about it, private equity versus venture capital, private equity, which is what I do, sort of buy these boring businesses.

49:38Private equity buys businesses based on the money they make today. and they apply a very small idea to the money they think they could make in the future, but they buy it based on what it makes today. Venture capitalists invest in a company now with the hope that the company becomes something else in the future. If the company that a venture capitalist invests in stays the same the day that they invest in it as the day they go to sell the company, big, huge issue. That means the investor is not going to make any money. If a small business stays the same the day that I bought it as the day that I sell it, that's okay because I anticipated that.

50:14And I just cash flow on that bad boy for some amount of time. And that's really the difference between the two. Yeah. Another tip here that I've heard you say is look for a business that doesn't do a lot of marketing or advertising and still is profitable. Why is that? I always call it the fax machine test. Every time I see a fax machine, I get all tingly because it basically means that they haven't spent much money on technology, probably haven't done much marketing. And that's something that's called value add. It basically is just the same as a piece of real estate in which you're like, oh, look at this awful shag carpet.

50:47And then you peel up the corner and you're like, beautiful, original hardwoods. Awesome. Like they don't even realize what they have. Oh, they boarded up this room and made it into something ridiculous. When in fact, when I peel it back, the room's way bigger. Look, there's a window underneath here. I don't even have to add the window. That's what a lot of these boring businesses are. They're kind of a pain when you first take them over because there's nothing systematized, right? A lot of these guys have their tax returns in paper folders scattered around their office. So it's not hard to do, but it's a lot of work to systematize that.

51:22And then you get to layer on the fun stuff like, gosh, could you imagine if a company actually paid attention to reviews and had software to get them at the top of Google reviews, I could instigate that. This company's never once tried to get a review. And I think we could change the company. And so we have something called the three Ms, which basically talks about, it talks about markets, marketing, and measurements. And those three things all have all of these different variables in them. So like markets, if you own a business and you are located in, I don't know, you're a baby, you're a toddler.

52:00What are those called where you go and you like take kids? Daycare. So say you're a daycare for toddlers and you're like, okay, at this point, we don't take newborns. Well, a new market might be you start to take newborns. Another market might be that you add a preschool in the back. Another market might be you just add another one 25 miles away in a new location. So you think about what are all the different markets we're not serving that we could get revenue lines on. And then you go to marketing, which might be like, we don't use Facebook ads. We don't use TikTok. Why don't we have a YouTube?

52:31What about if we had cold call outreach? And then measurements is what inside the business are we not actually measuring right now? Where if we measured something, then we actually usually outperform in it. And so we apply this 3M strategy to all the businesses that we run. This information is so good. So I want to give you a moment to tell us where we can find more information for unconventional acquisitions, your program, any sort of free resources that you have? Because I personally want to learn more. Well, if you can spell unconventional acquisitions, which is actually harder than you think, there's a lot of I's in that, then you can go to unconventionalacquisitions.com and there's a free blog.

53:08I think everybody should get on it. It's called The Boring Business Brief. And every week we basically break down a different idea of business to buy, a deal done, lessons learned. That one's really good. And then if you also go to contraindthinking.co slash recession, there's a really good piece that we have. I think you download it. It's basically all the ways to make money on buying businesses, starting businesses in a recession. Both of those I think are really useful. Amazing. So we'll stick those links in the show notes, guys. All right, so I wanna do a quick fire segment. We've got about 10 minutes left of the interview and I do wanna get some of your like day-to-day conventional wisdom at the end.

53:46So right now I wanna do a quick fire segment. I'm going to name some boring businesses. And I'd love for you to tell me like, what's the upfront cost typically, if that makes sense. Pros and cons, basically a data dump for us. So let's start with a laundromat. Laundromat? Well, how about this? I bought my first laundromat for 100K, made me 67K a year, then ended up buying two more laundromats, rolling those up. And we sold that for close to a million bucks. You can buy a laundromat typically for less than $100 ,000 all the way up to a million dollars. And you can do seller financing on these as well.

54:22You typically pay three to six X the profit of the business for a laundromat. They're what I call the gateway drug, good business to start with and learn with. For you, I'd say don't buy a laundromat. You can do a higher ROI and a higher returning deal, but a good one for a person who's just like, I want to do this for the first time ever without a big, huge business. And what are the cons of a laundromat? What do we have to look out for? The biggest con I think is that you can't typically make like tens of millions of dollars with a laundromat. You can make a couple hundred K to maybe a million or two.

54:53The second con is the customer that you're serving can be challenging. You've been to laundromats before. They're typically not in the nicest neighborhoods. You typically have machinery that can get broken into. I haven't really had any vandalized, but that can happen. So your customer segment is not Tiffany's. This is a different customer segment. So you have to be thoughtful on that. And then the other thing about laundromats that's just worth noting is they take a lot of equipment. And so if you're going to buy one, you really got to make sure you understand what that equipment is worth. Otherwise, you could get into a point where you buy a laundromat with all these machines, but the machines are all old.

55:30They're not going to work anymore. So you got to do some work on the equipment and get an appraisal. Got it. Okay. So the next one is vending machines. So I'd love to understand the pros and the cons of buying this type of business. Yes. Vending machines are great because this is a very cheap business to start or buy. I see people buy vending machine businesses for anywhere from$3 ,000 to maybe$300 ,000. So it's a really good, again, entry-level business. The problem with vending machines is that you can't sell very much out of one location. So they're not very efficient. You might make a couple hundred bucks per day per vending machine, but you'd have to travel all around to go both fill them up again and collect the money.

56:12So they're not a very efficient business where you can just go to one location. They require some logistics, putting money in, taking gear out. The second problem with vending machines is they don't scale very well for reason one. So there are some companies that have scaled vending machines, but not very many. And then the third issue with vending machine businesses, I think, is it's basically like a mini real estate place. You have to go negotiate deals with every single location that you go to, and they could take those deals away or they could require more cash. So you have to make sure you know how to negotiate and the right way to talk to a seller of the location.

56:48The good parts about money machines though are they're very cheap to start. They're really easy to run. Again, easy, not simple, important caveat between the two. And there's a bunch of technology now that allow you to track your expenses, your inventory, and all of that remote, which didn't used to exist. So that makes them a lot easier. So interesting. Okay. The last one is car washes. What are the pros and cons? So if I had to look at these three in order, I'd say vending machine, easiest business, least cost, probably the least profitable. These are all averages. Second business would be laundromats, medium cost, medium expenses, medium revenue.

57:29The car wash is most expensive, potentially the highest revenue of the three. And so the good part about car wash is all three of these businesses can be relatively automated businesses and you don't have to be on location all day in all of those businesses, which is really nice. The car wash has that same characteristic. They also can scale pretty easy. So car washes, you can add multiple bays to them. You can offer in-person service. I don't do that with mine. I like it better when it's just a location and you can self-serve, which also means you make less money, obviously. The thing to know about car washes is the equipment's extremely expensive.

58:08It's the most expensive of any of them. So you really have to make sure you analyze the equipment and make sure that it's in working order. And then it's really real estate. You've got to just look at the location, location, location, location. Do you have at least 10 ,000 cars that drive by per day? That's called your car count. Do you also understand your utilities and water bill? Because that'll be really big. for a car wash. And also, are there any taxes? Sometimes they levy taxes on those types of businesses. But I've owned all three. And I think all three have a place, maybe not for everybody, but to start.

58:40And I have to ask you, are there any boring businesses that you want to mention that are getting you really excited right now? Right now, the businesses that are most exciting for me are probably... I really like buying professional services. Right now, I'm buying accounting firms, typically just bookkeeping. I like the reoccurring revenue component of them. So every single month you pay somebody to do your books. I like that. I also like businesses and professional services that do things like insurance. Again, reoccurring revenue. It also has something that's, this is like very nerdy, but if any of these terms, you guys don't know them, I think of money has its own language.

59:18You teach people this all day long. Money has its own language. And if you don't learn to speak it, you're certainly never going to get much of it. And so if you don't know words like reoccurring revenue, or what I was going to say is CapEx, which means capital expenditures, aka the cost to build a car wash, things like insurance companies and accounting firms or bookkeeping have less of that. And so for somebody that doesn't have a bunch of cash to throw around, those businesses are kind of nice. So I've been playing a lot in the professional services realm right now. Really cool. All right. So let's move on to some of your conventional wisdom for entrepreneurship.

59:54I saw you on Instagram and you're making so much noise in the digital space. Congratulations on all your influence that you're going on Instagram, especially and other channels. You talk about mirror selfies and basically you started taking mirror selfies every day with your to-dos. Can you tell us about that and how it helps you stay accountable? So I found that the most critical person to you will be that person you see in the mirror every day And most people try to compete based on follower count or bank account And I think the only account that actually matters is the one that stares right back at you So about maybe a year ago I started realizing that I was letting my days slip away from me And that I was going along with whatever was happening as opposed to what I wanted to happen And so I started posting a selfie each day.

1:00:44And the selfie was just me in the mirror. And then it was my outline of things that I have going on that day. And the reason that I did it was a little bit of accountability. So am I actually going to do the thing I try to do, which is 1 % better every day because compounding is magical. And I thought, maybe this is a good way to do it. People do it a lot for working out, but I don't see very many people hold themselves accountable to what do they do with their time, their most precious commodity. And that's my idea. It's really cute. You have another exercise you call the one in 60 rule. Can you tell us about that ritual and how it helps you stay on the right path?

1:01:18So there's a saying among pilots that basically for every one degree that you go off course at any given time, at the end, you'll end up 60 miles away from the course of destination. And so when I heard about this, I started thinking about it from a daily action perspective. What if that's also true in the things we do each day? What if we have a plan, but every day we just get slightly moved off course, one degree off course, would we also end up tens of miles or hundreds of miles away from where we wanted to be? And I think the answer that we all know inside is that yes, that actually is what happens.

1:01:53And so when I realized that, I like to put things into practice by putting them on my calendar. So I put on my calendar pretty much every week that I can a little time for me to sit down with a notebook and I talk about what are my outcomes that I want to have happen that week. And I ask myself a series of questions and those questions lead me to hopefully steer myself straight each week. I think it's less important what questions you ask and how you do it and what day of the week that you do it, but that you have a practice where each week you're going to course correct slightly for every degree that you get off.

1:02:26Young Improfeters, this was an amazing episode with Cody Sanchez. Cody, thank you so much for joining us here on YAP. I really appreciated all your knowledge about contrarian investing, unconventional acquisitions, boring businesses. It was really, really interesting stuff. So I end my show with two questions. The first one is, what is one piece of actionable advice that our young and profiterers can do today to become more profitable tomorrow? You know what it actually is? The piece of advice I would give is that you don't actually need advice. You need to figure out your to-do list. And most people spend so much time listening to what other people say they should do with their lives when they know inside the things one through 10 they need to do to have a different outcome.

1:03:11And instead of trying to perfect, why don't you try to do? And I'll listen to my own advice on that too. I think that's brilliant. And what is your secret to profiting in life? And this can be beyond financial. The best deal I ever did was my partner. It was my husband. It's also the deal that was the most costly to me ever with my ex-husband. So when you're still young and you have this option, be really careful who you tie your life to. Because whether that person is your significant other, or that person is your business partner, or that person is a senior executive that you bring on, or somebody you decide to do a startup with, your partner will be the single largest impact on the human that you become.

1:03:53And most people don't pay enough attention to that. So choose your partners carefully. I love that. Well, Cody, where can everybody learn more about you and everything that you do. Contrarianthinking.co. Join the newsletter. That's hands down the best place. And then I'm Cody Sanchez, C-O-D-I-E, on all the internet of things, whether you like Twitter, TikTok, Instagram, or YouTube, we're on every single one. Amazing. Thank you so much. Thank you. This is fun.

1:04:32Amen.