The Mikhaila Peterson Podcast - Work Smart, Not Hard – How Anyone Can Invest ｜ Codie Sanchez EP 204

00:00:00.000 Some of the statistics are fascinating.

00:00:01.780 Only one out of 10 Americans dies wealthy,

00:00:03.940 which means excess money that they can pass on to the next generation.

00:00:07.060 And what I worry about is I remember 2008 vividly.

00:00:10.380 It's declines across all of the major technology sectors.

00:00:12.940 A few people that I knew tangentially in finance committed suicide.

00:00:16.560 You know, men defined as a protector and a provider

00:00:19.800 stopped being able to provide and protect.

00:00:22.520 And so I do worry about that.

00:00:24.200 Like, do not wrap yourself in your success.

00:00:26.940 Wrap yourself in maybe how hard you work.

00:00:29.180 If you are slightly competent, you have very few people who will compete against you as

00:00:33.140 long as you are willing to do an irrationally longer and harder amount of work than anybody

00:00:37.340 else.

00:00:38.140 It's actually all it takes.

00:00:39.700 This is literally what all the richest people in the world do.

00:00:46.780 Cody Sanchez, welcome to my podcast.

00:00:49.020 Thanks for having me.

00:00:50.220 Thanks for coming down to Scottsdale.

00:00:52.040 I'm excited to be here.

00:00:52.860 I was telling you, I grew up here, so this is my hood.

00:00:56.020 And then you ran away and left.

00:00:57.500 I did.

00:00:58.000 And I moved here.

00:00:58.660 you did yeah too hot for me you move in I moved to Austin I was only here for one summer it was

00:01:05.840 horrible yeah it's a it's a whole different vibe here people say it's a dry heat and that's how I

00:01:10.840 know that they've never been here in the summer yeah they tell you it's a dry heat and then you

00:01:13.680 move here and they're like ha gotcha that's exactly right it's right but it's beautiful

00:01:18.780 all the rest of the year so if you can like just live in the pool I actually couldn't think of

00:01:23.040 anything worse than a suit full-time in Arizona during the summer yeah unacceptable yeah capital

00:01:27.960 punishment. That is capital punishment. Okay. I want to know more about your background because

00:01:32.680 you're an extremely successful entrepreneur. You, how did that happen? Can you start from

00:01:38.720 the beginning? Like, did you come from money? Did you grow it all yourself? How did this happen?

00:01:43.840 Yeah. Well, I have my mom sitting over here, so she always laughs when I tell this story, but,

00:01:47.640 um, no, I didn't come from, from money. My mom was a 30 year special education teacher,

00:01:52.580 you know, incredibly hardworking, you know, master's degree, but really decided to serve 0.90

00:01:59.420 instead of focus on making money. And then my dad, you know, he came from a family that had to

00:02:06.040 build everything themselves, really. And so his side of his family comes from Spain,

00:02:11.100 and they moved to a place called Globe, Arizona, or Miami, Arizona, which is where copper mining

00:02:16.220 is. And so his story is wild. I want to have him on the podcast at some time. But like,

00:02:21.340 you know, he didn't get a chance to go to, to go to college. He built up his entrepreneurial

00:02:25.420 journey entirely by himself. Um, you know, he now has run and sold multiple businesses,

00:02:31.660 but, um, was the definition of, of bootstrapped. Right. Oh, that's cool. Yeah. And he, you know,

00:02:38.980 he had worked in a slaughterhouse for years and, you know, and was like, kind of like skiing across

00:02:45.240 the, the West coast for a while, kind of ski bombing and, and really good at it still to

00:02:50.180 this day, but he has, um, stories about, like, I remember this one story he told me about, he had

00:02:55.840 a pet rabbit. And, uh, this was back when he lived with his grandparents because his parents were

00:03:01.880 trying to make enough money to afford to bring my dad down to Phoenix, um, which is where they

00:03:07.120 moved because there was more money there than in Miami in the mining town. And, uh, and he had this

00:03:11.080 pet rabbit and he would feed it every day with his, his grandpa. And, um, and then one day,

00:03:15.920 you know, after dinner, he went out to go feed the rabbit and, you know, he was like, ah, you know,

00:03:19.640 where is he he's not in there well oh no I know they had eaten it for dinner because

00:03:25.820 the whole time they were grooming you know the rabbit was a very big boy but you know they made

00:03:31.580 their own wine they hunted uh and they raised animals to eat them and so that is so different

00:03:37.720 from how I grew up where my parents like kind of gave me every opportunity they could but like

00:03:42.380 you know like so many of us like a middle-class family in the u.s um and you know i think i

00:03:49.440 really benefit from the fact that i didn't have a trust fund for sure but i had a lot of love like

00:03:54.620 no better parents in the world so what do you think your parents gave you that like allowed

00:03:59.260 you to become successful are there specific values they taught you or did you have a whole

00:04:05.980 bunch of jobs growing up or something did you start working young like what what happened there

00:04:09.780 Yeah. You know, I actually, we have these four chairs at my parents' house that they still have to this day. And I have a brother. And one of the coolest things they ever did is we sat in these four chairs almost every night after dinner and we would debate. We would have topics and we would not just talk about what happened that day, but like, why did you do that? What did you think about that? What's happening in this world? And those four chairs, I think, led us to have to stand up if we had ideas and back them up.

00:04:35.360 you could say anything, but you better be able to back up your idea. And, um, and those four

00:04:40.460 chairs kind of lasted my entire childhood. So one thing I would say is they allowed us to question

00:04:44.880 things, but then we had to have a reason to do it. We had to be rational. I want to do the same

00:04:49.160 thing with my kids. And then from a very young age, they did two things incredibly well. I think

00:04:53.680 in my opinion, one is they really taught me to love learning. You know, like my mom, I remember

00:04:58.440 would take me to the library every summer here in Arizona. You could actually do it with your kids.

00:05:02.480 it's super cute if you go to the Scottsdale Public Library each summer they have a reading game and

00:05:07.980 it's kind of like a like Candyland like you know you you skip around the things on the board game

00:05:13.280 and every time you read a book you get you know part of the Candyland thing at the end you get

00:05:18.060 some reward uh from from the public's library oh that's cool yeah and so I would go and read like

00:05:23.380 I don't know however many books I was allowed to check out like 15 or 20 books at the time whatever

00:05:27.220 the max limit was and she just taught me to read and really love it and so that made me curious

00:05:32.300 and then my dad uh did a really incredible job i think of showing me what it meant to work hard

00:05:38.160 like he never called me a princess it was always you could be a future president

00:05:42.100 and uh and then he made me do as many team sports as i possibly could handle i mean i hated him

00:05:48.940 as a coach he was i'm sure your dad was tough in some ways yes yeah definitely yes yeah

00:05:57.160 my dad's a softy now but he was really i mean it was super hard always harder on me than everybody

00:06:03.240 else i felt but now in retrospect i'm like what a gift you know and that i think led me to business

00:06:09.480 because i watched him i watched my mom and i was like huh you know if he can build these things i

00:06:14.680 should probably be able to build them and because i'm curious and have this instilled learning in me

00:06:20.120 i don't want to go to my grave wondering if i had if anything left yeah yeah yeah you know i feel

00:06:25.000 that yeah yeah I wonder like one of the things I've been trying to figure out as a mom is how

00:06:31.020 do you well I think it's hard to as a female or at least it's hard for me to like give enough 0.98

00:06:36.560 negative pressure or something enough pressure in general maybe not negative pressure in order to

00:06:43.100 get people to strive to be their best right and so I think I had that growing up as well which was

00:06:49.260 like I expect you to get A's because like and if you don't get A's then you know you're not trying

00:06:54.780 hard enough or something like that but there was an expectation that was almost like higher than

00:06:59.620 what I was achievable so and like you said recently now that I'm older it's like lessened

00:07:06.080 but throughout I probably tell I was maybe like honestly 28 or 29 like quite recently it was

00:07:13.940 I expect a little bit more than you're capable of and that's like I think I'm still trying to

00:07:19.960 grapple with doing that to kids because it's like it's hard to strive for but then I think you get

00:07:25.760 such interesting results from it in a positive way yeah so it's tricky you know Chris Chris and

00:07:33.680 I have this saying he's my husband where he says for his parents he's like he's a navy seal or was 0.91

00:07:39.600 a navy seal and so uh our joke is always um you know to his parents thanks for fucking me up enough 0.98

00:07:45.260 to be a Navy SEAL, but not enough to be a stripper. Yeah. And I think there's like some 0.98

00:07:49.660 component that's right. You know, you need some trauma, like you need a little bit of difficulty

00:07:56.240 and trauma and strife and pushing in order for you to achieve anything. And if the part that's

00:08:03.040 curious, and I'm not sure how to manufacture it. Yeah. You know, I didn't have it manufactured

00:08:08.580 through a terrible mean family, which is a lot of times how overachievers have it. And so the

00:08:13.660 manufacturing for us at least came from really intense group sports so can you get out there

00:08:18.300 and can you make your kids sort of suffer in the Arizona heat and softball for 52 hours

00:08:22.500 also suffering for the parents probably more and then you know simultaneously my dad's a big hunter

00:08:27.940 and so um like this weekend we're going on a father-daughter trip and we're going to go

00:08:32.620 fishing and we're going to go hiking and so you know it would be camping and hunting and being

00:08:38.020 out in the wilderness and that makes it's hard it's you know it's not always the funnest yeah

00:08:43.760 So I don't know.

00:08:44.640 I like that.

00:08:45.260 I don't know if Jordan's a hunter, but maybe you could try it.

00:08:47.800 I don't know.

00:08:48.420 His hair wouldn't be done properly in the woods.

00:08:50.980 And like, who knows if that would work out.

00:08:54.400 He hasn't watched these, so it's fine.

00:08:57.520 I like, okay, team sports.

00:08:58.800 I can do that.

00:08:59.400 Because that's what I've been trying to do.

00:09:00.480 Like, how do you like manufacture trauma?

00:09:02.200 It's like, you don't want too much because that hurts.

00:09:05.360 But yeah, team sports.

00:09:06.300 That's a good one.

00:09:07.040 Yeah.

00:09:07.480 Team sports, I think, were big for us.

00:09:09.840 you know, the other thing that my parents really pushed on me sounds like similar to you is,

00:09:14.480 you know, if, if right now you have a kid and that kid wants to stop something. Yeah. Um,

00:09:22.420 how can you have a family commitment? You know, I have a friend of mine whose name is Jane Brady

00:09:26.360 and she's the daughter of a, of a billionaire, Joe, Joe Croft, um, Joe Croft. And, uh,

00:09:33.620 I, I remember saying to her, you turned out so normal, you know, you're, you're like very well

00:09:38.360 adjusted. You're very successful. What happened? And she said, you know, my family had family

00:09:43.120 mottos. And I remember the first thing my dad said to me is my fam, our family name means something

00:09:47.620 and here's what it means. And they had a family motto. And then it was, um, and then second was

00:09:53.600 you can't always be the smartest person, but you can almost always outwork everybody else. And that

00:09:57.640 is what our family does too. And so she didn't have massive trauma, but you know, while all the

00:10:02.160 other little billionaires, kids were getting bought horses and houses and et cetera, you know, 1.00

00:10:05.900 she had to work in the stable to just rent to go be able to afford to do her horseback riding. And 1.00

00:10:11.160 so, you know, levels to the game. But I like this idea of does your name mean something? And can you

00:10:17.100 make your kids believe that mission? You guys definitely as a family have a mission. And so

00:10:21.740 how do you make it supersede three generations, not just two? Yeah, yeah. What is that mission?

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00:11:17.140 enjoying this episode okay so where are you that's a bit of your background so what did you

00:11:21.620 achieve yeah um well you know brag a little bit yeah go for it i want to hear this part um we so

00:11:30.080 today we run a relatively large portfolio of what i call boring businesses or main street businesses

00:11:35.220 it's really private equity 101 so we took all the lessons that i had learned from finance i worked in

00:11:41.720 you know asset management and at companies like goldman sachs and vanguard and state street for

00:11:46.220 many years climbing my way through the corporate ladder as somebody who knew nothing about it i

00:11:50.100 had no idea what a mutual fund was. I felt really overwhelmed with money. I had that feeling where

00:11:57.240 you don't know if your checking account is going to bounce or not. I'd be frequently calling my

00:12:01.720 parents, asking them if they could put a little money in there because I couldn't quite figure

00:12:04.620 it out. And then finally, I just said that I want to understand this language of money because I

00:12:11.740 think it is the only thing that allows us to have power and agency. And if you're not rich,

00:12:16.260 then you can't push back yeah if you are rich you can push back yeah you know and and i think a lot

00:12:22.560 of people today are feeling that for the first time ever they use we used to believe the things

00:12:26.460 they told us which is that money is bad you should not have an ultimate pursuit of money

00:12:30.420 it's just a tool and you can either decide if you want those guys to have the tool or if you want

00:12:36.260 to have it and so somehow i learned that early from working in latin america and mexico and kind

00:12:41.140 of seeing what happens to people who don't have money but have other people who have ultimate

00:12:45.120 power on them and long short not good and so um so i climbed up the corporate ladder in a bunch of

00:12:51.040 these companies as somebody who was a former journalist just really interested in what does

00:12:56.240 it take to accumulate wealth yeah why do some people get it and we aren't taught it and can it

00:13:02.960 really just be that we should save our way and skip the coffee to millions and the answer is 0.92

00:13:07.620 fucking no yeah love a lot of you know what dave ramsey talks about but that's not enough it's not 0.66

00:13:12.260 enough to set a budget. And so finally, once I had done the corporate realm, I'm a wuss. I didn't 0.99

00:13:19.480 want to leave a corporate job. It paid well. And so it took me 10 plus years of working in corporate

00:13:25.360 finance before I really had become so unemployable that they were like, you can't just do whatever

00:13:32.200 you want while you work at a corporation. That's not how this works, Cody. And I remember Jim,

00:13:36.720 the CEO at the time, had that conversation with me. And I was like, you're wrong. We should do

00:13:40.420 this on the internet this is where we're going and he was like get your own chips if you want to

00:13:44.780 bet don't bet with my chips and so I said okay that's fair enough and started a private equity

00:13:51.260 fund with a couple of other players did that for a series of years and then started investing in

00:13:55.800 my own companies and um and I did that for a lot of years quietly like didn't tell anybody because

00:14:01.860 I didn't want to be found out and I thought it was maybe not that sexy to invest in laundromats

00:14:06.400 and small businesses and then finally when i got to our bigger private equity company once

00:14:12.000 covet happened and i couldn't run around raising money from investors anymore i started talking

00:14:16.880 about it on the internet and and that's how we have contrarian thinking today which is a large

00:14:21.200 media company sort of with this one goal of ownership can we get people into the game of

00:14:27.040 ownership because it's harder for people to take that away from you if you have contracts equity

00:14:34.000 then you have a legacy you can pass down and something that works even if you can't work

00:14:39.760 so did you start by building any companies first or were there way and then another question after

00:14:45.520 that is how how did you identify what to invest in yeah i built a lot of failed companies you know

00:14:51.680 i had one called selling south that was sort of a media company focused on selling um products and

00:14:58.960 services to latin america it didn't really work out that well i had another one called threads

00:15:02.640 refined i didn't work out that well i didn't like that business either i had built other companies

00:15:07.280 inside of companies like i built this you know we built a billion dollar asset management company

00:15:11.920 at a company called first trust where they had zero dollars in latin america when i started

00:15:16.400 and um and that business did well and so i'd really built other people's businesses plus

00:15:22.640 failed because i played way too small the other times like i was just too scared of somebody

00:15:27.280 finding out and getting rid of like the job that paid me a lot of money in my golden handcuffs

00:15:31.440 and so that is why I realized well if I could just buy some businesses instead because maybe

00:15:38.780 I'm not good at starting them I know how to grow a business I just might not know how to start one

00:15:43.440 and so then I started buying my own businesses and the only way I knew how to invest in those was

00:15:51.140 I copied other people's homework you know a lot of times when you don't know what to do what's

00:15:54.480 the best thing to do I think it's first you imitate then you iterate then you innovate

00:15:59.460 and people get it wrong today they start with innovation they're like i'm gonna come up with

00:16:04.300 this new crazy app in my garage i'm gonna sell it for a billion dollars have i ever done anything

00:16:08.400 before do i have a great idea no as opposed to like what's the idea that somebody already has

00:16:13.500 can i make it slightly better and then can i innovate on top of it and so that's what i did

00:16:17.420 i just mimicked what they did in private equity and scaled from there how do you do that as a

00:16:22.800 person if you don't have assets to start with yeah um there's sort of three ways that you can

00:16:29.000 get access to business ownership in my opinion the first is money right you can just go out you can

00:16:33.880 have your own money the second is leverage so debt you can the cool part about a business is unlike a

00:16:39.380 house when you go to get a mortgage on a house right you got to have an income in order to

00:16:42.740 qualify for the house you can't just go i want this house and i think the house is worth this

00:16:46.120 so give me this much money for it doesn't work for a business you can actually do that if a

00:16:50.040 business has a cash flow that cash flow is worth something to the bank plus its assets you can go

00:16:55.640 get a loan for that business if they want to sell it. I did not know that. Yeah. So you can go to the

00:17:00.180 SBA, the Small Business Association. You could also get seller financing from the owner. Most

00:17:04.720 small businesses get sold that way. And so that's the second way. So that's leverage. You could also

00:17:09.260 raise from other people if you want to. But the third way that a lot of people don't think about

00:17:13.020 is people who have money. You're a good example. You have money. You like your money to work for

00:17:19.740 you, right? But do you want another job? Do you want to run another business? I'm going to guess

00:17:23.820 no oh no no not at this point no yeah so what do you want instead you're like well i wish i could

00:17:30.220 just give money to this person who would run the business yeah yeah yeah which is an operator and

00:17:35.260 so there's this whole world of people who are competent have time and some expertise or a

00:17:42.700 willingness to work who i think are going to be the future of the next generation of ownership

00:17:47.100 it doesn't have to just be the people of money it can be the people who have time and a willingness

00:17:51.020 to work. And so that group in particular, I'm trying to talk to today, because, you know,

00:17:55.620 if you're working right now in an accounting firm, where you're the owner of your business is 65 plus,

00:18:02.040 you're, you know, a senior accountant there, maybe you manage a team, you know, why not start talking

00:18:07.060 to the owner of the business and ask them, what's your plan? Do you ever plan on selling this thing?

00:18:10.840 And if so, you know, who would that be to? What's what's your structure? Would you at all be open

00:18:15.480 to potentially me buying a business like this from you at some point? And what's astounding to me is

00:18:20.940 how many times that happens. And it just works because the owners don't have another solution

00:18:25.720 and you're a trusted commodity. So that is how you get equity in a business without having to

00:18:31.000 have a ton of cash. Wow. I didn't know you could get a loan for a business without an income.

00:18:37.140 That's true. Without an income. As long as you can show that the business is operating. Exactly.

00:18:41.000 Yeah. They'll require a business plan for the business. So if you go to the SBA, yeah, 0.73

00:18:44.320 they'll want to see like, you'll have to make a case like anything else. You know, you'll have to

00:18:48.420 say, hey, I ran this business over here, or I ran this group, or I'm an engineer from Google,

00:18:55.200 or, you know, I have an engineering background, and this is an engineering company. And then you

00:19:01.540 put together a business plan explaining why you should be the person to run this business. But

00:19:05.080 the SBA will absolutely do that. And then there are no rules to what a business owner can do.

00:19:09.780 So there's many business owners that'll just shut down their business. I mean, the story that I've

00:19:14.520 told a few times is that my uncle eb who's based here had a business the business did millions of

00:19:20.020 dollars and they shut the business down because he got older and he didn't realize that they had

00:19:25.780 a sellable asset and you know i think he he passed but i think if he was alive today he would say well

00:19:32.140 we had to wind it down we did things slowly maybe it wasn't worth as much at the end but if you

00:19:37.580 catch it at the peak when you know you're going to want to sell the business before you get tired

00:19:41.880 and sick and you know the market changes we need to start getting owners to sell up here and a lot

00:19:47.440 of owners don't know that they can't interesting yeah okay and did you learn all this throughout

00:19:53.520 like working you said that goldman sachs and things is that where you learned about this

00:19:56.940 yeah i mean it's this is literally what all the richest people in the world do i mean if you go

00:20:01.500 right now the forbes 400 list and you look at the richest people in the world as a percentage basis

00:20:05.940 something like 28 percent of them are from finance and a majority of those from finance are not from

00:20:12.740 public stock investing which is what people think they're from some form of active investing and

00:20:17.940 ownership directing companies like even even ackman like he doesn't just go and place a bunch of bets

00:20:23.740 on public stocks bill ackman is an activist investor who goes and tries to take ownership

00:20:28.820 and affect the outcome on a company and so um this is what the really rich do they don't buy

00:20:34.680 and large go in their garage come up with a crazy idea they fund the people who do that after it's

00:20:41.440 been proven and then like we use all of our blood sweat tears and difficulty on the part that's

00:20:47.440 making no money and then they come in as our savior to buy us out at the second we're like i can't 0.54

00:20:52.660 fucking take it anymore and then they have the best part of the journey and i think that's wrong

00:20:57.320 and uh and i think more of us need to realize that's what happens ah that's this is so funny 0.98

00:21:03.120 this is so funny I was talking to Jordan so my husband at the beginning of the year and like

00:21:08.240 making a plan for the next year is you make some goals and you can see what you've accomplished

00:21:12.120 or whatever something to work towards and I was like this is exhausting because we're building

00:21:15.440 Peterson Academy I was like this is exhausting this is so much work it's been so much work it's

00:21:19.460 been like two and a half years now we're about to launch so we're there uh I was like after this one

00:21:26.300 and maybe another one we'll see what I have like in me or what we have in us but I was like we

00:21:32.400 have got to get to the point where we're just buying companies, but it's so I've found that

00:21:36.440 the most difficult part of trying to, I haven't even looked at like regular companies, but trying

00:21:42.380 to find people to run them is tricky. Very. I've tried. So even, even like I started out by running

00:21:49.980 my dad's brand and just trying to grow that and doing social media and everything. I think you

00:21:53.600 did well. Thank you. Thank you. It was a lot of sweat and tears. Did you get a bunch of equity

00:21:59.920 in that thing no so oh jordan i know he runs a hard bargain i was just like i can do it i think

00:22:06.300 i can do it better uh but over the last number of years i've been like okay let's try to bring

00:22:10.800 this person in they seem pretty competent maybe they can just run it and that hasn't worked i

00:22:15.520 don't know if that's a weird family dynamic thing maybe that's the reason i find it's hard to find

00:22:20.400 people to run complex things you'd be like a dad's brand social media brand how complex is it but

00:22:26.560 there's like it's complex there's a lot of connections and like there's a lot of there's

00:22:32.040 a lot going on it's hard to find people who are competent that's the problem i've had true well

00:22:36.360 yeah i suppose if you're just looking at companies that are already running you can just look at

00:22:40.280 them running like well it's already competent well i think there is a curse of lack of competency

00:22:46.520 in general which is a good and bad thing it means that if you are slightly competent you have very

00:22:52.060 few people who will compete against you yeah as long as you are willing to do an irrationally

00:22:55.940 longer and harder amount of work than anybody else. It's actually all it takes. And so people

00:23:01.260 are like, what's the secret formula? It's like earlier mornings, later nights for longer than

00:23:05.360 you're comfortable until you're actually good enough to work smart, not hard. And that's not

00:23:10.100 possible. And it takes a while to get there. It takes a while. And then at a certain point,

00:23:13.740 your repetitions become so good that you can finally work smart while still probably having

00:23:17.540 to work kind of hard, but not irrationally hard. But one of the things I've learned is,

00:23:23.420 you know the first time you did a podcast probably not the best podcast um and if you think about it

00:23:30.680 with hiring how many shots on goal do we get to hire a players you know maybe if you run really

00:23:36.740 big companies then you've hired people incredibly often and continuously in order to be able to see

00:23:42.600 what the repetitions look like in order to pick the right person but for most people you don't

00:23:48.120 have enough reps yeah and so it's hard to be good at it and so i've found this is where systems and

00:23:53.480 processes come in like if you want to hire a players or you want to be an a player there's

00:23:57.640 like three things you really have to think about and the first is is the best predictor of future

00:24:01.820 behavior is past behavior so if you're going to hire somebody for a role have they already done

00:24:06.520 the role aka experienced talent do you know that they've already done the role aka you know them

00:24:11.480 personally and they've done some sort of project for you already that's known talent and then do

00:24:17.600 they have exponential talent? Meaning, are they steady state at what they've done previously? Or

00:24:23.080 are they growing with each role in order to have exponential growth? Because that's what you're

00:24:27.760 going to want in a business. And so that's the first thing, best predictor of future behavior,

00:24:31.800 past behavior. The second thing that I've noted is for these high performers, you want to catch them

00:24:38.060 having a history of success. And so a lot of times we think, oh, you know, they had a hard time,

00:24:45.860 but the boss didn't work out in the last one yeah oh this didn't work out but it's going to be

00:24:49.680 better oh they were looking for us the whole time that's not your hire get them when they're on the

00:24:54.340 uptick don't get them and try to fix them from being on a downturn and so a lot of times we talk

00:24:58.920 ourselves into that that's happened to me often and then the third thing i'd say is um if there

00:25:04.740 is anywhere where they have negative commentary negative posts on twitter complaining in any way

00:25:12.060 shape or form immediate out because winners actually are too busy building to focus on

00:25:17.480 burning down. And so if I had done that historically, if I had ignored people who had a negative

00:25:22.220 stance and complained, if I had ignored people who weren't on the upswing of winning, and if I

00:25:27.980 ignored people that hadn't done the deal before, whatever the job was, I would have probably had

00:25:33.760 incredible talent. And so next time we have a little box at Contrarian Thinking Capital where

00:25:39.140 we have all of our underlying companies and the box has five characteristics in it every single

00:25:43.620 employee that we go to hire gets ranked on those five and instead of like i like the guy i want to 0.99

00:25:49.600 have a beer with him overnight in the airport stupidest fucking question ever you do not have 0.99

00:25:53.400 to like people that work for you you do not you need them to be competent and you need them to be 1.00

00:25:58.980 positive for the team but you don't have to be besties and so they have to go through this five

00:26:03.780 step scoring mechanism and if they don't score high enough no matter what for that role we won't

00:26:08.000 hire them and so it's just ridiculous focus on process what it can can i know what these five

00:26:14.340 steps are yeah totally um and i can send you the matrix afterwards so you can use it if you want to

00:26:19.040 um so the first one is experienced talent have they already done the role the second is known

00:26:24.080 talent have we tested that they've done the role in some way shape or form the third is size so a

00:26:30.600 lot of times if you go to hire somebody at you're at a small company uh but they've been at google

00:26:35.920 there's a mismatch. Just because they did something incredible at Google doesn't mean

00:26:39.420 they're going to be able to handle a startup. So I like them to have a size match. Interesting.

00:26:43.420 Yeah. Super, super important. The next one is, do they have an industry match? So have they

00:26:50.220 actually worked? Let's say that you're hiring a project manager. So that's experienced,

00:26:54.480 right? He has the experience. He's been a project manager, but has he done it inside of a media

00:26:58.820 company before? Or was he project manager inside of a SaaS company? Yeah. That's going to score

00:27:03.280 differently and then the last one is that component of like positivity or negative bias so we do a

00:27:09.500 social media screen on everybody and if you are trolling people on twitter you're out i don't care

00:27:15.340 if you hit all of the other particulars and so those are the five things we look at every single

00:27:18.960 time oh i like that okay okay i think with peterson academy our plan is eventually like

00:27:26.500 after we launch to try and because we've been having issues with developers not really like

00:27:31.800 the developers have been great it's just been slow finding the right people so everything's

00:27:35.600 just been slow and hard because we're a startup and we haven't put a lot of money in we put

00:27:39.540 enough money in but it's just our own we don't have like totally other people investing um so

00:27:44.480 it's like are we going to steal like once we're at that point do we start stealing people from

00:27:48.240 google or apple but i like the size comparison i think you want there's 40 people right now that's

00:27:54.480 how big the yeah the company is that's a lot i mean your your video i saw was incredible i thought

00:27:58.920 the launch video for it was really well executed yeah and the courses they're they look great yeah

00:28:05.880 yeah i think you want to go i like to try to steal the best i mean there's an old saying which is if

00:28:10.920 you think uh amateurs are expensive i'm sorry if you think pros are expensive try hiring amateurs

00:28:16.120 yeah and it's so obvious except it hurts it viscerally hurts your soul when you have to pay

00:28:22.040 pro level pricing you know because they're expensive you know but if you are really

00:28:27.880 good at figuring out, Hey, success in this role looks like this. And I can map out if this person

00:28:34.700 is successful, we can make this much money then pay the pro. Yeah. Yeah. Yeah. And, uh, every time

00:28:41.000 I don't do that, I regret it. And I go kick myself. Um, you want to have some companies 0.93

00:28:45.480 where you can help people on the come up, but I never want people at the executive level that are

00:28:51.260 guessing. I don't want them learning on my dime. I want them learning on somebody else's, some other

00:28:55.460 big companies time and then they can come into you know my company once they've kind of figured

00:28:59.540 out and grow within my company then that makes sense yeah otherwise you end up hiring someone

00:29:04.100 who doesn't cost as much and that ends up being extremely expensive very expensive the average

00:29:09.340 employee at goldman sachs costs goldman sachs 150 000 a year in training and so when i and that's

00:29:17.240 that's uh average so i don't know i came in as an analyst which was the lowest level you could be i

00:29:23.160 was a little peon when i was there and um and i got 150 000 education and they paid me to get it

00:29:28.800 right same thing with the vanguard the company i was at before i think one if you're young and

00:29:32.940 hungry go to a big corporation to start because they plow money into you it's soul sucking but

00:29:38.520 you're gonna learn a lot you're gonna have a ton of training and you won't have like a throat to

00:29:43.000 your knife a knife to your throat if you mess up like you will at a startup yeah they literally

00:29:48.080 can't afford mistakes so it was the best training i ever had all those years in corporate america

00:29:52.860 even though I hated it just because you hate it doesn't mean it doesn't work so how did you get

00:29:57.120 into that you said you come from a background of journalism yeah I was actually I was covering

00:30:01.200 human trafficking along the U.S. Mexico border oh wow yeah not a natural progression to finance

00:30:06.400 yeah no but uh but I basically I was thinking about going into law or politics so I was taking

00:30:13.280 a few pre-law classes at I was at ASU Harvard of the West over here um and that's what people here

00:30:18.820 call it I don't know I'm from Canada I don't know you don't know the difference yeah it's

00:30:22.060 it's a party school. It's like a great for keg stands, not great for learning. Probably. I think 0.97

00:30:27.520 I took a, I took, they're going to hate this. I took like a history of Elvis and the Beatles

00:30:32.720 class. You know, I had a great time though. But, um, anyway, so, uh, at ASU, I really learned what

00:30:42.760 I didn't like, which I think is what college is for. Like, I think I had, I ended up leaving with

00:30:47.100 like three degrees by the end because I wasn't sure what I wanted to do. It was like political

00:30:51.420 science first then it was public relations then it was journalism and um and at the end when i was

00:30:57.540 doing the journalistic component i just i felt like i would lose my soul a little bit if i went

00:31:03.620 into journalism like i would look forward to bad things happening because i'd be covering them and

00:31:08.720 that made me feel sick inside yeah and so instead i started realizing like instead of just covering

00:31:14.360 stories how do you change them and i think the way that you change them is actually money yeah

00:31:19.020 so that's how I sort of just started climbing my way through money and and you know I wish somebody

00:31:24.080 had told me earlier that if you want to get good at a game you go where the game is played and it's

00:31:29.580 as easy as that to start out when you're young hungry curious and willing to work hard I just

00:31:36.060 went to a I went to a Latinas and finance conference that I didn't want to go to because

00:31:41.080 I was late and I was hungover and I remember being on the phone with my mom and I was like I'm not

00:31:46.400 going to go to this conference i don't want to you know i don't feel good and she was like just go

00:31:51.600 just go you want to get into finance just go and so i went and i sat next to this woman and i had

00:31:56.500 a nice conversation with her and that's what allowed me to eventually get my foot in the door

00:31:59.860 at vanguard and like so if you're young just go where the game's played because competency is so

00:32:05.120 rare people pick up on it yeah interesting if you guys are not filtering your air it is the easiest

00:32:13.600 thing, it's the laziest thing you can do to improve your health. I'm so gung-ho about this,

00:32:18.640 I literally travel with an air purifier for hotel rooms. Seriously. I've been talking about air

00:32:23.640 purifiers for years, but I didn't realize how important they are until I stopped being able

00:32:27.840 to think because of the very moldy house. Air Oasis is top of the line. The type of air filter

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00:33:31.300 off uh that is linked in the description and in the pinned comment enjoy the rest of this episode

00:33:36.980 this is actually what i was thinking about a second ago um i was on pierce morgan last year

00:33:40.860 and we were talking about why people want money because people want money for different reasons

00:33:44.980 and i grew up and my family didn't have very much money although but i didn't really know that until

00:33:49.240 i met other people then i was like oh okay um so it really wasn't obvious but i had like students

00:33:55.320 loans for university and like i remember i was at this is when i was like debaucherous years i was

00:34:01.080 at a concert and I was really thirsty and I had no money, like literally $0. And I remember calling

00:34:06.000 my brother and being like, can you transfer me $30? I'm like, I need a lemonade. Thanks brother.

00:34:12.820 But I was never worried. I was never worried. So I wasn't at that point. I was just, didn't have

00:34:16.540 very much money. And I had odd jobs and just jobs from like grade five onwards. But I was talking

00:34:23.100 about the reason that I wanted to make money and I wanted to grow things was for like two things.

00:34:28.920 one for stability in life because it makes you more stable and then when bad things happen

00:34:33.020 you have ways to fix it because you need money to fix things but it's also to get to the level

00:34:38.000 where you can actually change society I was like that sounds interesting and you can see all these

00:34:43.820 problems and I guess that's why people get into politics too but you can see where areas in the

00:34:49.220 world are wrong and in order to fix them you can't just be at the bottom you can't and if other people

00:34:56.920 can get up there then why can't you get up there it's so true yeah i mean i think i'd rather have

00:35:03.000 a seat in the boardroom than a sign outside the building yeah you know uh i remember being at

00:35:09.060 goldman sachs during the occupy wall street movement and they were chanting like you know 0.98

00:35:12.540 fuck the one percent and everything outside with all the the signs and the tents and uh what 0.96

00:35:17.340 happened nothing nothing happened nobody went to jail nobody really even got serious fines for what 0.99

00:35:22.540 happened during that um and yeah they were loud but they weren't very effective and i think that's

00:35:29.580 true with a lot of protests in general is that you know young people feel like they need their

00:35:35.860 voice to be heard as opposed to their work to be felt and it's like why don't you build something

00:35:42.000 better instead of yell about what you hate and the one's much harder than the other but you know it

00:35:48.220 kind of goes back to what you and your dad said i like i resonated so much with that like clean up

00:35:52.200 your room before you clean up the world thing um because i'm like i see it so often and you know

00:35:57.560 the companies that we have and the young people in it i'm like you don't even know how to read a

00:36:02.520 balance sheet yet you know you're you're gonna go change something no you've got to actually

00:36:07.460 understand what the fuel of the world is and if you don't understand that it's very hard to make

00:36:13.160 any substantive change so i think you're right people most people just want they want to be able

00:36:20.820 to work where they want, with whom they want, on what they want, and spend time on the things

00:36:25.840 outside of work that they want to spend time on. And increasingly, humans in the US do not have

00:36:31.320 that option. You know, some of the statistics are fascinating to see how, you know, one out of only

00:36:36.940 one out of 10 Americans dies wealthy, which means excess money that they can pass on to the next

00:36:41.260 generation. Most people die broke, alone, and overweight, like categorically in the US, which

00:36:48.860 is pretty wild. And so we're, we're not figuring out how to get people's core needs met because I

00:36:54.780 think we're teaching them the wrong things. And, um, and people want that. And then once they get

00:37:00.680 a level of financial freedom, the new studies and statistics say anything past $500,000 in annual

00:37:07.260 income, you have a very serious drop off on happiness. Um, and a lot, yeah, it's, it's a lot

00:37:15.040 of money. I remember, I think my parents had told me that statistic, but it was maybe 15 years ago.

00:37:18.860 and i think my dad had said something like 120 000 and i was thinking that's not enough yeah yeah

00:37:26.300 really yeah well i mean i remember my first job made 37 000 and i thought i was rich yeah i will

00:37:32.060 buy everything in here um but yeah i think the studies told us originally that they thought it

00:37:39.340 was a hundred thousand dollars after a hundred thousand dollars you would you drop off in

00:37:42.540 happiness it turns out that's not exactly true um the people making those studies were making

00:37:47.580 yeah well thousand yeah exactly they're like right about here yeah um but yeah i i think

00:37:53.660 that you should relentlessly pursue your first five hundred thousand dollars unapologetically

00:37:58.540 in annual income and after that you can think about making real impact in what you do and i

00:38:05.260 don't think there's anything wrong with taking care of the house before you go try to build another

00:38:09.020 one you'll also be taking way more seriously if you do that right yeah yeah and yeah then you know

00:38:16.220 know how the game's played then you're in a different set of you know you're in a different

00:38:20.140 set of rooms with a different set of people do you think so you're trying to teach people this

00:38:24.780 online do you think this is teachable or is this something people have to be brought up with

00:38:30.180 are there people who aren't able to do this yeah that's a great question um i'm

00:38:36.420 two things what i've realized so i thought if i gave somebody a spreadsheet and i told them

00:38:43.100 tactically how they could do this and the steps to take awesome they'd run with it then I realized

00:38:49.260 absolutely not yeah that doesn't really work in fact you have to have the fundamental belief that

00:38:54.240 you are capable of doing it the willingness to work extra hard and the like mental resiliency

00:38:59.900 to keep going once it sucks and you run out of money and it's awful and you have no other paths

00:39:05.500 and you can't imagine a way forward and so I suppose if I had to think about four steps that's

00:39:10.280 how it goes it's like first hey i think i could do this somebody has somehow you have to build up

00:39:14.720 a belief in yourself and then second it's okay i'm willing to do what it's what it takes to get here

00:39:20.520 and then third is i'm willing to continue to do what it takes aka resiliency and then only once

00:39:25.820 you have those first three steps can you actually even listen to a single tactic anybody tells you

00:39:30.220 and so i used to think that all the mindset tony robbins sort of stuff was too fluffy

00:39:35.580 and now i realize it's incredibly important yeah that's exactly how i used to feel too right i was 0.98

00:39:42.060 like just tell me how to get there keep your woo-woo manifestation crystals to your fucking 0.76

00:39:45.740 self and now i'm like i could take a crystal you know and most people need one so yeah i think 0.98

00:39:50.960 you're right i think i you know have you ever i've met a lot of humans who are not willing to do what

00:39:58.240 it takes I haven't met very many humans who are incapable mentally of doing it yeah I yeah okay

00:40:06.240 I feel the same way about that yeah yeah I don't think there's like some IQ gap where I'm just like 1.00

00:40:11.000 wow a majority of people are such complete idiots and they have no capacity for bettering their 0.99

00:40:15.280 lives I don't think that's true but I do think some yeah there's there might be a little bit of 1.00

00:40:19.220 that I mean it's probably the 80 20 or right there's probably like 20 percent of people that

00:40:24.240 just maybe from an IQ level yeah can't actually progress yeah maybe but um for the most part if

00:40:31.240 you're listening to this podcast you're probably capable and your biggest problem is you okay then

00:40:36.740 here's another question so uh I have like moving away from Toronto where all my friends were my

00:40:42.700 aspirations are definitely way higher like a crazy high enough that I talk to my friends they'd be

00:40:48.500 like you're crazy they're like no like I think I think I can do this or I think I can get to where

00:40:52.720 I want to be however I'm not sure if that having those aspir is is having those aspirations like

00:41:00.840 ideal health for a human or because like there are people that have they're doing less they're

00:41:07.440 much less stressed out they have more time to do other things and so I think the older I've got

00:41:14.240 I've been like is so my brother for instance and he's an entrepreneur as well and he has his own

00:41:18.200 company uh and it's successful but he's not aspiring to like change the education system

00:41:25.960 and the health care system and like ridiculous things but he has like his nice little family

00:41:31.100 and he's doing really well I'm like is that am I doing is it weird is like am I doing something

00:41:36.320 wrong and not that it matters because this is where I want to be but I don't know if it's ideal

00:41:41.060 for everybody or if it's even the right thing to do yeah this is what whatever makes you happy I

00:41:46.040 guess my brother's at the same time yeah yeah i mean i think i think you have to have a level of

00:41:51.800 you know sort of like to be a striving human is pretty miserable often you know i i was just

00:41:59.760 telling my brother this week so my brother's similar he's really smart and he uh categorically

00:42:05.980 has said that he has no interest in doing things at the level that i do them yeah he's he's

00:42:09.840 incredibly self-aware to go well that sounds great uh i'm glad you enjoy that i have no interest

00:42:15.520 whatsoever yeah and uh i'm i hope you're taking care of yourself cody and he is probably pretty

00:42:21.400 happy but i do think there's a there's a balance uh where i think i think humans and a lot of the

00:42:30.100 research seems to point to this they need some sort of purpose and work labor seems to drive

00:42:35.660 happiness in some way shape or form so i think the people that believe that they want to hang

00:42:40.240 out all day and netflix and chill and go party with friends and that will make them happy

00:42:44.500 are wrong by and large. Simultaneously, most people do not want to be outliers, which makes

00:42:51.480 sense because outliers couldn't be normal for everyone. And so, you know, I think I've never

00:42:57.360 met, um, an entrepreneur that doesn't have some sort of chip on their shoulder and something that

00:43:03.640 they want to prove. And I do think I was just talking to Arthur Brooks earlier this week,

00:43:08.160 who i adore and you know he's really big on this belief that workahola uh workaholism

00:43:14.480 workaholism yeah workaholism that sounds good enough sounds fine um is just as detrimental as

00:43:22.680 uh many other isms yeah yeah same kind of addictive addiction ish i've seen that too in

00:43:29.380 my family like my dad we've talked to to my dad about it too is like he gets he gets maybe too

00:43:35.760 much dopamine from overworking enough that he can make himself ill. And it's like, you're working

00:43:40.300 too hard if you're making yourself ill. And then I have the same thing. And I think I've got it

00:43:44.500 under wraps a little bit more in the last couple of years, probably since getting married and meeting

00:43:47.520 Jordan, actually, cause he's taken a bunch off my plate. So that was really helpful, but it's the

00:43:51.600 same kind of, am I getting too much dopamine from suffering through work and are other areas of my

00:43:56.100 life falling apart? But answer yes. Often for me too. Yeah. But, but you kind of like it. Yeah.

00:44:03.520 You know, I kind of go back and forth too.

00:44:06.220 It's like what, who says what you should or should not be doing and what drives your

00:44:12.400 happiness?

00:44:13.060 Where I think it is problematic is if you define yourself by your work and you feel

00:44:17.900 less than because you do not achieve X or Y or Z, you know, some sort of exogenous

00:44:23.660 achievement, that's probably not good.

00:44:27.580 If the only way that you define yourself is by other people's view of you and what you've

00:44:31.020 been able to achieve, not great.

00:44:32.200 if you love doing the thing for the thing and that thing happens to be work I don't find that

00:44:37.800 any different than painting writing reading hanging out and so that's at least how I think

00:44:42.320 about it with my husband I'm like I do not want to bake sourdough bread and hang out in a sundress 0.97

00:44:49.260 and fuck yeah to the women who want to but it would make me miserable and so um I do want to 1.00

00:44:54.620 do this labor and work thing but I imagine you know as I get older um it definitely shifts I 1.00

00:45:01.980 know I don't want to work like I work right now for the next 50 years but I'll never not work

00:45:06.900 yeah you know um but yeah I I find shoulds to be highly annoying and I try to avoid

00:45:14.980 shooting on anybody or getting shit on as much as humanly possible and uh I do really have to

00:45:22.220 to be careful and I think many people should try to be careful about like the definition 0.98

00:45:26.640 the definitions as success you know I I'm concerned a little bit with where the economy is going for

00:45:34.000 instance I think yeah we're starting to see the first signs you know I see it in a lot of my

00:45:38.280 businesses I was dealing with fires all last week regarding it and what I worry about is I remember

00:45:43.680 2008 vividly when you know a few people that I knew uh tangentially in finance committed suicide

00:45:50.340 and I think it was because you know they were defined men defined as a protector and a provider

00:45:57.040 and stopped being able to provide and protect because lost their job plus lost a lot of money

00:46:02.640 plus lost status and that spirals quickly to complete loss of self and so I do worry about

00:46:09.040 that like do not wrap yourself in your success wrap yourself in maybe maybe how hard you work

00:46:15.000 and what you do day to day but not the outcome because you can't control that

00:46:18.920 so what are the patterns you're seeing now compared to 2008 well leverage has a trickle

00:46:25.680 down effect on the economy and so when i think about what's going to come i try to not crystal

00:46:30.500 ball it and i instead say go to the area first that has the most leverage because that will show

00:46:34.680 signs of distress first so i think the economy is going to fall and it already is because we had our

00:46:40.920 most levered industry aka venture capital have its biggest pullback it's ever had we're going to have

00:46:46.340 zombie funds and startups that were going to be unicorns that will fade away into nothingness.

00:46:51.560 And we've already seen a lot of portfolios get marked down 20, 50, 60%. And that's because,

00:46:58.480 imagine, what do venture capitalists do? You go, I got an idea. And they go, cool,

00:47:01.900 here's a bunch of money for your idea, which makes no money whatsoever. And you're going to

00:47:04.880 burn money for years. High leverage. Then we have the second highest leverage, which is commercial

00:47:10.240 real estate. We have commercial real estate, have super high debt to leverage ratios. And the crazy

00:47:16.060 part is they never mark them down because that hurts their overall portfolio. So even though

00:47:20.840 right now it might only be worth 40 cents on the dollar, they're not reporting that. So that'll be

00:47:25.320 the next thing to fall. And in 2008, it was the housing crisis. And that was just because that

00:47:30.100 was where there was the most leverage. So I'm starting to see it. People can make money in any

00:47:35.260 environment, in any economy, but you have to be ready for it and try to have more cash than you

00:47:39.780 think you should. Do you think this will get reversed depending on the next election? But then

00:47:44.860 I guess it'll take a time to catch up. Yeah. I mean, the government can definitely continue

00:47:49.780 to put its foot on the accelerator by determining to keep printing money and to keep rates low

00:47:54.500 artificially. But at some point, the music has to stop and we notice that there are not enough

00:47:58.800 chairs. And so whether it is this year, the next four years, the next 10 years, I'm not sure.

00:48:05.680 But, you know, the funny thing about math is it's hard to manipulate. And so if we continue to spend

00:48:12.360 more than we take in and we continue to inflate the economy a balloon only goes so far before

00:48:17.160 it's going to pop of its own accord and so um i'm not sure but there's definitely a concern uh

00:48:23.960 that people don't pay enough attention to the economy right now but you think owning companies

00:48:28.760 this is the way to go anyway i think think about what a economic downturn is it's basically

00:48:35.000 people stop uh spending as much money people stop making as much money right and what you basically

00:48:41.560 need to be able to protect against is both of those things. How do you do that? Well, when you

00:48:46.300 own a company, you can increase your prices. So you have like a lever there. You can sell more

00:48:51.620 things. You can, you know, not have as many people work for you. You can have decreased labor costs.

00:48:56.660 It's just one of the most flexible things you can own. You can't really flex on salary. You can't

00:49:01.600 really flex on real estate ownership and it making you more or less. And so in times of distress,

00:49:08.280 I want optionality. You want the ability to know that there are five paths you could take as

00:49:13.360 opposed to only one. And what if that one's blocked? And so that's why I like ownership.

00:49:17.480 Yeah, that makes sense. Okay. Question I randomly had. What's the difference between

00:49:21.480 angel investing and venture capitalism? Not a lot. Angel investing is just individuals who

00:49:27.380 aren't institutions and venture capital is institutions. So you could angel invest in a

00:49:32.820 deal and be like, Hey, friends and family, I'm going to invest in Cody's new water bottle company

00:49:37.560 because we're friends and I kind of like it.

00:49:39.500 I think I could make some money.

00:49:41.120 And then a venture capital fund would be,

00:49:43.300 Cody runs a fund of other people's money

00:49:46.040 and is more institutional, more serious,

00:49:48.480 but basically does the exact same transaction,

00:49:51.200 typically at a higher level and later what's called rounds.

00:49:54.200 So first you usually have your friends and family

00:49:56.320 or angel round.

00:49:57.420 Then you might have what's called a seed round.

00:50:00.340 So that's like getting your first couple of dollars

00:50:02.360 either from them or from a venture company.

00:50:04.500 Then you have series A, B, C, D, E, et cetera.

00:50:06.940 each round getting more expensive and more serious or sophisticated interesting and so did you just

00:50:12.260 start your company with other people you knew in finance basically i started my company with my

00:50:16.680 own money i think you know cool if you were going to go out today like if you don't have money right

00:50:21.420 now it has never been easier to start a company now it's never been easier to have a more profitable

00:50:26.040 company um i'm not it's never been harder to have a more profitable company so there's really like

00:50:30.300 this there's an ease to start a hard to profit gap today if you're running your own business

00:50:35.300 something like less than 1% of companies ever hit $10 million in sales. It's a very small amount of

00:50:40.700 companies that ever hit it. But the good part about that is it's cheaper than ever to start

00:50:45.820 a company. So if I was, if I lost every single dollar I had right now and I couldn't even really

00:50:51.860 use my connections, I could just use my knowledge to make my first million. Um, it would be on the

00:50:58.220 internet. I would take the money that I have, which would be, let's call it 500 bucks. And I

00:51:03.380 would learn as much as i humanly could about some sort of industry probably in the sales profession

00:51:09.060 and i'd go try to sell other people's things until i saw what thing was easiest to sell what do people

00:51:14.420 already want so i don't have to make up demand i would make as much income as i could selling other

00:51:18.820 people's stuff i would stockpile that and then i would take it and i would try to compete with the

00:51:23.140 thing that was most expensive and easy to sell and um and these days you can do it all online

00:51:28.900 you could do pre-orders for a product you haven't even created yeah and drive all the demand um so

00:51:34.100 i don't think there's a lot of excuses there's a lot of overwhelm like there's so many ways to do

00:51:39.300 it there's so many things to do which one's right yeah that commitment is difficult i think it's

00:51:45.380 also fun that you can learn from people online now like you can't learn this stuff in university

00:51:49.460 right did you take business courses yeah i mean yes but i don't i even i went in i got an mba

00:51:55.300 and i don't and it was from georgetown not a bad school um but no i learned basically theory i think

00:52:03.620 you and i have a similar mission my mission is i want to change education for money and bring it

00:52:09.140 into the 21st century oh interesting cool yeah and i think i think universities today are way too

00:52:15.700 expensive yeah and they're they're taught by theorists as opposed to practitioners yes and

00:52:21.540 And that is not always bad, except in money, it's really bad.

00:52:24.560 Because if you've never actually built a company, bought a company, sold a company,

00:52:28.080 but you're telling somebody theoretically how to do it, not a great look.

00:52:31.840 And so we built what's called the Contrarian Community and our education institute,

00:52:38.400 basically with this one idea.

00:52:39.840 Can we actually make M&A, mergers and acquisitions, accessible, applicable?

00:52:46.720 And can we have practitioners teach everyday people how to do it for a fraction of the price?

00:52:51.540 And with technology, you can, you know, it's incredible.

00:52:54.380 You can have hybrid universities that are one one hundredth of the cost and yet have

00:53:00.980 good screens so that only real, really curious and serious people want to come in.

00:53:06.220 And so we're pushing on that aggressively right now.

00:53:08.840 But you know what's weird is that people, it has to be like educational lobbying or

00:53:16.820 some sort of belief.

00:53:18.260 people think that courses and communities that are online are bad which always like makes me

00:53:23.200 chuckle uh because i wish that i could have learned this without having to spend 10 years 0.61

00:53:28.000 it's so hard to pick out who's just selling bullshit it's so hard like i had someone he 0.75

00:53:35.300 was coming here to fix the house and he was like oh you guys make money off the internet and we're 0.92

00:53:38.420 like yeah okay that simplifies it but like sure and he's like oh well i like i want to work from

00:53:42.780 home too i was like okay a little bit more goes into it than that but he was like i keep he'd

00:53:47.980 spent thousands and thousands of dollars on courses from people and i was like well do you

00:53:52.460 have an idea do you have anything you want to sell and he's like he didn't have anything he

00:53:56.100 was just buying courses from people being like this is how you make a bunch of money and i was

00:54:00.380 like that's not for you did he apply it i doubt it i think he was just buying them being like well

00:54:07.360 maybe it's easy i can work from home and i don't have to do as much oh yeah that's not that's not

00:54:11.220 how it works no but i think it's tricky because i feel like there are i still have the mindset

00:54:15.280 that when i see a course online i'm like that's you know that's not real yeah that's how they

00:54:20.400 got rich rich selling courses like that's how i made my money it's like that's not real i think

00:54:26.640 that's very normal i used to also think that uh masterminds and communities were oh yeah me too

00:54:33.120 i've changed my mind on that yeah i mean i still think there's a sheen to it there's like yeah

00:54:39.040 yeah there's a veneer that i don't love but man i mean i spent a lot of money on school you know

00:54:44.800 know georgetown was like i don't know how many hundred thousand plus i ended up getting it paid

00:54:49.080 for by state street when i worked at that company but you know it was expensive and when i look at

00:54:53.520 what i got out of it what did they tell you that you were going to get they're like it's well if

00:54:57.020 it's not the knowledge it's the network i'm like wait a second we are all like you know 20 late 20

00:55:02.540 somethings trying to figure it out we're all in the you know please teach me please help me phase

00:55:08.260 nobody in there is in the i've already made it i've already figured it out let me hand down to

00:55:12.960 you phase so why is that the network that i would want i would want to be in a network where there's

00:55:17.160 a bunch of people who are higher up than i am and so i think that's the benefit of these online

00:55:22.060 communities but you're right i mean there's a anytime there's no barrier to entry to it you

00:55:28.120 have bad players and no institutionalization and so it'll be interesting i'm sure in the future

00:55:33.840 there will be ways for all of this stuff to be tracked and ranked kind of the same way that

00:55:38.160 we've done with with universities oh definitely that's coming yeah that's definitely coming which

00:55:43.860 i think is actually a great move for the market it's really good to see what works what doesn't

00:55:49.920 um but i think people are crazy if they don't take advantage of the fact that for the first

00:55:54.920 time ever people who have already achieved a bunch of stuff are willing to tell you how to do it

00:55:58.100 that's what's been insane with building peterson academy and inviting people on the platform we're

00:56:02.760 like we've got the marketing so the courses are going to reach a ton of people do you want to

00:56:07.020 teach something you really want to teach people. And there are people who started billion dollar

00:56:11.940 companies that are like, yes, here's how do you, how you do business. It was like the fact that

00:56:17.200 you can get the CEO or the founder of a billion dollar company to say, this is how you do it.

00:56:22.160 That's crazy. Like that was not accessible. What? 10 years ago, less five. Like it's been

00:56:30.020 pretty recent. Yeah, for sure. Yeah. Well, and you know, you would read the books, but you're like,

00:56:34.660 ah this is like a novel this is you know i want to know steps one through 12 and i also want to

00:56:40.760 be able to see you know i think a lot of times when people reach the top of the mountain when

00:56:44.440 you go to ask a billionaire how to do something and you're at the beginning of the mountain they

00:56:49.620 don't remember they don't remember yeah and so you know talking to a billionaire is incredible

00:56:54.320 for one thing which is opening up your worldview you know i have uh one who's a mentor of mine

00:56:59.480 that invested in one of my companies and every time i'm with him he's always like why are you

00:57:03.580 thinking so small yeah I'm like this is a big idea you know and he's like not so much yeah so

00:57:09.620 they're great for that but if I was to say how do I start a business for the first time and make my

00:57:14.240 first hundred thousand dollars for sure no way so I think you need both you need like three levels

00:57:18.980 of mentors like somebody who's probably even a little bit below you who's like young they know

00:57:24.020 technology they know what's coming and then you need somebody at your level you guys can sort of

00:57:29.680 riff off each other you're both striving and going and then you need somebody that's ahead of you but

00:57:33.480 for some reason we only want this we don't realize we kind of need all three yeah that's funny that's

00:57:39.080 funny do you think there are ways to skip steps or do you have to go because like at least from

00:57:43.380 my experience I've gone from oh my gosh I was delivering newspapers in grade five that's a

00:57:48.420 terrible job and nobody should do it it was a total scam you're probably cold it was cold it was like

00:57:54.280 I think I got it was ridiculous it was like I was in the 60s I got like five cents a newspaper or

00:57:58.620 something it was definitely like something was wrong with that and my parents would just like

00:58:02.740 go for it I was like I need to make money for some reason but um do you think there's a way

00:58:07.920 to skip some of the like delivering newspapers working as a waitress you know building yourself

00:58:14.360 slowly learning it's so slow to learn or can can you skip to the I'm just gonna learn how to buy

00:58:21.760 companies and then buy companies it's a great question I mean I do think we lost here's yeah

00:58:28.680 here's what my answer would be if you want to skip the line do what other people are not willing to

00:58:33.400 do and what would that be well that would be go apprentice for somebody for free yeah yeah instead

00:58:40.200 of doing the five cent newspaper job which i understand people will then say well i don't have

00:58:44.360 enough money so i can't do that and i will say can you question that assumption what if the fastest

00:58:48.680 way for you to get to where you want to go is for you to see somebody else every single day working

00:58:54.200 to achieve the thing that you already have and they have it and they're willing to teach you

00:58:57.640 And so I think it's a huge disservice actually in the U.S. that we got rid of apprenticeship.

00:59:00.860 I know.

00:59:01.360 Huge.

00:59:01.820 Yeah.

00:59:02.160 Because that's actually the fastest way for you to move forward.

00:59:04.420 And let me tell you what, interns and an internship, they are not worth the money that you pay

00:59:09.080 them.

00:59:09.580 That is a charity that you get interns and have them come in because they don't know 0.62

00:59:13.480 anything yet.

00:59:14.080 Same with me.

00:59:14.600 I interned for free in political campaigns here.

00:59:17.260 I interned at the Rule 11 Mental Health and Competency Court because I wanted to learn

00:59:22.500 about mental health back in the day.

00:59:24.120 Terrible job.

00:59:25.120 That sounds terrible.

00:59:26.060 Oh, yeah.

00:59:26.360 i remember how many times they peed in the the defendant's box and that's so sad yeah it was it

00:59:33.200 was not heavy it was heavy yeah um and you know and i i probably wasn't that helpful at all but

00:59:39.400 i learned a lot so if you actually want to learn i think the fastest thing that you could do is try

00:59:43.820 to cozy up to somebody that already has it and then work way harder than you think is reasonable

00:59:48.760 for way less money than you think is reasonable and then you could probably skip years of the 0.94

00:59:53.660 shitty bartending job but you might have to do one or two of the shitty bartending job while you do 0.73

00:59:58.140 this other thing i don't know if there's any other way around that no i don't know either yeah i mean 0.93

01:00:03.040 you could go like theoretically could you go today and you could go to a podcast production studio as

01:00:08.440 a young gun and say hey you know i'd love to buy your business with seller financing and you know

01:00:15.380 you might want to retire soon would you be open to that transaction you could do that but then 0.99

01:00:19.320 you're gonna get the business you're gonna be like the fuck am i gonna do with this you know i don't 0.96

01:00:22.660 know anything about anything and so i'm not sure there's any way to get around that what do you 0.95

01:00:27.760 what do you think apprenticeship i like the apprenticeship i think the difficulty i would

01:00:31.340 have had there is i didn't have connections at all so what do you do like i went to take me for

01:00:37.080 example i went to an art school which was a mess in toronto just like public art school and then i

01:00:43.100 went to like multiple universities i didn't even know the business realm existed as a concept like

01:00:51.480 my, my mom stayed at home and she was a massage therapist and my dad taught at university and he

01:00:57.400 had his own like business, although that didn't really take off until he, you know, he blew up

01:01:02.240 and then it took off. Um, he worked flat out, but his like line for me was always get a PhD in

01:01:09.260 something and teach it. Wow. Which was like, no, now that I know more, like absolutely not. No

01:01:16.240 offense to those people, but like, that's not going to get me where I want to be. Uh, so I

01:01:20.940 didn't have business connections the only people i knew were intellectuals that didn't own businesses

01:01:25.440 yeah so what do you do if you're if you graduated high school and you're like well maybe i'm

01:01:29.060 interested in finance i'm gonna go apprentice somewhere but i don't know anybody yeah i mean

01:01:34.340 just like wear a suit and show up and like talk to people until someone's like yeah i guess you

01:01:38.600 can hang around for free yeah i do think people who've achieved a lot of money find a lot of

01:01:43.260 inspiration from young people who want to be like them yeah you know so once you've already achieved

01:01:47.540 when somebody comes up to you, and I don't mean achieved like at your and my level. I mean, go to

01:01:51.320 like the 50, 60, 70 year olds, because that's when relevancy starts to fade. They're on what's

01:01:57.100 called the second cycle, right? So they've already achieved their wealth. They've already sort of won

01:02:01.080 and they're in sort of a relevancy decline. And so during that period, if you're a young gun and

01:02:06.360 you go to somebody who's 60 or 70 and had some success, they are looking for relevancy again.

01:02:11.080 And that is your way in. And one way I did this when we were younger is I went to some of my

01:02:17.380 parents uh richest friends and asked them if there was anything i could do for them like i just knew

01:02:23.000 that they had money because they had nice cars and like a nicer house than we did and i basically 0.95

01:02:26.600 just said can i be your bitch and she was like yes you can and so i just learned from watching 0.98

01:02:32.500 them i learned what they did i learned that like you know for instance you know who this is has 0.99

01:02:36.940 like a tractor and equipment uh rental company and i was like wait a second so you can rent out

01:02:41.860 these machines and and you rented it from somebody else to then just rent it to somebody else for

01:02:46.200 more money that's a thing and and you and that made you this much money you know like it's very

01:02:52.600 very rare for me and so if you don't have anybody in your school or network or friends then maybe

01:02:59.820 just like pick the biggest houses on your block and dress up in a suit and go knock on doors and

01:03:05.200 tell them what you're trying to do and like probably nine out of ten of them are going to

01:03:08.460 tell you to pound pound sand but I bet one of them goes that's wild you're 15 or 16 and you

01:03:13.820 want to learn this stuff okay let me give you a shot probably give you something small to start

01:03:18.560 and just judge you on how you accomplish that yeah and and I think especially today where so

01:03:24.320 many people aren't willing to do that and once you have a lot of wealth too you like your kids

01:03:29.100 aren't always as hard working as you were seems to be the trend and so a lot of times these people

01:03:34.260 are looking for who's gonna who's gonna take over all this who's gonna do next um so you might even

01:03:40.800 luck in on something pretty wild if you're willing to work irrationally hard i like that that's a

01:03:45.580 good lesson okay okay last question here uh what well what's your plan for the future like you said

01:03:51.460 you had huge aspirations you've already accomplished a bunch of those but what's next well we have i

01:03:56.700 have a book coming out this um this december um and that will be interesting for me because i think

01:04:04.920 i think a lot of people learn from doing the thing that is rare today which is putting a book in

01:04:10.660 of your face reading all the way through it and taking some notes and so i'm hoping that this

01:04:14.340 becomes really accessible for just about anybody so that book will be coming out i'm pretty excited

01:04:19.060 about that what are you what are you teaching people in the book it's about how to buy businesses

01:04:22.900 shocking nice okay that's super helpful though yeah yeah it's how to buy businesses and this

01:04:28.020 idea of there's these three waves happening in the u.s that are making this in my opinion our

01:04:33.060 industrial revolution our generational wealth creation event which is baby boomers retiring 0.79

01:04:38.660 they own most small businesses this young generation wants more they don't want to work

01:04:43.220 in the traditional corporate field and all these big corporations are buying up businesses everywhere

01:04:48.580 so with that like those tidal waves kind of meeting in the middle we have a unique moment

01:04:52.820 in time to capture it and not just for you to get rich and make money but because i truly think

01:04:59.140 you know you've been to a starbucks lately like shitholes i mean no no wonder their earnings are

01:05:03.860 down so badly yeah and why is that that used to be the fourth or the third place right which was

01:05:09.860 you know you had your house and your work and then you went somewhere else that like felt like

01:05:13.260 another home that was the premise of starbucks and why they did so well and then they became too big

01:05:19.220 they got too much money and they sucked the soul out of the third place and i think that's happening

01:05:24.560 all over our country you only have to go a few minutes from where you live here to the suburbs

01:05:28.900 to see you know these corporate retail commercial strips devoid of all humanity and i think that is

01:05:36.580 a travesty and i think a small business where you own it your neighbors go to it it's located in

01:05:43.460 your community is always going to feel more human than another chain that the private equity head

01:05:49.700 has never stepped foot in because they're located in new york and you're in scottsdale arizona

01:05:53.780 And so it's really this call to arms of, yes, you can make an irrational amount of money from

01:05:59.760 buying a small business, but maybe you could also have a better, more meaningful life and you could

01:06:04.680 help the country. And so we're going to have that book come out and then we're going to build a lot

01:06:09.500 of stuff on the back of it, which, which you'll see, we have a big SAS company I bought that

01:06:13.940 will be announcing stuff, this, some stuff this summer about how to make it more accessible for

01:06:18.140 people to buy and sell businesses. Cause it's cool. Yeah. I mean, it's so easy right now for

01:06:22.400 you to buy real estate like thinking about it you go on zillow you know you go on redfin you get a

01:06:27.100 couple clips you understand everything about it i think buying businesses will be a version of that

01:06:32.360 maybe not quite as easy in the next 10 years and so we're going to build things to do that instead

01:06:36.200 of me owning all the businesses i want to democratize people's ability to own them because

01:06:41.320 then i'm no better than starbucks if i just go out and all i do is if i don't teach i just buy

01:06:45.900 i don't create tools to allow for more easier buying then how am i any better than blackstone

01:06:50.620 I'm not and so um I don't want you know private equity billionaire on my tombstone at all I kind

01:06:58.080 of saw what those guys are like later in life and I don't want any part of it interesting oh that's

01:07:04.260 so cool thanks I'm excited okay definitely send me a book when it's out I will I will I just picked

01:07:08.960 the cover I'll show you it after this okay perfect also cover picking is horrific are you writing a

01:07:13.540 book I am I'm actually finally finishing it up now it took a number of like it's kind of a memoir

01:07:20.360 about like health things and then businesses and what happened to my dad and just everything in my

01:07:25.820 life has been so dramatically weird like movie like that I'm okay yeah every time something bad

01:07:31.160 happens I'm like whoa it's gonna be a good chapter in the book but like literally that's part of what

01:07:35.300 gets me through it I'm like this who how who does this happen to no like how many times you know

01:07:39.980 you know I've been extorted like do people normally I was like how many times I've like three times

01:07:44.940 I was like how why does it keep happening and call my friend and be like it's you know it's

01:07:50.000 happening again this is like a movie it was like does this happen to people anyway it's going in a

01:07:54.960 book it's coming out but i had to like live longer yeah because i was i started writing it when i was

01:07:59.860 17 because things were already messed up by that point and then uh it just never had a good ending

01:08:05.860 i was like this is just a and then a family member was dying the end like there's just never

01:08:11.760 an end part so i think we can put the end in this is a good period now we're gonna write it now

01:08:15.900 before something else happens yeah exactly yeah yeah it's a labor of of love writing a book but

01:08:21.620 i do think it's it's an important like uh milestone for people who love writing that's

01:08:26.380 very cool yeah okay well where can people find you online cody sanchez on all the socials and

01:08:31.640 then contrarianthinking.co if you're into buying businesses there's a free two free newsletters

01:08:35.640 there that are all about how to buy sell build grow businesses um so check those out cool okay

01:08:41.960 and we'll link all the socials in the description thanks for having me this was fun thank you

01:08:45.800 You're welcome.

The Mikhaila Peterson Podcast - June 26, 2024

Work Smart, Not Hard – How Anyone Can Invest ｜ Codie Sanchez EP 204

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