BigDeal Podcast #91: Seven Finance Terms You Need To Know To Get Rich

Host: Codie Sanchez
Date: September 5, 2025

Main Theme & Overview

In this episode, Codie Sanchez equips listeners with the foundational financial and acquisition terms necessary for building real wealth—especially through small business ownership. Breaking down each term with practical examples and candid commentary, Codie demystifies finance jargon. She illustrates how these concepts can turn everyday employees into owners, shares a memorable acquisition success story, and hammers home the mindset required to go from aspiring to actually achieving financial freedom.

Key Discussion Points & Insights

1. The Mindset for Wealth

• Opening Challenge:
  “You do not take enough risk for the amount of money you say you want. And small business acquisition is also the fastest, most overlooked way to build wealth in America.” (00:15)
  Codie urges listeners to visualize themselves as business owners, not just dreamers.

• Quote on Discipline:
  “Michael Jordan didn’t wake up early because he loved mornings. He did it because mediocrity felt like a personal insult... Discipline is dragging your half dead body to do what you hate doing. No one writes about the semi committed.” (00:38)

2. Seven Essential Finance & Acquisition Terms

a. Free Cash Flow (FCF)

• Definition: Cash left after all operating expenses and capital expenditures.
• Codie’s Perspective:
  “If you're going to be obsessed with any number in your business, it should be this one.” (01:08)
• Real-Life Application:
  FCF demonstrates how much money is “truly” left to grow or reward the owner.

b. Net Profit (Net Income)

• Definition: Total profit after subtracting all costs (cost of goods sold, depreciation, interest, taxes, and other expenses).
• Insight: “This is the true profit.” (01:40)

c. Types of Businesses: Cash Suck vs. Cash Flow

• Cash Suck: Provide service, then get paid; limited, irregular income.
• Cash Flow: Get paid upfront, deliver service later; predictable, ongoing streams (e.g., subscriptions).
• Key Quote:
  “Cash flow businesses: repeatable, predictable, de-risked. You want these, not cash suck businesses.” (02:07)

d. Working Capital

• Definition: Funds to run daily operations (current assets minus current liabilities).
• Breakdown:
  • Current assets = cash + inventory + accounts receivable
  • Current liabilities = accounts payable + wages payable + amounts owed to suppliers

e. EBITDA

• Definition: Earnings before interest, taxes, depreciation, and amortization.
• Importance:
  “The gold standard for talking about true operating profit and deal making... It’s used to calculate what a business is worth.” (03:02)
• Business Valuation Tips:
  • Check Profit & Loss Statement
  • Review Tax Returns
  • Understand industry multiples (typically 2–6x profits for small businesses)

f. Valuation

• Usage: Setting the sales price of a company—often calculated as a multiple of EBITDA or Seller Discretionary Earnings (SDE).
• Example:
  “If the multiple for auto shops is three times EBITDA, and the business has $50,000 EBITDA, then the valuation is $150,000.” (04:20)

g. LBO (Leveraged Buyout)

• Definition: Buying a business mainly with borrowed money, often using business assets as collateral.
• Codie’s Analogy:
  “Similar to how you pay 20% down and borrow 80% from the bank to buy a house... but for businesses.” (05:10)

h. Seller Financing

• Definition: Seller acts as banker, letting buyer pay over time, often at a better rate than traditional banks.
• Key Point:
  “It’s rare but possible to get a business for $0 using this method.” (05:27)
• Codie’s Emphasis:
  Small business acquisition is “the fastest, most overlooked way to build wealth in America, owning boring, profitable businesses that everyone else ignores.” (05:38)

3. The "Cody" Acquisition Story: Turning Knowledge into Action (06:25–13:10)

• Who: Cody (not Codie Sanchez) — a 12-year employee in a production company

• Situation: Had limited savings earmarked for a house. Decided to use this to acquire a small business instead.

• Process:

  • Attended Codie’s three-day acquisition workshop
  • Searched for businesses, faced repeated rejection
  • Found a pool route operation for sale: 40 clients, $70k annual revenue, $36k down, $24k seller-financed at 0% interest
  • Used all savings for the down payment

• Execution:
  “In two weeks the deal moved from handshake to close. Why so fast? Cody had a tiny window at his job where work was slow.” (09:25)

  • Did not quit corporate job immediately—maintained stability until business was cash-flowing

• Results (after 3 months):

  • Grew client base from 40 to nearly 50 pools
  • Monthly revenue: $7k
  • Monthly payment: $2k
  • Take-home profit: $4-5k/month

• Owner Mindset:

  • Hired and trained new tech for future delegation
  • Building systems for scale and future removal from operations
  • Targeted $150k annual recurring revenue
  • Considering vertical integration: buying supply stores, adding services (e.g., calcium removal, reverse osmosis machines)

• Codie’s Takeaway:
  “He did the thing that most of us just talk about. You want to know a hard truth? You do not take enough risk for the amount of money you say you want. So do the risky thing.” (12:54)

Notable Quotes & Memorable Moments

• On risk and rewards:
  “You do not take enough risk for the amount of money you say you want. So do the risky thing.” — Codie Sanchez (12:54)

• On business acquisition’s accessibility:
  “It’s rare but possible to get a business for $0 using this [seller financing] method.” (05:27)

• On what matters in business:
  “If you’re going to be obsessed with any number in your business, it should be [free cash flow].” (01:08)

• On discipline:
  “No one writes about the semi committed.” (00:45)

Timestamps for Key Segments

• Mindset & Intro: 00:15–01:05
• Free Cash Flow & Net Profit Definitions: 01:08–01:50
• Cash Flow vs. Cash Suck Businesses: 01:51–02:20
• Working Capital: 02:21–02:45
• EBITDA & Business Valuation: 03:02–04:20
• Valuation Example: 04:21–04:40
• LBO (Leveraged Buyouts): 05:10–05:20
• Seller Financing: 05:27–05:38
• Acquisition Story (Cody): 06:25–13:10
• Closing Challenge and Call to Action: 12:54–13:10

Summary

This episode is a high-energy, practical walkthrough of financial concepts the “gatekeepers” wish you didn’t know—delivered in Codie Sanchez’s relatable, no-nonsense style. Listeners walk away with a blueprint for evaluating business deals, hands-on definitions, and a real-life success story showing a clear pathway from employee to owner. Codie insists: learning these seven terms is essential, but action—betting on yourself and getting in the game—is what sets the real winners apart.

If you want to master this playbook and learn how to put it to use, don’t miss Codie’s upcoming Main Street Millionaire live event.

(This summary omits ads, intro/outro, and promotional segments outside of actionable, content-rich discussion.)