Podcast Summary: "Codie Sanchez: How to Make Money if You Don’t Have Money (4 Step Process to Make Money Today)"
Podcast Information:
- Title: On Purpose with Jay Shetty
- Host/Author: Jay Shetty, produced by iHeartPodcasts
- Episode: Codie Sanchez: How to Make Money if You Don’t Have Money (4 Step Process to Make Money Today)
- Release Date: December 2, 2024
Introduction
In this episode of "On Purpose," Jay Shetty delves into a critical yet often overlooked aspect of personal development—financial relationships. He introduces Codie Sanchez, an entrepreneur and investor, who shares her profound insights on building wealth without initial capital. The conversation aims to empower listeners to navigate financial challenges with confidence and strategic thinking.
The Foundation of Wealth: Ownership
At the heart of Codie’s philosophy is the concept of ownership as the cornerstone of wealth creation.
- Key Insight: "70% of millionaires are self-made, and 68% have some form of ownership in a business." [02:34]
Codie emphasizes that financial freedom is closely tied to having ownership stakes. Without owning assets or businesses, achieving substantial wealth becomes significantly more challenging.
- Quote: "If you don't have ownership, you're probably never going to be free financially." [02:46]
Understanding the Language of Money
Codie highlights the importance of mastering financial literacy as a critical step toward financial independence.
- Key Insight: "Learn the language of money. Obsess on becoming fluent in something that nobody talks about because money is supposed to be the root of all evil." [04:11]
She explains that financial tools and understanding money are essential to resisting external pressures and gaining control over one’s financial destiny.
Current Economic Landscape and Generational Wealth Transfer
The discussion shifts to the present economic challenges facing younger generations, including wage stagnation, expensive education, and housing costs.
- Key Insight: "Gen Z is the first generation where at their same age as their parents, they're making less money, not more." [09:14]
Codie forecasts a significant wealth transfer from baby boomers to younger generations, emphasizing the opportunity to take over and manage small businesses owned by the older generation.
- Quote: "Baby boomers own 60% of all small businesses. We need to find a way for young people to take over these businesses." [11:00]
Common Financial Mistakes: Chasing Shiny Objects
Codie warns against the allure of high-risk, speculative investments that promise quick riches but often lead to financial loss.
- Key Insight: "Young people are chasing shiny objects like day trading, NFTs, and crypto speculation, which rarely work out." [12:37]
She advocates for sustainable, value-driven investments that create win-win scenarios rather than lose-win situations.
- Quote: "Making money doesn't have to be lose-win; it could be win-win when you solve a pain point and add value to another's life." [13:49]
A Four-Step Process to Make Money Today
Codie outlines a practical, four-step framework designed for individuals with limited financial resources to build wealth over time:
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Learn: Immerse yourself in financial education to build a robust skill set.
- "Crack as much information as possible to increase your skill stack." [15:21]
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Increase Skills: Continuously enhance your abilities to become more valuable in the marketplace.
- "Can I increase my skills so that my skills are more valuable today than they were yesterday?" [15:21]
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Increase Income: Focus on maximizing your current income streams before investing.
- "How can I make more money currently with what I'm doing?" [15:21]
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Invest: Once you have a stable income, start investing your money to make it work for you.
- "Take your money and make your money work for you." [15:21]
Developing Essential Business Skills
Codie identifies three crucial skills for running and growing businesses effectively:
- Deal Making: Understanding how to negotiate and structure favorable deals.
- Grit and Endurance: Sustaining effort and overcoming challenges over the long term.
- "How much pain can you tolerate? Business is an elongated period of low-level pain." [16:41]
- Networking and Leveraging Expertise: Building connections and utilizing others' expertise to address business challenges.
- "Ask who can help you solve a problem instead of trying to fix it solo." [16:41]
The Art of Negotiation and Partnerships
Negotiation is a recurring theme in Codie’s strategy for financial success. She advises on creating win-win deals and forming strategic partnerships that offer mutual benefits.
- Key Insight: "Negotiate your way into a business and have equity in it by solving their problems and adding value." [22:35]
Codie underscores the importance of crafting partnerships where both parties feel valued and invested in the business's success.
- Quote: "The wealthy negotiate everything, while the poor often take the price without negotiation." [28:59]
Overcoming Personal Barriers to Financial Success
Codie shares her personal struggles with math and dispels the myth that financial success requires innate mathematical prowess.
- Key Insight: "Lean into your fears because being bad at money math is often a self-imposed limitation." [86:33]
She encourages listeners to overcome their apprehensions about money management by actively engaging with financial education and practical application.
Innovative Approaches to Buying Ordinary Businesses
Codie advocates for investing in everyday, "boring" businesses like vending machines, laundromats, and small service providers, which often have steady revenue streams and lower competition.
- Key Insight: "Most of the richest individuals own mundane businesses because they consistently generate profit without the high volatility of 'sexy' industries." [55:28]
She categorizes businesses into:
- Gateway Drug Businesses: Simple, low-maintenance ventures like vending machines.
- People-Light Businesses: Operations with minimal staffing needs, such as laundromats.
- Trades and Service Businesses: Traditional services like roofing and painting companies.
- Quote: "Main street businesses are profitable and have been sustained for decades without venture capital." [59:56]
Finding and Securing Business Deals
Codie provides actionable strategies for identifying and acquiring businesses suited to one's skill set and financial capacity.
- Key Insight: "Activate your reticular activating system by immersing yourself in the type of deals you're seeking, making you more attuned to opportunities." [73:51]
She advises building relationships, asking the right questions, and leveraging negotiation skills to secure favorable deals without overexposing oneself to risk.
- Quote: "Don't buy a business solely based on the idea; ensure you understand how to execute and manage it effectively." [64:37]
Effective Mentorship Strategies
Codie shares her unique approach to mentorship, emphasizing unsolicited, value-driven interactions rather than formal mentorship requests.
- Key Insight: "Build mentors who never knew they were mentoring you by offering value and genuine appreciation." [47:07]
She encourages fostering relationships through continuous learning and gratitude, creating a network of mentors and mentees organically.
Final Five: Rapid-Fire Insights
In the concluding segment, Codie answers five rapid-fire questions, offering concise yet impactful advice:
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Best Financial Advice Received:
- "Don't think passive income is a lie; leverage other people's money through private equity." [90:49]
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Worst Financial Advice Received:
- "That money is scarce and hard to get." [94:08]
-
Best Investment Ever Made:
- "Investing in health tools like a sauna and cold plunge to boost daily productivity and well-being." [94:34]
-
Biggest Waste of Money:
- "Poor choices in partnerships, emphasizing the importance of selecting the right business partners." [95:16]
-
One Law for Everyone:
- "Prevent government overreach in taxation and nationalization to empower individual builders and entrepreneurs." [98:55]
Conclusion
Jay Shetty and Codie Sanchez wrap up the episode by reinforcing the importance of developing an owner's mindset, mastering deal-making, and embracing ownership in business. Codie encourages listeners to recognize their intrinsic value, pursue financial literacy, and engage strategically in business opportunities to build lasting wealth.
- Final Quote: "You can make a ton of money whether you're an employee or the founder of a business; just have skin in the game and upside." [102:04]
Key Takeaways
- Ownership is Crucial: Owning assets or businesses is fundamental to building wealth.
- Financial Literacy: Mastering the language of money empowers better financial decisions.
- Strategic Investments: Focus on stable, value-driven businesses rather than speculative ventures.
- Negotiation Skills: Effective deal-making can lead to win-win scenarios and financial growth.
- Mentorship Matters: Building organic, value-based relationships with mentors accelerates personal and professional development.
- Overcoming Fear: Addressing and overcoming personal barriers to financial management is essential for success.
This episode provides a comprehensive roadmap for individuals seeking financial independence, emphasizing practical strategies, mindset shifts, and the importance of ownership. Codie Sanchez's expertise offers listeners actionable steps to transform their financial lives, making this conversation a valuable resource for aspiring entrepreneurs and investors alike.