← The Learning Leader Show With Ryan Hawk
The Learning Leader Show With Ryan Hawk
611: Codie Sanchez - How To Build Extraordinary Wealth Through Ordinary Businesses (Main Street Millionaire)
00:52:35
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- [00:00]
Cody Sanchez
I think the best way to get into a game is to go where the game's already played. There's always really room for greatness done slightly differently.
- [00:07]
Ryan Hawk
Main Street Millionaire how to Make Extraordinary Wealth Buying Ordinary Businesses There are some.
- [00:12]
Cody Sanchez
People these days that say that imposter syndrome isn't real. And I think that is likely sociopathic behavior. Because guess what? You're not God, I'm not God, and we're often wrong.
- [00:22]
Ryan Hawk
What are the first few things I should do to get started buying businesses?
- [00:26]
Cody Sanchez
First, I would say don't quit your job. A lot of people today will tell you quit, go all in. They have survivorship bias. We've been sold a lot. I'm going to understand money because I think that if I understand money, I can build things and that is what stops people from doing things I don't want them to do. If you're obsessed enough with something, you can find the commercialization in it. You can find the money. Are you picking something because you want it to be your passion? I prefer you pick a business because you want to profit off of it, and then you add not passion, but obsession to it. Profit plus obsession eventually leads to passion.
- [01:02]
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- [02:28]
Ryan Hawk
Text Hawk to 66866 to become part of Mindful Monday. You, along with tens of thousands of.
- [02:36]
Cody Sanchez
Other learning leaders from all over the world, will receive a carefully curated email from me each Monday morning to help you start your week off right. You'll also Receive details about how our book the Score that Matters will help you become a more effective leader.
- [02:51]
Ryan Hawk
Texthawk to 66866.
- [02:54]
Cody Sanchez
Now on to tonight's featured leader.
- [02:57]
Ryan Hawk
So good.
- [02:58]
Cody Sanchez
Cody Sanchez is the founder and CEO of Contrarian Thinking, a financial advice enterprise with over 2.5 million subscribers. She's also the co founder of Unconventional Acquisitions focused on small business acquisitions. Cody is the author of Main Street Millionaire how to Make Extraordinary Wealth Buying Ordinary Businesses. During our conversation, we discuss how to buy your first business on the side, even if you don't have a lot of money in the bank. And then Cody shares an amazing story about how to earn a job that you might not be qualified for. Then she talks about why it's important to be a contrarian thinker and the benefit of changing your mind after a debate. Ladies and gentlemen, please enjoy my conversation with Cody Sanchez.
- [04:00]
Ryan Hawk
I'm curious about your upbringing, particularly your dad. I read that he had said to you, cody, you're not going to be a princess. You're going to be the president.
- [04:10]
Cody Sanchez
What affects did that statement from your.
- [04:13]
Ryan Hawk
Dad have on you?
- [04:16]
Cody Sanchez
Well, I didn't wear a lot of pink growing up, despite the jacket that I have on now. But, you know, I had the best dad in the world. I have the best dad in the world. And for many reasons. But one was that he always said that I could do things on my own. And not in a you don't need no man type of way, but just in a, you are an independent center of gravity and you should add massive value to the world and to those around you. And you should expect whoever else comes along for the ride to do the same thing. And so he. He would famously tell me things like, I remember one story where somebody was saying something to him like, oh, man, you got it. You got a daughter. She's kind of cute. She better watch out for all those boys. And his response was, those boys should probably watch out, actually. And. And so he. He was just my biggest champion always. And my mother was the exact same way. But I talk about my dad a little bit more because he was an entrepreneur. And so I think a lot of our audience wants to be a business owner, wants to be good and successful at what they do. But a lot of that, the things that shaped me in. In my childhood came from having two parents who really gave a.
- [05:26]
Ryan Hawk
If you were talking to dads of daughters, which you are speaking to one right now, what, like, advice would you give to them in order to raise tough, independent, resilient daughters, to become productive members of society as they grow up.
- [05:46]
Cody Sanchez
Well, first of all, I would say that I'm really in awe of dads in our generation. I actually think, you guys, you got a bad rap in a lot of ways, but, man, I mean, I see a lot of my friends that are young fathers. This is an incredible generation. My dad was rare. My dad coached the softball team. And if anybody has ever watched a weekend of softball, especially in Phoenix, Arizona, during 120 degree heat, it's. That is like. That is sainthood, basically. And he probably. He did that for the better part of a decade. And that was no other girl's fathers were doing that. Very, very few. And yet now when I see a lot of my peers and people your age who have. Have children, you guys show up in a really serious way. And so one, I think you should probably just give yourself a pat on the back, because I think you're a lot more rare than people realize. And the other part is you're so incredibly important. My husband always has this joke that he says jokingly to his parents about the fact that he's a Navy seal and he found it from a comedian, and we altered it slightly, and it was, thanks for not fucking me up enough to become a drug addict, but just enough to become a Navy seal. And I think there is this idea that with young men, you do. A lot of you guys do really well with little trauma. Actually, like, daddy issues are a fuel in a lot of ways. And I don't think the same thing is true for women. It does not appear that women who have really tough relationships with their fathers have the same internal drive. It seems that we actually need our fathers quite a bit. And my dad always said, you can bake a cake, but you can't make more time. And it's like the one thing you can't make more of. And he just gave it to us pretty religiously. The other thing that I think he did different for me than other little girls is he took me along on all of his rides. So he didn't craft the world according to what I wanted. He was like, we're gonna go hunting this weekend. We're gonna go track some elk, we're gonna go play some sports, and we're gonna go play softball. And then with my mom, I would go to the library, she on reading books. And so I fell in love with that. I would go and plant things with both her and my dad. My dad's super into plants, and so he kind of took me along for the ride, which was another thing I really, like. It wasn't like I got to do whatever I wanted to do. I just got to come with them everywhere. And so I remember from a really young age going with my dad and God, God bless his soul, wanting to take me on a. On a duck hunting trip. And I didn't quite understand what happened with duck hunting. And so we're. We're laying down kind of at the edge of a pond, waiting for these ducks come in. And he's explaining to me what happened. So the ducks come in, they come low, then we shoot them. And I'm like, shoot them? Why are we shooting the ducks? Like, why would we do such a thing? That seems mean. And he's like, don't. No, it's okay. It doesn't worry. And when my. Famously, I jumped up right as the ducks were landing, and I'm like, fly away, duckies. Fly away. And. And my dad was not very thrilled about that, but he proceeded to not tell me that ducks circle back. And. And as I laid there, kind of really excited about the fact that I had scared these things off talking to him about it, he went ahead and got a duck and so on the come. I'm not sure that I could ever give any advice because I don't have kids yet. I hope one day we're so blessed. But it really was. Can you take me along for the ride on the things that you do? And can you spend a bunch of time with me doing the things that you love? And then I started loving them too.
- [09:04]
Ryan Hawk
Just like they value and want your presence more than your presence. Right. Just being there and being fully there. It sounds like that's what your mom and dad were and are for you. That's really cool.
- [09:15]
Cody Sanchez
Hey, Cody, I read that your favorite.
- [09:17]
Ryan Hawk
Book is called Letters to a Young Contrarian by Christopher Hitchens. Is that still your favorite book? And if so, why is it?
- [09:24]
Cody Sanchez
Yeah, it's definitely up there. I read Hitchens when I was very young. He's a very controversial guy. Famously an atheist for many decades of his life and until he finally found Jesus at the end of his life when he was sick. And famously a communist and a socialist for many years of his life until he, at the end, sort of realized that he might be a capitalist. And. And he was always quite ornery, but very open to the idea of changing opinions. And I named my company, actually after that book Contrarian Think, because he had a line that said something to the effect of every chance we can, you should have a little debate. There's no room for quarrels in the grave. And I kind of liked that idea of we should question everything, even ourselves, and maybe especially ourselves, because that's how the truth is found. And so he taught me a lot about that in the book. And they're these short, very brief letters to a young person on how to think and how to push back and how to ask questions. And so that is certainly one of my, one of my very favorite books. And the quotes from Christopher Hitchens are just incredible. He was a very eloquent man till the day he died.
- [10:36]
Ryan Hawk
You mentioned that's what you named your company, Contrarian Thinking. And it started as a blog, right, about four or five years ago, but then has evolved now into a media and business education company. So was there a specific moment or a turning point where you made the decision that this is going to go beyond just a blog and become a real business?
- [10:57]
Cody Sanchez
Yeah, I love to write. So I think oftentimes when you can find the thing that you do, even when nobody pays you, when you become so obsessed that nobody can compete with the numbers of hours worked, that's when you found your unfair advantage. And so I was obsessed with writing. I always have been. That became my unfair advantage in the blog. And then as obsession happens, I think obsession, eventually, if you're obsessed enough with something, you can find the commercialization in it, you can find the money. And so famously, Andreessen Horowitz, the venture capital firm, likes to say, I believe it's Mark Andreessen, that they often don't invest in people who haven't lived and breathed the problem for 10 years. Plus, they want somebody who is the founder of a company that has been so obsessed with this thing that they're entrenched in it, like they know all the aspects of it. And that is when they will invest in the founder. It's not somebody who says like, oh, well, the other day I realized that this, this phone could charge faster with this. It's like somebody who's just, they', had, like they've had something in between their teeth for a while and they're like working it and working it and working it. And so that's how I am with writing. I find my best thinking happens when I write. And because I started going in depth, then it led to, huh, Actually, I think there's an opportunity here for a 21st century media company and that is a commercial pursuit. And I think we could do it in a way that it hasn't quite fully been done yet. And we're actually at this precipice even back then. I mean, if you remember, when I started substack, there were substack newsletters everywhere. Felt like everybody had a newsletter. Everybody was substacking. They were like, the market's full. There's no more room, and there's plenty of room. There's always really room for greatness done slightly differently. Not that mine's great, but just some. Something that's a little bit off. And so I finally realized, about a year and a half maybe in about this idea of a media company. And that's when I realized, well, it's going to be more than newsletters. It's going to be video, and it's going to be audio, and it's going to be me, and then it's going to be communities, and then it's going to be academies, and then it's going to be courses and it's going to be books. And then eventually it's going to be more than just Cody. And we're on our way. We'll see if I'm right.
- [13:06]
Ryan Hawk
You mentioned how writing is a. I think it's. It's the ultimate clarifier for thinking. If you want to get clear or if you want to truly understand something, try to write about it. It's like, like your book Main Street Millionaire. I'll be curious to hear this part of the process, because I know for my three, when I've sold the proposals a little bit or a good chunk about the material, and then you got to write the whole thing. And that's when you really learn about the topic because you got to get very clear on everything that you had promised that you're going to write about. How does writing clarify your thinking?
- [13:46]
Cody Sanchez
Yeah, the funny thing about writing is if you wrote the way that you think you would probably be committed. You can stop a sentence mid sentence, go to another paragraph, hit to another topic, circle back around, add an exclamation point followed by a parentheses, finalized by a period. And you can do that all verbally and it's okay. And somehow we humans, we can follow each other like some sort of schizophrenic 10x match. But if you write that way. Whoa, that's. That's crazy, Lance. And so what I've realized is that because your brain allows us to fill in these gaps in the same way that when you visually see the world, we're actually not noting everything around us at all times. Famously. If I was to ask your listeners or your. Your viewers right now to show me everything in my image Right now that was blue, you would be able to pull up a bunch of blue things. But if I asked you then following to show me to tell me the number of things that were green, you'd probably be able to pick out less than, than 25% of them because you were preordained or pre told to pick out blue versus green. And so visually we actually fill in gaps all the time in a way that is just continuous and we don't even notice. And then verbally we do the same thing, but to a lesser degree written, you can't do that written, you really have to almost follow the sentences, which is why it's quite hard for us even to go back and read like Shakespeare because the dialect was so different, even though the thoughts might be clear. And so when I'm writing, I have to be a better version of the thinker that I am. And so I obsess a little bit on can we be clear and can we be brief? You also don't, it doesn't allow for interjection. It's a one way communication. And so I think there's a lot of reasons why great business people like Jeff Bezos, for instance, make their employees put together a brief before meetings. Everybody reads the brief in the meeting and then they discuss. Because otherwise you can get too easily distracted and things can move too quickly when you do it verbally. So that was always my thought.
- [15:54]
Ryan Hawk
Interesting. I loved learning about your career path. And you've said that I don't believe that humans have linear paths ever. Anyone who has had an interesting career keyword, in my opinion, has had a completely divergent set of experiences, which you certainly have. And you're still in like the early stages of your career. Can you talk me through parts of your career and why you've chosen to do such different roles? Work at big companies, be educated, be a journalist, now this media company and writing and publishing a book. I, I'd love to hear just your overall philosophy on your career path and then career paths in general.
- [16:36]
Cody Sanchez
Yeah, well, it was funny for the book we did this whole chronology of my background because I'm a little bit older now. And so Charlie, who I, who's my editor for the book, he'd be like, so when did you buy the first laundromat? Like how old were you? How much money did you have? What was the exact amount? And it was so funny going back, cause I was like, fuck, I can't remember. Was that 2007? Was that 2009? Like, was it 120k there. How much was it down? And so we had to do this whole chronology to make sure that everything matched up and was correct because it's like I've had like a 20 year career by now because I started working in high school and so, so it was interesting when we went and looked back is one I think most careers and mine is no similar. It's not like I grew up knowing anything about finance or how to buy businesses. And if this book had been put in front of me as a roadmap to financial wealth when I was first starting out in college, I would have many more 8 figures in net worth. But I didn't think about the world this way. I was from a young age interested in politics and interested in journalism. Those were the two things that interested me. I wanted to understand what I think are two of the biggest levers in the world of power. The third being money. Politicians run the world. They decide what is right or wrong, what is good or bad, AKA law. Journalists fill the national narrative and so they tell us one way or the other, what to believe, what not to believe, what's happening, what's not happening. And then money is the thing that allows you to assert your will on the world one way or the other. And so I was interested in all three of those. I started out out interning for some politicians when I was quite young in undergrad, John McCain being one of them and, and then I realized that politics was kind of gross and I, it just felt like a. It was a lot of networking and you had to make people like you and you had to say things to them. And I was never very good at that. Even in the corporate spiel I didn't, I didn't play politics very well. And so, so I decided that was not going to be for me. So then I thought, well, maybe it's journalism. And so I went to journalism and, and I worked along the US Mexico border and I wrote some really heart wrenching stories about border conflict and what happens to, to people who have no money and no power, but a great need, such as a need for safety and a flight of trying to get into this country. And I saw things that I'll never forget as a young woman. I remember very vividly the first time I saw a body dangling from an overpass. And that was when the cartels were really, really tough in Juarez time I believe it was the Sinaloan and the Sonoran cartel were at odds. And I think there was a three year period in there I would have been there around like 2008, where 10,000 people were murdered over that three year period in Juarez. Even last year, there were 2,000 people murdered there. So, I mean, we're talking about massive violence. And I remember seeing that and thinking, huh, I could write about these stories. And in fact we did, and we won a bunch of awards and nothing changed. And the subjects that we talked about, they didn't get saved. Nothing changed for them. I went back to give a few awards to some of the people I covered in a story called Generation Abandoned. And their life changed not at all. And I remember very vividly, one said to me, her name was Carmelita. This is amazing. Now America knows. Now you're going to help us, right? And I was 21, I guess, at the time. And I hadn't even thought, like, I just was so, like, proud of myself. I hadn't even thought about what their reaction might be. And so I was pretty dejected and went back to the. To actually my law professor at the time because I was considering going to law school. And I said, what is the point of this? We cover things, nothing changes, and it just feels like voyeurism at some point. And so he said, well, what do you think would make change? And so we did this fun theoretical exercise. I wish I could remember what his name was. And the exercise basically came to this idea of why is my last name Sanchez? These people's last name was Gutierrez Fernandez. And why did I have such a different life than them? It's not because I was American and they were Mexican. It's actually just socioeconomically I had more money than they did. And so because I had more money, I had more power. And so that's when I was like, fuck it, I'm going to understand money. Because I think that if I understand money, I can build things. And that is what stops people from doing things I don't want them to do. I don't think journalists have as much power. And so that's when I started climbing up the corporate ladder of a bunch of Wall street firms, financial firms, until I remembered that I never wanted to be in finance in the first place. I really wanted to just understand money and have more of it. And so I started buying these businesses on the side to escape a thing I never meant to do originally, which was work on Wall street and own my own series of small businesses, have my own little empire. And then I wanted to share with other people the things I wish I knew back in the day. And so it kind of came full circle back to this idea of sharing and journalism because they let me in to the boys club and maybe they shouldn't have.
- [21:51]
Ryan Hawk
How did you get in? Because you're a journalist, you had self proclaim said you didn't really know what those people were doing. And then you became, at least you didn't become one of them, but you worked alongside them on Wall street at some of the biggest and most prestigious places. How did you get in?
- [22:09]
Cody Sanchez
Yeah, I think the best way to get into a game is to go where the game's already played. So at the time I was at Arizona State University, Harvard of the west really, but huge university, 60,000 people, not a lot of hand holding at all for you to progress in your community career. I didn't really know any rich people at all. And so I was like, how am I going to get into finance? It seems like everybody wants to get into investing in finance. It seems hard. All my friends are going to be marketing majors and they're going to go and be a journalist and make $30,000 a year or go and try to be marketing at a company. And so I didn't really know how I was going to learn about money. But I usually was pretty good at finding where the people were that had the story I wanted. That's what a journalist major does. I would go to the clubs in Juarez. At the time there were like these nightclubs where we knew that some of the one group of gang members versus another group of gang members would be there. And we would kind of like make buddies with some of them because we'd want to understand who was coyoting who across the border. And so we wouldn't like go knocking around to gang members. We would go with like a group of of us and like cozy up to them and get to know them. And so I was like, yeah, I bet these guys party, I bet they're drinking at night and this is not a good idea. Basically I do not recommend this now, but back in the day when I was a young idiot, it seemed like a good idea. And so I went where the game was played at Arizona State and I was like, well, they're not going to let me into the any of the business school classes because I'm not in the business school. But I bet there are a bunch of conferences. And so I started looking for finance events and conferences. I went to everyone I could find and then I thought, well, there's a lot of people at these, that's not going to be perfect. So then I was like, huh, how can we Narrow this down. I'm like, well, are there Latino conferences for people in finance? Are there conferences for women in finance? Let's go to all those. I bet there's less people there than there were. So I famously went to. I think it was a Latinos in Finance conference, and I really didn't want to go. I was super tired. I had a bunch of, I don't know, sorority parties to go to or something, and. And so I ended up going to this event and just started asking people questions, sat down next to a woman, and got really lucky that one of the women I was sitting next to at the table was a recruiter at Vanguard. And everybody else at the table is talking about where they were going to go and what they were going to do. And I just asked her a ton of questions, and at the end of it, she was like, let's keep. Let's keep in contact. And I was like, yeah, sure, sounds great. And we did. And I followed up with her, asked her a few more questions, until finally she asked if I would come into the office and interview for one of their positions. And. And I did. I ended up interviewing for a rotational development program that allowed me to go to a bunch of different areas inside of the company. But it wasn't because I was super smart. It was just because most people love talking about themselves. And so if you ask them a lot of questions and you seem curious and you take their advice and you follow up on it, you are 1%. And so that was basically all I did to get in the door.
- [25:05]
Ryan Hawk
Genuine curiosity is a form of respect. It's how I think a lot of people show love and receive it. And it's interesting that that. That is. Seems to be the way that you, regardless of your background, got into a place that is tough to get into, is by being curious, asking questions, and then follow up, follow up, follow up. It's. Some of these things are so basic, Cody, but people don't do them. And so if you do, like you said, you become part of the 1%.
- [25:35]
Cody Sanchez
You're right. Yeah. I mean, the other thing that I remember was thinking that, like, lots of people make it too big of a deal. They'll be like, will you be my mentor? Or, I want a job. And so you come out and you ask the girl to marry you right when you meet her, which would be ridiculous in real life, but it's not that different with mentorship and business. And instead, I learned quite early that it was much easier to ask for very small things. So if I Met somebody that I knew was going to be illegally crossing the border at some point and I wanted to follow them to see how they, they went and what happened. I wouldn't ask them to follow them. The first I met, I would be like, tell me about you. What's your story? Where are you coming from? How long have you been here? Are you thinking about making the crossing? When might that be? That's amazing. What do you need? Like, you want to go like over there and we can get some, some food together, whatever. And so you would have these tiny little steps. And I think that's the same in business. So for her it was quite easy to be curious because I was and then send a couple follow up. So it's like, hey, you told me to read this book. So I read it and I had like these two questions on the book, like very little tiny snippets. You told me that this was like the favorite fund that you guys had at Vanguard. It's really interesting. I didn't understand this word. And so for that reason I got in. But I do recall on the first day that I got into the company, looking around at where everybody else came from and it was like, I don't know, Stanford and, and Wharton and all these fancy schools. And then they were like as what'd you do to get here? And. And the beautiful part was it was just asking a couple questions.
- [27:09]
Ryan Hawk
Did you feel a bit of imposter syndrome that day?
- [27:13]
Cody Sanchez
Surely there are some people these days that say that imposter syndrome isn't real. And I think that is likely sociopathic behavior. I think that most people have a self worth issue at some point in their life. I don't think I've ever met a human who at some point did not doubt themselves. That's actually really healthy to doubt yourself because guess what, you're not God, I'm not God, and we're often wrong. And so even though I've been doing deals for 10 plus years, you're crazy if you don't think that. Sometimes I'm like, maybe I don't. I wouldn't say imposter syndrome, but I might be like, God, am I ready to do the size of a deal? Is this deal like in my right wheelhouse? Am I missing something? Does somebody else have to look at this instead of me? Do I believe this fully that I'm thinking right now? I think that's actually quite healthy. And so I've had plenty of that. And then, and I think there's some gender portions of it. Women in particular seem to feel like we need a lot of credentials. So I was like, well, I'm going to get the Howard F. Buffett Grant for Print journalism, and then I'm going to go to grad school and then I'm a layer on a PhD and then I'm going to go work at Goldman, and then I'm going to get this title and then I'm going to learn Portuguese. And so it felt like I had to keep adding all of these credentials, which is. That part's not so healthy. At some point you just have to say, I think I'm good enough. But I think in the beginning it's totally reasonable for you to think, maybe I'm not good at this yet. And also, if you're a high achiever, you should be feeling that way multiple times a year because you should be progressing the curve of your capability. Otherwise you're stagnating. If you're not feeling kind of afraid from pushing an envelope too much, and then you're probably not doing anything very interesting. And I think often of, I remember vividly the video where Elon Musk has the Tesla on the stage and they shoot like, I don't know, they throw like, they shoot a bullet at the windshield. They throw a rock at the windshield or something and it's supposed to be bulletproof and not break and the thing breaks. And his reaction isn't like, oh my God. His reaction is like, oh, well, well, I guess that didn't work. And so he, he was pushing himself too far. And I was like, huh, yeah, we haven't figured that out yet. But he didn't let it break him.
- [29:34]
Ryan Hawk
Your husband would know this probably better. Anybody? I've had a handful of Navy SEALs on the show over the past decade, and one of the things I know that those that they look for and others to be surrounded by are people who are regularly pushing their edges, right? And that's like a phrase I remember Jay Hennessy, 26 year seal, used is, I want, want to be surrounded by others who are pushing their edges at all time to ensure they're getting better by pushing your edges, meaning regularly doing things that are really hard and really uncomfortable because then they become less hard and more comfortable doing things that were previously really tough. And I think that's a, a good sign in a person. I know you're hiring leaders and you're choosing who to partner with or who to work with. People who are pushing their edges and who make, make the hard a little bit easier by continuously doing Hard things. That's a big time quality. I have to feel like that in somebody that you'd want to work with or hire to run one of your companies.
- [30:33]
Cody Sanchez
Very true. I mean, you are either in a process of improvement or stagnation and then eventual decay. Right. That's like the law of thermodynamics, basically. And so you're either having forward looking action or you're having backward action. And so nothing is ever actually truly static. And I think about that a lot in business. If people are like, no, I'm comfortable here, that's a bad sign. That's a really bad sign. Actually. In contrarian thinking, which is the main business I run now in, we sort of have a saying which is one, it's really important how you start and finish your team meetings. If you come into a meeting frazzled. Ah. Oh yeah. How are you guys doing? It was crazy. And the thing is, I couldn't do that. That's terrible. That's negative energy transfer. And do that. You also shouldn't end a meeting like that. Okay, like, okay, thanks. Bye guys. Whatever. No, no, no, no. Start on a high note, end on a high note. And the other thing in that same vein is none of this we are busy, we are doing lots of things thing. Everybody's busy, everybody's doing lots of things. Nobody wants to hear about it. Like, when have you ever met a human? Even one who doesn't have a job, doesn't have kids, doesn't have a husband or anything to take care of that's not busy. It's like the perpetual state of humanity. So, like, I'm not more busy than anybody else is. We've all made choices and those lead to activities. And those activities are by and large a byproduct of our choices. And so that's a big pet peeve of mine is like, how are you doing a lot. I don't want to hear it. Not in my company. And so I try to, I try to say the same thing myself. And there's, there's a lot of data that supports this. Like, I don't know if you've ever worked in an office before. Have you?
- [32:09]
Ryan Hawk
Yep, I have.
- [32:10]
Cody Sanchez
Yeah. So one of the studies I was reading the other day is there are people that work in offices that do like the loud breathing and size, like, whatever. Have you heard that before? I remember vividly a person I used to work with. Like, exactly.
- [32:27]
Ryan Hawk
Yeah.
- [32:27]
Cody Sanchez
And, and there's like always a type of person that does that. Like they just want the attention from the heavy Breathing.
- [32:33]
Ryan Hawk
Exactly.
- [32:34]
Cody Sanchez
And it, it rubs off on you. And so what that actually does is that's like negative energy transfer. And so if you sit next to somebody like that, over time you actually decrease your happiness at work. And it was one study, but I think about that often. And so one of the things that we do back sometimes is we just mimic because it makes the other person more aware. So we'll, we'll go back to another person at the company, be like, if they're like ugh, then we'll be like ugh. And if you're just slightly more dramatic, it brings awareness to the thing the other person is doing. And I think you got to push edges, but you also got to, got to bear the pain in silence.
- [33:10]
Ryan Hawk
Yeah, I like that. My, one of my friends and mentors, Tom Ogburn, said to me when I got promoted for the first time in corporate America, you no longer get to be energy neutral. You're setting, you're, you're the thermostat now. You get to set the dial for the energy in the room. So think about that before every meeting you start, whether virtually or in person, about your setting that dial. And you don't get to be energy neutral anymore like you were when you were a follower. So you have to lift, think about like actually lifting up that room with the juice that you bring to it or you're going to do the opposite. And I've never forgotten that. I think about how to start, how to finish, how to inject, and if I don't have anything, a meeting, we're going to cancel and we're not going to do it right. And I think like those little things become really big things. So I love that, that mimicking, I love that idea. I think that's, that's really good.
- [34:00]
Cody Sanchez
I'm going to steal that. You are no longer allowed to be energy neutral. I love that because it's, it's really true. What's interesting is everybody wants to be a leader and everybody thinks they're a leader, which is also fascinating, except real leaders who often are very concerned with how good or bad they are as leaders. Real leaders also have a lot of self doubt. And so this I found a lot of people say, well, I'm a great leader. Why do you think that? Can you back that up with data for me? And often they can't. And I think one way that you can tell a really good leader is how do you feel the second that person walks out of a room? Do you feel like you can go run through walls Is that like a, do you feel like you're ready to go run the treadmill or do you feel like fuck me, I'm so tired, lay down on this couch right now because I got fucking low energy Jeb around here, not doing anything for me, me. And so I think that's really clever and I'm going to say that to my team because I've been struggling to think about that idea of what does it mean to be a leader. And I think a lot of it is yes, it is tactics and yes it is techniques, but a lot of it is, is inspiration actually.
- [35:08]
Ryan Hawk
Yeah. Yeah. How do you, it's, it's kind of goes back to the basic Girl Scout rule of leaving people places and things better than you found them. That's what leaders do too. You, you, you leave if, when you leave the room, your people are better for you having been there and you make them better. And there's a lot of different ways and there are tactics, but I think at its like fundamental level, that's what you do. So let me paint the picture of an avatar, Cody, of, of, of who I talk to, who listen to this. And that's like a mid level corporate leader who has some curiosity about what you do. They may have some extra money. They may, may want to get out someday, may not, may want to do this on the side, but they, they.
- [35:51]
Cody Sanchez
Have an interest in buying businesses.
- [35:54]
Ryan Hawk
You, you have called them boring businesses at times. Laundromats or landscaping companies or whatever. You can get into it. So let's, let's think about that person who is currently working as a mid to high level leader within a Fortune 500 company. And they're doing well. They're doing well. They don't hate it, it, they don't love it, but they're just good. So they got a little extra money. What would you say to them if they're like, Cody, I don't even know how to get started. I don't even know what to do. What should I be looking at? I should obviously read Main Street Millionaire, but after that, what are the first few things I should do to get started buying businesses?
- [36:31]
Cody Sanchez
Yeah, first I would say don't quit your job. If you work in a corporate job right now you have the most beautiful thing ever, which is you have other people's money, AKA salary, coming in on a bi, bi, weekly basis for your skill set. A lot of people today will tell you quit, go all in. They have survivorship bias. They have the belief that because they survived, everybody else will and that is just not statistically true. And so my belief is that unless you have plenty of cushion and or a giant belief in yourself and really comfort, a lot of comfort with with risk, it is perfectly fine to keep your job job while you are thinking about buying your first business. And now is your employer going to love that? Probably not. So you're going to have to manage the fact that you shouldn't be the future employee you don't want to have. Karma's a real so I think if you are working in a corporate culture, make sure you are still a high performer. Make sure you don't give yourself the bad corporate karma of hey, I'm going to go do this thing on the side and I'm going to really let my I'm going to quiet quit. I'm going to let my work not matter. I think that goes around it is not a good thing you want. And one day you're going to be an owner just like one day you're going to be a parent. And all those things you said parents should never do or all those things you said owners just don't get, you're going to see the other side of it for the first time. So, so I'm thoughtful on don't quit your day job, but don't be a shitty employee. And it's the hours outside of the nine to five that are yours for learning how to buy a business now. And here's the good thing about corporate individuals. If you're like me, you're a high performer, you're good at what you do, you are qualified and you're skilled. You just never had a brilliant startup idea that was going to cash flow enough to make up for the salary that you had. You just didn't have that spark. Or you had a few sparks and they died and flamed out spectacularly, which I did too. And so you're kind of looking for what is the thing that could actually replace what I do or meaningfully impact my income. And the truth of the matter is is that we've been sold a lie. The lie is that we have been told that the way that you leave a company is you either go from one company to another, one job to another, or you have a startup where you have a 90% fail risk. You have a startup where most people pay for the right to future potentially earn, which is what a startup is costs you money to start. It costs you money for years and you have a very high likelihood of failure. I'm glad some, some people do it, but I Don't think we all have to do it. I think in fact, the faster, less risky way is to buy a business because the number the two main reasons why businesses fail are a lack of cash flow and a lack of product market fit. Well, product market fit is there when you already buy a business because you have a business that's been in existence for years selling customers. Cash flow is there because you have a history of the business cash flowing. And so if you're in corporate, I really like the idea of buying businesses now. You don't have to start huge because maybe you've never run a business before, but you can, just like you would in real estate, start with a studio, then go to a one bedroom, then go to a house, then go to a multifamily. And it's the same with buying a business. We just were never taught this.
- [39:53]
Ryan Hawk
You bought that laundromat, you said, and was it. What was. When was your first one?
- [39:58]
Cody Sanchez
I did it while I was still employed. So, I mean, God, 10, 10 years plus ago, probably.
- [40:02]
Ryan Hawk
So what made you want to buy a laundromat at that point?
- [40:05]
Cody Sanchez
Point, I didn't want to buy a laundromat at all. There was no part of me that thought I should buy a laundromat. I said, I want four things. There's four things that every good business transaction has. I want the ability to cover my debt service. So if I have interest or payments, I want enough cash in the business to have an operator because I'm still working at my job. So I didn't want to leave my job. I wanted the business to have enough money to make me the salary or the income that I needed. And I wanted enough money in the business business for operating cash in order to make sure that the business was stable. So I define a good business as one that covers those four things and thus gives me an income stream with a little risk buffer. I ended up going for a laundromat because it was in my deal box. I talked about this a lot in the book. How do you narrow down what type of business is right for you? And the business that was right for me was one where I had those four things. It wasn't that big of a business, so it couldn't bankrupt me. It was a simple business that I could understand. It was profitable, it been around a lot, a long time, and it really hadn't been marketed. So I thought that we could market it more. And, and the first thing that we found like that was a laundromat. But back in the day. I mean, I think with my operator at the time, I was looking at laundromats. I was looking at car washes. I was looking at dry cleaners back then. They're not my favorite now. I was also looking at, do I just buy real estate? Do I buy, like a strip mall? But that took a lot more capital and didn't have as much cash. And so. So we finally landed on a Laundromat because of the financial component of it, not because I cared at all about an individual laundromat.
- [41:41]
Ryan Hawk
Are those still good? Now?
- [41:45]
Cody Sanchez
Really depends. I don't think that there is such thing as a good or bad business. Actually, you could say, hey, Cody, buy this laundromat off me. It's losing $100,000 a year. It's making no money. It's the bane of my existence. I'm super annoyed by this thing. Please buy it for me. Me. And if I get it at the right price and the right terms and it fits in my deal box, that could be a great business. Because maybe your nightmare is actually the perfect add on to my other laundromat business where I have a great operator who just needs to clean up and handle some of the maintenance on your machines. And you need more marketing because you've been kind of shitty at it. And so I think that I could take that 100,000 loss and make it a hundred thousand positive. Now, I think turnarounds are tough, but my point being, a lot of people focus on what sector do I buy. And I hope they buy the book instead, because by the end of it, you'll realize it's not about sectors. It's about, like, the right fit for you. And that's how we. That's how we make more money in private equity than anybody else, because they don't care. I mean, go look at, like, some of the biggest private equity firms out there. Go look at Sun Capital's investment list. It'll be like an airplane screw company, and then it'll be a water fountain installation company, and then it'll be an airport kiosk company. And I mean, they have nothing to do with each other, because private equity knows it's all about the price, the terms, the cash flow of the business, and that's it.
- [43:13]
Ryan Hawk
What are the first things you would advise somebody to do after reading your book? I mean, that's a playbook, and I highly recommend that. But for just our purposes of having this conversation, what are the first things somebody should do who doesn't really have a Clue, but is like, yeah, this could be me.
- [43:29]
Cody Sanchez
Yeah. Well, I call it the 3912 method. So the first three months of you thinking about buying a business, I want you to spend learning how to buy a business. There's 10 steps to buying a business that we teach. So I want you to go through the ten step methodology all the way from is this even an opportunity or a good idea? To how do I finance this thing, to how do I find this thing, to how do I close this thing, to how do I get a team in it, to how do I run it afterwards? So you're going to spend your first three months doing that. You're going to spend your next nine months looking for the perfect business for you and probably starting to dabble in maybe a few small deals, maybe you're doing a partial deal. And then I want you to spend your last 12 months, this is when you stabilize the business. So now you've spent your first 12 months learning to buy a business. Buying a business, your next 12 months stabilizing the business, making it optimal for you to get money out of it. And then you might go to add on acquisitions or maybe you go to sell. You're like, cool, cool. I stabilized this business. I grew it a little bit. I realized this business isn't the one I want to own. So I want to sell it and get something a little bit different. So 3912 is typically where I want people to start.
- [44:40]
Ryan Hawk
And can you talk about the significance of Main street and why you titled it Main Street Millionaire?
- [44:48]
Cody Sanchez
Yeah. Well, one, there's a fascinating phenomenon which is essentially, we call it the boring versus sexy curve. And the idea is essentially this. The sexier the industry, the fewer at the top that make all of their money from said industry. The more boring the industry, the higher the percentage of people in that industry make all of their money from that industry. So let me give you an example. They say that there's less than 10% of like SAG, AFTRA, the union actors and actresses that make make enough money to cover their average income from being an actor or an actress. It's very sexy. There's lots of competition. The people at the top make a ton of money. Everybody else is broke. Then when you go down to the boring side, if you are in Porta Potties and you run a porta potty business, you 100, you make 100 of your income from Porta Potties because nobody's really doing that business just for funsies, right? And so we have this like, like spectrum that we've been talking about for like the last three years and now we're seeing the data start to support it. I used to say the sexier a business is, the less likely you are to make money in it. Now we have a lot of data that supports it. And so I think that people should be really thoughtful about the fact that. Are you picking something because you want it to be your passion or it is your passion, or are you picking something because you want to profit off of it? I prefer you pick a business because you want to profit off of it and then you add not passion but obsession to it. Profit plus obsession eventually leads to passion because it's really, really fun actually running a profitable business that you're obsessed with the process of being in business or playing the game.
- [46:30]
Ryan Hawk
You just had a post about the richest self made woman in the United States. Can you talk about who people might think that is and then who it actually is and what she does?
- [46:43]
Cody Sanchez
Yeah, a lot of people. If you said who is the richest woman woman in the world? This was two years ago. But who is the richest woman in the world two years ago? Some people might say, well, I've heard a lot about Taylor Swift lately. She a billionaire. That could be it. Also Kim Kardashian, maybe even if you put the whole family together, could be that, hey, maybe it's like the Walmart heiress. And you would be wrong on all of those. It is actually a woman who owns a roofing company that she built. And you'll never know her name, you probably won't know her face, but she prints money while she sleeps. And this is true in so many industries. I mean, in the beginning of the book, we talk, we start out with a guy by the name of Wayne Huzinga, who's one of my favorite billionaires. And the man drove a garbage truck out of college. He went to college and the only job he could get was garbage truck driving. And he too saw what I saw, which is, wait a second, these guys who own these garbage truck businesses are making a ton of money. How do I get a piece of this? And he actually used, used varying types of creative financing and leverage in order to buy his first little garbage truck, his first $500 in supplies, and turn it into waste management, one of the biggest garbage truck companies in the world. And then what did he do afterwards? Then afterwards he bought a bunch of sports teams, he bought planes, he had all the fun. But I think these days people confuse having fun up front with making money up front. And it's just not True. Your first couple years of doing anything, it's going to be miserable. And so you should prepare for that.
- [48:18]
Ryan Hawk
Cody, one more before we run. Speaking of that, let's say you're meeting with someone who's fresh out of college. They want to leave a dent in the world, but they don't necessarily know what they want to do. What are some general pieces of life, career advice for that person?
- [48:35]
Cody Sanchez
Well, I think before you go change the world, you could start with changing your local community. And the truth of the matter with Main street millionaires, all around us, we have small businesses that are closing, that have value in them, that are somebody's 30 years of experience. Imagine you work for 30 years, you build a house. Over those 30 year period, you're ready to leave the house and move to Florida from Nebraska. And instead of selling the house, you naturally just light it on fire and walk away from it. You would never do that, right? You would never do that with a house. And yet we do that with businesses all around us. So in my mind, if I was graduating college right now, I would be going around and talking not to big corporate companies, but I would be going around and talking to people who own small businesses and saying, can I start apprenticing with you saying, what's your transition plan for the next generation? Don't be the obnoxious young person that's like, I'm going to do this and this and this to your business. But get curious about people who actually, actually run our country. And 42 employ 42% of the population, which is small business owners. And what you'll find is you might be able to get skin in the game a lot faster than you think. And skin in the game increases your bank account size.
- [49:48]
Ryan Hawk
Love it. The book is called Main street how to make Extraordinary Wealth Buying Ordinary Businesses. Cody, this was fantastic. I would love to continue our dialogue as we both progress.
- [49:59]
Cody Sanchez
I love, would love that. Thank you so much for having me. You made this so fun.
- [50:03]
Ryan Hawk
Thank you. Appreciate.
- [50:08]
Cody Sanchez
Is the end of the podcast club. Thank you for being a member of the end of the podcast club. If you are, send me a note. Ryan learningleader.com Let me know what you learned from this great conversation with Cody Sanchez. A few takeaways from my notes. I love that her dad always said to her, you're not going to be a princess, you're going to be the president. I think this is a great reminder of the power we have as leaders to believe in someone and to raise their level of expectations because we see something special in them. And Cody.
- [50:42]
Ryan Hawk
I was looking at her as she.
- [50:43]
Cody Sanchez
Was talking about her parents and specifically about her dad. She was glowing, had that huge smile. And I, I love seeing the impact that her parents have had on her and how she, she still feels that to this day. And, and then how she earned a job at Vanguard when everyone else there is from an Ivy League school and she's from Arizona State. She went to conferences, she met people, she got in the room and took action. And then when she got her opportunity, she led with her curiosity, asked questions from the woman she met with, learned a lot, read the books that the woman told her to read, and then she followed up. Follow up, follow up, follow up. So show up up, do extra follow up. Those are a great way to earn a job that we might not be qualified for. And then think about specifically how you start and how you end your meetings. What type of energy do you bring to the space? Remember, you no longer get to be energy neutral when you're a leader. You're either lifting the room up or you're zapping that room of that energy. And we want to be the type of people that leave people better than we found them by lifting them up. Bring the juice, be energy additive to the space.
- [51:58]
Ryan Hawk
Once again, I want to say thank.
- [51:59]
Cody Sanchez
You so much for continuing to spread the message and telling a friend or two, hey, you should listen to this episode of the Learning Leader show with Cody Sanchez. I think she'll help you become a more effective leader because you continue to do that. And you also go to Spotify and Apple, Apple Podcast, and you subscribe to the show, you write a thoughtful review and you rate it hopefully five stars. By doing all of that, you are giving me the opportunity to do what.
- [52:25]
Ryan Hawk
I love on a daily basis.
- [52:26]
Cody Sanchez
And for that, I will forever be grateful. Thank you so, so much. Talk to you soon.
- [52:31]
Ryan Hawk
Can't wait.