Best Lines
- The only way to have freedom is through ownership and the world doesn’t want to give it to you.
- Money is a tool for gaining more freedom, enabling you to do more and say no more often.
- Focus on learning—treat your salary as an investment in your brain, absorbing as much knowledge as possible.
- I don’t have the same stamina I had at 25. While it’s tough to work long hours over 20 years, it’s easier when you’re 20. So, front-load the pain now to enjoy enjoy more freedom and fun in your 30s.
- Surround yourself with people who are wealthier than you. You don’t need to live near them or have their money—just being around them is beneficial.
- One of our hiring rules is to bring on people so hungry you’re worried they might overstep.
- Never ask for something unless you’ve given ten times as much value in return.
- People are more inclined to give you things when they feel you know them better than they know you.
- Try to maximize your salary and invest the money from your salary in side deals before starting your own business.
- To get rich, avoid losing money over time and aim to make enough bets to achieve outsized returns.
- The fastest path to wealth is through some form of ownership.
- I’d prefer reading 10 billionaire biographies over 200 self-help books because they’ve actually accomplished extraordinary feats.
- The reason I am successful is I’m faster than everybody else. By the time they’ve thought about an idea, taken it to a meeting, and started moving, I’ve already made 3 mistakes and found a faster way. Bill Perkins
- There’s a strong correlation between success and obsession. Obsessed individuals tend to be the best and often achieve the greatest outcomes.
- Review your expenses and identify vendors who might be small enough to approach about buying a stake in their business.
- Obsessing over creating a great product is challenging because it’s a slower process. You can either invest time upfront to build something exceptional or spend a lifetime on marketing and sales.
Cody’s Message
- The only way to have freedom is through ownership and the world doesn’t want to give it to you.
- The message is for every human who’s felt disenfranchised, tired of others directing their lives, and wishing they could take control.
- In today’s age, ownership is portrayed negatively by those in power, but it’s really about their desire to remain in control.
- This message won’t resonate with those who think they should own everything and have others ask for permission, or with those unwilling to work hard. Ownership is challenging.
- It’s not for those who aren’t willing to face difficulties. Being broke is as hard as working hard, so choose your struggle.
How to learn about deals
- I have a book coming out called Main Street Millionaire and you’ll learn about doing deal to start. I made it on purpose, not really long. Not overly intense. It is exactly what you need to know.
- And then you go to contrarianthinking, we have courses and free newsletters and a community all about buying businesses.
Why Your Message Really Matters
- When I think about politics today, I focus on who’s in charge and why some politicians resonate while others don’t.
- Many people currently feel a lack of trust in institutions, governments, and the media.
- For example, CNN had only 83,000 prime-time viewers for a week in May, the lowest ever, while Fox had 186,000. The media is failing to reach the masses due to a complete loss of trust.
- People are seeking authenticity; they don’t trust scripted messages from teleprompters.
- We need to be honest because trust is at an all-time low.
What You Will Get from This Episode
- Learn how to make more money and understand why it matters.
- Money is a tool for gaining more freedom, enabling you to do more and say no more often.
- This advice applies to everyone, except those unwilling to put in the effort. If you’re not willing to work a little earlier or later, this episode isn’t for you.
- The concepts discussed aren’t complicated; they’re fundamental ideas that we may have learned early on, possibly with the help of a few mentors.
- About me: I’m a former finance professional with 15+ years in investment banking and asset management who realized I didn’t want to follow the path of the managing directors around me, so I started writing online.
Best Advice for a 20 Year Old
- Accept that your 20s can be tough—you might be partying too much, surrounded by people who aren’t their best, dealing with crazy hormones, and stuck in a job you dislike.
- Don’t ignore the struggles, especially when starting your first job. Acknowledge that it’s painful, and it’s real.
- Focus on learning—treat your salary as an investment in your brain, absorbing as much knowledge as possible.
- I don’t have the same stamina I had at 25. While it’s tough to work long hours over 20 years, it’s easier when you’re 20. So, front-load the pain now to enjoy enjoy more freedom and fun in your 30s.
How People Actually Make Money
- A study on economic interconnectedness shows that if a poor neighborhood has just a few rich individuals, children who interact more with these wealthier people are, on average, 35% richer after 30 years than those in similar neighborhoods with less interaction.
- Surround yourself with people who are wealthier than you. You don’t need to live near them or have their money—just being around them is beneficial.
- While working at Goldman Sachs in Chicago, I stayed in touch with Bruce, the head of the fixed income division. After leaving the company, I learned Bruce became the U.S. ambassador to Canada, which surprised me until I discovered that ambassador positions can be purchased. This revelation changed my perspective, emphasizing that money is power.
How to Attract Wealth
- You won’t attract wealth if you dislike it or view it as evil.
- Money is a tool, so it’s important to let go of any negative emotional attachment to it.
- To attract what you want, focus on becoming the best version of yourself. If you want a great partner, be one; if you want to be rich, start acting like it.
- I do think where your body goes your belief follows. Embrace a positive mindset towards money—physically and mentally reinforce that money is good for you.
Money and Gender
- The audience across socials is about 60-65% men, yet it’s challenging to engage women.
- Many women find the topic cringe-worthy and there’s a lack of normalization—women rarely discuss their financial deals in groups.
- I believe everyone, especially women, should learn about money. Understand where your money is, how it’s made in your family, and the cost of things. There’s nothing more rewarding than earning your first dollar on your own.
- Investment banking is 86.7% male, and the finance industry overall is over 65% male.
Building Wealth from Scratch
- It’s easier when you’re young. People with money often see themselves in young individuals who show hunger and drive.
- One of our hiring rules is to bring on people so hungry you’re worried they might overstep. You’ll meet someone with intense drive who will go above and beyond, even tackling tasks beyond their role.
- If you’re young, align yourself with a successful individual who embodies the life you want, and focus on providing value to them.
- Intense competence is rare. When you’re young, avoid quitting and fully engage; doing so for just a year or two can lead to rapid progress.
- Find a wealthy person willing to give you a chance and work with them for as long as possible.
How to Get a Rich Person’s Attention
- First, start with concentric circles. Identify the wealthiest person in your block or community. They might only be making a few hundred thousand a year, but that’s still significantly more than you might have imagined. Begin there.
- Focus on those you can physically connect with and engage. Set a deadline (e.g., 6 months or a year) to learn at this level, then move on to the next wealthier person you can access.
- People often confuse fame with wealth. Avoid influencers and seek out successful, low-profile individuals, like the owner of a sprinkler company who quietly makes a lot of money.
- When reaching out, demonstrate expertise. Show that you have unique insights or understanding that can advance their goals.
- Apply the 10x rule: never ask for something unless you’ve given ten times as much value in return.
- In my early days, I sought advice from mentors who didn’t know they were mentors. I’d ask a specific question, thank them for any response, and follow up later to show appreciation for their input.
- Consistent follow-up and appreciation are rare and valuable. If you want something, remember that thorough follow-through is worth its weight in gold.
What to Do When You’re Starting Out
- The young generation is right that staying at a job for 20 years is not ideal unless it allows you to continuously earn and learn more. If you’re no longer increasing your earnings or learning exponentially, it’s time to move on.
- Many start entrepreneurship too early. Learning on someone else’s dime is better than risking your own money and potentially falling behind due to lack of experience.
- Work for various entrepreneurs for 5 to 7 years to gain experience. Once you’re certain you want to be an entrepreneur, then take the plunge.
- Try to secure initial capital from your boss. If you’re a great employee, they’ll likely be supportive.
Best Behaviors for Job Interviews
- People are more inclined to give you things when they feel you know them better than they know you. We all love to talk about ourselves, so showing deep knowledge about the company and humility in your interest can make a strong impression.
- During an interview, demonstrate your knowledge about the company and express genuine curiosity. Say, “Here’s what I know about your company, which I’ve gathered from the outside. I’m impressed by this and curious about that.”
- Pursue the top 3 positions you want aggressively, researching everything about the company and the boss to increase your chances.
- Immediate Red Flags:
- If you talk badly about your last boss because the way you treated your last person is probably going to be the way you treat me.
- If you talk about all the reasons why something didn’t work and it’s not your fault so you have the vicitm mentality.
- Discussing work-life balance may signal you’re not a fit for a company with a demanding work culture.
Employees Ask This to Make More Money
- Firstly, ask your boss: “If I consistently perform at a top level and make myself crucial to the business, can I earn or invest in ownership of the company or any related ventures?”
- People in private equity become wealthy because they can invest in the best deals. Even non-accredited employees in the U.S. can sometimes invest in these deals.
- Try to maximize your salary and invest the money from your salary in side deals before starting your own business.
- Avoid startup investing until you’re a millionaire due to its high failure rate. Invest in startups only when you can afford to lose some capital for potential high returns.
- Consider investing in profitable ventures like bond deals through companies such as “Percent” or equity deals in cash-flowing businesses. Avoid non-profitable ventures until you have your first million.
- Do you think that if you left the company right now they’d be unable to function without you and if the answer is yes, it means you’re on the path to partnership. Continue to take on more responsibility and demonstrate that the business would struggle without you.
- Warren Buffet allows equity in his company only for employees he plans to work with long-term, as seen with his long-tenured team.
- Yes, you can become wealthy with just a salary. Bruce from Goldman Sachs, who was only a salaried employee, bought an ambassadorship.
- To get rich, avoid losing money over time and aim to make enough bets to achieve outsized returns.
Where Should You Invest Your Money
- Investment Areas: Consider investing in businesses that are service-based with low upfront capital requirements, such as senior care centers, window cleaning, pressure washing, or painting businesses. Also, look at semi-autonomous or “gateway drug” businesses like laundromats or car washes.
- Example of Nigel:
- Background: Nigel is 37, has no business experience, and is unsure about investing options. He wants to become an owner in 10 years, is willing to work hard, but is overwhelmed by the many options and conflicting advice.
- Advice: Codie suggests Nigel should first decide whether he wants to keep his current job or leave it. Since Nigel isn’t making enough to fully quit his job yet but has some savings, he should start with a side hustle that could potentially become his full-time endeavor.
- Unfair Advantage Venn Diagram: Nigel should consider his skills, network, and what excites him. This diagram helps clarify what he’s good at, who he knows, and what drives him, beyond just industry interests.
- Many people struggle with what to do next because they don’t fully understand themselves. Knowing your strengths and interests can guide your investment decisions.
- The fastest path to wealth is through some form of ownership.
3 Smart Ways to Buy a Business
- You can use cash, expertise, or time—what I call sweat equity—to acquire a business.
- If I had a young, driven person and could provide $100k to operate a business, I’d consider doing that, even if I don’t have someone who can run the business.
- For example, Adam, a 19-year-old in our group, worked in a marketing company but had never run a business before and didn’t have much cash. He approached the senior partner of his company with a proposal: buy a graphic design vendor that was on the verge of closing, integrate it into their company, and pay for it with a percentage of future profits—a concept known as seller financing.
- The marketing head agreed to the idea and offered Adam a stake in the company for bringing it over. Adam didn’t need to invest much capital but would run the business and essentially engage in a risk-free trade.
- Now, Adam owns a business that he’s about to sell, having successfully partnered with the owner using minimal upfront investment.
- What is Seller Financing? It means the seller allows the buyer to use a percentage of future profits to purchase the business.
- Example: If my business makes $100k a year in profit and I want to sell it for $300k, but you can’t pay the full amount upfront, I might agree to sell it for $300k over five years, with payments made from the $100k annual profit.
- Selling anything is a trust trade. Although we rely less on trust today because of secure payment methods like credit cards, trust remains a crucial factor, and seller financing is entirely feasible.
What’s the Banister Effect
- Steven: I resonate with that because I was that 18-year-old sending out emails and asking for help. Many people lack a deep internal belief that they can shape the world. This belief is a bias you and I have because we’ve seen that it’s possible to influence the world around us.
- You’ve heard of Steve Jobs’ Distortion Field, which made those around him believe they could change the world and were unstoppable. After his death, people recounted how he’d come into their office and say, “We’re going to ship this product in 24 hours, even though we planned for 3 weeks,” and they would achieve it. Afterwards, they’d be stunned, asking, “How did that happen?”
- If you truly believe in your capabilities, it’s astonishing what you can achieve.
- To cultivate a reality distortion field, reading biographies of billionaires is highly effective. I’d prefer reading 10 billionaire biographies over 200 self-help books because they’ve actually accomplished extraordinary feats.
The One Skill for Major Success
- Steven: I spoke to Walter Isaacson, who wrote the Steve Jobs biography, and he mentioned that Elon Musk has an obsessive ability to question the validity of what he’s told. For instance, if someone says a project will take 8 months, Musk rejects this idea and immediately examines the core components of the challenge. He then determines that it can be done in 8 days. This approach highlights the advantage of saving time on challenges and making things happen faster, as time is a crucial resource in our lives.
- One of my favorite mentors, Bill Perkins, shared a line that changed my life: “The reason I am successful is I’m faster than everybody else. By the time they’ve thought about an idea, taken it to a meeting, and started moving, I’ve already made 3 mistakes and found a faster way.” His success comes from moving quickly.
- In our company, we implemented the 24-hour rule: if we want to succeed, we must have a bias towards action, reducing the time between thinking and doing.
- If the only difference between us and our competitors is that we complete tasks in a day while they take a week, we don’t need to be richer, smarter, or better—we just need to be faster. We focus on a few key tasks and ignore less important ones.
- Speed is key. Overthinking is often confused with working, but more often than not, thinking is not the same as working.
- Move fast and iterate. I tell my team to make decisions in 30 seconds. If they like the decision, they should move forward.
- Steven: I once spoke to a former SAS soldier who gave advice when his friend was struggling. The soldier said, “When you’re in the middle of the woods and feeling lost, start walking.” You might face dire consequences by standing still and overthinking, but starting to move will help you gain information and progress.
- To advance to higher positions, improve your speed of communication. In interviews, be concise and direct, speaking quickly without wasting others’ time.
- I don’t handle everything that comes my way. I probably let 40% of things go unanswered and stay on top of 20%.
- High performers typically have no patience for wasted time. They prefer engaging in meaningful activities that drive progress.
Why Obsessed People Win
- There’s a strong correlation between success and obsession. Obsessed individuals tend to be the best and often achieve the greatest outcomes.
- You might know people who can recall every score of a Manchester United football game. They don’t have a photographic memory; they’re simply obsessed.
- Genuine obsession cannot be faked. If you’re truly obsessed with something, it will be evident in your behavior, such as staying up late watching related videos on YouTube.
- Once you experience a few small wins, it becomes easier to build on that momentum and continue pursuing your passion.
Drug Gateway Business
- A drug gateway business is one so simple that you could explain it to your grandmother and run it even if you’ve never managed a business before. Examples include laundromats and car washes.
- If you can’t understand the basics of cleaning clothes or cars, you might want to reconsider starting a business. Simple businesses are appealing because they have fewer employees, fewer moving parts, and less change. They offer a manageable introduction to the business world, allowing you to gain some initial success and become addicted to the game of business. Your next venture can then be more advanced than a laundromat.
- While you might not make a lot of money initially, your first deal is unlikely to be your last. This is important to remember when buying businesses, just as your first job is rarely your final job.
- If you’re currently working a W2 job, consider starting a side business like an Airbnb or another low-intensity venture. These businesses are relatively inexpensive to start and will teach you how to manage P&L, market effectively, and generate revenue.
- Every business has unique characteristics, and by learning from a smaller one, you’ll be better prepared to scale up. Elon Musk started with simpler ventures before building his rocket company, showing that even top achievers start with manageable projects and gradually scale up.
Buying “Boring” Businesses
- The baby boomer generation owns over 50% of businesses and is approaching retirement. Many of these businesses will be shut down rather than sold.
- Currently, there are about 11 million small businesses for sale in the US. Around 70% of these will never sell, either due to poor condition or an inability to find a buyer.
- Trillions of dollars in wealth are tied up in small businesses owned by baby boomers. If these businesses are not purchased, this wealth will evaporate.
- Target business owners who are 65+ and looking to retire. They may be open to seller financing, and their businesses, though possibly challenging, offer opportunities for acquisition or apprenticeship.
- For those aiming to be top performers or level 10 operators, find a business suited to your unique skills. Our Deal Clarity worksheet helps identify your ideal business by considering location, skills, financial requirements, and preferences.
- The key rule in buying businesses is to avoid a bad first deal. Spend more time learning how to do a deal than actually doing the deal and ensure you reduce your risk to bankruptcy.
How to Avoid Bad Deals
- At Contrarian Thinking, we offer a 90-day program where you spend 20 to 40 minutes a day learning how to buy businesses. It’s like a mini MBA focused on business acquisition.
- Start by mastering deal-making. This knowledge will enable you to negotiate effectively, understand valuation, and identify dishonest practices.
- Once you’re well-versed in deal-making, start exploring opportunities. Approach it like dating apps or browsing real estate listings—evaluate various businesses to find the right fit.
Where to Find Profitable Businesses
- Finding profitable small businesses to buy can be challenging as there is no centralized platform like Zillow for businesses. We’re working on a solution to address this gap.
- The common questions are: What type of business should I buy and where do I find it?
- Currently, you can explore platforms like BizBuySell, BizScout (which we own), E-commerce Flippers, and Flippa.
- There are two primary ways to find deals: on-market (e.g., Zillow or BizScout) and off-market (e.g., door knocking). We teach 12 strategies for finding deals, with one effective method being the Personal P&L Review. As a business owner, review your expenses and identify vendors who might be small enough to approach about buying a stake in their business.
- For individuals new to buying businesses and without significant funds, try the Venmo Challenge. Review your Venmo or PayPal transactions and reach out to service providers you’ve paid. Offer to help them gain more customers in exchange for a stake in their business.
- Go to all of these people where you could get to the owner and say “you cleaned my house, do you need more customers? Maybe I could help you get 20 more customers. And I could own part of your business if I help you grow it. Would you be open to that?”
Is Your Business Failing? Fix It
- If your business seems to be failing, it’s rarely a marketing or lead problem; more often, it’s a product issue. Many don’t believe this, but it’s true.
- To determine if your problem is with the product or marketing, check for referrals or reviews. If you’re not seeing 20-30% of your customers referring others or leaving positive reviews, you likely have a product problem and a leaky bucket.
- Your first customer is crucial. Encourage them to refer others and leave positive reviews. Treat your current customers as your primary marketing and sales team.
- By improving your product, you’ll also improve your sales.
Why Retention is Key in Business
- Obsessing over creating a great product is challenging because it’s a slower process. You can either invest time upfront to build something exceptional or spend a lifetime on marketing and sales. This concept ties into the idea that upfront pain often leads to long-term gain.
- Focus on the three R’s: Referrals, Reviews, and Retention. Without these, you’ll find yourself constantly marketing, which can be both hard and expensive.
- Steven – I was greatly inspired by Tesla’s story for this reason. Years ago, Tesla’s stock price was stagnant, and Elon Musk endured significant struggles. Yet, eventually, the company exploded in success. What was most inspiring is that, despite the flat stock price, Elon meticulously laid every foundational brick of Tesla in silence. For those who have built businesses, this is crucial: Elon’s patience and dedication during the challenging years laid a solid foundation that led to explosive growth.
- When you’re young and starting out, you might not be as experienced as Elon. If you were given 10 years to build something like him in silence, you might not know what a strong foundation looks like. Thus, it’s important to optimize for urgency initially, gaining experience and clarity through multiple attempts.
- Warren Buffett says, “Once-in-a-lifetime opportunities come around about twice a year.”
- Understanding what success looks like means you should work swiftly towards it. In the beginning, do more, faster, to figure out what works.
- Remember, every business is fundamentally a people business before it’s a product or profit business. Exceptional people are always in high demand.
Turn Contacts into Business Partners
- Steven – Many people I met in my 30s became valuable contacts later on. What I was essentially doing was being interviewed by them without realizing it.
- We have a mutual friend from the past who has achieved success, but your success surpasses his. When comparing the two of you, the key difference is Grit, Time, and Consistency. You chose specific goals, remained dedicated, and continually took on bigger challenges as you progressed.
- Steven – Over the years, I’ve realized I have a very narrow skill set that I’ve applied across various markets. People often think they need a promotion, but sometimes, it’s more effective to move your skill set to a market where it’s in high demand.
- Many people seek step-by-step guides to becoming successful, like “follow these steps to get into real estate and become a millionaire.” However, true wealth often comes from combining diverse ideas that don’t initially seem related. This cross-pollination can lead to exceptional returns.
- To discover your own cross-pollination of ideas, you need three things: a whiteboard, a pen, and a smart buddy.
Ways to Maximize Your Income
- Steven – Start by listing your skills on one side, such as “writer,” and on the other side, “money.” That’s the starting point.
- Consider what might be the least lucrative options for a writer. For example, writing fantasy books or working for a local newspaper at $14 an hour.
- A quick search for “highest paying jobs for writers” will likely show that copywriting is at the top.
- Steven – Here’s a better example: When I was in biotech, we struggled to hire a medical writer. While an entry-level copywriter might earn around $35k, a medical writer could make $150,000. You don’t need a medical degree; you can learn medical writing in about a month.
- Finance is another high-paying field, and financial writing is lucrative as well.
- Another strategy is to negotiate a percentage of the revenue you help generate. For instance, if you write a funnel for a biotech company that increases their monthly revenue by $100k, propose a commission of 10% on the additional revenue.
- Mastering deal-making is arguably the most valuable skill set you can develop.
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