Codie Sanchez
Appearances
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Yeah, well, I don't think you can spell rich without risk. And so if you really want richness in your life, like if you want to be very, very rich, you are not gonna get there if you take no risk, unfortunately. I've never seen it done that way. Maybe you guys could tell me if I'm wrong. And if you wanna get rich, here's the stats. One thing that's cool, Stat, 79% of all millionaires in the U.S.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
are self-made. That number shocked me. Because if you heard in the news, you'd think, no, no, it's all handed down. But 60% of all millionaires own a business. So you immediately know, well, I have a 60% higher likelihood of becoming a millionaire if I own a business. And if I want to make crazy levels of money, like $30 million plus, 88% of people who are worth $30 million plus own a business.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
So first, you've got to be honest with yourself. What do I really want? If I want to be a millionaire and if I want to be worth $10 million plus, hard to get there without having some version of ownership or equity.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
I giggled because another YouTube video did a video of me and it was like,
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
make millions it's easy no work what's the title passive yeah yeah yeah i was like i'm pretty sure i've never said that in my life how many hours do you think you work a week oh a lot um i mean when i was in finance i was working 70 80 hours a week i remember one of my colleagues eduardo we were walking back from a uh we were in new york at the time and we were walking back from uh from work one day super late at night and he just passed out in the middle of the road
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And I was like, holy hell, Eduardo, are you okay? What's going on? And he just, he was exhausted. It was like passing out from exhaustion.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Yeah, and he was young. Analyst program, I was only there for two years. He would have been about the same. But just that compounding, plus it's a work hard, play hard environment.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
No, unless you are the capital. That's where you start.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Unless you got the money. Then I have many businesses that I do no work for now.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
But that's because I did risk.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And I could lose it all. And the only way you get around that is you work really hard as an employee for somebody else and you get a percentage of the company, which is something that we do for our employees and I think really important. But you've got to become valuable enough to do it.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Well, there's two ways that you can actually get equity in businesses that we learned in private equity that I think are useful for people. The first way is you can ask to buy in. So you can say, hey, I don't have a lot of cash, but we're gonna do this deal over here. Could I put $10,000 into this business deal? Hey, you're gonna do this partnership, could I buy into the partnership for 10K?
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And we're not taught how to do that as normal people, and we should think that way. Because what is that telling me? That's like, hey, you're willing to put a little risk on the table, and also you're not trying to sell me that you should get X, Y, Z entitlement, you're saying let me put some skin in the game.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Right. And that's how most private equity guys make their first dollars is they are just allowed to put some skin in the game, which is great. And then the second way is you become so valuable that the business can't see itself operating without you. And this is typically how startups do. So it's like, hey, you're so valuable, you're going to do the first stage of XYZ of the company.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Because of that, we're going to give you a percentage. And every single year, you'll get a little bit more of that percentage over like three to five years. So two ways to get a percentage of a deal. And we teach one in the book called partial acquisitions. And so basically if right now you're working, like let's say somebody's working for you or me, right?
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And if you're working for a company right now today and you love what you do and you want to stay there, but you want to get some income on the side, you have a skill set, you're a photographer, I don't know, you're a videographer. then what could you do?
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
You could go to other companies that need your skill set and you could say, hey, if I can increase the revenue of your business, if I could decrease the costs of your business, or I could decrease your pain of the business, could I get a percentage of the business? And you could do that both for distributing equity. That's where you cash flow or regular equity.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
This is what I'm teaching a lot more people to do because there's a stair step way to buy a business. Maybe you're not ready to go all in. We'll learn how to get a small percentage instead.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Not outright. Not outright. I don't think you're going to want the call on a Friday night when you're going to run out of cash.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Well, I like work. So I just worked a lot both times. I think, you know, I was probably working from seven until seven or eight or nine. As an employee. As an employee.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
I'm probably working from seven until six as an owner, but a little bit on the weekends. And maybe when I was an employee, I wasn't working on the weekends. And, you know, I think when you're an owner, your schedule kind of looks more you know, when your name's on the door, it's easier to work more hours. Like, let's be honest, it's just easier.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
It's yours. And so, but when you're the owner, it's also easier when you set the hours to work more of them. And so, you know, for me, I got no problem taking, you know, four weeks off and going to Europe and I'm checking on stuff every day a little bit, but they're mainly running the business. When I was an employee, that wasn't an option.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
But when I did go on vacation, I was an employee, wasn't checking. I was like, good luck, bye. So it really depends on how you wanna run your life. you know, too. But I think the one thing that I do want to impress upon people is like, there is nothing wrong with being an employee. Being an employee is amazing.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
It means that you do not carry all the risk and you can actually become massively wealthy as an employee if you understand how to become so valuable that you get a piece of multiple gains. Like for instance, right now we're hiring a president for one of our companies and he's from a huge company. So do we have a right, like,
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
It's not really reasonable that he would come and do this for one of my companies, given what he's done in the past.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Maybe one-fifth of that. And so why would he come work for me? Because I'm like, listen, you could go work for this one company and have one shot at goal. If that company wins, you're going to win big. But the founder's got to sell at the right time. You guys got to hit these huge milestones. The investor's got to get paid. You've got one bet.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Or with me, you can come into this company and you can take an equity bet on this company, but also a bunch of these other little bites. And so that's why I think private equity is so interesting and why people stay as private equity employees for decades. I mean, I have a friend, let's call him Frank, who's probably one of the richest guys I know.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And he has been an employee in a private equity firm for like 30 years. He's like dating celebrities, has a plane. He's an employee, but he gets little bites at the apple. And so I'm trying to really explain this to my employees.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
No risk. The only risk is getting fired. and that you have to work a lot.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Right. Well, and let's talk about the truth of the matter here is that 90% of startups fail in a 10-year period. Most startups fail in the first three to four years. And in those first three to four years, you make $0. In fact, you spend on average $30,000 to $50,000 a year attempting to make money. Oh, man.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And then when you eventually do make money in year three or four, the average entrepreneur pays themselves anywhere from $40,000 to $60,000 a year in salary.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
I think that is the question we have to ask ourselves.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
No, that's why I get excited about boring businesses, because what are the two reasons that most businesses fail? Well, 60% of businesses fail because they don't have product market fit, which means like, I had an idea. I wanted to sell these graphic mugs. These graphic mugs are amazing. I asked all my buddies, are you going to buy one, Louis? They're like, yeah, of course. Great idea.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
You should go be your own CEO of your company.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Right. Then you go and create the company. And all of a sudden, Louis is a little cheap. Nobody's buying my mugs, right? So the market didn't actually want what you were selling. And then the second reason most businesses fail, which is about 20% of the reason, is lack of cash flow. So you have this big idea, nobody wants it, you run out of cash before you get to figure it out.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And so I think we've been sold a total lie about business creation and startups, which is that employment sucks and also we should go start a business instead. And what often happens, and I hire a lot of these people, is they go start their business, they're like, oh my God, this is worse than employment, and I'm not making any money.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And so if you're gonna play the odds, if you're gonna go gamble, you can play the slots and know that you have the worst odds out there playing the slots. And if you're gonna gamble, you at least are probably gonna play blackjack if you're good at it, because you know that's where you have the best odds. Business is very similar.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
The best odds is somewhere where the business party has product market fit, and the business is already cash flowing. It's already making money. It's already profitable. And it's been doing it for years. And so that's why I'm obsessed with this idea of boring businesses and buying them because statistically it has less risk and it has more ability for you to earn over time.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
It's not no risk, but it is less risk than a startup. And nobody talks about that.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
There is a huge gap in education between asset value in business owners and ability to sell your assets. Think about it this way. If you owned a house anywhere in the country and that house was too small for you and it was still livable, it's still a house, maybe it's not the nicest house, it's not really what you want, you would never just go, let's just light that.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Fire and like walk away, right? That would be crazy. You'd be like, okay, well, let's sell it for whatever it's worth, or let's put a renter in there, or let's do something with that asset. We think about a house like an asset. In the U.S., we do not think about our businesses as assets. We do not think about our business lines and divisions as assets. And so what do we do instead?
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
We just walk away from a house that somebody else could live in. And so, you know, there was a, who was I talking to? Oh, it was Sean Rad, founder of Tinder. So him and I were chatting the other day.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Oh, good. I'll have to tell him that we're buddies. So he was funny because I was explaining this to him. And he's like, you know what's interesting? Because I went into a, I might mess this up slightly, but let's say that he went into like an old book binding shop. And in this book buying shop in LA, he looked over to the left and there were like these racks and racks and racks of books.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And he was like, these are some cool vintage books. And so he was going through them and he was like, hey, I want to buy a couple of these from you. And she's like, no, I don't want to buy them. You can just take them. And he's like, no, no, I want to pay you for them. What's the deal with these? Why do you have thousands of books here?
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And she's like, oh, well, my husband had a bookstore and he died or they got divorced. And so we shut down the bookstore. So what are all of those books? Those are assets. And if they had been thinking about their business as a house, what would she have done? She would have done an appraisal, had somebody come out, look at what the books are worth.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
She might have had somebody come and look at what the lease was worth for the business. She might have sold the whole business or done an asset sale. And so Sean ended up buying a bunch of one-off books. And then he was laughing. He's like, God, I felt bad because I went and checked them later. And I'm like, totally underpaid for these things because they were worth something.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
And so people sell their business because they don't understand the value of the business and they don't think it's sellable. And like an example that I would probably give you is like, you've done it like you've had a business line before, right? Let's say your education business and you're like, this isn't serving the current business right now. I'm going to shut it down.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Reasonable, you're like, I'm the face. It's not set up to sell. You haven't prepped a business that you created to be a business you could sell because most business owners do not know how to do that. And so you shut it down because you're like, well, reputational risk, all of these things.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
But let's say that you went through our program that we teach and we talk about prepping a business for sale like a cake. Thank you.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Thank you. Thank you. Thank you. Thank you. Thank you.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
Thank you. Thank you. Thank you. Thank you. Thank you.
The School of Greatness
5 Money Beliefs To Rewire Your Mind For Wealth
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