Kind: captions
Language: en
wages are stagnating we have gen Z
making less than their parents did at
their age their University degrees are 3
to 4X more expensive than what their
parents were now their housing is
anywhere from 1 and A2 to 2x more
expensive than their parents were and
simultaneously they have had inflation
eaten away at their dollars you're
saying we're not as valuable and our
skills aren't as good anymore except wa
a second our productivity level is
higher than our parents generation but
we're making less money you got to
realize that there's an opportunity
let's get normal people back into
ownership Cody Sanchez welcome back to
the show thanks for having me truly my
pleasure researching you every time is
extremely enlightening and this time
something very interesting occurred to
me and I want to see if you think I'm
out of my mind what if I told you I
think that there is a causal
relationship between deaths of Despair
and plumbing what's interesting is today
we know that there are 7 million working
age men that are out of the labor force
and in the ages you know where they're
supposed to be prime age working men so
20 to 30 um they largely don't have work
they say because they can't find it and
and I don't actually think that's the
case I think what we have is we have
kind of like JD Vance popularized in
Hill bology um and normalized now we
have the statistics to back it up that a
lot of people have lost dignity in their
work and they don't believe that the
things that they do have dignity any
longer they don't believe that being an
employee has dignity any longer and I
think a lot of the despair we have in
this country is attributed to drugs
rightly so fentanyl uh suicide
especially among men but is actually
because they don't have purpose and that
sounds touchy feely except if you go to
the data and you see the employment
correlation between those who are
working and have uh substance ause uh
overdoses or uh SU Ides and those who
are not you'll find an incredibly High
correlation between unemployment and
deaths of Despair which would be things
like um suicide and and overdose and so
what does that have to do with plumbing
well I think in particular with plumbing
we have lost the dignity that we thought
existed with the trades back in the day
and you know back when we were growing
up there used to be a show called Dirty
Jobs right mikro and his entire purpose
was to bring dignity I was like in my
30s back when were I love that you're
trying to make us the same age that's
extremely generous don't tell him how
old I am you know I was four um but but
he basically popularized this idea of
like Dirty Jobs have real dignity and he
tried to make that mainstream and it was
kind of like this Niche on the internet
that did get a cult following but then
we sort of popularized huge TV stars
twitch
streamers uh say how dare you um you
know YouTubers right like all these
these people who like we really don't
build anything I think we do serve a
purpose but we're not the person you're
going to call when your house is falling
apart and so I think one little good
Avenue about today is while in the past
uh there was a study that was
fascinating that showed um young people
increasingly want to go into the trades
AKA Plumbing for the first time ever
we've seen a 40% increase in young
people wanting to go into the trades but
you know what we haven't seen a change
in their parents perspective most
parents still more than 60% of parents
do not want their kids to go into the
traits they do not want their kid to be
a plumber they want them to go to school
take a huge loan out go work uh very
minimum wage job um following it you
know the average uh college degree
afterward afterwards makes somewhere
between 30 and $40,000 a year a
Tradesman makes $75,000 a year on
average so they actually want them to
make less money because of status which
is wild and so I think deaths of Despair
are because these people don't feel like
their work is valued anymore because
don't value it and then simultaneously
they can't find other work because
they're not skilled in the 21st century
economy and so the only good thing on
this is I think it's starting to change
like there was just a Wall Street
Journal article last week and the
headline was millionaire uh millionaires
in HVAC and plumbing like the Next
Generation something like that now we've
been talking about this for three years
so I'm like good job Wall Street Journal
you're catching up but for the first
time ever they put the words Plumbing an
Empire in the same sense in a mainstream
uh news news campaign and so I think we
might be changing it and there might be
a way to get those 7 million men and all
the women as well back into the
workforce and to believe the thing that
I believe to be true which is dirty
fingernails is a is a sign of dignity
and
labor yeah so I'm always trying to
figure out what's going on what there's
malaise a deep Mala is right now yep and
yet the economy RI roaring and so trying
to piece those two things together has
been really jarring for me um I think
people been sold a bill of goods that
everybody needs to go to college get a
degree become part of the elites and
that model feels super dysfunctional you
I think were certainly the earliest
voice that broke through the noise on
this but what is the opportunity so
you've got the book uh Main Street
millionaire what is that trying to
encapsulate yeah well I think if you
want to make money you should follow the
math where are the numbers where can you
make money more reasonably with a bigger
surface area so of course if you become
a Hollywood celebrity or an NFL athlete
you can become one of the top 1% but
what happens with most people well the
99% never make any money and so that's
really only good to go to the elite jobs
if you're absolute best in class if
you're not Best in Class you're probably
better off actually being in finance or
real estate or owning a business where
most uh wealth is created and so the
idea with Main Street millionaire is we
started going down this road map and
realized oh man the highest correlation
between Millionaires and wealth is one
thing and it is ownership do you have
equity and ownership in a business more
than 80% of people who are millionaires
have some ownership in a business
structure or a or a business owner
themselves and at that point you might
say well must be nice maybe they got it
all from Daddy well no it turns out more
than 70% of millionaires are self-made
um they actually come from very medium
backgrounds we we don't see a lot of
outliers
um as the norm the norm is that they
made it themselves and so the idea with
Main Street millionaire is like wait a
second where are people making a ton of
money where is the biggest indicator for
for wealth and if it's ownership then
how do we get more people to get it the
other thing that's fascinating is
basically since the 40s we've seen stock
ownership and Equity ownership in
companies come down so we saw the youth
get really excited about it during Robin
Hood Etc right and uh and and GameStop
and they started taking stock ownership
but actual ownership in a direct company
down significantly from double digits to
less than 4% and this is a like
profitable businesses that exist not
llc's signed so tax returns as opposed
to llc's created and if you measure by
llc's created you'd say Cody it's a boom
everybody's got business ownership well
no people have like dabbled in things
but they don't actually have real
ownership they're because they're
creating their own little
LLC yeah there's lots of like you know
you and I have done it I mean how many
little one-off businesses or llc's have
you created over your life probably a
lot I know I've done distressing number
exactly we should all actually own part
of an accounting firm instead yeah um
and so the idea on Main Street
millionaire is like let's get normal
people back into ownership and we can
talk about sort of the Waves happening
in the economy right now that I think
are generational wealth creation event
triggering but uh the one thing I want
people to understand more than anything
is if you don't understand ownership and
how to get it eventually and how to
trade your skills for some type of
contract that allows you to earn even if
you are no longer able to work which is
what Equity is um the statistics say
that you have a much lower likelihood of
becoming a millionaire and so it doesn't
mean you should go become Your Own Boss
by the way not everybody wants to run a
company it can be totally miserable but
it does mean that you should become so
valuable and know how to negotiate to a
business that you can at least get a
part of it yeah uh I'll say that even
more aggressively you're never going to
get rich if you don't have ownership
getting ownership though is harder than
people think I know you're going to make
it simple and we'll go through that um
but oo it is it is a real shift in
thinking before we go there I really
want to put a fine point on what I think
is going on in this moment right now and
I want you're going to know the details
of it a lot better than I do
but they the big divide right now is
between young and old is I try to piece
together why do people feel really like
hey the economy's great jobs up
everything wonderful and yet on the
street it's like this is madness I feel
like I'm being gaslit but I I don't know
that they're lying like it let's just
assume that it's all true how can those
things be true and there still be a
problem and I think it goes something
like this a lot of the jobs being
created are second and third jobs they
are not first jobs of somebody who
wasn't working and is now working I
think it's somebody who's working but
still not able to make ends meat because
of inflation despite it being down we
were high for so long it's not like
we've started reversing the trend we're
just not growing as fast anymore so you
hit this plau that was already brutal so
people are still having a hard time
paying for things uh but if you own
assets because of the way that the debt
is working and now my long-term
listeners will feel very comfortable
right now so uh we've got so much debt
that we have to keep money printing to
deal with the debt which devalues
people's ability to buy things so even
if the cost isn't going up your
purchasing power is going down but the
way that money gets into the economy is
with people that have assets right now
that's old people so old people are able
to take advantage of this complete
Distortion in the economy which is the
debt and the money Printing and young
people are like hey bro you yanked up
the ladder like I'm not sure what I'm
supposed to do here but to me looking at
what you're doing it's it is it's not
going to be the only hope there's never
only one thing but this really feels
like a huge opportunity which is for
better or Worse all of the people that
have accumulated that wealth they're
going to die or retire and so we have
all this wealth trapped inside of the
Baby Boomers is an easy way to think
about it but how do we get that back out
how is that wealth not just uh
dissipated when they die and the
business just folds which is one way
because this we could fumble this moment
this can either be a tremendous wealth
transfer from old to young or it can be
wealth destruction that poof just goes
away that is the part that nobody's
talking about is that right now today if
you want to get rich what you should
realize is there are 68 trillion dollar
of wealth that may be transferred in
Baby Boomers to the Next Generation may
be transferred right or it could be
completely destroyed and the the and
then a lot of people go oh great well
they'll just hand down their house to me
they'll give their money to their kids
here's the
problem of the $68 trillion in wealth
transfer what do we know we know that
most baby boomers so more 60% of baby
own Boomers own a small business what do
we know about business owners we know
that business owners have 90% of their
net worth on average tied up in the
business so what does that mean it means
that $68 trillion likely is tied up
entirely in businesses in a way in a
number that we can't quite imagine like
we're talking somewhere between 20 and
$40 trillion of the 68 trillion is tied
up inside of businesses and assets and
so if if we just say okay baby boomers
we wait for you to die we take over your
houses we take over your cars um what
will we be left with well not the $68
trillion number because a lot of of
their wealth is tied up in small
businesses and so we only need to look
to Japan to realize how real this is so
Japan's a fascinating case because in
Japan they're like maybe 10 to 15 years
ahead of us and you can see that Japan
has the same issue we have they have an
older demographic population than us
they have a lot of baby boomers times
you know two or three and they have a
slowing younger population uh from a
growth rate perspective and they have no
IM immigration they really don't allow
immigration in in Japan to meaningful
numbers and so they have this generation
of business owners who are literally
shutting down their businesses and you
can read about it it's in the Wall
Street Journal um and it's it's been
such a detrimental uh force in the
economy that the government created a
task force to essentially help pair Baby
Boomers who want to sell their business
for zero dollars just transfer the
assets basically to the younger
generation meaning that they have grants
they have systems and processes they
have matchmaking agencies they F funded
m&a agencies because they realize if
they don't do that one in 10 jobs in
Japan is tied up in those small
businesses owned by the Baby Boomers and
so that would be almost Great Depression
level of unemployment if uh those
businesses just disappear and so it's
really it's kind of scary on a macro
level to think about it that big uh and
that we could have this huge
looming wealth transfer that could go
sideways um but on the other hand if you
think about it
opportunistically there are so many
small business owners that are baby
boomers that don't even realize their
business is has a value and and a lot of
them might think the value is much
higher than it is or should be and a lot
of them might not even think to sell the
business they think to just shut it down
that's what happens with most small
businesses like only one in 11 small
businesses inside of a year will sell on
average
um who mhm and so if we know that then
uh we have to realize that there's this
big huge supply issue that's sitting out
there and and at this point people will
go oddly nobody's ever handed me a
business before where are these business
oh there's just profitable businesses
running all around well I'm not saying
it's not work you have to know how to
look for them you know we call it the
our our version of the reticular
activating system right so you know when
you activate your reticular activating
system it's basically your brain saying
I need to care about this thing so I
always use example like when you go buy
a Porsche before you bought the Porsche
you don't really know where to notice
Porsches anywhere you buy the Porsche
all of a sudden every [ __ ] in
LA's got a Porsche what happened
everybody bought them on the same day no
your brain just said oh Porsches are
important to our survival because we're
paying a bunch of attention to them now
we're going to see it everywhere and um
and so if we can turn people's brains
onto that uh what we found in the 3,000
students we've taught to do m&a is then
they start to see deals where they
didn't before it's kind of like you
start to see The Matrix right and so um
you you all of a sudden are talking to
your buddy and his dad and his dad's
like yeah you know got to go do the
plowing business again man it's tired
and I can't believe do been doing this
for 60 years and you're like yeah well
does Brian buddy do you want to take
over the business no I'm a lawyer I'm
happy I don't want to run that huh uh
have you ever thought about how you're
going to transition that business and
all of a sudden you just see them and
you start to have meaningful
conversations that allow for what we
used to have in this country which was a
business an apprentice and a transition
instead we replaced that with a business
and private Equity iping or closing down
and we allowed the institutions to get
in the middle and I think we should push
back on
that okay uh I can't stop myself uh from
talking about this uh which is I think
that everything moves in these cycles
and it is very hard for us to avoid the
sort of Boom bust of it all cuz what
happens is getting into Finance right
now is a g way to make a ton of money
like if you've got the brain power to
pull it off go into Finance you can get
obscenely wealthy even just working for
somebody else y uh eventually it's going
to stop working but it works right now
so this there's something really really
uh difficult to deal with happening
right now you said something earlier
that I think is important to now bring
forward in what you're saying now which
is uh if you can uh if you're not going
to be Best in Class then hey go buy a
mom and pop shop run that whatever um no
one is going to believe that they're not
capable of becoming Best in Class at
least that's listening to a podcast like
this so how do you help people um either
get their feet back on the ground be
realistic assess the situation as it
actually is um yeah how do you get them
to
navigate that self um identification
part of this yeah well one I would say
let's let's let's bifurcate two things
let's cut them in half a lot of times
people start a business because they
want to make money right so they are
like I want to start a um advertising
agency why is it because your life
mission is to create an advertising
agency is it because you can't sleep for
the want of this advertising agency to
be in existence is it because you think
you are so uniquely skilled at it that
you want to spend the rest of your life
on this Mission if that's true go do it
go do the startup thank God that you
exist we need people like you in the
world that are crazy Psychopaths willing
to do the startup grind right you and I
have both been there you cannot win
longterm in being a startup in my
opinion uh in this environment where
there are more businesses that have been
created than ever before uh so it's
easier to start a business than it's
ever been it's harder to have a
profitable business there's What's
called the four valleys of death which
is like you know before you make your
first dollar before you make your first
million after you make your first
million until 10 uh and from 10 to to
100 and so at those points most
businesses die so if you can't sleep for
the one of the business go do it but if
what you really want is I want cash flow
and freedom then you should look at it
numerically what is Cash Cash is numbers
so now you should be saying okay where
do I have the highest likelihood of
success because yeah maybe I'm a smart
[ __ ] and I'm better than
everybody else and I'm Elite okay
incredible you still want to be smart in
the games that you play right so I would
much rather even though I think I'm
quite smart and clever I would much
rather go and compete against my local
handyman in my region go compete against
my local landscaping business than
compete against Jeff Bezos I am going to
pick the game in which I have a higher
likelihood of winning against my
competitor and I'm also going to pick
the game in which most of my competitors
make money and so where do most people
not make money startups that's why
there's big VCS that have to fund them
all the time why are small boring trade
businesses easy or interesting because
nobody funds them nobody's giving
plumbers and landscapers Etc money to
start they can't even get a loan so what
does that tell you that means that the
first dollar that you invest in that
business has to come back to you pretty
quick otherwise you're not going to
continue to run that business those
Services businesses end up being
profitable pretty quickly so you already
know that and then how could I really
drisk my ability to win upfront then I
can create an empire later if I want to
but if I just want to win faster what
would be make more sense the average
startup costs you somewhere from $2,000
to $100,000 to start averages is not
that useful it's probably less if you
looked at the median but let's just
leave it and say so a couple tens of
thousands of dollars at least the
average startup isn't profitable for the
first three years so you pay for the
privilege of eventually potentially
making money um and then once you do hit
profitability the average uh founder of
a business makes during that first 10e
cycle about $40,000 a year which is
great but maybe not for that much risk
now if you could go to a business that
was already making money so already has
Revenue already is profitable and has
been profitable for the last 3 six or 10
years you walk into something that has
already beat that startup curve and has
a higher prediction or a higher
likelihood of continuing to make money
because it has historically and that
somehow we got sold a big lie that
because things are old they're outdated
and they're not no longer relevant
actually the biggest risk to a human is
when they're a newborn that is when you
are most vul vable uh not when you're a
teenager right the biggest risk to a
business is not when you're a teenager
when you've already existed you know how
to feed yourself you know how to addess
yourself AKA profitable business not
when you're a baby I mean and and
instead when you're a baby so that's how
I think about the two like yes you can
be elite but pick the game that you have
a higher likelihood of
playing okay so um what does somebody
have to be good at in order to pull off
buying a business cuz I think most
people can imagine running the business
what they don't understand is what
they're going to have to be good at to
find buy the business yeah well um we
teach 10 steps to buying a business so
basically what I did is I worked in
private equity and asset management
investing for a long time and I was like
what are what are like the bare minimum
things you have to know in order to
steal the private Equity guys homework
who buy businesses all the time that's
what they do for a Liv in and what I
realized is there's not that much
difference between doing aund million
deal and a million dollar deal or doing
a million dollar deal and a $10,000 deal
it kind of has the same steps and the
steps basically go like this one you got
to realize that there's an opportunity
cool two you've got to figure out what a
good deal looks like for you we call
that deal Clarity some people call that
um creating their dealbox three you've
got to figure out how to find a business
to buy that's called origination uh four
you've got to figure out how you going
to finance that bad boy how are you
going to make money uh how you going to
get money order to buy the business most
of us don't have maybe money to do that
how are you going to sell the owner on
why you Tom should be the one to buy
this business how are you going to due
diligence the business to make sure that
you actually want to buy it and you
believe the things they're telling you
how are you going to negotiate the deal
in order to get the best deal possible
how are you going to structure it and
put together the documents because Wall
Street gate kept that from us for so
long then finally how are you going to
close the business so what is like the
last segment look like so you transfer
everything correctly kind of like when
you go buy a house and you have the
mortgage docks and you go to Escrow and
all of that stuff very similar for Buy
in a business um and then what is what's
your first 90 days in year going to look
like running the business and so when
you put together that framework you can
see just like anything in life it's not
that you don't have the money to do it
it's not that you um can't do it most
likely it's that you don't know how you
have a knowledge Gap not a resource Gap
and so the book is is trying to say hey
this doesn't have to be as big as SC and
scary as maybe you think and what if you
could buy a business just using your
expertise what if you could buy a
business just using your time what if
you could buy a really small business to
start the first time like a $5,000
business and then once you figure out
how to do it at $5,000 you can scale up
scale up scale up just like you would
and buy in a house so that's what we're
trying to teach people is can we make it
more democratic and can we help you
really think about what you might want
to buy or own or buy a part of or own a
part of because if we can get your first
deal to be good then you're more likely
to do more deals we'll get back to the
conversation with Cody Sanchez in just a
moment but first let's talk about
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what you just said is awesome it was not
the answer to the question that I asked
so what I'm trying to figure out is um
what do people have to be good at
because people die in the face of
tactics all the time so I have a
university and the one thing that I see
all the time is if I lead with hey here
are the tactics you're going to learn I
get people to sign up but if I actually
tell them the thing that they actually
need to do they don't sign up now here's
what I'm going to say as the answer to
the question um you tell me if you think
I'm crazy let's do it if you want to buy
a business you have to do all the things
you just said but the thing that you
have to be good at before you can even
get there you have to have balls yeah so
you've got have a highrisk tolerance so
even if you're buying something small
you're going to put your life on hold
you're going to get into this thing you
are almost certainly going to get in way
over your head you have to have an
ability to learn you're going into
something unless you're already a master
in that space you're going to have to
learn about this thing there is a
methodology to learning you have to have
a willingness to suffer this is going to
be hard for sure and most people should
go work for somebody else so don't own
the plumbing business be a plumber for
somebody who owns the plumbing business
because they're going to have to deal
with making sure that we make payroll
and all of that and so just by way of
being honest with yourself uh you have
to have an ability to convince people if
nothing else you have to go and convince
that person that they should sell to you
if we're talking about a no money down
thing this is going to be uh hey dear
person um I know that you spent your
whole life building this thing up I'm
not going to buy the money I'm not going
to buy this thing for money outright
yeah but you can trust that I'm going to
buy it out over time with earnings from
the business so you have to be able to
convince them that you're the person to
be able to do this and above all of that
you have to have a belief in yourself
like you actually have to you you can't
be trembling as you take that step
forward as you walk into the business
and so um did I miss anything on that
list like if you were to think about the
people that have gone through your
program that absolutely murder
it is that what they all have in common
or is there something else well no I
think they all have that in common but
they're still scared you know I I think
you know Pros know that you do it scared
um they just understand what is a true
fear like what is an acute reasonable
fear and what is a uh influenced fear
somebody else puts it inside of you or
what is a future State fear so like
something that could be but maybe is not
so reasonable and so if an acute fear
might be I'm buying a business and it's
a million dollar business and I'm
putting my life savings into this
business and I've never done a deal
before and my house is on the line cute
fear you should be scared about doing
that please don't do that um until
you're a really good dealmaker you want
you don't want to put your entire life
on the line an influenced fear might be
somebody saying but you've never done
this before there's no way you can you
shouldn't do that why don't you just
stay employed employed by somebody else
that's somebody else influencing you and
implanting a fear in you and then a
future State fear is like what what
happens if this happens and this happens
and you're not really actually you're
not modeling the problem and seeing like
how reasonable or likely is that to
happen you're just stuck in the future
and not in a current state and so I
think the only thing that I would add to
what you have is you're exactly right if
you're going to do anything there's
never any risk in education so like you
learning the thing and becoming a
dealmaker and learning how to do deals
I've never had anybody go God I wish I
didn't know how to do that I wish I
didn't understand what Equity meant I
wish that I didn't understand how to do
the Distributing deal versus a normal
deal wish that um when my boss came to
me to negotiate my salary I didn't take
it three steps further because I
realized the game of negotiations
nobody's ever said that to me they're
not like God I wish I didn't have that
knowledge Now where's the risk the
implementation the doing of the thing so
we have to get people to obsess with the
part upfront which is can we get you to
learn as much as humanly possible not
only about how to do it but about who
you are and what you want because when
you know what you want and you know what
you're capable of and you know how to do
it then you really decrease the risk
risk and let me give you an example like
you know I had a guy buy one of our
newsletter businesses back in the day
for $88,000 it was like not really a lot
of money for him at all he already ran a
newsletter business this newsletter
business was a marketing business it was
basically a glorified list and he
integrated it right into his company he
felt no fear on that that transaction he
had never bought a business before but
why did he feel no fear he already knew
newsletters he was running it already he
had a little model that was like I think
that we can sell 3% of all users on this
list so I can make my money back in 30
days because at $88,000 with our
purchase price this is going to make all
the sense in the world and then the deal
was small enough where he's like H if I
lose $8,000 I'd be annoyed at that but
it's not going to bankrupt me and so can
we get them in this sphere where they
know themselves they know how to learn
and they know how to do a deal so I
guess the only part that you missed is
you need to know yourself like you need
to be honest about what you want want
not even what you're capable of because
I think more people most people are more
capable than they think but one thing I
see people do sideways sometimes is
they're like Cody runs laundromats and
buys laundromats I'm going to buy a
laundromat that's called mimic desire
right that's you saying Cody's life
looks cool and she started with
laundromats so I should start with a
laundromat as opposed to taking a little
bit of time which we call the deal
Clarity worksheet and walking through
what do I want how much money do I want
to make how much risk do I want to take
where should it be be based like what am
I willing to do what am I not willing to
do what's the outcome that would be
worth the work and if you do that then
your risk decreases substantially on
doing a deal but skip that just go buy a
business after you listen to this
podcast with Tom and I and say Cody said
that I could and not really know
yourself and don't follow tools and and
resources and don't know thyself yeah
you'll probably regret it you shouldn't
do that in my opinion what's harder
figuring out how to do the deal and
getting that done or running the actual
business I think most entrepreneurship
is like it's like War it's like long
periods of boredom punctuated by extreme
periods of fear and misery right and so
um entrepreneurs if I could get people
to believe you their lives would be a
lot better you know it's it's I also
heard um Emma gr Emma Gren what the
woman who runs a bunch of the
Kardashians businesses she talked about
something that I loved which is true in
entrepreneurship it's called the rule of
thirds typically you think about that in
like uh cameras you know how to place
something on a on a field but in
business she said a mentor told her that
um when she was when she was younger a
third of the time in business you're
going to be great like you're going to
be like I'm the [ __ ] CEO like this is
so fun get me a coffee you know whatever
like gets you off you'll it'll be
amazing you'll be really proud of
yourself you'll be doing work that
matters and you'll stretch yourself to a
point that you're like I didn't know I
was capable of this great a third of the
time you'll be stretched but neutral
you'll be like all right this is work
it's you know I'm going I'm kind of
neutral on it but like slightly
uncomfortable and then another third of
the time you will be miserable and you
will be like oh my God I can't figure
this out this is going to be a nightmare
I probably will become a massive failure
and everybody will hate me and as long
as you realize that those thirds exist
then I think it's a lot easier to get
through it because when you're in a
great period you go okay awesome but
like I know it's not going to last
forever and when you're in a neutral
period you're like okay cool and when
you're in miserable period you're like
please God finish but I do know that
another period is coming and so um that
always makes me feel better at least
yeah this too shall pass I I have said
that to myself a million times also when
things are going well like H don't get
too uh compac in here because this too
shall pass and it always does doesn't it
it always does even the miserable stuff
but it's interesting so I think that
people really do break I think that most
people uh will emotionally break and
that success is game of resilience how
long can you stay in the game and if
you're really getting better and you
stay in it long enough you'll be fine um
let me ask you so wait can I add one
thing I do think that you're right
though like I don't think that everybody
has to go be an entrepreneur and a
founder of a business I think it's a
really fair point like my the people who
work for me for instance why do they
come and work for me it's not that they
couldn't go become entrepreneurs many of
them have been entrepreneur
entrepreneurs before and run businesses
um but they come because they think or
they know that they can get equity and
upside in my businesses eventually and
they see a path for them to get in skin
in the game and simultaneously they're
like God I did that thing before and I
don't want to go be the person in charge
100% And if that's somebody listening I
think there's two types of humans there
are types of humans that are like I want
the risk I want to be in charge and I
want to try my hand against the universe
let's go right and then there's another
person that's like I just don't want to
work in this job anymore and I'm kind of
miserable and I wish I had more control
over my fate but I'm not sure I want to
fully dive in maybe ever or at least
right now and for that second type of
person it is perfectly okay to learn
deal making and figure out how to get
part of a company or part of the risk or
transfer some of your salary and
earnings into a company that you get
ownership for instead of taking straight
up compensation um but not be the person
where the buck stops with you you can
just take less of the risk but take some
of it the only thing I'll add though is
you can't get ownership without some
risk there has to be risk if you're
going to become an owner and so I think
you are very right on that point all
right so going back to the idea of deal
making versus running the business do
those skills dovetail or is that just
general intelligence they they dovetail
I think because nobody taught us I mean
I was breaking this down with somebody
yesterday nobody taught us the language
of money like they taught us
it's like you know how most people in
the US speak Spanish uh like kind of
yeah like that much right they're like
you know
like H but like if you were to go deeper
and say like let's talk about the
meaning of life in Spanish uh oh
nobody's gonna be able to do it right
see and so because of that um we we
train for Spanish but we never actually
Implement utilize and integrate Spanish
and so we can't speak the language even
though we might be able to understand
pieces of it all over the place I think
it's the same with money so we
understand budgets maybe we understand
savings we maybe understand investing in
the stock market we might understand
salary like what should I earn broadly
but I mean God some of the best
entrepreneurs I know don't even know how
do I structure a deal like what does it
mean what are the levers that I can use
price and terms and inside of those
price in terms in order to get a
percentage of ownership like that is not
taught that is taught in private equity
and I mean it's not private equity and
finance and that's about it maybe if
you're like if you have a VC startup you
learn a little bit of it because you're
giving away the equity so you learn it
in reverse um but for the most part
nobody learns that and because we don't
learn that we can never actually
manipulate money at the highest level
and so I think they dovetail and we've
got to learn this language of money so
we have a whole P Point basically
talking about structuring which most
people would think is boring like why
would I want to learn how to structure a
deal what does that matter well I give
the example of like all right if I'm on
a stage sometimes I'll pick somebody out
of the audience and I'll say like who
here owns a business and then somebody
will raise their hand I'll go okay how
much revenue does your business do a
year they'll be like $10 million I'm
like awesome I'd love to buy your
business for a billion dollars would you
take that deal and they're like [ __ ]
yeah where do I sign I'm like cool right
here but you didn't at the structure and
the terms which tell me that I am going
to pay you a dollar a day until I pay
off the billion dollars is that a good
deal now or a bad deal it's a bad deal
and structuring is all about that right
it's like hey oh dude I remember one
time my attorney didn't catch a deal
where what was the exact terms it was
they missed gross profit instead of net
profit the average person does not know
the difference and and the average
person can't actually calculate that so
gross so I ended up having to pay out a
partner on a gross profit basis which
means basically Revenue like basically
Topline Revenue to simplify instead of
the actual money we took in hand now
that could have bankrupted me if that
was the only deal that I did and so if
we can learn these terms we actually
make money more money by doing the same
thing we're doing right now because you
would know you know if you read the book
or if if you obsessed with Finance you
would know oh I don't want to structure
a profit share deal because if I
structure a profit share deal then Tom
could run all of his outfits in the
business and take all of the profits out
of the business and when he pays me a
percentage of profit it's much lower I
want to try to do a revenue share deal
because I want a percentage of Topline
Revenue the whole every dollar the
company brings in and if you don't know
these terms it's hard for you to
actually do deals very similar to
healthcare I think it's like what they
did to us in healthcare they're like
organic asteris there's no definition
for organic in the US Healthcare System
for for food so it's like all right what
does organic mean grassfed well that
must be better because that means the
Bull's out in the field right no have
you ever seen the thing with the cows in
a row and they're just spewing a machine
with grass at them and they're in all
their own [ __ ] that's actually not
better so it's like if we understand the
real meaning that's where the money is
and that's what we're trying to kind of
like pull the curtain back on for people
um how can somebody watching this go
okay wait a second either I'm G to be
good at the deal side or I'm going to be
good at the laundromat side uh how do
you help them bridge that or shut me
down and show me that this really is one
and the same but it feels more like I'm
going to look into well certainly you
it's obvious you know that you can scale
just by being so good good at deals but
I have a feeling if I look into your
audience your students excuse me I'm
going to see the same thing that they're
going to be good at either the deal or
the running of the business and it's
really about bringing those two people
together yeah that's a good point so my
point before is not that deal making and
running a business is similar it's that
if you do a partial deal Andor you run
the entire business that's or or you buy
the entire business that's similar so
it's Bas my my point was basically you
don't have to be good at running a
business to do a deal facts just don't
buy the whole thing so if I was unclear
on that I want to make sure that's
that's clear now you're totally right
there's it's kind of like EOS how they
talk about in business a lot of times
entrepreneurial operating system correct
it you know it's kind of like in
business often they talk about having a
Visionary right somebody who comes up
with the crazy ideas you you know what
do we do next yeah I want to do this
it's going to be magical and then you
have your integrator the person who goes
chill Tom like what's the budget on that
what are we going to do next here's
here's the timeline here's the followup
it's a little rare in business to have
both crazy ideas big vision and ability
to execute on the vision and I do think
in some ways I got lucky I have a little
bit of both of those I definitely air
more towards the Hey Big Ideas but I'm
also pretty maniacal on the details um
and I think you could say like who would
be best at this Elon right he's like
crazy about details don't say yeah I
can't believe that people hate on that
guy it makes me want to crawl through
the YouTube screen and bite somebody
it's like I want that in
myp his uh his
politics what he's done is unreal unreal
anyway yeah well I think my soap no like
a if if probably a measure of your bank
account is whether you like Elon or not
like if you don't like Elon I bet your
bank account's not very big or there are
some big big boys with bees after there
well or you have an ulterior motive
there you go cuz they're they're getting
in squabbles now over politics for sure
yeah that's status games at that point
but if if you know if you're not on
elon's level and you don't like him uh
that's okay to not like him as a
personality but to not respect what he
has accomplished or at least want to
learn from it even if you hate the guy
going oh by the way he built three
multi-billion dollar businesses
simultaneously that had never been
created before like I probably I could
learn something from him you know
actually a funny story we had a member
of one of our teams we have a podcast
too you know the big deal podcast and
um on it I had a billionaire friend of
Joe Lonsdale who built paler and uh what
was funny is we had a vendor that worked
on the podcast and about like three days
uh before we had Joe on the vendor uh
reached out to my head of content and
was like the thing is I don't feel
morally right working on this podcast
and um so you can give me anything else
but I'm going to opt out on that and and
I hope you respect my moral compass on
that or something like that and and at
first I was like kind of categorically
baffled because this was a business
podcast we weren't talking about Joe's
politics we weren't talking about Joe's
background um we were literally talking
about how do you build he's built five
multi-billion dollar businesses I want
to learn how he did that so that I could
even if I hated the guy I want to I want
to steal his homework of course wow you
could only learn from somebody you like
what a limited worldview that would be
but the second thing that I thought was
fascinating I was like the point of
podcasts and all this media that we do
um is to beat up ideas you know it's
it's to see what ideas stand the test of
time and if you can't do that you can't
be on my team and so we said you know
with all due respect and not a ton of it
you're fired and no I don't appreciate
your moral compass at all uh I think
that you have a very limited worldview
and I think it's very sad for you and if
you only ever can talk to people that
you 100% agree with you'll never have
any friends and oh by the way you'll
never become intelligent because nobody
will push back on your ideas and so if
if you have an opportunity to talk to
somebody you hate that's a beautiful
opportunity because you can understand
why why do you do this that doesn't make
any sense to me and then you can become
better but um yeah I don't understand
people who don't like Elon either yeah
it's Madness so you brought up Elon he's
the best at uh balancing the two which I
think is really important uh for people
that don't understand give them a primer
so you're able to do both Big Ideas set
the vision but you're also able get into
the details um talk about that that
certainly uh by default personality I am
a big idea person but I found that my
progress in business was held back until
I could get in the operations of it all
yeah um why does the integrator matter
what exactly are they doing yeah well a
couple things you can do to figure out
can I run a business likely and do I
have what it takes is there's tons of
personality tests out there so I think a
few times it's interesting for you to
take something like a kby test which we
have a lot of our our people who work at
our companies run through and it
basically shows you you know fast action
how fast are you to move on things which
is a pretty high indicator of a of a
Visionary uh I never like that word
because I feel sort of weird it's like I
just sit up here andate yeah yeah if if
there was a counterveiling cool name for
the integrator I'd be okay with it but
like you right it does feel Visionary
that [ __ ] guy you know it's weird cuz
you really can't have one without the
other or you have to be both so they're
they're pretty equal um maybe the only
difference with the Visionary is that
they take risk like that again is I
think how money is made um but um so you
can take a Colby test and you can find
out how fast action are you versus
detail oriented and B do you think an
operator is just detail oriented no it's
like a it's a spectrum and so you have
to be there's four pillars that are in
it not that I think that this test is
perfect or any of them are but um part
of it is attention to detail and part of
it is a finalization of execution so
like how do you take something all the
way to completion and Visionaries also
typically have a less likelihood to be
attention to detail and a less
likelihood to follow to execution and I
think most businesses and people's bank
accounts die at the alter of 80% done
you know and and it's not actually that
you guys don't start it's not that it's
not a good idea it's that you don't
finish and that's why you're poor and um
and so if we can change that then we can
be successful in business so you have to
ask yourself am I really good at taking
risk coming up with ideas under
understanding complex structures or by
and large am I really good at finishing
things doing what I said I was going to
do and paying attention to the details
and wherever you
fall as an entrepreneur I think the
biggest mistakes we usually make is we
hire somebody like us because we hire
people we like and uh my business has
started to change when I hired somebody
not because I liked them but because
they had the opposite skill set set of
mine they loved to do the things that I
hated to do and because of that we
worked well and so that's what I would
ask yourself first is which one are you
and then whatever you don't have you're
going to either have to really
compensate for that or you go find
somebody to go on the journey with how
long do you think this opportunity is
going to play out so we've got this $68
trillion doll trapped Baby Boomers uh
you're teaching people as fast as you
can how to do the deal structure how to
get in how to be an operator uh but this
is a limited window so um yeah what how
quickly do people need to to get in this
yeah well let's think about it this way
since so if you think this is an
interesting idea very categorically by
2030 we think a large majority of the 68
trillion in wealth will have been
transferred or in some way Destro
destroyed you could push that that's
like five years you could push that to
2035 and the way that we calculate that
is basically Boom Baby Boomers to
retirement age to degradation of
business when businesses start to
Plateau due to length of existence and
you know no new things added to the
business complacency because you know
the only thing we know for sure is if
your business isn't growing it's
stagnating which mean means it's going
to move into Decay and so um retirement
age uh degradation of businesses um and
then the the average lifespan in the US
and so um so I think it is eminent very
very eminent I think this is the next 10
years we have to figure this out and
it's just math like how many 85y olds
are really coherent and can handle the
game of business or like it anymore not
very many um and so if we don't transfer
before that then I I think that's not
great and simultaneously how many 75y
olds are still moving their business
forward or is the business starting to
Decay and so we want to catch it before
that period where we can sort of we can
continue and and maybe even grow it so
the the it is eminent and the the second
part about that that is that is very
very true is
you know private Equity is the other
alternative so if we don't do something
will all 68 trillion get wiped away no
but wealth will continue to get more and
more concentrated all right talk to me
about that I'm literally writing in all
caps right now Black Rock yeah uh so why
not why not just let Black Rock gobble
it up man yeah I mean we basically have
we have a situation which Black Rock in
20 o gosh I should look at the exact
number I think it was in 2000 but check
me on the
owned uh so private equity in 2000 owned
about 4% of us businesses last year
meaning stock market or everything uh
private private businesses uh last year
20% woof and that is accelerating we're
seeing more private Equity Funds uh
continue we're seeing increased
fundraising levels we're seeing more
companies get owned by the few and it's
actually really really scary because if
you look at the food market like there
are 11 companies that we buy things from
cing gamble Kelloggs um we actually
think that we have like 200 companies or
300 companies we buy things from we
don't we have 11 and if you look at all
the brands that they own you realize oh
wow this is why policy actually really
matters in the food industry because 11
people control anything you put in or on
your body whoa that's a little scary and
then you might go well maybe that's just
the food industry and you'd be wrong
because if you were to look at the S&P
500 you have four companies that own 40%
of the [ __ ] S&P 500 are biggest
companies in the world and that is the
the black rocks and the vanguards of the
world and I used to work at Vanguard so
and my biggest competitor used to be
Black Rock I played with these guys all
day I have met with the CEOs of Vanguard
and back in the day I met with the
founder of Vanguard and these people are
not evil people we are in Cen of aligned
little chimpanzees that do things
according to whether we get zapped or
whether we get a treat it's kind of how
humans work the problem is the
incentives are really skewed so if you
went to Bill McNab right the CEO of
Vanguard and you had asked him uh which
they did publicly you can see his
response people would say right now well
those companies Black Rock and Vanguard
and the like they don't actually own
everything because they're passive index
investors right I was literally just
going to ask for clarification on this
right so they would say no no no it's
not up to us we just buy whatever is in
the stock market and we don't have any
influence on it on your behalf a lot of
times on your behalf you go and give
money to Vanguard go get Mone and oh by
the way we're Vanguard and we're very
nice and kind and so we just lower your
fees they actually have an incredible
economic structure separately but that
that's that's their Mantra right you
know Bogle was famous for driving the
same car continuously all of his life
he's very waren Buffett esque right um I
don't know why people love that so much
but yes I know yeah I'd rather know who
you are um for real that really may be
who he is but anyway I won't be rless
yet okay so the point is um they say hey
we just buy these passively it's not up
to us and when I was in the industry I
sort of I believed that uh a lot um but
then Bill McNab came out and said
something he shouldn't which is people
think that we're passive and we're not
we absolutely talk to these companies
about things like ESG and things like
corporate governance aake right yeah all
right so this is his whole shtick so uh
I'm going to lay out what I think Black
Rock and Vanguard do you tell me if I've
gotten this all correctly so they're
taking your money boys and girls and
they are buying stock in these companies
and I think Black Rock owns more than
80% of the S&P 500 I'm pretty sure
that's an accurate stat somebody should
check me I don't think it's drop it in
the comments when I heard about it I was
freaked out in fact we're looking it up
right now yeah uh so we'll report back
shortly they might own 80% of the well
no they would Own 100% meaning that the
all of the people in the world that own
the shares own it through the this very
small number of companies yeah I think
it's 40% the right number for the four
you're getting at let's find Black Rock
is one of the big three passive index
funds managers that controls the largest
share of at least 40% of the US
companies but 88% of the S&P 500 yeah I
I thought that was correct all right so
that's more terrifying Yeah by a long
shot uh and so what they do is because
most people that can hear my voice right
now don't think about the fact that they
own four shares here five shares there
they just have their passive Index Fund
yeah and that black rock there was a law
passed I forget when that says oh
whoever's aggregating these can
aggregate their holders from a voting
perspective correct and so they're
voting on your behalf because you don't
think about it you probably don't even
care but then that concentrates to your
point about policy that concentrates
these decisions in a tiny number of
hands the started a firm to compete
against these guys basically saying hey
we're going to uh vote on a pure
fiduciary
uh Lane so um like them we're going to
Aggregate and vote on your behalf but
we're going to do it based on what is
going to return the most Capital to
shareholders instead of things like ESG
which may or may not yield returns yep
utterly fascinating this is one you and
I were talking about this before we
started rolling my obsession is I'm
trying to make my brain the ultimate
prediction engine yeah to do that I have
to understand how the world actually
works and man when you start peeling
back the layers on things like how Black
Rock works it's scary and
they I will assume that they're lovely
people yeah For Better or Worse I'll
make that assumption uh that doesn't
mean that when changes like that get
centralized that it yields a good
outcome even when you have good
intention people and this goes back to
Abraham Lincoln and his whole idea of a
Team of Rivals you have to want tension
between ideas in order to get somewhere
well you actually mentioned that earlier
said you're never going to get smart if
you're morally turning people off
because they're not going to sharpen
your own thinking that's right uh which
I agree with very aggressively no I mean
I think you know what you pulled up is
so interesting I also used to work at
Vanguard that was the very first company
that I worked for uh when I got into
finance and I remember that we for a
period they do um like every single time
a company votes on something important
within them so let's say for instance a
big public company Amazon that we own
part of at Vanguard has a big change
that they need to make well uh it's
called proxy voting so like basically uh
Vanguard would go out and say hey we're
going to vote on your behalf I'm your
proxy and they might have to pull a
number of their shareholders uh in order
to get XYZ done and if you have one type
of fund then the shareholders have to
have a message sent to them and if you
have another type of structure they
don't and they are allowed to be your
fiduciary well it's not even called the
fiduciary they are allowed to act on
your behalf and I think the problem is
exactly what you said these big guys now
can put their finger on the scale very
easily for every single company and what
does that look like well if um Black
Rock meets with you uh and they say hey
will you meet with our active management
team active management means they're
choosing to invest in um I don't know
pick a public company out there in uh
Walmart or in Amazon so Black Rock comes
and meets with you and they and you know
that black rock has the ability to move
your company stock more than anybody
else does right and they can move your
company's stock because of the pass
things that they have the the stocks
that they invest in regardless but they
want you to meet with their active team
and their active team says something
wants you to do something Etc is Amazon
or Walmart going to say no to something
that maybe even an active part of Black
Rock wants uh because it's not the
direct passive component I don't know
and there are all these rules in place
where you're not allowed to put your
finger on the scale you're not allowed
to do X and Y and Z except if you are a
shareholder in which case you are
actually allowed to put your finger on
the scale and that's what become so I
think that is really really scary but
the part that we don't talk about as
much is you know if you were to compare
the founder of black Rock's wealth
versus the founder of black Stone's
wealth who's wealthier the founder of
Blackstone in fact we could maybe you
could pull up the numbers so we can see
the the numbers exactly but uh Black
Stone is worth like 10x what the Black
Rock founder is why does nobody talk
about Blackstone because they're private
they don't have to disclose everything
they don't have have public listings
they're not responsible to go and speak
as often with the SEC and finro which
are the registering agencies for um for
public companies by and large and so
they are actually unregulated buying
everything and and that's really
interesting because this is like the
shadow influence that's even above and
beyond Black Rock in some cases and so
what I'm concerned about is there we go
so schwarzman that's the that's the CEO
of black stone is worth 41 billion now
go check out Black Rock 1.2 billion so
I'm sorry not 10x so also though that
could be tied to just quantity of
ownership and things like that but well
well schwarzman was actually part owner
in Black Rock because why are Blackstone
and black rock so closely named they
split it's basically the private and
public sectors although no you said that
black rock does some private ownership
now they do private ownership as well
they do houses as well they kind of you
know these Asset Management firms gobble
up everything in fact like you know I'm
I'm buddies with some of the people who
run inre and horowits but if you go and
look at what happened to them they
registered as an asset management firm
not a venture capital firm because they
were also spreading their purview of
what they do and so my point is again
these people are not bad I I mean I have
dear friends who work at Vanguard State
Street Black Rock and Blackstone and
some of them run the companies and and
I'm still quite close with them but man
should any of us own 40% of the comp of
the country's companies and 80% of the
S&P 500 no that doesn't seem like a good
idea not even me not you and so um I
think it's maybe me you're like I'm
willing to try um I I just don't think
it's right that's why we don't go out
anymore and try to buy all of the
individual companies out there that's
why I talk about it so much in the book
and I teach other people to do it
because I looked at some of these guys
and was like have you ever been inside
of a company that you just can tell is
owned by a private Equity like they just
strip away kind of like all the extra
things that were the soul of that
company um and even big conglomerates
like you walk into a Starbucks and
you're like this place [ __ ] sucks you
know it's dirty they don't know your
name they get your order wrong you know
they're mad you're there half the time
that's not the third home or the third
room or whatever they used to call it
the third space you know it doesn't feel
anything like home anymore this is part
of that loop I was talking about so debt
moves in Cycles businesses move in
Cycles uh the economy moves in cycles
and so I I have a growing hypothesis
that I'm going to lay on you like a
[ __ ] filthy blanket with small pox
all over it uh yeah tell me what you
think about this um I don't know that
there's any way to escape it and that we
may just have to write it so uh boys and
girls please do me a favor I really hope
you will do the following in fact Drew
pull this up um the national debt is so
crazy right now and basically nobody's
talking about it and everyone's life if
if you'll let me extend it to just your
kids
forget grandkids nope just your kids uh
is going to have to deal with it and it
is going to be bad and the reason it's
going to be bad is it's the physics of
money so the way that money works is
such that if you run up debt you are
going to have to pay interest on the
debt uh the way that you pay interest on
the debt when you have a uh balanced
budget in your nation is that you
collect tax money and you pay that
interest but our national debt is
getting so high that the interest on the
national debt will eventually Eclipse
100% of the revenue collected so it will
take up your entire GDP that's clearly
not sustainable so then you have options
you can default on the debt or you can
um take money from people in the form of
money printing so it doesn't feel like
they're taking money we were talking
about this earlier but you're robbing
their buying power and so this is how
you get into an inflationary spiral and
the problem is which they will they will
inflate the money supply they'll print
money in order to make the payments
insane like if you put the two charts
the national debt is effectively a
straight line up yeah and money printing
is effectively a straight line up yeah
and people are not being honest with the
fact that there's a Breaking Point and
so everybody that's touching this is
just saying I hope I can kick the can
down the road long enough that I'm not
the one that has to deal with this but
you can look backwards in history M Look
Backwards 500 years that's a long time
and if you look backwards 500 years it's
just a cycle of this debt getting big
bursting and there's Bloodshed uh
starting small again getting big
bursting there's Bloodshed getting small
again and and we just cycle through it
over and over and over uh and Ray doio
who uh nobody has put their own money
where their mouth is more than Ray doio
and had more to show for it so he's
built the largest hedge fund in the
world which is basically a casino that
on what's going to happen in all the
economies around the world once you
think of it like that it's like okay
this guy's called more shots and one
more than anyone else ever and he's
saying that there's six stages to this
debt cycle stage six is total collapse
and that we're at stage 5.5 right now
and this is one of those where I'm like
I feel like Elon back when he was trying
to tell everybody to chill on AI and
nobody would listen so then he just
built his own AI company I was like well
I guess I'm going to be fatalistic about
it yeah that's how I feel uh since Co
started I started learning about the
economy how money actually works uh and
I'm just looking at this going wait a
second that we're driving at full speed
towards a cliff and no one no one's even
like looking at the break let alone
stepping on the break yeah and so I just
go H it may just be that these Cycles
repeat and you are in the point of the
cycle that you are
and now you deal with h how do you
thrive in the moment that you're in
because you're never going to convince
people to uh turn the car around yeah
well I mean I think I think there's a
lot of reasons why you might be right
and I think what it comes down to is
what can we do individually like if
you're a person listening the individual
thing you can do is is vote politically
in a way that gives more power to the
people that decreases government
spending and and uh that believes more
in you than believes in big government
and I mean we're seeing it in Argentina
it's probably one of the first examples
where a government has really expanded
continuously and then severely
contracted um post pain though I want to
be very clear about that well and and
argentinians really like to run out of
money and and explode their debt I think
this is like what the 11th time or
something like the de cycle they just
are on an
accelerated they kind of they they are
accelerated but but that said I mean I
guess listen I'm an optimist for a ton
of reasons one
I do think you can make money in any
Market guaranteed and so if that's true
and then what am I going to do I'm going
to bifurcate my f Focus I'm gonna say on
one hand I realize that governments
can't make you rich no president is
coming to save you it's up to you if you
want to get rich but they can't hurt you
a lot like governments can't really help
you that much truly but they can ruin
you and I've seen it happen again and
again so I think making sure you're
politically voting for people who don't
ruin you is really like your base level
it's like just don't ruin our economy
and Country because that's when
everything goes sideways that's like
apocalyptic um it's not like who has
Vibes or personality that doesn't
[ __ ] matter then the other side is
now with everything that's happening
what can I do to become richer this
moment because I do think money is
protection like money is freedom money
is optionality and choice and you know
and if you are correct then you earn
money and you place it in things that
are not Cor related to the US dollar
right you buy gold you do crypto you add
on these additional things that maybe
you hope protect yourself against the
risk of the dollar basically
eviscerating but I think my thesis kind
of goes to this idea of one I actually
do think we can beat private equity and
why do I think that
because if money was all you needed to
win then the big companies would have
created the best AI companies then the
big companies would have won at search
continuously I actually think that a lot
of times when you get really big you get
bureaucratic oversight you get heavy you
get constrained you get uh concerned
with too much risk actually because you
have a lot to lose you have a lot of
regulatory oversight you have compliance
you can't move fast and for all these
reasons I actually think that small
businesses small Nimble teams
increasingly with tech to enable them
can beat the big guys we'll get back to
the show in just a moment but first
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s.com Theory now let's get back to the
episode with Cody and for all these
reasons I actually think that small
businesses small Nimble teams
increasingly with tech to enable them
can beat the big guys we just have to
one make sure we have uh regulations and
politicians that push back on them and
then two we've got to be a nation of
Builders and Vivic talks about this too
I mean he says the way to get out of the
situation we're in there's only one way
and that is GDP growth that's been his
comment sort of since the beginning when
I first talked to them GDP growth is the
only way to do it one of the ways to do
GDP growth is is AI for instance and
having our next cycle of evolution but
you're not wrong like why do young
people today not trust the system in
particular it's because wages are
stagnating so they've ma for the first
time ever we have uh gen Z making less
than their parents did at their age on
on an inflation adjusted basis the their
University degrees are 3 to 4X more
expensive than what their parents were
now they're housing is anywhere from one
and a half to 2x more expensive than
their parents were and simultaneously
they have had inflation eating away at
their dollars um there are more jobs
available out there but to your point
they're not jobs that are making more
money overall and and so I think young
people today are rightly saying hey
we're out here working you're saying
we're Qui quitting you're saying we're
not as valuable and our skills aren't as
good anymore except wait a second our
productivity level is higher than our
parents generation but we're making less
money and so that there is reality to
what a lot of them are saying you know
sometimes I kind of chuckle at these Tik
Tok videos where they're you know saying
oh I'm crying because my first job is
really tough and you and I know of
course it is it's your first job it's
supposed to be tough but they're right
in some other ways which is that it is
harder than it's been in a long time
economically for young people in this
country the only option is not working
within the system stop doing the thing
that everybody told us to do when we
were young which is go to university
burn four years and let's call it on the
low end $50,000 in debt that you can
never get rid of for a job that pays
basically minimum wage at 30 to $40,000
a year after you spent 50 to get it then
go and try to climb a corporate ladder
where people get 3% raises on average
try to buy a house but you really can't
because if you don't have a W2 job then
it's really hard to get a loan uh if you
do have a W2 job you probably don't make
it enough income to get it and so we
have to as young people we got to say no
like I'm not doing it this way and
that's I guess why I keep coming back to
the only solution I see is [ __ ] the
system don't go to a bank go to the
seller of the business and talk him in
to letting you buy the business using
future profits don't go work in a
financial institution become financially
independent and intelligent so that you
can become the financial institution
don't go work at a corporate job for
somebody else for 3% wages each year
become more valuable negotiate your
salary if there's no upside leave and go
somewhere else and don't rely on
traditional University degrees because
they don't teach you business the best
way to learn about business is being in
business and if and if I was going to
tell that to a young person I'd say skip
the 50k in the partying and the liberal
arts Theory learn that at Jordan
Peterson's Academy go listen to the
beautiful Theory that's happening there
and simultaneously go get in the game
now and I know it's not very and I'm not
saying don't go University I'm not one
that's saying everybody should be an
entrepreneur but I'm saying what you're
doing right now young
people it's a lie and it's not going to
get you to the same place that it got
your parents in the current situation
sadly why do you think that's true
because just math I mean if there if
wages aren't paying you more why not why
so if they're more productive why aren't
they getting paid more wages oh like why
does was wage stagnation exist and
productivity yes productivity gains well
that's a that's a really good question I
mean what could it be it could be like
you said are the jobs that are open are
those actually higher paid hired skilled
jobs that are open are the number of
jobs that are open actually real or are
those like static jobs that look like
they're open but aren't actually going
to be fil something like 70% of all the
jobs that have been added in the last oh
God two years uh have been excuse me
have been government jobs oh another
freak you out and we need to look that
stat up just to make sure Direction
that's correct M it's some just
horrifying I know I wish I had vivx uh
like memory recall and statistics you me
both um yeah amongst other things also
i' take his bank account but um I think
that I know that you're right uh the
private sector has actually I think lost
jobs while the public sector has gained
jobs but I'm not sure if it's material
like one or 10% right um and so I think
there's some funky things going on in
the economy there can I name them yeah
tell me uh so here's what I think is
happening the reason that the
productivity is going up is entirely
because of Technology it's not like the
kids today are better they're not worse
either they're just not better so
productivity goes up basically in lock
step with um gains in technology now
technology is by its very nature a
deflationary force so the question is
why do we have inflation you have
inflation because you have to ask
yourself what is the thing that's
inflating the thing that's inflating is
the money supply and because the
government and instead of getting you to
vote on things is just printing more
money which they do not have to get you
to vote on y um they are just steal
stealing away all of the gains that
people should be getting from the change
in the level of productivity and since
buying power is going down and prices
are going up it becomes effectively
impossible for companies who are having
to deal with all those price changes uh
to pay people more because some
invisible thing is stripping all of what
should be that profitable Cush away and
that profitable cushion is being
Stripped Away by inflation is my
hypothesis now this I'm going to have to
do more research on and make sure that
I'm correct but boy oh boy does
everything that I know all the pieces
that I am very confident on lead me to
that no I think that's right I'll call
it a theory I don't even think that's a
hypothesis it is far more I think that's
right then then you add to it a couple
other things which is globalized
Workforce so uh maybe job wages aren't
increasing because actually there's a
massive decelerator which is uh
International labor Force at 10x cheaper
the cost um it could and that's about to
break apart we're going to see whether
that is a big part of the answer or not
because um I don't know if you know any
of the stats on this but that feels like
since Co that really blew apart and we
are now becoming more isolationist
certainly that's the direction that
Trump is leaning it's America First all
of that Ric is about stop the
global um the global exportation of jobs
all the stuff about tariffs which I
think is being wildly Mis either
intentionally or unintentionally but
misrepresented in the Press yeah um that
stuff is about okay wait a second don't
export our jobs and then some amount not
all because I have beef with the Border
but my beef with the border is not about
importing low wage workers um but that's
certainly some of I think those two see
I think what they're what they're doing
is they are mandating even in this Trump
instance let's say I think they're going
to try to retool jobs in the US in
manufacturing for instance take back key
services but at least I play in the
small business Lane so you know when I
look at our small businesses we have
Main Street holding company we own you
know 26 businesses there in content
thinking Capital we own 30 businesses
there when I see the amount of these
businesses that now used outsourced
Talent it's incredible I mean for
instance even at con thinking our media
company we probably have 12 we have 12
team members that are located all over
the world uh that are oneir the
effectively editors everything customer
service um you AR using AI for customer
service no we're probably not as
intelligent as you but that would even
I'm just very curious if you see
something I don't yeah I mean uh I think
going forward that'll even be more uh of
a deflationary measure right same with
the robot Baristas right do you really
need a human who's not going to show up
on time one way or another to do that
job I don't know but right now I I mean
so if we have 12 at a company that has
let's see contr think he probably has 30
full-time employees um plus maybe I
don't know 20 or so um uh vendors uh and
then if I look at at our underlying
companies most of them have I don't know
5% of the workforce or something like
that that's that's outsourced uh I think
it's probably more material than we
anticipate and there's no way those jobs
can be brought back to the US if they
are doing a good job the only way
they'll be brought back to the US is
through AI because uh it's so much
cheaper and to your point inflation has
eaten the profit margin of businesses so
much so they're not making much money
anymore unless they get intelligent with
Outsourcing and so we've seen it
continuously I mean I was meeting with
one of our business brokers at a company
we own called bis Scout which is like a
business buying and selling Marketplace
and uh and he was saying he's never seen
a higher level of La uh restaurants for
sale than this year highest level ever
ever distress I ass distressed yeah and
the reason why I'm like if you had to
like narrow it down to one thing I was
like is it population leaving um is it
just that that business is really hard
it's one of my least favorites don't buy
a restaurant they're hard um and he said
it's actually labor costs they increase
the minimum uh wage to $20 and that's
the third biggest restaurant cost and so
they're they go from a 10% margin
business where for every dollar they
make they keep 10 cents of it to
essentially nothing and so um they just
don't make sense to operate anymore here
and so I think that is really big and I
do think ille illegal immigration in
small business and in sectors like
agriculture
Etc it artificially deflates wages and
it's not great for them either um so for
who for uh it's not great for illegal
immigrants here in the US yeah I mean
look I'm riffing now but if I were going
to do some um freestyle bars on this
it's going to go something like this you
allow illegal immigration out of a very
weird sense of empathy y uh you let them
flood in you intentionally turn a blind
eye to people that hire them all the
while raising minimum wage so that you
can Rail and say people have to be able
to make a living wage off of XYZ job
which PS not every job is meant to
provide a living wage many a job many of
the uh jobs at the minimum wage are
meant to get you a foot on the ladder so
that you can start learning you're doing
it in high school or right before
college or instead of college or right
after college like I was making peanuts
right after college sharing an apartment
with a guy and his girlfriend and was it
fun no it was not but I needed to keep
my rent low so I could figure enough of
Life out to get going y so it it's one
thing when it's like oh that's actually
a sustainable model and you just have
evil capitalists that you're fighting
against and so you have to do that it's
another when it's like hey like run run
the math figure out what you're doing
here you are um making it such that you
need an illegal immigrant that the
business owner is going to take
advantage of because it's under the
table and you were turning a blind eye
to it to make up for a problem that you
created and so we're going to say things
like well we have to do this in order to
do the jobs that Americans won't do it's
like oh my God so have a system that you
can just stand up and say this is my
system leis and I talk about this all
the time in the business don't ever do
like one-offs with people because you
like them just it's a policy and if you
want to do something for that person and
you're willing to make it a policy it's
a great thing to do if you're not
willing to make it a policy it's
probably a bad idea you're just doing it
because you like the person and so H
good Lord so I say all of this because I
am an optimistic person and I often will
paint this stuff with a dark brush but
the reason I cannot stop myself is I
hope that people hearing this understand
this is a swayable system that they can
go in not just politically that's one of
the ways and that they
can understand this is how the system
works these things make sense these
things do not make sense rail against
the things that don't make sense so that
you can get the person who's driving
towards the cliff with their foot jammed
on the accelerator partial partially
through the floorboard uh to let up and
then I welcome look if I'm seeing
something crazy and somebody has a more
accurate interpretation all I care about
is predictive validity yeah I mean I
think what I what I guess I come back to
today is like it's so similar to
healthcare it's like two options get
Kelloggs to get rid of red food Dy and
work on that problem which is great and
I think people should do that Kelly
means shout out to you yeah the man he's
a buddy of mine from Austin also
simultaneously learn about Kellogg's
putting red food die in their food and
don't feed your kids that and don't eat
it yourself and so it's sort of the same
idea here here's what we think is
happening in the government don't spend
your life glued to a screen obsessing
about a thing that is out of your
control take what ever measurable
control you can do there and then give
it not one second more thought because
the best way to control the universe is
to become financially free in order to
put resources towards things that you
want to exist in the world and if more
people did that then we would be a lot
harder to control what I talk about with
being a business owner is you become
more unemployable in a lot of ways and
you become more un pushable because
nobody can fire you because you have an
ability to actually affect your
financial outcome and so I think Sim
multaneously to railing against whatever
you feel in the government you should
simultaneously obsess on how do I
increase the size of my bank account
because that is my protective armor and
if I increase the size of my bank
account I can make a lot more decisions
based on optionality and what I would
like to do as opposed to what I don't
want to do because money doesn't make
you happy but is sure as hell decreases
misery and I think we were told a total
lie that money is bad for you that money
is evil that money is is wrong that
people who have money AKA billionaires
must have gotten it a bad way in fact
the opposite is rather true which is
it's really hard to get money if you
create no value now at a certain point
you like have a lot of money and money
can make more money but to create it the
first time you have to have provided
something that somebody was willing to
pay for some sort of value transfer and
so if you think about it that way money
is just a tool it's like do you want to
build the house uh and put together the
framing with uh a nail and a hammer or
do you want to do it with an industrial
nail gun like one of you is just going
to move faster than the other and so get
bigger tools so you can make a bigger
impact and that is sort of my my point
and you will feel more free because
let's say worst case scenario this would
be awful I don't think it's going to
happen and I hope it doesn't but let's
say America implodes you can't take your
assets with you you can't take your
business with you money becomes
worthless here what could you do well if
you're a doctor you could technically go
to another country but what are they
going to make you do they're going to
make you go to medical school there
you're going to have to become licensed
and certified there hm that's not great
well what if you understand the language
of money and doing deals can you buy a
business in another country in the exact
same way that you bought a business here
of course you can could you go and
negotiate something that shows your
value in order to get equity in a
business somewhere else of course you
can so it's going to be really hard for
you to be poor once you understand how
money works and I think that's my my
belief because I I argue with Biology
sometimes not well because he's a genius
but I in my head I argue with him and
and say stop giving up on America like
no I don't want to move to Singapore
like no thanks I don't want to be in a
high-rise covered in green and feel like
that's the forest for me I don't want to
live lovingly to him I don't want to
live in the apartment complex with a
bunch of other people you know talking
about crypto I don't want to I want like
a little land I want a little maybe
country music every once in a while you
know I like a cheeseburger um I like to
speak English and so like I'm going to
fight for that and I think a lot more
people if more of us think that way we
will win you know what else I was into
Ubers while I was here I remember I came
it was like maybe two years ago when I
first came on the podcast about that
yeah okay so two years ago or in La I
came on the podcast let's just say that
when I was in the Uber I would have
never said things like H the governor
here is kind of nutty huh not a huge fan
of that guy if I would have said that I
would have probably had a pretty
negative reaction from people today two
people brought it up to me proactively
they were like yeah well it's not that
great around here and you know we got to
change our politicians and one of them
does Tanner do you remember what she
does did for living she does like energy
work like not the type of person you
think healing yeah she's like crystals
right so you wouldn't think maybe she
would be one way or the other I think
people are waking up I really do and I
maybe crazily optimistically think that
more people are willing to fight for
what we have here and that if a bunch of
people wake up the stuff isn't that hard
to understand and I think now there are
people talking like a little bit of
common sense and I think we just might
be able to pull it out well your book is
an amazing version of that thank you all
right what I want to do now is uh I want
you and I to rank Financial advice so my
producer Drew has put together some
stuff so I don't know if you're familiar
with uh doing like the S tier ranking
all right so uh we've got s a b CDE e n
f okay and S tier is like yo gangster
that's like the the highest tier all
right let's go Drew hit user meaning
good the best okay cuz I'm not cool
that's like that Sigma tier I think
that's what the S actually stands for
somebody have to correct me is like
[ __ ] bad terrible fail why he's made
it blue on here I guess it's just a
color from Red Hot amazing to Blue cool
lame okay I like this exactly yeah the
blue is a colde hard take it's the first
one going to be
me I I would be uh I would be shocked if
you end up anywhere other than S tier
right okay okay here we go your netw
work equals your net worth all right is
that s tier F tier what do you think I
think that's probably
a yeah not s but
a I believe in it big time but because I
have not done it I'm going to put it C
tier uh I am living proof that you can
do it without it but man do I think that
I should be punched in the mouth by
myself uh this is not an invitation to
people out in public uh for not doing
that more so that that's a big Miss in
my book but you can clearly do it
without it yeah I think I think we've
been messing around with this idea the
five steps so in order to become really
really wealthy step one and two are you
have to work really hard for longer than
you think which is Step uh two you have
to increase the skill stack that you
have you have to have more valuable
skills then you have to take risk once
you have those skills and finally you
have to have connections where you give
and take in order to have like real
wealth and so it's you know your that
thing you talked about in the beginning
grit are you willing to do a hard thing
for a long type of for a long time
resiliency to finally are you valuable
do you have a good skill set to then can
you take risk are you willing to jump in
and and choose yourself and then finally
connection so I think it's it's really
helpful at the highest level No Doubt
all right Drew next the way to get rich
is to save
money I disagree with that where does it
go I've never met anybody who got rich
that wasn't in their 70s uh and did it
by saving so I think that is an F tier
that's hard F you cannot save money
because of inflation the buying power
will be stripped from you that is a
Fool's errand it's immoral that that's
true yeah but it is true so true hard f
for me hard F I mean that's just math
actually literally that's I mean have
you ever seen the dollar symbol where
basically when the Fed was created in
the 40s yes uh and then you go all the
way to the dollar amount that an
individual dollar is worth today you can
like see it it looks like this it looks
like a sloping ski slope uh with what a
dollar used to be worth and is worth
today it's like a beautiful visual that
only is because of our government every
fiat currency has the same graph that's
what I'm saying these are probably
inevitable Cycles yeah you have to have
a currency that can't be inflated I got
to buy more Bitcoin huh I mean look I
try not to overhype it because right now
Bitcoin is volatile but you need a
currency that is
uninflated you could also have assets
that increase in value such as like gold
for instance maybe real estate you could
say lay on real estate makes me nervous
yeah because of maybe nationalization in
fact we're going to get to that I think
that's one of the items if I'm not
mistaken Drew yeah and but the last
thing I think we should talk about is is
price controls so like one of the
reasons I like owning businesses is
because if the currency deflates or if
inflation happens you increase your
prices and as long as you make sure you
have some price elasticity the ability
to raise prices for Value then you can
continue to outpace inflation in a way
that you can't if you're in a job now
are you saying that the government being
in control of prices is aad bad idea
Cody Sanchez yes did did you read that
uh tweet from it's actually a friend of
mine his name is Robert he's like a CFO
and he had the world's best tweet about
why price controls is a terrible idea
and it's worth it's worth reading but if
it was the one that like breaks down
like literally from a grocery store
perspective yeah I didn't know I don't
remember who it was from but it was
literally brilliant yeah uh and price
controls equal starving to death that's
just quite literally true that tweet and
many other analyses have just walked
people through it it's it's absurd
that's a red flag anybody who says you
should control PR I mean and then people
go like what about Pharma and so there
are instances in which um it makes sense
to make sure that if there is lifegiving
care in some way we aren't gouging
people for it it's interesting I think
that what Mark Cuban is doing would be
my preferred method of dealing with that
yeah if you have created some bizarre
system where the market has been clamped
down on so hard that nobody has done
that yes uh but whoa do that at high
risk because once the government starts
doing that they just want to keep going
keep going keep going but what Cuban is
doing with drugs Cost Plus drugs I for
the exact name but that to me is
brilliant like get the transparency let
somebody compete in the open market and
let him win and he's doing exactly that
and I hope he gets even wealthier for
doing it yeah uh he and I certainly
don't see eye to eye on all things but
I'm so glad like so many people have
have gone against him simply because he
has a take politically that they don't
like and I'm like yo look look at what
this guy's done like he brings a lot you
could by all means ignore a lot of the
things that he's saying that don't work
in the real world or you fear won't but
man uh don't throw the baby out with the
bath water oh I agree moral absolutism
will not make you money for sure what's
our next one go buy a house you should
rent
e what's your take on buying versus
renting um well multiple aspects one um
I think we have to not just look at what
the math says which is that sometimes
it's cheaper to rent especially if you
add in all additional costs to it and
say the average American has uh let's
see so what is it 60% of Americans have
$1,000 saved up and something like 30%
of Americans have no savings and so if
that's true and the numbers are anywhere
near that anything that we can do to
have assets
that increase wealth over time and
mandate that we have an ability to save
with earnings increases are probably
good and so I think sometimes people
talk about this and they're like no you
shouldn't do it because like ramit seti
is sort of famous for this for this line
um but we shouldn't do it because in
fact you should allocate your your money
somewhere else and it'll make you more
money that's like the argument there
except that most people don't keep their
money in the stock market when the stock
market goes down and so so you can't use
like the average return of the stock
market which might be 10% because people
get emotional and they pull things in
and out so that's why I think behavioral
economics is really important overlay it
on top of hard math and investment
returns so for me I know that most
Americans net worth is largely tied up
in their homes for instance and that
might be good considering our behavioral
economic patterns of not really saving
at all yeah so I'll put it B uh C tier
excuse me uh so remember this is dear
audience remember
uh don't buy a home rent and the reason
that I think that that's actually
mid-tier it's not terrible advice is
dumb money should buy a house and leave
the money in the house because it's
going to be a force savings account the
thing that I don't think people take
into account with the house all a house
is doing is saying pay an insurance
policy and I will keep I'll I'll make
sure your money keeps up with inflation
y housing
prices it's not an absolute it's rare
that housing prices are going up because
suddenly Austin is the hottest place to
be it obviously does happen but for the
most part what's really happening is the
value of the dollar is going down and
just to keep them equal the house price
appears to go up y but houses are
extremely expensive to maintain
especially over long periods of time and
so you're basically just paying into an
insurance policy to make sure that the
money you save because the government
has done an immoral thing and they are
printing money uh that you're paying
into this insurance policy to ensure
that the money that you sunk into the
house actually maintains its purchasing
power yeah that's it now
you probably on a long enough timeline
you are way better off putting that into
the stock market or whatever uh because
you can just set and forget there but to
your point the actual thing that people
do is they buy low and they buy high and
sell low yeah that's what people
actually do um so there is some
protection there for the average person
who is probably buying the house because
they love it um and not because of
literally any other reason and so cool
it's a thing that you love that you're
creating memories inside of and if you
keep paying that insurance policy it
will be there for you when you retire
yeah I mean the other reason that buying
your own home kind of makes sense to me
is that you uh can also use that as
leverage so you can take out loans
against your actual property but you can
also take should do yeah you could take
out loans against your stock portfolio
too stock secured his securitization so
you could technically take out both of
them but your house price is probably
less volatile than your stock price so
maybe less risk there and then you do
have some tax benefits of write-offs you
can do for it plus you maybe could turn
that asset into multiple things with
like income properties in it but by and
large I think real estate is for keeping
wealth not making wealth and so that's
why I don't invest a ton in real estate
because the average home in the US I was
just at Bigger Pockets giving a little
speech the average home in the US is
somewhere between $300 and $400,000
and it was funny I asked one of the guys
there I'm like so how much money do you
make on a $300 $400,000 house he's like
well if you buy it with cash like 1,00
bucks I'm like hold up nobody's buying
this with cash like if this is your
first house they're not buying it with
cash so with a mortgage on top of it
he's like yeah you know you probably
make hundred 40 40 bucks to 150 bucks a
month so you you have a liability that's
$400,000 and then you only make 50 to
150 bucks a month on it that's not great
that's terrible given that something
will break it will go wrong and it will
cost a lot more than that yeah exactly
so I think you're right I don't think
over time real estate is the way to make
real wealth but people in real estate
hate me saying that and it it's
definitely in some ways less risk less
volatile for sure yeah the math is the
math the math is the math maybe that
should be the name you got PR you gave
me c for your net worth equals your net
wor um so you can't use C for the house
one it got to be a b or d uh then it's a
d got it oh man
next one Speaking of the stock market
the stock market is a
gamble
um I mean no I think that's probably
what I've already used F and E yeah I
guess that's a d uh the stock market is
a gamble is a d to
me it is a gamble if you're day trading
like don't Robin Hood don't YOLO into
the stock market but over time we have
numerical returns that show that if you
average out the returns it's not a
gamble that um you can have some
predictive ability to see what the
future might look like over a long time
period so I think the the question is
are you investing consistently are you
investing uh for the long term are you
not pulling money out are you using
lowcost Investments because costs really
eat into your returns and investing um
and have you Diversified your risk
enough and and I still think even though
I hate a lot of what happens in the
asset management industry that over time
there is a benefit to having
diversification of income in the stock
market but I don't give Financial advice
it's totally dependent on what you want
to do I'd much rather you built a
business it's interesting building a
business as a way to secure the bag and
that I if I could do another F tier on
that one uh I would uh just because I
don't think most people are going to be
capable uh I love the energy I love
where you're coming from but I think the
average person is is going to Fumble
that uh but to the
question uh I would just first like to
say definitionally the stock market is
gambling period perod end of story and
if you think of the stock market as
gambling you're going to be in way
better shape uh the weird thing is
though on a long enough time Horizon
what you're gambling on is the Ingenuity
of the people in whatever sector you're
betting on and betting on human
Ingenuity especially uh if you can take
a full Global Perspective so you're
protected from um any sort of pocket
problem is the best gamble that I know
to make so um the stock market Market as
a gamble is the give it the lowest thing
that I haven't uh already
used and if that's B then I'm switching
my uh previous home one up to B and then
this one goes to D flip-flopping more
than politicians today yeah well because
I don't I don't know the full gamut here
of the questions being asked the two of
us that that's a e for you that's a e
for you then all right word there it is
we got two more we're almost there you
should get out of debt as soon as
possible you should get out of bad debt
which I would Define as high interest
debt where you are not out earning the
interest as fast as possible yes whether
you have low interest interest debt
long-term debt that you're able to out
earn somewhere else uh that I don't
think
matters I don't think matters that is
very shrewd advice it's interesting you
clearly have a mental model the person
that you're speaking to is very sharp
engaged they know it the mental I have
is um somebody who is more likely to
need a set and forget solution uh so I
with all of your caveats I agree like
that if you understand it that well like
you can leverage debt and get way ahead
um but if you don't understand debt is
the one thing that will obliterate you
um so it's but what about a mortgage
yeah mortgage is debt yeah in 2008
having a mortgage was pretty trash and
you who I I can only imagine the number
of people that got divorced because they
lost their house because they were in an
adjustable rate mortgage 2008 they could
make the payments that's what I'm saying
with all your caveats I love it the most
like if you're Savvy and sophisticated
and you get all the things you just said
amazing but as somebody who spends a lot
of time in the world of crypto and you
see people get liquidated like that uh
because they're doing things on debt or
like margin calls that's that's really
dangerous like people just they go ham
and so I get super nervous so getting
out of debt is uh for the average person
getting and staying out of debt as s
tier yeah is the top so you're you're uh
that's what what is it it's uh Charlie
Munger said or the easiest way that a
man lose all loses all of his money
ladies liquid and leverage ladies liquor
and leverage I [ __ ] that one up pretty
royally but it's a great line which is
basically and then Warren Buffett had
the best one where he came back and he
said my partner Charlie I think meant to
say just one L leverage yeah um you know
again it's I think I guess that you're
right I'm I am optimistic about an idea
that what if we can actually I mean if
you really sit
down and you explain to somebody
simply uh here's a calculator that shows
you how much money you make in this
scenario with debt and this scenario
with debt and they look at that
calculator and they see an outcome that
comes from it I think we can teach more
people how to just like most people know
how to do addition and subtraction we
could teach them how to understand
finance and I think the problem with our
our world today is that we don't have
any financial literacy and so this is a
perfect example it's like Charlie Munger
and Warren Buffett says the the easiest
way to kill a man and lose all his money
is leverage and yet they're highly
levered to be honest but it's really L
it really is I mean to derail the
conversation but if you want to see the
the oh God who was it that said it it
might have been Sam Harris and he was
like it was during the whole time where
it was like um do men really have that
much power over women and Sam was like
hold on a second yes there can be
situations no doubt but what is the only
thing you could ever imagine a highly
successful man with a family and all of
that what's the one thing that he'll
throw it away on an attractive woman it
is CRA and it's true man it's true I'm
totally derailing the convers but that
ladies number one yeah yeah ladies most
people won't take on that kind of
Leverage just because they don't
understand it that's a good point but
the thing that people will ruin men the
thing men will ruin their life over is a
woman that is probably a little too
attractive for their station in life and
men will just do dumb [ __ ] the fact Jeff
Bezos I love you to death man and I am
so sorry I keep bringing this up but the
fact that Bezos has dickpics out there
just tells you everything
does he really I didn't even know that
that's how his whole thing got blown up
was someone hacked his phone and they
were I'm sure trying to take down Amazon
or something like that so they're like
we're going to go after him they tried
to blackmail him and he was just like
yeah I'm having an affair yes that is my
dick pck and the fact that what I've
done historically I'm not going to be
blackmailed so um he just stood by it
and credit to him and that's that's a
baller move like he was just like I
don't do blackmail uh so yep it blew up
his marriage
um just just the fact that I can picture
Jeff bezos's face and like his bald head
and then what I imagine it's I don't
need that in my life I am now picturing
things about Jeff Bezos I never needed
to picture I can almost imagine what it
looks like like I feel like maybe they
represent the two this is this is a dark
corner of the internet for me now yeah
it's uh but that's the thing man guys
there was a time I would like to reflect
it was a very long time ago but there
was a time where I thought that women
would want to see it like that they
would be to dickpics to my wife yeah
there's no Universe in which I could
stop myself with the serious face yes I
have occasionally to my wife and my wife
is like of course she's very sweet but
both of us know that she doesn't care so
yeah I'm just also I don't think women
actually like the other Financial advice
that's a that's F level is whoever said
that women really want to see your
isolated dickpick is a liar that's an
that's an absolute fail in the
background the women are like
100% nobody wants to see that little
naked mole rat out there sreaming around
keep it to yourself you know men are
giving the gift they would want to
receive because if my wife would like to
take a quick pick and send it on any day
of the week you're into it youa I'm here
for it just shoot it over yeah we are
wired differently and there's been a few
years of confusion here for a minute
about boys and girls being the same and
they are not so my inbox is open Cody
Sanchez my wife send them all day long
that's that's true I'm I I don't think
that most women are the same in that
that's how we can tell if you're a man
or woman correct actually correct yeah
this is devolved from Financial advice
oh we did start in the beginning that
either we could talk about politics or
[ __ ] and now we've devolved their
both top ranked podcast thank you yeah
we're all the way do we have any more or
do we get all of them I feel like we hit
all of them I had a couple more but the
way
better please just stop well on that
note Cody Sanchez your book is brilliant
you have filled uh an important Gap in
the market today I really believe that
there's something that you've come onto
the scene and done and that's get people
hope that they could take control of
their own destiny with a super tactical
way for them to actually do that um in
fact we're going to be now going over
and you and I are going to film
something for my University where we're
going to get very tactical so anybody
that wants some hyper tactical advice on
how to identify a business to purchase
and what to do can join me there
but until then where can people follow
you how do they get the book yeah MSM
book.com and there's also lots of cool
things we're giv away with it so if you
buy it within the next couple of months
here uh there's tools and tactics and
calculators and the things that I talk
to you about because I do think tools
limit mistakes when it comes to making
money A lot of times we were talking
about well how could the average person
do this well how can they figure this
out by themselves well if you have a
nice little calculator that kind of can
tell you what the outcome would be and
you can see it in dollars most of us
understand the value of a dollar and so
we want to take these crazy ideas from
private equity and finance and we want
to simplify them down to a place where
you can understand it in 30 to 60
seconds and so the book does that and
then the download that comes with the
book hopefully really does that for you
I love it cool all right everybody make
sure you check that out it is
mind-blowing and speaking of things that
will blow your mind if you haven't
already be sure to subscribe and until
next time my friends be legendary take
care peace if you like this conversation
check out this episode to learn more to
me the economy is like a chessboard once
you see where all the pieces are you can
get a sense of where you are in the game
and um what is most likely to happen
next in the near- term as you look at
the set piece right now of a a
right-wing populace lead