#726 Find Cash Flow Businesses Today w/ Codie Sanchez

Codie Sanchez is a journalist and investor. She is the founder of the "Contrarian Thinking" newsletter, focused on alternative approaches to investing and cash-flow businesses. This is a special guest host episode by my brothers Joe and John from The Best Business Show. In this conversation, they discuss inflation, finding boring companies with huge cashflows, Recession-proof businesses and how to make $1,000 this weekend. ======================= Gemini is a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy, sell, store, and earn bitcoin, ether, and over 40 other cryptocurrencies. Offering industry-leading security, insurance and uptime, Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under 3 minutes at gemini.com/pomp and get $20 of bitcoin after you trade $100 or more within 30 days. ======================= Ethernity.io: The world’s first authenticated and licensed NFT platform, trusted by over 150,000 members. Digital NFTs and exclusive real-world unlockables, authentic partnerships with athletes and artists. Visit Ethernity.io, where you can buy and sell authenticated NFTs from top notable figures, rights, license, and IP holders you can’t find anywhere else; the start of an entire ecosystem bringing utility to #NFTs. ======================= Nasdaq-listed BTCS was the first US-public company to secure today’s top layer one protocols. Recently, BTCS launched the beta version of its digital asset analytics dashboard! From across multiple exchanges, the BTCS Data Analytics Dashboard lets you evaluate your entire portfolio’s performance with plans to add year-end reports and yield earning on your crypto through linking to staking pools. Test out the BTCS Data Analytics Dashboard today at BTCS.com.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. First up is Gemini, a leading regulated cryptocurrency exchange, wallet, and custodian that makes it simple and secure to buy, sell, store, and earn Bitcoin, Ether, and over 40 other cryptocurrencies. They offer industry-leading security, insurance, and uptime. Gemini is the go-to trusted platform for beginner and sophisticated investors alike. Open a free account in under three minutes at Gemini.com/pomp and get $20 of Bitcoin after you trade $100 or more within 30 days. Again, you can go in under three minutes, open a new account at Gemini, a leading regulated cryptocurrency exchange,

• 0:43Anthony Pompliano?

  wallet, and custodian. You go to Gemini.com/pomp and you will get $20 of Bitcoin after you trade $100 or more within the first 30 days. Go check them out and go pick up that free Bitcoin if you go ahead and you follow what they need you to do. Next up is Athernity. You might have noticed just how many NFT projects are coming onto the market lately. The problem? It's becoming harder and harder to determine the true lifelong value of NFT collectibles. Meet Athernity, the world's first authenticated and licensed NFT platform, trusted by over 150,000 members. On Athernity.io, you can buy digital NFTs and redeem real-world unlockable collectibles and experiences. At Athernity, our team believes in transparency and legitimacy. That's why they partner directly with the individual,

• 1:28Anthony Pompliano?

  the team, the brand, and the league, so you know what you buy is the real deal, with value that will stand the test of time. So visit Athernity.io to register for upcoming collections, buy and sell in the marketplace, and much more to come, from the app, to packs, to virtual worlds, and gaming. It's Athernity.io. Go check it out. What I like about them is they've got tons and tons of licensed content, so I think you'll like it too, Athernity.io. Last but not least is BTCS. BTCS is a NASDAQ-listed publicly traded company, the big boys. They're the first US public company to secure many of the top Layer 1 protocols. This quarter, BTCS just launched the

• 2:10Anthony Pompliano?

  Data version of a new digital asset analytics dashboard from across multiple exchanges. The BTCS data analytics dashboard lets you evaluate your entire portfolio's performance with plans to enable year end reports and yield earning on your crypto by linking to BTCS staking pools. This groundbreaking dashboard is currently in beta mode, but you can go check it out. Go test out the BTCS data analytics dashboard now by visiting BTCS.com. Again, BTCS.com NASDAQ listed company, the first US public company to secure many of the top layer one protocols, and they just launched the BTCS data analytics dashboard. But you can go check it out at BTCS.com. All right, let's get in this episode. I hope you guys enjoy this one.

• 2:52Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 3:15Anthony Pompliano?

  So we've been talking the most of this show about inflation. I know you spent a lot of time thinking about this also, not only from a number standpoint, but what people can do about it, right? So one of the things that I want to talk to you more about and get your opinion and advice on is like, how can people hedge against themselves or invest in themselves from a business standpoint against inflation? Forget gold, forget Bitcoin. What can they do to protect themselves against inflation from a business standpoint?

• 3:38Speaker 02

  Yeah, well, you guys got the corner rallied on Bitcoin, so I'm not even going to go on that one. But from my perspective, I think there's a couple of different things. One, first and foremost, I talked about this until I'm blue in the face, but there are all these businesses out there in the world that are doing the one thing we care about during inflationary periods, which is their cash flowing at a rate that's higher than inflation. And in fact, as inflation continues to grow, those businesses raise their prices right along with them. These are things like essential services, think laundromats, think the yard scaping team that you have, think car washes. We just bought a car wash last week, or we're in a deal, hopefully it goes through, to buy a car wash that's about $700,000. The car wash

• 4:20Speaker 02

  Itself does eighty one thousand dollars in revenue, I'm sorry, in profit a year. And the piece of land is worth about six hundred thousand dollars. So we're buying a business at like a one X multiple, which in the world of crypto and stocks would never happen. So the first thing I would say you could do is before you even think about protecting your business. I also think you should think about how do you cash flow in ways that are almost correlated with rising inflation. That would be what I would be doing today.

• 4:44Anthony Pompliano?

  And how does the, how does the average person do this, right? Because I think a lot of the gap is, hey, I work an everyday job. I get paid an hourly wage. I don't have a bunch of savings. I don't have a bunch of investments. How do they, how do they implement advice like this?

• 4:58Speaker 02

  A couple of different ways. Well, first of all, if say you want to have an immediate endorsement rush and go do it today. You could start investing in stocks that do this exact same thing in small, medium business space. So, you know, there are stocks out there today. There's actually a car wash company. I'll look it up while we're on here. There's a car wash company that went public to the tune of multiple billions of dollars. They have a subscription revenue business. So if you believe in my theory, you could invest in stocks that track it. So what are the biggest stocks out there that do things that are essential, like laundromats and car washes? Then you could take it up one step from there. And you could actually, so you don't have any money. So you have zero dollars to invest. You might have some extra time. And what you could do is there's plenty of people with so much money sloshing around right now. They don't know what to do with it.

• 5:42Speaker 02

  But they don't want to be the ones to go and run and operate these businesses. So be the operator for them. If I was working a nine to five and remote, like most people are these days, I would be thinking about how could I get equity ownership in a business? Who are my rich friends or my parents' rich friends or my rich neighbors? But I could say, hey, what if I actually went out and like I picked up the coins for the laundromat once a week? Or I ran this car wash. It's not rocket science for us. You bought it and I'll take a percentage of the equity. And this is called value added deal structuring. It's just a fancy way of saying lots of times, people who have money don't have time. People who don't have a lot of money have some time, make a trade between the two.

• 6:23Anthony Pompliano?

  Yeah, and people I think have gotten a little lost in the returns of crypto and some of these assets, right? And they see things going up 100% in a day, or 1,000% over a year, whatever it might be. How do you think and how did the return profiles of some of these small and medium businesses trend over longer periods of time?

• 6:39Speaker 02

  Well, what's interesting, so I was actually looking at a deal right here. So for instance, this this cash flow deal will do for me about 222% cash on cash return, which basically means if I give them a dollar, they're going to give me $222 inside of that one year period. That's that's pretty wild. That's Bitcoin wild, actually. But they're not always going to do that great. These companies, you know, the average small business grows anywhere from about 7 to 15% per year. But that is a heck of a lot better than putting it in a cash reserves account that makes zero today. The other thing is, we all know this, but nothing goes up forever. And so all the people that are only investing in crypto, or all of the people that are only investing in NFTs, or only investing in the stock market,

• 7:23Speaker 02

  at some point, you're going to be wrong. I certainly have been many times. I hate to tell you, it's gonna happen to everybody. And you need to make sure that when you're wrong once, you have something else where you're right. And that's the easiest way to say diversify this shit.

• 7:36Anthony Pompliano?

  Yeah, I think no one bats 100%, right? So that's obviously good advice also. But as someone who has had the conversations of actually going out and taking the risk and saying, hey, I want to do something else. I want to look at other careers. I want to look at other investment opportunities and having that conversation with your current employer, how do you think about that?

• 7:52Speaker 02

  Oh, yeah. Well, actually, my team does it all the time. It's sort of weird. I teach deal making to my team. And so basically, all the time, my COO Nikki came to me, she's like, how can I get rev share equity on this deal? You know, how could I come into this and actually take a percentage of the profits? And here's how the conversation would go if I was in your shoes, and I have been, have been. I would say something like, okay, you know, boss, typically, I do XYZ for us. I'm going to take on this new task that's not at all related to what I do. So let's say we have a new product and we want to market it. How about I do online marketing for this product? I will charge you $0 to do it, but maybe I'll take on the project for free, and you only pay me if I am able to grow the product above what we already think The product is going to grow by us launching it. So I basically take all the risk on the front end.

• 8:37Speaker 02

  And for that, say, you know, I want to make sure we're aligned. I want to make sure that if I win, you win. If you don't win, I don't win. So how about I take a cut of the profits that I bring into us? And if I don't do well, you have zero risk. And most bosses are going to say yes to this. Also, I don't know how many people watching this, like what the breakdown is of what you do. But for most small businesses in the US, go look up any business you utilize and look at their Yelp account. Or look at Google reviews for them. They're typically terrible and very few. So if you work in one of these small businesses, I would, that would be an easy place to start. I'd be like, listen, if we get more reviews, we get more clients, right?

• 9:18Speaker 02

  How about you pay me for a percentage of all the new reviews and new clients I bring in? And that way I take essentially part of the profit share of the business. Then if you work in like a typical job where you're going into the office every single day, you just have to start thinking of yourself as a profit center, not a cost center. So how can I make my time worth X dollars to the business? Not just a task. And as soon as you can do that, you can figure out a way to negotiate.

• 9:43Anthony Pompliano?

  Yeah, and I, that's an excellent point, right? Because I think a lot of people forget sometimes how much opportunity there is out there. And, and there's so many different ideas you can do. And like doing Yelp reviews is one that I literally would have never probably thought of. But it's certainly something that you can make some money on and you can, you can show your, your profit center instead of a cost center. But talk to me about the idea of miniaturizing real estate. I know that's something that you focused on. I don't know much about it, so I'd love to learn more about it.

• 10:07Speaker 02

  Well, I like finding weird ways to cash flow. But one other thing on the first thing, I was talking with Neville Madhura, copywriting course, I don't know, he's like an OG on the internet. He's been doing it forever. And I was talking to him yesterday on his podcast. And he was saying, well, you know, here's what you could buy for us, from us. You can buy this course for X dollars. And, you know, we used to do consulting, now we don't do it anymore. And I said, well, you could go out and keep trying to sell people that. Or Neville, what if instead, why don't you reach out to the small businesses that are located here in Austin? You're good at copywriting, which means you're good at online selling. And you're probably good at doing, you know, online lead gen, bringing in new, new clients. And anybody who's young in our age is about a 10 to 100X better than a boomer at doing any of this. Although I don't know, your dad tweets at me a lot.

• 10:53Anthony Pompliano?

  We're trying to get him off the internet, so don't encourage it, all right?

• 10:58Speaker 02

  I totally can't help it. So, um, but I think, uh, so I would be doing that for all of us young guns. Like, why not go out to these services that you use all the time and, and try to get them on the, get them on the internet. We talk about web 3.0. Half the US isn't even on web 1.0. If you can bring them on web 1.0, you can make money without putting a dollar in.

• 11:16Anthony Pompliano?

  Yeah. And I was going to ask, it seems like there's a large disconnect still of people that think we've transitioned to a new era of the internet, uh, where there's these DAOs and there's these communities and all these things. And people often forget that there's this large percentage of people who do not have websites set up for their businesses, right? And it seems like you've done a really good job of finding opportunities there.

• 11:34Speaker 02

  Yes. I think that's right. And I can circle back to your question too on miniaturizing things.

• 11:38Anthony Pompliano?

  Yeah, let's talk about miniaturizing real estate. No, let's talk about it because I, I honestly don't know much about it. I think it's fascinating. I know you talk about miniaturizing, uh, homes, small homes, uh, mailboxes, uh, pet hotels. So just tell me a little bit more about it.

• 11:52Speaker 02

  Dude, so fun. Um, so basically I think we've all realized this, but making money is just a game, right? It's just a game. And you just try to find what sport you're better at or have some unique advantage. You know, if I'm five two, I'm probably not playing basketball. If I'm 64, maybe I am. Um, and so in, in the world that I was, that I like to play in, uh, I go and find weird people that make money doing things I would never think about, uh, that I think they're smart, but I don't think they're geniuses. So I could probably replicate it. So I have this friend, Lisa Song Sutton. Um, and I think I just put a tweet on this. So if anybody wants to see if they, they can see the full breakdown. But essentially I was like, Lisa, what are you up to lately? She's always got weird deals going on. She's in real estate. She goes, you know what? I just bought a postal service company. And I was like, can you explain that to me?

• 12:35Speaker 02

  She's like, you know, you go to UPS or FedEx and you like to send out your, your, your mail, right? And I was like, oh, I guess maybe there's money in shipping. That can make sense. A lot of Amazon going on. She's like, wrong. It's not where the money is. The money is actually, and think about it like storage units, you know, lots of people invest in storage units now, but miniaturize it into P O boxes. And she's like, so each P O box, I charge somebody 20 to $30 a month to use this P O box. And since we're all now on the internet and remote, we maybe don't want, you know, Weird people on the internet to know where we live, so we send it to a post office box. And so she's like, so I have now a thousand post office boxes in one tiny thing, I mean, size of my office.

• 13:17Speaker 02

  It's so small. And she's like, and I make, uh, what were the exact numbers? She makes $22,000 a month in tiny steel, storage units off of, uh, this deal. And the cool part is you don't want to do a franchise with UPS and FedEx because they only let you to have 300 mailboxes. This one allows you to have a thousand.

• 13:35Anthony Pompliano?

  And how much, how much labor does that require? How much labor does a deal with that require? Is she checking the P O boxes all the time?

• 13:42Speaker 02

  Well, with 22K in profit, you can actually have a nice little operator in there. We're talking about a couple hundred K a month. Um, so she actually hired one of her friends who was a cocktail waitress and tired of cocktail waitressing on the Vegas Strip. I can't imagine why anybody would get tired of that. And, um, and so she basically put her in instead and said, hey, why don't you take off the stilettos? And, you know, you can come and run the store. And basically we can hire somebody to be the daily, you know, person in front of the store, but you can manage it. And we can open a couple of different locations. And so now Lisa sometimes parades around there doing different things, but for the most part she's out of the business. And if you think about it, it's the same thing we've done in real estate historically forever. You know, first we had like, well, not first, but we've had a lot of really big buildings, like industrial scale business, buildings.

• 14:25Speaker 02

  You used to only be able to buy if you were, you know, titans of industry. Now some normal people can buy it. Then we went a little bit smaller and it was like commercial buildings, like, oh, you can only buy those if you were tight enough industry. Then it was like strip malls and then that got commercialized. And then we went down to multifamily units, like apartment buildings, et cetera. And then we went to single family houses and then we went to storage units. And then maybe we went to boat or RV parking, which I've invested in some of those. And then it's like, how else could you take it smaller? So I thought mailbox money was a cool one. Uh, I also talked about one that's glamping related and one that is for tiny pets. And we could talk about either of those.

• 15:01Anthony Pompliano?

  Yeah. Why don't we go through both of those? Cause I think people, this is a fascinating concept, right? And you're, you're totally right when it makes sense from going down to large commercial buildings all the way down the spectrum. Uh, but maybe let's start with glamping. Are these just like really nice campers that you're renting out to people?

• 15:15Speaker 02

  So that's where I thought the play was. I thought it was. Like hipsters need to be in nature and so we want to get some vitamin D and we could sell them an experience in a glorified tent for a couple hundred bucks a night. But the play that I thought was even more interesting is another girlfriend of mine, Kate Hancock. She, um, I asked her what she's up to lately. I just like to ask my rich friends, like, what are you doing? And then maybe I could figure out how to do something similar. So she, um, bought some land in Joshua Tree. She told me, which is located in California. And at this point, there's going to be a bunch of people that are like, this is the problem. Stay out of the national parks, but like, pick any national parks around an area. She bought a national, uh, she bought in Joshua Tree and she bought for about fifteen thousand dollars, ten to fifteen thousand dollars, three to four acres.

• 15:58Speaker 02

  And first of all, I thought that sounded ridiculous. I'm like, you can get land near a national park for that cheap? Yes, you totally can. Go check on Zillow and Redfin. I was dubious too. So she bought this land and then all she did is on each parcel of land, you can do something, um, on a site called Hip Camp. That also now exists on Airbnb where you list camping sites. No toilets, no tents, no air streams. People come and they rent the ability to camp on the land from you. In each acre, you can have seven to eight tents. So she took fifteen thousand, let's call it ten thousand dollars to make the math easy, easy. And she makes about a fifteen hundred dollars a month on one acre of land. Because she has six to eight campsites that are reserved about seventy percent of the time, uh, which is wild.

• 16:42Anthony Pompliano?

  Yeah, see, I, I would have thought that she was putting up, uh, these massive tents and helping people with, uh, kind of the whole idea of, uh, come to Joshua Tree. You'll get a really nice tent, but that's even more fascinating. I guess it, uh, it would just depend on like, where else can they find camping? If there's no other resources nearby, then, then that's the only one that makes sense. So talk to me about the pet hotels.

• 17:02Speaker 02

  Yeah. So actually the second tier pet market is fascinating, which I didn't even know what this was until we have a guy in our deal group. Who, um, just was looking at, at buying pet hotels, sort of interesting post pandemic. A bunch of them shut down because they were not deemed essential, right? During the pandemic. And so he was like, I think I could buy a couple at a discount. Let's look at the economics. So we were running through the deal with him and, um, and in the deal. itself is interesting. These things make a lot of money. Um, and for the most part, they're like starting to get resold out in cities again because uh we're traveling. But um, the part that fascinated me is when I think of a pet hotel, I think of dogs and cats, right? That like seems reasonable. And he said their largest growing segment is the second tier pet market,

• 17:45Speaker 02

  which apparently includes things like ferrets and rabbits and parrots and birds of varying type. And and I thought about it. I'm like, wow, you know, for dogs, you maybe have a need to have a little bit of room. For cats, you need to have less, but then like, how tiny would a hotel be? If all you needed it for was for rabbits and ferrets? Um, and so he has a segment of his business that I swear to you is literally, again, probably the size of this room and you could fit like, I don't know, forty two bajillion ferrets in here. And um, and so the multiples are really interesting. And he bought this business, uh, I think he's looking to close the deal right about eight hundred K for the real estate, the land. But he is actually able to double the profits of the business by only targeting the second tier market.

• 18:29Speaker 02

  And so like you guys out there might be thinking, okay, this is interesting, but like, I don't want to be a ferret babysitter. Totally reasonable. Um, but I think the the main point here is really, um, how could you look for these weird opportunities in the market that nobody's talking about that are boring businesses? Where you don't have to be the next creator of the next Dow or NFT or whatever. And the one thing I like about it is yes, dabble in that space, but also make sure that you have something that people still want. If the whole internet hype doesn't maybe continue at the same level than it does. And that's sort of my plea for our generation.

• 19:04Anthony Pompliano?

  So that was fascinating. My biggest takeaway might be that you must have the most interesting group of friends ever. That are buying campsites, that are buying ferret hotels, uh, P O boxes and whatnot. I love it. Uh, I got John here, uh, my brother with me. John, what questions do you have?

• 19:19Speaker 03

  What's up, Cody? How are you?

• 19:20Speaker 02

  Going on, man?

• 19:21Speaker 03

  Um, so I got a few questions. One, obviously, we just went through a massive recession. What industries do you think are just recession proof? You talk about laundromats and car washes all the time. What what industries do you look at to kind of be recession proof to hedge yourself against that?

• 19:33Speaker 02

  Well, more than ever, and you guys get this, I think it's not just industry, it's geography. I I used to think that geography meant international, like, do I want to invest in the US? Do I want to invest in China? Do I want to invest in emerging markets? Now I'm like, do I want to have zero exposure in California? The answer is yes. And do I want to have more exposure to what I call freedom markets? So like Oklahoma, Texas, you know, Alabama, Florida. And so before even sector specific, if you're thinking about actually buying, starting a business and running one, you need to do it in markets that allow for good regulatory environments, which basically mean like, protect us, keep us safe, but then kind of get out of the way. So that would be the first thing.

• 20:16Speaker 02

  Then the second thing that I focus on are anywhere during the recession that the businesses were allowed to stay open. It's a really weird paradigm shift that we now have to consider that the government at any point in time could shut down your business and mandate that you lose any income source. And so I like to look at what were those industries that kept going, which is why I invest in cannabis. It's why I invest in things like laundromats because they're deemed an essential service. So there's a list of, I don't know, thirty five, forty different types of businesses that are allowed to stay open. And I would do that. And heck, another friend, and maybe I have some interesting friends, but I think as it turns out, just people are more interesting than you give them credit for. And, you know,

• 20:59Speaker 02

  I have a couple of friends that made a ton of money on, oh my gosh, places to go get shots, obviously during the pandemic, and swabs. Like, those little tents, you know, you see those popped up everywhere where you can go get a rapid test? They're making millions of dollars a year. And they cost basically nothing to set up, and you set them up on the back of a doctor's insurance. So you don't even have to be a medical professional. It's it's wild.

• 21:24Anthony Pompliano?

  Yeah, I've seen some of the ones at sporting events or concerts and stuff like that, and the line's out the door. I I know some of these sporting events, it was literally like, hey, if you do this, you get a discount inside or something like that. And it makes you think, right? Like, that's a weird incentive. They're obviously doing something to incentivize themselves to do that, right? So that's fascinating to hear the amount of money that's being made.

• 21:44Speaker 03

  One more thing, Cody, I'm glad you brought up laundromats. So one thing that I've I've seen a lot with people who are selling their laundromat, right? They want to basically get away from the laundromat business. How do you think about when you're going to acquire or just even look at buying a laundromat, the managers and all of that? Because most of them are family run businesses and they want to stop doing it, which is why they're selling their entire business.

• 22:06Speaker 02

  Yeah, it's such a good question. I mean, people sell businesses for a myriad of reasons, but usually they're like sick, older, bored, need to move, right? Those are some of the most common. And so, you know, how I like to think about buying a business is it's just a trade. Just because you buy a business now doesn't mean that you need to keep it forever, which is how I would have thought about buying a business even 10 years ago. I would think like, now I am a laundromat and all I do is I think about laundromats. And in reality, that's not the case. Instead, you could have a business for a period of time until you grow to the next one. So for somebody that was first time buying out and starting with laundromat, by the way, I'm not like obsessed with laundromats. I just use it as an example because it's super easy to understand. Instead of me explaining like, oh, I do a roll up and then I add another company

• 22:50Speaker 02

  and then we do a reverse merger. That's a kind of a lot. So we talk about laundromats, but it could be just about anything. But I think you should think about it as this is your first little foray. And so, do you want to be tied to this business for like a year? Sort of figure out the business and then get somebody in to operate it for you so you can keep a little bit involved, maybe not that involved? Or do you want to scale it and have four or five or six or seven or 20 laundromats? And then you build a business on top of it. And then you can create, get creative. Like we invested in one here in Austin called The Fold. And most laundromats are used at about 30% utilization. So lots of empty laundry machines. They took it up to 70 because they add wash and fold services to delivery to apartments. And so, you know, you can add lots of different types of businesses.

• 23:35Speaker 02

  But I would just ask yourself, do I want to do this? For what period of time? If not long, can I get an operator in place or can I sell the business?

• 23:42Anthony Pompliano?

  All right. So Cody, talk to me about some of the side hustles. I know you're super interested and you spend a lot of time thinking about side hustles, how people can earn incremental income on top of their current job. Tell me some of your best ideas there.

• 23:52Speaker 02

  Yeah, totally. Well, we have this, I kind of have this belief of our mantra at Contrarian Thinking is civilize the mind, make savage the body, build the bank account. And so the thought is, you know, start wherever you are. So if you can buy businesses now to diversify, awesome. If all you can do is start with a little side hustle to add to your current income stream, awesome. If all you have time for is just to renegotiate your salary rate where you're at in order to get more income, Awesome. But the goal is that we move towards this sort of free human, this financially free human that can think for themselves and act for themselves too. That's the whole sort of frame. But um, let me look, I put some of them together, but one of the ones that I thought was fascinating that I saw the other day. So I don't know if you guys have this in Florida, actually, or Miami, but I was in California and San Diego, and all along the beaches,

• 24:36Speaker 02

  there are these little pop-up picnics. Have you guys ever seen that with like the umbrella? And then there's a little stand. And basically what they do is it looks like a beautiful little Instagram-worthy moment. But there are humans who set up this picnic for you. So if you're gonna propose to somebody or take somebody on a date, there's like champagne waiting and little fluffy pillows and those silly umbrellas that people want to use. And I got curious. And so I went up to them, and there were these two guys, and they were both Mexican immigrants. And they were like, yeah, we started this business on the side. One was in architecting school, and one was, I don't know, maybe marketing. And they were like, yeah, we started this business. We now make $7,000 a month by putting together a few pillows, like a little charcuterie board,

• 25:21Speaker 02

  and a couple of different umbrellas for people. And we set up three, so they do three different segments each day. You can do morning, afternoon, or evening. And they charge anywhere from $100 to $300 for the setup. And they rinse and repeat. So it's their weekend side hustle. And I loved this business, because you don't need a lot of overhead. You don't really even need permission. People will immediately yell like, what about permits? What about insurance? But I think in most businesses, like, how many of your friends do you know that like, I'm gonna start a business? So I went out and I got my insurance to start the business today. Like, nobody does that. So like, you start where you are. And this one I thought was fascinating. So now they make, you know, whatever seven times 12 is a year.

• 25:58Anthony Pompliano?

  If you, one of the things, a question we asked a few weeks ago, which the people in the audience were fascinated with, and everyone was giving their own opinion. If you, if I told you this weekend, Friday afternoon, you had to go make $1,000 in cash by Monday morning, what would you do?

• 26:12Speaker 02

  Do I have anything? Like, any?

• 26:14Anthony Pompliano?

  We'll call it incremental income. Basically, you can use a couple dollars to buy some goods or some tools that you need. But basically, yeah, you just gotta go earn $1,000. You can't set up a structure. You don't want to set up something that's gonna last. It's just as quick as you can. A thousand dollars.

• 26:26Speaker 02

  Yeah, I mean, I don't hate this pop up picnic idea. I would basically, the first tenant would be pre-sale. So I would basically say, I'm a pretty convincing salesperson. So I think I would probably go around on the internet. I'd do something for free, like create a free Instagram account. And basically offer, you know, something, could be a pop up picnic, it could be, could be like a, a cool dinner that you set up for people, but I would have set up an experience because people are craving experiences right now post pandemic. And if I wanted to, I could make definitely more than a thousand bucks by just saying, I would steal pictures from other people's events, like, oh, here's Codie Sanchez picnics. And I'd steal pictures from other people's picnics. So I don't have any of the stuff. I don't have any money to buy the stuff, but I would put it out and I would target

• 27:10Speaker 02

  towards people who were located in the park before. So you know how you can check the geo-targeting in Instagram? So I'd go to like here. I'd be like, who is at Zilker Park? Here's a bunch of people that look like they were there recently. I'd probably ping 50 of them and say, I have this opening. It's my last one. It's on Saturday. Uh, if you want to, I could set up this beautiful picnic for you that mostly celebrities have, including some champagne. Maybe that part's free on me. It's very cheap, $200. And I'd probably do that, you know, seven times. And by the end of the weekend, uh, they would probably prepay me for it. So I'd have all the goods. I'd set it up and we'd be good to go. And then you'd probably upsell them in something else like, oh, you're going to propose to your girlfriend? Do you want this wine? Probably not. That would look really cheap, man. You should probably go with this instead. So maybe this is recency bias, but I like that idea.

• 27:54Anthony Pompliano?

  Well, let's clarify something real quick. When I was asked the question, I said that I would go beg a local golf course and let me caddy.

• 28:02Anthony Pompliano?

  And try to make a thousand dollars. So it sounds like you're gonna be making a lot more than I'm making. So that, that, that's good. That's a much better thought process. All right. I got two more for you and then we'll let you go. I know one of your friends recently had lunch, I believe with Warren Buffett. Just talk me through what they took away from that. I think, uh, whether people like him or not, he's obviously a fascinating person that has done extremely well, uh, from an investing standpoint. So just talk me through what they learned from that lunch.

• 28:25Speaker 02

  Yeah, totally. Funny side note, a guy reached out to me on Twitter, a journalist, from Business Insider, no less, which I found funny, given the shenanigans of the last couple of weeks. But immediately wrote a post about it, very quick. I didn't like, I'll tell you guys what he told me. But he was like, if you'd be interested, I'd definitely be willing to speak to your friend about his experience with Warren Buffett. I was like, really, man? Right after everything that's going on, you're gonna reach out? And the answer's definitely no. But the world's a weird place. So, anyway, a friend of mine is a hedge fund manager. He's very successful. And the part that I thought was fascinating about his interaction with Warren Buffett is, I sort of imagine if I met with Warren Buffett, I would be the most over eager, like, questioner of all time. And what my friend said is that

• 29:08Speaker 02

  instead of that, it was like Warren Buffett assaulted him with questions. He's like, first of all, who am I to answer anything to Warren? But the whole time, all Warren cared about was hearing from my friend, all of his favorite ideas. What stocks are you trading? What are you interested in? Why? I don't believe that thesis. Dig down into it for me. Talk to me about like, the worst trade that you ever made. What's the one that you're excited about today? And by the end of it, Alex said he was exhausted. And he basically, like, needed to take a break because he almost felt like he had just had his insides cleaned out of all of his best ideas. And I wanted to keep that tight with me, because it reminded me, it's total, what do you guys say, like billionaire energy, is not to be the one talking all the time, but the one answering or asking

• 29:51Speaker 02

  the questions. That's the real power, I think.

• 29:54Anthony Pompliano?

  Yeah, it's fascinating, because I recently heard this idea from Sam Hinkie. And he basically says, whenever he meets someone that is, one, smart and wants to make a connection with him, or be friends, or whatever it is, he basically says, yeah, let's stay in touch. But anytime you come across something interesting, send it to me, right? Just send me an article, send me an idea, send me whatever it is, an investment. And basically, what he uses it for is, one, he gets a lot of really good information, and it's kind of like a filter for him to find a bunch of stuff. And then, two, it tells him what kind of like intellectual level they are on relative to him, right? And it shows if they're gonna be someone he wants to add to his, I think he calls it his tribe, right? Which is very similar to what it sounds like Warren Buffett is doing, which is, how much information can I gain out of this relationship also?

• 30:34Speaker 02

  Yes, I love that. I'm gonna steal that idea. I mean, every time I meet with somebody, I always say, anytime you're investing in anything, if you're open to it, send it to me. And

• 30:44Anthony Pompliano?

  Even if it's a Farid, even if it's a Farid Hotel.

• 30:47Speaker 02

  Especially at the Barrett Hotel.

• 30:50Anthony Pompliano?

  Exactly. All right, last one, off the back of Warren Buffett. You hung out with two CIA agents. What's going on there?

• 30:58Speaker 02

  Yeah, so one of the things I'm obsessed with and why we started Contrarian Thinking was, I think we're all in our bubbles, right? Maybe you guys are in like a little bit of the crypto bubble universe. And the reason that you did this business show that's really cool is you basically have now all these different types of humans in your ecosystem. And the magic actually happens not when we're all speaking to each other, but when we're cross pollinating. And so the fascinating part about talking to these two is I was like, your frameworks are so different than mine. And the words and the way that you see the world are so different. So I kind of wrote down 10 lessons for them. I also put it into a tweet, which I guess is a thread and tells you how my mind works. But let me give you just two that I really liked. And these are friends of my husband's because he was former sort of in that world, special forces.

• 31:42Speaker 02

  But one of them that I thought was fascinating was, she said, "The white zone is dangerous. Stay in the yellow." And I was like, "What does that mean?" She's like, "The white zone is basically when you're walking around and you have like a podcast on and you're like listening to it and then like you end up at your destination. You kind of forgot what happened all the way through. That's a dangerous zone. And the yellow zone is when you're present and paying attention. So you're like, "Oh, I see that guy over here. I see what's happening there." And what I realized is in almost all our interactions and in almost everything we do, we're white zoning it. We're like not really paying attention. And that's actually really dangerous because you can lose deals, you cannot pay attention to cues, you can like, you know, these days offend anybody. And so I liked that idea of like stay in the yellow as much as possible. And then the part that I thought was interesting on top of that is she said also, I loved

• 32:26Speaker 02

  this quote, "I always regretted saying too much. I never regretted saying too little." And she's like, "The chatty ones often lose." And I think that's really powerful. Maybe it goes back to that Buffett quote, which is, "Why do we always feel like we have to be the ones to tell everybody how intelligent we are as opposed to just sitting back and listening to it?" So there were sort of like 10 lessons, but those are maybe my two favorite.

• 32:46Anthony Pompliano?

  I love it.

• 32:46Speaker 02

  And maybe the last one being like hire ex-CIA people if you can ever because they're brilliant.

• 32:51Anthony Pompliano?

  Yeah, I like that. John, you got anything else?

• 32:53Speaker 03

  Um, yeah, just one more thing around kind of just acquiring businesses and stuff. How do you think about risk? Do you just look at competition? Do you look at the geography and kind of the regulations that's happening? What do you think about risk when looking at different businesses?

• 33:04Speaker 02

  Yeah, so if I'm angel investing, I usually think more like that, like what could happen in the future? And, um, you know, what are those like asymmetric shocks that could ruin me? Um, when I invest in small businesses, the biggest risk is usually something that I can own, which is like, am I getting fooled? Is this just a bad deal? You know, are the financials not real? And so they're a little bit more quantifiable or math-based, which is really nice. So the biggest risks in the business overall is my ego. I get, you know, I have to check myself all the time to make sure I say like, do I really know this? Or am I just saying I know because I think I should? Um, the second biggest risk usually in a deal is not asking enough hard questions because it can be uncomfortable. So you have to make sure you're digging in enough. You don't have to be a rocket scientist.

• 33:48Speaker 02

  You just have to be willing to keep going a little bit further. And the third is just getting too excited about a deal or getting married to a deal. You know, there's a reason that we see ads 400 million times on the internet because the first time we see it, it's kind of annoying. The second time we see it, it's kind of annoying. The third time, we don't even realize it. And the fourth time, it's actually inner subconscious and changes our buying patterns. And so the same thing happens with doing deals. You get too close to this person, you're embedded in the deal, you feel weird backing out, and that's the part that I think is one of the bigger risks.

• 34:15Speaker 03

  Completely agree.

• 34:17Anthony Pompliano?

  Fantastic information, Cody. Thank you so much. Where can we send people to find you on the internet?

• 34:21Speaker 02

  I'm at Twitter, Cody underscore Sanchez, and then ContraryThinking.co. That's our free newsletter. If you want to hear any of those sort of stories about how we cash flow and you want to civilize the mind and make savage the body, that's where we do it.

• 34:33Anthony Pompliano?

  The newsletter is fantastic. Uh, the Twitter is fantastic also. It's basically all of these ideas in a digestible way, uh, on a much more frequent basis.

• 34:42Speaker 03

  Cody, I subscribe to the newsletter. I have seen some of the craziest business ideas. I love it.

• 34:47Anthony Pompliano?

  But it's awesome because I think a lot of-

• 34:49Speaker 02

  No, I was just gonna say, now you guys, when you see one, let's practice what we preach here today. You gotta tell me now. You gotta send me the weird businesses. I'll write about it, I'll give you credit, but yes, I want to know all of them.

• 34:59Speaker 03

  Only if you do the same for, if we're given ideas.

• 35:02Anthony Pompliano?

  I'm sure the people in the comments are gonna be sending us a bunch of ideas. They're still going off the Farid idea, uh, and curious how they're gonna implement that. But we'll have to, uh, we'll have to send you any ideas they send us. But thank you so much for doing this. We appreciate you coming on.

• 35:15Speaker 02

  Thanks, gents. This is awesome.

• 35:17Anthony Pompliano?

  All right.