“It’s So Easy!” Money Expert Exposes The #1 Way To Get Rich In 2025 | Codie Sanchez

ZocDoc: ZocDoc: Go to https://www.zocdoc.com/ICED and download the Zocdoc App for FREE SelectQuote: Get the RIGHT life insurance for YOU, for LESS, at https://selectquote.com/ich Shopify: Sign up for a $1 per month trial period at https://shopify.com/ich Subscribe To @CodieSanchezCT Here NEW: Join us at http://www.icedcoffeehour.club for premium content - Enjoy! Add us on Instagram: https://www.instagram.com/jlsselby https://www.instagram.com/gpstephan Official Clips Channel: https://www.youtube.com/channel/UCeBQ24VfikOriqSdKtomh0w For sponsorships or business inquiries reach out to: [email protected] For Podcast Inquiries, please DM @icedcoffeehour on Instagram! Timestamps : 00:00:00 - Intro 00:01:08 - Her Story 00:03:47 - Money misconceptions 00:04:36 - Controversial takes on money 00:05:40 - Why are rich people seen as evil? 00:06:45 - Sacrificing morals 00:10:10 - Being a woman in finance 00:13:55 - Sponsor - Zocdoc 00:15:28 - Generational mindset differences 00:17:14 - More controversial truths about money 00:18:28 - On Starbucks 00:21:32 - Erewhon and trendy companies 00:22:59 - Opportunities and predictions for 2025 00:27:15 - Downsides to a Trump economy 00:31:19 - Harm in hustle culture? 00:33:11 - How W2 workers can get wealthy 00:34:14 - Sponsor - SelectQuote 00:34:40 - Is AI overhyped? 00:36:20 - Businesses to buy in 2025 00:37:20 - How to find good businesses to buy 00:42:39 - Businesses to avoid 00:45:01 - Is real estate a business? 00:46:49 - Biggest failure 00:50:08 - How to tell if someone is lying 00:54:15 - Green flags in people 00:57:13 - Predicting success or failure 00:58:03 - How people change from broke to rich 00:59:13 - Are rich people happier? 01:02:56 - Sponsor - Shopify 01:03:44 - What are you chasing in life? 01:06:17 - Big issues no one talks about 01:14:32 - Speculation on robots 01:15:59 - Thoughts on regulation 01:19:40 - Where do you invest your money? 01:21:54 - Taking income or reinvesting in business 01:24:58 - Reverse tax bracket 01:27:03 - Hypotheticals 01:29:46 - Biggest fear 01:31:05 - Non-financial advice 01:32:03 - Selling something you dislike *Some of the links and other products that appear on this video are from companies which Graham Stephan will earn an affiliate commission or referral bonus. Graham Stephan is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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

• 0:00Speaker 00

  This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.

• 0:29Speaker 01

  I didn't have money. I wanted more of it. And I felt like when you had more money, you got to push back. I wanted to be able to make so much that it made other people uncomfortable. And so for that reason, I obsessed on this idea of like, how do I get more financial freedom? Probably shouldn't have let me in the club at Wall Street. I used to think that you had to be really smart. You had to have really big ideas in order to make a lot of money. And I don't think that's true at all. It's move fast, take a lot of risk, learn from that risk continuously. I think it's risk that makes you money, not save that makes you money.

• 1:01Graham Stephan?

  What are some of the misconceptions that people have about money?

• 1:03Speaker 01

  The most controversial take about money these days is that it's actually good if you have it. If you're young today, you have such an unfair advantage. It's never been easier to start a business. A Trump economy is really good for people who have not made their money yet. If you want to make money today with a high degree of certainty, you want to go.

• 1:26Graham Stephan?

  Cody, thank you so much for coming on the Ice Coffee Hour. I really appreciate it.

• 1:29Speaker 01

  Thanks for having me.

• 1:29Graham Stephan?

  Yeah, so for those who are not familiar with who you are, what you do, could you explain it in a few minutes?

• 1:34Speaker 01

  Started off on Wall Street, kind of consider myself a reformed journalist and investor. Spent 12 years learning on big corporate floors, how to invest from Goldman Sachs to State Street to Vanguard, to finally running my own division and then country at a company called First Trust. We built up a billion dollars in assets under management firm in Latin America, but that all started from having really no idea about money at all. You know, dad came from nothing, mom was a 30-year special education teacher. And the only thing I kind of knew for sure is that I didn't have money. I wanted more of it. And I felt like when you had more money. You get to push back on other people more and and I couldn't do that when I was younger, always checking the bank account, never had enough. And so I kind of convinced myself through

• 2:18Speaker 01

  my road that I wanted to learn not only how money works, but I wanted to be able to make so much that it made other people uncomfortable. And I think that came from, I started off as a journalist along the US Mexico border. And so I was covering human trafficking and drug smuggling. And I saw some pretty awful things, like what happens to young women along the US Mexico border who come and work in the maquiladoras. And so I saw young Codie Sanchez, and then a lot of other young women with the last name Sanchez. And I was like, what's the difference between me and them? Probably just the fact that I have more money, more socio economics than them, not even like that I was American. And so for that reason, I obsessed on this idea of like, how do I get more financial freedom? They probably shouldn't have let me in

• 3:02Speaker 01

  the club at Wall Street. And I just took a lot of questions and notes about what they were doing until finally, I got a chance to run my own business and run my own financial firm. And from there, built a private equity company in a couple of different verticals, and finally went out on my own and started buying up a bunch of small businesses. Like, it's kind of private equity 101. You buy a business, it's profitable. The business has been around for a long time, uses other money, people's money to buy it, and you keep growing. Except I didn't realize you could do that individually, too. And so I did it quietly on the side because I made a lot of money at the time and I had golden handcuffs and was too scared to leave. And so I built up my little portfolio on the side, kind of without telling

• 3:44Speaker 01

  anybody. And then I probably would have stayed in finance forever and always been an employee, except I got pushed out. And eventually they were like, you know, you can't do this other thing in this. We want to run the business like this. You want to run it like that. If you want to run it like that, go do it yourself. And so I eventually did. And then built up a media company called Contrarian Thinking that now gets 100 million views a month, all talking about this idea of what if all of us owned our communities again? What if we had a little bit more financial freedom, instead of asking for permission from other people?

• 4:16Graham Stephan?

  What are some of the misconceptions that people have about money that hold them back?

• 4:20Speaker 01

  The first thing I wish I knew when I was young about money is that other people who have it are no smarter than you on average. They don't have, you know, famous or rich family members. Eighty percent of all millionaires are actually self-made in the US. Seventy-nine percent of all millionaires are self-made in the US. They're not, it's not gifted to them. You don't have to get permission to get it, but instead, uh, what do they really have? They've taken more risk than you have. They've moved faster than you have. They've probably failed a little bit more frequently and they've surrounded themselves with other people who have the things that they want. And I wish I knew that when I was younger because I used to think that you had to be really smart. You had to have really big ideas in order to make a lot of money, and I don't think that's true at all. It's move fast, take a lot of risk, learn from that risk continuously.

• 5:05Graham Stephan?

  Do you have any other controversial takes about money?

• 5:07Speaker 01

  The most controversial take about money these days is that it's actually good if you have it. And that it doesn't mean that, you know, you're bad from being rich and somebody else is good from, uh, not being rich. There's no virtue signal to poverty. In fact, it's the opposite. If you have a lot of money, typically what does that mean? It means that you've provided a ton of value in the world. I've met a lot of billionaires I don't like, but I haven't met a single billionaire that made their own money, that hasn't provided 10x the value to the world that they actually have in their bank account. And so I think these days we get told by a lot of people that money's bad and you shouldn't want it. Money is the root of all evil. We almost say it like we're programmed. And I think we have to go back into our programming and ask ourselves,

• 5:50Speaker 01

  why would we be told from such a young age that money is the root of all evil? When actually it's a, it's a biblical saying, that's from the Bible, money is the root of all evil. But it's out of context because it's actually the desire for money is the root of all evil, which is very different. That is if you are driven to only get more money, not if you have more money. Two very different.

• 6:08Graham Stephan?

  Where do you think the idea came that like rich people are bad or evil?

• 6:11Speaker 01

  Well, power hates pushback, right? So when you're a boss, what do you not want your employees to have? You probably don't want your employees to have another job that makes them more than the one that you pay them for right now. Why wouldn't you want that? Because then they have optionality and they might leave you. And I think power overall does not like rich. Members of society, you know, a government overall typically wants more control. They think that they know things better than us. And because of that, they can assert their will more on others. It could even be from a nice perspective, like, hey, we're here to help. Right? I've had all this abundance, so I'm here to help everybody else. But I think what's actually the problem with money today and why we get pushback on it is because we humans are interested in when we get a bunch of money and when we get a

• 6:55Speaker 01

  lot of power, we don't like to give it up, any of us individually. And simultaneously, when our governments get a bunch of money and power, they would rather distribute it than us have it. And so I think it actually comes from centralization of power, which has continued to happen over the course of history until where we're at today.

• 7:13Jack Selby?

  Have you ever felt like you had to compromise your own morals for the sake of business or making more money?

• 7:18Speaker 01

  When I was young, I definitely did a lot. You know, I was, I'm a little bit older, so when I was young in finance, I mean, it was the days of like, you took people out to the strip club. You guys know all about that in Vegas here.

• 7:28Jack Selby?

  I know, Graham does.

• 7:31Graham Stephan?

  Jack tells me about it all the time.

• 7:33Jack Selby?

  Favorite thing to do.

• 7:34Graham Stephan?

  I learned about it through Jack.

• 7:35Jack Selby?

  That's not true to the viewers out there, not true at all.

• 7:38Speaker 01

  I think I see the Spider-Man meme where it's like this. You guys are just both staring at each other.

• 7:42Jack Selby?

  And we're both just at the strip club together. That's not true, not true. We don't do that.

• 7:45Graham Stephan?

  I wouldn't spend the money on it.

• 7:47Speaker 01

  That actually tracks. But, you know, back when I was younger, that was really what the industry did. I mean, so it was steak dinners nonstop. You took them out to towel if you were in New York and this is an investment banker with the bottle service. Strip clubs, even like I was a woman, I'm not really into that. But if you wanted to close deals, that's like, that's literally what happened.

• 8:06Graham Stephan?

  Are you serious?

• 8:07Speaker 01

  Oh, yeah.

• 8:07Graham Stephan?

  How do you close a deal at a strip club?

• 8:09Jack Selby?

  I feel like it's, you know, loud. I don't know.

• 8:11Speaker 01

  Oh, you're not literally like, hey, baby. And then, you know, signing some paperwork right underneath whatever's going on at the top.

• 8:16Graham Stephan?

  They're on the lap and you're like, hold on one second. Sign this over here.

• 8:19Speaker 01

  No, not exactly that.

• 8:20Graham Stephan?

  But how does it happen at a strip club? It just doesn't?

• 8:22Speaker 01

  Well, a lot of times what happens when you close, so what is a deal in finance? So typically, if you think about investment banking, what are you doing? You're trying to talk somebody into trusting you to take their company public, to do some transaction with them. And a lot of the ways that power happens in the U. Especially in the positions on high is through like, you know, traditional bonding experiences, which this is how like rich dudes in finance bond, which is like you get together, you have steak dinners, you go out and drink. It's it's not dissimilar like American culture has the same thing in a different way than Japanese culture does. So like I used to do some deals in Japan and there you're literally not allowed to turn down a drink in some instances. And so that seems weird to us. Like, why would I care if I'm gonna do a deal, especially to our generation?

• 9:06Speaker 01

  Like, I don't want to do a business with somebody just because they kept drinking with me all night. That makes no sense. But culturally in Japan, that's a big part of it. So, you know, you can't say no to a drink if you go out for a celebratory dinner that you guys closed a transaction. And it was a little bit the same in finance. It was like, I don't trust you if you won't maybe make bad decisions with me. So when I was younger, I definitely saw crazy things. Thankfully, I'm a woman, so like, it's not like I would participate in that. But when I look back on it, you know, when I was young, I just didn't know how to say, like, I feel uncomfortable with that. Like, I don't want to go to that. And I sort of felt like when I was younger, maybe I'll get left out of the deal. Like, they called it the 19th hole. So if you would go to the 19th hole was, you know, when you go to play golf. Do you guys play golf?

• 9:49Speaker 01

  Yeah. And you go to the the men's locker room or whatever. And so the 19th hole had a lot of connotations in finance, but it might be like a bar or you go and close a deal at a golf club. And so I felt like, oh, man, if I'm not the cool girl, then am I gonna close this or not? And, you know, I think I was one of the youngest analysts they'd ever hired at Goldman in the division that I was in. And I was definitely the only woman who was also a Latina. I didn't think much of the gender thing at the time, but that just was a fact. And then when I went to First Trust, I was one of the only managing, well, what was the what was the title there? I was one of the only directors of the business. We didn't call them managing partners then. So, anyway, certainly when I was younger, I did.

• 10:34Speaker 01

  Now that I'm older, that's another great thing about money is you get to push back.

• 10:38Jack Selby?

  Do you think being a woman in finance served you or worked against you? I feel like the notion these days is that if you're a part of like a quote unquote marginalized community in some capacity, that you'll always be having to work a lot harder to get ahead or to stay on par. How how was your experience with that?

• 10:53Speaker 01

  I think if you call yourself a victim, you're much more likely to be one. And so I never felt like I was victimized by being a woman. I think when you look different, there's a huge opportunity there, too. And so it's really, how do you want to see the world? Do you want to see the world as, you know, for you or against you? So for me, there was never a world in which I thought, hey, I think men have it easier than me. If anything, I was like, well, I'm more memorable. Like, you're going to remember this one sort of loud Latina that's in the mix, maybe. But these days, that's not that popular of a thing to say. And, you know, and there's a lot of stuff that happened back then in finance that I don't think is the case anymore. Like, generationally, my best mentors of all time have been men. You know, every, almost everybody that's ever given me a job in my career was a dude.

• 11:38Speaker 01

  And every single one who helped me get promoted, I think, except two, were men. And so the women were actually really tough in finance. We were tough on each other. I think they call it like the token effect, which is essentially if there's only a small group of people, sometimes they combat against each other. And so, you know, you guys have all met. Have you ever met like a woman who's been in business for a long time? And when you meet her, she's like, hey, yeah, you know, what's going on? This is, and it's almost like overly aggressive. That was a lot of that going on in finance. So I had to shake that off a little bit and remember like, you can be a woman, you could be a dude, you could be gay, you could be whatever, and just, you know, do you. And for the most part, nobody cares. If you're good, competency kills just about any identity.

• 12:20Graham Stephan?

  Has there ever been a time, though, where you felt like that has held you back?

• 12:25Speaker 00

  This episode is brought to you by Indeed. You're ready to level up your business, but the pressure to find the right person to make that happen is intense. Indeed sponsored jobs can help carry the load. It boosts your job post to help it reach quality talent fast. Cut through the chaos with Indeed sponsored jobs. Get a $75 sponsored job credit at indeed.com/podcast. Terms and conditions apply. Hiring now? Then this is a job for Indeed sponsored jobs.

• 12:56Speaker 01

  No, the only time it's held me back is when I let it. So if I in my head said, hey, you know, for some reason or another, they're not going to give me this deal because it's just for the dudes or whatever. When you tell the universe something, I think it usually listens. And so you got to be careful what you project out into the world. And especially as a young person, I did that often. Now, I remember like, you know, I got my, I got my ass slapped when I was younger. I didn't like that. And I think that probably that happens to men in different ways, too. But you guys are physically bigger, so you know, that's-

• 13:26Graham Stephan?

  I speak for yourself.

• 13:28Speaker 01

  Grand.

• 13:32Speaker 01

  That's true. I promise not to slap your ass.

• 13:34Jack Selby?

  I slap his butt all the time. He can't do anything about it.

• 13:37Graham Stephan?

  I can't, I can't fight back.

• 13:39Speaker 01

  Jack, don't do that. You're just like, I'll take it.

• 13:43Speaker 01

  Maybe you like it. This podcast is really going downhill now.

• 13:46Jack Selby?

  Yeah.

• 13:47Speaker 01

  Yeah, but no, I don't think so. The only time I, you know, struggled in, in, when I was in a corporate setting was like, it was mostly my fault. Like, I'm kind of unemployable. You know, I think a lot of entrepreneurs are. Like, we're super obstinate. I wanted things my way. I was super aggressive. I thought we weren't moving fast enough. And like, I remember one mentor, who now is a friend of mine, but back then, I was really mad at him, was the CEO of a company that I was running a big division for. And I thought we should use the internet. Like, I was like, here's my idea. I think that in the future, we will sell investment products entirely online. You won't go to steak dinners. You won't meet with people face to face. We could do literally all of this remote. And that was kind of crazy, like, 10 years ago.

• 14:31Speaker 01

  And he said, it's never gonna happen. We don't want to run the business that way. And he basically got so annoyed with me that eventually he was like, listen, you want to go left, I want to go right. It's my boat. Like, if you're gonna be on my boat, then you need to row the same direction that I am. And so I finally, I kind of got pushed out. I left the company. And he did me a huge favor. Because if he hadn't done that to me, I probably would have stayed there forever.

• 14:55Graham Stephan?

  Being an adult has its high points. You can eat ice cream for dinner. You can play video games whenever you want, and you can even eat ice cream while playing video games. But sadly, it's not all fun. You have to do your taxes, figure out what's for dinner every night, and of course, make doctor's appointments. But for that one, there is our sponsor Zocdoc, the healthcare app that makes adulting that much easier. For those unaware, Zocdoc is a free app and website where you can search and compare high-quality in-network doctors, choose the one that's the right fit for your needs, and then click to instantly book an appointment. We're talking about in-network appointments with more than 100,000 healthcare providers across every specialty from mental health to dental health, eye care to skincare, and so much more. You can filter for doctors who take your insurance, who are located nearby, who are a great fit for any medical need you may have,

• 15:39Graham Stephan?

  and who are highly rated by verified patients. You can also see their actual appointment openings, choose a time that works for you, and click to instantly book a visit. Plus, Zocdoc appointments happen fast, typically within just 24 to 72 hours of booking, and you can even score same-day appointments. I'd highly recommend you check out Zocdoc because it really makes the entire process simple. And in the past, I'll admit, sometimes I put off things like this because I just didn't want to go through the hassle. But Zocdoc really helps to streamline everything and just makes it easy. So stop putting off those doctor's appointments and go to zocdoc.com/iced to find and instantly book a doctor today. That's z-o-c-d-o-c dot com slash iced, zocdoc dot com slash iced with the link down below in the description. Thank you so much, Zocdoc, for sponsoring today's episode.

• 16:23Graham Stephan?

  And now, let's get back to the podcast. And speaking of millennials, have you noticed a difference between the mindset of being a millennial, Gen Z, or like Gen X boomer? Have you seen that like maybe one generation's a little better than the other? Or more motivated, less lazy, less entitled?

• 16:40Speaker 01

  If you're young today, you have such an unfair advantage, which is, it's never been easier to start a business. One problem is though, it's never been harder to have a profitable business. And so, it's actually fascinating when you look at the data. We've had more businesses created since 2020 than we have for 15 years prior. And that's as determined by LLC and corporate entity structures. And but what's fascinating is simultaneously, we know that young people, thirty years old, thirty year olds on average are making less than their parents for the first time ever. So we're creating more businesses than ever, but we're making less money than our parents did at any time. And so I think you have an incredible opportunity to start something, but what's really hard is to actually make it profitable.

• 17:23Speaker 01

  The thing between the generations that I'm really curious about is how can we have those two groups actually be each other's solution? So we've talked about this before a little bit, but you know, if baby boomers own, let's call it 60% of all businesses, and 80% of businesses owned for more than 10 years by baby boomers are profitable. As opposed to young people who start businesses today, 90% of them fail, thus are unprofitable. Well, it seems like young people want to start businesses, but they don't know how to make them money. Old people know how to have businesses that continue to make money. How do we pair them up as opposed to beat them against each other? And I think boomers in many ways think that young people are idiots. Young people in many ways think boomers are out of touch.

• 18:08Speaker 01

  And actually, they might be the solution to each other's problem if they actually looked at the data and thought unemotionally about where the profits lay.

• 18:14Jack Selby?

  Any other controversial truths about money that you've learned along the way?

• 18:17Speaker 01

  Well, I don't think you can spell rich without risk. And so if you look at our generation, we're on average taking more, less risk than any other generation previously, as evidenced by the amount we have sex, how fast we get married, the amount of risk we even take with risky behaviors like drinking or smoking. And I actually think that bleeds into risk that we take in our businesses, too. Like, we might start a small Etsy store on the side, but we're never going to take a big risk with a business in the same degree that, you know, the generation right before us did. And so I kind of want to push back on something that young people seem to think is a good idea today, which is like playing the super safe route. It looks like on average, you know, wages don't beat inflation.

• 19:02Speaker 01

  You know, we have wage stagnation of 3% to 4% per year. We have inflation rates, double that in some specific instances, and depending on how you measure it. So if you don't take more risk... You stay with your job, you lose money year over year. And so I think we have to take more risk today in our generation. And that is not something that I was taught. And I don't know if you disagree with me on that one way or the other, but I think it's risk that makes you money, not save that makes you money.

• 19:27Graham Stephan?

  Yeah, for the most part, I agree with that. What are your thoughts on buying Starbucks?

• 19:31Speaker 01

  I hate Starbucks. I hate everything about Starbucks. So I would say, don't buy Starbucks because they're a corporate behemoth that's lost all soul in every way, shape or form. And anytime you go into-

• 19:39Graham Stephan?

  Holiday drinks just came out, though.

• 19:41Speaker 01

  You know what? I'm just, I'm here to shit on all the pumpkin spice ladies. I think, uh, I think Starbucks is like a perfect example of what's wrong with society today. Which is, we had a corner coffee shop that our barista knew our name. They wrote it down correctly. We maybe knew the owner. We had walked in there multiple times. The place is clean on the outside. It felt like a third place. That was Starbucks' original idea before. And now you walk into a Starbucks and, I mean, have you guys been in one lately?

• 20:07Graham Stephan?

  Jack goes all the time.

• 20:08Speaker 01

  Oh, gosh, Jack's the problem.

• 20:09Graham Stephan?

  What's it like, Jack?

• 20:10Jack Selby?

  It's only $3.52 for a venti coffee. Okay, how am I supposed to say no to that value?

• 20:16Speaker 01

  You have, you have principles and morals for small business.

• 20:20Jack Selby?

  So you're telling me to skip out on the behemoth and go to the small business?

• 20:24Speaker 01

  Yeah, and I don't think that you have a price differential. I bet the small business actually has super comparable prices, if not even slightly less. Because you don't have brand awareness. So they can charge you more because their brand is more well-known. I went, uh, last time I was here, I went to a local coffee shop and loved it. It was like motorcycles.

• 20:41Graham Stephan?

  And the sense of Starbucks, they're everywhere. There's no guarantee that-

• 20:44Jack Selby?

  It is the closest coffee shop to my house. It's a Starbucks.

• 20:47Speaker 01

  Yeah, I mean, that makes sense. I just don't think you're gonna get rich by saving from, from buying Starbucks. That I know we differ on. But I also think that Starbucks is a perfect example of like how we lost the soul of, of Main Street and everything that we're pushing back against.

• 21:02Graham Stephan?

  Does it matter if you lose a soul? If, if consumers get, let's just say, a superior product or the same product at a lower price? Same thing like Walmart coming in. And yeah, they've ruined the small businesses, but you're able to get all these items at like 50% less than it would cost you somewhere else.

• 21:18Speaker 01

  Well, I think Walmart has is an interesting model because Walmart's model is price return to users, right? That is like, it is literally a low cost offering. That is what Walmart lives and dies by. And I have a lot of respect for Sam Walton. His book's incredible. If you haven't, uh, haven't read Sam's biography. But, uh, that's different than Starbucks because what happens with most others? I mean, we see it right now with prices across industry. Netflix takes over a huge market share. They lower costs for a period and then what do they do? They eventually increase costs because we need to have increased margin, because we have public companies, because we have quarterly results. And so, yeah, if all Starbucks did was continue to lower prices across the board, maybe that would be good. And you would know that you were choosing the low cost option. But I, I think

• 22:03Speaker 01

  that's a fallacy that that's actually what happens. Uh, what happens is brand becomes known and then, uh, they end up increasing their margin, which is what you've seen at Starbucks. And then eventually you get a inferior product because it is hard, I think, on scale at large to continue to serve customers well.

• 22:21Jack Selby?

  I guess that is true. They do sell their brand and relatively speaking, their coffee isn't that inexpensive. Like, you know, three and a half dollars for just a coffee is, is pretty, pretty wild. What do you think about those companies like Arowan or those other like crazy expensive grocery stores that you buy a water and it's like $9?

• 22:38Speaker 01

  That's funny. I mean, serves a, serves a product and a customer segment, certainly. But I mean, I think, I, we have a friend, Khalil, who owns a company called Sun Life Organics, which is a smoothie shop. They have something called the Million Dollar Smoothie that I think is a $47 smoothie, which is like bananas.

• 22:54Jack Selby?

  What does it have in it?

• 22:54Speaker 01

  Gold. Um, I, I don't actually know what, what is in it. I've never bought that smoothie.

• 22:59Jack Selby?

  But try.

• 23:00Speaker 01

  You think I should try?

• 23:01Jack Selby?

  I feel like you should just do it once. You have to do it once.

• 23:04Speaker 01

  You gotta get one.

• 23:05Jack Selby?

  He convinces everyone to do what he doesn't do.

• 23:07Speaker 01

  Oh, okay. He wants to be rich and then all of us spend. Okay, okay, I get it. Yeah, I mean, I, I'm fine with people serving a market, but, um, and, and like Arowan's market is this, you know, people go there for what? The Hailey Bieber smoothie?

• 23:21Jack Selby?

  Yeah.

• 23:21Speaker 01

  Again, good for them. And if she can market something that expensive, that's amazing. It's probably not going to be what I, what I buy. Actually Tanner gets mad at me all the time because. Because I come on a show like this and they're like, tell me what you like to spend your money on. And my answer is always like, I hire more people and buy more laundromats. You know, he's like, that is so uninteresting to young people today. You know, they're like, where's the car? You're good. You're a car guy. You show that online. I'm not that interesting because I think the most interesting thing to spend your money on is like, impact, like where could I grow the next thing? And leave a little bit of a legacy with like the businesses we have, the people that we hire. I wish I liked fancy. I guess I have a nice watch. I don't know if that counts.

• 23:58Jack Selby?

  For the average viewer out there, where does the opportunity lie in 2025? And also any predictions on the Trump economy?

• 24:05Speaker 01

  One, uh, we're already seeing what hap- what's going to happen with somebody in office who is pro markets. Overall, I think what you're going to see is probably a massive resurgence. So we're already seeing the stock market go to all time highs. I don't know if that'll continue. But I do think decreased regulation, which Trump has historically done over time, decreased taxation, which he has historically done over time, leads to big booming growth. My prediction is the economy looks really nice in four years. Now, if there's a worldwide pandemic again, there's always like black swan asymmetric events. But for me, this is really good, especially for poor people. I mean, you could not like the guy, but a Trump economy is really good for people who have not made their money yet. Because it is going to make it easier to do business.

• 24:50Speaker 01

  I mean, for, for instance, if you want to, if you want to braid hair in Louisiana, you have to have a license that is a multi-year license to get in order to do braided hair. And it costs five figures.

• 25:04Jack Selby?

  Why?

• 25:05Speaker 01

  Because the government loves to layer things on top of industry in order to preserve safety. So you're always at a, you're, you have this dynamic with any industry of how do we preserve, preserve the safety of users versus the freedom of users?

• 25:22Jack Selby?

  What's the, what's the danger with braiding hair? I don't, I don't understand that.

• 25:26Speaker 01

  Might also be industry incumbents. So you might say, I mean, California is a perfect example. $50,000 on average over a multi-year period to become certified in hairstyling and cutting. You have to go to a multiple. Three-year school in order to do it. And if you want to add on these additional things, that's where you get up to 50K, 15K on the low end. Why do I need a beautician's license in order for somebody to cut or style my hair? Why does that need to be certified by the state of California? That makes absolutely no sense whatsoever. And all it does is give the government more power. And I don't mean like big government, even like regional government and certifiers. And, um, and so we have that across this country in a way that we don't even get to see on a daily basis. But that increases the prices for everything that we have on a day-to-day basis.

• 26:09Speaker 01

  So we want to pull back those regulations and that's where we start to have more of a free economy, especially for those who are brand new.

• 26:15Graham Stephan?

  Yeah. Is Trump ever going to do that though? And get into like the hair industry and be like, hey, listen, you don't need to go through like, you know, 20 grand worth of student loan debt to cut hair. I think stuff like that seems really common sense to me to get rid of a lot or at least bring it down.

• 26:28Speaker 01

  Yeah. Well, I mean, I can say, you know, we're talking with members of the administration right now about the Small Business Association and what we should be doing different for small business today. And so, you know, they're already in talks about this and it's something I'm really passionate about. I mean, like, think about this for a second, you guys. If we have right now in the US, in the next five years, 11 million small businesses for sale, okay? And those small businesses, on average, only one out of 10 sells inside of a year. We have a huge supply and demand imbalance with small businesses. Most of these small businesses are like jobs, not even like full businesses, right? But they're still transferable. There's a client list, there's revenue, there's profit, there might be a lease outstanding. Okay, banks won't lend on most of these $10 million.

• 27:11Speaker 01

  So if somebody wants to buy these businesses, what has to happen? You have to get the seller to agree to seller financing, to finance the business for you. Okay, maybe you could do that. 60% of all businesses sold have some aspect of that. But in my mind, what I'm talking to the SBA about right now is like, why don't we create a policy? Where if a baby boomer sells their small business to a person under 40, let's say, the segment of the population that is making the least money, that's the angriest, that has the most wage stagnation, they get a tax cut and so does the baby boomer. Why don't we incentivize a transfer of wealth between the two generations? So it won't be Trump on high that cares about hairbranding, but if his entire series of advisors, they

• 27:55Speaker 01

  have 4,000 positions they have to fill, which is what happens when one administration transitions from the next. About 200 of them are what we'd call material that then run down the rest of the administration. And so I think if they put business people in those positions, typically, business people do not want to see more regulation, they want less.

• 28:14Graham Stephan?

  Do you think there's any downsides to a Trump economy? Do you see any risks, maybe with tariffs, for example?

• 28:20Speaker 01

  Sure. Everything has, in economics, everything has second and third order effects, right? So you have an idea that sounds good, and then if you're a smart politician, you have to look at like, what's going to happen in the second and third wave of that iteration? So for instance, in San Francisco, you might be like, hey, it's probably not necessary for us to put people in jail if they steal $99 worth of stuff, or $999 worth of stuff. Let's not fill up the prisons. These people aren't career criminals. Maybe they made a bad mistake. You go, that seems reasonable. That seems reasonable to me. Your second order effect is, well, now we have an increase in that type of crime, right? Because there's no incentive for you to not do it. What's your third order effect? Well, because there's an increase in that sort of crime, then actually businesses can't function anymore. Once businesses

• 29:03Speaker 01

  can't function anymore because they're not profitable, what do they do? They pull out of that industry. Well, what's the effect of that? Well, then, we actually don't have enough jobs in that industry. So what have we done? We've actually created more people that now have to steal in order to survive. And so we've created this vicious cycle. And so I think you're right. Any administration has to look at their policies and go, is the thing that I am going to change net-net so positive, potentially, that the second and third order effects are going to be better than doing nothing? Because often, nothing is better than doing more.

• 29:35Graham Stephan?

  What do you think are the real effects of having a difference?

• 29:38Jack Selby?

  In, you know, a new president or new congress and stuff like that, does it actually affect the average person in the daily life?

• 29:44Speaker 01

  I think that no president is ever coming to save you, but a president can really hurt you. And so net, net, a president will not make you rich. That's up to you, unfortunately. But, you know, unlike people who have never lived in a third world country and done business there, I have. I was in Argentina doing business when Cristina Fernandez, the president of Argentina was in charge. She nationalized almost all industries. I had a friend who had a BMW import-export company. That they made him nationalize his business. BMW would no longer transport into the country because his business was nationalized. And they made him turn into a coffee-producing company. And this coffee-producing company failed. Obviously, the guy had no idea how to run this business.

• 30:26Speaker 01

  So they had taken over his business, then they had mandated production, then the business eventually failed. Politicians can definitely hurt you. This is, I mean, I had a business in money market funds. So back in the day, like 2008, if people don't remember, there used to be something called stable NAV, which basically meant your, your money market fund wouldn't move from the price that it had listed at. And you might be like, what is this technical nonsense that matters not at all? Well, the government changed that stable NAV. They made it variable, so it moved with the market. And because of that, they eviscerated an industry, had to have the whole insurance industry redo how they price things, and also had to redo the whole pension industry because they have mandated risk levels.

• 31:09Speaker 01

  And so I think until you have had the government reach into your pocketbook and pull the whole thing out, you cannot understand real risk. Because you've probably played at a level that's not that big yet. But industry, there's really two risks you have to be super careful about in business. When you're young and starting, it's execution risk. And eventually, it's called, it's what's called asymmetric risk. Where is there a risk so big that it can put you out of business with one stroke, regardless of how good you are? Most entrepreneurs, if they've never built a multi-billion dollar business, they don't know how to think about asymmetric risk. But that's all over the place. I mean, we don't have it right now on YouTube, but we theoretically. Could like media back in the day was was governed by an agency that could put Graham

• 31:54Speaker 01

  Stephens out of business if you did something inappropriate on the air. You would have the government say, you can't do that again. Your business is done. I don't care how many views you have. I don't care what you're doing. This is this is public broadcasting and you can't actually do that. And so I disagree with Alex in that vein. I think for most normal people, um, the, the president cannot make you richer, but it can certainly hurt you. And the data just proves that.

• 32:18Graham Stephan?

  That's a really great point. Do you feel like there is a harm in the hustle culture lately? When people are like looking at that saying, all right, well, I'm going to take matters into my own hands and just work nonstop.

• 32:31Speaker 01

  When you're young, you should have the expectation of having to work harder than you want to, for longer than you want to, doing things you don't want to do. You can either delay, uh, pain or you can frontload it. And I think when you're young, you have a really high ability to tolerate pain. You can tolerate work, pain, both acute. So like in an instant, gosh, this is really hard. I don't know how to do this thing. And endurance pain, I'm doing this for a long time. It's really sucks. It's super monotonous. I hate what I do every single day. You can tolerate that when you're young. You know what really sucks? When you have to do that when you're 50. And so I do think hustle culture for all life is not necessary. But I would rather I err on the side of telling somebody, hey, it's going to suck when you're young. You're not going to like your job.

• 33:13Speaker 01

  You're going to wake up each morning and think I, I went to university for this for a period. And if you expect that, but you keep learning and growing and earning more, it'll be worth it. The only thing that I don't agree with with some of the whole hustle, hustle porn stuff is that you have to sleep on a couch and go all in and go after one thing when you're young. I don't actually think you should do that. You don't know how to recognize your one thing yet. Like, how are you going to be able to determine, is this a really good game or not? When you don't have enough at bats, like you don't even know what sports you're good at yet. So I think it's perfectly okay to diversify your risk when you're young and not to focus on the one thing. Once you're a stud and you know what you're doing and you've already proven yourself, go hard when you find the thing that

• 33:58Speaker 01

  You are uniquely skilled to do, but that is my biggest problem with hustle porn today is like, go all in, do or die. It's like you can't recognize opportunity yet and your opportunity will always be limited by the amount you are able to see it.

• 34:10Jack Selby?

  And what's your recommendation for people that don't want to be an entrepreneur and they just want to work W two jobs? Like, how how would they go about becoming rich or wealthy?

• 34:18Speaker 01

  First of all, if anybody ever tells you that you're less than because you're W two, that's ridiculous. I mean, Sheryl Sandberg makes more money than all of us combined and she's been an employee her entire career. So anybody who says that being an entrepreneur or founder is better, that's not true. It's just if it's if you are unemployable to the point at which you cannot listen to somebody else and work within a corporate culture, go be an entrepreneur. But if not, it's really hard. Starting something from scratch, being the 10% that wins is rare and not everybody's meant to do it and you don't have to do it. But what I do think is true is you got to get some skin in the game and equity. And so for me, that might mean that you go and you work for companies until you

• 34:58Speaker 01

  become so valuable that that company needs you and wants to assign you equity, distributing equity, upside. It might be going from a cost center in a business like compliance, let's say, to saying, I also want to understand how the business makes money, it can get some sort of commission so that I have upside for every dime that I work and then taking my cash and investing it in things continuously. This is not that sexy anymore because people want to say, go do the new AI startup. But to be fair, I don't think that that's necessary overall. I hope that one day you struggle under the mantle of being in charge. I think that's good for humanity and good for your your resiliency, but I don't think that you have to if that's not something that calls to you.

• 35:41Jack Selby?

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• 37:09Graham Stephan?

  Do you think AI is overhyped? Like, are we a little ahead of ourselves?

• 37:14Speaker 01

  I think you have a higher likelihood of failing in the AI sector than you do in a laundromat or car wash. I think if you wanted to actually make money today and you wanted to do it with a high degree of likelihood of winning, you'd be better off running a boring business, running a landscaping company, running a roofing company than going and trying to jump into AI. I think that most people will utilize AI in some form or fashion, but it'll be 1% of companies that make a ton of money. I mean, think about, how is AI really that different in its infancy from like, what happened with, you know, internet companies back in the day? From what happened with social networking companies? In tech, you typically do not have a big distribution of wealth. You have few who win really big and everybody else basically loses. It's venture capital.

• 38:00Speaker 01

  Ten companies, one wins. And so I don't think it's overhyped in that it'll change the way we work forever. But if you're thinking about me personally, should I jump into the AI train because first I was crypto and then I was web three and now I'm AI, I think your likelihood of not making a lot of money is way higher than you think.

• 38:20Graham Stephan?

  So what do you think the biggest opportunities are in 2025? They're mentioning taking over businesses. I've been seeing this a lot on Twitter.

• 38:26Speaker 01

  Yeah. Well, here's what I know. I like to look at the data and I like to try to look forward in the future. If you want to make money today with a high degree of certainty, you want to go where other people have made money with a high degree of certainty in a big luck surface area. So like, let's think about it like this. If you go right now and you want to make money as an artist making music, what do we know for sure? Well, we know that less than 1% of artists can survive on the money that they make both Turing and Spotify. So if you become an artist, you better hit the top 1%, otherwise you're not making much money. We know, however, that if you dedicate your life to, let's say, finance, well, pretty much everybody that's in finance is sustaining their entire livelihood

• 39:08Speaker 01

  off of finance. So you probably have like a 90% success rate to make the type of money you need if you're in the finance industry. So what does that tell me? I go, okay, well, I'm not the smartest person out there. So I basically want to be where the game is easiest to play. For me, that's focusing on on small businesses. I think there's a big wave happening here. If you look at Japan, basically Japan is like 10 to 15 years ahead of us. Japan's Economic Industry Association has basically said that we have to grant to our populace the ability for them to buy small businesses using government funds, because if we don't, so many small businesses are closing for $0, we will lose one out of every 10 jobs in Japan. So the Japanese government right now is giving away money for people to buy

• 39:53Speaker 01

  small profitable businesses, which is wild to think about. I think in the US, we're not that far away from that. And I don't think we realize that, you know, 65% of all jobs are held by small businesses, that most small businesses that exist have to be profitable because they have no venture backing. They're not able to get loans. And so for me, I think you're crazy. If you want to make money, don't confuse it with passion upfront. Like make the money first and then you can add your passion on top of it. Buy the podcast production studio. Don't start with a YouTube channel and a podcast. It's hard to make money that way. And then after you have money from the podcast production, doing the boring things for other people, layer on the sexy things.

• 40:33Speaker 01

  So the best opportunity for me in 2025 is look at where all the opportunity is for you to leverage. Somebody else's 10,000 hours and you get to steal it. I mean, think about this for a second. I was talking to a dude the other day. His name's Adam. He's going to buy a small business from his former boss. So he worked at this company. The company's been around 20 years. It's a construction company. He's going to use the future profits of the business to buy the business. And the business took this guy 20 years to build up. It's a few million dollars in revenue and he gets to steal his 20 years by buying and buying the business through future profits. And so I'm like screaming about this slightly because I think if we don't do this, then these small businesses close, private equity market share grows,

• 41:17Speaker 01

  and we're surrounded by Starbucks and you guys know how I feel about that.

• 41:21Speaker 00

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• 41:50Graham Stephan?

  So why can't they just sell the business to, you know, put it on the market and get like a really high multiple? Why would they sell it to an individual at that point?

• 41:58Speaker 01

  It's supply and demand. We don't have that many people who know how to buy businesses and thus they don't have a lot of buyers. So one, buyers and sellers both don't know how to buy businesses. I mean, think about it for you guys. Before some of us started talking about this on the internet, I mean, I was in finance. You were in finance. Like I didn't know that I just personally could go buy a business. That just sounds kind of like elitist and like I need to have millions of dollars to do it. And it also makes me think, why would somebody sell me a small business that's profitable today? Why wouldn't they run it forever? And the first thing I always tell people and like you guys are a perfect example. You guys own a few businesses. Is there any point in time where if I said to you, hey, can I buy your business at the right price and the right terms? Would you guys say no?

• 42:41Speaker 01

  You'd be like, of course, there's a price and there are terms to buy my business. Every single small business owner has the right price and the right terms and what I call the wrong Tuesday. Like you get a business owner on the line on a day that they don't want to run their business anymore, you've got a business. And so that's why. The second reason is because most small businesses are not financeable. So if you think about it, how many times have you guys gone to like a dry cleaners? Or maybe you've gone and talked to your landscaper and you like slip them a Venmo or you give them some cash or they've got like the pad in front of you? Well, what does that mean every single time? It means the money's not tracked. So a bank will not back that business. They're not getting internet checks where you can API check every single dollar spent.

• 43:23Speaker 01

  And so because of that, they don't have people sitting around that can say, okay, I can pay a couple hundred thousand dollars for this dry cleaners out of pocket. And the bank says, I'm not funding that. So what do we have to do instead? We got to go back to what we used to do, which is, you know, back in the day when we had small businesses, if you were a blacksmith or, you know, if you had a construction company, what did you do when you were done? When you wanted to retire or in that day, pass it on to the next generation? You brought on an apprentice, if it wasn't your family member, that apprentice eventually took over the business. We got rid of that because we inserted corporations and we inserted institutions and we ended up having a corporate structure that we could buy and sell. But that's actually pretty new.

• 44:06Speaker 01

  So I think we have to go back to the way that we used to run some of these businesses.

• 44:10Graham Stephan?

  And how do you find them? How do you know it's a profitable business and what's actually good to run?

• 44:14Speaker 01

  Yeah.

• 44:14Graham Stephan?

  Because it seems like at that point, I've seen with a lot of franchisees, you just like buy yourself a job and it's not that good.

• 44:20Speaker 01

  I think the most important part, we call it the perfect fit business. So the biggest misnomer in buying businesses is that there's a good or a bad business. There's really not. It's like, what's good or bad for you? So if I am brand new out of college and I don't have any money, but I want to make like 30K a year and I want to work for myself and I want to learn how to buy and run a business, I might want to buy a laundromat that only makes me 30K a year that I can use financing from somebody else because I'm going to learn how to do it live. Is that a bad business or is that a right business for somebody? Simultaneously, the ones that we always see on Twitter or somewhere out publicly is like, I want a $10 million a year business that makes $3 million EBITDA and I want the seller

• 45:03Speaker 01

  to pay me to buy that business. That's going to be hard. You're going to have a lot of competition. But the average salary in the US is like $67,000 a year. I think on the internet, we get a little disconnected from like, most people want to live the unicorn type of life, which is like, I want to go to my kid's practice. I want to be able to make enough money where I get to do my two-week vacation. I get to own my house. I get to have my own employees and I don't have to work for somebody else. And so I think we have to normalize what is good, too. And then if you want to buy a business and you want to do it in three steps, here's how I would do it. One, there's on-market deals. We bought a company called BizScout. So you can go to BizScout.com. You can search for small businesses

• 45:45Speaker 01

  to buy, just like you could Zillow, right? We're real estate 20 years behind in buying businesses. Second way is off-market deals. So you go around to your local neighborhood and you get to know some of the owners. And every time you walk into a store, you say like, oh, this is a great place. You run this place? Amazing. Tell me about that. Have you ever thought about transitioning this business? Who's going to buy it? Your kid? What's going to happen? And the third way to buy businesses is the people that are already in your sphere. We call this the center of influence strategy. So that's like, my dad's buddy is older and talking about retiring. And I ran into him the other day and I've always really liked him and he's always kind of seen me like a son. I want to go work for him a little bit and then maybe I could talk him into eventually selling the small business to me. So those are three ways I would buy a business without having to go

• 46:30Speaker 01

  be really sophisticated.

• 46:31Graham Stephan?

  Are there any businesses that you would not recommend people get into that are just bad?

• 46:36Speaker 01

  If you were going to buy a small business, what's the worst small business you could buy? One that doesn't make any money. So a nonprofital business, which is like what I call hopes and dreams, not profits and realities. A business that is a turnaround, like, oh, there's all this stuff going wrong in this business. I'm going to be the one to fix it. That's really hard. I would never do that. And the third thing that's really bad with businesses, if you're doing it for the very first time, is a business that seems really cool and complex. Complexity makes you look smart. Simplicity makes you money. And so when you're buying a small business, I stay away from a business like restaurants. Restaurants are really hard businesses because they have a lot of complexity to them. You have assets that degrade almost instantly, AKA food. You have a huge red market or a red ocean as opposed to blue. You have lots of competition.

• 47:21Speaker 01

  The second type of business I really don't like that I've been thinking about a lot lately, and especially right now, is retail. So I don't want to compete with Jeff Bezos. I don't want to compete with e-commerce. In-person retail is a really tough business. Most retail that wins, they're just, they're, they're an expensive billboard. They lose money and they try to get you to buy stuff online. People don't realize that. And then the third business that I really don't like is, are hotels. Hotels, I think, are real estate masquerading as a business. This is often true even for Airbnbs, for instance, and we saw that. We've seen how Airbnbs used to make people a lot of money and, and haven't. And I sort of said that for a while and it wasn't very popular to say, but hotels actually run on negative margin, which is weird.

• 48:03Speaker 01

  So like hotels, if you look at the balance sheet, they lose money every year. The only way that they make money is through a fancy tax process that allows them to depreciate a bunch of assets and not pay taxes. So they're one of the only businesses that like net-net loses money without taxes.

• 48:20Jack Selby?

  Do you think real estate is a business or no?

• 48:23Speaker 01

  I think real estate is a great way to lower your taxes and preserve wealth. I think it's an awful way for you to actually make money, which really pisses people off on the internet, but it seems to be true. I mean, play this game with me for a second. All right, you got two options. Option one, you can go buy a single-family home for $400,000, the average price for a single-family home in the US. You take $400,000 worth of risk and then you rent it out to somebody. Well, the average rent net, nets you profit-wise about $167 a month. So you're taking a $400,000 risk for like a couple hundred bucks a month in profit. Then you take the average small business. The average small business, maybe you could buy same way you could for buying a small piece of real estate, a $400,000 business.

• 49:05Speaker 01

  You put some money down and get the rest from the SBA or seller financing. And the average small business makes, let's be conservative and say 10%. Fifteen percent per year, you're still cash flowing tens of thousands of dollars. And if you're good, you're probably increasing profit margin where you could be getting a hundred thousand dollars plus from a business instead of a piece of real estate.

• 49:24Graham Stephan?

  Business will take way more work than the real estate would, unless you're doing a lot of the work yourself. That's the difference I see between the two.

• 49:30Speaker 01

  It's totally true, but what's the risk? I think that's where people go wrong. We've sort of started to associate work as bad and we don't think of the risk. I think the risk with real estate is actually way bigger than we think, which is this big asset that you have overhead. And theoretically, maybe it's less work, but you've also got to find a renter. You also have no ability to increase the upside value of the property materially. You know, most real estate increases by what? Four to if you're really good, 10 or 13% per year.

• 50:01Graham Stephan?

  You could buy a fixer, cosmetic changes.

• 50:05Speaker 01

  A lot of work and you would still be only netting a couple hundred dollars per month on average. So I think you're right. It's way more work to run a business, even if you have an operator and there's no such thing as a free lunch. But the risk return ratio is actually higher for businesses is my argument, especially if you're young. Like, what do you have to lose with your first time going after a small business this way? And, and this is really not popular to say, but Bill Perkins, a dear friend of mine, who was the author of Die with Zero, and obviously he has a lot of money now. But he said something to me that I was like, fuck, that's so true. He's like, if you're in the US today, for most of us, especially if you're probably listening to this, you have near zero risk.

• 50:50Speaker 01

  The likelihood of you being homeless and starving is actually quite low. For most of the US, that's just not going to be the case. If that is true for you, which is true for most of us, that means our only risk is ego risk, which is real, which is we don't want to have a relative disconnect from where we think we are today versus our peers. So we're not willing to take a risk on a business because what if we fail? And we lose this nice house and podcast studio and we've got to go be a waiter, right? Our risk is ego based. And if we think that way, then we should actually be taking as much risk, smart risk, strategic risk, learning risk as we can when we're young. Because the older we get, then it is material. Then you have kids, then you have a house, then you have car payments,

• 51:34Speaker 01

  and maybe you can't take care of them. But when you're young, man, I wish I had taken more risk early on, and I didn't.

• 51:40Graham Stephan?

  What would you say is the biggest failure you've ever had?

• 51:42Speaker 01

  Hmm, I've, I mean, I failed miserably at businesses. So, I mean, I lost, let's see, well, in one, in one business, we lost, I lost $12 million in a business transaction.

• 51:53Graham Stephan?

  Wow, how does that break down?

• 51:54Speaker 01

  Fraud. I mean, the biggest issue with doing big deals is not typically, when you're at that level, you're probably not going to do a deal really poorly. If you've done a lot of private equity deals in order to lose that much money fast. But in that deal, you know, we got defrauded. And, you know, somebody stole a bunch of money, moved out of the country, to Dubai, couldn't get access to the, to the assets, had fudged their balance sheet. Like, those are real risks that happen in business, which is why I think you should diversify your risks. So, all 12 million of, that wasn't mine, thankfully. We had a few investors. And we ended up recouping some of it and growing the company back. And so, everybody was fine at the end. But if, I mean, I didn't sleep for weeks with that transaction, had to fly out somebody in the middle of the night.

• 52:39Graham Stephan?

  What could you have done differently in that deal?

• 52:41Speaker 01

  There's a Russian proverb, which is trust but verify. The, the, I think the biggest mistakes I've ever made are never hows but who's, and that's the same for life. You're always, it's always going to be a human that you trusted that you shouldn't have, as opposed to an action that you took that you shouldn't have. Almost always in deals. And so, my dad has a great line, which is you can't do a good deal with a bad guy. And in that instance, we now have a rule, which is, we don't do new deals with people that we haven't known for a year, where they're a partner in the deal, where they have assets to grab the money. And I think almost every entrepreneur I've met has had not just one, but like multiple soul-wrenching failures. And I'm not sure you can become really successful without a few of them.

• 53:22Graham Stephan?

  Yeah, but in the trust but verify, if they're faking documents, even if you know them for a year and they're like completely forging things, how would you even discover something like that?

• 53:30Speaker 01

  Time, time actually divulges a lot. Like there's a, I have a friend who was ex CIA and he said something fascinating to me. He was like, here's how we determine often who's lying to us or not. It's duration and touch point. So the longer you are with somebody, the more likely you are to see what the slip is. First thing in the morning, somebody comes into your office to interview. They've had their coffee, they're buttoned up, they're ready to go. Anybody could, could fake me out in an interview, probably in the morning. But if I stayed with them all day long, continuously, at dinner, after drinks, after a really long grueling day, I'm gonna start to see a little bit of who they are more often. There's gonna be a red flag when they talk to a server. There's going to be them maybe executing something in a way that I don't think matches something they told me earlier.

• 54:15Speaker 01

  And if you can do that multiple times with people, you're just gonna see their true colors. And so that's why I think it's often really important, you know, Sam Zell had a famous line. He basically has this idea. Sam Zell was a famous real estate investor, multi billionaire. He said, one of the best things he ever did to do deals was, he's like, hey, I'm rich enough. Anybody will come to me to do a deal and I never do that. I spend thousands of hours per year on my plane, flying out to people individually. Why? Because it's a much harder to fake me out on your home turf. I want to actually touch and see and feel what you have going on in your scenario. And I think that's very true. If, you know, just by being in your house today and being in the studio, I can tell a lot about you as an individual.

• 54:56Speaker 01

  I could see over time, let's see, small things matter to you, aesthetic things matter to you. You know, you know how to grow something and keep it alive for an extended period. You have a, you have a memory for numbers. $50 and growing a clam all the way to $400 if you grow it for X amount of time. You know, a pretty high recall on the things that are interesting for you, such as like photosynthesis to a clam is how they actually grow, right? So like just from, he's really into clams.

• 55:22Graham Stephan?

  I've talked a lot about clams. I have three clams now.

• 55:24Jack Selby?

  Yeah, clam sushi, there's a theme there.

• 55:26Speaker 01

  There is, that's a weird parallel, actually. You would think you wouldn't eat the thing you love, but you know. So moral of the story, get in touch with the human and that's how you don't let them fool you very often. It's the same thing with dating. Like in the beginning, you can pretend to be anybody. But if you spend more and more time with somebody, the more tired they get, the more rundown they get, the more life hits them in the face, you're gonna see who you're actually with.

• 55:47Graham Stephan?

  So what are your tells if someone's lying to you?

• 55:49Speaker 01

  Yeah, well, the first tell is, um, my dad always said, uh, tell the truth, it's easier to remember. And so. You'll start to notice discrepancy. So like, for instance, with this guy, he had mentioned somebody that worked for him a few times, but he had used two different names. And that was because he had two people in that position that were both his mistresses, which was a funny, funny story. So I remember being like, well, why is, I thought you said it was Sally. No, it's, I can't remember what the other name was, Mary Beth or something. And so there was like one little discrepancy. And so I just kind of like write those down. Some people could be bad at numbers or names. I'm really bad with dates. I can never remember, like, was it, you know, 2010, 2011? I can't really remember that. So that's first. The second thing is typically when people lie to you, they don't like you or respect you.

• 56:33Speaker 01

  And so passive aggressive comments are a really good indicator for, are they going to mess with you in some way or the other? So haven't you guys ever been around somebody and they're like, oh yeah, you guys are YouTube, you like do something on YouTube, right? Like, oh, that's cute. Like a little podcast. Ha, just kidding. That's so cool. I love your podcast. That's amazing. Have you felt that before? Right? And you kind of, you note it there for a second, but then they hit you with the, it's like the slap tickle. They're like, oh, hmm, just kidding. I'm just kidding. They're not kidding. So when, when they show you who they are, and when they do a little passive aggressive comment, note it. That typically means deep inside, they actually don't have a lot of respect for you. The third thing I've noticed when people lie to you is that they don't have a long history of relationships. So be really careful about humans who do not have long-term

• 57:17Speaker 01

  friendships and relationships. And I see this a lot online. I'm sure you guys do too. Like, how long have they employed people? How long have their people been with them? Do they have friends, like going all the way back to high school? Are they close with, like their family? Or is every single time you talk to them about somebody historically, it's that person's problem? It was their family's problem? They kind of put them to the side once they got bigger? Really good indicator of somebody who is probably going to do the same thing to you.

• 57:44Jack Selby?

  That is, those are some, yeah, those are some things I've never considered before. That's fascinating. People with long histories with other people.

• 57:50Speaker 01

  Yeah. Well, think about, I mean, we all know a few people who are online and they come on like a storm, right? And like, you guys, we're all charismatic if we're online. So we could probably make anybody like us for a short period of time, but the real tell, if you want to. Especially if you're in like a position of power or like somebody might take advantage of you is to figure out like who's been around them for a long time. Can you talk to people that they've done deals with before? You know, can you talk to ex clients of theirs? How do they talk about them? And if, if, if you talk to a few of those people, you'll very quickly see, you'll see a pattern. And, and I think it's the same with dating. Like, I would never date a girl that says, "All my ex-boyfriends were toxic." Guess who's

• 58:33Speaker 01

  toxic? You. I would never date a guy that says, "All women are crazy." Guess who's crazy? You. And so that is so common today. And yet, what we are really doing is finger pointing in the mirror.

• 58:45Graham Stephan?

  What are some of the green flags to look for?

• 58:47Speaker 01

  Hmm. Best predictor of future behavior is past behavior. So, have they won? You know, in, in sports, if some, if a team is on a losing streak and a team is on a winning streak, who will have a higher betting percentage? Well, you're gonna, almost always, you're gonna give the odds to the person who's been winning before. Even if the other team historically was a better team. If they're on a losing streak, it's hard to break a losing streak. And so, one thing I always look for is like, what happened recently? What's your recency bias? So, the last couple of ex, you know, ex-employees, ex-endeavors, or whatever, did you fail at all of those? And if so, that's, that's a red flag. If you've been winning at a bunch of them, that's a green flag. It's like, oh, you were at this company,

• 59:29Speaker 01

  that company did well. You were at this company, that company did well. Okay, that's probably like, you're gonna continue.

• 59:35Graham Stephan?

  So, being around so many people, could you tell if someone's gonna be a failure or a successful, like, pretty quickly?

• 59:40Speaker 01

  I can tell if I wanna bet on somebody pretty quickly or not. So, like, in our portfolio at, at Contrarian Thinking Capital, we have like 31 companies or something like that. We look at hundreds of companies per year to figure out who we're gonna invest in. And I could tell pretty quickly who's gonna win by a few things. One is speed. Faster you move, the bigger your bank account is. And so, I think there is a bias towards speed and action that is critical in anything you do. In fact, you know, I've gotten to know some, some members of, of, let's say, Mr. Beast's team. And I remember the first time I was talking to one of them, I'm like, "Why is Jimmy so good at what he does?" And... They were like, it's really one thing. He moves so fast, it's uncomfortable. Like, everything is now, now, now, now, now.

• 1:00:21Speaker 01

  And because of that, he gets so many shots on goal that he may actually fail more than anybody else, but he just has more time to execute on it. And so if I can see that somebody responds to my emails right away in like a hiring process, if they get back to me immediately with action items or next steps, if they speak kind of quickly and move fast, not always true, but a good indicator of success.

• 1:00:43Graham Stephan?

  Do you notice any life changes when people go from being broke to middle class, to then wealthy, to then like ultra wealthy? Terms of maybe how they think, their mentors, time management.

• 1:00:54Speaker 01

  I think you can't be what you can't see more than anything. And so what I've noticed is every time you can get in a room where other people's Tuesday is your dream day, you end up making more money. And so I'm always fascinated by what happens when I get around a billionaire. They just think different than you and I do. You know, and so a lot of times I'll write about what billionaires are like, and it's because of this crazy fascination I have with like, how do you have so much abundance in your mind that you even think that's possible? It's like still hard for me to categorize what like a billion dollars would look like if you were gonna touch it. And yet, there are some people that they wouldn't do a job or they wouldn't do a business if they don't think it is going to be a billion dollar business. And so the biggest difference I see from the really big and the really small

• 1:01:38Speaker 01

  is that they really like risk and they want you to sort of play, hey, 10 years down the future, how big do we win from this? Because they value their time so intensely that that 10-year period better be orders of magnitude. Otherwise, they're just not gonna play the game. And so I think, you know, a lot of times in business, you know, I think about a little bit like sports. You know, a lot of us just play these games and we don't think about opportunity costs at all. We don't realize that like every time we're watching Netflix or we are selling something tiny or we are staying in a job we don't like. It's not just that we're not making more money today. It's that that compounds over time until the very end of time.

• 1:02:22Speaker 01

  And so that's one thing that I think is really different between the two. And maybe the other thing that's different between the really rich and the poor is when they see somebody who has more money than them, they're really curious as to how they got it. And they don't at all see that negatively. Like if I was to, if we were sitting here with some of my friends who have billions of dollars, they would probably not talk very much. They would ask a ton of questions. They'd be like, you guys, you know, one of my friends had dinner with, with Warren Buffett. And he said, the funniest thing happened. He's a multi-billion dollar hedge fund. He's a great guy. He sat down with Warren and they went to dinner and he was like prepared. You know, he had his questions. He has his research. He sits down with Warren, starts talking to him. And every time he started asking him a question, Warren flipped it and asked him a question. And so I'm like, so what did you learn?

• 1:03:05Speaker 01

  He's like, what I learned is, is that Warren only asked me things. He totally, you know, brain raped me for everything that I knew. And I didn't even think about it because I was trying to impress the guy, kind of. And at the end of the conversation, I'm much less rich than he is, but he probably learned more from me than I did at that dinner.

• 1:03:24Speaker 00

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• 1:03:53Graham Stephan?

  It's funny, I sometimes do that when I don't want to talk. I'll just start asking people questions and let them talk because I just don't feel like it.

• 1:04:00Speaker 01

  Yeah.

• 1:04:00Graham Stephan?

  You just flip it. Maybe Warren Buffett.

• 1:04:02Jack Selby?

  There's so many advantages to that, though. It's like the be interested, not interesting.

• 1:04:06Graham Stephan?

  Yeah.

• 1:04:07Jack Selby?

  Like the Dale Carnegie thing.

• 1:04:08Graham Stephan?

  I guess so.

• 1:04:09Speaker 01

  Well, and think about it. If you're, if you play a game of, of money, what is money? It's really just like a knowledge transfer or a trust transfer. You're just like, it's kind of like what you guys, I think are doing here, which is, okay. If I want to make more money today and I, I have a goal, maybe I want to create a podcast that makes as much money as your guys is. What would I be doing in a perfect scenario? I would be sitting down with Graham and Jack and I would be saying, how does this? Work. How many people do you have here? How'd you get the views? What does the data look like that you guys look like? So what do you like thumbnails? How many times do we do it? Oh, do you guys analyze it the same way as this other podcast provider is? I would be like really curious about all of your stuff. And I kind of wouldn't care if you thought I was big time or interesting. I would just be diving more into what you do.

• 1:04:53Speaker 01

  And so I think the really, really rich, they're almost always insatiably curious or they're totally uninterested.

• 1:04:58Jack Selby?

  Do you think that they're happier than the average person?

• 1:05:01Speaker 01

  I mean, the data seems to show us we're happier up to at least $500,000 in annual income. I do think that money decreases misery. I don't know if it increases happiness. And I think we should realize that more often. But I would say the, the, the really, really rich that I know are the one that are happy are from like, they're like a couple hundred millionaires. The billionaires are different because they get to shape the world at their fingertips. Like when you talk to a Joe Lonsdale who runs Palantir, for instance, he is so uninterested in small problems and he plays at a totally different playing field. And so I do think in order to do that, you're probably not optimized for, for happiness. You're optimized for achievement.

• 1:05:46Jack Selby?

  So what do you say it is that you're optimizing for in your own life right now? Is it achievements?

• 1:05:50Speaker 01

  Yeah, absolutely. I mean, for me, I, I think at the end of the day, the most fun game to play is building. And like, if you can get bit with the building bug, then nothing else is that interesting. And maybe that's how billionaires think in some way, too. It's like, I want to know actually what I'm capable like of. I don't know if you guys ever think about.

• 1:06:11Jack Selby?

  Capable in terms of what though?

• 1:06:13Speaker 01

  Like, what could I build? What is the biggest, most impactful thing I could build on this planet?

• 1:06:17Jack Selby?

  And the metric would be money?

• 1:06:19Speaker 01

  The reason I went on the internet is because I also want an impact. At some point, to me, money is not that interesting. Up until you have enough of it, you guys should find out for yourself. You should go try to get as rich as possible. I think that's awesome. But then you get to a certain point where you're like, what are you gonna like? What are you gonna buy? I'm not into yachts. I'm not into all this crazy stuff. I like, I wouldn't even buy a plane.

• 1:06:39Jack Selby?

  Wouldn't even buy a plane?

• 1:06:40Speaker 01

  No, I think it seems wasteful. Like, I would use it. And sometimes we do. But like, having one outright? I don't know. I don't know if I do. Maybe less security became an issue or something like that. But impact? Like, that's cool. At the end of, like, when I die, I hope there are a lot of people that are like, I'm glad she was here. That like, meant something. And so even if there's nothing after this, people could be like, hey, she like, helped my life in some way.

• 1:07:02Graham Stephan?

  Although, really quick, while we're on the topic of business, for those unaware, I got a coffee company, and it's called bankrollcoffee.com. Our goal is to bring you the highest quality coffee at the most affordable price. But in terms of delivering on that promise, we had to find an e-commerce platform that would be the best fit for our needs. And that is where our sponsor Shopify was there to help. Shopify is home to the number one checkout on the planet with way less carts going abandoned and way more sales going.

• 1:07:28Jack Selby?

  For example, Shopify is this amazing service called Shop Pay that lets customers save their email address, credit card information, shipping and billing information, which, I kid you not, boosts conversions up to 50%. And if you're serious about growing your business, your commerce platform better be ready to sell wherever your customers are scrolling or strolling on the web, in your store, in their feed, and everywhere in between.

• 1:07:49Graham Stephan?

  All in all, nobody's selling better than Shopify. So if you want to upgrade your business and use the same checkout that Bankroll Coffee uses, sign up for a $1 a month trial period at Shopify.com/ICH, all lowercase, with the link down below in the description.

• 1:08:03Jack Selby?

  Again, that is Shopify.com/ICH to upgrade your selling today. Shopify.com/ICH with the link down below in the description. It is just $1. I strongly recommend it. It truly is the best platform out there. Thank you so much to Shopify for sponsoring this episode. And back to the podcast.

• 1:08:19Graham Stephan?

  What do you think are some of the biggest issues today that not a lot of people are talking about?

• 1:08:23Speaker 01

  2020, private equity companies owned 4% of the companies in our country. Today, they own 20% of the companies. We have the S&P 500, you know this all too well, in which three companies own 40% of the S&P. S and P 500. Now you might say, well, those are passive investments, Cody. They don't actually own that. They're in ETFs. You know, they don't get to choose who, but they still get governance rights. And Bill McNabb, CEO of Vanguard, for instance, has publicly whoopsie said out loud, we are not passive in our governance, actually. So what do we have? We have big companies continuing to own everything and we become renters underneath them.

• 1:09:00Graham Stephan?

  Now, I thought the stockholders of those ETFs still are able to cast a vote based on how many they own. So that doesn't fall necessarily on like Vanguard, let's just say.

• 1:09:10Speaker 01

  Well, it depends on what kind of structure they have it in. So it depends on if it's an active versus a passive ETF. It depends on how the shareholder vote works. So if you have, for instance, like when I was at Vanguard back in the day, you could have an ETF that had to get a majority of X people to vote on Y situation. But here's how it works. Vanguard reaches out to those shareholders and pushes them to make varying decisions. They also are the ones that get to educate them on what decision they think they should make or not. As a shareholder of a Vanguard ETF, how much do I know about what the governance of ExxonMobil should be that's inside of there? I know dick all. Plus, I don't have time for that. So what am I going to do? I'm going to go with the recommendation of the company that manages my assets overall.

• 1:09:55Speaker 01

  And oh, by the way, it's not just shareholder votes. It's also what happens in the boardroom. So they're not allowed to influence decisions, except of course they do. You don't think that if, I don't know, Deloitte has as their highest shareholder BlackRock, they're not going to take meetings with BlackRock? And when BlackRock says, here's our core initiatives that we want to have all companies we work with execute on, Deloitte's not going to pay attention to that? Of course they are. And so there's both hard power, AKA shareholder voting rights, and there's soft power, AKA what might they do if XYZ happens?

• 1:10:28Graham Stephan?

  You don't think they would want people to vote in something that's in their best interest? Because it seems to me like if they're pushing people to a certain thing, that certain thing will ultimately make the shareholder more money. They wouldn't want to impact performance of the stock. So like, they want the stock price to go. Like, they want you to do better. They have vested interest in that because they'll take a percentage.

• 1:10:45Speaker 01

  I think that makes sense theoretically, except what have we seen happen? We've seen shareholder votes go for DEI over making money, for instance, frequently.

• 1:10:55Graham Stephan?

  Is that shareholder voting that's doing that? Or is that the government kind of like putting their hands on the thing?

• 1:11:01Speaker 01

  Let's put it this way. Let's say Vanguard, which has, they have created this, State Street, which I worked at too. They've created entities that only invest in companies that have XYZ characteristics. Right? So those XYZ characteristics might be a woman or a minority on the board. Right? And if they don't have that, they won't fit into this bucket.

• 1:11:22Graham Stephan?

  But I thought that's because certain government agencies are funding companies like that. So these investment firms have just made companies like that to get funding. And because it's become more popular among certain groups, they do this because it just makes money.

• 1:11:34Speaker 01

  That's one bucket, but not all, because you have so many corporations that do no business with the government that still have these corporate initiatives that might sound good. It goes back to that second and third order effect. It might sound good, but does it actually benefit the user? Like, I don't know about most people listening, but I don't ever want to be chosen because I'm a woman and a Latina. I want to be chosen because I'm the best person for the job. And yeah, I'd like to have a wider breadth of people that we're choosing from for varying board positions. But don't, don't, don't hire me because I'm a female. That's crazy. Hire me because I'm best or hire somebody else. But yeah, I think you have some government entities that get contracts because they are listed as veteran owned, female owned, minority owned, sure.

• 1:12:16Speaker 01

  And increasingly, we see a lot of government funding going to institutions like that. But we certainly have corporate, non-government entities that are still being influenced to the exact same way. And that's just one instance. I think the problem in the US today that nobody's talking about is too few people own everything. And I actually think we can push back on it quite a bit. And my last little You know, push here is a perfect example is say you buy from Amazon, I don't know, coffee cups. Those Amazon coffee cups leave in your local economy somewhere around 10 to 16 cents. If you were to go to a store locally in Vegas and buy a coffee cup, you leave about 60 cents to every dollar in your local economy. And so what we've had happen

• 1:12:59Speaker 01

  is we have these centers that are gobbling up tons of the profits and not centralizing them locally in our economy. And so I don't think we realize the implications of that yet as these big companies get so, so, so big. It's why antitrust and monopoly are actually important. And I'm like a bit of a libertarian, so I'm kind of like the government get out of the way, except they start getting subsidies and government tax credits. And so maybe being libertarian is also limiting all of that.

• 1:13:25Graham Stephan?

  It's hard for me to find a reason why I wouldn't do the Amazon example and like purchase locally because it's just they make it so much easier to be able to like-

• 1:13:33Speaker 01

  No, you would. That's the point. The whole buy local thing doesn't work. So what works instead, in my opinion, is that you own local businesses that service customers better, more consistently. We can't tell users to not use Amazon. It's way too convenient. The product's way too good. And we've given them a ton of subsidies and taxes in order for it to be better and better and better. So what do we have to do instead? We have to, in the areas where we can compete with the big guys, we need to own those businesses instead of letting private equity companies and the big corporations own it all.

• 1:14:01Graham Stephan?

  Yeah. Well, it really just seems like the business, the only businesses worth going to are retail establishments that you can't get online, like getting your nails done or getting your hair done or a dentist's office.

• 1:14:11Speaker 01

  Yeah, services.

• 1:14:12Graham Stephan?

  Services.

• 1:14:13Speaker 01

  So you can have, you know, personal services. That's what you just might get my hair done, get my nails done. Home services, which would be like roofing, landscaping, cleaning, plumbing. You could also have professional services, which is like, if you guys have ever worked with a personal accountant that's local, oftentimes way better than going to TurboTax or a centralized, you know, professional services business. So those three verticals, human touch is still really necessary. And oh, by the way, if you're scared of AI, the last thing that'll be taken over are my plumbing companies. You know, those will last much longer than the graphic design companies and even than us on the internet. We're going to have AI versions of us everywhere. And we will be taken over before the hands-on service-based businesses will.

• 1:14:54Graham Stephan?

  Incredible. It just got me thinking. This is what's going to happen. You know those Elon Musk robots?

• 1:14:59Speaker 01

  Yep.

• 1:15:00Graham Stephan?

  Imagine you program them with AI and they could fix anything. All of a sudden, they're a licensed electrician, a licensed contractor, a licensed plumber, and you go to your robot and say, hey, robot, this sink isn't draining and it just downloads, it just immediately searches Google, finds the answer, looks at the thing, is like, all right, I'm going to fix it.

• 1:15:21Speaker 01

  So that-

• 1:15:22Graham Stephan?

  I'm going to go to the Home Depot.

• 1:15:24Speaker 01

  That will probably eventually happen, but we're investors in like a big, a few big, really big robot companies. One called Figure. So Figure is Brett Adcox's company, multi-billion dollar company. And what's interesting with these robots is it is so complex to build a human robot that has ability to do multi-functions that they just came up with a way for a robot to avoid somebody if they're coming at them. Like, that's brand new. This ability was incredibly difficult. And Figure's the only one that's been able to do it. We are so far away from a multi-function robot that it's hard to imagine. And so, you know, there's a lot of things that can be run remotely with human intervention,

• 1:16:05Speaker 01

  but we're far from that. What's going to happen first is that accountants and bankers and attorneys will be robotized online. And that will happen much prior to, it's almost difficult to understand the complexity of plumbing. Like, you have to have somebody come to your location. You have to have somebody have the ability to have tactile function with things that is incredibly difficult to replicate with humans right now.

• 1:16:31Graham Stephan?

  I think at one time, we're all going to be in a pod somewhere. We're going to have our, like, robot figures, like, in public. So you could be, it's trying to do, like, you could be home right now, like, in a pod.

• 1:16:43Speaker 01

  This sounds awful. I hate this for us.

• 1:16:45Graham Stephan?

  But you have your robot, you, like, go to the Starbucks, but that, but that robot could, like- Run faster than you could drive.

• 1:16:53Jack Selby?

  That is interesting.

• 1:16:54Graham Stephan?

  Sit there like a video game, like you're playing the video game avatar of yourself going to the Starbucks.

• 1:16:58Jack Selby?

  In your pod, you could be so perfectly regulated where you live like 300 years. And then you just have your robot like actually living your life where you're like simulation controlling that. And you have like an ab machine on you, you're getting like carrot injected into your veins, like fruits and vegetables.

• 1:17:13Graham Stephan?

  Imagine doing roofing, like you're, you're a roofer since you don't have to exert your body anymore. Like you have the, the like robot version of you going to work.

• 1:17:24Jack Selby?

  This, as soon as you're talking, it's all high level and then we start talking, it just devolves.

• 1:17:27Graham Stephan?

  I don't think it's devolved. I could see that happening.

• 1:17:30Jack Selby?

  Well, sure, but that's such a hail Mary prediction that like.

• 1:17:33Graham Stephan?

  A place where you could have your robot go and pick up heavy things, way heavier than you could do yourself. And it's not backbreaking work.

• 1:17:40Speaker 01

  And do you think we'd be happier if we did that as a society?

• 1:17:43Jack Selby?

  I think it really, it really depends.

• 1:17:45Graham Stephan?

  I do. Yeah. Imagine you're just, you're in a pod and you could joke with all the other robots. Like, like you're playing a video game. It's like, imagine you're playing a video game, except you're getting paid to do a job within a video game.

• 1:17:55Jack Selby?

  The, the only way is if it's completely indistinguishable from real life. That's when it would be fine, where you literally could not tell. It's the simulation theory where you could not tell. But I feel like if there's a splinter of doubt of like, wait, my robot is not actually me. Then all of a sudden that's going to send you in some sort of like a existential crisis. And you're like, what, what am I even doing? Get me out of this pod. Get these things out of my arms.

• 1:18:15Speaker 01

  Yeah. Well, maybe. I mean, I think more likely is some sort of like consciousness development that goes beyond. Um, you know, it's something like Neuralink, but I think, you know, it would be very, I mean, think about it today. What do we know for sure? We know that the more we use technology and the more we are in our phones and online and gaming, the less happy we are. That's what the data tells us. The less human engagement that we have, the less happy we are. The less human touch we have, the less happy we are. The less you work out, uh, your happiness drops. The less vitamin D you get from the sun, your happiness drops. So I think the idea of being in a pod continuously. Yeah. Uh, maybe I'm older, but I think it sounds fascinating, but you go straight to Neo and the Matrix.

• 1:18:58Jack Selby?

  So you said you're kind of a libertarian. Then how do you squash the argument that most of the things in life that are enticing to us are the things that are bad for us? And especially recently, when we don't really suffer any consequences for doing, you know, bad actions on ourselves, like, you know, it's fine not to go to the gym because you can get medication and you can do all of these other things. You could take Ozempic and there's so many shortcuts that like long term have really bad consequences. But realistically, you don't really see those.

• 1:19:26Speaker 01

  Well, um, I think that it shouldn't be incentivized by the government. So for instance, you know, today we have subsidies on a lot of food types that are actually bad for us that makes them cheaper for us. That I don't think is good government intervention. I do think having optionality is important, but we should make honesty important. And so for instance, it's just easy to go to healthcare because you look at food today. And, you know, think about during our lifetimes, you guys remember when the food pyramid was like, the best thing is you should eat all the grains. We should do all the greens all the time. Pizza is a part of food group, actually, we should include that in schools.

• 1:20:05Speaker 01

  And what are we finding increasingly that, you know, this, this processizing of all of our food is making us fatter. And then, you know, Mike Isratel, an exercise scientist that I recently had on the podcast. I liked his take on Ozempic because I tend to think that the more self-selected misery you have, the more happiness you actually get as a byproduct of it, to your point. But his take that I thought was fascinating is he goes, what most people don't understand is, if you've ever been a bodybuilder, you've been so hungry that it's, it feels painful. Like before a bodybuilding competition, you're starving yourself, your muscles are eating itself. You can't think about anything besides food, you're ravenous because your food drive is incredibly high. His thesis is that there are some humans who have an incredibly high food drive,

• 1:20:51Speaker 01

  just like some people have an incredibly high sex drive, let's say. And because of that, something like Ozempic can really help with curbing the food drive. You've got to pair it with positive solutions like working out, exercise, et cetera. But I liked that take because in a lot of times today, I think people are shitting on Ozempic. And I think anything that allows you to kickstart is really important. Because it's, you know, in life today, it's sort of like, if you think about what's easier, is it easier to? Light a match? Is it easier to start a lighter? Or is it easier to whittle two pieces of wood together until the sticks catch flame? The whittling together is definitely the hardest. And so if you can instead start a fire by something like Ozempic, have material change or gains, and then make lifestyle change on top of it, because forward momentum is hard to stop,

• 1:21:35Speaker 01

  I think that's incredibly powerful for people. But I do think we have to limit what corporations can do from a greed perspective.

• 1:21:43Graham Stephan?

  Where are you investing your own money these days? Is it just businesses? Are you buying stocks, real estate?

• 1:21:48Speaker 01

  I don't buy stocks. I have some.

• 1:21:51Graham Stephan?

  Okay.

• 1:21:51Speaker 01

  I have some, and it continues to accumulate. But by and large, I have, you know, I have some like different bond strategies that my advisors might use. Like, we use a lot of securitized loans, basically. What else would be like stock market investments? Probably just that. Generalized stock market that I never touch. I have a financial advisor that runs it. Some bond, varying types of bond portfolios, because I want there to not be a lot of movement in the price so that I can use it to get loans to buy more businesses or to fund businesses, have lines of credit. But for the most part, yeah, I'm buying businesses today, more than anything. I mean, there's just not a better trade I can find. Like, for instance, you know, we just bought,

• 1:22:35Speaker 01

  we just bought a business in the defense space that I think makes a ton of sense. And that business is 90% seller financed. It's profitable. We make all our money back in like a year. That's not easy to do every single time. But like, where can you do that in, in stock market investing? The leverage is just really hard. And once you get good at running businesses and investing in businesses, I think it's hard to see opportunity elsewhere. And then the best business investors always buy businesses that are strategic. So these days, it's like, all right, Tanner and I were just looking at what media assets can we acquire?

• 1:23:06Graham Stephan?

  Yeah.

• 1:23:06Speaker 01

  You know, so can I acquire a couple of different channels? What about some licensing agreements? You know, can we buy, you know, the assets of this company to plug into what we're doing here? And then it becomes like this giant game that you get to play with, connecting all these puzzle pieces together. And that, I think, is like the highest level of rich. Like, when you don't really know what you're doing in business and you don't have a lot of money, you think everything's a how problem. You're like, how do I do this? When you have some money and some understanding of business, it becomes a who problem. Who can I go to to solve my problem? And then when you hit the final level, it becomes a buy. Solution, which is like, where can I go buy with a high degree of certainty, the solution to my problem today? I can't hire somebody? Let me go do an aqua hire of a business over here. You know, I need more revenue? Let me buy this company to insert into it.

• 1:23:51Speaker 01

  And once you learn this level of the game, it's really hard to be poor again, I think.

• 1:23:56Speaker 00

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• 1:24:26Graham Stephan?

  And how does it work when you own these businesses you buy into? Do you just take like a percentage of the revenue as your own income? Or do you choose not to take income to reinvest?

• 1:24:35Speaker 01

  Well, it depends where you're at in your life. For me personally, I take a percentage of most business deals we do, or it goes to the portfolio. Now we have a company, you know, we have Main Street Holding Company and Contrarian Thinking Capital. Those two entities have teams on them. So this is the stuff that like private equity guys never tell us. I don't know why. I guess they don't want, they don't, they want to moat around it. But those, a lot of the revenue goes to fund the companies and to like, so we'll go do another deal with the revenue we get from one company goes to fund the employees. We hire a few more people to run these entities. And then, yeah, we take a lot of revenue for ourselves. I mean, that's the ultimate tax play. It's actually, it's a little crazy that that's how the government is set up. But you know, you look at the difference and you know all about this, but if you make

• 1:25:19Speaker 01

  just earned income and you're a high earner, the government takes, you know, 50% of what you earn. So when they say tax the rich, well, if you're making multi millions, they're taking 50% of what you earn if it's an earned income, AKA wages. But if you're able to instead get most of your earnings from distributions and capital gains, you make your money do all the work for you, you know, you can have a 9% tax bracket. And so. You know,

• 1:25:45Graham Stephan?

  How do you get a 9% tax bracket?

• 1:25:46Speaker 01

  Well, you'd have to have a decent percentage in real estate. You'd have to take loans from your own portfolio and use the loans as income, as opposed to taking direct distributions and capital gains. Like, there's so many ways the rich game the system.

• 1:26:02Graham Stephan?

  Do you think that's the way it should be?

• 1:26:03Speaker 01

  No, I don't.

• 1:26:04Graham Stephan?

  How should it be, then?

• 1:26:05Speaker 01

  I think that

• 1:26:06Graham Stephan?

  The earned income is taxed at a lower rate?

• 1:26:09Speaker 01

  I think that we should incentivize people to work more and deploy more capital. I think why they tried to do the distributions at a lower tax rate in capital gains is at a lower tax rate is because they wanted people to put more money into the economy and keep the economy growing.

• 1:26:22Graham Stephan?

  You'd be crazy. Imagine flipping the tax brackets. The more money you make, the less you're taxed.

• 1:26:29Speaker 01

  I mean, I'd like that. Do you know how much Elon Musk is paid in taxes? Personally?

• 1:26:33Graham Stephan?

  A ton.

• 1:26:34Speaker 01

  $10 billion. He is the single biggest taxpayer in human history. Isn't that wild?

• 1:26:40Graham Stephan?

  But what's crazy is

• 1:26:40Speaker 01

  I mean, I'm okay with that. I would do that, too.

• 1:26:42Graham Stephan?

  That's a drop in the bucket, though. When you look at like, how much the United States spends, like even $10 billion?

• 1:26:46Speaker 01

  Yeah.

• 1:26:47Graham Stephan?

  Nothing. I mean, it's like a day.

• 1:26:49Speaker 01

  Yeah, oh, it's true.

• 1:26:50Graham Stephan?

  He funds it like the day, the government.

• 1:26:51Speaker 01

  Yeah, that was like a very unpopular reel we did once as we tried to explain. I'm gonna mess up the math, so I won't do it publicly. But we tried to explain how long the US government could actually fund itself if it took all income from the top 1%. And it was somewhere between 30 days and 6 months. And so it was like, if you eviscerate the wealthy, the government continues for 30 days. And so, you know, I think this idea of taxing the rich at the highest level doesn't really work. We've got a, I think the only person that has made a really good case about how to grow our way out of our debt and everything that we have happening is Vivek, talking about GDP growth. Like, the only way out is growth.

• 1:27:30Graham Stephan?

  I do think a reverse tax bracket would be very interesting, though. Because I was thinking to myself, if Trump were to lower taxes significantly for the next four years, and you just know, for the next four years, the top tax bracket is going to be 20%. How much harder would you work over the next four years to maximize that?

• 1:27:46Speaker 01

  Yeah, I would work hard.

• 1:27:46Graham Stephan?

  I would, yeah, I would work really hard. And so I'm thinking, what if there's a tiered system where it's almost like a, you know, like a pyramid? Where it goes up and like you hit the max taxes at like $400,000, $500,000. But then if you make over $1 million?

• 1:27:59Speaker 01

  Yeah.

• 1:27:59Graham Stephan?

  It's taxed a little less. Over $5 million, taxed a little less. Over $10 million, taxed a little less. I think it would really push people over that hurdle to just, alright, let's make the most of this now. It's just an interesting concept. I've never thought of it until now.

• 1:28:11Speaker 01

  And I think, actually, for salary earners. You already see what a decreased tax incentive does for people who earn salary. All you have to do is look at the U-Haul rates leaving California and the U-Haul rates going from Texas to California.

• 1:28:26Graham Stephan?

  Yeah.

• 1:28:27Speaker 01

  It's like 2X cheaper going from Texas to California as opposed to the other way. And the reason why is because people who make a lot of money are like, we're not staying here. They're going to tax the hell out of us. We're moving to another state, which is probably why Texas is booming in a way California isn't. So I think you're probably right. And it's good that we have like a federal system where people can make, they can move with their feet. I think that's actually really, really important for like health of economies because just like companies, could you imagine if you were just held hostage by a company, you could never earn more, you could never leave, how they would treat you? They wouldn't treat you very well. And so I think we should want that inside of our country too. And we should, we should reward the people that treat us well, cities, states, et cetera.

• 1:29:07Graham Stephan?

  I think states should also give people an amount to move there, like as an incentive.

• 1:29:12Speaker 01

  Like Alaska, though.

• 1:29:13Graham Stephan?

  Yeah, Alaska does. But like, imagine.

• 1:29:15Speaker 01

  Nobody's taken, has anybody moved into Alaska?

• 1:29:16Graham Stephan?

  But like imagine certain states.

• 1:29:17Speaker 01

  It's too dark there. Raise that amount a little.

• 1:29:19Graham Stephan?

  It's just bright all the time.

• 1:29:20Speaker 01

  Yeah.

• 1:29:20Graham Stephan?

  18 hours of sunlight.

• 1:29:21Speaker 01

  Although sometimes I even get tempted, you guys ever see on the internet, it's like, move to this small Italian city and make $200,000 if you stay and they'll give you a house. I'm like, oh, it's pretty nice. There are days.

• 1:29:32Graham Stephan?

  We want to end it off on this. We have some hypotheticals for you, but I think are really interesting.

• 1:29:38Graham Stephan?

  The first is about labor costs and working conditions. You run a company that could maximize profits by outsourcing labor to countries with lax labor regulations where wages are low and conditions may be subpar. What is your moral obligation to workers in other countries? And does your profit justify their potential exploitation?

• 1:29:57Speaker 01

  Uh, no, I think humans are humans. I do think that if you can get a mobile workforce and they're cheaper, but it is a good quality of life for them, that makes all the sense in the world to me. We do it, we outsource some third-party, you know, remote tasks. But do I think that you should subjugate humans for profit? No, nor do I think it's necessary in today's day and age. There's too much transparency as is. So you can actually sell worth the premium if you say 100% made in America, for instance, no exploitation over time. I don't think that's necessary, even though I think a lot of people do it.

• 1:30:34Graham Stephan?

  Product has a great profit potential, but may pose risks if overused, like a sugary food product or gambling app. Should you market aggressively to all demographics, including vulnerable customers, or focus on responsible marketing that may limit profitability?

• 1:30:49Speaker 01

  The problem with that is thinking about, like, what isn't bad for you if used excessively? Like, God bless. I mean, I think everything is bad for you if used excessively. You could probably die from eating too much celery. So I guess the question would be like, who's in charge of what's bad for you or not?

• 1:31:05Graham Stephan?

  Well, it could be something maybe that's more addictive. It could be like a TikTok sort of deal or like the sugary foods example, where if you consume it, it's going to lead you to want that even more.

• 1:31:16Speaker 01

  Here's the thing. If you are good at making money, you can make money doing anything, which is, I think, something I wish more people would realize. So why spend your life doing something shitty? I never understood that for, like, I actually, I think most people are doing what they do because they think that it is beneficial in some way if they're at the highest level. I think even people inside of PepsiCo or Coca-Cola who are selling sugary beverage drinks actually are in some way rationalizing to themselves why it's good or bad. I don't think a lot of people are purely, purely evil, actually. I think that we are incredible self rationalizers as human beings. But my question for the youth, and I think they're already thinking about this, is like, like, I can make money. I can make millions of dollars with laundromats. Like, what can't you make millions of dollars with?

• 1:32:01Speaker 01

  So why would you want to go sell vapes to teens if you wanted to make millions? If instead, you could probably make just as much, I don't know, like saving puppies or making puppy gear? Like, choose a path that actually makes you happy and feel like you're a good human being. I don't think it's necessary to do bad things in order to make a lot of money.

• 1:32:20Graham Stephan?

  What's your biggest fear?

• 1:32:21Speaker 01

  My biggest fear used to be failure, but I don't think that's the case anymore because I've failed so many times. It's, it's, the biggest fear is probably that I miss an opportunity to do something because of fear. So am I playing too small? I mean, one of my favorite mentors... Really rings that in my mind again. I was with him yesterday. It's Bill Perkins again. And he basically said this thing to me, which was when I was walking along the lake with him, have you been around small business for so long that small has infected your thinking? And I remember at the time thinking like, you're kind of a dick. That's rude. But then the more I've gotten to know him, you know, he was just saying yesterday, he's like, because when I see somebody who's capable of something, it makes me sad if they don't really

• 1:33:02Speaker 01

  try for something big. In the same way that I think for a lot of us, if I had a kid, it would make me sad if my kid didn't try to play all out. Like if they held back during a sports game because they were scared they might fail. If they just wanted to hit singles and they never tried for a homerun. I think that's kind of sad. Like try for a homerun once in your life. So my biggest fear is like, where are we playing too small? Because what if this is all a game? What if we are in a pod right now? We're sitting here, our robots are out there in the actual world doing something. We've chosen this game and we don't play all out. You know, we know we all die at the end of the day. And so why not really try?

• 1:33:38Graham Stephan?

  What is one piece of non-financial advice that you'd want to give to all the listeners right now?

• 1:33:42Speaker 01

  I think life is a lot easier if you have a belief in something bigger than you. I know it's not that popular to say these days and a lot of people don't believe in God. And I think you should do whatever you want with your personal beliefs. But man, faith really takes you pretty far. I think every time I worry about something, I remember that I'm practicing atheism, basically, that I think that if I'm so worried this isn't going to work out, that I don't have a lot of faith in something bigger than me. And kind of the opposite side of the equation too, which is like, I don't know, isn't it more helpful to believe that there is a God that's got your back than just to like be existentially worried about everything all the time? And so I think young people, if you're lonely, if you're struggling, if you're scared, like, I don't know, maybe, maybe

• 1:34:25Speaker 01

  try a church. Because there aren't very many places where people try to get better every single week together. And they actually believe in the good of humans. And I think we're a little bit happier when we do that.

• 1:34:36Graham Stephan?

  I'm curious about this. Can you be a good salesperson if you're selling something that you don't like?

• 1:34:41Speaker 01

  Yes, they exist everywhere. Because they're obsessed with the game. There's lots of salespeople that just love selling. And so they're like, you know, fuck, I mean, I could, I could sell somebody if I really wanted to on most things. And I think good salespeople can, you know, I could sell you this glass of water, even if I knew. I was sick and you probably shouldn't drink it because I might just be obsessed with the idea of selling and can I get somebody else to do a thing that I want them to do? So I think that's a false narrative when people say you can't be a good salespeople if you don't believe. It's just more fun, I think, long-term when you do believe in it. But you can believe in just yourself and just in bettering yourself and not believe in your product and sell a shit ton and the world is full of companies that do exactly that.

• 1:35:24Graham Stephan?

  Well, thank you so much. I'll link to all of your information down below in the description where you guys could follow along to.

• 1:35:28Jack Selby?

  The book link down below, guys. Check it out. Lots of great graphs and illustrations in there. If you want to see it.

• 1:35:33Graham Stephan?

  And if you're watching this right now, you're not already subscribed, please subscribe. It's totally free. We spent a lot of time going through these. Costs you nothing. It would mean the world to us.

• 1:35:43Jack Selby?

  Cody, thank you for coming on the show.

• 1:35:45Speaker 01

  Thank you for having me.

• 1:35:46Jack Selby?

  Thank you, guys, for watching. Until next time. See ya.

• 1:35:52Speaker 04

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