The #1 Financial Freedom SECRET Rich People WON’T Tell You!
Timestamps are as accurate as they can be but may be slightly off. We encourage you to listen to the full context.
Podcast Summary
Cody Sanchez shares her journey from feeling controlled by money to building wealth through buying boring businesses. In this dynamic conversation, she reveals why 90% of startups fail while ordinary businesses offer a more reliable path to financial freedom. (41:00)
• Main theme: Traditional business ownership as a more reliable wealth-building strategy than startups or saving alone
Speakers
Cody Sanchez
Cody Sanchez is an award-winning journalist, founder of Contrarian Thinking and Unconventional Acquisitions. She previously worked in private equity and has amassed millions of followers by educating people on finance and business acquisition strategies. Her new book "Main Street Millionaire" focuses on building wealth through ordinary businesses.
Lewis Howes
Lewis Howes is the host of The School of Greatness podcast and a New York Times bestselling author. He's known for interviewing world-class performers and helping ambitious professionals achieve mastery in their fields.
Key Takeaways
Earnings Trump Savings for Wealth Building
Sanchez emphasizes that saving alone will never make you wealthy - it can only get you to zero spending at best. The key insight is that it's far easier to earn more than to save everything. (04:43) She argues that really rich people think about making every dollar more productive rather than just saving it. For professionals aiming for mastery, this means focusing energy on maximizing earning potential through skill development, salary negotiation, and seeking upside opportunities rather than obsessing over cutting expenses.
Take the Next Job Before Getting the Next Job
One of the most actionable strategies shared is to "take the next job before you get the next job." (09:00) This means proactively taking on responsibilities and delivering results at the level you want to be promoted to, rather than waiting for the promotion first. Sanchez suggests negotiating upside deals with your current employer - if you can measurably grow a department or achieve specific goals, you should be rewarded accordingly. This approach allows you to get paid while learning higher-level skills, essentially turning your current role into an MBA program.
Choose Cash-Flowing Businesses Over Startup Dreams
Sanchez strongly advocates for investing in cash-flowing businesses rather than startups until you've made your first million. (22:48) She points out that 90% of startups fail and most startup equity options are worthless. Instead, she recommends buying existing businesses or franchises with proven revenue streams. The key principle: "cash flow is king, and I don't invest in hopes and dreams. I invest in realities and revenue." This provides immediate returns while you learn business operations with lower risk.
Network Through Value Creation, Not Asking
Rich people trade in knowledge and give favors rather than asking for them, while broke people constantly ask for favors. (14:02) Sanchez learned this lesson the hard way when she used to ask successful people to mentor her for free, essentially asking them to give up their most valuable asset - time. The better approach is to become a "gift giver of time" by offering value first, whether through insights, connections, or solutions to their problems. This creates genuine relationships based on mutual value exchange rather than one-sided taking.
Build Equity While Employed
Rather than quitting your job to become an entrepreneur, Sanchez suggests getting equity while remaining employed through "club deals." (20:04) This involves bringing deals to your company and negotiating to invest alongside them, or finding ways to get equity in deals you help structure. For example, if you bring a new sponsor to your company, you could negotiate for both cash compensation and equity in that sponsor's business. This allows you to build wealth without the risks of full entrepreneurship while leveraging your employment income to make investments.
Statistics & Facts
- Only 30% of people will ever negotiate their salary without the company proactively coming back to them. (07:01) This statistic highlights how most people leave money on the table by not advocating for themselves.
- 90% of startups fail, and only 10% of businesses ever make it to a million dollars a year in revenue. (34:07) Even more striking, only 0.4% of businesses ever reach $10 million in revenue, showing the harsh reality of business success rates.
- The average startup founder only makes $60,000 a year after working for the first three years without income. (34:53) This contradicts the common belief that starting your own business automatically leads to higher income.
