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Lewis HowesThey're About To Reset the Rules of Wealth — Your Last Chance To Get Ahead Is Now | Codie Sanchez
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80 min read · 15,661 words- 0:00 – 4:18
The Grind Myth
- CSCodie Sanchez
You need to realize that most people who are giving you advice on the internet about business were miserable before they started their business, miserable as they're building it, and probably still kind of miserable post-success. Those people who say that you have to do the really clickbaity thing, which is grind to the point of misery until you eventually outlive everybody else, I'm not saying that you don't have to work hard. I'm saying you could actually choose a life that you like and fit work into it, and I actually think that's possible.
- LHLewis Howes
A former Wall Street investor turned nine-figure founder and best-selling author of a book called Main Street Millionaire. She's also got a new book out right now called Own or Be Owned, Codie Sanchez.
- CSCodie Sanchez
Most entrepreneurs make $46,000 to $64,000 a year. Most entrepreneurs across the US make less than minimum wage.
- LHLewis Howes
Wow.
- CSCodie Sanchez
You should not feel bad about yourself if you haven't started a business, haven't made all your millions, you know, aren't flying on a private jet. I promise you, most people are not. I think it's totally possible, but just don't get it twisted that most people are not there.
- LHLewis Howes
What is the mindset that you think keeps people living paycheck to paycheck rather than shifting them to creating more financial freedom?
- CSCodie Sanchez
Well...
- LHLewis Howes
One of the biggest stresses that people have around, I think, work and money right now, you said you did a survey to your audience, um, about do you wanna have more, um, money, do you wanna have more profits, do you wanna do more of the things you love, or do you wanna have more freedom? And you said over 50% of the people said they wanted more freedom. And something you were just saying is like I think a lot of people feel like they have to grind and work so hard to make more constantly to keep up with the bills, to keep up with the expenses-
- CSCodie Sanchez
Mm
- LHLewis Howes
... or keep up with the appearances, that they're just starting to feel burnt out and exhausted around work, money, or the idea that they have to do so much more work to make more.
- CSCodie Sanchez
Yeah.
- LHLewis Howes
So what is the, the way out of this trap?
- CSCodie Sanchez
Yeah. Well, first, I think you real- you need to realize that most people who are giving you advice on the internet about business were miserable before they started their business, miserable as they're building it, and probably still kind of miserable post-success. And so, like, that was a huge realization for me. It's like, oh, all these people that I'm listening to have lives that I don't want, so why am I listening to them about building a business?
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
And I think, as a generation, a lot of us like trauma bonded as entrepreneurs-
- LHLewis Howes
Mm
- CSCodie Sanchez
... saying like, "Oh, it has to be this way. It has to be so hard." Because if instead you say, "Life's actually pretty good. Yeah, we're grinding, we're growing, and there's a couple things here and there, but like by and large, it's good," people are like, "You're a liar. You must not be trying that hard."
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
It just sounds so much less sexy. And so I would say first realize that those people who say that you have to do the really clickbaity thing, which is grind to the point of misery until you eventually outlive everybody else, that's one way. You can.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
You can also do what Jeff Bezos talks about, which is he's always puttered in the morning.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
You know? Or Tim Cook, all through his life of being an employee, spent the first hour working out. I'm not saying that you don't have to work hard. I'm saying you could actually choose a life that you like and fit work into it.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And I actually think that's possible. And so I started writing this book because that was me. I'm like super pregnant, I'm slowing down, and I wanted to get pregnant. We've been trying to get pregnant for five years. So I started writing the book because I was like, when I am eventually a mom or pregnant, I don't wanna go at this pace-
- LHLewis Howes
Yes
- CSCodie Sanchez
... anymore. And I keep building all these things to keep up with all these other people that I don't even like.
- LHLewis Howes
Why?
- CSCodie Sanchez
Why?
- LHLewis Howes
How long were you running that race for?
- 4:18 – 7:12
Why Entrepreneurs Go Broke
- CSCodie Sanchez
wait a second, most entrepreneurs make $46,000 to $64,000 a year. At-
- LHLewis Howes
Most entrepreneurs make $46,000 to $66,000 a year?
- CSCodie Sanchez
Yes. The minimum wage in California is $78,000 a year. So most entrepreneurs across the US make less than minimum wage.
- LHLewis Howes
Wow. Why is that?
- CSCodie Sanchez
Because most businesses aren't optimized for profit. Um, we... And think about it, how often... Most people don't even really think profit is sexy. If I was to stack rank what do you want, revenue, money, cash, profit, they're not gonna rank profit first.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And so most businesses aren't taught to pay themselves first, and that that's okay. And that-
- LHLewis Howes
There's a great, there's a great book called Profit First, right?
- CSCodie Sanchez
Yeah.
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
Michael, uh, Michalowicz.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
Um...
- LHLewis Howes
So they don't think about profit as sexy, right?
- CSCodie Sanchez
No. And I think they... And I think, also, as an entrepreneur, you end up feeling like revenue is the be all and out- end all.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
I just want more, more, more, more top line. And eventually you realize, wait a second, I need to eat, I wanna have a nice lifestyle. And I remember another mutual friend of ours, Dean Graziosi, said to me years ago, he was like, um, you know, he's like, "I have a lot of friends that have run these scale businesses, these hyper-growth businesses." And he kinda leans in 'cause he's a nice guy.
- LHLewis Howes
[laughs]
- CSCodie Sanchez
And he goes, "But I've had a plane way longer than all of them."
- LHLewis Howes
Oh.
- CSCodie Sanchez
And I joked with him and I was like, "Why do you think that is?" He's like, "Because I've always optimized for having a lifestyle business that paid me first and cash flowed to me, and then I cash flow to the business."
- LHLewis Howes
Wow.
- CSCodie Sanchez
And that is-
- LHLewis Howes
Instead of like, "Oh, I'm doing 100 million a year in revenue, but I'm struggling financially in a sense."
- CSCodie Sanchez
Yeah. I mean, I was like... You know, most entrepreneurs, they pay themselves last. And then, you know, when you're an employee, I remember when I was an employee, I'd go to my boss and think, "He's super rich. We just made millions." And you don't realize, you know, Walmart's profit margin is like 6%, the average business is 15%. So if you're making a million bucks, you're only making $150,000 a year. Well, you'd be better off being one of now my employees than that
- LHLewis Howes
Mm-hmm. Yeah. And the challenge is if you're making $150,000, I guess, in profit, that doesn't mean there's not other expenses or taxes or legal fees on top of that that you might be spending at the end of the day.
- CSCodie Sanchez
Yeah. Yeah. So I think, you know, like one of the great realizations in life is that nobody's really doing as good as you think they are. Alternatively, you're probably not doing as good as they think you are. And so you realize after a while everybody's out there kind of massaging-
- LHLewis Howes
Mm
- CSCodie Sanchez
... exactly what's going on in their world, whether through omission or not wanting to, to have other people know about all the difficulty.
- LHLewis Howes
Yeah.
- 7:12 – 14:07
Rethinking Time & Money
- LHLewis Howes
How has being pregnant taught you about money in a different way?
- CSCodie Sanchez
Mm.
- LHLewis Howes
Maybe you haven't had enough time to think about it [laughs] yet, but is there-
- CSCodie Sanchez
Well, it's really taught me that, like, the most powerful thing you can have is, is time-
- LHLewis Howes
Mm
- CSCodie Sanchez
... and freedom, and that eventually you'll have something happen in your life that will happen to you. You will have no control over it. And whether you want to or not, your business, your career, your money will not be first and foremost anymore. And you might not even be able to perform at the level you want to.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And so that's not an if. That's a when. And because of that, it made me realize, why am I trying to be a hero in everything I do in my career? And now at our company, we say to be a hero is like to take heroin because it is this addictive drug where you are the one always fixing everything. You're the martyr. It's all on you. And you idealize that at some point until you realize, wait a second-
- LHLewis Howes
Mm
- CSCodie Sanchez
... like, this is all supposed to support me. Like, how you work or your job is what? How you support your family, how you support, et cetera. Well, when did support actually become primary? And so my push is that we should build amazing, big, huge things. It's super fun. I [beep] love what I do, but you should do it by choice, not by necessity.
- LHLewis Howes
Do you think a lot of people are trying to prove something when they're building a business or scaling a business?
- CSCodie Sanchez
Yeah, I mean, um, we jokingly say that entrepreneurship is really a bit of PTSD and that you, you can't have a lot of entrepreneurs without PTSD. Because if you go to some of the best entrepreneurs, they've really struggled through life. And so because of that, you have this bias that in order to be an entrepreneur, you have to struggle, and I don't think that's always true. It's just that a lot of people felt like they had something to prove.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And a chip on your shoulder can be just as much fuel as a purpose or a mission. It's just not as efficient fuel-
- LHLewis Howes
Yes
- CSCodie Sanchez
... for a long time, and it's corrosive. You know?
- LHLewis Howes
Well-
- CSCodie Sanchez
It'll eat you
- LHLewis Howes
... what is the downside to always trying to prove yourself?
- CSCodie Sanchez
Well, eventually you figure out who are you proving yourself to, and you wake up one morning and your, you know, wife doesn't wanna talk to you the same that she used to, and your kids don't recognize you, and your business has some sort of downfall. And you realize that you loved things that could never love you back.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And what a tragedy. And so instead of building a system and a business that can support you, that you do like, but is a choice to pick up the phone every day as opposed to an addiction.
- LHLewis Howes
I don't know why I wanna ask you about being a mom more, but it's probably gonna be hard for you to predict the next 10 years of your life.
- CSCodie Sanchez
Mm.
- LHLewis Howes
Because you might have one idea of how things are gonna be, and then your, your child comes, and then maybe something changes, maybe it doesn't. Um, but if you could go 10 years in the future-
- CSCodie Sanchez
Mm-hmm
- LHLewis Howes
... and imagine your, your child is 10, or almost 10, and it's that 10th birthday, what's the things that you think Cody today needs to hear from you 10 years away from now?
- CSCodie Sanchez
Mm. You know, you know what I hope is I hope that, like... I have a picture of when you have a kid, and you have a business, and you've built all these things, that your kid doesn't end up thinking that your business is the reason that you aren't around.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
You know, I have a, a picture in the future about why so many kids don't take over their parents' businesses, and it's because that was, that was their biggest competition growing up. So why would I take over the thing that kept Dad away from me-
- 14:07 – 17:34
Builders vs. Takers
- LHLewis Howes
What is the mindset that you think keeps people living paycheck to paycheck rather than shifting them to creating more financial freedom?
- CSCodie Sanchez
Mm. Well, you know, it was interesting. My husband and I were on a walk this morning, and we were talking about exactly this. I said, "There's two types of people in the world. It seems like there are builders, and there are people who only wanna go take what the builders have built. And, uh, the builders, by and large, seem to believe that there's massive abundance, and by me going and building this thing, I can create whatever I want. But there's a whole school of humans that just believe I have to only take what somebody else has because I'm not capable of building it or because it's unfair or whatever." So I'd say that the first thing is you have to ask yourself, are you a person that has to take? Are you a person that has to be given things?
- LHLewis Howes
Mm.
- CSCodie Sanchez
Or are you a builder? Are you able to build things out of thin air? And I th- I like to draw a really tough line there 'cause it's hard. That's a hard thing to look in the mirror and say, like-
- LHLewis Howes
Am I a builder?
- CSCodie Sanchez
... am I a builder?
- LHLewis Howes
Eek.
- CSCodie Sanchez
You know?
- LHLewis Howes
Not everyone is, though. Right?
- CSCodie Sanchez
Well-
- LHLewis Howes
Or can you be?
- CSCodie Sanchez
I think everybody can be.
- LHLewis Howes
Really?
- CSCodie Sanchez
And by builder, I don't mean you have to go be an entrepreneur. I mean, in, in the book, at the end of every chapter, there's two parts: one, if you're the owner, and two, if you work inside of the business, if you're the employee because Sheryl Sam- Sandberg, super rich employee, she's doing fine.
- LHLewis Howes
Oh, yeah. Yeah, she made money.
- CSCodie Sanchez
Right? Um, how about, uh, Glenn Shotwell, CEO of SpaceX, always an employee for Elon Musk.
- LHLewis Howes
Making money.
- CSCodie Sanchez
She's a billionaire. So I don't think you have to go build something by yourself, but those humans also believe that they can build something in the world. So I think, uh, money is attracted to builders, and it is repelled by takers.
- LHLewis Howes
Interesting.
- CSCodie Sanchez
And so you should go make sure that you are a builder, not a taker, first and foremost.
- LHLewis Howes
Why is money attracted to builders versus takers then? What is it about it? Is it an energetic thing-
- CSCodie Sanchez
Mm
- LHLewis Howes
... or is it a value thing? Is it a worth thing? What is that?
- CSCodie Sanchez
Haven't you ever wondered why some people, like, money just comes to them and it proliferates?
- LHLewis Howes
Oh. Yeah.
- CSCodie Sanchez
And, uh, back when I was poor, I used to hate that [laughs] . And I used to say things like, "It takes money to make money."
- LHLewis Howes
Ah.
- CSCodie Sanchez
Or, um, you know, "Rich people just have it easier," um, or, "Rich people steal and take it."
- LHLewis Howes
Mm.
- CSCodie Sanchez
I had a lot of limiting beliefs.
- 17:34 – 25:40
3 Millionaire Mindshifts
- LHLewis Howes
the three keys or the three mindsets that make someone a millionaire?
- CSCodie Sanchez
Mm. Well, one, the number one reason that you'll be a m- a millionaire or not is one thing, and that is do you actually think you can become a millionaire?
- LHLewis Howes
Really? It's the belief that you can.
- CSCodie Sanchez
Yes.
- LHLewis Howes
Because if you don't believe that it's possible for you to make a million dollars-
- CSCodie Sanchez
Oh, it's n-
- LHLewis Howes
... it's probably gonna be hard to happen.
- CSCodie Sanchez
It's gonna be hard to happen. I mean, w- there are so many studies, like-
- LHLewis Howes
Interesting
- CSCodie Sanchez
... like, I saw this incredible study about they gave two groups of people, uh, a, a packet, like a newspaper packet, and in the, and they said, "Go and find the word Ralph in here, and count how many times the word Ralph is in this newspaper packet." It wasn't the word Ralph. I'm making that up, but I can't remember what the word was.
- LHLewis Howes
Yeah. My dad's name.
- CSCodie Sanchez
Oh, there we go.
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
He's in the room.
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
So, um- Go and find the word Ralph. And there were two groups of people, people that self-describe themselves as lucky-
- LHLewis Howes
Uh-huh
- CSCodie Sanchez
... and people that describe themselves as unlucky.
- LHLewis Howes
Huh.
- CSCodie Sanchez
The unlucky people, they said, "Go and find it. It's in there," uh, the number was, like, 217 times, let's say. So the unlucky people, it took them, like, 15 minutes or something like that to go find the 215 times. Then they said, "When we're done." "Okay, great." The lucky group, it took them, like, 90 seconds.
- LHLewis Howes
Wow.
- CSCodie Sanchez
Why? Because on, like, page two of the newspaper it said, "Ralph is written in here 217 times." Like, there is a lot of research that shows the luckier you think you are, the more luck [laughs] you find. And so these are just, these are your perceptive beliefs.
- LHLewis Howes
Wow, okay. So that's the first key, or the first mindset is believing you can be a millionaire.
- CSCodie Sanchez
Yep, is believing you can.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
And you gotta break through that before you can do anything else. That's why, like, Tony Robbins and this show is really important, I think, because I teach people more, like, here's how to grow your business. Tact- like, if you wanna build a business less miserably and make more money, I can help you.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
If you don't believe in yourself at all, you should listen to Lewis-
- LHLewis Howes
Yeah
- CSCodie Sanchez
... and Tony first.
- 25:40 – 29:00
The New American Dream
- CSCodie Sanchez
Mm. The largest struggle... L- well, let's be real about what's really hard today, especially, you know, for some of the younger generations. It's more expensive, uh, to buy a house than it's ever been before on an inflation-adjusted basis. Uh, interest rates are still quite high, so that is another added in tandem with it being expensive. Uh, wages have not increased-
- LHLewis Howes
Mm
- CSCodie Sanchez
... uh, in line with productivity. Uh, and, uh, jobs have continued to decline, so we are at, writ large-
- LHLewis Howes
Mm
- CSCodie Sanchez
... having a harder time in the job market. So I think you could pretty safely say it is a little bit harder during this generation than probably our b- parents' generation to have the American Dream of a house, uh, you know, a really nice life off of one salary. Um, man, education costs through the absolute-
- LHLewis Howes
Mm
- CSCodie Sanchez
... roof.
- LHLewis Howes
Crazy.
- CSCodie Sanchez
I mean, college has three X'd really in our lifetime since our parents.
- LHLewis Howes
Wow.
- CSCodie Sanchez
And so that's all real. Now, the next question here is, what of all of that have we been sold is the American Dream that actually isn't? And so I think some real questions to ask yourself that people are struggling with today is, like, do you really need the college degree? You know, do you act- are you actually sure that what you want to do is buy another liability, AKA a house, when you might be able to rent way more cheaply? How much are you sure you wanna be an entrepreneur and take on all of the difficulty and cost of being an entrepreneur? I promise you they're not driving Lambos around every single day.
- LHLewis Howes
No.
- CSCodie Sanchez
And so I think if we were sold a bag of goods about what the American Dream is, can you actually reset what that might look like for you? And I actually am really proud of this generation 'cause I think in a lot of ways they are, and sometimes it pisses us off-
- LHLewis Howes
[laughs]
- CSCodie Sanchez
... like being a little older.
- LHLewis Howes
What is the younger generation doing right?
- CSCodie Sanchez
Uh, I, I think they're questioning everything.
- LHLewis Howes
Oh.
- CSCodie Sanchez
You know? And they're saying, "Yeah, I'm not sure I need to own a house right now. Actually, I want rental freedom. I don't wanna have to be tied to a W-2 income and salary, uh, because I have to pay my mortgage consistently over time." Uh, which I think is totally reasonable. Um, I think the younger de- generation today is actually being really smart about saying they're starting a lot of businesses, but they're actually not leaving their jobs to the same degree.
- LHLewis Howes
Mm.
- CSCodie Sanchez
So in 2025, there are 5 million new business starts. In 2019, there were 500,000 new business starts.
- LHLewis Howes
Really?
- CSCodie Sanchez
Yeah. Look at the difference between the two. What's crazy, though, is that there's less profitable businesses than there were back then. So the big guys are eating way more, and the little guys aren't. The, the average small business, if you are part of the 60% of the middle, the 1 to 10% at the top are 30X more profitable. So, like, there's this huge curve between the have and have-nots.
- LHLewis Howes
Wow.
- CSCodie Sanchez
Which means I think you should not feel bad about yourself if you haven't started a business, haven't made all your millions, you know, aren't flying on a private jet. I promise you most people are not.
- LHLewis Howes
Right. [laughs]
- CSCodie Sanchez
And they're not.
- LHLewis Howes
It's very rare.
- CSCodie Sanchez
Yeah. And, and you can have all that and do all of that if that is what you want to do. I think it's totally possible, but just don't get it twisted that most people are not there.
- LHLewis Howes
Mm.
- 29:00 – 33:28
The Billionaire Playbook
- LHLewis Howes
What is something you've learned from someone extremely wealthy in the last year that's made you think about money and business differently?
- CSCodie Sanchez
Yeah. Well, one, uh, I, I m- you know what the craziest thing to me is with billionaires and the really, really rich? It's usually, like, one to three decisions that got them there.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And almost all billionaires I've ever really gotten to know, it's come down to either their systems that they run or the terms that they set. It's almost never anything else. And what do I mean by that?
- LHLewis Howes
Mm.
- CSCodie Sanchez
Like, I've become friends with a guy who's really big in private equity, and he's, like, one of the fathers of private equity. Super cer- super brilliant guy, multibillionaire. And if you were to ask him how he got rich, it is not from grinding from 6:00 AM to 12:00 in the morning. He would say, "You know what I did? I bought businesses. I implemented systems in every single business. I ran those systems again and again over time. I found the few one to two things that were problematic in each business, and then, um, I fixed those. And then I sold them at really good terms." And what's crazy is most billionaires are that.
- LHLewis Howes
Mm.
- CSCodie Sanchez
They're like, you know... I just had on my podcast David Adelman, who was kind of the founder of student housing, billionaire, owner of the 76ers. You know mo- more about sports than I do.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
I guess he just had LeBron come there or something.
- LHLewis Howes
Yeah, yeah. No big deal.
- CSCodie Sanchez
No big deal.
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
And if you were to ask David why he got so rich, it's not because he raised a bunch of capital and did something crazy. He ran a system inside of his business. He followed the system continuously. And he almost told people, "Don't be a genius. Just, like, follow the playbook." And so- I am continuously baffled by the fake narrative and the real narrative. The fake narrative is you have to be a genius to massively succeed. The real narrative that I've seen again and again is you have to just steal everybody's homework and follow a proven system that almost all private equity guys run. And if you do that over time continuously, and it's kinda boring, you'll have a much higher likelihood of success. Now, most people fail because they're golden retrievers chasing after every new object.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
They do not fail from implementing something and sticking with it.
- LHLewis Howes
Yeah. I feel like, uh, in my business, I've been really consistent of doing the same things but trying to improve them every single day and every single week for 13-plus years now. But I also, for the first maybe six or seven years, got into too many different things, and it exhausted me. It drained me. But there was money everywhere and opportunities coming to me as I was growing, so I said yes to everything, and then I was exhausted and drained. And then I said, "I'm stopping all of this and sticking to the main thing-"
- CSCodie Sanchez
Yeah
- LHLewis Howes
... that is bringing me the most joy, the most fulfillment, the most impact, and the most income."
- CSCodie Sanchez
Yeah.
- LHLewis Howes
And for the last six or seven years, we've refocused on that, and it's just continued to be a better life, a better business, and, um, a better product because of that. Because I'm able to show up differently. And s- my mind wants to think, "Oh, but this opportunity, this opportunity," but I have to keep saying no to so many different things, stay focused, and, and almost keep it boring in certain ways. Whereas I used to invest in so many different things, but I didn't have the right system for investing.
- CSCodie Sanchez
Yeah.
- LHLewis Howes
So I made a lot of the poor decisions. If I had a better system, maybe it would've been better. And now I'm just like, "I'm going to put my money every single month into index funds and consistently ride this thing for the next however many decades," and just be consistent there as well. It doesn't have to be super sexy or know all the best trades or whatever, but just be consistent, build what I love, put the money in there. If a great opportunity comes that works now into my, my lifestyle, okay, maybe I'll go for it, too, but not doing too much and being very consistent now.
- CSCodie Sanchez
Yeah. You know, you know what I realized? Is, like, early on, I thought that all of this was so complicated.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
I... And I think maybe that's what people want you to believe. Like, they want you to believe that making money is really complicated because that serves a lot of interests. It means that we give our money to financial advisors.
- LHLewis Howes
Mm.
- CSCodie Sanchez
It means we give our sovereignty to employers. It means we sort of, we're like, "Oh, I don't wanna be in charge. This is so complicated." And then now, you know, we've run, like, 1,621 people through our systems and processes.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
Why that's kinda cool is that's 1,600 businesses, so I got to see, like, what matters. And I found that, like, if you wanna make
- 33:28 – 40:03
3 Steps to More Profit
- CSCodie Sanchez
more money, there's, like, three steps that almost everybody should do and nobody does.
- LHLewis Howes
What's that?
- CSCodie Sanchez
The first step is you need to sell more things to rich people. They pay more.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
We call this persona, and so basically, most people do not sell things to rich people because when you start out, you're not rich. It's really scary. And so you have something called the wallet share phenomenon, which means you think that your wallet is everybody else's wallet.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
At some point you'll realize, oh, no way, having 500 clients pay you 2X more is so much more fun than having 1,000 clients pay you 1X less.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
And so it's like, one, find your richest client, try to clone them or multiply them. And then two is pricing. Um, so let's say you have a, a job. Like, you know what the best way is for you to immediately make 20% to 30% more? Ask for a raise. It's the same thing in business. Most businesses are underpriced 30% to 300%, 30% to 300%. In fact, I've gone into 1,621 businesses where I can see their QuickBooks. I can, like, see into their business in the back end. They're not just telling me. I have the data in front of me. Do you know how many businesses I found that were overpriced?
- LHLewis Howes
How many?
- CSCodie Sanchez
Zero.
- LHLewis Howes
Really?
- CSCodie Sanchez
Not a fu- Isn't that cra- Like, zero
- LHLewis Howes
So they undervalue themselves?
- CSCodie Sanchez
Zero.
- LHLewis Howes
Why is that?
- CSCodie Sanchez
Because we think that... Well, actually, there's a couple reasons. The first reason is because you wouldn't be willing to pay more, so you artificially limit what everybody else is willing to pay more.
- LHLewis Howes
Mm.
- CSCodie Sanchez
The second is because you have a team, and everybody on your team makes less money than you do, right? So what do they do? They artificially limit to the amount they'd be willing to pay.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And down and down and down and down.
- LHLewis Howes
Interesting.
- CSCodie Sanchez
And so it's almost like this cascade.
- LHLewis Howes
Huh.
- CSCodie Sanchez
And so that's the second thing, is pricing. And then the third thing is, for some reason, like, what you really want in life, you want to sell something once and get paid continuously.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
That's what you want. Recurring revenue. Sell once, get paid continuously. You wouldn't work at a job that just paid you one time. Like, you want people to pay you again and again, right? But for some reason, when we start our own business, we are fine with people paying us once. In fact, we feel really uncomfortable when we ask them to go on subscriptions or recurring. So most businesses, let's call it 60% to 70%, have a bad product set up because you are chase... It's like, it's like only ever limiting yourself for the rest of your life to go on a date with a woman once.
- LHLewis Howes
Mm.
- CSCodie Sanchez
That'd be pretty hard to keep getting dates.
- LHLewis Howes
Yeah, yeah.
- 40:03 – 45:11
The Owner Mindset
- LHLewis Howes
wealthy withou- without ever becoming an actual owner?
- CSCodie Sanchez
Oh, yeah. In fact, I think you're a little crazy if you wanna be an owner.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
I mean, in order to own something-
- LHLewis Howes
It's a lot
- CSCodie Sanchez
... you have to be a masochist that kind of likes pain in the beginning because you'll... You've never done it before. So when have you excelled at something that's hard-
- LHLewis Howes
Yeah
- CSCodie Sanchez
... without doing it before? That would be crazy to think that. So you do not have to be, uh, an owner to be rich. What I think you do have to have, you have to have an owner mindset. And an owner mindset-
- LHLewis Howes
Mm-hmm
- CSCodie Sanchez
... really just means that you own every task and every bad thing, and every good thing that has happened to you in life is up to you. And if you can have the type of mindset where you say, "I take ownership over the fact that I'm not making what I want to in my salary. I take ownership-
- LHLewis Howes
Mm-hmm
- CSCodie Sanchez
... over the fact that I got fired. I take ownership over the fact that my side hustle failed." If you own all of that, then I believe you can succeed.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
Plus, you'll be so... I don't think people realize... I mean, Lewis, how rare is it when somebody comes to you and they're like, "Hey, Lewis, I know I'm in graphic design, but I saw over here on the website there are a couple things I think weren't optimized, so I, like, spun up a new version of it. I wanted to iterate on that for you. I think this could help improve our LTV." You'd be like, "What?"
- LHLewis Howes
Right. Yeah.
- CSCodie Sanchez
You know? And you'd be like-
- LHLewis Howes
That's amazing
- CSCodie Sanchez
... amazing. And if that person kept coming to you-
- LHLewis Howes
Yeah, every week
- CSCodie Sanchez
... understanding the language-
- LHLewis Howes
Every month
- CSCodie Sanchez
... of money with an owner mindset-
- LHLewis Howes
Sure
- CSCodie Sanchez
... you would pay them more eventually.
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
And I think-
- LHLewis Howes
'Cause they're thinking of how, how to make you more money. They're thinking of, "Oh, let me optimize something that I'm skilled at-
- CSCodie Sanchez
Yeah
- LHLewis Howes
... that can help make you more money."
- CSCodie Sanchez
Yeah. And what's crazy is that most people will never do that.
- 45:11 – 50:15
Hitting Rock Bottom
- LHLewis Howes
they built. When was the time that you realized part of your business was owning you, that you had to start fixing that?
- CSCodie Sanchez
Oh, yeah. I mean, yeah, so often.
- LHLewis Howes
Still now, you know? [laughs]
- CSCodie Sanchez
Yeah, but-
- LHLewis Howes
Last week
- CSCodie Sanchez
... yeah, I mean, I remember one moment in particular-
- LHLewis Howes
Okay
- CSCodie Sanchez
... where, um, I had a business that was doing really well, and I had done the thing that everybody tells you to do, which is hire great people, get out of their way.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
I hired a guy I thought was great.
- LHLewis Howes
It's hard to do that, though. It's hard. [laughs] I mean-
- CSCodie Sanchez
Well, I think it's wrong. I think instead it's, it's not, it's never... You should never hire more people, hire great people and get out of their way. You hire great people, you incentive-align then, s- incentive-align them, you get out of their way, and you track performance consistently.
- LHLewis Howes
Yeah, yeah, yeah.
- CSCodie Sanchez
And if you don't do those four-
- LHLewis Howes
Weekly report. Yeah, weekly, weekly tracking
- CSCodie Sanchez
... expect this to happen to you, which is-
- LHLewis Howes
Yeah
- CSCodie Sanchez
... I had a business where... I'll never forget, I, uh... One day I went to go get a loan for the business, and I needed for something else we were gonna do, and I walk into the bank, and I think there's a big pot of money in the bank. And I talk to the banker, and the banker looks at me and goes, "Well, you can't get a loan for this account. There's no money in here. In fact, like, we're gonna need you to fill this up again soon." I'm like, "Excuse me, can you please turn that thing around so I can see what's on that screen?" And the account that I thought had a million dollars in it was basically to zero.
- LHLewis Howes
Come on.
- CSCodie Sanchez
And I remember my gut just dropping, and not only it was about the money, it was like, "Oh, my God, I have to make payroll, and I need to pay the lease, and what am I gonna do for this?" And so, uh, I go to the guy who was the head of operations of the business there, and he was like, "Oh, well, you know, we kept this spreadsheet but not this one, and I did tell you this one time that it might be tight this summer if we didn't do this," and basically had sort of obfuscated and, and hid from me that we were almost out of money-
- LHLewis Howes
Ugh
- CSCodie Sanchez
... and didn't wanna give me the bad news and so kept hiding the ball, hiding the ball, hiding the ball. And it was my fault for not tracking him, obviously. And so I remember sitting at home, and I call my dad in the middle of the night, and it's lights out in the dark. I'm sitting on the couch, and, uh, I had no idea what to do next, and I thought I was gonna lose the business. I'd have to go back and get a job. And I remember calling my dad, and he said, "You know what? If you haven't sat in the dark in the middle of the night with no idea of what to do next, you're not really in the game."
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
And I remember he was like, "So now what do we do? When you step on a nail," he's like, "you don't complain about it, ask what happened, try to figure out the culprit. You pull the [beep] thing out, and then you tape it up-
- LHLewis Howes
Mm
- CSCodie Sanchez
... and you figure out how to keep going." And so I remember having a good cry [laughs] and then trying to go to work to- the next day to figure it out. But what happened after that is it was so painful, like, just my identity and that I was a failure because I had let an entire business fail-
- LHLewis Howes
Right
- CSCodie Sanchez
... that after I'd cleaned it up, I promised myself I would do everything in my power not to have that happen to me again. And that's when I realized, like, there's a reason why cowboys don't have long lives. You know, when you're out there just riding a bunking bronco with no system, no support, what do you think's gonna happen? Eventually you're gonna crack your head. And most entrepreneurs, what do we do? We just look at other entrepreneurs around us that also have no idea what they're doing. We mimic them, or we have some component or comparison between them, and we don't ever try to put a system in place to make sure that we have, like, airbags when we need them. And so that's when I decided, like, I'm never running a business like this again, 'cause it was, it... too painful for me.
- LHLewis Howes
Wow. And so what did you learn then? I have to build these systems in place when I hire great people and make sure that I'm always tracking everything?
- CSCodie Sanchez
Yeah. I basically realized, like, well, if you don't wanna have something happen to you again, you usually like need to study the cause.
- 50:15 – 52:02
Asset vs. Expensive Job
- LHLewis Howes
an asset and... What's the exact question I'm gonna ask you? What's the, what's the difference between having an asset and a really expensive job that feels like, oh, this is an asset, but I'm just working really hard, essentially, and it's an expensive job? Um, and how do you tell which one you actually own?
- CSCodie Sanchez
Yeah. I think, f- first of all, it's such a good question. Like, do you have a business or do you have a job?
- LHLewis Howes
Yes.
- CSCodie Sanchez
And most people, I would say, have a job. And how do you know the difference between the two? One, when you leave for two, four, six, eight weeks, what happens? Does everything collapse and the money stops flowing? If you do, you have a job, not a business. If you, in your business, have to be on your phone, on your computer-
- LHLewis Howes
Mm-hmm
- CSCodie Sanchez
... checking in constantly on your business, you have what's called key man risk.
- LHLewis Howes
Mm.
- CSCodie Sanchez
Which means that you are like the key that opens the door to the business, and if you don't open the door, the door is shut.
- LHLewis Howes
Mm.
- CSCodie Sanchez
And so I always try to get people to ask themselves, "Okay, if you're gone two, four, six, eight weeks, what happens?"
- LHLewis Howes
Yeah.
- CSCodie Sanchez
That's one. And then two, who inside of your business is better than you? Like, do you have anybody surrounding you who you think, "Man, in that zone of genius, in that zone of genius, categorically better than me."
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
And if they aren't, you've really surrounded yourself with what, what I call a sea of assistants. I was notorious for doing this. And what that means is assistants are always just going to be there to do what? Assist, never to lead.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
And so it's like our ego is going to keep us trapped in this thing-
- LHLewis Howes
Yeah
- CSCodie Sanchez
... because we have hired people who are not as good as us because we're probably a little afraid of what that might look like.
- LHLewis Howes
Wow.
- CSCodie Sanchez
And so those are the two, very two first things I look for.
- 52:02 – 56:45
Finding Hidden Money
- LHLewis Howes
Yeah. What advice would you give someone like me in a key man business?
- CSCodie Sanchez
Mm.
- LHLewis Howes
You know, knowing what you know about me or this business or this industry, um, and knowing that I've already done a lot of coaching programs in the past. I've done masterminds. I've been very successful in making multiple million-dollar revenue streams and membership-
- CSCodie Sanchez
Mm
- LHLewis Howes
... sites, courses, coaching, masterminds, events, all these different things. But they also take a lot of time from me to continue to be the key man. I've tried, uh, network of bringing in other talent. That takes time and energy managing and-
- CSCodie Sanchez
Yep
- LHLewis Howes
... um, what would you see from the outside looking in-
- CSCodie Sanchez
Yeah
- LHLewis Howes
... on, on how to double the business or 10X a business without taking on more time from the key man?
- CSCodie Sanchez
Yeah.
- LHLewis Howes
Is it investing in other businesses, launching other businesses that have partners and helping push audience to those businesses? Is it something else? What would you see?
- CSCodie Sanchez
Well, on every business, you wanna start at the source of truth.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
The, the single source of truth for every business is your profit and loss statement. And so when I come into a business, just like any private equity investor, the first thing I'm gonna do, I'm not actually thinking about you at all.
- LHLewis Howes
Mm-hmm.
- CSCodie Sanchez
I'm going to your profit and loss statement.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
And when I look at my profit, your profit and loss statement, I'm gonna do an analysis to say, where is this business hiding money? That's first. Where-
- LHLewis Howes
Hiding money, what does that mean?
- CSCodie Sanchez
That means that inside of your business right now are areas that are inefficient-
- LHLewis Howes
Mm-hmm
- CSCodie Sanchez
... and too expensive.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
And the easiest thing to do is not go out and make more money. It's just to keep more of what you got.
- LHLewis Howes
To fix those problems first.
- CSCodie Sanchez
100%.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
So I'm basically looking there first, and the reason we don't like to do that is 'cause we're like, "Ah, I don't know. That's probably not in there."
- LHLewis Howes
Yeah.
- CSCodie Sanchez
"Where's the big things? That's not so big." But costs always costs. Like, if you can control the costs in your business, you'll survive longer, and any great entrepreneur knows that. So I'd start with your profit and loss statement. Then, as soon as we're done looking at your profit and loss statement, we're gonna look at the, the big three. We're gonna look at your pricing first. Almost every business, probably including yours, doesn't need to do a damn another thing.
- 56:45 – 1:04:20
Business Builder Archetypes
- CSCodie Sanchez
much money you make.
- LHLewis Howes
Mm.
- CSCodie Sanchez
You know, if hard work was gonna make you really rich, my roofers and plumbers would make way more money than I do.
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
But they don't.
- LHLewis Howes
Unless they own their business in a certain way that-
- CSCodie Sanchez
And that would be leverage.
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
And so, but I really think we need to internalize that-
- LHLewis Howes
Mm
- CSCodie Sanchez
... because it, it... I needed to internalize that, I guess I'll just say. I'm, I'm what's called a workhorse archetype.
- LHLewis Howes
Yes.
- CSCodie Sanchez
So I always wanna keep working. I associate hard work... Like, have you ever... You know how you know you're a workhorse? People go, "Oh, she's a beast. Oh, like, you work so hard," and you kinda like it.
- LHLewis Howes
Yeah, yeah. I am a beast.
- CSCodie Sanchez
I'm a beast. I'm tough. I keep going.
- LHLewis Howes
I outwork everyone.
- CSCodie Sanchez
Yeah.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
I outwork... That is a huge red flag.
- LHLewis Howes
Yeah. [laughs]
- CSCodie Sanchez
Because what that actually means is that you're probably not very good at hyper-
- LHLewis Howes
Mm
- CSCodie Sanchez
... prioritization, boundary setting, and choosing other people to do low-level tasks.
- LHLewis Howes
Interesting, yeah.
- CSCodie Sanchez
Which was me.
- LHLewis Howes
You take it all on. Yeah, I did a lot of it, too.
- CSCodie Sanchez
Uh-huh.
- LHLewis Howes
For sure.
- CSCodie Sanchez
Yeah. I wonder what you are now. Like, if I had to guess your archetype-
- LHLewis Howes
Is it-
- 1:04:20 – 1:09:03
Buy Boring Businesses
- LHLewis Howes
a lot of people think you have to be so smart to launch a business or make a lot of money.
- CSCodie Sanchez
Yeah.
- LHLewis Howes
And you continue to teach people, like, find something that people want, and usually it's pretty boring, right?
- CSCodie Sanchez
Mm-hmm.
- LHLewis Howes
This is why you talk about boring businesses. Like, people need to wash their clothes, so use a laundromat. People need roofing. Okay, get... Or plumbing. Get a plumbing service, whatever it might be. Buy a company that people already are paying for-
- CSCodie Sanchez
Yeah
- LHLewis Howes
... every day.
- CSCodie Sanchez
Yep.
- LHLewis Howes
And just optimize that. Optimize that business. Don't have to try to launch something new, start something new. It is so hard to launch a new business.
- CSCodie Sanchez
Yeah.
- LHLewis Howes
It just takes so much time and energy. If you're excited about that, cool, but it is a lot of effort to launch.
- CSCodie Sanchez
Oh.
- LHLewis Howes
Unless somehow you're lucky and, like, you have a big audience and it just effortlessly comes out and people... You know. But that takes time to build to that too. And so I love that you continue to tell people, like, you don't have to complicate this.
- CSCodie Sanchez
Mm-hmm.
- LHLewis Howes
Keep it simple. Get involved in a, in a business where people are already spending money so you don't have to come up with some new creative idea. It doesn't have to be that hard.
- CSCodie Sanchez
Oh, yeah. I also think, like, you gotta be really careful today trying to follow what the really, really skilled tell you online.
- LHLewis Howes
Yeah.
- CSCodie Sanchez
Because even if I listen to every single piece of advice from Michael Jordan, I still wouldn't shoot baskets like him.
- LHLewis Howes
No, no.
- CSCodie Sanchez
So even if you listen to every single piece of advice on how to build content from Gary Vee, you're probably not gonna do content as well as Gary Vee does.
- LHLewis Howes
No.
- CSCodie Sanchez
He's a, he's a G at it.
- LHLewis Howes
Some people have and some people don't.
- CSCodie Sanchez
And, you know, even if you get all the sales line, the sales stuff, we were talking about this earlier. One of my biggest pet peeves in the world, one of the worst pieces of advice I think you can take, is to copy everybody's offers-
- LHLewis Howes
Mm
- CSCodie Sanchez
... and to copy everybody's pitches.
- LHLewis Howes
Oh.
- CSCodie Sanchez
Because guess what happens? If you continue to use the same pitch or offer that somebody else does, what's gonna happen to you? You're gonna sound just like everybody else.
- LHLewis Howes
Yes.
- CSCodie Sanchez
And it so quickly goes to the bottom. You know, I, I actually posted a clip on X of, uh, Jefferson Fisher, who's a buddy of mine, and he was on my podcast.
- 1:09:03 – 1:13:59
Codie's True Legacy
- LHLewis Howes
What is your dream? What is it really your dream? You got a, you got a baby on the way, you've got, you know, your businesses are, I think, are valued in the nine figures. You're buying more businesses, you're scaling, you're, you know, you're expanding, all these different things, and you're bringing a family to, to life here soon. What is your real dream for the future for you, Codie?
- CSCodie Sanchez
Yeah.
- LHLewis Howes
Is it to build and exit something at a certain number one day? Is it to impact lives? Is it to have revenue coming in where you can do what you want? What's the, what's the vision for you?
- CSCodie Sanchez
You know, like, I think your vision changes at different-
- LHLewis Howes
Yeah, yeah
- CSCodie Sanchez
... points of your career. And at first, early on for me, it was, uh, I don't ever want anybody to have control over me or my life again. I don't ever want to have to work for somebody I don't like or to spend a moment of my day in somebody else's life architecting their dream instead of mine. And, and even in points in my career, it was, um, like, " [beep] you. I'll become every single thing-
- LHLewis Howes
Wow
- CSCodie Sanchez
... that you said I wouldn't," you know?
- LHLewis Howes
Yeah.
- CSCodie Sanchez
And just try to stop me and try to get in my way, because there's no way you'll be able to stop me, and you'll have to watch me on the climb, and I will love every minute of it.
- LHLewis Howes
Wow.
- CSCodie Sanchez
It was angry.
- LHLewis Howes
You were trying to prove yourself.
- CSCodie Sanchez
Oh, yeah. And-
- LHLewis Howes
Prove people wrong.
- CSCodie Sanchez
Let's go.
- LHLewis Howes
And what did that do for you?
- CSCodie Sanchez
Um, it got me afar [laughs] .
- LHLewis Howes
Yeah, it helped.
- CSCodie Sanchez
Yeah.
- LHLewis Howes
That energy-
- CSCodie Sanchez
Honestly
- LHLewis Howes
... it gets you results
- CSCodie Sanchez
... it really... And I don't think there's anything wrong-
- LHLewis Howes
Yeah
- CSCodie Sanchez
... from building from anger.
- LHLewis Howes
Oh, yeah.
- CSCodie Sanchez
That is o- You don't think Martin Luther King was angry?
- LHLewis Howes
Yeah, yeah.
- CSCodie Sanchez
Like, you can build and be angry.
Episode duration: 1:13:59
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Transcript of episode a_5-iAEMRpE
