Podcast Summary
Focusing on personal growth and making small investments: Embrace personal growth, make small investments, and prioritize meeting basic needs for a fulfilling life. Not everyone needs to aim for exceptional intellect or build groundbreaking companies.
Not everyone is meant to build the next groundbreaking tech company or possess a genius-level IQ. Most people prioritize meeting their basic needs and living a comfortable life. The idea of making small investments or buying businesses, similar to buying stocks, can be a more practical approach for many. The discussion also highlighted the existence of a handful of individuals with exceptional intellect, but it's essential to remember that not everyone needs to strive for that level of brilliance. Instead, focusing on personal growth, making small bets, and taking care of one's needs can lead to a fulfilling life. The conversation also emphasized the importance of understanding and respecting individual differences and strengths.
Sean's insights on HubSpot and Cody's simple approach: Sean shared insights on HubSpot's value for businesses dealing with multiple software tools, while Cody kept it simple and introduced himself as a salesperson or investor, depending on the situation.
During a podcast interview with a highly intelligent and successful investor named Sean, the hosts found it challenging to keep up with the conversation due to Sean's deep knowledge and expertise. However, the most valuable part of the interview came after the recording ended when Sean's guard was down, and he engaged in a casual conversation with the hosts. HubSpot was mentioned as a solution for businesses dealing with the complexity of managing multiple software tools, offering a single source of truth where everything is organized and tracked in one place. Cody, the other guest, was described as a private equity investor, fund manager, and writer, sharing his experiences and insights through his newsletter and investment fund. Despite his impressive background, Cody kept it simple and introduced himself as a salesperson or an investor, depending on the situation. Overall, the podcast episode showcased the importance of genuine and relaxed conversations to build connections and gain valuable insights.
Private Equity Trend: Investing in Small, Profitable Businesses: Private Equity firms are buying profitable, steady businesses from retiring owners, generating significant returns, and preserving value for the next generation.
There's a growing trend towards private equity (PE) investing in small, "boring" businesses as a new generation takes over from baby boomers who are looking to retire and sell their companies. PE firms like Entourage Effect Capital, which manages a $200 million cannabis PE fund and a smaller $20 million micro PE fund, are capitalizing on this trend by buying profitable, steady businesses from retiring owners. These businesses, which range from plumbing companies to laundromats, often have multi-million dollar revenues and steady profits, but are being overlooked by larger investors. By buying these businesses and placing operators to run them, PE firms can generate significant returns for themselves, while also preserving the value of these businesses for the next generation. This trend is expected to continue as more baby boomers retire and look to sell their businesses.
From journalism to finance and cannabis: following curiosity: Curiosity can lead to unexpected career paths. Ask questions, identify emerging markets, and be prepared to capitalize on opportunities.
Passion and curiosity can lead to unexpected career paths. The speaker, who started off as a journalist covering human rights issues, eventually found herself in the finance industry due to her curiosity about why some people were in better financial positions than others. She went on to work for various financial institutions, learning about passive and active investing, and eventually found success in building out international portions of their businesses. Later, she took a leap into the emerging cannabis market, despite initial resistance from her family. Throughout her journey, she emphasized the importance of asking questions and being prepared, as well as identifying and capitalizing on emerging markets before they become mainstream. The speaker's unique background and experiences make her an expert in niche industries like micro PE and cannabis, making her a valuable resource for those looking to learn more about these fields.
Mailbox Money Business Model: Profitable PO Box Rentals: The Mailbox Money business model is a profitable venture focusing on PO box rentals, with potential for expansion through buying existing stores and effective marketing strategies.
The mailbox money business model, which involves operating a pack and ship center with a focus on PO box rentals, can be a profitable and repeatable venture. This business model is an evolution of the self-storage trend, where instead of renting out large units, one rents out small mailboxes for a lower overhead. The profit comes from the rental income of these mailboxes rather than the packaging and shipping services. To succeed in this business, one can follow the example of successful entrepreneurs like Lisa, who started by building the first location from scratch and then bought existing stores to expand. Marketing efforts include PPC ads, direct mail, and local promotions. This business model allows for the efficient use of a small real estate footprint and can be a viable alternative for those looking for profitable business opportunities.
Focusing on small businesses or buying existing ones: Instead of building a startup, consider buying distressed assets for financial stability and diversification
Not everyone should aim to build the next big business or startup. For most people, focusing on a portfolio of small businesses or buying existing ones can provide financial stability and diversification, allowing them to meet their basic needs and enjoy their weekends. Buying distressed assets for $0, as an example, can be a viable option, as these businesses may have value despite being worth nothing to the market. This approach gets criminally underrated compared to building from scratch or joining an existing company, but it can offer freedom and lower risk. The media often glamorizes building, but the buy path can be an appealing and easier alternative for those seeking financial independence.
Acquiring client rosters and investing in modular homes during tough economic times: During economic downturns, acquiring client rosters from closing businesses through revenue-sharing agreements and investing in modular homes at scale can provide new sources of income and impressive returns, but careful planning and research are essential.
During tough economic times, there are opportunities to be creative and help businesses in need while also benefiting from their assets. One such opportunity is the acquisition of client rosters from closing businesses through a revenue-sharing agreement. This not only provides a new source of clients but also generates income for the business owner during the closure process. Another example is the investment in modular homes, particularly at scale, which can offer significant cost savings compared to traditional housing options. Both of these strategies require careful planning and research but can lead to impressive returns.
Experience of buying a modular home and angel investing: Buying a modular home offers faster construction and lower costs, while angel investing requires due diligence and multiple investments for potential returns. Modular homes can be used for tax write-offs by turning them into a business.
The process of building a modular home offers numerous advantages, including faster construction time, lower costs, and potential tax benefits. However, angel investing in startups comes with its own risks and requires a significant number of investments to yield successful returns. During the discussion, the speaker shared their experience of buying a modular home that was being built in a record time and at a lower cost compared to traditional construction methods. They also mentioned the addition of a back office module and the potential of using the property for tax write-offs by turning it into a small business. Regarding angel investing, the speaker expressed their view that it can be an enjoyable but risky investment type. They mentioned the importance of proper due diligence and the high number of investments needed to achieve successful returns. They also shared their friend's perspective on deal structuring and the potential for founders to be charismatic and sellable, which can sometimes lead to fraudulent activities. Overall, the conversation highlighted the benefits and challenges of both modular home construction and angel investing, offering valuable insights for those considering these options.
Angel investing and public market investing should have a clear reason: Accumulate wealth first, approach angel investing as a hobby, and focus on financial literacy, networking, and industry knowledge before investing in public markets or angel deals.
Investing in angel deals or public markets without a clear and compelling reason is not advisable. According to our discussion, angel investing should ideally be approached after accumulating significant wealth, and even then, it should be seen as a fun hobby rather than a primary source of income or investment strategy. Similarly, relying solely on public market investing to build wealth is not a reliable approach, as evidenced by the fact that none of the wealthiest individuals made their fortunes solely through stock market investments. Instead, focus on building a strong foundation of financial literacy, networking, and industry knowledge before diving into these investment opportunities.
Investing in individual stocks can be risky without an unfair advantage: Invest in indices, mutual funds, or private markets where you have an edge, or consider buying real estate at auction before it's listed online for discounted prices.
The stock market can be irrational and unpredictable, and without an unfair advantage, it's risky to speculate on individual stocks. Buffett's investment in Goldman Sachs during the financial crisis was a backroom deal with asymmetric risk, and the same principle applies to ICON. If you don't have a clear edge, it's wiser to invest in indices or mutual funds in private markets where you can have an unfair advantage. The stock market often operates on a "Keynesian beauty contest" basis, where people bet on what others will value a stock at, leading to out of whack valuations. Buying real estate at auction before it goes on Zillow or Redfin is a way to buy properties at a discount. Foreclosed properties are those listed on popular real estate websites, but buying at auction before that can result in significant savings.
Maximizing Profits in Real Estate Auctions: To succeed in real estate auctions, investors need accurate info, property validation, and understanding of debts and liens. A more streamlined online platform could save time, resources, and minimize risks.
There are opportunities to make significant profits in the real estate market, specifically through the purchase of foreclosed properties at auctions. However, to be successful, it's essential to have accurate and up-to-date information, validate the properties' existence, and understand the debt and liens on the properties. Currently, resources like Roddy's List help investors access this information, but there's a need for a more streamlined online platform that can provide real-time access to auction information, property details, and debt ownership. By doing so, investors can save time and resources while minimizing risks associated with physically attending auctions and validating property conditions. This could potentially revolutionize the real estate investment market by making it more accessible and efficient for everyone.
Building genuine connections through unconventional means: During economic downturns, unconventional methods like sending thoughtful gifts or engaging in meaningful conversations can help build strong relationships in the startup world.
Building genuine connections with people, especially in the startup world, can be done in unconventional ways. During the 2008 housing market downturn, individuals with cash could buy foreclosed homes at auctions, but in today's market, the government is the biggest buyer due to restrictions on non-primary residence purchases. In the past, investors like Sean made connections by showing genuine interest in people, even sending them favorite candies or t-shirts. However, simply sending a gift does not guarantee a deep relationship. Instead, it's essential to also be doing interesting and cool things yourself, as people want to connect with those who add value to their lives. While social media can be a helpful tool, old-school methods like sending thoughtful gifts or engaging in meaningful conversations can still be effective in building strong relationships.
Keys to Establishing Connections: Be around creators, have low expectations, offer value, be interesting, avoid neediness, be knowledgeable, share knowledge, give without expecting, maintain authenticity, and avoid desperation.
Building meaningful relationships requires genuine interest and a selfless approach. According to the speaker, being around creators and having the lowest possible expectations are the keys to establishing connections. Engaging with people by offering value, being interesting, and avoiding neediness are effective networking strategies. The speaker emphasizes that it's essential to be knowledgeable in your field or area of expertise and to share that knowledge with others. Additionally, being non-needy and giving without expecting anything in return creates a positive and reciprocal dynamic. Avoiding desperate or pushy behavior and maintaining a simple, authentic approach will help build strong and lasting relationships.
Seeking mentorship organically is key: Ask for specific advice and follow up with progress to build genuine mentor-mentee relationships. Financial freedom can open up opportunities for meaningful connections and effective learning.
Building meaningful connections and seeking mentorship organically is more effective than forcing it. Instead of asking for a formal mentorship role, ask for specific advice and follow up with progress updates. This approach allows both parties to evaluate compatibility and build a genuine mentor-mentee relationship. Additionally, achieving financial freedom can open up opportunities for personal growth and ideological freedom, allowing for more meaningful connections and effective learning. It's important to remember that mentorship is not a prerequisite for success and that seeking advice in a situational context is a more productive use of time.
Financial freedom is a personal concept: Financial freedom is about internal realization, fewer desires, enough savings, and strong skills/relationships.
Financial freedom is not solely about having a certain amount of money, but rather an internal realization of not making financial considerations the primary decision-making factor in life. It can be achieved through having fewer desires and demands, accumulating enough savings to sustain one's lifestyle, or even letting go of the attachment to having more money. Ultimately, financial freedom is a personal and subjective concept that varies from person to person. Additionally, having a strong skill set and building relationships can also contribute to financial freedom, even in the absence of significant financial resources.
Understanding finances, being debt-free, and having valuable skills are keys to success.: Cody Sanchez emphasizes the importance of financial literacy, being debt-free, having a valuable skillset, and independent thinking for achieving success.
Having a solid financial foundation, being competent, and the ability to reason and think for oneself are essential ingredients for success. Cody Sanchez, the guest on the podcast, emphasized the importance of understanding personal finances, being debt-free, and having a skillset that others value. He also highlighted the significance of being able to think critically and independently. Cody's newsletter, Contrarianthinking.co, and his Twitter handle, @cody\_Sanchez, are great resources for those interested in learning more about money, business models, and the workings of various engines of wealth creation. The podcast and the newsletter share a common goal of demystifying complex financial concepts and providing insights into what makes businesses successful. If you're interested in learning more from Cody, be sure to check out his newsletter and follow him on Twitter.
