(upbeat music) - Hello, and welcome to another episode of All The Hacks, a show about upgrading your life, money, and travel. I'm Chris Hutchins, and I'm so excited you're here today. Now, when I think of a small business like a laundromat, I don't usually think of it as an investment opportunity, let alone a cashflow business that could make millions of dollars.

But my guest today, Cody Sanchez, quit a lucrative career in finance to start investing in what she calls boring businesses like laundromats, car washes, vending machines. And since then, she's successfully built a $50 million portfolio out of it. She is a true contrarian thinker who has an exceptional ability to see beyond the surface and find hidden opportunities that others often overlook because they seem too boring or unexciting.

Cody also runs Contrarian Thinking where she uses her own experience to teach people to think critically and build cashflow unconventionally. We're gonna talk about how anyone can start investing in these small, boring businesses, why you might want to, what you might want to look out for, the do's and don'ts of deal-making, different ways to incorporate contrarian thinking into our daily routine and our relationships, and a lot more.

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Again, that's allthehacks.com/G-E-L-T. Cody, thank you for being here. - Thanks for having me, I'm excited. - So I love that you've owned the phrase, contrarian thinking. I really like that people challenge the status quo, go against the grain, whether it's life, investing, or anything. We both had these early finance careers.

You had a lucrative career on Wall Street, and then you left it to do something, invest in boring businesses. I'm sure so many people talked you out of it. What drove that kind of early contrarian thinking for you? - I can't remember who said it, but I loved that quote.

What it takes to be successful is, first you have to be contrarian, and then second, you have to be right. And I think that's true. I mean, you know from being in finance too, you can't make money if you follow the herd. You'll basically pick up pennies continuously, but that won't ever amount to dollars.

I think the thing that made me wanna leave actually had nothing to do with being contrarian. It was that it was categorically fucking miserable being in finance for so long, especially when I was at the big firms like Goldman Sachs, State Street, Vanguard. Vanguard, I thought was like, sorry, Bogle, but like left of communism from like a worker's perspective.

It was just, everybody is the same. It doesn't matter if you outperform. It was the opposite of a meritocracy, which is what I wanted. You could only progress in your career at certain levels and years and timelines like the military. So I was like, this is awful, gotta go.

Then I went to Goldman Sachs and at Goldman, it was the opposite. It was like, no matter what, 20% cut every single year. And if you don't perform, cut. And if people don't like you, cut. That was a really aggressive environment and I actually liked it more, I think.

But then finally where I ended up was in private equity running with a couple other partners. And I think what I realized, Chris, is you were smart. You were like, I didn't last that long in finance and I got out. And I think I thought, oh, it's just not this company.

It's not this company. It's not this company. And then I realized, oh no, I hate finance. It just took me 12 years to figure this out. And in actuality, maybe I'm more entrepreneurial and I wanna do my own thing. And I just got sort of a really long PhD in how to buy businesses and how to structure deals from being in finance for a long time.

You remember, I mean, when you were an investment banker, how long did you work? - My kind of tipping point was I didn't see my girlfriend then, now wife, for a week awake. And I was like, this is just untenable. Like, what's the purpose? And then I had the same experience.

I moved to management consulting and I remember we were courting like a Fortune 50 company. And a friend of mine's mother-in-law happened to be the CEO of that company. And I remember going to the managing director and saying, "Hey, I know you guys are courting this company. "I'm gonna be at the CEO's house this weekend "because my friend happens to be her son-in-law.

"How can I help?" And they were like, "Your job is to make slides. "Like, why would you help?" And I was like, "I actually have a relationship "with the person you're trying." And they're like, "That's not your job. "This just seems like you're not thinking about business "as a way to like take every advantage "and try to be successful.

"You have these rules." And I was like, "I don't like rules. "I don't like rules that don't make sense. "I love rules that make sense. "I don't like rules that don't make sense." And that was like the downhill of that career. So it was just brutal work. The no meritocracy thing was driving me nuts.

It was just like, this is what you do. I ultimately got laid off. So that kicked me out earlier. So maybe you didn't have that good fortune, which in hindsight feels fortunate and in the moment wasn't, but it's not like you went into this other career that everyone knows and it was very popular.

You started doing something that I think even years later is not popular. So maybe give a little context to what it is to buy these businesses, but what led you to start doing it? The secret is, I think, that the really, really wealthy have always bought these businesses. I mean, richest guy in the world, owner of LVMH.

How did he get there? Did he start those companies? No, he bought them. He bought a bunch of these companies. Some of them basically out of bankruptcy like Dior and he amassed a massive empire from the fact of buying, I mean, if we think about it, really bad companies, right?

Clothing companies, they just have fancy labels on them that are highly overpriced. That's how the richest guy in the world made his money. The richest guy in India made his money through a conglomerate of businesses that he bought. You look at a lot of the Fortune 500 and what you see if you peel back the layers and you get rid of all of the heirs of Walmart, let's say, and the heirs of some of the large historical industries like Rockefellers, et cetera, you find that most of these people actually got there not always from starting companies, but from buying.

The second most common is from buying companies. And so in finance, private equity, we did that all day. I think that, they're not gonna like that I say this, but I think people in private equity are brilliant in a way, but it's slightly predatory. We are so sneaky that we make entrepreneurs think that putting their sweat and tears into companies is like the fun game.

This is what it means to be an innovator. This is what it means to be a creator and to build huge businesses. And then right about at the point where they wanna slit their wrists, private equity swoops in and we say, is it miserable running your company? Do you not wanna do this anymore?

Are you ready for something else? What if we give you a great offer? And what the entrepreneur doesn't realize is that zero to one is the least profitable period of time in your business. The most profitable period of time is actually the next stage. And then the stage where you continue to cashflow for a really long time on it.

And so we sort of scoop up these businesses at a period of time where the entrepreneur is in pain often, and then we cashflow on them forever. And it's a gross generalization. That's not what all private equity firms do. But once I realized that, I was like, wait a second.

So we don't have to be clever enough to come up with an idea. I'm not clever enough to come up with some crazy new billion dollar idea for a company. I don't know. But what I do know is how to look at what are expenses and what is income, AKA a P&L, and tell me if this business is making money or not.

And do I think that this business could continue to exist inside of the next three to 10 years? At which point I'll have all of my money back plus three to five X, let's say. I can't go figure that out. And because that's not that difficult, why couldn't I do for myself what the big, huge guys do with LBOs, leverage buyouts, and all of that, but at a tiny scale with laundromats and car washes and things that cost $50,000 or $100,000, and then scaling up to a million and then five and then 10?

It's the same game. It's just I'm playing it at a smaller level, at the mom and pop level, than what I call, or what is called micro P.E. - I think when anyone listening is thinking, oh, wow, Cody goes and buys businesses. She must be a billionaire. It sounds like something you could actually make part of your investment portfolio at a very early stage in your wealth building journey and grow from there.

Would you say it's for anyone or who is buying a small business for? - The only people it isn't for are the lazy and the completely risk averse. So if you wanna do zero work, if you want to have zero risk, then don't buy businesses. It's just not gonna work out for you.

So if people are trying to sell you Airbnb arbitrage and you take no risk and you bring on these people and you make your millions, okay, fine, do that. But I think for people that are willing to put in some work, there's no better way to make a return on it than having equity ownership that cash flows over time.

And the problem is, if you look at the S&P 500 or where people typically invest, what is a good dividend paying stock? Three to maybe 9%, I mean, gosh, if you could get a 12% paying dividend stock, you're probably thinking that it's gonna have some downside, right? 'Cause that's too much.

But in a small, boring business, you could have a return on your money of high double digits in a year. You could return all of your capital within a year. And so I think it is for quote, unquote, anybody that's willing to put in some work. Now, the flip side to that is then people go, Cody sounds great, but I don't actually have millions, right?

And I like to give examples like, I bought a newsletter for $3,000 just for shits and giggles. I wanted to put it into our media empire. I realized it didn't really fit. It wasn't gonna grow the way that I wanted to. So I turned around and sold it, I think a week later for $8,000.

And that for me at the stage that I was at was not meaningful. But for young Cody, like the Cody whose parents had no money, who used to bounce her checking account every weekend, who kind of thought her first job making $37,000 a year was amazing. That was like, I'm rich.

Like I just made 5K in a week off of flipping somebody else's asset. That's fascinating. And so if you can start at that level, you can start to understand the bigger levels, the $100,000 deals, the million dollar deals and the hundred million dollar deals, I think. So yes, the return expectations of the stock market, maybe five, seven, 8%.

But it's very easy to maintain a job and do that on the side 'cause there's no work. Is the amount of work you need to go buy a boring business, a laundromat or something, enough that you don't need to quit your job? Can it be a side hustle? Or how full time is doing this type of investing?

Very similar to rental properties, right? What sucks about getting rental properties? Well, first you have to understand the market. You got to understand what's a good buy, what's a bad buy. Then you've got to actually get a mortgage. You've got to figure out what that looks like. Then you have to figure out how to get somebody to rent your property out.

But after you have that first period of understanding, you either Airbnb it out with some consistency or you get a property manager that manages it, right? And I think it's really similar to businesses. Depending on the size and scale and type, you can have a business that's less active.

I try to not say passive 'cause I think that's a fallacy overall, but that's less active. I use the example of car washes and laundromats and vending machines. I call them the gateway drug businesses. So basically like you can get your little skin in the game. You can get your little first hit of being in business and being the owner.

And then as you do that, you're like, oh wait, this game's kind of fun. Maybe I'll do another one. I'm more capable than I thought. And I just, the world looks a lot better if we have more humans with skin in the game. And I think you can absolutely do it while you're still working.

My caveat is always just, I had a boss basically back in the day. We were in Latin America and we were running an investment business in there. And we basically had to do this evolution with one of the government entities where they wanted us to run a process to make sure that our security protocols and the way we were investing met their government requirements, right?

And so we ran that once, check. All the boxes checked that we were supposed to. They wanted us to run it again. So we ran it again. And then the last time, they wanted us to run it one more time. And now I didn't agree that we should run this exercise three times.

I thought that was ridiculous. But my boss basically said, hey, this go round, I'm agreeing to this. And the reason why is because I wanna get our leaders to trust me a little bit more. And I also want to get our team used to doing things that are hard that we don't wanna do because we're gonna have to do some really hard stuff for this project we were working on.

There was a lot of turnaround assets. So I need you guys to support me in doing that. And we kind of looked around and I remember I asked, I was like, are they actually gonna know if we did this or not? Like, can we just check the box that we did this?

And he just kind of looked back at me and was like, what do you think would be the right thing to do? And I was like, oh, fuck, fine. And so basically I think the right way to do a business while you have a job is to make sure you're doing it the right way.

And I think the only thing I see going wrong in people's lives is I've seen people get fired from their jobs when they don't disclose that they have a side hustle. And I think it like eats at your soul a little bit to not live in the light. And so as an owner of a business, I take it personally if people are working in my business and on my business, and really they're like focused on something else, they wanna be doing something else.

And remember when you own a business in the future, you will be the person with employees that might be distracted. So I always kind of push people to think like you already are an owner and then ask yourself what would you want your employees to do? That's my only caveat to side hustles these days.

I think the Reddit sites where they have 400 different jobs and these people who talk about having 37 side hustles, I actually think it makes you distracted, it makes you less happy, and it often makes you less money. And so if you're gonna buy a business, make sure you do it the right way, set the right amount of hours.

And if your job doesn't allow for it, then pick a different job or take the risk entirely. But don't be a human not living in the light is my only caveat. - That makes sense. So you made the reference to rentals. Why do you think it is that buying a rental property is for some reason so sexy when it comes to how do you spend your money and build your wealth, and buying a business like a laundromat is just not even on the same radar in terms of like societal opinion?

It sounds from what I heard you say, like the returns might be even better. They both are work. How I haven't people caught on, is this like the secret? Obviously you're the champion of it. - Buying rental properties is a one to 10 step process that is clearly defined and most everybody knows what you're supposed to do.

There's not a lot of variation. You can't take a house in a neighborhood here and make one house do 100X more than the house located next to it in rent typically. You could maybe make a house do a little bit more in rent by having a nicer house, but you're putting a ton more cash in there.

So you go step one through 10, you have a rental property. Those are clearly defined. And because of that, lots of people do it. And so the opaqueness or what we would call the arbitrage window of people who don't know the good trade to do and people who do know that the good trade to do is actually really tiny in rental land 'cause everybody's playing the game.

In buying small business, steps one through 10 look really different if you buy a laundromat, than if you buy a online business, than if you buy a education company. And so there's not a clearly defined process, which typically freaks people out. People on the internet love for me to tell them, "Here's the three businesses I would buy.

"You should go buy them right now. "This is what they cost. "This is why you should buy them. "This is what they should make." But the truth of it is, is that in business buying, it's all personal. So a good deal for me, it's probably not a good deal for you because you live in San Francisco, I live in Austin because you need the deal to make you a million dollars a year and I only need the deal to make me $100,000 a year 'cause you wanna spend 40 hours on a business and I wanna spend zero hours on a business.

And so that's the difference, is anytime there's an arbitrage window like this, where there's no clearly defined process, there aren't a ton of people doing it, you're gonna have more opportunity, but you're gonna have less action takers 'cause people like to be led. - If there's not a lot of information or I guess there's not a lot of process defined for every business 'cause it's unique, how much expertise does someone really need?

Or said a different way, how much work would it be to get up to speed to be able to buy a laundromat? Like, I don't know anything about how laundromats run. Do I need to become an expert there to really make that work? - In my opinion, no. I bought a laundromat.

I couldn't even tell you today how to fix machines. We own laundromats that do like $3 million a year. I have no idea how to run them. I don't know any of their SOPs and processes. It's not that I'm lazy on that stuff. It's just leverage. It's like when you run a business.

Somebody asked me right now, how do you run your marketing segment of your business? What do your funnels look like? Do you have ads that go to your business? I'm like, I have no idea, that's Chris. I gotta talk to this guy. And it's the same with buying businesses.

So what you need to learn is how to be a deal maker, which I think is actually way more important. You gotta learn what a good business looks like for you. And we have a 10-step process in this, but you basically have to learn what's a good deal for you.

You have to learn how to sell yourself. You have to learn how to negotiate. You have to learn how to finance the deal. You have to learn how to do diligence to deal, make sure they're not lying to you. You gotta learn how to close the deal, like the proper structure, terms, et cetera.

You gotta get your deal team together. So your attorney, accountant. You have to understand what your first 90 days will look like post-close. You have to learn how to value a deal, like what the deal is actually worth. And you gotta learn origination, how to find a deal. If you learn those 10 steps, you can apply those across any industry.

And I think the opportunity for us is like, most people say, I don't understand HVAC, so I could never buy that. I don't understand a painting company, so I would never buy that. And if you actually just understand how to buy businesses, you can find experts and consultants for nothing to help you understand a sector.

You've just gotta find the right deal. - So for anyone who just heard that and was like, whoa, whoa, whoa, whoa, 10 steps. I'm hoping that you can either send me a link or I could just pretty easily find those 10 steps written somewhere, and that we don't have to go deep down each one because that could probably be an entire conversation.

Assuming that's correct. - Yes, I will send that to you. - Awesome, perfect. I will put that in the show notes. Getting the crew together isn't as easy as it used to be. I get it. Life comes at you fast, but trust me, your friends are probably desperate for a good hang.

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There are really two things that people do that make them unhappy that they bought a business. One is they buy a job, not a business, so they go too small. So they're like, ah, I'm gonna do this deal, it only has $60,000 in profit, but I only have to pay $100,000 for it, so this is awesome.

And then they realize, oh man, now I own a cleaning company in which I am the cleaner. Not ideal, right? So typically, you wanna go a little bit bigger. And then the second thing they do wrong is they don't follow some of our key commandments. And over the years, I've realized a few.

Like, first of all, 50/50 partnership's bad. Somebody's in control, somebody's not in control. That has to be the case. No partnerships. Two, your partner or operator who runs the business never gets equity day one. They earn it over time investing year over year, where basically if they hit X parameters, then they win.

Three, you stay out of the five areas that I don't like to invest in, things like restaurants, FBA, hotels. Those businesses, for a myriad of reasons, are my favorite. Four, people, when they buy their first business, often buy what they think a business can be, not what a business is.

So I buy facts and realities. People often buy hopes and dreams. And so what you really wanna do is make sure that the business is profitable today, that the valuation you're paying is the right valuation for how much profit you make and nothing else, and that you're not focusing on, what could I do to this business?

This business is gonna be a fixer-upper and it's gonna be worth a million bucks 'cause I'm so awesome. Instead, I assume I'm an idiot, I won't be able to get this business to do any more revenue than it's doing right now, but that revenue is worth the price I'm paying.

If you do those things, you're usually pretty tight. - Sounds like take all the advice that I learned being a venture capitalist and investing in early-stage startups and do the exact opposite for every single deal, throw it all out. And for someone listening and thinking, wow, you have it all figured out, I have to imagine there's at least a story or two of a deal that just didn't turn out well and that everyone makes mistakes and that's just part of the process.

- Oh, yeah. What usually goes wrong is people lie to you and you believe them. I think humans, we're really good at one thing, which is making ourselves believe the lies that we tell. I actually think humans are incredible self-rationalizers. So it's not always that the owners are bad, it's that they have talked themselves into a story.

We had one company I bought, it was actually in the cannabis space and it was a pretty big deal. I think it was like a $12 million deal. And this cannabis company, it was like the backbone of cannabis. They did like packaging of products, basically. And all the financials checked out.

We did a review of them. We looked at their accounting. We looked at the money that they had in the bank, all reasonable, the profits seemed reasonable. So we buy the company and we leave the operator in. We're gonna buy a large majority, 60, 70% of the business, and then he's gonna keep a 20% stake, but he's gonna continue to run it and it's growing pretty nicely.

But lo and behold, this guy got one of his friends to put all the money in. So all the cash in the bank account was not right. Had his accountant in on it, who was actually one of his family members. And so his family member accountant had cooked the books, which we didn't realize.

He was actually in San Francisco and he was doing cocaine and mistresses and all sorts of stuff and had like an extra apartment. So one day we have this tracking app that we use to follow the cash that they have and we see a big drop in the bank account.

And so we get confused by that. He says, "Oh no, it's moving inventory around." And give some example, I don't really remember. And then two weeks later, he calls us and he's like, "The thing is, we're out of cash and in two weeks we'll be closed down." And we were like, "What the, this company had like $3 million in the bank and was profitable at making 5 million.

How did, what?" So anyway, that deal was a ton of work. So what that meant is we had to fire him, lawsuits happened, we had to take over the company, we had to put in a new operator and that happens in doing deals. But typically you're not gonna get like massive fraud and lies upfront, just sometimes.

- You've done, I don't know, probably close to 100 deals I'm guessing at this point. What's the success rate of these buying small business deals? - Oh, like 99%, most of the deals work out. I can count on like one hand. I've maybe had three deals go wrong. That cannabis company, my very first investment, which was a little bit more like a venture style deal.

I invested in a friend, which is a good way to have things go shaky without much due diligence. The only other one that went wrong was a business that I invested in and it was too small and I bought a large majority of it, but the operator still wanted to be involved and it was just a waste of time basically.

So I got all my money back in that deal, plus three or four X. I actually just ended up giving the business back to him. I was like, the thing is just never call me again. And he was happy 'cause he had his business to motor along with and I was like, oh man, this isn't a big enough deal for me.

But for the most part, we don't have the 88% thing. I mean, in your venture funds, you guys kind of assume what, one to five to 10% of them are gonna return the fund? - Usually, yeah. The goal is you're looking for the deal that will return the fund.

It's a totally different multiple. I wanted to humanize the fact that just because so much in this space, you started somewhere where you didn't and you still had some bumps along the road, but also the success rate overall is pretty high because I think that's important for anyone thinking about this as an asset class.

But when you talk about buying businesses, you briefly touched on ways to finance things, but I think one of the most interesting things I've learned from you and your content is just that you don't actually have to have $100,000 to buy a $100,000 business, which is just like the big unlock that no one knew.

Can you talk a little bit about or maybe give some examples of why that is true? Because it certainly doesn't seem it. - It's two magic words when you don't have money and that's seller financing, which used to be a thing in real estate. You used to be able to sometimes buy a house and from the future profits you got off a rental unit, you could buy that house for $0 down and pay them over time, right?

So the seller would finance your purchase. Now it's not so normal, but in buying businesses, it's very normal. 60% of all businesses are bought using essentially the seller's future profits. And the reason why is because you've run a business or seven before. So how miserable is running a business sometimes?

It's tough, right? And so for a lot of these sellers, they've been doing this for 10, 20, 30 years. And at some point they're ready for the next thing, even if it's a profitable business, but they're stuck in it because unlike a job, not everybody knows how to exit a business.

Everybody knows how to leave a company. Not a lot of people know how to sell their company. Not a lot of people know you can even sell your company. And so there are a ton of sellers out there who are trapped in their business. Most of these sellers do not have enough cash for retirement.

More than 70% of them do not have a transition plan for the next generation to take over or somebody else to take over. And so you come in as a little bit of the solution for that. And how that works really quickly, for instance, I always use this one deal 'cause it was one of my smaller deals in the beginning, is I bought a laundromat for like 100K a year that did $67,000 in profit.

So that's one and a half X the profits of the business is how you value these for everybody listening. So I buy this laundromat, but I don't use my own cash to do it. I tell the seller over a three-year period, I'm gonna pay you back from the profits of the business to take over your business.

And at the end of three years, great, you have your full 100K. And at the end of the three years, I own the business outright. And this is very common. And I would say it's not always common you get 100%, but it's more common than people think. - So a business costs $100,000, the business is making enough profit to pay for that.

Like, why is this a good deal for the seller just to get out? It seems like a great deal for you 'cause the business pays him back with the profits, you don't spend anything. - Yeah, it goes back to the old supply and demand curve. When you have a lot of supply and not a lot of demand, then you're in charge.

There's somewhere around the range of 10 to 12 billion small businesses for sale, and there just aren't enough buyers. I mean, there was a great article, actually, we did a video on it, about Japan, and that they have a crisis in business owners starting to give away their business for $0.

I'm not talking $0 seller financing, I'm talking $0, because the next generation doesn't wanna run a goat herding business, or they don't wanna run a plumbing business. And so the founders of the companies just shut them down, or they try to give them away. So this is a real thing that happens every day.

In fact, a lot of people don't think that they have a business. They think that they have a job. So think about your neighborhood wedding photographer, who also happens to have some contracts for high school photos that they do every year. They do $100,000 in revenue a year. It's a great little business for them, right?

That's their business. They do $100,000 a year. And when you take out their salary, which at this point they pay themselves the full amount, but let's say you take out their salary of 60, $70,000, that leaves 30 to $40,000 profit. That person, when they're done being a wedding photographer and a high school photo photographer, they probably just like stop and go do something else.

But those contracts with the high schools are worth something, that residual revenue is worth something, their gear is worth something, their website, the SEO that's built up, all of these jobs have inherent value to them. And it's just that a lot of people, there's a big mismatch. And it's one thing we're working on.

I'm trying to build right now, as I should talk to you about, but I'm trying to build right now a better mousetrap because there's something called Biz Buy Sell, which is like the Zillow or Redfin of small businesses to buy, except it's awful. Like bad UI, UX, a bunch of garbage on there.

The financials aren't clean. They have business brokers that never respond to you. It's not a great site, but it's the best of all of the bad, right? And so we're trying to figure out how to build a marketplace where sellers can come and trust that there's gonna be non-looky-loo buyers on it.

And we can normalize the information and pair the two, but there's not a lot of that right now. So that wedding photographer can't find you, the young new photographer, that would love to buy that business because you, the young photographer, are just thinking, "Oh, I'm just gonna go start my own," as opposed to, "What if I could buy it?

What if I could, instead, when I graduate dental school, what if I could buy somebody's practice and I could give them an annuity in retirement?" I think buying small businesses is the next real estate. And in 10 to 20 years, they'll be completely commoditized and normalized in a way that it is not today.

But until then, there's a lot of opportunity. If there's not a platform to do it, is it knocking on doors? Is that how you find these businesses in your local community? Well, actually, we bought a company called BidScout, BidScout.io, and that company sources off-market deals. And so, basically, if you wanna buy a car wash in your geographic area, it pulls together all the data from Yelp and Google and business listings and pulls them into one location, also cross-references that with PPP loans so you could try to get to who the owner is in your location and maybe needed some help, and so might be more likely to sell now, and then also pulls this list of proprietary deals we have from having this big audience.

So BidScout is the one that we wanna build off of. It's what I use right now. I think the best way to buy a business is different than buying a house. It's almost like buying a house back in the day. Before realtors, you would be like, "Oh, my friend Sally's selling.

"You wanna get into the neighborhood? "Like, you should talk to Sally," right? That's like foreign to my generation. Like, we can't even imagine you just buy houses on word of mouth. What's wrong with you people, right? But that is actually the best way to buy a small business, is to build up your network or do what I call a personal P&L review, where you look at all of your expenses and you see which CEOs of those companies you could actually get to, and you start nurturing relationships and saying, "Oh, man, you guys produced my podcast on all the hacks.

"How's that business going? "Is it profitable? "How long have you been doing it? "A while, cool. "Is this something you wanna do forever? "You wanna keep running this business? "No, you don't. "You're ready for the next thing? "Interesting. "I actually buy small businesses. "If you had an offer at the right price "and the right terms, "would you be open to a conversation "on potentially getting acquired "or an investment that comes with distributing equity, "cashflow, something like that?

"Oh, you might be interested in that? "Great, now we're in the game." - So you mentioned deal-making earlier being an important skill, and then you just said at the right price and the right terms. I think you have a pretty contrarian perspective there that most people think price is the most important, but I think you believe terms are actually more important.

Can you talk about that? - Only amateurs think price is the most important thing. That is something that people egotistically want to put on their Twitter feed. I sold for seven figures. That's awesome. Because you know that, you have a great leverage point that you should just poke at.

The real pros know that terms are the only things that matter. If I was to say to a seller, "Hey, I'll buy your business for $2 million, "which is what you want. "I think your business is only worth a million dollars. "So here's how we're gonna do it. "I'm gonna give you X dollars upfront.

"And then if your business hits the goals "that you say it's going to hit, "because your business is so great "and it should be worth $2 million, "I will pay you that amount over time. "In fact, we can put it in escrow, "we can put it in writing, "you can have a clawback provision "if you hit those numbers.

"But until then, I'm only gonna pay this amount." And so you can say, "Hey, Chris, great. "I'll buy your business for $2 million." But that amount might only end up being 500,000 or 750,000 if you structure the deal right. That's where the game is. That's where like the fun part for me is in deal-making, because you sell a house, there's no wiggle room.

You're like, "Here's the price. "It is what it is." Maybe you get a realtor to skip their commission or you get a better rate, but like that's it. Buying a business, you can play as many chords as you want to. - It's funny 'cause as you said that, I was like, "I tried to play that game "when I was buying a house, "but at the end of the day, "I got them to throw in some plants, "a TV, and like rebate half a percent of the commission." It's nowhere near the kind of impact you're talking.

It felt good. I'm doing an episode maybe in a month or two about how to optimize the home buying process. There are levers there, but they don't sound nearly as opportunistic and awesome as the levers you could play buying a business. - I think maybe the key to life and being successful is playing the right games.

And if you only have like so many words you can say a day, so many hours in the day, where is it worth the negotiating or deal-making and where isn't it? And most people spend their time on really low-level activities, coupon cutting, asking for a discount at a restaurant or for wine or buying furniture, whatever.

Okay, that's fine. But instead of doing that, you could just be a little bit more strategic upfront and think about if I negotiated my salary every single year, for sure, but maybe even twice a year, mid-year review time, maybe if you're really good quarterly, I can never clip a coupon again and make more from just negotiating my salary.

And then a second level from that is, man, if I could figure out how to negotiate, how to buy assets that cashflow and can do 100X or 300X return to me, then I don't even have to negotiate my salary that much because I just take the salary, use the salary, apply it to assets that I keep buying.

Those keep cash flowing for me. So it's all about like, what level are you playing? Lots of people play level one games. And I think the pros, they don't bother with that. They don't Dave Ramsey their way to millions. It's not the fucking Starbucks. Have the Starbucks if you want it, but instead try to get really smart on negotiating or deal-making so you can play the level six games and then buy whatever coffee you want.

- I feel like I like playing all six levels of games at the same time, which is maybe my problem is I end up spending too much time there. But I agree that you could save a little here or there, worry about that. But if you're not working on your salary, if you're not working on income, if you're not working on your investments, it's not there.

But I think for the right person, getting that Starbucks for free because you played the Starbucks rewards thing and they had a double star day, like it just feels good sometimes. So I think that's my challenge is that every now and then knowing that you got this thing for half the price, that satisfaction just kind of like fuels and makes me excited, but I'm not doing it for the money to be clear.

Like it's a different type of game where it's like really more about enjoyment and satisfaction of what I'm doing day to day. But I have realized that as you level that up, it's not about trying to save $2. It's like, how do I apply that principle to something else?

I think I've talked a few times about working on this book about principles of optimization in life. And part of it is that, it's like, how do you go 80%, get the 80/20 out of optimizing your travel? And then instead of going down the 20, think about what do I care more about?

Oh, maybe I care about my health. Let's go do the 80/20 on my health before I go. Once you've done all the 80s, sure. Go take 10% more on each one. So that's, I think the next level thing that I'm working on just generally and trying to put a little bit more thought behind it because it's a broad topic.

- I love that. It's interesting because you're right. You play a lot of the points games, which I think are fun and valuable. I love a discount. I do love a discount. I love a deal. I think I will always, no matter how wealthy I am, try to get them to optimize the sides I want on a dish and give me them for free as opposed to add-ons to the dish, which really ticks me off.

I play that game, but I think the question that I come back to, and I'd be curious your take on, is if we're gonna play these optimizing games, I think a lot of people fuck around and find out these days. They're like Twitter guys talking about their ice baths and their saunas and these things that have, could you even say a 1% difference?

One to 5%. Let's be generous and say ice baths and saunas give you a one to 5% better overall health, which I think that would be a lot maybe. Even go 10%. It's like instead, man, I looked at your profile picture. How about you go to the gym five days a week for one hour?

And then instead, how about we skip some of the processed food? And a day a week, you try to not do processed food. And so I think a lot of people choose the wrong games and they make life way harder than they need to. And I do this in many different ways.

I wanna optimize all these things on the fringes because they seem cool. When if you wanna get fit, it's just be more active, eat healthier food, and that's it. But instead, we wanna add 37 supplements and 472 podcasts and three ice baths before you've fully woken up. - It's funny 'cause I was listening to a talk Peter Attia gave and he wrote this really long book that I really enjoyed about life.

It's called Outlive. And someone was saying, if you could just do one thing, he's like, look, almost none of this book matters if you're not just exercising. If you're not exercising, don't even open the book. You don't need to do all of these things. But if you are exercising and you are eating healthy, the data on sauna is pretty great in terms of longevity and health, but it's nowhere near as good as the data on what it means to just go out and exercise and go on a run or lift weights or whatever form of strength or cardio or zone, whatever you want, that is going to do more than other things.

But if you're already doing that, I think decide where you wanna spend your time. If you have a family history of a certain type of illness, okay, what's the thing that might be best at preventing that? Great place to spend time. But I agree that if you're not exercising and you're eating like crap, any amount of little tiny optimizations are not the priority to focus on.

Might make you feel good, but you need to get out and you need to get some exercise or stay in. I don't care where you do it, but you need to do it. - That's so true. I have a great friend, John, who's a categorical badass. He was in the foreign service.

He did incredible things for our country. He's one of those guys. So he basically does a workout and he eats whatever's in front of him. And he's this brilliant dude, but he's like, "The thing is "I have to start with ice baths." And I was like, "This is what I know.

"Twitter's gone too far." I think you're right. Choose the right games and then optimize for the 10% in everything. - I've talked to lots of people about ice baths, cold plunge. There's one aspect of it, which is this is a thing that might help my health. And compared to exercise, maybe it's not there.

But there's also the, this is the thing that gets me fired up every day in the morning and makes me feel alert and ready to kick ass on my business, on my work, on my career. And so I put those in two camps. There's the, this is the thing that recharges me.

This is the thing that helps me recover from run or whatever it is. And then there's the, will this increase my longevity? If I'm not exercising, maybe no. But if that ice bath makes you like pumped for every day and makes you work 10 times harder, by all means, jump right in.

- I agree. We'll stop beating up the poor ice baths. I have one, I use it. Sorry, ice bath company that gave me one. I think as humans, if we could really figure out this beautiful secret, which is that we have a finite amount of energy and focus is the only thing that matters if you focus on the right things first, most humans, let's be honest, one out of 10 people in the U.S.

will die wealthy when they die, one out of 10. Everybody else inside of there will largely die broke, will die before the age of 60, will be on government subsidization. So sometimes I try to not forget that, man, we have so many different paths in the U.S., but by and large, we have a lot of people who if we don't overwhelm them, and just like when I was younger and I didn't even know what a mutual fund was and I didn't even know how to not overrun my bank account, but we just make it really easy for them to make one or two good decisions, then everything else gets a lot easier.

But I'm sure the people on your podcast are doing all the right things. So if you guys are here listening, you should probably ice bath and do red light therapy, which I also love. - Oh, interesting. So I wanna go down a handful of paths. One, we talked a lot about one aspect of investing that you do, and it's become your core thing.

When it comes to money, are you still doing any other types? Are you diversified? Or is everything all in on buying businesses? - Yeah, no, I'm diversified. I have like probably a 20% bucket that's stocks, bonds, typical things. I have a financial advisor that manages all of that for me.

I probably have another 20% bucket that's startups, early stage companies, and then the rest are in either real estate or my boring businesses. And that's without leverage. Obviously, if I applied the leverage that I have to the boring businesses, it would be maybe 90%, maybe 100%, basically. But if we take leverage off the game, then I probably am like 55, 60% in these cash boring businesses, and the rest of them are in startups or stocks and bonds.

- And another money thing that I think maybe other people listening, myself included, are thinking is, one of the greatest things about running a business is you have all these business expenses, great opportunity to rack up unlimited number of points, miles, cashback, whatever it is. Please tell me that you're like at least playing that game a little.

I know you're not as deep as maybe I am, but is that kind of a side benefit to owning all these businesses? - After me talking about all this, I probably should have just a one-on-one call where you could consult me on my points. No, I think if you looked at my Amex, I probably have like millions of points that have never used them.

And we don't optimize that at all. Maybe we optimize a little bit because we have everybody use company cards across all the businesses and those get aggregated in a few different ways, and then we spend some big expenses on that. But for the most part, the games that I play with that are taxes.

So are we buying the right real estate that's gonna allow us to do accelerated depreciation, amortization, because that could be a huge benefit. Are there some businesses where I could acquire them, but I could acquire them like, oh, this is a fun one. So I was out there looking for a head of production, right?

I needed somebody to produce part of my media company. And I was having a really hard time finding this role and I needed actually a few roles underneath it. And I just wasn't having time to hire for it. Then I was like, wait, pause. What if I could acquire these roles that I need in the form of a business as opposed to hire them?

And so I went out to a few vendors and I started working with a few vendors and all of those vendors were open to being sold, which will surprise you guys. Almost every single business owner out there is open to being bought at the right price at right terms.

And so three of them were open to it. Two of them, I didn't like the deal. One of them, it was perfect timing. I had mentioned this to them. They had a little bit of a conflict inside the company. And I said to the guy, "Hey, how about if I acquihire you guys?

"How about I buy your company "and I'm gonna buy out you four plus your gear. "We'll give you some multiple on that, "but it'll happen after you've been with me for 90 days "and you've been executing and I'll pay you in salary." So through that acquisition, I have decreased my overall profits in the business by hiring them with an increased salary, but that is a complete before the line tax write-off.

Say I acquire all of them for salary of 100K for the year, I can't write off that acquisition dollar for dollar in my business. But if I hire all of them through an acquihire and that $100,000 rolls through as an expense payment for payroll, that lowers the total profits in my business and thus decreases my tax bill dollar for dollar.

And so that was a cool way that I sort of gamed my little point system. But no, I'm terrible at Amex cards and lights and all of that stuff. - We're gonna have that one-on-one at some point. We're not gonna do it live, but we'll get to it. Our partner today is AG1, the daily foundational nutrition supplement that supports whole body health.

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- You also mentioned the most important game is to figure out where you spend your time and what you're focused on. How do you think about when to spend your time on certain activities or how you spend your time? - I used to be really bad at this, and it's just something I struggle with daily.

I think I, probably like a lot of entrepreneurs, have mild ADHD. Everything's distracting. I have FOMO all the time, and there are a couple things that made a big difference. One is, by and large, we think that technology is going to help us, so we have Tinder and Bumble that would make dating so much easier.

The world was going to be better because instantly we would be paired with other humans. According to some algorithmic match, we would find love, we would find sex, we would find meaning. What happened in set? Loneliness numbers at all-time high, people having sex at all-time lows, decreased marriage likelihood, decreased people having children.

This technology that was supposed to help us actually seemingly did not, and in fact, through what I think is just massive optionality and overwhelm from paralysis by analysis, means that we're not engaging anymore in that way from an intimacy perspective. I think a lot of the tech that helps us in business is the same thing.

Slack is one of the most useful thing in my business. It's also the worst thing in some of my businesses. So if you were to look at my calendar, for instance, you would see basically that I do not take a phone call before 12 p.m. I would say I'm not 100% of the time.

I am about 70, 80% of the time. So no calls before 12. I am 100% of the time before 10 a.m. No phone calls, no mediates. You'll also see that we have in our business, we have reminders that go out on our Slack channel that says, "Are you being productive or are you being busy?" So every so often in the general channel, like a thing will come on, and then the people in the companies will be like, "Oh, fuck, I am fucking around on Slack.

"I shouldn't be on here." That's fine. And then actually I met with Bill Perkins, our mutual friend, this last weekend, and he kind of messed with my mind, Chris, because we were meeting, and he wants me to go big in acquisitions and small business and let him invest in my company, and I don't let anybody invest in me right now.

We have all our own cash in it. And he's like, "Cody, the thing is this. "You have been investing and playing "in small business land for so long. "I think small has infected your thinking." I was like, "What?" Like, one, ouch, kind of hurt. Two, I rolled it around in my mind for a second and thought, "Huh, he's kind of right." And so I was like, "What do you mean by that?" He's like, "One, you have a portfolio "that does $60 million in revenue.

"That would be a lot to most people." He goes, "But you have run billion dollar funds before. "Why don't you have a billion dollar?" And then he's like, "Two, how many things do you do "throughout the day that are not high-leverage activities? "Count them." And my husband was there with me, and so we started naming off a bunch, and I was like, "Shut up," like elbowing him beneath the table.

And so really quickly I realized, gosh, there are all these things where because I didn't come from money, because I still am always scared that I'm gonna be broke, because I never feel like we're rich no matter how much money we have, I keep doing that is really holding me back from getting to the next level.

And so now I have a question on my computer that says two things. One is about content. So it says don't ship a product unless it makes you pee a little bit, which means it should be funny, it should entertain you, anything that we go out in media. And the second thing basically says long-winded, but does this seem important or is this important?

So now I try to remind myself of that. Has Bill ever messed with your mind like that? - His whole book kind of messed with my mind 'cause I kind of played a little bit in that financial independence, retire early world, it was all about saving. And we were on a call doing an interview and he told me, when you're trying to use all your points and miles, you're optimizing for the best deal, you're not optimizing for taking the trip.

And I left the meeting, went to my wife and I was like, we've always talked about going on a trip for the holidays. This year is like the perfect time. Who cares whether it's gonna be a lot of points or not a lot of points, let's just do it.

The awesome part about that was once I committed, then I still found a way to make a great deal. But like, I was afraid the deal wasn't gonna be good 'cause it was the holidays, so we weren't gonna do it. So he kind of has really messed with my mind, which is like, make sure you're optimizing for the right thing.

And for anyone who hasn't listened to the episode I did with him on his book, "Die With Zero", go back and find it. It was excellent. It might be one of, if not the most listened to episode of the show. And so he's really messed with me, just like, let's make sure I'm really focused on what I want to get out of life in more broad sense, but not in a business sense.

But what he said about your business, all I could think about when we were talking about renting was, well, I understand that real estate is an asset class that could be interesting to invest in. I don't want to be a landlord. And so I have some percentage of my portfolio in a REIT.

You have convinced me that these opportunities, these millions of small businesses, buying them and running them, operating them, growing them, buying their suppliers, it's a great place to invest time and energy and money. But I also have my own business and I'm like, now is not the time with two small kids to do it.

What's the REIT of that? And it sounds like the answer is there are like private equity things, which are much more up the high net worth and in that level of business, I wonder if there's as much arbitrage as it sounds like you've found, but I also don't necessarily want to do it.

Is there a thing in that space or is that what Bill wants you to go do? Well, that is what Bill wants us to go do for sure. But private equity funds have varying sizes. What I've found is below the $10 million in revenue mark is actually where a lot of the meat is still on the bone.

Once you get past 10, definitely $20 million in revenue, you're more playing with some of the bigger, lower middle market firms that are buying up some of these companies. But below that, there's just not enough people playing because it's riskier and it's harder to scale. If you think about these companies, KKR, Blackstone, they're not just billions of dollars, they're hundreds of billions of dollars.

And it's how much easier is it to allocate $100 million once or to 100 deals for $1 million, right? The second is categorically harder to scale than the first. And so because of that, they go up market bigger and bigger, bigger. It's the same reason why in venture, you saw everybody start doing later stage deals, right?

Because what, you're gonna put like 525K checks into a brand new company and hope that something pans out, that's a lot of work. When instead I could just pick a few companies that are larger later stage and I can allocate a bigger chunk, I could put $20 million in it, I could put $100 million in it.

And so what we're trying to figure out is there a way to scale the low end of the totem pole? For most people though, they don't care. Like for you, you don't care. Can I scale this to 100 million? You're like, how do I pick a couple of businesses where I can have an operator that runs this business and I just cashflow on it?

I'm like the money and maybe I'm the counselor once a month or I'm a strategic advisor quarterly. And that's the real game. So for people who already have a business like you, I would do a couple of things. If I was to tell you, Chris Hutchins, what sort of business should you invest in right now?

I would say, Chris, take your businesses today and look at all your expenses. Look at every single thing that costs you money each month. Just throw it in an Excel spreadsheet, categorize it by who the vendor is, get rid of the majority, right? So let's call it 60% of the costs are like Amazon, Riverside, like stuff that you can't buy, right?

So you're gonna get rid of all those. And then you're gonna be left with 20 to 30 to 40% and you're gonna get rid of all the repeat transactions, which means you're probably gonna be down to like 10 to 50 different companies. And in those 10 to 50 different companies, you're gonna look at them and go, oh, you know what?

I spend $50,000 a month on PPC on ads that I give my vendor for ads. But I have a podcast that gets hundreds of thousands of listens, right, a month. And I have a bunch of friends who use paid ads. So what if I go to this guy and say, here's the thing.

I really like you. Are you gonna continue to run that? And you do that thing that I said to you. You would say like, would you ever sell the business, I don't know. Most likely this guy's young because paid ads business is newer. So this person's probably a little younger.

They're not ready to sell. And so instead you go, hey, how about this? I'm gonna partner with somebody. I'm going to invest in the form of financial return that I give you by talking about you on my platform in somebody's paid ads company. I'd like it to be you.

I really like working with you. I like us paying you $50,000 a month. And I think that I could probably get you another $200,000 a month in paid. Would you be interested, if we set it up right, it works out perfectly for you. I get the right terms for you.

Would you theoretically be interested in partnering where I do some deal, where I take a portion of equity in your company, but that equity distributes as a portion of revenue. So I'm not gonna be messing around, trying to figure out what your profit is, bothering you in the daily.

I'm just gonna say, talk line. I'm gonna take a percentage of total revenue that we make, and you're gonna send it to me. Just like you would send me a rent check if I was a landlord. Would you be open to something like that? What you're gonna find is like, honestly, I have a high record, but somewhere between one to four people that you talk to out of five will be interested in that deal.

And you're gonna structure a deal where you start to own a portfolio of small businesses in chunks because you have a platform that can distribute, and also because you've figured out how to get distributing equity deals. That's what I would do if you, I wouldn't go out and buy a car wash, unless alternatively you have your wife who doesn't wanna work 40 hours a week, but she would love like a five, 10 hour a week thing that could be hers, that she could make her own money.

She could do it her way. Then you could buy a small business too. - I think my wife is more of a business mercenary than I am. She would be like, let's go buy 50 businesses and I will run that empire. Maybe that's the path. But if someone doesn't own a business, in real estate, there's like these private real estate deals where you can go in and instead of buying a unit, there's a developer doing this.

Does that stuff exist in businesses? Like when you buy businesses, do you ever get financing outside? I think you said no, but do other people like you do that? - Yeah, totally. I don't do it right now. I use all my own cash, but there are search funds. Those are typically people pull together assets and then find an operator who wants to buy a business.

And that operator goes and buys a business and he has pooled funds. People raise independently for buying businesses. Part of the reason that I started a mastermind group where we talk about all that said unconventional acquisitions is because I invest in my people's deals. We have 600 members in there.

The average person buys a business inside of 11 months that does at least $250,000 in revenue. I invest in a bunch of those deals. So I invest in their one-off deals. I invest in pooled funds like search funds. And then there are certainly like micro PE funds that'll take, the problem is you really need 25K at least to do that.

And a lot of them have 100K minimums. But when you're raising for one-off deals, those don't. The other nice part about this is these distribute. When you invest in a VC fund or an angel investment, eight out of your 10 deals, you're gonna lose money on. And you're not gonna get your money for at least five to seven years, but more likely 10, right?

And so this one's a little different. I like doing deals where I cashflow within the first 30 days but I'll sell for 90. - So it sounds like find the places like the community you've built where people are doing this. And I think this is the answer for almost any type of industry business that you wanna get into.

It's go find where the people are talking, whether it's a meetup, whether it's a forum, whether it's a mastermind and just start talking and you will slowly build the relationships you need to find ways to get into this. And maybe you'll just decide, oh, this is something I wanna do or I met someone, they love doing it.

I can invest in their next deal. - Yeah, 100%. And I really just think it's such a skill. I was talking to a guy who owns maybe one of the largest fitness companies in the country today. And he's like, I don't even know if I know how to buy businesses.

This guy does almost a billion dollars in annual revenue. I'm like, it's not that hard. What is it that scares you or why don't you think you could do this? And his comment was, well, I've grown so fast organically, it feels scary to me to take my eye off the thing I do every day to try this other thing.

And I think that's the other biggest reason why people don't buy businesses because you feel like I don't wanna take my eye off podcasting and my business and everything that's working right now, it's a distraction. And that is true often if you feel like you're playing, let's call it a level six game, a really high level game.

But if you're in a job you don't love, if you're making the same amount of money continuously, I think you should spend at least 90 days learning how to acquire things because then you'll never have to do something just for the money again. You can do it if you want to.

I don't think everybody should go and be a laundromat owner forever. And that's their highest and best use. But I think if you have assets behind you, then you get to choose, you don't have to do. Super interesting. It's something I'd never considered until I ran across your content, which is like, we have to have this conversation 'cause I just wanted people to know about it.

We briefly went over life. You talked about your calendar, about how you spend time. Are you a big fan of outsourcing a lot of things to team members, assistants, that kind of stuff? How do you, on the personal side, manage your time and not get caught up in kind of those small questions and focus on what's most important?

This one I've always been pretty good at. I think I read "The 4-Hour Workweek." I think I read that like way too early almost. I was like, "I shall outsource everything." But I read that really early and I've tried to live it. It's actually helped a ton. So I've had a VA since I made like my first 100K.

The second I hit 100K, I was like, "Hire a virtual assistant." And now I have a few virtual assistants. And then I have an assistant that manages the virtual assistants. And then I have my chief of staff who all of them report into. The key though, I think, in delegation is realizing that you can only really have, in my opinion, five, max 10 people report to you directly.

I think once you get past that 10 direct reports, even if the direct report is your nanny, your housekeeper, your property manager, you need those to funnel up. And so one thing people don't talk about enough in delegation, I think, is that you have to have an org chart for the people that help you even.

This is a higher level game. This is for people who have some disposable income that they can use. If I was you, I actually think the easiest thing to do with delegation is if you can afford to start with a chief of staff. So like a higher level person, maybe you're paying that person.

You could get a young, hungry person for like 65K a year all the way up to chief of staffs can make hundreds and hundreds of thousand. And that person can be your go-to contact for a VA that only costs you a thousand bucks a month. And for your housekeeper that only costs you 400, 500 bucks a month, but they all go through this one person.

That's really the key because the thing stopping you from getting where you're going is typically you don't have enough people working for you. Your 100% can never be as powerful as five people's 50%. So it's a fallacy that if you're great at something, you're the only person who can do it.

And simultaneously, those five people with 50% will distract you hugely. So how can you put a barrier between the two? I do that well now, but I haven't always. - I have never done it well. And in the last two weeks, maybe, I'm very early in this experiment, I hired a VA, but I would say based on two weeks, I feel like this person falls in the spectrum of like VA to chief of staff, like way more qualified than just, I'm gonna send an email to this person.

And they could do the full spectrum. And this is early. And I worked with a company called oceansxyz.com. Feel free to tell them. Maybe go to allthehacks.com/oceans. And before you hear this, I'll go get some deal. That's my plan. So go to allthehacks.com/oceans and we'll see what I can do.

But it has been so interesting to try and really force that. And I wanna do a whole episode on outsourcing things. And this is not just work. Like this is personal. This is everything from email to meal planning to researching. But what I did was I started in advance of let's go and write down for like two weeks everything I could outsource.

So similarly, as I was going through anything, I would just got in my mind. Okay, could this go out? Okay, I'm putting a list. Once I saw the magnitude of that list, if you think about the cost of hiring virtual assistants, you said it could be anywhere from one to $4,000 a month for a full-time person.

And there are other options if you want fractional and all that stuff. Imagine what you could do with that, whether it's spending it just with your family or on really big strategic things with your business or maybe you don't have time to buy a small business like you just heard us talk about because you have so much stuff going on in your personal life.

What if you could outsource a lot of that personal life stuff so that you could go and buy a small business and end up finding out that this all pays for itself. Now you can roll that person's compensation into that small business. Now it's a deductible expense above the line.

There's all kinds of interesting stuff. But I am going to do a whole episode on this kind of process of everything we've organized and how it worked and how I looked and all the companies that I interviewed. Fancy Hands was by far the worst option for outsourcing tasks. I can do nothing more than wholeheartedly tell you do not use this company.

It was an awful experience. - Really? - It was task-based VA and it was so bad. A waste of money, completely zero value. Sorry, Fancy Hands. Unfortunately, completely not satisfied. But I'm incredibly satisfied with the woman I'm working with from Oceans and it's early, but so far I am so optimistic.

- I have this friend, Dan, who runs a company called My OutDesk. It's another one of those companies you just talked about, but they do something called like the Notepad Challenge. I gotta find this for you. But basically he had me do the same thing. The long and short of it is, and I'll find it so you can link it, basically you track for an entire day every single activity that you do.

And then he says that for a week after, for an hour a day, you should track all of your activities that you do. And then you catalog them along a quadrant. And to the left, it's high leverage, low time. And on the bottom, it's low leverage, high time. So the bottom would be the worst.

It's something that takes me a ton of time and it doesn't have a great outcome for me. And at the top, it takes not a lot of time and it's a great output for me. And the goal is basically you wanna spend all your time in the left quadrant at the top, very little of your time in the bottom right.

So you wanna outsource all of those tasks. And then there'll probably be another quadrant right next to it that's like high output, lot of time. So you're spending all of your time in the top two and the bottom two quadrants, you're basically trying to offload all of those tasks.

And so every so often I go back and do this version of the Notepad Challenge and it's really, really helpful. In the beginning, you do what you can afford. And then you layer on top of it. There's a saying, I can't remember who said it, but that you are one hire away from a completely new business.

And I think that's true also for your life. Like you are one hire away from a completely different life. And it can be very small thing. It's like, I can't remember the last time I had to get on the call with AT&T or Verizon or deal with a cable provider or schedule my doctors.

Six years ago, I spent hours on that stuff, haggling, dealing with issues, changing flights. I don't do any of that anymore. And it probably costs me about a thousand bucks a month to save me tens and tens of hours a month. And it's not just hours. It's like the overhead of having to keep track of all of the things.

So I'm a huge fan of that. We're almost out of time. I'm gonna ask you one more thing. You have all of these great posts and threads where you're like, here's the way I've optimized this aspect of my life. I'm gonna mention one and I'll just link to it in the show notes, which is this 160 rule on Sundays about how you ask yourself and check in on what you're doing.

I think it's great. But the one that I was most recently looking at that's a bit of a tangent from this conversation was about a check-in you do on your relationship. And so I think maybe as a total aside from everything we've talked about, maybe share that a bit because I adopted it.

I thought it was so great. Oh, that makes me happy. I had no idea this would go as viral as it did. It's just what we do. We're busy. My husband works a lot too. He's a pretty serious guy, former Navy SEAL, sort of a tough dude. And what was happening is we were building up tension throughout the day.

So like little things, why are your socks out? Why didn't you put the car keys away? Very small things would get blown out of proportion or they would just nag throughout the day. So we came up with this thing in partnership with this woman called Brandy who helped us called Team.

And basically what it is, it's an end of day check-in. And our goal is the little things that come up throughout the day, instead of just word-vomiting them at each other at any given point in which you feel annoyed and you're elevated, what if you wrote them down and you save them for later in a place where maybe you're having a nice glass of wine or for you biohackers out there, you're doing whatever you do in the evening and you sit down with your spouse.

The first tenet is touch. So T for touch. And it basically means you sit next to each other, you hold hands, you put your feet on each other on the couch, whatever. Or when you're really mad, we jokingly do this little E.T. one-finger touch thing. 'Cause sometimes at the end of the day, you're still mad from what's going on.

And you start with touch because you're reminding each other, you guys are in this together, you're a team. The second step is education. So you know how you come home from work, a lot of times you're like, how was your day, honey? Good, how was your day, honey? Blah, blah, blah, same conversation.

You don't get that deep. And that I think really leads to why a lot of people actually get divorced or cheat or whatever. You stop dating your spouse and you stop getting the most interesting information out of them because your routine has meant that you ask the same lazy questions always and you tell lazy stories.

And so education means you have to tell your spouse one thing that you learned that day that was new to you. And so that means it's usually a great conversation starter. So like the education part will usually go longer. So I might be like, today I was with Chris and I just realized that we have a million points on Amex and now I'm super stressed because we have never used these.

And so now I have to figure out how to optimize this. And did you know that there's a whole group of people that this is all they do and we're not doing it? And so maybe that's my thing. And then he'll tell me something. And then the next is appreciation.

So even when you're mad, there is a reason why you chose this human to be with for life, for now, for whatever. And so giving a little piece of gratitude typically helps diffuse what comes next. If you're mad, it could be, I appreciate you taking out the trash today.

Our only rule there is you can't keep repeating the same ones. You're so beautiful, I love your hair. No, you gotta get a little bit more creative. And then the last one is metrics. And here we basically say, well, I kept my list of things that annoyed me today that I wish you would do differently.

Or here's this big thing that I want us to talk about. Or some days we really have nothing. But because you're not telling the person in the moment when you're upset at them about this thing, the level of intensity, emotional intensity is so decreased that typically we get through the metrics in a way where we're in our rational brains, we're not elevated so we can have a really pretty easy conversation.

And then the internet has actually changed up this one a little bit and they now think it is teams. And at the end, it should be S for sex. And that's how you should add it. So up to you, that's an optional add-on at the end. So I know that was a departure, but I think you have a few of these.

I'm gonna link to a couple of the other ones that you've done where you've just like, hey, here's the way I've optimized this thing in my life. And what I love about having conversations with people that have thought very deeply about one area of their life is that they've generally actually done that other places.

You create content, so it's a little easier, but the hardest thing for me is pulling it out. Maybe before you made that post, you said you didn't think it would go viral. Well, it's just a thing I do. It's like, no, you've applied all these lessons you've learned about business relationships and tracking things and trying to find this way.

Oh, let's just apply it to this relationship. And it turned out amazing. Not to say just this relationship, the most important relationship, of course. So that was awesome. Thank you for sharing that. I'll link to the rest. We're way over time. Where can people go and learn more about everything you're doing in your community, about buying businesses, follow you, everything?

Hey, contrarianthinking.co is probably the best, or I'm Cody Sanchez on all the socials. Take your pick. The free newsletter comes out weekly and is awesome if you wanna learn two things, mental frameworks and you wanna learn monetary frameworks. So how to make money and how to think better. That's Contrarian Thinking's newsletter.

Awesome. Thank you so much for being here. Oh, thank you for having me. This was a blast. Gotta get my points now. I really hope you enjoyed this episode. Thank you so much for listening. If you haven't already left a rating and a review for the show in Apple Podcasts or Spotify, I would really appreciate it.

And if you have any feedback on the show, questions for me, or just wanna say hi, I'm chris@allthehacks.com or @hutchins on Twitter. That's it for this week. I'll see you next week. (upbeat music) (electronic beeping) (electronic buzzing) (birds chirping)