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🎙️ On Purpose with Jay Shetty #1 Formula to Get RICH Off Your Normal Salary (It’s EASY!)

The Money Expert: #1 Formula to Get RICH Off Your Normal Salary (It’s EASY!)

🌲 Evergreen 🎧 Podcast 💰 Money 🧧 Investing

🎙️ On Purpose with Jay Shetty

PODCAST INFORMATION

On Purpose with Jay Shetty
The Money Expert: #1 Formula to Get RICH Off Your Normal Salary (It’s EASY!)

Jay Shetty (Host)
Cody Sanchez (Guest) - Entrepreneur, investor, founder of Contrarian Thinking, former journalist and Wall Street investor, author of "Main Street Millionaire"
Episode Duration: approximately 1 hour and 37 minutes

🎧 Listen here.


HOOK

This episode challenges conventional wisdom about money, revealing that financial freedom comes not from working harder, but from understanding the language of money and learning to play the game by its actual rules.


ONE-SENTENCE TAKEAWAY

Understanding money is like speaking a language, and mastering this language through financial literacy, strategic thinking, and recognizing opportunities in any market is the true path to building wealth.


SUMMARY

In this insightful episode of "On Purpose with Jay Shetty," Jay welcomes back Cody Sanchez, entrepreneur, investor, and founder of Contrarian Thinking, for a practical and eye-opening conversation about money, financial literacy, and building wealth in today's challenging economic landscape. Sanchez, who built a community of over 4 million people teaching unconventional approaches to money, shares her contrarian perspectives on everything from homeownership to credit cards to investing.

The conversation begins by addressing the common belief that now is not a good time to make money due to economic challenges. Sanchez challenges this narrative, pointing out that while wages have stagnated, housing prices have increased dramatically compared to previous generations. She references Warren Buffett's famous advice to "be fearful when others are greedy and greedy when others are fearful," suggesting that current market conditions actually present opportunities for those who are prepared and financially literate.

A significant portion of the discussion focuses on financial literacy as the foundation of wealth building. Sanchez emphasizes that understanding money is like speaking a language, and without this understanding, it's impossible to build wealth effectively. She provides practical advice about the difference between debit and credit cards, explaining why credit cards, when used responsibly, can be powerful tools for building credit history and accessing resources, while debit cards offer no such advantages. This section challenges common misconceptions about debt, distinguishing between "good debt" and "bad debt."

The conversation then shifts to entrepreneurship and business building. Sanchez argues that you don't need money to start a business; you need knowledge about how to access money. She discusses various funding options, including grants, loans, and investors, and emphasizes the importance of changing one's mindset to recognize that money is all around us. She also challenges the "hustle culture" narrative, suggesting that working harder doesn't necessarily lead to wealth, especially in the age of AI when everyone will have access to similar knowledge.

Sanchez and Shetty explore the concept of career growth within organizations, with Sanchez sharing her "NPC ladder" framework, which describes different levels of contribution from basic roles to "main characters" who change the script and move the company forward. Jay shares his own "brick layer to city planner" framework, illustrating how employees can grow from executing basic tasks to designing entire business ecosystems.

The episode delves into the relationship between money and dating, with Sanchez sharing surprising statistics about married couples having significantly higher net worth than single individuals. They discuss modern dating dynamics, including who should pay on dates and how financial conversations should happen in relationships. Sanchez advocates for prenuptial agreements not as a sign of distrust, but as an opportunity for crucial conversations about shared values and vision.

Regarding investing, Sanchez outlines a four-stage approach: (1) investing in yourself through education, (2) investing in low-cost index funds like the S&P 500, (3) exploring private equity and alternative investments, and (4) becoming the company that others invest in. She emphasizes the importance of paying yourself first by automatically investing at least 10% of your income.

Throughout the episode, Sanchez challenges common misconceptions about wealth, arguing that real millionaires focus on winning and learning rather than money itself. She warns against the cultural phenomenon of "looking rich instead of being rich," using examples like Coachella where many people go into debt to appear wealthy on social media.

The conversation concludes with reflections on the importance of loving "the game" of business and investing, respecting the rules while finding innovative ways to win, and building wealth that aligns with one's values and purpose rather than simply accumulating possessions.


INSIGHTS

  1. Financial literacy is the foundation of wealth building; without understanding the language of money, it's impossible to make more of it effectively.
  2. Current economic challenges actually present opportunities for those who are financially literate and prepared, contrary to popular belief.
  3. Homeownership as an investment is mathematically unsound in today's market with high interest rates, housing shortages, and stagnant wages.
  4. Credit cards, when used responsibly, are superior to debit cards for building credit history, accessing resources, and gaining protection against fraud.
  5. You don't need money to start a business; you need knowledge about how to access money through grants, loans, and investors.
  6. Working harder doesn't necessarily lead to wealth, especially in the age of AI when knowledge is more democratized.
  7. Married couples have significantly higher net worth (nearly 3x) than single individuals over their careers.
  8. The most successful approach to investing involves a progression: invest in yourself first, then low-cost index funds, then private investments, and finally become the company others invest in.
  9. Real millionaires focus on winning and learning rather than money itself; they care about the game more than the score.
  10. Looking rich on social media often leads to being poor in reality, as many people go into debt to maintain appearances.


FRAMEWORKS & MODELS

  1. The NPC Ladder: Sanchez describes a framework for career growth within organizations, comparing it to video game characters. At the bottom are "NPCs" (non-player characters) who stay in the same spot repeating the same tasks. Above them are supporting cast members, then main characters who change the script and move the company forward. The highest performers, who may receive equity, are those who actively change the company's direction.
  2. Brick Layer to City Planner: Jay Shetty shares his framework for employee growth, which includes four stages: Brick Layer (executing basic tasks), Builder (understanding how to connect different elements), Architect (designing new parts of the business), and City Planner (planning the entire ecosystem). Growth isn't about more effort or hours worked, but about expanding vision and strategic thinking.
  3. Four Stages of Investing: Sanchez outlines a progressive approach to investing: Stage 1 involves investing in yourself through education and skill development; Stage 2 focuses on low-cost index funds like the S&P 500; Stage 3 explores private equity and alternative investments; Stage 4 is becoming the company that others invest in by building your own successful business.
  4. Fixers vs. Freeloaders: Sanchez introduces this framework to describe two types of people in business and life. Fixers actively identify and solve problems, recognizing that problems represent opportunities. Freeloaders stand by waiting for others to solve problems, often blaming external circumstances. The fixer mentality is essential for success and wealth building.
  5. Boring Sexy Matrix: Though not fully explained in the episode, Sanchez references this concept showing a correlation between boring industries and higher income potential, challenging the common pursuit of "sexy" careers that often pay less.


QUOTES

  1. "If you don't understand money, you're never going to make more of it because understanding money is like speaking a language. How are you going to speak to somebody in Spanish and communicate and win at that relationship if you guys don't speak the same language?" - Cody Sanchez
  2. "Buy when there's blood on the streets, even and especially when the blood is your own." - Baron Rothschild, quoted by Cody Sanchez
  3. "I think you never suffer from a lack of money. You suffer from a lack of knowledge on how to get money." - Cody Sanchez
  4. "Hard work will equal wealth and that is actually not true at all. Just work harder. What's your work ethic? That's not true anymore, especially in the age of AI because everybody will be able to do a midlevel execution." - Cody Sanchez
  5. "In this world today you don't want to work like a cow. You want to be the lion. You want to have periods of sprint and rest." - Naval Ravikant, quoted by Cody Sanchez
  6. "Every time I find a problem in my business, that's where the profit is. Every time I have a problem in my life, that's where the money is." - Cody Sanchez
  7. "Passive income is a tax statement... But is passive income in the fact that I will make money if I do nothing and I take x amount of risk and x amount of my money in order to do something? No, that's a total lie." - Cody Sanchez
  8. "Anybody tells you you should follow your passion in order to make money is probably already rich." - Cody Sanchez
  9. "The highest performing asset class that you could ever have is you because you have unlimited upside and it compounds over time." - Cody Sanchez
  10. "Real players find things and money to be uninteresting at some point." - Cody Sanchez


HABITS

  1. Build credit history early by using credit cards responsibly and paying off the balance each month. Start with a basic credit card from a major bank, focusing on building credit rather than maximizing rewards.
  2. Practice automatic investing by setting up regular contributions to investment accounts, treating investing as a need rather than a want. Aim to invest at least 10% of your income.
  3. Develop a "fixer" mentality by actively seeking out problems and viewing them as opportunities for growth and profit. Take ownership of issues rather than waiting for others to solve them.
  4. Negotiate rent prices in the current market where there is excess inventory and landlords want to retain tenants.
  5. When dating, have honest conversations about money early in the relationship. The person who initiates the date should pay, but be willing to discuss financial expectations openly.
  6. Focus on investing in yourself first through education and skill development before investing in other asset classes.
  7. Avoid the trap of "looking rich instead of being rich" by resisting social pressure to spend on appearances. Focus on building actual wealth rather than displaying symbols of wealth.
  8. When building a business, keep your job initially and use your salary to fund your side hustle until it generates enough cash flow to support you. This reduces risk and leads to better decision-making.
  9. Surround yourself with people who have the financial habits and mindset you want to develop. Social circles significantly influence financial behaviors and outcomes.
  10. Have crucial conversations about money with partners before making major financial commitments like marriage or business partnerships. Use these conversations to align on values and vision rather than avoiding difficult topics.


REFERENCES

  1. Warren Buffett's investment principle: "Be fearful when others are greedy and greedy when others are fearful."
  2. Baron Rothschild's investment advice: "Buy when there's blood on the streets, even and especially when the blood is your own."
  3. Charlie Munger's perspective on what causes people to go broke: "Men only go broke by three things and it's whiskey, women, and leverage," with Warren Buffett adding that it's really just leverage (debt).
  4. Naval Ravikant's work philosophy: "In this world today you don't want to work like a cow. You want to be the lion. You want to have periods of sprint and rest."
  5. Statistics on marriage and wealth: Married couples make on average more than 30% more than non-married couples, with a net worth nearly 3x that of single individuals over their careers.
  6. SAG-AFTRA (Hollywood union) statistics showing that more than 80% of members don't qualify for health insurance, with an average income of around $23,000 for actors in LA.
  7. Small Business Administration data showing that more small businesses close each year than open in the US, indicating that people are taking fewer risks than commonly perceived.
  8. The "lipstick theory" from Estee Lauder, which shows that during economic downturns, sales of small luxury items like lipstick tend to increase as consumers pull back on larger purchases.
  9. Vanguard's approach to low-cost index fund investing as a strategy for regular investors to access diversified portfolios without trying to beat professional stock pickers.
  10. Studies showing the correlation between social circles and financial outcomes: having friends who make over $100,000 increases one's likelihood of making more money by 10% and investing more by 2.9-5%.



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