Codie Sanchez: This is How You Get Rich off Your Normal Salary! (Use THIS Easy Formula to Build REAL Wealth NOW)
In this episode of On Purpose, Jay Shetty and financial expert Codie Sanchez explore fundamental strategies for building wealth with an average income. Sanchez explains how to maximize credit cards for rewards and protection, outlines investment approaches for beginners and experienced investors alike, and shares insights about the mindset shifts needed for financial success.
The discussion extends beyond pure financial strategy to examine how money intersects with personal relationships and growth. Sanchez and Shetty address topics like finding financially compatible partners, maintaining open communication about money in relationships, and balancing wealth-building with personal fulfillment. They also explore Warren Buffett's investment philosophy and discuss how to recognize opportunities during market downturns.
This is a preview of the Shortform summary of the Sep 8, 2025 episode of the On Purpose with Jay Shetty
Sign up for Shortform to access the whole episode summary along with additional materials like counterarguments and context.
1-Page Summary
Financial Literacy and Basic Money Concepts
Codie Sanchez emphasizes the importance of financial literacy, particularly focusing on the strategic use of credit cards over debit cards. She explains that credit cards offer superior fraud protection, rewards, and credit-building opportunities when used responsibly. Sanchez compares financial literacy to language proficiency, arguing that mastering the language of money is essential for building wealth and increasing earning potential.
Investment Strategies and Asset Classes
For beginners, Sanchez recommends starting with low-cost index funds, specifically highlighting Vanguard's S&P 500 funds for their cost-efficient structure. She emphasizes the importance of investing in personal education and skills first, noting their unlimited potential for returns. For more experienced investors, Sanchez discusses alternative investments like private equity, real estate, and commodities, while cautioning that complex strategies should be left to professionals.
Wealth-Building Mindset and Principles
Sanchez and Jay Shetty explore the mindset necessary for financial success. Sanchez introduces the concept of a "fixer" mindset—viewing problems as opportunities for profit and growth—in contrast to a "freeloader" mentality. They discuss the importance of combining passion with wealth-building potential and surrounding oneself with ambitious peers. Sanchez references Warren Buffett's philosophy about being "fearful when others are greedy and greedy when others are fearful" to illustrate the importance of recognizing opportunities in market downturns.
The Intersection of Money, Relationships, and Personal Growth
When it comes to relationships, Sanchez and Shetty stress the importance of open communication about finances and aligned financial expectations between partners. Sanchez advises finding a financially complementary partner rather than a competitive one. Both hosts emphasize the importance of maintaining individual passions and skills within relationships. Sanchez cautions against wasting money trying to appear wealthy, suggesting instead to prioritize experiences that foster personal growth and fulfillment.
1-Page Summary
Additional Materials
Counterarguments
- While credit cards offer benefits, they can also lead to high-interest debt if not managed properly, and not everyone may have the discipline to use them responsibly.
- Financial literacy is crucial, but systemic barriers can make wealth-building more challenging for some individuals, regardless of their understanding of money.
- Low-cost index funds are a good start, but they are not entirely without risk, and market conditions can affect their performance.
- Personal education and skill investment have great potential, but not all education investments guarantee high returns, especially with rising education costs and potential over-saturation in some fields.
- Alternative investments may offer diversification, but they also carry their own sets of risks and may not be suitable for all investors, even experienced ones.
- The "fixer" versus "freeloader" mindset dichotomy oversimplifies complex socioeconomic factors that influence individuals' financial situations.
- Passion is important, but not all passions can be monetized or lead to wealth-building, and the pursuit of passion should not be equated with financial success.
- Warren Buffett's investment philosophy may not be applicable to all investors, especially those without his level of resources and risk tolerance.
- Open communication about finances in relationships is ideal, but cultural and personal differences can make this challenging for some couples.
- The idea of finding a financially complementary partner might not align with everyone's values or life situations, and financial compatibility is just one aspect of a successful relationship.
- Prioritizing personal growth and fulfillment over appearances is a positive message, but societal pressures and the influence of social media can make this difficult for some individuals to practice.
Actionables
- You can create a "Financial Literacy Book Club" with friends to deepen your understanding and hold each other accountable for learning. Start by selecting books that cover the basics of financial literacy and meet monthly to discuss key takeaways, personal financial goals, and strategies. This not only reinforces your knowledge but also helps cultivate a supportive community focused on financial growth.
- Develop a "Skill Investment Plan" by identifying a skill relevant to your career or personal interests that has the potential to increase your income. Allocate a specific amount of time and resources each month to learn and refine this skill through online courses, workshops, or self-study. Track your progress and the impact on your earning potential to measure the return on your investment in education.
- Engage in "Opportunity Simulation Exercises" to train your mind to recognize and evaluate investment opportunities during market downturns. Create hypothetical scenarios where the market drops and research different sectors or companies that could be undervalued. Practice analyzing financial statements, market trends, and potential recovery strategies to build confidence in making investment decisions during real-life market fluctuations.
Get access to the context and additional materials
Financial Literacy and Basic Money Concepts
Codie Sanchez stresses the essentiality of financial literacy and the understanding of money management tools such as debit and credit cards—pointing out they are stepping stones to personal wealth.
Understanding Debit vs. Credit Cards
Sanchez stresses that the difference between debit and credit cards is crucial to financial success, and suggests that people should primarily use credit cards with proper financial discipline.
Debit Cards Lack Protection and Credit-Building; Credit Cards Offer Benefits and Protection
Debit cards, Sanchez argues, should not be heavily relied upon as they don’t support credit-building—an essential element for wealth establishment. Additionally, debit cards provide fewer rewards and less protection against fraud compared to credit cards. Credit cards, if paid off monthly and used wisely, offer points, perks, or cash back, and also offer stronger fraud protection, ensuring quick resolution and refund of unauthorized transactions.
Sanchez explains that credit cards come with consumer protections and that interest rates shouldn’t discourage their use, highlighting credit as a fundamental resource for financial freedom. She recommends introducing credit to children in high school to set them on a path of resource accumulation and credit building early in life.
Mastering Money Language Is Essential for Increasing Earnings
Sanchez believes that the average American's financial education, usually stopping at high school level principles such a ...
Here’s what you’ll find in our full summary
Financial Literacy and Basic Money Concepts
Additional Materials
Clarifications
- Debit cards are linked directly to your bank account, offering immediate access to funds but lack the credit-building benefits and robust fraud protection of credit cards. Credit cards allow you to borrow money up to a certain limit, offering rewards like points or cash back, stronger fraud protection, and the opportunity to build a credit history when used responsibly. It's important to understand that while debit cards provide easy access to funds, they do not offer the same level of benefits and protections as credit cards, which can be valuable tools for financial management and security.
- Credit cards support credit-building by reporting your payment history to credit bureaus, which helps establish a positive credit history. This history is crucial for obtaining loans, mortgages, and favorable interest rates in the future. Credit cards offer stronger fraud protection compared to debit cards, as they are covered by federal laws that limit your liability for unauthorized charges. This protection ensures quick resolution and refunds for any fraudulent transactions, providing peace of mind for cardholders.
- Financial literacy is the understanding of various financial aspects like budgeting, saving, investing, and managing debt. It empowers individuals to make informed financial decisions and navigate complex financial systems effectively. By being financially literate, individuals can optimize their financial resources, make sound investments, and build wealth over time. Financial literacy serves as a foundation for individuals to enhance their earning potential, accumulate assets, and secure their financial future.
- The analogy between financial comprehension and language proficiency highlights the importance of becoming fluent in financial concepts to navigate money matters effectively. Just as mastering a language allows for clear communication, understanding financial principles enables individuals to make informed decisions and effe ...
Counterarguments
- While credit cards offer benefits and rewards, they can also lead to high-interest debt if not managed properly, which can undermine financial freedom rather than support it.
- Debit cards can be a better option for individuals who struggle with overspending, as they limit expenditures to available funds, preventing debt accumulation.
- The idea that credit cards are essential for financial freedom may not apply universally; some individuals or cultures prioritize savings and investments over credit usage.
- Introducing credit to high school students could be risky if not paired with comprehensive education on debt management and financial responsibility.
- Financial literacy is important, but it is not the only factor in wealth-building; access to capital, economic opportunities, and systemic barriers also play significant roles.
- The assertion that the average American's financial education is limited to high school level principles may not account for self-taught individuals or those who ...
Related Shortform Content
Get access to the context and additional materials
Investment Strategies and Asset Classes
Jay Shetty and Codie Sanchez unpack investment strategies, focusing on options for beginners and then diving into the more complex world of alternative investments.
Index Funds: Low-cost, Safe Investing For Beginners
Codie Sanchez explains the basics of investing in stocks and bonds and highlights the importance of low-cost index funds for beginners, particularly praising Vanguard for their cost-efficient structure.
Vanguard Index Funds Recommended For New Investors
Codie recommends that new investors place their money in a diversified portfolio, specifically suggesting the S&P 500 through Vanguard, which allows for trading with no fees. She endorses the practice of automatic investing, which she views as a necessity rather than a luxury, and refers to Vanguard in this context.
Prioritize Education and Skills Before Other Assets
Sanchez underscores the significance of investing in oneself first, especially with limited cash. She argues that the potential for personal growth provides unlimited upside and that this form of investment compounds over time.
Alternative Investments: Private Equity & Real Estate Offer Higher Returns but Need Experience & Risk Tolerance
As Sanchez moves into the complexities of alternative investments, she provides insights for those who are ready to take on more risk in search of higher rewards.
Private Equity, Commodities, Real Estate for Advanced Investors
In what Sanchez refers to as the third stage of investing, she introduces private equity, which involves investing in companies off the stock exchange, as well as direct investing in real estate and commodities like tim ...
Here’s what you’ll find in our full summary
Investment Strategies and Asset Classes
Additional Materials
Counterarguments
- While low-cost index funds are often recommended for beginners, some critics argue that they can lead to a lack of diversification if investors rely solely on them, potentially exposing them to systemic market risks.
- Automatic investing is beneficial, but it may not be suitable for everyone, especially those who may need to access their funds or adjust their investment strategies frequently due to changing financial circumstances.
- Investing in oneself is important, but it should be balanced with other forms of investment to ensure a diversified portfolio and financial stability.
- Alternative investments do offer higher returns, but they also come with higher fees and may not always outperform traditional investments when adjusted for risk.
- Private equity, real estate, and commodities can be volatile and may not be suitable for all advanced investors, particularly those who are not comfortable with illiquid assets or the long-term commitment these assets often require.
- The assertion that real profit comes from becoming the entity in which others choose to invest may not hold true for all investors, as some may achieve significant profits through direct inv ...
Actionables
- You can start a monthly "Invest in Yourself" challenge where you allocate a set amount of money or time towards personal development, such as online courses, books, or attending workshops related to your career or personal interests. This practice not only enhances your skills but also increases your value as an investment to others in the long run.
- Create a "Risk Tolerance Journal" where you document your reactions and decision-making processes for various financial scenarios. This can help you understand your comfort level with different types of investments and prepare you for more advanced options when you're ready. For example, you might note how you feel about stock market fluctuations or the idea of investing in a friend's startup.
- Develop a "Peer Investment Group" with friends or colleagues where you collec ...
Related Shortform Content
Get access to the context and additional materials
Wealth-Building Mindset and Principles
Codie Sanchez and Jay Shetty discuss the mindset and approaches necessary for financial success and personal fulfillment, highlighting the importance of problem-solving, combining passion with wealth-building, and surrounding oneself with ambitious peers.
"Fixer" Mindset Key To Creating Wealth
Sanchez and Shetty reflect on a mindset that is central to creating wealth—viewing problems as opportunities for growth and taking active steps to solve them.
Viewing Problems as Profit Opportunities Unlocks Growth Avenues
Codie Sanchez suggests seeing problems not with trepidation but as indicators of where profit, opportunity, and growth lie. She uses an NPC ladder analogy to show how one can view challenges as opportunities to become the main character who moves the company forward, showing an evolution from "Non-Playable Character" to a player changing the script.
Avoiding a "Freeloader" Mindset Is Key to Financial Success
Sanchez contrasts “fixers,” who actively look for solutions to problems, with “freeloaders,” who wait for others to solve problems and in turn, let others profit. Avoiding the freeloader mentality and embracing responsibility for solving problems is key to financial success, as it empowers individuals to seek profit-making solutions.
Passion and Purpose Over Money Lead to Fulfillment and Wealth
Sanchez and Shetty steer the conversation towards finding fulfillment in one's work by aligning talents and interests with a wealth-building mindset.
Combine Talents and Interests With a Wealth-Building Mindset For Success
Sanchez notes the value of engaging in work that combines one's talents and interests with the potential for financial success. She advises against trying to turn every passion directly into a profit and suggests finding a love for the game of business itself. Similarly, Shetty speaks to the significance of respecting the process and allowing success and possessions to be a benefit of passion and hard work.
Ambitious Peers Can Boost Financial Success
The discussion reveals that being surrounded by ambitious individuals can contribute significantly to one's success. Sanchez proposes seeking leaders and teams who are visibly progressing and learning from them. Studies support the idea that being around high-earning peers increases the likelihood of higher income and investing m ...
Here’s what you’ll find in our full summary
Wealth-Building Mindset and Principles
Additional Materials
Counterarguments
- Viewing problems as profit opportunities may sometimes lead to exploitative behavior if not balanced with ethical considerations.
- The "freeloader" mindset might be an oversimplification, as collaboration and delegation are also important aspects of successful wealth-building.
- Combining talents and interests with a wealth-building mindset doesn't guarantee success; market demand and other external factors play significant roles.
- A love for the game of business might not be attainable or desirable for everyone, and other paths to success can be equally valid.
- Being surrounded by ambitious peers can be inspiring, but it can also create pressure and an unhealthy competitive environment.
- The influence of high-earning peers on one's success may not account for individual differences in values, goals, and definitions of success.
- A problem-solving approach is important, but it's not the only factor in wealth creation; luck, timing, and access to resources are also critical.
- Recognizing downturns as opportunities is a strategy that comes with high risk and may not be suitab ...
Actionables
- You can reframe daily inconveniences as business ideas by keeping a "problem journal." Whenever you encounter a frustration or inconvenience, jot it down. At the end of each week, review your entries and brainstorm how each problem could be turned into a service or product that people would pay for. For example, if you're consistently annoyed by the lack of healthy snack options at your office, consider creating a subscription box service for healthy, office-friendly snacks.
- Boost your financial literacy by starting a book club with friends who are also interested in personal growth and wealth-building. Select books that focus on financial success and problem-solving in business, and meet monthly to discuss insights and actionable steps you can take. This not only helps you learn from the content but also from the diverse perspectives and experiences of your peers, potentially leading to collaborative investment opportunities or business ventures.
- Turn your hobbies into learning experiences with a profit potential by documenting ...
Get access to the context and additional materials
The Intersection of Money, Relationships, and Personal Growth
Money Management in Relationships: Communication and Shared Values
Discussing Finances, Joint Accounts, and Prenups Can Help Avoid Conflicts
Codie Sanchez discusses the importance of openly talking about money in relationships and the significance of aligning financial expectations with partners. Conversations about money, expectations, and prenuptial agreements are necessary to navigate potential conflicts. Sanchez suggests that these discussions reveal whether a couple has the same life visions, can handle conflicts, or can compromise on essential issues.
Jay Shetty supports this view, noting that a lack of communication about finances can lead to less money in the bank account, reflecting a couple's unwillingness to have difficult conversations. Crucial conversations about finances before marriage are a must. Who pays on the first date sets the precedent for these conversations—Sanchez posits that the person who asked for the date should pay, indicating clear communication and setting early expectations.
Finding a Financially Complementary Partner Aids Growth
Sanchez also discusses the dynamics of modern relationships, where men and women often compete for the same things, including financial success. She advises finding a partner who complements rather than competes with you financially. Sanchez suggests that when someone is open about their financial goals and limitations, they might encounter others who share similar concerns, potentially leading to a relationship with a complementary financial partner.
Jay Shetty adds that when friends understand your financial stance, they may pick activities that align with your budget, which could foster finding a partner with similar financial habits. Sanchez emphasizes the importance of mutual respect in relationships and suggests that acknowledging equality can lead to more balanced discussions regarding who should pay on dates and other financial matters.
Balancing Career and Personal Life Ensures Happiness and Wealth
Fostering Partner's Passions Enhances Relationship Fulfillment
Codie Sanchez and Jay Shetty agree on the need to balance work and personal life. Sanchez attributes the balance in her life to her partner ensuring they engage in fun activities, while Shetty expresses the importance of not letting his private time become consumed by business. Shetty underscores the value of nurturing each partner's individual passions and skills for a fulfilling relationship.
Sanchez shares how working closely with her partner in their investment business resulted in initial friction, eventually leading them to embrace more specialized roles to reduce conflict. She highlights her personal experience of understanding what her spouse does for a living, suggesting that intertwining careers can be a source of strength.
Jay Shetty and Codie Sanchez also touch on how married couples often fare better financially over time. Sanchez reflects on how women are increasingly seeking men with similar or higher income levels and discusses how this doesn't necessarily lead to happiness. Thr ...
Here’s what you’ll find in our full summary
The Intersection of Money, Relationships, and Personal Growth
Additional Materials
Clarifications
- Prenuptial agreements are legal documents created before marriage that outline how assets will be divided in case of divorce. They can address property division, spousal support, and other financial matters. Prenups are designed to protect individual assets and clarify financial expectations, providing a level of security and transparency for both parties. Discussing and drafting a prenuptial agreement can help couples have open conversations about finances and potentially avoid conflicts in the future.
- Finding a financially complementary partner involves seeking someone whose financial habits, goals, and attitudes towards money align well with your own. This compatibility can help create a balanced financial dynamic within a relationship, where both partners support each other's financial aspirations and work together towards shared financial objectives. It's about finding someone who complements your financial strengths and weaknesses, creating a partnership where both individuals can contribute positively to each other's financial well-being. This approach aims to foster a harmonious financial relationship that minimizes conflicts and maximizes mutual growth and prosperity.
- Intertwining careers in a relationship involves partners sharing professional goals, responsibilities, or working together in the same field or business. This can lead to a deeper understanding of each other's work, increased collaboration, and potentially more shared success. It requires clear communication, defined roles, and a willingness to navigate challenges that may arise from mixing personal and professional dynamics. Balancing individual aspirations with joint endeavors is key to making intertwined careers in a relationship successful.
- Lifestyle comparisons can negatively impact financial well-being when individuals overspend to emulate a perceived affluent lifestyle, often seen on social media or at events like Coachella. This behavior can lead to financial strain as people prioritize appearances over building actu ...
Counterarguments
- While discussing money openly is important, some individuals or cultures may value privacy around finances, and there can be successful relationships where money is not a frequent topic of conversation.
- Prenuptial agreements, while practical, can sometimes create a sense of mistrust or lack of confidence in the relationship's longevity.
- The idea that the person who asks for the date should pay can be seen as traditional and may not align with modern views on equality and shared responsibility in dating.
- The concept of finding a financially complementary partner might not be feasible or desirable for everyone, as some individuals may prioritize other qualities over financial compatibility.
- The assertion that married couples often fare better financially can overlook the complexities of individual financial situations and the fact that marriage is not a financial panacea.
- The emphasis on balancing work and personal life, while widely recommended, may not acknowledge the reality of those who have to work multiple jobs or long hours to make ends meet, for whom balance is a luxury.
- Encouraging partners to pursue their own pas ...
Get access to the context and additional materials
Create Summaries for anything on the web
Download the Shortform Chrome extension for your browser
