wealth

Jan

2021

The two reasons you don’t have the wealth you desire

The relationship you have with money will directly affect your wealth.

The fundamental flaw of our modern education system is that we were raised and primed to be employees. Once upon a time, this wasn’t a bad thing. Those who influenced us to pursue traditional education paths wished us no harm. More than anything, they wanted us to be secure, in the best way they knew how.

Our post-depression era parents and grandparents saw our American economy in collapse and sought job-security, defined benefits, and government jobs for stability and safety. For decades, this logic was sound. Go to school, get a job, work 30 years, get a gold watch, and retire comfortably. Things have changed and this is no longer the case.

Employees trade time for money

Most employers have reduced their defined benefits plans to defined contributions and have removed any guarantee as to how much income employees will have when they reach the other end. Worse yet, the employee path pays you the employee less than your worth. Think about it this way, if you work for someone else, you are an investment. Your employer is getting at minimum a reasonable return on their investment and you are earning less than you are worth. This is the cost of “security.” At the end of the day, you are trading your time for money and are lucky if you can retire at close to the same standard of living as your working years.

What about small business owners?

Small business owners trade time for money and often become too vital to grow out of their roles

Some employees seek more control over their time and their earning potential and make the decision to start their own business. The drive is commonly to increase earning potential, set one’s own hours, and to have more control over their job. The trouble most small and startup owners face is that their traditional education governs their mindset. The new business owner has already been conditioned to equate dollars to hours. They will find themselves in a different landscape yet still trading time for money. The small business owner is at the greatest risk of making themselves the product of there business, in an inescapable job.

Those who plan appropriately and think big have the opportunity to limit their stay in small-business land to a brief layover in their career as they aim to build systems for their businesses. The smart business owner systematizes their job so that they can give it to someone else. They raise other leaders to carry out their vision. The smart business owner makes money from other people.

If you are unclear what type of business you are in, the test, as described by Robert Kiyosaki in his book Cash Flow Quadrant is: If you took a year off from your business, would it grow while you are away?

Making the switch to wealth and financial freedom

Financial freedom is attained when your passive income from businesses you own and your investments exceeds your expenses and liabilities. Following the thread from Kiyosaki’s book, the person who earns this passive income earns it either as a big business owner or as an investor.

Big is not bad

Big business owners develop leaders and build a wealth pipeline for themselves.

Big business gets a bad rap. These owners, often the millionaires and billionaires are vilified for their success. Those with employee mindsets often accuse them of being greedy and perhaps their feelings tie to their own realization (conscious or not) that their boss was earning a profit on them.

When you change the way you look at things, the things you look at change. Think of that big business owner not as greedy, rather as giving. Business owners create jobs and opportunities and the best want to raise those they lead into leaders themselves. This is because a big business owner must develop leaders and systems to remove themselves from the operation and to keep the business growing.

Take action!

You’re ready to get into business for yourself and you want to avoid the pitfall of dead-ending yourself in your own company. Maybe you’re already in business and realize you have become too essential. It doesn’t matter where you are. What matters now is that you do not wait to build the systems you need to grow your business to the point that it outgrows you.

People – You cannot be a big business without others. Even if you are the only member of your company at this point, here is your four step process for assembling the right team:
1. Write your own job description and all of the roles you currently have.
2. Choose the roles and tasks which are not your strengths or which would best be served by someone else.
3. Develop your organizational chart and assign roles to the future people who will take on those tasks. This will inform your next hires.
4. Develop a path on your org chart for your growing organization so that as you grow you can assemble the leadership team which will grow your business and pushes you out the top.
Systems – The only thing a skill which you are uniquely qualified to perform guarantees is that you will forever hold that job. If your desire is to grow, you will need to empower others to do what you do best. At a minimum, you will multiply your own efforts. Document processes, bring others in, and you are likely to find that their unique perspectives bring even more innovation to your already great product or service.

Jan

2021

Are you winning or losing? Why you need to know your Net Worth

Your Net Worth is your financial health barometer and not knowing it will cost you!

When I coach business owners and leaders in achieving their goals, we look beyond the business. Business success is merely a symptom of the habits you’ve formed and your holistic success in life. The most common cause I encounter of poor business performance is physical health. The next is financial uncertainty.

When clients indicate that a physical health habit would improve their lives, we have several measurable ways to track their progress in achieving their goals. We can track:

Net worth is a measurable goal which focuses on the most important financial number... your wealth!

Weight
Body fat %
Cholesterol
Daily caloric intake
Hours of daily exercise
Waist Size

It seems so simple to set these goals and then to take action on them. Some combination of diet and exercise will achieve the desired outcome and measurements are fairly easy to take and to see.

The financial challenges most of my clients bring to me relate to their income, their spending, and their savings. It is common to see financial goals of an anticipated gross revenue or a savings goal for a planned purchase or investment.

One very astute and wise beyond his years client of mine recently asked me for help setting a goal around his net worth. He didn’t know his net worth and only knew it was important for it to grow.

What is net worth?

Your net worth is the balance sheet for your life. The scenario I like to give is that you have been summoned to leave earth and rise to the mother-ship, move to Eden, or to join John Galt. You have one day to sell off every asset and valuable you own and settle all of your debts. Once you’ve liquidated your belongings and made right your creditors, the balance remaining is your net worth.

Why is net worth the most important number on your financial bill of health?

If you are playing the short game, income goals can help you live comfortably and achieve your goals of recreation, lifestyle, and even investments. The trouble with income alone is that it does not care how much you spend along the way.

There is a reason many high earners and CEOs file bankruptcy as soon as their business suffers a bad year or closes their doors. Despite the fact that they saw tremendous incomes last year, their Mercedes is being towed away by the repo man. Their liabilities exceeded their assets.

What you focus on expands!

Two factors increase your net worth… 1. An increase in assets and 2. a reduction in debts. The core tenets of increasing your net worth are to save more and borrow less. The lowest risk means of doing so is to put your savings into a safe vehicle and to pay down your debts as quickly as feasible.

Some choose a higher risk option of leveraging their investments by investing their assets in real estate, the stock market, businesses, collections, and more. These investment vehicles, when carefully selected can dramatically increase the rate at which they see a return on their capital investment.

How do I determine my net worth?

As I mentioned, the most simple means of determining your net worth is to add up the value of everything you own and subtract all of the debts and liabilities you have. The next is to use a tool designed specifically for this purpose. I have you covered! Read on.

Checking your net worth is not a “one and done” process. It changes each and every day. If you are invested in the stock market, your net worth changes continuously from the opening bell until the close of the market. Each time you make a purchase or the value of your home rises, your net income changes.

The process of updating your net worth is fairly simple and takes little time. Growing your net worth on the other hand requires intentional planning and focus. You can accelerate this growth with lessons learned from others and a high level of accountability.

My invitation to you!

If you are serious about growing your net worth, I have a group for you. I am passionate about wealth building and I have a lofty net worth goal set for myself. I want to make as many millionaires as I can along the way. My group is called Wealth Watchers. We currently meet on the first Thursday of each month at 6:00pm (Mountain Time), online.

I share an intuitive and simple net worth tracking tool with all Wealth Watchers members. Sign up below for our next meetup and we will get the tool to you. Our group is committed to helping one another achieve higher net worth values through education and accountability. Not to mention, we are a social club, connecting growth mindset leaders with one another. Sign up now by clicking here:

Join Wealth Watchers

Once you’ve joined, we have a private Facebook community where Wealth Watchers can ask questions, share wins, and offer strategies to one another, between Meetups. Find us on Facebook here:

Wealth Watchers on Facebook

Dec

2020

Never ever eat from the community fish bucket again!

Live your life without safety nets, set bigger goals, and overcome limiting beliefs

On a recent trip to the Caribbean with my family, I spent a lot of time beaching it, as one would when they have two young kids. The other thing I spent a great deal of time doing was reflecting on the year. What went well? What didn’t go well? What did I learn? How will I show up next year? These were all questions I pondered as I listened to the waves crash and watched the kids play.

One of my favorite sights quickly became watching the local birds of prey fishing. I am not a bird watcher, by trade, and I owed it to you to identify my favorite as the Brown Booby (not that we should hold its name against it). As I watched the booby, sometimes solo, sometimes in pairs, and at greatest in groups of four take to the beach, what quickly became apparent was that they had a strong work ethic.

The brown booby has no limiting beliefs to overcome. He fishes relentlessly to catch his meal.

These majestic sea birds would swoop down low, their bellies barely off of the surface of the water, and hunt for their meal. They would pulse their wings just enough to keep themselves mere inches from the water and respond quickly as the water would rise. They systematically passed back and forth over the water until they spotted the shimmer of a fish below at which point they would abort their thirty or so miles per hour flight in exchange for an abrupt dive into the water to catch a fish.

More often than not, the booby would emerge empty-beaked and would quickly resume flight in search of the next shimmer. I watched these birds perform tirelessly for hours as they hunted for fish. What occurred to me after some time was that I was not merely seeing work ethic. I was seeing survival instinct.

No free meal

These birds knew that their survival hinged on them finding their next meal. Their young relied on them to return to the nest with enough fish to feed them. If these birds gave up, they died. Where in our lives does this show up? Would you agree that your job is mandatory for your survival? Why then is it so easy for us to fall into the trap of not working and avoiding the tasks which lead to our success?

One night on our trip, we stopped at a seaside restaurant for dinner. As we ate, I noticed a congregation of small birds, resembling sparrows. In the spirit of this post, I attempted to identify these birds, however when I searched the internet for “sparrow Caribbean,” I was returned Captain Jack Sparrow from Pirates of the Caribbean. I cannot confirm with any degree of certainty that this particular species had any relation to Captain Sparrow.

These smaller birds were incredibly comfortable with people and it was apparent they’d eaten at this dining establishment before. They came right up to my feet and even hopped on the table next to ours looking for a chunk of bread to be tossed in their direction. These birds patiently awaited and I never did oblige. They clearly knew that they did not need me to survive and that it was only a matter of time before someone else did toss them some food or leave extra fries on their plate.

The stories of these two birds of paradise taught me a great lesson. When survival is at stake, it seems we’ll do anything it takes to keep ourselves and our young alive. The trouble comes when we know there is a safety net in place. If the brown booby knew that if it didn’t catch a fish one day it could just go to a community bucket of fish and grab one to take home, it would quickly learn to take the path of least resistance and start its day at the bucket.

The path of least resistance

Humans and birds alike, we are all susceptible to taking the easy path. Often this comes at the cost of our dreams and our goals. Why do we accept mediocrity when we have the potential to be great? Why can’t we approach life like the brown booby and see our mission through to completion? Is it that we know that when we fall someone will be there to pick us back up?

Especially in developed nations, such as the United States, we don’t have many people dying in the streets of hunger. Does this mean that they all go out and catch their fish every day? Often, no. Remember, like all other creatures, we are always looking for the path of least resistance. When we know we can grab a fish out of the community bucket versus working tirelessly to catch one, we will opt for the easier route.

The community fish bucket isn’t going anywhere. We must set goals so big that the thought of community fish seems like death and the taste repulses us. How do we train our minds to think so big? How do we overcome the limiting beliefs which allow us to continue accepting mediocrity?

Someday starts today!

Start with the end in mind. The greatest, the smartest, the strongest, and the wealthiest don’t have superior genetics to yours. They are not super-human and even if they did have a leg up from their parents, their parents had to create their wealth somehow. We all have the opportunity to be our greatest selves. It begins with your allowing yourself to dream bigger.

The first time I had my limiting beliefs challenged, I was going into business for myself and I was asked how much money I wanted to earn. My response was “$100k.” For me, it was more than I had ever made before and would certainly cover my survival. It also meant that I would be accepting of $90k, the last amount I’d made… $80k, which I had survived on comfortably as well. The point being, I also likely would have been accepting of a community fish. Once I was challenged to expand my thinking, I looked at where I wanted to be, someday, and the legacy I wanted to create. What I learned was that my first goal was selfish and my second was more selfless.

Overcome limiting beliefs

In our society, there is often some amount of shame in wanting to build wealth and the wealthy are often vilified. I remember, in my own youth, uttering the words that I wanted to make “enough to pay the bills and be comfortable.” I was afraid that if I stated I wanted to be a millionaire that I would be shamed. As it turns out, this couldn’t have been further from the truth. My “noble” limiting beliefs were completely selfish and were entirely about me.

If we believe this rhetoric, we will limit our own beliefs, put a governor on ourselves, and even start believing the dangerous narrative that the evil wealthy elites should be filling the community fish bucket for us. Don’t be fooled, this only perpetuates the reliance on the community bucket and is hypocritical.

When you change the way you look at things, the things you look at change

As you challenge yourself to dream bigger, think beyond the dollars alone. What would you accomplish as your greatest self? What impact would you have on the world? Sir Richard Branson, one of the wealthiest people in the world is a shining example of those using his success to make an impact on the world. Branson has amassed great wealth and has also made it a mission of his to save the ocean from human impact.

Oprah Winfrey’s personal mission statement is “to be a teacher. And to be known for inspiring my students to be more than they thought they could be.” She has used her wealth to build schools and to create opportunities for underprivileged children.

A new year. A new you?

As we enter a new year, what will change? As much as many of us would like to wish away the old year with the turning of the clocks to midnight, it is up to us and us alone to create our own destiny. Someday starts today. Build a future vision and reverse engineer your goals to the things you must do today. Determine who you must be and the habits you must build to achieve the success you’ve always wanted. Identify the limiting beliefs you must overcome. Most important, never eat community fish again!

Top resources to start your year right!

Set big goals for yourself with my Intentional Goal Setting series
Develop the habits which will take you to the next level
Get intentional about the activities which will grow your business
Enlist support. Hire a coach!

Oct

2020

Leave when you want, with your dignity, and your wealth!

Will your business be ready to sell when you are?

There is no doubt that 2020 has effected great change on the way we live our lives, what we do for fun, and where we choose to live. The stay-at-home orders of the Spring pushed many businesses to work remote and re-tool to provide more virtual services. While this came with its share of growing pains and Zoom-bombers, there has been some good that has come from this.

The new business landscape

Many businesses have announced that they will never return to full in-person workplaces, reducing their office costs, and creating happier employees. This is beginning to cause a shift in the way we view cities. With remote work spaces and the ability to attend face-to-face meetings from across the globe, many do not see the need to be close to the city center. Once upon a time you could not “make it” if you lived in a rural area. Today, it is becoming a viable reality.

With a growing workforce of remote employees, many armed with mobile hot-spots and their laptops took to the road in Recreational Vehicle’s (RVs) and have been enjoying a new office everywhere they park. In May and June, RV rentals were up over 1000%, compared to 2019 and sales in June were up 10%. My partner and I decided to seize the market of the moment and as RV campers with our own families, we decided to buy an RV park.

Doing what you love does not guarantee a fairy tale ending!

For those not familiar, an RV park is a campground with amenities for RV campers to park, connect to utilities, meet friends, and have a home base while they explore new areas. When you buy an RV park, very little of what you actually buy is tangible. The largest expense is the business itself. The real estate, buildings, and anything else, from utilities to golf carts and trucks, is a small portion of the purchase. Even though the sale of the business takes place in a real estate transaction, the most valuable asset can be transferred by email.

Imagine the freedom to retire inspired, work remote, and sell your business when you want. Your coach will help you achieve this!

As we began our search, we identified an RV park, right here in Colorado, in a popular mountain town, which appeared to suit our needs. We loved the location and saw a lot of potential to modernize this park and to bring it up to speed. Just as you wouldn’t buy a car without knowing what’s under the hood, you wouldn’t buy a business without knowing what you are getting into. In the business, we call this due diligence. We were certainly glad we did ours as this little fixer upper had some devastating yet avoidable defects hidden behind its curtain.

The couple who owned this park were older and like many getting into this business did it to make friends, spend time outside, and own their own business. They had achieved these goals and had finally made the decision, in their 80’s to move from operator to guest. The gentleman reminded me of my grandfather, very smart, resourceful, and reserved. The woman was sweet, cheerful, and personable. She was an outstanding face for their business. Let’s call them Bob and Sue.

The proof is always in the pudding… or the P&L

Running a mostly cash business and doing most of the repairs and maintenance themselves, Bob and Sue were able to report very little income and still maintain a profit. No doubt this system saved them on their taxes, year over year, despite it being a risky play. Bob and Sue had regular friends who would come visit them for the entire summer to take advantage of the deeply discounted site rentals at the monthly rate and with the added cash discount.

While this helped Bob and Sue maintain long term friendships, they would soon find that it did not serve them in selling their business. When a business like an RV park is sold, as mentioned before, the minority of the price goes to the physical assets of the park and the majority goes to the business itself. Therefore, without a doubt any bank which is called upon to lend money for the purchase will want to give the business its own checkup. When my partner and I accessed the books for this business what we saw was not pretty.

Bob’s crafty workaround to avoid the tax-man and Sue’s clever bookkeeping, which had kept them under the radar for years was unavoidably exposed when we investigated the P&L ( Profit and Loss statement). The business did not generate enough income to support the purchase price and the bank can only assume that if the business continued to run as the books indicated it had, it would lose money when a large loan payment was added into the expenses.

Running out of options!

There are creative financing options in cases like this which allow for the seller to act as the bank and carry the note for the buyer, yet Bob and Sue saw it as they were too old and would not be around to see that loan to maturity, nor much of its benefit. They were stuck. Their only options were to sell the business well below the value of other well-run parks in the area or stay in business for another two years, into their 90’s, to run an above-board business and improve the financials.

When you’re ready to exit, will your business be an attractive product poised to fetch top-dollar? Or will it be a bargain barrel dent-and-ding special? Learn from Bob and Sue and leave on your terms, with confidence!

Key Lessons

Budget – Your books cannot lie! You might lie on your books, however, they can always be verified. How much are you really saving in tax to take that risk which is in-fact digging into your wealth? In Bob and Sue’s case, their shortsighted ploy devalued their business by $700,000!
Economics – Ensure that you are running a business and not a charity. Going into a business where you can make friends and your friends come back is about as rewarding as it gets. Just remember, you are still running a business. Bob and Sue had a nightly rate of $50 to stay the night at their RV park, yet their friends who visited and stayed all summer, the ones who capitalized on all of the discounts offered, were paying less than $5 per night. This drastically hurt their business. Where could yours be improved?
Legacy Planning – A little bit of foresight and planning prevents heartache like this story. No one is too young to begin planning their legacy. Whether it is to pave the way for your retirement or to build a multi-generational trust, I can help you plan for your exit, ensure your business will be highly marketable at that time, and even put more money in your pocket, today.

If you’re ready to plan your legacy and prepare yourself to leave on your terms, with passive income, you can’t wait another year!

Build your Legacy Plan!

(Sources: https://www.forbes.com/sites/alexledsom/2020/07/12/all-aboard-the-land-yachts-as-rv-bookings-spike-1000/#222dbaa447d5, https://www.travelandleisure.com/travel-tips/travel-trends/rv-sales-increase-coronavirus)