5 Principles to Get Rich in the New Economy

The S and P is hitting all time highs, the housing market is overinflated and interest rates are through the roof and inflation is ramping up. We're in the new economy and the bubble is going to burst eventually. I'm going to share with you how to get rich in this new economy with principles as old as the market itself. And I'm going to go over everything from how to protect yourself against the downturn to getting ready for the upswing and capture as much money as possible. So without further explaining it, these are the old principles of the new economy. Foreign. Welcome to the Martel Method I went from rehab at 17 to building a hundred million dollar empire and being a Wall Street Journal best selling author. In this podcast I'll show you exactly how to build a life and business you don't grow to hate and make sure you don't miss anything by subscribing to my newsletter@martel method.com. The first principle is to build an emergency plan. When the 2020 event hit, I had to build a plan for my personal and my business life within two days. I learned a long time ago that the best way to focus on creating a predictable future is to build a disaster recovery plan to prepare up front on. If this happens, then I do that unemotional before the world pushes on you and causes you to overreact. You want to just sit there in the calm and just decide you here's what I will do if this happens. And I think most people miss this and it's why they lose when the economy goes into a downturn. What I've learned over the years is that great leadership isn't about how you show up when things are good, it's how you show up when things are bad. People want to lean on somebody that is calm, collected, cool, even in the face of a storm. When things go bad or worse, what are you gonna do? Are you gonna overreact? Are you gonna sell everything? Are you gonna run away and hide in the woods? Are you gonna stop and say, hey, what's really going on here? What's, where's the wind blowing right now? Because I learned a long time ago from one of my mentors, this guy named Jim Rohn who I studied in my car university style. It's not the direction of the storm, it's how you set your sail. In the storm. Everything's going on around you. It's chaotic. I want to set my sail to take advantage of that wind so I can create forward movement. I had friends in the downturn take their whole business and pivot it into a medical company. I had people that took all the resources and the assets and the knowledge they knew and restructured it into something that could take advantage of the way the world was moving. So the key is to have a plan for each phases and each threshold. For example, if all of a sudden your profit goes to half, then you lay off 25% of your team. If then the next stage is one of your large customers fire you and you lose 30% of your business, then you lay off another 25% of your staff. You want to decide how you're going to respond unemotionally when the threshold is met for each phase of reaction. Cause you wanna be proactive, you don't wanna be reactive. Which brings us to principle number two, which is to cut cost. You know, several times in my entrepreneurial journey, we've been on a tear upwards and all of a sudden hit a ceiling or a wall and then we have to readjust. It's almost like the entrepreneurial journey is an expansion, contraction, expansion, contraction. It's two steps forward, one step back, and layoffs is part of it. As an example, I remember I was building this company, Flowtown. One day we wake up and there's a change in an API that had no f us that cause our whole product to stop working. Imagine you build a business on top of all these different data points and you find out that one of them is no longer going to be provided to you. So you can't actually deliver the thing the customer's been paying for. We went from doing almost 200,000amonth to zero almost overnight. So we had to lay people off. But we also knew that we had potential to build something different, knowing what we knew now. And we didn't want to tarnish the culture, we didn't want to hurt the culture. We didn't want it to stop us from having the team. I mean, we spent all this time building this team. So we did is we decided to do a layoff. But we were very strategic. We wanted to really assess all the people, all the roles, all of our expenses, and cut off any of the fat without nicking the bone. See, that's the key when we're doing layoffs, is that you want to remove anything that's unnecessary, but not to the point where you demoralize your whole team and cause all of them to start looking for other jobs. Because if you want to talk about dealing with an issue, losing your customer, losing your team, that could give you a fighting Chance to rebuild it. That's a completely different game. So step one is to print off all of your expenses. Then I want you to highlight in green everything that is necessary. We're talking like your food, your rent, your mortgage, your transportation, your debt. But I mean some of this stuff, even mortgage, you got to ask yourself, do I still need that office space or can I let that go? So only keep the things that are green that are absolutely necessary. Then highlight in yellow everything that is a need. Gym membership is a need. I think it's really important, but it may not be necessary. Medical type stuff, clothes, shoes, like whatever is your expenses that are more needs not necessary to live. Then highlight in red everything that are nice to have. This is everything from entertainment, eating out, travel expenses, gifts for other people. And that'll give you at least the roadmap for what you need to do next. Step two is plan the cuts. I want you to take all your expenses for the year and then you have total amount of cost then divided by 12 so you know what your monthly costs are per month. Then you take everything. You've highlighted all the red and yellow items and that's when you start planning the cuts. You figure out who you're going to call in what order, you're going to schedule things, you're going to maybe do some layoffs, you're going to call some vendors, you're going to renegotiate your credit card bills. You're going to do everything. But the key is don't be emotional. I know that it sucks and that it's tough, but I want you to know this from somebody who's done this dozens of times. It is required to be successful. There's no pride in holding on to inflated expenses when the business is not able to support it. To have your whole life implode on itself because you aren't able to weather the storm. When people are able to make the tough decisions, even though it's not popular, that's when you actually develop your leadership skills. Before we get back to the episode, if you actually want to know what my real life looks like and see the people and the businesses and the companies I buy and my family and just like how I make it all work, go. Follow me on Instagram Dan Martell 2 Elder Martell on Instagram it's where I show the behind the scenes, the real deal, real time. I'd love to see you there. Have an amazing day. Foreign. Which brings us to Principle 3, which is to audit your financials, see a lot of people Say that they manage their money, but they actually don't know what's going on with their money. I get a daily report every day. It's called daily cash reports for all my companies, including my personal, including my holdings, including all my active companies. That tracks how we're doing from a cash point of view. Now, anybody that knows finances also can say that's probably not the best way to manage the success of a business. But what it does for me is it creates rhythms. It allows me to look at different levels, how they fluctuate, how they get replenished, how they move. And I can start to see patterns. I can see, if all of a sudden a company had a million dollars in cash and all of a sudden drops down to 100,000, you better believe I'm going to be asking questions. I mean, honestly, what I've done is I've asked my team that if there's ever a change that's more than 20%, please include notes and in the email telling me why that happened. You know, it's just like tracking your body weight. You know, if you don't track it at all, you'll slowly put on weight until the day you finally realize you're a little chubby. And then you go and you step on a scale and you're like, holy cow, I put on £12. It doesn't happen overnight. You don't notice it right away. But if you manage it every day, it's almost impossible for you to have these reactions that are massive amounts of change. So the key is to measure what matters. If we don't measure how our business is doing, how our lives are doing, our daily cash position, then we're not going to focus on making it better. And sticking your head in the sand and pretending like it's not there is not going to help you. I've learned that clarity is an accelerator. Clarity gives you confidence. If you just audit your financials, figure out exactly where you're at, how much debt you have, what your cash flow position is, and not pretend like it's not happening. When you know it's bad, then you'll at least be able to respond. Amateur entrepreneurs may look at their numbers once a year. They literally sit down with their accountant and they get the report, and they either drink because they had a great year or they drink because they had a bad year. Good entrepreneurs look at them maybe once a month. You know, it's funny is that even at that it might be 30, 45 days after the month is done that they're Getting a report for something that's almost two months past. The best entrepreneurs look at their numbers every day. They look at the leading indicators that drive the results. And at the end of the month, they're getting their reports within seven to 10 business days for the previous month's performance. They are maniacal. You can't manage what you don't measure and you have to be on it frequently. The way to make sure that you track those leading indicators is to implement a scorecard. So within all my companies, there's a scorecard that every leader has to report into that shows the leading indicators into their progress. So there's a plan and there's an actual. There's. This is what I said I would do and this is how we're showing up. So that way there's a red, green, yellow for each leader to know if they're on track to hit their numbers, which supports the bigger goal of the business. If you do this, then it doesn't matter how big your company is. Everybody will know where they stand on their ability to perform. And it takes all the responsibility off of you. Decide if somebody's doing good or bad because it's in the scorecard. Most people mess up their scorecard. So if you're an entrepreneur, DM me scorecard is Dan Martell 2000 Martell on Instagram, just send me scorecard and I'll send you over my template foreign. If you prefer to watch your content, then go find me on YouTube. I have this episode on YouTube. I'm Dan Martell on YouTube. Just subscribe to the channel, turn on the notification bell because then you'll get notified in real time. It'll tell YouTube to tell you got a new episode so you'll never miss anything. Let's get back to the episode. Which brings us to Principle 4, which is to become a necessity. The other day I had a friend and I hadn't seen him in a while and asked him how life was doing. He said he just gotten laid off. It was interesting because he was kind of confused. He didn't know why he got laid off. And I was like, how are you making the company money? He goes, what do you mean? I said, well, how did your work make the company money? And he couldn't answer the question. See, I think a lot of people go to work every day and they don't correlate their activity to how it makes their business money. I think a lot of people have team members working for them and they can't correlate how that activity Makes the money. If I can teach somebody how their activity makes the company money, then they'll make better decisions to make the company more money. It's like I had a bookkeeper once, it was making 80 grand a year and they wanted to make 300,000. And I said, cool, I want you to make 300,000. Do you know what needs to be true for you to make 300,000 in this company? And they're like, I don't know. And I said, well, if you're making 300,000, then you're probably making the company $3 million. And they were like, oh, well, how would I do that? I said, well, you tell me. Well, I don't know. And I said, well, that's the problem we need to solve for you to make 300,000 a year, because I want you to. But it also means you got to create value. So, for example, do you think a person is creating $3 million a year in value is got a team that they're leading? They go, yeah. I said, cool. And I go, do you like leading people? And they were like, not really. And I go, well, that's going to be a challenge for you. So you gotta decide where do you want your career to go? And once you understand how your work or how people make you money, then everything gets a lot easier. So whether it's at your job or at your business, the key is, is it doesn't matter if you're the CEO and it's your company or you work on a team. You want to become a necessity to your team. You want to invest in yourself to a level to become so good that people would feel sad if you weren't on the team. It means that you're the kind of person that solves big problems fast, you're reliable, and it doesn't matter how crazy the world downturns, trust me, it doesn't matter how sharp the ax gets for making cuts. If you're the kind of person that everybody points to as somebody as an example, that creates massive amounts of value for a team, they're going to want to keep you around. And that's how you become immune to the external world. That's happening because you become so valuable that people would never consider cutting you or versus all these other expenses. They would rather get rid of their whole office before they got rid of their team. So my question to you, if you're on a team or you're evaluating your expenses, have you shown up for your team to teach them how to become valid, to become necessity and have you become a necessity so that when they're pulling out their highlighters, you're in the green or the yellow, you're not in the red. You do what you say you're gonna do. You're a person that has integrity. You're a person that shows up and does the work, even when nobody ever asks you to do the work. You're somebody who goes above and beyond. You're somebody that says, sees opportunities all around them. And you don't have the Debbie Downer attitude. You know, you spend more time talking about ideas, not talking about constraints. Before we get back to the episode, if you're enjoying it so far, could you go ahead and do me a huge favor and leave a review on Apple podcasts or Spotify Reviews help us get up in the rankings, which gives us credibility to reach out to big, bigger and bigger guests. We can bring them to you. It would mean so much. Let's get back to the episode. Which brings us to Principle 5, which is to find the bright spots. One of my favorite things to coach people on is to identify what's going good in their business, not necessarily what's going bad. See, most people can find the thousand things that are going wrong, but they forget to focus on the things that are going awesome. And if you focus on it, it will expand. So during the 2020 event, where the whole world just melted, the whole economy went to zero, there were certain industries that actually were skyrocketing, like sas, the housing market, the stock market, all of these things went on the opposite of where the restaurant, the local gyms, et cetera, in regards to their performance. And what happens is people that take those moments to pivot are looking for the bright spots. They're. They're looking at their business that are going, okay, we can't do this anymore. But what can we do? What data do we have access to, what capacity do we have, what competency do we have? Like, what are we good at? And we take what we're good at and we offer that to the market. So one of my clients had this software for restaurants that helped them understand if the customers are happy. The problem with that is, is all the restaurants shut down. So then he took his technology, he pivoted it, and went after big corporations in America to figure out if the employees were happy. Same technology, essentially. Same workflow, same everything. They just pivoted the bright spot, which is, we have a great product, a great technology. We were just using it in the wrong way. When you identify the opportunities in your business and you focus on what's working and double down on those things, those will expand. If you focus on what's not going good, trust me, you're going to bring more of that into your life versus finding those moments, that information that's crushing and putting all your resources into that so that you can get more. It's bananas. What can happen. You've got to find what's working and double down. Attention goes where energy flows. If you focus your energy on something, you bring that attention, it's going to get better. And most people don't invest in the opportunities that have a unique advantage because they just don't think it's that impressive. They don't realize that what they do is actually tip of the spear, top of the mountain for what they're doing in their industry. And that's where their biggest opportunity lies, to expand. That's how you get rich in the new economy. If you want to learn the best investments you can make this year, click the link and I'll see on the other side.