Ep 734 | 4 Steps to Starting the Year Financially Healthy

Thank you for joining me today. It's Brian Gubernick, and welcome to the No Days Off podcast, where we believe that every day brings a new opportunity to get better. In yesterday's episode, we talked about healthspan, and specifically we talked about the things you can do at the start of the year to change your health, change your healthspan, the simple steps that we can take to create some momentum. I wanna have a similar conversation today, but instead of talking about our physical health, I wanna talk about our financial health. At the start of the year, most financial conversations drift toward tactics. What to invest in, how to make more money, what asset class might be the one for 2026. I think those conversations skip what I believe to be the more important question. And that question is, is my financial foundation actually sound? See, financial health isn't about net worth screenshots. Or making aggressive bets. It's about how resilient and flexible and durable your financial life ends up being, especially when it's under pressure. And for the No Days Off nation of entrepreneurs, pressure is not a hypothetical. It is a guaranteed thing. So, I wanna chat a little bit about building a financial base that allows you to operate with a bit more clarity and confidence for the rest of this year. I think as entrepreneurs, we have a tendency to blur personal and business finances, intentionally or not. Income can be volatile as an entrepreneur. Opportunities can appear quickly and they could disappear quickly, and risks are rather uneven. When your financial foundation is weak, you make short-term decisions to relieve pressure. You, you accept deals that you probably shouldn't. You delay long-term moves because, because you need liquidity right now. And that stress, that financial stress, it bleeds into leadership and it bleeds into relationships. In my opinion, financial health creates optionality, and I love creating optionality. I believe the more options you have, the better decisions you can make. The ability to say no, the ability to decide to wait, or the ability to move decisively, that, that freedom comes about when you create optionality. I think a strong foundation or financial foundation rests on really 4 elements. Number 1, clarity. Number 2, stability. Number 3, liquidity. And number 4, intentional risk. In my personal experience, if any one of these is missing, the system— your financial system— becomes a little fragile, even if you're making a bunch of money, even if your income is high. So let's start with clarity. What is clarity? Clarity is knowing where you actually stand. I think that Financial anxiety oftentimes comes from ambiguity. It's not from a lack of money. So, as you start the year, I would get real clear. I would get a very clear understanding around, you know, what do I earn? What do I spend? What do I own? And what do I owe? What do I earn? What do I spend? What do I own? And what do I owe? This doesn't require some complex spreadsheet. I'm a big fan of tracking net worth, and when you track net worth, right, it gives you a picture as to where you stand. That requires some honesty. I think entrepreneurs who don't have clarity tend to overestimate progress and they underestimate risk. So, clear numbers like I'm describing, they reduce emotional decision-making. And what does that allow for? It allows for rational planning. So number 1, I want to start with clarity. Know where you actually stand. Number 2, I want to talk about stability. I think most people focus on increasing income first, but a healthier approach is almost always to stabilize your expenses. So same line of questioning as I, as I just did with, with clarity for stability, I'd be asking myself, hey, which expenses are fixed? Which expenses are lifestyle-driven? And which are legacy decisions that just no longer serve me? See, reducing financial friction increases margin, not just financially, but mentally it increases that margin. And stability allows you to withstand the slower months, It allows you to, you know, pivot when the market shifts, and it allows you to operate without a sense of panic. So number 2, stability. Number 3, I want you to think about liquidity— strategically having some cash on hand. Liquidity is often undervalued during the really good times, and it's desperately needed during the bad ones. So I think we have to be in the appropriate cash position. We have to have liquid assets because it gives us psychological safety. It gives us, gives us the ability to, to act quickly. And a financially healthy entrepreneur treats cash reserves as strategic capital, not as unproductive money. Liquidity buys time. And time improves decisions. So, when I think in terms of liquidity, I'm asking myself, how many months cash reserves do I have available to me? Not some tied-up investment, but capital that I could access quickly. How many months do I have? And I think a 4 to 6 month reserve will give you a degree of, uh, peace of mind. And then, number 4, I mentioned was intentional risk. What do I mean when I say intentional risk? I mean taking risk on purpose, not by accident. Risk is absolutely unavoidable in entrepreneurship, but it should be chosen. It shouldn't be just inherited. I think the most financially healthy people know where they are taking risk. They limit exposure in areas that don't matter, and they concentrate risk where upside is really present. As, as Morgan Housel, who wrote The Psychology of Money, says, or emphasizes, the goal is not maximizing returns, it's staying in the game long enough for compounding to work. So remember, number 1, clarity— where do you stand? Number 2, stability— how do I lower my burn rate? Number 3 is liquidity. Cash on hand. And number 4 is about intentional risk, taking risk on purpose. Now, what are your action items as you leave today's podcast? I want you first to make sure, number 1, you create a, a personal balance sheet if you haven't already done so. So some— something that lists out your assets, lists out your liabilities, gives you an idea as to your net worth. Number 1, make sure you've got that balance sheet, and if you have one, make sure it's updated. Number 2, identify your true monthly burn rate. How much money are you really, really spending? Let's get clear on that. Number 3, take a look at your liquidity. I mentioned 4 to 6 months. Where do you sit right now? Maybe for this first portion of the, of the year, you've got to stockpile a few more dollars, which means increasing income surely, but cutting expenses and placing those dollars somewhere where you have access and it's liquid. And then number 4, decide where you will intentionally take risk this year. Also decide where you will not take risk this year. Financial health is never going to be about perfection or aggressive growth. It's about building a base. And this is a base that supports better decisions and lower stress, and ultimately the endgame being greater freedom. For the No Days Off Nation, a strong financial foundation is not conservative. In my opinion, it's enabling. That's all I have for you today in the No Days Off Podcast. Thank you so much for listening. And remember, every single day brings a new opportunity to get better. So let's get after it.