Lunch & Learn - Session 20

And we count 10. There we go. Angela, our producer on the show. I'm Tom Powell, and this is Wednesday's Lunch and Learn. Thanks for joining us at the founder's office. Of course. We've got Candace Powell coming to us in the midst of a big snowstorm in the Reno Tahoe area. And everybody's asking. I'm getting all the texts. Candace, everything's good with the avalanches?

I mean, no, but we are good. And our in our close loved ones and family and friends are all safe and accounted for. So, yes, there is quite a big search and rescue going on not too far from us.

But I was also talking about the avalanches of the little kids that are staying at home because they don't have school today.

Yes. Full disclosure. There might be people, guest appearances from. From my children who of course, last week had illnesses and this week have snow days. So we're clocking in on eight days with people being in my house. Their house too. But usually I'm used to them leaving at some point.

That is always funny. And of course, joining us is our general counsel and whiz at all the things law, including. Can I say that you are actually in court right now and they're on pause. Is that okay?

I'm in a full day mediation right now on my other laptop. It's a zoom meeting and we're kind of like inching toward this. And I said I need a break, but we didn't break for lunch, so it's fine. Everyone needs a break and fresh minds. It'll be better to continue after this.

No, that's at the Founders Law Group, and she does phenomenal work, but it's in our respect of how we look at everything across the board, from the finance side, from the legal side, from the accounting side, and of course, most importantly, from the founder side. And within that, today it is talking about founders and wealth. And so you're about to hear from someone who's helped thousands of entrepreneurs transform not only their relationships with money, but their measurable financial results. Actually, measurable. That's great. More than two decades, Penelope Jane Smith has worked at the intersection of mindset, strategy, and execution. Widely recognized as a premier financial freedom mentor for women entrepreneurs and a trusted advisor to leaders throughout the conscious business community. Her work focuses on one clear outcome, durable, repeatable financial independence. Author of the Little Book of Prosperity. Welcome, Penelope. Hey.

Hey, Tom. So happy to be here. Love it, Love it.

Now you're. You're actually in the Bay Area as well, so not too far from us.

Yeah, I'm, I'm bi local part of the time in Silicon Valley, part of the time in beautiful Benicia, which is where I am today. And thankfully the, the heavy rains and storms have stopped and so we get to just enjoy the clear skies and conversation about financial freedom.

I love it. Well, they have. Candace and I were just about two, three hours ago at a recording studio talking about our lift pitch Tahoe. And in the guest for the TV show was a longtime 30 year type friend in the financial independence world. And he was talking about how few entrepreneurs actually have financial independence outside of their business. So maybe we start there. Tell us about. First of all, tell us about the little Book of Prosperity, but also tie this back into the founders, because this is the Founders Office show.

I think that as a founder myself and having worked with thousands of founders and business owners and entrepreneurs, I think that if you've been in business for a while, especially if you've founded your own business and been successful and gotten past that critical two year mark and even five year mark, and even for me now it's more than 20 years, you've attained a level of mastery, you figured some things out. I mean, there's always more to figure out, right? But you figured out how to sell something, you know, how to get some clients, how to get some customers. And we tend to focus so much on our business and learning how to do that. Think about all the time and energy and money you've invested into your business through real world experiences, coaches, mentors, masterminds, courses, books like all of that. And you've attained some level of mastery, right? And you've learned how to make money. Now maybe you want to make more, but you've learned how to make money if you're still here as a founder. And then when people talk about money, they look at it like one subject, like here's the subject of money, but it's actually like two subjects in one, or like two sides of the coin, or two different worlds. There's the make money world, which is where we're, what we're so familiar with was you're creating some value, you're trading some time for money and you're like generating revenue, you're generating income. And we figured out at least somewhat how to do that. And then there's this whole other side of the coin, this whole other world of growing money. And the rules are very different. Like over here, you know, you can work harder over here. Sometimes working harder actually is bad for growing money. Um, so we don't really Have a good sense of this. And as somebody who has some mastery in this area, it's hard to now go to this other area and have to be a beginner again and have to learn again and have to feel uncomfortable again, like you don't know everything. So I think a lot of founders, they just reinvest back in their business. Back in their business. Back in their business. They're like, well, I know if I hire this person or if I know if I hire this Facebook ads team or if I, you know, do this thing, thing, there's a really good shot that I'm going to get a return on investment on it. Right. Because they have visibility and control. But if I put money in like the stock market, that just feels like gambling, you know, or, or insurance or real estate or like any number of assets that you could invest in, right. It's like they don't really understand it the same way they understand their business. And so it's scary and uncomfortable and they go, well yeah, okay, let me just put it back in their business.

Well, how many, how many of the clients that you start working with are actually building lifestyle businesses versus actually building a wealth business or anything along that line? So that it's just like you just said, they put everything back into it because their goal is to drive more revenue of which then they can do X, Y or Z with.

Yeah, I think that most founders are really focused on revenue. You know, and we talk about like I did this in my launch or we did, you know, this many million at this event or this year or whatever. It's all that like that top line revenue number, not, not even looking at profit. Okay, like one level deeper and then not even looking at taking some of that and putting it into assets that are going to create long term wealth for you. Like even if you're growing your business as an asset, right. And you plan to exit or sell your business at some point, it's really important to also be investing in assets outside your business because like the latest stats are that 9 out of 10 businesses don't sell. So assuming that your business is going to sell and you're going to be able to retire on that, especially if you're an owner operator and not just an owner.

Let's go back to that just a second. 9 out of 10 don't actually sell yet 100% of all founders will have an exit. Yeah, it is guaranteed that they will exit, whether it's through death or disability or through whatever purposes, whether it's on their choices or not so only. Only 1 out of 10 actually exit

of the ones listed, right? So those are. Those are the stats that I have. And I think a lot of people don't even. They don't even have any kind of exit plan. They're like, I'll just do this until I can't do it anymore. Like, one of my friends and JV partners, she's just shutting down her business. I'm like, whoa, whoa, whoa. You have all this ip, you have this list. Use assets. Like there's. There's a monetary value there. Like, let's. Let's take a look at it before you just burn it all down, right? But even, even, even so, I think depending on selling your business as your only chance at financial independence is rolling the dice, you know?

Well, and so many of the founders that we talked to you talked about, you know, investing elsewhere. A lot of times the thing I hear is, well, I'd rather invest in myself and what we see. And it's not just us. It's across the board. I think EPI came out with the stat. I think it's. It's roughly like 80% of. Of founders or. Or for founders, 80% of their estate is in their business of their net worth of their value is tied up into their. Into their business. So you talk about they may not be able to exit. They may not be able to. Or their exit is not necessarily by choice. They don't have actually as much cushion. And we say this not as a scare tactic. Some of you might be on here feeling lonely in this position. Some of. A lot of people sit here and they go, oh, my gosh. I'm not. I'm not.

I'm.

I'm making it on paper, and it doesn't feel like it in person. What is going on here? And what we're saying is you're in a not so exclusive club. This is a lot of. A lot of founders are sitting in the same boat. And that is who you help. That is who you are working with every single day.

And Candace, it's super normal. It's like we've become totally responsible for our own financial futures, right? The whole, like, work for some company for your whole life, and then they're gonna pay you retirement that you can live on. Like, that's not the norm, right? So it's like, okay, you're responsible for your own financial future, and guess what? We're not gonna give you any education, any. Any support, any resources, any help whatsoever on how to make that happen. And by the way, you're not even allowed to talk about money because in a lot of families and communities, talking about money is taboo. It's crass. We don't talk about that. And so everybody walks around thinking like everybody else has this money stuff handled. And oh my God, what's wrong with me that I haven't figured this out? Maybe I should just go hire a financial advisor and fork all my money over to them and that's fine. The only problem is that there's a difference between delegating and abdicating responsibility. Right. And when you abdicate responsibility, that's when you have to be willing to lose all your money.

It's also the only way exit too, because we see so many founders that they are the company.

Yeah.

Without them, without their ip, there's nothing else to transfer. So there's a reality check there where it's like you need to separate yourself from the business. And yes, that is risky. But if you use the right advisors and mentors, they can help you do that in a strategic way so that the risk is not as huge. But you do need to separate yourself to build and unlock the wealth that's there as opposed to just shutting it down like your friend was gonna do.

Yeah. Here's the good news. It's a yes. And so. So investing in yourself. Absolutely. That's almost always going to give you the highest roi. Right. I remember early on in my business I invested $9,000 in a, like a business mentorship program that taught me how to lead events and create info products and do all these things that I wanted to do and really like launched my dream business, my passion business. And I have made millions and millions and millions of dollars from that one time $9,000 investment. The first year, I made $220,000 in my new passion business, in profit, doing what I love and feel like I was put on this earth to do. So if you do the math on that, that's a 2,344% ROI.

That's unbelievable.

I love where you can get that. I mean, maybe crypto, if you like, land on the perfect meme coin or something. But like, so, yeah, investing in yourself. Yes, yes, yes. And have some going into assets outside the business too. It's like growing your own version of the goose that laid the golden eggs. Right. You grow a big enough golden goose that eventually you can live off the golden eggs and so then you don't have to depend on your business or a partner or a job or the government or an adult child or anyone Else for money. Right.

So Penelope, I want to step back for just a second there. When you are helping and you help a tremendous amount of female entrepreneurs too, which is just fantastic. Right. Because Candace and Jackie have this program which they probably need to have you back on called wtf Women Talk Finance. And so yeah, is that rock.

And my favorite thing.

He's our, he's our hype man. He's our dance mom. I am, he's booking our, booking our game.

I book him all the time. Well, it's just because it's critically, critically important and having that freedom in there. But what you said was a sliver in there. When you help founders become financially independent, separate from their business, what it does is it in my mind and what I oftentimes see is it allows them to actually run their businesses better because they're no longer making decisions out of desperation or I must create this revenue which is oftentimes very short term thinking. Is that what you're finding as well, on your side of business?

It allows you to build your business and make choices in life everywhere from a place of freedom and joy instead of debt and obligation. Like, I lead a three day online event called Financial Freedom 101 and I don't have to. I put, you know, videos on YouTube. I don't have to. I, you know, do events like this. I don't have to. And so I get to check in and be like, what do I want to do with my precious time and life energy? What calls me, what excites me and that feels good versus like I have to do this because I need to pay the mortgage and you know, that's no fun. Or even like stay in relationships that aren't a fit because you're financially entangled or all of that. So for me, it all comes from one of my highest values is freedom. Freedom, you know, and it just, it just lights, lights me up on fire in a good way. And that's. I always am seeking more freedom for myself and, and for everyone. I, I want everybody to be able to live from what choices that are like aligned with their higher self, with their heart, with their inner guidance versus like, oh, I have to do this because of money or I can't go visit my dying mother because I don't have the money for the plane ticket like that to that, that stuff. It like physically hurts me to hear stories like that.

I gotta tell you. So of what we hear is, it's, it's oftentimes made as a joke. But yes, I have the freedom to Work a hundred hours a week, you know, but that's also what you're talking about is that sometimes that is out of passion or you're doing a new startup or you know, a variety of things, but it is so many founders are driven, especially the ones that I tend to be friends with, which you and I now are just going to be instant friends because of that. On the freedom. It is that freedom to make the choices. Well, like it's beautiful ski day and I'm choosing not to ski because I'm here with you. But that was a choice. That was my freedom, right to do that.

I will say I gave him the option. I said there is Fresh pow if you need to go. And he did choose you, Penelope. That's a big deal.

Thank you.

That is a big. It is a big deal. But we were very super loved.

I can't say he's always chosen me over fresh pal.

No, I choose to bring you along with me.

I know I've arrived now. That's good.

No, it's awesome. So tell us about your book and your classes and these different things. How does someone I know, Angela, we've got a QR code of how to follow some of this and we also have a lot of guests and they generally are very chatty. So ask some questions in here.

Yeah, well, there's the Little Book of Prosperity is is. I wrote it a while ago. So my, I've evolved a lot since then. But it's got some really good combination of like practical financial how to as well as like inner game stuff. And it's just a little book so you can put it in your bathroom or whatever and off you go. Another book that I've written more recently and it's, it's. I have it for you as a digital download so you can grab it for free. Is my Financial freedom formula ebook. That is a great place to start if you want to kickstart your financial freedom journey. Because it's bite sized but powerful, you can probably whiz through it in less than 15 minutes and it's going to give you a lot of clarity around creating your own personal roadmap for financial freedom. We talk about the two different types of passive income, how to get more of each and how to get clear on your own magic number. Like how big of a golden goose do you need?

Well, let's talk, let's talk through those.

Give you the golden eggs you need.

Let's walk through the numbers a little bit. So what is your golden goose? How do you get There. Give us, give us the very basics of that.

Yeah. So let me. Oh, it's like doing something weird in the chat for me. So if you go to financial freedom gift.com financial freedom gift.com you can download that ebook and that'll walk you through everything. But I think that this is, this is something that I run into a lot with people is that they think they need millions of dollars or I need $20 million. Like, they don't know. They don't know what they need to be financially free. So the financial freedom formula is that is PI is greater than E. That's the formula. PI is greater than E. What does that mean? When your passive income is greater than your expenses, you're financially free. And the truth is there's a spectrum of financial freedom all the way from being able to pay your bills. There's freedom there to having a cash cushion. There's freedom there to not having any debt that feels like an obligation. So there's like, like eight milestones along that spectrum. But when I talk about financial freedom, I'm always talking about guiding people along that spectrum to the point where the passive income from their assets gives them enough to more than cover their bills, more than cover their lifestyle.

You know, it's interesting because, well, as we go through life and we have these wonderful great sayings that we do, and oftentimes people would ask me, what does, you know, what is wealthy? You're a wealthy person. What's that mean? Da da, da. And I said, wealth has so many other areas. Not just finance, but finance. For me, being wealthy and really around that idea of freedom was when my money, when my investments earn enough to cover all of my needs and most of my wants, I am wealthy.

Yeah.

Period.

Financially free. Anyway.

I'm financially free from that, from that. From the financial standpoint, the wealthy checkbox is there now. I still need the wealth of the family and the health and, and the opportunities and the growth mindset and all those other pieces that go into overall wealth. But on that financial checkbox, it is quite simply that. And you said it with your passive income. Right. So it's, it's. Your passive income is coming in and it's filling all of your buckets so that you don't have to worry about those things. That's great. I love that.

Yeah. And I think a lot of people are. I don't think that that's news to a lot of people. Like, okay, when my passive income is more than my expenses. Great. However, when you really think about it, this is a game changer, because when you focus on the right things and when you focus on that formula, it allows you to massively compress the timelines. So now, instead of chasing revenue, revenue, revenue, revenue, revenue, you're like, how can I start creating passive income? How can I invest in things that'll give me more passive income? How can I create assets that'll give me passive income? And that, that's how I'm able to help people get there in five years or less. Because traditional financial advice is all the same. You know, dollar cost average for 40 years. And, you know, I'm like, thanks, but, like, what if you didn't think to start doing that in your 20s? Or what if, like me, you've had financial challenges? You know, I had taken $10,000 of my own money, turned in over 6 million in real estate. I was on track to retire by the time I was 31. And then the global financial crisis hits, and I lost everything. I lost my own home to foreclosure. I was forced to declare bankruptcy. I was like, scrambling around to find a place to live, scared that I was going to find the locks changed and my pets trapped inside. So, like, there I am having to start over in my 30s, and there's other people that have to start over in their 40s, 50s, and up. So I was like, I can't. I can't in good conscience help people that it's going to take them 20 or 40 years. I need a different approach. I need a different way. And so when I created that approach in the ebook, and we can go through the overview if you want.

Yeah, I'd love to.

I want to myself through that system. And it worked. Right. And so that's where I work with other people as well.

So before we move there, will you talk about the prosperity coin and the cryptocurrency designed specifically to support women entrepreneurs? I'm super curious of that. Candace and I love normalizing conversations around money, and we love supporting female entrepreneurs. Dom too.

That's.

It's a big part of our investment thesis and focus is women entrepreneurs. So I'd love to hear how you're using that a coin. And you're with the times. It's 2026. You're a girl with a cryptocurrency. I would love to hear how you're using that to support women.

Absolutely. And the reason that we have people of all gender identities that we work with, so we don't work exclusively with women, but the reason we focus on that is because women are just massively underserved by the traditional financial planning industry. Most financial planning, most financial planners are men over 50. There's a huge gender bias in the models, so that they're based on the average man. Right. And so it doesn't take into account women's longer lifespans, the differences in our career paths, differences in our financial goals. And so what happens is, statistically, women end up with less money at retirement, but it has to last us longer. And I find that extremely frustrating. And so that's why we specifically speak to women entrepreneurs in our marketing. However, we welcome all. All gender identities or lack thereof. So just want to be clear on that. So the coin, I found that a lot of my clients, and especially people who identify as women, feel nervous about crypto. Like, is it even real? Is it a scam? What do you do with that? You know, I mean, there are a lot of them, like, they're a little nervous around technology in general. You know, they're a little nervous about money. Money in general. And so now you're combining money and technology. It's like, oh, my God, like, count me out, right? But I do think that now that we have there's enough time and there's enough money in cryptocurrency that it's worth paying attention to. And you have even big companies like JP Morgan and these guys suggesting that you put some amount in crypto. And so creating this coin was a way that I could make it, like, safe and fun and palatable for women to dip their toe in crypto with no risk at all. And then maybe that'll have them be more open to actually investing, because prosperity coin is not an investment. I don't know if you know about how coins are created, but you can, like, actually code a coin, create an original blockchain like bitcoin. You can do what's called forking. I know it sounds kinky, but all it means is, like, you're copying an existing blockchain, changing the code a little bit, you know, paste it, change the code a little bit. Now you have a new coin. So, like litecoin, you could copy bitcoin, paste, turn it into litecoin, and then on top of an existing blockchain, you can create tokens. So prosperity coin is what's called an ERC20 token on top of the Ethereum blockchain. So that's. That's like the. How I did it. And so it's. It's basically works like tickets in an arcade. You know, you could, like, play games, you can get tickets, and then you can come and turn them in for prizes. So it's. I mean, I suppose if someone wanted to create a liquidity pool, there could at some point be monetary value in prosperity coin. But it's basically just like tickets in an arcade.

I love that metaphor. And I love the opportunity where it just opens the door, makes it so safe, makes it so fun. Come and play and learn how this works here in this kind of, like, sandbox, and then go out and use what you've learned, your skills, your confidence, and go play with other coins.

Cool. Basically, anyone and anyone in the community and all you have to do to be in the community is say, I'm in the community. Anyone in the community could get coins for free by, like, commenting on my YouTube videos or promoting my stuff. Like, I just give the coins out, right? And then you can redeem those coins for all sorts of prizes. They can be prizes that we offer, like coaching sessions or a ticket to Financial Freedom 101 or something like that. But also, anyone in the community can offer a prize. Just like if you go to a networking event and you offer a prize for the raffle, like you contribute a bottle of wine or a session with you or something like that, it creates visibility for your business. So you could say, hey, I'm gonna throw in, you know, a session with me for 200 prosperity coins, and somebody can redeem that as their prize. And now you have coins. And so you create. It almost creates, like, this little alternate economy, you know, which you could do with any kind of monopoly money or arcade tokens if you just, like, the more people decide to play with them, the more value it has.

I love it because there's. I think a lot of times people want more opportunities to learn and make it fun and almost gamify it. And as you get older, some of those opportunities aren't as ready. I look at what my kids are doing, and. And actually, they have great educators. Like, they've got, like, a little business in school, and they're learning business. Actually, my daughter's the worm CEO managing a wormhouse right now. She's got a job, and they get paid, and then they have to budget. It's really cool.

And.

And I'm like, I kind of want more gamified ways for me to learn, too. So I love that you're doing this. Ernest is asking for the. The coin information. Do we have the link?

Go to realpresspay.com crypto I'll put that on here.

That's fantastic. Thank you. For sharing so much about that because that's. I, I think you, you're spot on with that. So

if you see this page, if you want to join the priority notification list, we send out emails about anything going on with prosperity coin. Very rare, infrequent emails. It won't put you on any other lists. Here's some of the prizes that we offer that you can redeem coins for. And then here's the online community where you can see the prizes that anybody's offering.

I love the financial freedom, the purple dress. So purple must be your color based in there. Which is. It is.

It is.

So I have a. I have a sister who is. I always joke about it. She's paid an ungodly amount of money for clearing castles of bad energy. This is kind of her cool, man. I know, I know. And she lives in Sedona, of course, you know, which is. Family's had a house there since the 80s. And it always sounds great. And she tells me, you need to wear more purple. You need to wear more. It is a royal color on you and you need to wear more purple. And I see it on you and I'm like, gosh, I need to remember to wear purple because you really.

Another person. Who's our purple guy.

Oh, that's true. We do. Yeah. Chris Jarvis.

He is a whole cute little shoot of you guys all in your purple.

Purple.

Yeah.

I'm in blue and black today because it is sky Tavern day. I know.

Well, thank you, Bloom.

Like, there you go. So we want to make sure we cover a handful of these things. We got some questions in here. One was for founders who say, I'd rather invest in myself. How do you help them see when that becomes over? Concentration risk, such as we were just talking about, 80% of wealth is in the business. How do you help them get over that fear? You said the stock market. Scary. I don't understand it.

Well, right. And here's where a little bit of financial distinction goes a long way. The reason that it's scary, the reason it just feels like gambling, is because you don't understand how an investment strategy works. So an investment strategy is just a clear plan based on real data that you can see for yourself. You're not like trusting anybody. You're not, you know, like, you can delegate, but you're not abdicating responsibility. And once you understand, oh, here's the information that I'm looking at. Here's the information that I'm basing my decisions on, all of a sudden it becomes really clear. And easy. And now it's not gambling. Now it's, it's just following a plan, just following a checklist. Easy peasy. It's like, oh, okay, I can do that. And that's one of the things we really go deep into at Financial Freedom 101. We do a deep dive on Saturday all about different investment strategies, the most common investment strategies in the big box advisor world. So if you're working with an advisor now, you understand, you can look, you just look at your portfolio, you're like, oh, that's what they're doing. And you can have an intelligent conversation with them about it and say, maybe we move this here and move this here. And all of a sudden, oh, your money's growing faster. So here's the complicated but very true and meaningful answer. How do you know if you're like over investing in your business? There's a term, I think Mike Michalowicz is the first one I heard say this. Lifestyle congruence is what he calls it. So I think as long as your finances are lined up to create lifestyle congruence, if you want to invest in your business beyond that, that's fine. So here's what I mean. We talk about financial freedom as your passive income is more than your expenses, right? So the first step in our three step approach for how to become financially free in five years or less is your financial freedom vision. Like, what is that lifestyle that you want to create? You need money for some of it. Some of the best things in life, you know, don't require any money like snuggling with my kids or you know, stuff like that. But, you know, paying for our house, going, we just went to Legoland for eight days. That's not. Things like that are going to cost money. So you tune into like, what is that vision? What is that life that I want to lead and how much does it cost to support that lifestyle? So you can actually like write down, here's what I want, here's where I want to live, the kind of car I want to drive, how often I want to buy a new computer, like whatever, you can put whatever on there and then put numbers to it. Now, you know, this is how much passive income I need to be financially free at this level of lifestyle. And then you can start building your plan, right? So if you need $10,000 a month or $20,000 a month in gold eggs now, we could figure out how big of a golden goose do you need, right? So then step two is to buy assets like what we were Talking about, you take some money and you put it into something where your money is going to grow for you. So that might be stocks, bonds, cryptocurrency, other businesses, real estate, vending machines, gold, silver, platinum, like there's all these things. You could do it, but basically you're putting your money into something that's going to grow. Right. And here's the good news. As a business owner, you're going to totally get this. Your money can work so much harder for you than you can work for it. So I want you to think about your money as your most loyal, dedicated, hard working, trustworthy team member. Okay? So you need to give them a little bit of time, a little bit of attention, a little bit of guidance. But as long as you do that man, they can crank for you. Like if you start at, let's say you're 25 years old, you start investing $50 a month and you do that till you're 65. Well, $50 a month times 12 times 40 years. You would have invested $24,000 over the course of 40 years. Does that seem manageable?

Very.

Yeah, right. So let's just say you could get 15% on your money over that time. On average your money would grow to almost $1.6 million. So you've put in 24,000, but you have almost 1.6. So the majority of that isn't you generating the money. The, the majority of that is your money growing and working and multiplying for you. It doesn't need to eat, it doesn't need to sleep. It can just be having babies. And then those babies are having babies and like working and multiplying and snowballing 24 7, 365, that is richest man

in Babylon right there type scenario. If you, if you, you know that that scenario of the coins have then little coins that have little coins that have little coins and they work 365 days a year. They don't need to take vacations or holidays. They're agnostic as to what, what, you know, holiday, it's Ash Wednesday today. They don't care. They're working, just working. I love that. And they're working for you.

Yeah, they're working for you. So I invite you to like look at your money as, as that team member and you might say, oh well, I don't have 40 years or well, where can you get 15%? Just settle down. We could cover all of that. But my point is your money can really grow much faster than, it can work harder for you than you can work for it. So when you're buying assets, you're looking at like, how do I get my money working for me?

Right.

And so now we know how many golden eggs we need. How big of a golden goose do you need? So a lot of financial advisors use the 4% rule. Are you familiar with that?

Okay, you are?

Yeah.

Let's explain it.

Let's explain it so well. Take it away. I want to hear how you explain it.

I would need it better than I do. Like say you talk with a founder and the founder's done that exercise and knows the car they want to drive, knows the house, and they say, I want to live on 400,000 a year. You use the rule of four. So I don't know divider times by 04%. It tells you you need X amount in assets to support that.

Yeah.

Based on your age, based on a few other factors, but that's the rule of four. And I don't know who developed it, but it seems like it's on average generally applicable.

Yeah, that's, that's awesome. So, yeah, there's a financial advisor named William Bengen and what it says is you should be able to sell off 4% of your portfolio each year, every year, adjusted for inflation. And with that approach, your risk of running out of money over a 30 year retirement is very low. So basically it says you can pull off 4% of your portfolio as golden eggs without killing the golden goose. So if you wanted 400,000 in passive income, you would divide that by 0.04 and that would give you $10 million.

I think that's a great question. In the chat, Diana says, when you calculate your wishful life for your retirement, for how many years do you calculate those expenses? And that goes to the age you want to retire. Right. You might want to work till you're 70 and then you would need. There's different assumptions. Sorry, I cut you off. Go ahead.

Yeah, the way I look at it is, I mean, I'm not planning on running out of money and I don't know how long I'm going to live. So it's like the amount of passive income that I'm going to generate indefinitely. And with the 4%, hopefully your money is making more than 4%. So the additional is going back in to adjust for inflation and taxes and, you know, so that you can still maintain that lifestyle as inflation happens. So I know they say the 4% rule like over a 30 year retirement, but like I, I start with that because that's what's out there, you know, in the financial planning world. But I look at that, I look at it as I want to have this much passive income forever.

Well, and I'm going to take an aside there because I think that it's a really critical part we had. So we helped a client here that was looking at an exit for 15 million. Sounds great. And you know, and 68 years old, well, 66 at the time that they were doing that. And we're like, okay, if we make a handful of changes within the company because you're still too much involved in the company, they're going to one have you be. Have to stay in the company because it's not really a company. It's still you as an individual. And by the way, at 15 million, if we don't do some tax strategy, you're going to walk away with about 10 million and then you're going to have 400,000 a year in income. If you get the 4% sounds great for most people, but they're living on 2 million a year income off of the business, and yet they're still only going to exit for 15 million. So what we were able to do by focusing on what you exactly just said and what Jackie was talking about is we get to this lifestyle question of, okay, we need $2 million a year. So what is my actual net exit number that I have to have? And it is far closer to 40 million as an ex exit number after taxes scenario. And so what we were able to do is over that period of time, we got them in under two years up to a $45 million exit. And tax strategies, that was the right way. But that number only became a real number because of actually figuring out that what they're taking out is 2 million a year live the lifestyle that they wanted.

Which is so great, Tom, because it's like that is personally meaningful to them.

Yeah.

And that's what matters. And so when I hear people say you should save 10% your income or 15% of your 20% income, like, that's nice, but it's not like meaningful.

But we don't spend percentages. We go on trips.

Yeah.

Like, is that going to get you to your goals?

Right.

So I look at like, here's my passive income goal. Here's you know, how many years, here's what kind of return I think I can get on my money. And so my business needs to pay me that to be on track. And so like, once the business pays me that, then I can invest in other things in the business. So that going way back, that's, that's what I like. I like this is a business needs to pay me to reach my personal goals and then I'm happy to reinvest back in the business after that.

Well, and we had an anonymous that says, what if you're pre revenue or your bootstrapping? I've definitely been in different times of where I've been bootstrapping. And when Candace was much younger, we had an opportunity where we were rebuilding a company. So had a company that did, we did phenomenally successful. And then all of a sudden I was working as a waiter while we were starting the next company. And what I did during that time, and I don't like saying the percentages, but, but I still always paid myself first out of richest man in Babylon as that book that has been written back in the 40s. That was a very simple thing. And so it take 10% of tithing, 10% to me and 10% for investment back into the company. So 30% setting aside. So when I made $1,000, it was still up. Put, you know, these little pockets of money in there. So it was pay yourself first. So even when you're pre revenue or you're going in there, I think that that's an important piece. And I want to make sure we answer Anthony's question. What if you don't want to sell? Many, many, many of the companies that we work with on our capital alignment method never want to exit. Because what it does is once you're no longer the hero within the business and you have freedom in the business, you actually have all the freedom and the money to do what you want to do. There's no reason to exit and exit. Every founder, 100% of founders exit. It's again, whatever happens, it's life happens. We all have an exit date at some point. So do you exit on your terms or does your family get to take it over? What do you do on that? But that's the numbers we're talking about.

Exit planning is a poor name for it. And I'm sure you run into this as well. Penelope. I think there's a lot of words in our, in our community that you know. Exit planning is a really easy term. Financial planning is really like people can quickly identify what that means, but really it's just, it's just business strategy. You're building things to not be dependent on you. You're adding value. You're planning for growth, you are planning for succession or however you want this to go. You're planning for your freedom. That's what exit planning is all about. And it, it goes so hand in hand with what you do, Penelope, because so much of it is about you as the founder and your financial goals and your freedom goals and what that means and how that ties into what it is that you're spending your time and energy and money on.

Absolutely. And I will say, even if you are pre revenue or you're not like cash flow positive, yet, the habit of managing your money is more important than the amount and putting even a little bit into investments, Even if it's $100 a month, $50 a month, $25 a month, $5 a month, like building that investment muscle and also nurturing your investor identity. I really encourage you to think of yourself as an investor. And I don't think a lot of us, I don't think of a lot of us as founders and business owners necessarily, like, call ourselves investors or think of ourselves that way off the bat. But, like, as soon as you invest in a dollar, as soon as you put a dollar into your golden goose, like, you just invested. An investor is somebody that invests, and you just did that. You're an investor.

You just did that.

The more you can, like, train your system that you're an investor and it's safe to have your money working for you, the better. Because we've been taught to work hard. Work hard, work hard. You hear, like, work hard, play hard. Hard work always pays off, by the way. Does hard work always pay off?

No.

I have worked very hard in businesses that were absolute floppers.

Yes. So I can say a lot of conditioning. So it can be very confronting. Like, yes, your money can work a lot harder for it. But like, if my money is working hard, my money is working so hard for me that I don't have to work anymore. Who am I?

Yeah, I'm going to change bases here

about talking if I'm not working my butt off.

Right, Exactly. Well, that is a big deal because that is also where we go with founders, is that they are so intertwined within the ego of the business that we have to unwrap that and let them know that they're actually a person, that they're not the business, that they're not intertwined, and then that allows the value to be in there. I'm going to talk about an investment that's really near and dear to my heart. We talked about it just as we were coming on, which is Lift, pitch Tahoe. Lift, pitch Tahoe. It's coming up March 1st, and it specifically is to invest in adaptive programs that we're running at Sky Tavern. Sky Tavern is a non profit ski and bike mountain that we have up at Lake Tahoe. And the lift pitch, Tahoe is one of these great opportunities to give back if you are a founder that has made some money or you want to be in that angel space and meet founders that have ideas. It's also a space for you to be able to go yourself and make a pitch while you're riding up a chairlift. And if you don't ski or snowboard, we actually have a chairlift that's staying down on the ground. So you can do that. It's going to be a fun day at Sky Tavern. We now have a lot of snow. It should be great weather. Looking at the calendar out to that point and it's liftpitchtahoe.com it started with a friend of ours, Kevin Peterson, who's been on the show. He runs sastermind. So it's about founders that have ideas and want to find the capital to invest in them. So as Pinel Blicky is talking about, you can invest in other people's businesses and get extremely wealthy even if your business isn't the one that ends up succeeding. Right. So which is a great way to do it. So liftpitchtahoe.com and then let's talk again about how does someone get in touch with you, Penelope? How do they learn more about this? This is so critically important.

Yeah. Awesome. Thank you so much. I think the first step is to download the Financial Freedom formula ebook@financialfreedomgift.com because that'll help you start building your own Financial freedom plan. And then if you're, if you want to go deeper, my best financial education resource that I can possibly give you is our Financial Freedom 101 online three day event. It's all on the Internet so you don't have to fly to California. You can attend from your jammies anywhere in the world. And in just three days, we give you the money, skills, tools and systems you need to become financially free forever.

And you're doing this. This is a claim, your ticket for financial freedom 101.

Yeah. And it's over the three days, you get the financial education that you should have gotten in school or at home growing up. So you're going to learn how to manage cash flow. Even as a founder whose income goes up and down, you know, managing cash flow is really important when you're running your business. You're going to learn how to relate to money differently. Big deep dive into investment strategy. You're going to get all of those money systems over the three days. So think about all the time and money and energy you've invested in your business. Is it appropriate to invest 3 days and 14.97 to finally get this money stuff dialed in? And if it is Sorry to interrupt you Tom. I have good news for you because we have created a special website just for you as part of the the Founder's Office where Instead of paying 14.97 you can attend the entire three day event. You and a partner will send you this beautiful box of workshop materials to support you before, during and after the event and you can have that whole experience for only $97.

Wow.

Amazing. Thank you.

That is great. From your jammies. Three days and you get the Kit

Penelope that is link for that. Here's the magic link. Realprespirating.com founders office realpresinc.com founders office here's what the page looks like. You see me lounging on my chair as a member of the Founder's Office. You can attend the Entire event for only 97 bucks. You can also bring a friend without paying you more. So just click the gold button to claim your ticket and you are in

you 11 are the sessions recorded or are they live?

It's all live. It's an experience.

Perfect.

It's an in depth immersion event. So we do a lot of experiential learning and exercises and movement and games so you'll be surprised how energized you feel after geeking out about money for three days.

Oh Penelope, that is so awesome. Yeah, we are definitely money nerds. So that's awesome. I love it. Thank you so much for that offer. To our guests and our clients that are watching this and the people that are just new to the Founder's Office. We are founder centric and so this is something that we love and many founders get to the end and they're like I didn't end up saving anything. And so this is critical, critical work to do and critical work to do if you are going to be looking at exits or not. It's regardless. It's the quality of life and thank you for making it so fun and enjoyable. And purple, right?

Yes, absolutely. I feel like this gives you a really good framework and system to plug in all these wonderful gems that you're getting from these lunch and learns. You're like oh here's where the JVs plug in. Here's where the insurance plugs in. So you can see, you can see the map that we call your entrepreneurial wealth blueprint. You can see how all these systems and all these pieces fit together to turn your business into a vehicle not just for generating revenue but for creating long term wealth.

Oh, this is great. Well, so I think without a doubt I'm going to be out the cheerleading for these guys again. But they've got to have you back on Women Talk Finance because this is just absolutely fantastic. And that's Candace's and Jackie's show where they work on our women in the financial sector. You know, had the fund called results oriented Women Entrepreneurs, the wtf. And that's just a blast. And then once in a while they let me come on here with the lunch and learn and get get time with our special guest. So Penelope, thank you so much. It's been just, just a pleasure getting to know you and look forward to getting you and your little ones up on sledding around snow at some.

Yes, yes, that sounds amazing. So I look forward to seeing you in Tahoe.

Well, thank you all for joining us. Next Wednesday lunch and learn. Have a great rest of the week everyone. Take care. Thank you.

Thank you.