Ep. 86- Rocky Lalvani Wants You To Take Your "Profit First"

This is the You Winning Life Podcast, your number one source for mastering a positive existence. Each episode, we'll be interviewing exceptional people, giving you empowering insights, and guiding you to extraordinary outcomes. Learn from specialists in the worlds of integrative and natural wellness, spirituality, psychology, and entrepreneurship so you too can be winning life. Now here's your host, licensed marriage and family therapist, certified neuro-emotional technique practitioner, winner and certified entrepreneur coach, Jason Wasser.

Alright everybody, welcome back to the You Winning Life podcast. This is one of our live episodes. So for those of you who are out there in Facebook land, you get to connect with us. And if you have any questions while we're talking, please feel free to jump in and leave some questions in the comments. And we'll try to hit them up as soon as we can. So welcome today to Rocky Lalvani. He is the Profit Answer Man, and he helps small business owners maximize their business profits so they have the time and freedom to do what they love. Coming all the way from Harrisburg, Pennsylvania, which is not that far from my birth town of Scranton, Pennsylvania. Rocky, welcome.

Thank you so much for, uh, allowing me to be here, Jason Wasser. You and Biden both share that, right? That is true.

So I looked it up the other day. So my family, we still own our— which was my grandparents' home. But it's still in our, you know, in our possession. And I looked up how many blocks away was his home from mine, and it was not far. It was like less than a mile away. So I know some people in my family are happy about that. Some people in my family are not happy. I'm happy. So, you know, I I let my, you know, I want there to be peace and happiness amongst everybody, but like, you know, sometimes you have to, you know, you know, it's like proximity, you know, success by proximity, right? Which is what we're going to be talking about today. So, um, I know you help people become more successful by proximity to making things simpler by paying themselves first. So number one, let's start off with the idea of profit first. I know that you are certified in that modality. I know that's something that you, uh, teach and preach. So let's start there. What is Profit First and how can we access that? And how can we utilize the tools that are in that modality, in that mindset?

So Profit First is a book by Mike Michalowicz. He's a serial entrepreneur and he had some real early success and then he blew it all, you know, to the point where they're coming after you and, you know, repossessing everything. And he said, why am I struggling so much? So he's kind of on this journey and he's got a lot of books besides Profit First to help the small business owner make the best decisions and figure out what do I need to fix first in my business? And how do I go about doing that? Uh, Profit First is one of the books that came out of a chapter in another book that just exploded. And he, he realized how impactful it was in, So they built an entire business around that. The principles of Profit First are that the accounting equation you've all been given is wrong. So everyone uses the accounting equation of sales minus expenses equals profit. Well, where does that leave profit? It's a leftover. It's an afterthought. And Mike said, this isn't the way it should be. So he changed the equation to sales minus profit equals expenses. So we essentially take our profit first and we learn to essentially spend less. So there's a couple of underlying principles that are universal principles that make this all possible. The first one is Parkinson's Law. I don't know if you're familiar with that one.

I am not.

So Parkinson's Law is a principle that says the amount of a resource that we use expands to consume the entire resource. And it's true for time, it's true for money. So if I give you 3 months to do a project, you'll take 3 months. If I give you 3 days to do that same project, you'll figure out a way to, to get it done. And actually, Brian Moran wrote this book, 12-Week Year: How to Get More Done in 12 Weeks Than in 12 Months. It's the exact same principle as Parkinson's Law. Right? It also applies to money. So if I come to you and we say, hey, we've got this business venture, you know, well, what's our budget? Well, it's $100 grand. Okay, we'll go spend it all. But if I come to you and say, hey, here's our business venture, what's our budget? $10 grand. Entrepreneurs are smart, they're resourceful. You'll figure out a way to get it done for $10,000. And so you have to put that pressure into place. Now, people say, how are you gonna get something done for $10,000 you know, everyone else is spending $100 grand, or how are you going to get something done in, you know, in 3 days that everyone else has taken 3 weeks, right? I'm sure you know of the Pareto principle, right? The 80/20 rule.

Yep.

So if 20% of our results get us 80%— or 20% of our efforts get us 80% of the results— that also further means that 40% of our efforts get 96% of the results. So I would rather give up the 60% and not worry about the 4%. And so along those same lines, there was another book that I read, and this is actually comes out of a professor at MIT. His name's Jonathan Burns, and he wrote this book Islands of Profit in a Sea of Red Ink. What he did is he studied public corporations, and he said, if I look at a public corporation doesn't matter which one. 40% of what they do is unprofitable. 20% of what they do is so profitable it's paying for everything. Again, goes back to the 80/20 rule, right? It goes— the remainder is break-even. The problem is nobody knows which 20% is super profitable, which 40% is losing money, and other than the business owner, nobody cares. Because if you're in the division that's losing money, are you going to go to your boss and go, hey, we're losing money, let's, let's do something about that? No. And there's no incentive for you to as an employee. If you're the CEO of a public corporation and your guy comes to you and says, hey, let's cut sales by 80%, what is Wall Street going to do to you? They're going to crucify you, even though you're going to make more money. So there are all of these things going on out there that really prevent us from success. And then the last principle is compounding, right? Compounding works in all areas of life. And if you do small things, or if you take small money out little by little, you can compound and grow the amount that you are savings. So you take all of these proven principles and you put them all together and you start taking action. And that's how the Profit First system works. So basically what we do is we look at where are you today, right? Here's where you are today. Mike in the book shows you where you should be. Now there's a gap here. We're here, we want to go there. How do we do that? Baby steps, right? So what Mike suggests is that you set up multiple bank accounts and most business owners freak out about that. Get over it. All right. This is the same principle that Dave Ramsey uses with his envelope system of give every dollar a job, put it in its place. And Dave got that from someone else. These are timeless principles. We just aren't taught them and we don't execute on them. Right? You're laughing because you know it's true, right?

And they're not taught necessarily in like a systemic order, which I find that a lot of people are just grabbing piecemeal from these amazing tips. And right, and everybody has these competing philosophies. But my experience is, right, as a therapist, is it doesn't really matter. Just pick one and do it consistently, but also have the backing of people behind you who are— who have done it before consistently.

Exactly. So what Mike suggests is we set up 5 bank accounts. One is our income account. So all the money from all your sales comes into here. Now you have clarity on your top line. Right? Then you set up an account for profit because you're a business and you're supposed to be profitable. Then you set up an account for your pay, because you put the time and effort and risk into this. You deserve to be paid first, not last, like most entrepreneurs do. Next is taxes because the government wants its cut, right? You owe them. And then the last are your operating expenses. So the money comes in at the top, You use your current allocations and you allocate money to each of these pools. And what you spend and what you look at now is your OpEx, because most business owners are not looking at their financial reports. They're looking at their bank balance. So we're going to reward your bad behavior and say you can look at your bank balance, but the only bank balance you look at is your operating expenses. It's already been constrained for you because you've already paid taxes, you've already paid yourself, you've already paid your profit. Now you can spend what's left. And so it makes it easier. And then what we do is every quarter, we use the compounding effect of making small baby steps. So let's say when we start out, you say, well, my business isn't profitable, how can I do this? Well, let's start with 1%. And we'll put 1% to your profit account, because you will never miss $1 out of $100. Right?

Yeah.

And every quarter, we'll, we'll up it by 1%. Over 3 years, you'll have a 12% profit margin, right? You're going to cut your operating expenses. How am I supposed to cut my operating expenses? Well, here's the bottom line. If we go back to the 80/20 rule, you're wasting a lot of money. You've just got to figure out where you're wasting it, and little by little, you make cuts. Don't do things drastically. Everyone wants an overnight success. Nothing happens overnight. Most of my clients, I tell them upfront, it's going to take us 2 years to get to where you want to. So let me share a couple of success stories. One of the—

yeah, yeah.

So one of the guys who used this system, his business did really well one year. Now the problem is your tax accountant's always basing your taxes based on the previous year. So the year ends, he's had a lot more sales, paid taxes based on a lot less sales. The accountant doesn't want to call him because they know there's a problem here. Hey, sorry, I've been dreading this call to you for the past 3 weeks. What's up? You owe a lot in taxes. He goes, I know, we had a great year. How much? And she was like, it's almost 6 figures. He said, hmm, no problem, I'll drop off checks tomorrow. And she's like, are you kidding me? In 20 years plus of doing this, nobody has ever said that to me. And he told me, he's like, I had even more money in the tax account because he was setting money aside all year. He was able to handle it. And it's the same principle the government used with your paycheck. They take money out of your paycheck every paycheck because they know if they waited to the end of the year, you'll have spent it all. Right? So it's, it's again, it's the same principles. They always work when you figure them out and apply them. It's great. And over time you will build profit. So my— one of my clients, we've been just working together. He pivoted during COVID so his sales are up 60% this year because he pivoted quickly. Since he's working with me, his profits are up 300% this year. Next year, I guarantee you we will probably double them again. So you think about how much money he was wasting. And what he basically said to me, he goes, in the past, if I saw something interesting and I had money, I would just spend it. There was no restraint. He goes, now, you know, we're just spending the net amount we need to spend, and we're saving the rest, and we're letting it grow. So he, he actually is doing amazing with that. So the— it works. It doesn't matter what kind of business you run. You start with where you're at today. And you make tiny steps to get to where you need to be.

So let's talk about a most commonly asked question, which is business write-offs versus tax payment, right? People say like, well, if I made more money, if I spend more money on growing the business, if I spend more money on marketing, or any type of tools, or, right, sound equipment, doing whatever marketing, that will help me lower my tax cost. Can we talk about the real numbers that people— a lot of people assume it's a 1-to-1 ratio. For every buck I spend, it's a buck off my taxes, right?

It's not. So that is essentially the dumbest thing in the world, right? You go spend a dollar to save a quarter. Like, seriously, your accountant's going to tell you to do it. You know why? Because the less taxes you pay, the smarter they look. They, they are not tasked with making you profitable. Right? The penalty for being profitable is a tax. And okay, you've got to give the government a quarter out of the dollar, but you still get to keep 75 cents. Now, I will say this, if this is a problem for you, just put your money in a retirement account. And then you don't have to pay the tax. Right? You can put your profits away that way. So there are ways to do this that are— that make sense. But giving somebody else a dollar to make them rich so you can keep a quarter is absolutely absurd.

Yeah. So walk me through some of the most common additional misnomers about this. So I think that it's very much, you know, there's all these things, right? Again, from the accounting side,, that people are doing. One, you, you just talked about setting up the appropriate and right bank accounts and, and the funnel method in which to do that. I know I've heard that in other places. I know there's a, a big person in the real estate world who talks about that with his, right? I had the name just, uh, escape me right off the top of my head, but I know that's one of the big YouTube videos that I saw, um, about how to set that funnel system up, which probably sounds very similar to that. So I wonder if, um, if there's a big way of, of, of helping people, these misnomers, what can we do? What are some of the things that in addition to this, of the tax deduction or spending it in a certain way, what other things can, can they look at and tackle?

Well, so I think too often business owners are told you got to spend money to make money. And I'll challenge that. I don't think you need to spend money, or at least not your own money to make money. Let's use other people's money. Let's figure out a way to cut costs. Let's figure out how to do this for less. Because if you— too often, right, we're constantly— it's a time versus money battle. Sure. I don't have time, so I'm just going to pay money. I don't have time to learn that, so I'm just going to pay money. And more often than not, we don't even investigate. We get sucked into something and we start spending money, and then we don't even use it anymore, and we keep spending money on it, right? Because it keeps hitting our accounts every month. And so I think you need to take the time to go look at your spending and challenge every single line item. On top of that, we do a lot of vanity spending. I need a fancy office. Does your client care if you have a fancy office? No, they don't, right? And you talked about, oh, I need to buy fancy sound equipment. Why, right? The infinitesimal difference doesn't make a difference. And that's part of it.

So a lot of what I do is I give people permission to spend less, which is amazing right off the bat, because especially now, I know that people going through— we're in the middle of the pandemic, it doesn't seem to be going away anytime soon. And I know a lot of people have shifted to the more instant, right, whether it's Instacart or Amazon. And, and there's people I know who they say that like on a daily basis, there's something showing up from Amazon. And I see it in my building, right? It's the people are constantly— and now holiday season is coming, right? This is pre-Thanksgiving time now for us. The amount of excessive spending, really, like we have the opportunity to see what we're spending our time on, what we're spending our money on, what we're— I don't know how to best challenge everybody out there listening to relook at their priorities. And I think, right, I think what you're saying is that this is an in-your-face challenge to reprioritize what your values are, what your purpose is, as well as what you're— where you're putting your money towards.

So I'll give you a simple way to realize that, because I've done it twice. Go be an executor for an estate and go have to clean out someone's house. And see how fast you're filling up dumpsters with crap that has no value. And then imagine how much money was spent on that. It is eye-opening. Yeah, like we've, we've gone through it. We actually paid people to come into our house, take all our crap, arrange it into piles, and we looked at it and we went, just get rid of that pile. There's a handful of items we could sell where the time value of selling them actually made sense. And we got rid of 70-80% of our stuff and said, okay, this is the 20% we want to keep. And that goes through for every part of life. We definitely spend too much. And as you said, we're coming up to the holiday season. We're going to have a chat with the family this coming up Thanksgiving going, these are the ground rules for Christmas. And I don't want to say bah humbug, but The Christmas gifts from last year, some of them are still sitting in the living room. Like, why?

Right. I had a conversation with my sister about this recently, and we have a third-generation family furniture business. As when we first talked, I think I shared this with you, that my grandfather, when he survived Nazi Germany and came to Scranton, they opened up a furniture business there, and now it's in South Florida. My brother and sister run it along with my father.. And I was talking to my sister, I'm like, what would it be like if we no longer bought gifts for birthdays, but we decided to co-invest in stuff together? Whatever money we're going to spend each year, right? Let's say it's $100, $200 a birthday gift times our siblings and spouses, right? So that's whatever it is, right? If that adds up to $1,200 a year for birthday gifts, why aren't we putting that into financial vehicles that will eventually allow us to make more money? Than buying, you know, as we say, tchotchkes, right? Stuff that like, we're probably— I mean, a book is great, right? And I always try to, you know, I'm a big book giver, especially when it's like, as you and I are big fans of them looking at some of our libraries. But, but I wonder like, how cool that'd be if families decided to do that, they decided to research and figure out what will eventually give them returns on something than just some random item that is a temporary or instant gratification thing, but versus long-term Planning.

And so that's what, like, when Christmastime comes, I'm gonna say to my kids, and usually what I do, my kids have had Roth IRAs since they were teenagers. I'll just put money in your Roth. Like, here's $500 worth of gifts that you're gonna throw away. I'll buy you one teeny little thing so you feel like you got something. And the rest of the money is gonna go into your Roth IRA. And they realize, you know, if you put $2,000 in a Roth IRA as a 16 or an 18-year-old, you're talking about $100,000 at retirement. You know, so like I wrote a blog post, it was called, "I Gave My Kids $100,000 for Christmas." And because everyone is constantly spending, right? So I'm like, hey, Instead of buying this crap, put money in the Roth IRA, teach your kids delayed gratification, and let the money grow and let it expand. Like, we constantly have conversations with my daughter about weddings. I'm like, can I just pay you to elope? Right? Like, seriously, the wedding industry has gotten ridiculous.

It's insane, right? Right. And, and right now, especially during a pandemic, people are really finding the value in having smaller weddings. The people who need to be there, be there. Yes, listen, it's obviously wonderful to have this big celebration, have everybody you love and everybody you've ever known show up. But, but there's a difference between a wedding and a marriage. And can you take that and put that right there? The $60,000, if not more, right, on a wedding when 54% of people, if not more, are getting divorced?

So there is actually a statistic, uh, the wedding cost is inversely, uh, correlated to the, the how long the marriage lasts.

Interesting.

So the more you spend on the wedding, the less your marriage is, because you're, you're living in fantasy land, right? Not in reality, right?

And right now, now, like, right, the economy is shifting and changing. My guess is it's a buyer's market with a lot of things going on. I know property, definitely, right? Definitely the, the Northeast, right? People are are leaving in droves from New York. I know, because I see it here in South Florida, how many new New York license plates in my building, how many New Yorkers have moved down from the, you know, from Long Island and from the city. Right now is the time to use that. So, you know, it's leveraging what we used to think the financials, the society has changed, and it's not necessarily going to go back. There's no going to be what was like pre-pandemic. This is a new world. It's a new society. We have to take these things into consideration. And I want people to hear this and impress upon this point of what you're saying. So, so what's another little thing? Because I again, like, I want to milk for the time that we have together. I want to milk you for as much as possible, right? Short, short of people, you know, obviously going and consulting with you and paying you for that. But I want to, I want to milk as much as we can while I got you.

And I'm going to be honest with you, please, whether you consult with me or you listen to this podcast and my other stuff, I'm not holding any secrets back. Everything that I do for my clients, you will— I will tell you point blank up front. And it's because I've realized most people won't take action, right? And I think because I was talking to you, you were listening to your coach. He's like, yeah, 97, 98, 99% of people don't take action. Go hang out with the very small group that does. And as I was listening to that, I'm like, you know what, I think I spent too much time trying to focus on the 97%. Screw it. Enough of this. If you're not willing to do, too bad. So you have to decide for yourself, am I going to be part of the 1%? And they're not these evil rich people. They're the people who show up and take action. So actually, here, I'll blow your mind. If you're listening to this podcast, right, chances are you make more than $33,000 a year. If you make more than $33,000 a year, you are in the top 1% of the world for income. Are you living your 1% life?

Right, right, right. And it's interesting, because when you compare that to the top 1% of American income, that moves you way down, because I believe the number was $315,000 and more, right? But when you look at it across comparison, because we're living in a first world society, right, property values are high depending on where you're living, especially in major cities. People, right, it's shocking to me. And I remember, I remember years ago, making that $33,000, $34,000 before taxes. And what— like, and knowing how much of a struggle it was, knowing, can I go out this week? How much can I spend? Can I order one sushi roll or two sushi rolls? And being mindful of that, right? Can I treat the people that we're going out to dinner with? Can I cover? Or is that going to be something that's sticking on my credit card that I have to pay off with interest later on? And I remember thinking and being conscious of those things. And I know how many people aren't conscious of that.

Most people aren't. They're, they're not. And, and that's the problem with credit cards. When you spend in cash, you viscerally feel it. When you spend on a credit card, a swipe's a swipe. A $2 swipe is the same as a $2,000 swipe. But when you're taking out, you know, $1, $2, or you're taking out 20 $100 bills, it's a very different feeling.

So how do we mindset that right now, right? Again, middle of the pandemic, everything is digital, digital. Most things are now virtual. We are doing transactions, whether it's Venmo, PayPal, right? We're probably not going back to real cash, and most people don't even carry cash anymore. So how, how can we have that mindset of having that, like, I'm taking this money out, I'm lever— I'm using this money for a specific thing, versus just swiping when we're not going back to that hand and, right, changing hand-to-hand cash transaction.

So the way I built wealth is the same principles that we talked about earlier. So if you're an employee, or regardless of who you are, set up your automated savings, whether it be a 401k, a brokerage account that swipes money, your bank that moves money over. You know, I was just reminded recently, and we're talking about Christmas. When I was a kid, there used to be something called Christmas accounts at the bank. And what they would do is all year long they would take out like $10 a week from your account so that when Christmas time came, you actually had the money to pay the bills. Because back then people didn't use credit cards like they do today and go the opposite. So just set up automated savings systems, and there's a multitude of ways to do this and let the money start building up. There's even apps that will like round up all your spending and put that little bit to, to savings. And then learn to live on what's left. In other words, at the end of the month, if you can't pay your credit card bill in full, then stop spending until you pay your credit card bill off. Learn to control yourself and do that. And as long as you automate your savings and you keep upping the amount that you're saving and you, and you know not to go into the negative, then life is okay. And if you've got to go to a debit card because that will prevent you from overspending, go to a debit card. It's getting pulled out of your bank every, every time you swipe. You'll start to see your bank balance go down. You'll start to freak out a little more.

Yeah, so let's talk about the banking side of things, because some banks are probably, based on your experience, better at this and, and in the consumer's favor versus it being like, you know, how can we charge you and ding you for every little thing? How can someone find the right place to do their banking that is in alignment with this philosophy?

So I recommend two different things. Credit unions are usually great. They are usually much more focused on you, the person, than on making, you know, money like some of the big banks. And then the second thing is stay away from the big banks, go to the small or local regional banks, and find the one that, you know, is willing to work with you and willing to do it without a whole bunch of fees. When I go to my bank and I walk in, they know who I am, right? We have a relationship. And so we've been with them for— I'm looking at the date. I think I've been with them for 28 years. Right? And when I want a relationship, it's a relationship. They know who I am, stuff gets done. I don't have to fuss over things. And I don't pay fees. And so it kind of works out. And occasionally you make a mistake, they wipe it. Because it's a relationship. So go find those things in all parts of your life. You should build great relationships. Banking is just one of them. Uh, throughout the other parts, go find great relationships.

So as far as savings and getting all this started, I know that right now we're living in a time of Bitcoin, and every— it's not a day that goes by where I get hit up by someone like with a forex thing, which we're not going to get into the merits or non-merits of that, of, you know, of that. But how do you suggest, like, is there a number that people should have safety stockpiled before they start getting into investments, before they start buying? You know, like, what's— I have a friend of mine, Matt Monero, and he was on episode 50. He owns a massive financing company for trucking. He wrote a book called You Need More Money and has a podcast of the same. And he says $100 grand. Don't do anything until you have your stockpile of $100 grand. And then because when you start doing investments, when you start doing— people aren't going to come to you for $5,000 to buy in, you know, to do an investment business or something like that, right? They're looking at the $50,000 to $100,000. And don't do it on these little short-term things. Don't invest in the stock market yet. Don't until you have at least this going on for you. And I know that's one philosophy, and I know he's built a successful company in a successful business and helped others. What's, what's your approach to that and thoughts about that?

So you have to look on your return on investment. For example, if I've got $1,000 and I'm spending all my time picking stocks, how much can I really make more on the $1,000? Maybe I get it to $1,100, $1,200. You're not— you're putting in a lot of time getting very little effort. Now if I've got $100,000, now I make 10%, it's $10 grand. Now I might want to pay attention. I got $1 million and I make 10%. I'm making $100 grand. Now I really need to pay attention. In the beginning, the key is build your stockpile, right? Get yourself at least to have 6 months of savings so that when things like COVID hit, you are not crushed. People are getting wiped out in COVID because they didn't save a penny. And I'm reading these stories. I'm like, wait a minute, this makes zero sense to me. You're a minimum wage person. You lost your job. You got unemployment and you got pandemic money. So now you're making more money than you were before. And the moment the pandemic money runs out, you're out of— you're screwed. What did you do with all the excess you had? Why didn't you pull it out? And save it. And that's kind of one of the principles that you need to do, is just start saving, build up a cushion, because you are going to face a storm. We all face storms. You have to decide how you're going to handle it, because it's going to happen. It's guaranteed. And so be ready for the storm. You know, if you're a young person, 6 months is great. Um, and then in that time, start learning the principles of investing. So what you're talking about with Bitcoin and Forex, that's gambling, right? Okay, understand it for what it is. It's gambling. And the people who are selling it to you, they don't even understand what they're selling. I, I saw one that was hilarious. They had a commercial on and it was for options trading, right? And so what happens when you sell an option, you get paid up front, but you are now the insurance company. So like, they had these people, oh, look at this, click these buttons, look at that, you now have $1,000. And I'm like, you have $1,000, but you have now $50,000 at risk. Some of you may have heard that story of that kid on Robinhood. Yeah, you know, unfortunate, but that's what's going on because people have no idea what they're doing. Robinhood is gamifying stock investing, and that's why you see Hertz is going bankrupt. They put out an offering that says, hey, we want all this money, whatever it was, uh, and we think we're going to go bankrupt and not give you a penny. And all these people raised their hand and said, here, here's some money. Seriously, learn what you're doing. There are great books, right? We got a whole ton of them. Uh, we read a couple of books and read different books from different people and read conflicting ideas and say which one makes sense, which ones goes back to— so it goes back to the principles we talked about. Right? Slow, steady growth is how compounding works. So let's do an example of that, right? I think it's great to— I'm going to pull up the numbers because I have them here. So here's the challenge, right? Uh, Jason Wasser, your wish has been granted. January 1st, we are going to make you wealthy. All you have to do is work for me for 31 days. All right.

Okay.

I'm going to give you two pay plans. You pick the pay plan that you want to get wealthy. The first pay plan, I am going to pay you $100,000 a day for every single day in January. Simple math, right? 10 days out, you get $100,000. The end of 31 days, 31 times a million is, I mean, 31 times $100,000 is $3.1 million. Here's the other plan. I'm going to pay you a penny on January 1st. On January 2nd, I'm going to double it. So on January 2nd, I'm going to give you 2 pennies. January 3rd, I'm going to give you 4 pennies. January 4th, I'm going to give you 8 pennies. Every day I'm going to double it till the end of the 31 days. Which one do you want?

Well, people would assume right off the bat that the $3.1 million is massive, right? But, but based on what I'm assuming with the compounding, we're assuming that the second— I'm going to assume that the second one is going to pay out more.

So we already know what the first one pays out. 3.1 times $100,000, $3.1 million. Give me a guess on what the second one pays out.

I'm thinking somewhere around $8 million.

You're a little short.

Well, if you saw me in person, that's definitely true.

So the penny doubling pays out around $21.5 million.

It's a lot short.

It's a lot short, right?

31 days of compounding.

31 days. But here's what's interesting. Let's, let's just walk through a couple of days. At day 7, you're at $1.27. Nothing going on here, right? Day 14, you're at $164. You're making zero progress. How is this going to amount to anything? Day 21, you're at about $21,000. You haven't even made what the other guy made on day 1. Right. But here's where it gets interesting. When you get out to like day 28, you're almost at break-even. You're both about the same place. But then that's where things get interesting, because if you're slow and steady and you're only growing $100,000 between day 28 and day 31, you only pick up $300 grand. But if I'm sitting here with $2.7 million, On day 28, it goes to $5.4 million, it goes to $10.8 million, it goes to, you know, $21.5 million. That principle applies in every part of life. And what happens to most people is most people are sitting here at day 14 with $164. They feel like they're running full speed. They feel like they're doing all this work. It's like an airplane on a runway, right? You're, you're, you're halfway down the runway, you're doing 100 miles an hour, you feel like it's, it's all of this, and you look out the window and you realize, I'm still on the ground, like I haven't gotten anywhere. But you know that within no time you're going to be soaring. People give up, they don't keep at it. Compounding resets every time you re- start. So if you restarted at day 14, you'd end up with like $320 at day 28, and then you start over and now you're at like nothing, and you're like, why am I so hard? Why? Figure out where you want to go. Set yourself straight. So when a plane flies across the country, when a plane flies to New York City from Los Angeles It is off course 97% of the time. It's constant correction, constant failure, constant mistake. But as long as you know where you're going, right? Yeah, you are most apt to get there. So I had the honor of interviewing Bob Johanson. He's from the— he spent 50 years figuring out the future. So he's always working on what does the future look like, right? He spent his whole life on this. And he said, looking forward, because things are changing so fast, you need to have certainty on where you're going, right? You need to know this is what I want and this is where I'm going. But he said, if you have certainty on how you're going to get there, you're going to fail miserably, because we have no idea in a constantly changing future how we're going to get there. So you've got to constantly course correct, constantly make changes and keep showing up like that.

Agreed. Well, I see that as the reverse engineer, and I see that with my clients when they come in. I don't typically ask them beyond what they say on their intake form what the problem is. I focus more on what would life be like if this problem no longer existed? And what would you then have to start tackling? And a lot— what I mean by that is a lot of times we have this thing that we've built up as the main issue. But that's just a symptom of a bigger scenario, right? And that becomes the mountain when it's really not a mountain. It's probably a bunch of pebbles. And now, with all the energy spent on trying to solve that out of the way, what can we now really do? But I need to have them look past all that. And that's like an exercise in and of itself that I find so many people have difficulty doing. But the question again is, and for people out there listening, like, if we can reverse engineer your outcome, if you know truly where you want to be, and you're so specific with the goal, whether it's a number financially, whether it's about a relationship, whether it's about your health, whether it's about working out, it's reverse engineering the outcome versus falling into it reactively and being as proactive as possible. And not only what— not only is that, you know, part of the question, but who and what do you need in your life to help you get there? Because if you've tried multiple times over and over again, and you're still not at that place, right, financially, specifically, then we have to get you out of the basic assumptions that you're carrying predisposed to, right? Our programming to help us unpackage that with people who have already done that and are doing that consistently with others. Whether it's a personal trainer, whether it's a financial advisor, whether it's a therapist, whether it's whatever it may be, we need that dream team, which I'm a big fan of creating that into your life. So a lot of times I ask my clients a question, not how are you going to get there, but who are you bringing into your life to help you get there?

And we had that comment earlier where I said to you, I, I share everything I do with people. I don't hide anything. This is what I do with my clients, because what I find is when they hit friction, they give up, they restart, they do something different. Because I'm there, I'm literally like their trainer. You go to the gym and you've got a trainer. You're going to work out harder. You come home and you've got a nutritionist delivering your meals, you're going to eat better. And so that's what I do for small business owners. I make sure that you're financially on track.

So it's much more accountability, right? And I think that's the consistency, right? Coming to therapy is partially accountability. Working with a coach is accountability, right? I know that people who have accountability groups are people who held them accountable. In specific areas are radically more successful. And in fact, like, everybody I know who's massively successful is part of an accountability group, or has people holding them very specific accountable in very specific tasks of their life beyond themselves.

Yeah, I was gonna say, I, I'm in a bunch of different ones.

Right, for different aspects of your life, right?

Different as I'm in 4, at least 4 different mastermind, 5 different mastermind groups, each one with a different focus, each one with a different kind of goal. And so they helped me and sharpen me in all different parts of my life.

Yeah, yeah. I know one of the things that I work with my clients on is getting everything scheduled that are the big rocks first, right? You know, that old metaphor. But a lot of times we find that people are spending, right, like you were talking about before, they're putting these, the money and their time into like low-frequency things that aren't getting them to their goals. So I'm really working tightly with my clients on this. And like, so a good story, like the other day, one of my clients, right, post-election, one of my clients was very upset about the outcome. And as 50% of the country is, and they were talking about a family member who was doing something that they didn't agree with. And they were like, Jason, I don't understand, like, Can you explain to me that philosophy about this specific, whatever, approach to something? And my first question was, I'm happy to explain it to you. But I didn't know you had enough free time in your life to be worrying about that. In other words, why are you not focusing on higher value, higher frequency activities that are completely involved with your purpose and your mission? And you're allowing this thing that a family member is doing that you are a) not financially responsible for, 2) you're not their parent, 3) you see them maybe once a year. Why are you allowing that to take time, space, and energy in your day and in your mind? Why are you not doing the more important things in your daily life?

And that comes back to what we talked about before, is letting go of the 97%. Like, if you want my help, great. If not, just, you know, and as you said, I— whoever wins the presidency wins. We've survived every single one of these people before. We'll survive the next round of them.

And here's what you and I can guarantee: within 8 years, there will be a different president. And within 4— and within 12 to 16 years, there'll be a different one. One. And that's right, that, that, like, all of the things that we need to focus on are the things that we really have energy, time, and effort over, which is what is our purpose, what is our mission, what is our legacy. And especially when we talk about financials, right, legacy is important. Money is— right, how many phobias, how many fears, how much, how much family intergenerational themes do we have about money? Like, one of the things that I love sharing is this. I grew up in South Florida, and and I grew up in an affluent community, but I was a scholarship kid. And I remember like going from public school to private school and seeing kids with like Range Rovers at 16 years old and very, you know, very expensive cars. And I was on scholarship, thankfully, right? I had someone who sponsored me to go to the private school. And I had this mindset of people with money are douchebags, especially being in, right, in South Florida where it's very flashy. And I know where you are, it's a very different, you know, it's it's a little bit of a different mentality. You know, and people don't necessarily show off with, with their money. It's, it's, it's, they may be driving a Toyota Corolla, but they're insanely wealthy in their bank account, right? Miami's a little bit very much different. So I had this going theory of like, if you know, unconsciously, and that if I have money, I'm going to become an a-hole like them. And that limited me for so many years until I got in front of people who are radically successful, who have values, who are taking, you know, who legacy is important, core values are important. Spirituality is important for them. Their health is important to them. Doing good by people is important to them. And I'm like, oh, this exists. I can be them, not them. And that's— within 6 months, my whole entire mindset and practice changed.

And that's very true. If you have the wrong money mindsets, you will blow all your money. That's why lottery winners and people who get, um, inheritances usually blow the money within 2 years because they haven't made the mindset shift. We were very intentional. So I knew my kids were going to grow up with wealth. And we were very intentional so that at 16, you're not getting a Range Rover. Like, that's just not happening. Like, your parents are rich, you're poor. Like, you have to learn how to do this for yourself, how to put the time and effort in it, because we realized how big a problem that is. And more often than not, I think those parents are doing that because they didn't spend time with their kids. And so they've got— they have to cover up for their lack of time, lack of caring, lack of respect, and problems by buying these kids this stuff. And what do the kids say? It's the wrong color, right? Right.

They're already assuming that they're getting it. There's an entitlement here, and I see that all the time. Of— I don't see any children in my practice without the parents being involved. And I right off the bat say, this isn't drop-off therapy. And if they're like, well, my schedule is really busy, I say, you have two options. You can be part of the process, or I can refer you to somebody else.

And usually the problem is the parent.

Of course, right?

So I, I've read a ton of psychology books, and, and I always say the same thing. These aren't psychology books, these are parenting books. It's always the parent's fault. They they create this mess.

Well, this intergenerational theme, right, is so massive. It's, it's, it's what's being passed on consciously and unconsciously, right? Nothing happens outside of a bubble. And a lot of times, right, the children are there as a product of this environment and culture. And, and we're going to assume, I'm going to assume that obviously everybody means well, because, right, what parents really, deep down, no matter what the chaos and trauma, still love, unless they have significant severe mental health issues, which is not the purview of my practice, but the worried well, which is who my practice sees. I'm assuming that you love your child a tremendous amount. And like you said, right, a lot of times that love language becomes through the receiving gifts or giving gifts, which is one of the 5 love languages. And I realized that like years ago when I had this experience in my— and when a friend of mine came to visit, and they, they bought me something, they actually brought this amazing ice cream that from, from LA, deep froze it, brought it all the way from LA to South Florida. I'm like, wow, that's really, really nice. And I loved it because I had it there with them. But one night they were sharpening my knives that I never just— I just didn't have the time to get around to. And I have this really nice knife set. And I'm like, oh my God, that's amazing. And I really— it really hit home that that connection through my friendship and through— is helping me make my life easier. I don't need you to buy me something.

Right.

And when we can figure out and bringing this back into like that psychological side of especially when it comes to financials, What's the person's love language, right? The acts of service, receiving gifts, quality time, physical touch, right? Words of affirmation. But I wonder if that, that probably also applies to their philosophy about money. How do they approach money through that? And there is money love languages, right? Are you a spender? Are you a saver? Are you a masser? Are you thrifty? Right? And then definitely people can take those assessments and find it out there. And I don't know if Profit First has that of figuring out your money psychology, but there is You know, and I'll put that into the show link for everybody. So as we wrap up, I have this, you know, on one foot question, right? You get to meet someone only once and you have 2 minutes with them. And if you can share any part of your wisdom that you know that you absolutely completely want them to have by spending any amount of time with them and with you. That they want— you want them to walk away with? What would that be?

So I'm going to give people an action step, right? And it's going to be around money because that's my focus. Go open one account, and however you, you get income in, just take 1% of everything you get and put it in that account. You will not miss it. And just keep doing this for the next 3 months. At the end of 3 months, look at the amount in there and go, hmm. And then take one more step and increase it to 2%. And just every 3 months, just keep doing this. I guarantee you, you will become wealthy. I don't care what else you do. It is guaranteed to make you wealthy. You just have to keep doing it. Every quarter, a little teeny bit at a time. And you will be shocked at the results you get.

So put it on your calendar. So what I'm hearing you say is set it and forget it. And then every quarter, reset it and forget it. But make sure it's calendared. I love that, right? Because I know a lot of times I do that. I have my automatic draws. And I know that like things are coming out. I'm like, oh, I don't even miss that. But I haven't gone back and added an extra $50, an extra $100, extra $200. So I'm going to take that personal action step. And I'm going to do that tonight and do that with all the monies that are being drawn out. But I want everybody out there to listen. That's such a practical thing. Go to your bank, add an additional account, see what you can pull out, right? Really, $100. Can you do $100 a month? Can you do $50 a month? And then do 90 days, put it on your calendar, see if you're missing that. Put it— literally put it on your calendar for 90 days from now. And then go back and see if you can add an extra 1% to figure out the math.

Don't see, do it, do it.

Do it. There you go. Thank you for correcting me on that. All right. So, Rocky, how can, how can they get in touch with you? Because there's so much more that I would love people to just like milk from you. So where can they track you down? Where can they follow you? Where can they listen to you?

So if you're a small business owner, whatever you listen to your podcasts on, it's Profit Answer Man. And I focus strictly on the small business owner there. If you want to build the life of wealth and talk about harmony and all these other areas, I do that at Richer Soul, and both of the emails are rocky@whateverone.com. Happy to, uh, to hear from you and to answer your questions.

Awesome, Rocky. Thank you again for, for giving us some hard-hitting practical advice, especially during these difficult times. I'm so glad we connected, right? So for people out there who didn't know, we connected on a Speed Podcasting event. He was my— he was my blind Speed Podcast date. So I'm so glad that we're, we're continuing our connection and our friendship, and I very much much looking forward to, uh, to talking to you again in the future.

It was great to, uh, to be here, and thank you so much for having me, Jason Wasser.

Thanks, my man.

Thanks for listening to the You Winning Life podcast. If you are ready to minimize your personal and professional struggles and maximize your potential, we would love it if you subscribed so you don't miss an episode. You can follow us on Instagram and Facebook at You Winning Life.