How Canadian Businesses Manage Money | Cashflow Explained

The way that you approach new business opportunities that track you down, the way that you approach reinvestment in your existing business, the way that you approach goal setting and where you want the business to go, everything is expanded because you have. You're working from a place of being confident in the cash flow of the business. And so it's a process to get there because you have to build that discipline into your company where from every gross revenue dollar that that's being generated, you're taking a portion of that dollar and you're allocating it to a capital surplus reserve.

Jason, welcome again.

It's good to be with you. Thanks for having me.

Yeah. So we kind of go through a bunch of different topics. I know that I'm. I'm with you. At Ascendant Financial, we practice infinite banking every day. So I thought we can touch a little bit on some of, like, the nuances to that in terms of. Talk a little bit about Nelson's five golden rules. But some of the exercises we've been going through in the businesses, just talk about entrepreneurship and partnership. And then the other piece that I feel is like, I think that I want to get your thoughts on cash flow confidence and what that means to an entrepreneur. So maybe we can start. Maybe we can just start with that. Right? Because I think that's something that I think is on the mind of every entrepreneur. I don't know what your thoughts are on it, but let's talk about that. How do you define it and how do you know when you actually have it as an entrepreneur? Wow.

Well, cash flow confidence, I mean, if you wake up on January 1st and you know that you have enough of a continuing capital surplus reserve to operate your business, so that if you went from January 1st to December 31st, and. But you have more than enough reserve to take care of your business, you're in a very confident scenario. So the way that you approach new business opportunities that track you down, the way that you approach reinvestment in your existing business, the way that you approach goal setting and where you want the business to go, everything is expanded because you have. You're working from a place of being confident in the cash flow of the business. And so it's a process to get there because you have to build that discipline into your company where from every gross revenue dollar that's being generated, you're taking a portion of that dollar and you're allocating it to a capital surplus reserve. And in our businesses, that percentage is minimum 20%. And so by doing that, it also forces you to innovate. It forces you to rethink your thinking as you go about your day to day business. And it has proven to be extremely beneficial for us and for our businesses because of that very reason. You know, we've achieved cash flow confidence, but it takes years to do. It's not, it's not an overnight thing. It has to get accomplished incrementally over a period of time.

Yeah. And I guess as a, as an entrepreneur, is that, how would you, what would you call it? Is casual confidence considered a goal or is it like a step?

It's a habit. It's a habit. It has to, it has to become a habit because what I see with the entrepreneurs that I interact with who, you know, have not embraced that approach, well, they may be saving money or, or setting some money aside, you know, somewhere, but without making that continuing capital surplus requirement a habit in the business, then we, we all know things happen, right? There's cash calls for a variety of different things that come up in your business, but that reserve is meant for and has, you have to have parameters and define what that reserve is meant for and how you can access it and making sure that it never falls below that low level limit of whatever percentage you establish. And once you make it a habit, it just gets easier to do.

Yeah, that's, that's so good. I think it's definitely, I think that in that response you woven a couple of things I think of one is profit first, right. Which is, you know, which is woven in, into the business. Right. And just some of the sprinkle in a little bit of Nelson's rules as well. So maybe we can go to that next. Can we go through them one at a time, Nelson's rules, and maybe talk at a high level and explain what it's all about and then we can go into them one by one.

Oh yeah, for sure. I, I mean R. Nelson Nash, who, you know, I was blessed beyond really the definition of good fortune to be mentored by for so many years. He developed and pioneered the process of becoming your own banker, the infinite banking concept as he describes in his book here. Oops. Just over there we are, the book titled becoming your own banker, which has sold more than 470,000 copies. And part of Nelson's approach in teaching the layperson, like he wrote the book for the general public. He didn't write it for you or me in the financial sector, you know, he wrote it for the layperson. And he always said that everything begins with the way that we think and things through that, he developed what we now know are his five golden rules. And the first golden rule is to think long range, meaning to think three generations past your own. So if you're improving or expanding your wealth and you plan to transfer to the next generation, it's not a matter or a function of just transferring the wealth, because again, money's not wealth, but if you just think in terms of dollars, if you're transferring that to the next generation without any knowledge or stewardship, then then you're not going to make it past the second generation. The money will be squandered. Secondly, he goes on to say, don't be afraid to capitalize your system. What he means by that is your money must reside somewhere, so don't be afraid to store it inside of your own system versus allowing it to stockpile in someone else's. And then thirdly, his third golden rule is don't steal the peas. And that requires a reading of his book, in particular the grocery store example that he leads people through in the book to help you understand that, you know, there's one business business that you should be actively involved in, and that's the banking business. But you've got to treat it like a real business and you certainly don't have to be rich in order to do it. And then his fourth golden rule is don't do business with banks. Because every time you're borrowing money from banks or you're stockpiling money there, you're contributing to inflation, you're part of the problem. And so become part of the solution by seceding yourself from that, that traditional banking system and developing your own process within your own family or your business. And then lastly is to rethink thinking there's no such thing as having arrived in knowledge. There's always something new to learn. And so if you believe that you've arrived, there's nothing new for you to learn, nobody can teach you anything, and you've lost that ability to be inspired to learn new things, then it's all downhill from here. So having a good understanding of his five golden rules comes from your exposure to the process, thinking about the fundamental truth that someone has to perform the banking function in your life as it relates to your needs, and that you should no longer be abdicating that responsibility to someone else. You should be taking that responsibility and performing that function for your own family or business. And once you do, you will accumulate wealth and more importantly, keep it.

I think those, the rules obviously applies to banking and controlling that banking function, but I think of so many ways. And just in everyday life where it can not that banking is not everyday life, but think of my health, think of like all these different components of my life where those rules still apply. Right. And going back to your just running a business. Right. Is like things like don't steal the peas. Don't be afraid to capitalize. Like pay yourself first. Right. Before you pay anyone else. You know, make sure that. Because if you're not paying yourself first, then there is no business. Right. So many entrepreneurs get themselves caught in, you know, it could be payroll, could be expenses, all these other things and it takes away that casual confidence in the day.

Right.

If you don't build that, that happen. I think these, all these rules apply directly into what we started the conversation with.

Agreed.

Let's, let's get into. And so, I mean that kind of speaks to kind of this much of Nelson.

Right.

And there's, there's so much more that can be said. Maybe just before we continue on, can you just give a little plug to where someone can find more about Nelson himself?

Oh, absolutely. You know, I would encourage anyone watching this, listening to it. If you want to get a, a glimpse into the essence of just how amazing our Nelson Nash was and just the revolutionary impact that he continues to have even after he passed away. Just head on over to nelson nashfilm.com Again, that's nelsonnashfilm.com and you'll be able to take in a one hour documentary film that I had commissioned on Nelson. And I hope that you enjoy it as much as we enjoyed creating it. You'll really get a sense of just how incredible this man was.

Thanks, Jason. And I was gonna say, if you don't have an hour to watch his video, another option is to maybe read all the books that Nelson recommends in his book. That might take a little bit longer, but.

Some people like the YouTubes as well. Right. If you head on over to the YouTubes and you search for our channel, the Bankers Vault, again, that's the Bankers Vault. There is a treasure trove of resources about the concept, a number of different people, our teammates, including yourself, who, you know, share wisdom and knowledge about this process and the advantage and the positive impact that it can have on you.

Always like to have a little nugget from Nelson. It's always easy to have those. And I know that you had. He was your mentor for a number of years. So it's always good to hear that. And good reminder, I think we talked about this before is just some of these things that.

The more that we educate ourselves. You know, you may have heard it before, but they're always good reminders. And to seal in those habits, maybe let's go back to, you know, entrepreneurship and kind of, kind of the stage you're at for non entrepreneur and kind of how you take that next step and to grow the business and how I guess one is we went through the exercise of, you know, the, the painted picture vision, right? As, as one thing, how do you put that to work and then how do you get other everyone else on board, right? Because it's not just you and the business. You, you have to build camaraderie. You have to build, you know, connections and network like all these things that come with it. Everybody's got to be on board. How do you, how do you do that as a business owner?

You give them a voice, you know, you ask for people to share their contribution to the painted picture vision, which is in our case, we look ahead over a three year time frame and we put ourselves at the end of that three years and we talk about what specifically would have had to have happened in order for us to feel like we made significant progress. And then we literally paint a word picture of what we've achieved as though it's done, as though it's happened. And we ask every team member to have a voice. In other words, here's a paintbrush, it's all yours. Put your stroke of genius on this painted picture vision. And much like we had just recently completed our exercise where we're going to work 2022 through 2025, when you see this completed word picture, you'll be able to scan that document and go, okay, that was mine. That stroke of genius was mine. And when you feel like you've been a part of building it, then you want to see it through. You want to actually be a part of building it. And to build the camaraderie, it just requires, I guess, an unshakable determination and accountability. We talk about that so often that it's so important, you know, to really assess continually where that level of accountability is. And it has to be peer to peer once it really starts blossoming, peer to peer. So think about, to give people a simple analogy, if you think about a professional sports team, you know, I just happen to be a huge hockey fan. So if you think of a National Hockey League team, maybe your favorite team comes to mind. When accountability is just the coach to the players, it's far less effective than when it's player to player because you're playing to Win for each other and you either win or you lose together. And when a teammate's falling short, it should be another teammate holding that other teammate accountable. And when a team member falls down, it should be a teammate that helps pick that teammate up. And when a teammate's doing something great, it should be a fellow teammate that calls it out and recognizes it and so on. The coach has the playbook and makes sure that everybody is performing to their fullest potential. But it's gotta be the teammates that hold each other accountable. That's where you're gonna get the greatest level of buy in and the greatest level of success. And you don't find yourself in a situation where you have individual playbooks, you've got the team playbook and everybody's bought into it and everybody is working toward achieving, you know, the, the championship in, in that case. Right. So I really take that to heart, you know, in the construction of, of a team and the belief system and holding people to a higher standard. And it works, it works extremely well, especially if you're genuine. You know, people are pretty sophisticated in human nature. They know you can pick up on whether somebody is coming from a place of authenticity. I love and care for my teammates and I try my very best every single day to hold myself to a higher standard and to lead by example and to not only accept accountability, but when I make a mistake, I'm the first person to pull up my sword and fall on it and to learn from it. And your teammates pick up on that. And if you're genuine, they'll follow. They'll follow you wherever you want to go. And if you're not, they won't. So those would be the components or I guess the ingredients of it from my perspective.

Right. No. Thanks for sharing that. And I was going to maybe dive a little bit deeper into that TO at the individual level we talked about, it's how do you have an ever expanding business? I think there's opportunity for people to grow and how do you nurture that? And you know, I think, you know, when I started a couple years ago, I came with a specific rule in mind as to what I was going to do. What I'm doing now is not a kind of got to steal a bit of it, but a lot not. So what do you do to help nurture people? You know, one is to accelerate their growth, their learning, all that, but also to, you know, weave that back into the business as well.

Give them an opportunity to, you know, to, to demonstrate. Right. Without so mitigate the risk for Them. You know, sometimes people are just so afraid of failing that they don't take any steps forward to even attempt to grow. And if so, if you create an environment that's safe in the sense that, you know, making mistakes is encouraged, you know, that's where the best learning happens. And if you're. If you have the guts to share with people what they need to hear, and if you have that trust with whomever it is that you're leading, where they know that you're going to tell them what they need to hear, because you've already had that dialogue, what would you rather me do, you know, placate you or tell you what you need to hear? Because telling you what you need to hear is what's actually going to help you grow. And you know, you've got the right team member when they say, hands down, I need you to tell me what I need to hear, because I. I really, truly want to grow. And that's really the. The sign of an effective leader or a really good coach is that they can see. They can see past where you are currently. They can see that potential that's there. They just got to get it out. They got to get it out, but they can't. They can't. You know, it's not like tugging a rope. They can't just. It can't be an exercise where it's. It's the coach or the leader doing all that work. You have to inspire that team member to get it out and. And then give them a chance to perform and give them a chance to make mistakes and letting them know that it's okay. I mean, making a mistake is okay, provided that, you know, you. You accept the responsibility of learning from it. If you repeat it, then it's a choice. But ultimately, yeah, you've gotta. You've gotta believe. You've gotta express to your team members what they need to hear. Don't placate them. Don't blow smoke up their ass. Tell them exactly what they need to hear when they need to hear it. And they're either going to progress or regress. It's gonna be one or the other. And if you've got the right teammate, they're gonna progress. And, I don't know, it's a bit of an art form. You know, you really have to understand and know how to connect with people on an individual level.

Well, that's what. That's my next question was really about. There's so many different personalities. There's so many. Right. Like, how do you. One approach is not going to work for the next person. Right? Every little nuance to every. Every single person you. You deal with. So navigating that I know for.

From my experience working with you is, you know, leaving. Also leaving that. Well, what you said is allow you to stub your toe, give some. Give some room. You know, I think that for me, that definitely see it direct. I was like, you want to hear the exact words. But no, I think sometimes you got to leave some space for people to kind of fill in those gaps themselves too. Right?

Yeah, definitely. Because you want them to think. You want them to have those. Those breakthroughs. And if you have. Think about the last time you've achieved a breakthrough if you got there on your own because you thought your way through it. You know, you had a coach or somebody who maybe pointed you or steered you in the right direction, and then you had that breakthrough. It's far more impactful than if the coach or the leader just gave you the breakthrough. Like, it requires deep connection. You know, you've got to be constantly communicating and connecting with your team members. It's when you do you want to do more of it. If you really, truly love to lead and to coach, and that to me is like. That brings me so much fascination and energy. I just really love that. I love to help coach people, develop them. You know, I have the privilege of leading, which is a privilege I don't take for granted. And I try to do my very best every single day to inspire people to bring out their best.

So good. So good. How can people get in touch with you? How can they find out more about what you do and how you serve Canadian families and entrepreneurs?

Oh, wow. You know, I would say again, if you visit us on the YouTubes, you know, we've got the Bankers Vault channel, we've got our podcast wealth without Bay Street. Again, that's Wealth Without Bay street, which is also Uploaded on the YouTubes, our website at Ascendant Financial CA. Again, that's Ascendant Financial CA. And if you click on the Meet our team, you'll get a amazing glimpse into all of the people who really make. Make all the. The great things happen. You know, inside of the company, I have. I'm fortunate to honestly hand out all the credit when things go great and to accept the ultimate responsibility when things don't go well.