Birth to Net Worth with Toni Counts - Episode 6

Happy, happy Thursday, guys. This is Birth to Net Worth, episode 6. We have an exciting guest today, um, somebody that I've known for almost 2 years now through, um, through real estate. Extremely, extremely talented young lady based in Miami, or actually north of Miami, I believe. She'll correct me in a moment. And you'll notice that there's only my hairy beard on the screen. Jesse has gone camping this week, so he'll probably come back from the Alaskan wilderness with an even bigger woolly beard than I have, probably with some antlers and things along with him. So, so just be me today. So without further ado, I'm going to bring in our wonderful guest, Tony Counts. Tony, welcome to Birth to Network. Thanks so much for joining us.

Thank you. How are you?

Very well, thanks. Very well. Well, tell us a bit about your background, Tony. How did we meet and, and what is it that you do? And, and, you know, give us a little background about, uh, about how we came across one another.

So, um, we met through Pace Morby, and, um, I do— I'm actually Pace Morby's bookkeeper. Um, I have a bookkeeping service. Um, I also have my own bookkeeping company where I have a handful of clients that, um, that I've been servicing over 3 years now. Um, I limited my amount of clients because I don't like to jeopardize the quality of my work just for the sake of building myself up. So that's when I started, um, the bookkeeping service so that I could continue to help business owners like yourself and, um, just expand into sharing my knowledge of, of bookkeeping.

Fantastic. Well, I appreciate you joining us today. So as you know, this is, this is Birth to Net Worth. It's about helping, um, helping adults, and through the adults, preferably primarily parents, uncles, aunts, family members, etc., and friends become financially literate. And also the, the end goal is to bring financial, financial literacy to the next generation that graduate in high school. So The conversation really focuses around not only financial literacy, but also mindset around money as well. So I know that you're a bookkeeper, you've got an extreme talent with numbers and finances, etc. And we were just on a Zoom call a couple of days ago with David Richter, who was a sort of a co-writer or writer of a book called Profit First for Real Estate Investors. For those that you're not aware, Profit First was a concept brought to the fore by a gentleman named Mike Michalowicz, or MikeMotorbike.com, to get to his website easily. He wrote a book called Profit First, which based on 5 bank accounts in one bank, 2 in another, to try and break down where businesses put their money when it comes in as income. So they've got operating expenses, tax account, operator profit— or sorry, operator income, profit— and just to basically set it out in a very logical way that makes sense for handling your money. So he's kind of created a financial literacy model for adults, but the reason I mentioned so much about that is that, you know, it really is centered around what I've been working with Tony. And, you know, what do you see with your clients? Do all of them use Profit First? Do some of them use Profit First? Do you, you know, suggest that's one of the things that they maybe use to both make your life easier in their working life, a lot more pleasurable where money's more visible and clear to what they're doing.

So, um, I do have some clients that operate Profit First like to the T, exactly the way the book has designed it. And when you do it exactly the way the book has designed it, it works wonderfully. But then I also have clients that, you know, they have their own method of doing Profit First, and that's okay too. I mean, because it's really about just building that habit of just keeping your money separated. Because, um, the clients that I do see that don't use Profit First and only operate out of one account, they, they tend to have more, um, issues throughout the years, uh, when it comes to like big money purchases, especially a lot of the real estate investors. When you have these unexpected expenses for like a fix and flip or a rental property, um, when you have that money just stashed away waiting for, for that particular event to happen it doesn't really, uh, affect you as much as if you don't have that separated account and you're just kind of like pulling, you know, from your operating expense for unexpected things.

So, understood. Yeah, yeah. I mean, it's— I'm, I'm not— I'm not one of those, uh, first candidates that you spoke of, but I'm a hybrid between pretty much the Profit First model with a few, um, additional implementations that I can make to, to really make that, you know, down to the T. And I think the next quarter I'll probably be putting everything in. But it's just really to gauge really how adults that are businessmen and entrepreneurs are really— are they really financially literate? Is this something that is obviously you being an amazing service to us to give us the clarity of what we have going on, to categorize expenses and income? That gives us a great kind of dashboard of what we're looking at. But Without that, have you— I'm sure you've heard amazing stories, testimonials from people not just using any bookkeeper, but you particularly with that Profit First model, where that's got to change their, their perspective on, on how they handle money. Um, obviously that's just one system for business, could be implemented in that way or a similar way for personal use. How do you see money being handled differently for personal use versus business use?

Um, I, I only have a few clients where I see, um, their personal, uh, expenditures. Most of my clients, I only take care of their business accounts, but I do have two clients that I service almost like an executive assistant to them as well. So I see everything. So, um, they— when, when they get to that level where they need like an executive assistant like that, they're pretty well managed with their money. So, um, but if I, I imagine if I saw the personal accounts of some of my clients, it would probably be similar to how I see their business accounts.

Understood. No, I read between the lines. Absolutely. So from that perspective, um, this is where you are currently in, in your business life. This is how you see the different extremes of handling money and the mindsets towards money. Take us back to your childhood, your younger days where you first became aware of money. What was your perspective on money from the perspectives of those around you? Maybe your parents, family members. Some cultures talk about money a lot. Some cultures don't talk about money at all. How was your family's viewpoint and approach to money? Bless you, dog.

So my parents were totally— had different mindsets about money. My dad, he was always like a really strategic saver. Every Saturday morning I saw him sitting at the table balancing his checkbook, writing out bills. My mother, on the other hand, God rest her soul, she was— when she had money, it was like there was a hole in her pocket. It just had to go somewhere. So I had both extremes. So I could see the stability from my dad and the way he was managing the finances. And then I could just see the mindset of my mother, the way that her mindset was more like, I can't take it with me when I'm gone. So spend, spend, spend. So growing up was just kind of like, yes, growing up, it was kind of like, in the beginning, my mother's way, I'm like, wow, this is fun. I'm sure everybody, as they come of age and start working in the corporate world, like, they're all going to have mishaps with money in the beginning because, you know, you go from being a college student, then getting a salary, and you're like, wow, I can afford all this stuff now. And then it's just, you know, your financial habits aren't really developed yet until you go through the experiences that kind of shape you into developing those habits.

Yeah. And it's very often failing forward in some of these cases, isn't it?

Yes, definitely.

Absolutely. Yeah. So did you have siblings as well? Are you an only child?

I do have siblings. I have an older sister. I'm the second oldest, and then I have a younger brother and sister as well. So I'm actually the first one in my family that graduated college and actually the first one to hit six figures as well. So I come from a family where my siblings and I are second generation US citizens. So my parents were first generation US citizens and my grandparents were not US citizens.

From Mexico. Understood. Have you seen any— did you notice any differences in the habits between your grandparents, your parents, and your generation in mindset towards money and how that's used?

Yeah, actually I did, now that you mentioned that. My grandparents on my mother's side, my grandfather was really similar to my dad. You know, he had a lot of structure and I could tell that he was the one managing the finances in the home. As far as my grandmother on my father's side, she kind of had a hard life. So she was one of those that just kind of lived a simpler life. Yeah. So definitely some differences there. But I've learned from all of those situations just doing from the outside in. At a younger age, you don't really understand, But as you get older, you can kind of put the pieces together.

Yeah. And between you and your siblings, you being the second, obviously there's one before you. Different kids have different experiences when you're the elder or elder of the sort of the generation. I can imagine that there's maybe early on in life before you're really aware of money, there may be a little bit more than maybe when there's 2 more, 3 more children behind you. And now parents are trying to survive and thrive with 4 children instead of 1, then the experience would have changed. But I would imagine unless there's a larger gap between the early and late children, maybe there's—

My younger brother and sister, they're 11 years younger than me. And then my older sister, she's 5 years older than me. So there's kind of some gaps there. But as far as the way that they've developed their habits, I try to be a good influence on my siblings and kind of coach them and lead them along the way. But everybody learns on their own. It's one of those things, just like when you become a new driver, you're just not going to know how to drive by somebody explaining it to you. You just have to go out there and learn those experiences yourself.

Yeah, it's until nobody else is in the car with you when you really learn to drive. And I think that's the same with money. No one's kind of watching over you and guiding you, it's then, you know, you, you learn what it's really all about.

Yes, that's very true.

So it sounds like you've got a fairly balanced and, and balanced experience of two extremes— experiential, as we'll call it, and kind of the more frugal saving side of things. How, how have your— did you go through— and I'm not after specific incidents, but Were there any occasions that you may have bent in one direction versus the other for a period of time? You said you enjoyed spending money for a period of time, and then obviously something kind of brought you onto the course that you are now, where now you're advising other people about what to do, not necessarily what to do with their money as far as spending it or investing it, but how to manage the money that does come in and make sure they keep as much of it as they can. In parallel with CPAs that I know you work hand in hand with a number of CPAs as well to support your clients.

Yes. So I think what really shaped me into kind of getting a full grip on my own spending habits was just seeing the clients that I was servicing and knowing their stories of how they started. It's actually really intriguing to hear how some of my clients started. One in particular, you know, started as a landscaper and then ended up becoming like a multimillionaire. So like kind of just seeing and, and, um, hearing those stories, just it kind of shifted my mindset to like, you know, maybe I should kind of follow what they're doing, or maybe I should, you know, it's like you, you, you want to just learn from somebody that's already been there and is where you want to be. So I think a lot of that, you know, and Even still today, I learned so much from my clients that are in places that I want to be eventually. So that really helped me to form those kind of different mindsets for me as far as not spending on things that I normally would have.

Do you find that those from more humble beginnings are more diligent with their money versus people that not necessarily have means, but of middle class that had something but didn't necessarily have an uncomfortable life might be a little bit more frivolous with their, with their money?

I think so. That seems to be the pattern. A lot of people, you know, you hear it all the time, like a business will not survive like within the first 5 years. And that's because a lot of people, you know, money starts to roll in and they don't really know what to do with it. They're kind of thinking that it's just going to continue rolling in. So it's just continuously going out at the same time. And then things happen, you know, like recessions happen, the, the market shifts, and you just have to be prepared for that type of stuff. So, um, I think it's just a learning process for everybody, you know, because I've also had, um, businesses in the past. I've actually had a failed business in the past. Um, I had a construction management company with two business partners, and we did really well. We did subcontracting for the Army Corps of Engineers. So we were getting jobs, you know, doing beach renourishment projects. Um, and as that money was coming in, you know, with 3 owners and different mindsets, you know, like, um, the business just— it didn't last because we had, uh, one of our owners had the— still had the mentality as an employee. So the more money we got, the more money he wanted to take. And it just, you know, it— we we just didn't, we didn't last because of that. So, um, so that was one business that, that didn't really last for us, but it could have been a great thing. But, you know, it's just a lesson learned. And, you know, when you go into business with somebody, it's— you got to make sure you really know them. It's like you become married to them.

Yeah, yeah. So not that you're advising people on becoming financially literate, but what, what have you seen out there for different age groups and even adults to learn about handling money and what, what different, um, areas of wisdom are necessary to sort of be more diligent and more, um, aware of the possibilities of not just being a consumer. Um, you know, there's a consumer lifestyle, but then there's an extreme consumer lifestyle, which, you know, instant gratification, 0% finance, leave the store today, pay in 5 years, and they forget until the day after the 5 years is up, and then suddenly they've got 5 years of interest, which they've tripled the value, the cost of their product. There's obviously very different extremes. There's other, the Dave Ramsey sort that just want to save up for everything and miss so many opportunities in life. What resources are there out there that you've seen to aid? I mean, primarily, we just keep finding that the adults are the problem. We can't just encourage adults to create financial history for their kids without creating financial literacy for themselves. And I think there's, there's a great unawareness or lack of awareness in adults that they're not financially literate. They're just getting by paycheck to paycheck. So, you know, we really, we're looking for ideas, and I've done a bunch of research. I mean, like I showed you the other day, My Money Bunnies for the elementary school age by Mike Profit First is effectively a template for a business, but it's not necessarily explaining more about what the difference between assets and liabilities are. And I'm sure I'm probably going to lead into you speaking of Kiyosaki's book in a moment. But what have you seen out there for different age groups that you might be aware of?

So a lot of my financial literacy just came from reading books and then just from observing the habits of my clients. Because I do have clients on the other spectrum where they have a lot of credit card debt, and then I see the struggles that they go through when they have big money coming in. Do I pay the credit card down or do I keep going? So a lot of that was how I learned, just by observing and then also reading books like The Millionaire Mindset. That one was a really good book.

Yeah, I love that one.

Yeah, because that one really goes back to your childhood and explains how you develop your financial habits by watching, you know, how your parents handled money. So I really liked that because that opened my eyes to see the differences between, you know, how my dad was with money and how my mom was with money. Um, as far as any other resources, I mean, really, like, just find somebody that, that's already where you want to be and then just, just follow them. They've already got the blueprint for you, you know, just follow their lead, just, you know, take any instruction that you can, you know, reach out to them, ask questions. You know, a lot of people that are wealthy, they want to help others to get to where they are as well.

Yeah, I think that's for the entrepreneurial mind. I think that's probably a lot easier for to do, to ask for help, where people may be, you know, embarrassed about their financial situation or just not aware that other people are willing to help, where maybe they're living more in the sort of survival energy where they feel threatened by everything and they don't know what to do. And really, I think at that, at that level, the only financial literacy or financial education at that point is sometimes credit counseling. When you've got an overwhelming amount of debt where you have to surrender to, I can't do this anymore, you go to a credit counseling agency and they negotiate with your credit cards or tell you not to pay for 3 or 4 months so they can close the account. And then put you on a payment scheme which you pay up the butthole for as well. But sometimes that's the only thing that happens. And I don't know the percentage of people that come out the other side of it as reformed. And other— you know how many come through just the other side and are in the same position again within 2 or 3 years? It's like the lottery winners. Within, within 2 or 3 years, many of them are bankrupt, or at least in the same position they were before the win, within a very short space of time.

Yeah, same with, um, people that file bankruptcy. I mean, there are people that file multiple bankruptcies, and, you know, you would think that somebody would learn from the first one to know what not to do for the, you know, to be in that situation again. But it happens, you know, you, you hear it all the time, people filing bankruptcy and then 10 years later again another bankruptcy.

Yeah, I, I think that's, that's all too common. I think sometimes it's used as a tool in some cases, unfortunately, because it's, you know, I'm not making a judgment, but maybe there are some abuses of the system, as there are of any system. But, um, you know, I think that that can sometimes be used as a tool. But, uh, so looking, looking into books that you read, you mentioned, uh, Secrets of the Millionaire Mind, T. Harv Eker. That's one of my favorite books. I love, I love his voice and his character in the book, and I think there are definitely benefits and drawbacks to listening to Audible. You get to very often hear the author and you really get the character. Sometimes they throw some extra information, like David Goggins' book, there was a little extra bit in there. I think Mike McCallum, it's put some, some extra stuff in Pumpkin Plan or one of those books that he did. Um, but what books have you come across? I mean, I mentioned The Richest Man in Babylon, that's a good one too. Great book.

I like that book. Yes. Because that really teaches you the concept of taking a portion of what you're earning and then reserving it off to the side.

Yeah.

And then Profit First. Of course, everybody's read Profit First. And Profit First doesn't necessarily have to be just for business. You could just take those habits and shift them to your personal accounts. I do it all the time, and I even have my kids do it. I'm like, even if you just have another savings account to the side, Um, I tell my son, like, anything that, that comes in, just start low. Like, put 1% of that into your savings account. Every time you get money, 1% in there, 1% in there. As you see it grow, that's gonna excite you. That's gonna get you addicted to just, you know, see that account grow. And then maybe, you know, 6 months from now, up it to 2%. Next thing you know, you'll be up to like 5, 8, 10% that you're saving, and then it's just going to continuously grow. You know, because my son, he's 26 years old, so, you know, he hasn't bought his first home yet, but that's one of his goals to do. And, and I try to instill this in him, like, just, you know, it might seem like a little bit that you're saving now, but as it grows, you're going to be surprised to see how quickly that account will grow.

Yeah. So what, what product are we talking about? Kind of older child things now. Um, What, what products out there are kind of adults using to, you know, prepare for retirement and, and invest their money? I know I've got whole life, I've got a self-directed IRA. What other, what other products are out there that the adults are using to sort of help, you know, uh, not, uh, put their money in places where the tax code is favorable as far as long-term, you know, building of wealth towards retirement? What have you seen out there?

Um, I see a lot of, uh, the younger generation, um, investing in like crypto and Robinhood. Um, you know, I know the stocks right now aren't doing too well, but you know, about a year or so back they were, they were doing great. But, um, I see a lot of kids getting involved in that, especially now that it's really easy to, um, you know, download the Robinhood app and then just kind of like play around with stocks and stuff like that. Um, I always try to tell people too, especially the younger generation, like, you know, develop a skill and, and offer it as a business. It's so easy to start a business, you know, and then you just become independent. And you'd be surprised, like, you know, if you have a skill and you can solve problems, I mean, that's really all you need, you know. Like, if you're good at what you do and you're, you're a good person, like, business is just going to come to you. Yeah. And I feel like that's just right. I mean, because you can't in this day and age, you can't just live off of a W-2 salary anymore. You know, you have to have some— you have to be building something on the side. You have to have a side hustle. You have to have something to supplement that income because it's just, it's just not enough anymore.

Yeah, absolutely. Especially these things. I mean, I think in the '60s, '70s, it started changing through— definitely through the '80s where the affordability of homes wasn't possible for a single person. They had to be you know, husband and wife had to be working rather than, you know, one of the two parties. And, you know, that's just, that's just grown even more with inflation and cost of living rises. I don't think that's going to stop.

No, that's definitely not going to stop. Yeah, I mean, gas is at its highest that it's ever been historically. It's costing me more than double to fill up my car now.

Yeah, yeah.

And it just, it just makes you wonder, like, how is, you know, somebody that does live check to check, like, how are they dealing with this right now? You know, it's Yeah, it's pretty sad, you know. I mean, the price of groceries is just ridiculous, you know.

Yeah, it is crazy. So what I've been looking at recently is, is the fact that whole life policies, like Kirk was talking about in the, the recent, uh, podcast that he did—

Kirk Hortal—

he's got life, whole life policies for his, his baby, his, his children. So if we did that so early for our kids and even just made it a $10 a month premium for these kids Imagine by the time they get to 18 and we've been able to invest some of those funds for them and they've got, you know, a substantial— maybe it's $50,000, maybe it's $20,000, who knows— in that hockey curve at that point. Self-directed IRAs, I believe, can be opened at a very young age so that kids can again start maybe 10 years before they might otherwise start saving for retirement or having funds that they can actually go and invest. Um, how, how do you think it would be accepted with some of these entrepreneurs particularly starting up similar products like self-directed IRAs, whole life, that type of thing, with their kids at an early age where they can actually invest together in real estate, whether it's acquiring assets they completely own or whether it's, um, investing in other people's projects where they can get a return, whether it's debt partners or an equity partner where they can maybe also get tax relief as well from depreciation and even charitable donations from that, which also still builds up their policy. Do you talk to any of your clients or hear about that with your clients?

Yeah, I actually have one client that has a whole life policy, but I do have other clients that have the self-directed IRAs. I did have a client that actually I have another one right now that there's a way that you can add your children to the payroll of your business, and that becomes a good tax strategy for you as well, because as long as you don't pay them over a certain amount, then the income becomes nontaxable, and then they end up getting a tax refund. And then it also benefits you as a business owner to pay that salary to your children. Yeah. And another tool that I've seen recently, too, is that people are adding their children as additional cardholders to their credit cards, and then that builds up their credit as well. Even though they're not the ones that are applying for the credit, they're added as additional cardholders. And then it's just, you know, it's building up their credit. Maybe you get to a point where you can trust them and actually give them a credit card. I actually, when my daughter went away to college, I helped her get a Discover card for her, and I've taught her too, really well, like, how to manage that. And, you know, money that she got, a lot of scholarships because she's really exceptionally smart. And so she was getting basically extra funds every semester, and we opened up a savings account, and then we would just leave her just enough for her to get by, you know, and then we would put the rest in savings, and then I would I would send her snapshots of, you know, this is how much you have in your savings. And she liked to see that account build up. And so I helped her get her first Discover card. And I've, you know, showed her and explained to her, you know, that this is very important for you to manage and it can affect your life very negatively if you don't manage it correctly. So she's done really well so far. And yeah, really impressed with that.

So That's awesome. So, um, there's, there's a lot of strategies out there, but we— I've been talking with a couple of people about, you know, we want to either buy rental properties for ourselves, have a portfolio that we kind of, you know, give our kids through inheritance at some point. I think these are some of the ways that we could do that, that, uh, investment with our kids to invest in, in rental property. So it's almost like a relay race. So you're building the parents financially literate, they've got an idea about what they want to do for their retirement plan and their long-term passive income. But if they invest with their kids, their kids are learning along the way that Daddy's got 2, 3, 4 houses. And by the time that the inheritance comes, or at least the retirement where the dad or mum doesn't want to deal with managing the property anymore, they've kind of handed over the baton to the child that already knows what depreciation is, what the cash flow is, how to manage the vacancy and repairs. All of those things so that they can just kind of transition seamlessly instead of, you know, at a passing that I often see with probate cases. There's 2 or 3 different siblings and none of them are on the same page. One wants cash right now because they're terrible with money. One's willing to wait, but they have to come to some sort of agreement on what goes on. But again, that's selling the asset instead of having a cash-flowing asset, which could be a very long-term wealth-building tool for these people.

Exactly, yes, definitely.

So wonderful. So, um, I've covered all of the ground. I think we've done really well. The conversation has been amazing. What else would you like to share with us about your, your experiences with, with, with, uh, financial matters, families, you know, not necessarily specific clients but just, just humanity in general with money? What have you noticed? Has there been any changes over the last 10, 20 years? Do you notice in habits?

Um, I do notice, um, you know, like, I noticed that when you can always tell when somebody is bad with money, I mean, at least I can, because they're more concerned about things like name brands or flashy stuff or just trying to like impress others, um, living beyond their means. And, um, when I started working in this industry, you know, servicing a lot of like high-level investors and and wealthy clients and helping them manage their money, it was really shocking because I always had this impression of wealthy people that they were real flashy and arrogant and this and that. And really, they're just normal people. They're just like walking around you all the time and you won't even realize that they're a wealthy person because they blend right in. And that's what I noticed is that somebody that is very wealthy and good with their money, they're not trying to show it, you know. They're just kind— they're just living, uh, among us, and you, you don't even realize it. But the ones that, um, are not very good managing money, it's like they're trying to prove all the time that it's the wannabes. Exactly.

And they think that they should be because they're, they're in survival energy ultimately, right?

Exactly. So it's more about just trying to make an impression, and then you know, not realizing the long-term consequences of those decisions.

There's an expression I heard a few years ago: people that buy things that they don't need with money they don't have to impress people they don't like.

Yes, exactly. There's a lot of people stuck in that phase right now, and, you know, hopefully they can smarten up and get out of it.

Absolutely. Well, Toni, thanks so much for spending your valuable time with us. I really appreciate you. I'm sure we'll connect again in the next couple of weeks. But yeah, thank you so much for joining us. I'm not sure who we have on next week. I think I've got a couple of people lined up. We're just scheduling people, but you've been great, great value, and certainly your insight is immeasurable. Thank you so much, Toni.

Thank you, Trystan.

Appreciate you. Well, until next time, guys, have a great, great week, and we'll see you in a couple of weeks. Take care.

Bye-bye.