[Music]

hello everyone I’m Kiko Suarez and I’m here with Jim my co-host welcome to

episode two of fire your boss how are you doing today Jim incredible Kiko how was your day buddy doing great uh I’m

very excited about this episode and I’m tell I’m gonna tell you why because I’m gonna ask you questions which I normally

don’t get to ask you many questions but I’m very excited I have to say to the audience that um Jim is not only a

friend and a co-host in this program but it’s a person that has wisdom in this space and a lot of experience so we both

thought that it would be a great idea to start episode two asking Jim a few

questions and the questions are probably more about both your personal experience as an entrepreneur but also helping

others and so let’s let’s start and I’m gonna and I’m gonna just say that this

episode is more for those that have been or have right now a corporate job or a

job sure and considering starting a business right but they are in that stage where they are still thinking

about it and there are many questions in your head so we’re going to try to just kind of address some of those but before

we start tell us more about your background and how we both thought it

would be relevant for this episode well I’ve been fortunate to run and operate a

financial coaching and advisory firm for about 22 years uh as you learned in the

first episode I fired my boss on March 24th 2002 so I’ve been full-time for 21

years but I did it part-time uh for about a year and a half before that and

you know we come alongside families and individuals to teach them how to tell their money where to go instead of

asking where it went and in my travels and in my relationships that I’ve built with people over the years there’s

people that have come and go in my business as clients and as teammates and some of them actually several of them

have gone on to launch their own companies and said hey it was you that kind of encouraged me it was a CD that

you gave me it was a book you gave me to read it was the encouragement that you got that I went out and launched and found out my own it wasn’t in financial

services that my destiny was it was something else and so over the years I’ve inadvertently helped people launch

their businesses and kind of encourage them and help them prepare financially going into it and just kind of giving them locker room talk and I didn’t I

don’t specifically help people with planning to launch a business right but

there are some basic fundamental things and uh to put people in a position where

financially they can fire their boss and come full-time and leave their job

behind and I love that because you talk about fundamentals and sometimes we think we have them but we probably don’t

and so let me ask you what are the things or the metrics that you would use

as those fundamentals to start with what what do we have to bear in mind yeah I

mean the first thing that comes to my mind is the statistic which again

sources may vary but where eight out of 10 businesses fail within the first five years I think I looked it up one time

and it’s worse than that wow uh but that’s you say well that that’s

discouraging no there’s a reason for that and in my experience it doesn’t

necessarily I haven’t seen a lot of businesses fail in the first five

years my experience is sometimes the business doesn’t fail but people just don’t make enough money enough cash flow

to continue pursuing their dream Ah that’s difference that be running a restaurant or a boutique or whatever the

case may be being a consultant of some sort right and so many start the

game with a lot of liabilities that need to be serviced

and a lot of huge debt loads or a massive mortgage that needs to be

maintained and so I say you know the debt monster comes in every single month and the debt monster is hungry and you

got to feed it because you know the banks are your best friends they say hey Kiko no problem buddy you’re good for a

half a million we trust you it’s all good I mean they shake your hand at the table I mean everybody’s high-fiving and

there’s pictures on the internet with your mortgage broker and all that and then but you go ahead and fall behind

two months and see how that relationship goes it turns into like The Sopranos or

Good Fellas like yooo Kiko Hey Hey where’s our money buddy like I thought

we were a best friend yeah hey you you hey you don’t get the money in here in the next 30 days we’ll send the dogs out

we’ll ruin your credit we’ll mess you up so these are the fears that people have on striking out on their own because

those are real things so the reality is what I think step one is you have to

figure out what your zero is what is your z mean more yeah yeah that’s interesting that’s what I coach

everybody you figure out what’s your zero so your zero means it it ain’t

Netflix anything would bed or bath or Beyond or anything in that that’s not

those are all wants you have to figure out what your barebones needs are your

rent or your mortgage your gas your heat

bill in the winter time right I mean all of these basic things because some people I mean I’ve I’ve had people come

up to me and say man I want to come full-time right away it’s like okay how much do you need to make in order to get

by they go oh six grand I start laughing at them yeah for

sure good luck with your interview process uh I will be your biggest cheerleader to go get a job because you

can’t go into business and come in day one and say if I don’t make six grand next month bad thing are going to happen

right like you’re out of control your liabilities you’ve you’ve spent yourself

into a job you will be sentenced to a job for the next five years unless you get your head out of your rear and get

your finances together okay because when you come in and let’s say but but the reality is if if you got the

entrepreneurial bug when you’re 25 the great news is man what are your what

were your what was your zero at 25 like if you made two grand a month you were great yeah okay on Once you turn 40 you

have two kids in travel soccer now you’re zero and you get a mortgage in Caramel you’re zero becomes like five

grand a month right like that’s tougher it is tougher okay no doubt that’s why

less and less people do it but here’s the deal it doesn’t mean that you can’t do it it just means that you might need

preparation time from the time that you got the entrepreneurial Epiphany like I want to be on my own I

want to be free all right remember Andy from the Sha Shank Redemption I know in the movie he

was incarcerated for an hour and a half but that was actually like 20 years that took him to dig out of the prison right

so you got to start digging when the warden isn’t looking and if that’s from a financial perspective in my case my

wife we agreed that she would stay at her job which is a teacher our goal was to get her out of her job but she was

going to stay in her job and if she made three grand a month and our zero let’s

say our zero was five grand it wasn’t that much back then but if our zero was five grand then it means I needed to

make two grand a month that was my zero I need to map out the

metrics and figure out what business I need to close or what deals I need to

close in order to make sure that we net $2,000 a month so we can pay our bills

for that month does that make sense that’s what I mean by zero what is the Bare Bones and if somebody says well six

grand is my bare bone no no no that really means it’s 4500 because you’re spending a bunch of money you shouldn’t

spend on stuff you don’t need to spend it but still in that 4500 can we get that down to

3500 if we took the next year and you pretended like you were an entrepreneur

maybe you started it on the side but you got really really really disciplined on your personal budget and

only spending money on needs instead of wants and you went crazy for the next 12

months how much debt could we pay off could we get rid of your car payment over the next year could we get rid of of a credit card right could we build

your emergency fund so that zero when you go back to to metrics that zero

let’s say the zero is 3500 you have to multiply that by three or maybe

six because you have to figure out what emergency fund you’re going to have to have in order to give you the cushion to

walk away because you will have months even if you map it out on paper I know it’s hard to believe kind of like

you know Mike Tyson says everybody has a plan until they get punched in the mouth right you said well I’m going to make

two grand all I got to do is this to make two grand okay I guarantee three months from now when December turns around and you’re G to make $800 and

your wife is going to be like dude or your husband like I thought you were gonna you had to make you better have an

emergency fund and that emergency fund for me because I grew up broke and I never I just

Kiko the wor worst thing to me the worst thing in my mind maybe it’s my pride

maybe it’s because I like to do what I say I’m going to do the worst scenario wasn’t going bankrupt the worst scenario

was me having to go back and ask my boss for my job back like that’s something

like literally I said that will never happen so in order for the reason it

took me a year and a half to come full-time is because we paid off $122,000 of credit card debt and we

saved $10,000 in our emergency fund and as I think I mentioned in episode one my

my my job Freedom date was March 24th because I I got five years of tenure on

February 24th which means I got an extra 20% added to my 401k and my

non-qualified account so I think I got an additional 10 grand put into my retirement accounts so

we saved 10 grand and I got an additional 10 grand that was just sitting in accounts that wasn’t my 401K

so I didn’t have and that was $20,000 and that was my comfort

zone I had some mentors that said dude you should quit now because once your

back is against the wall you’re going to have to perform maybe and maybe that’s true for some and maybe you’re wired

that way but I grew up poor I do not that’s the worst thing to me I don’t

want to have to feel that again so I wanted my cushion to be such that even if I was a fool and even if things went

sideways that I would have enough to pay our bills and so I saved 20 grand and paid off a bunch of credit card debt to

put us in a position where our zero was a reasonable amount and that I had

enough as a cushion that if I didn’t do what it take if I made zero bucks in March I could take two grand out of our

savings and make sure that we made enough to pay our bills and that’s how I make sure to do it and I gave my wife

some security that we had a plan that I wasn’t just doing it because I didn’t like my job right right you know

so let me let me see if I understand this Jim so on on the one hand you have to be realistic and pragmatic about your

zero right it has to be the needs not the wants correct once you get to that

number you have to basically multiply by say six so you have six months of

Runway that will pay for your Essentials without you panicking and hitting the I

want to go back to word for someone button right right is that right that’s

right I say you know the most important thing isn’t getting married anybody can

get married the key is staying married right anybody can leave their job lots of PE

probably a million people around the world will leave their jobs today but how many will go back and ask and beg

for their job back you know 90 days from now so right right yeah it’s just the preparation yeah and it makes makes a

lot of sense I think that the whether you want to be on the on the more aggressive or or more conservative side

you said three to six months I would agree with you six months I remember back in the day someone told me exactly

the same thing and those six months go fast and go fast without you necessarily

as you said generating a lot of money at the beginning right it’s your intro months you have to let people know that

you exist then you’re not going to be selling Like A Champion uh whatever you’re selling products or services

until people get to know you and it’s funny because I went through a similar situation where right at that line I

don’t know if it was a miracle or not but right around the six months is when people started to get to know me in my

in my in my new thing and so there’s something magical about giving people time to

reposition your the image they have of you as this new person right so it’s

it’s a it’s a it’s not only a financial thing but it’s almost kind of a branding repositioning thing that also takes time

right yeah 100% I mean people it’s an ego thing because people here here was

the deal with me people would have said I’m a nice guy I’m a fun guy I’m a loyal guy but here’s

what I realized when I stepped out into business and I went out to talk to friends and family I thought they’d all be like oh yes come rescue us

financially and we need this help they’re all kind of blue collar and I know that there was some needs where I’m

from but the reality is I

failed to put enough credits in okay when I had my job and when I was

things were going I mean things were going great for us we moved over the corporate ladder and we didn’t go to the

family reunions and stuff like that we didn’t go so it was like you can’t make a withdrawal if you haven’t any deposits

I wasn’t in overdraft nobody saidwell that guy’s a jerk I don’t want to do business with them they were just like

they were just ambivalent they were like eh yeah we’d love to hear what you do but we’re kind of busy our kids got a

baseball game so you know let’s catch us catch up with us next time you come in so at that moment I realized that and I

had to look in the mirror and that was probably the closest I ever came to quitting is when I realized that I

hadn’t deposited enough credits that when I started asking people for favors they were just uh apathetic right

and it was very disheartening and so at that moment that’s when I really started changing my life for the better because

at that moment is either quit or get better and I decided to get better and I started doing thank you cards and I

started volunteering to help people when they ask who can help me move I was the last person to volunteer before I became

the first person and I started trying to establish credits in people’s love bank

or care bank or whatever you want to call it and it really helped me in my business business because that was a

moment where I almost quit when you’re talking about where you have to go out and Rebrand yourself right and you just need time to

do that and some people it happens like that and maybe the challenge in their business will happen three years from

now and other people like me that I never branded myself I never thought about it I was just an employee the one

day decided I didn’t want to be anymore yeah and that does take time and it’s interesting because that’s also

something that you would you could call Social Capital right you have to have some social cap capital in addition to

actual Capital to start a business and % it’s a it’s a great it’s a great piece

of advice that if you ever have something like this in mind even if you don’t but if you do have the idea of

starting a business um getting to know people and developing relationships that

matter is important because you never know where and it’s very karmic right when you do well for others when you’re

doing well they will do well for you when you need it and so and nobody explained that to

me because I grew up in my parents were in survival mode and most of the people around me and that’s that is not a

higher you know maso’s hierarchy um that’s that’s you know I

was always in survival mode and taught the survival mode skills nobody explained to me that social capital and

investing you know I call it people’s love bank I didn’t have any credits in their love Bank yeah absolutely so when

I went to wake a withdrawal it just said hey I’m sorry yeah no balance someone

said once I’m not going to say who that was but it was a it was a very important Mentor in my life too that said the world moves based on two

axes ideas and relationships so it’s funny how I mean

money is there right it’s fuel for things and he may come and go but

everybody thinks they have the best idea right but if you don’t have the relationships it’s not going to work and

so this whole concept of ideas and relationships builds very well into what

you just said that uh you have to have um a very intentional approach to um

position yourself in the community or whatever you’re serving uh as someone that is trusted a trusted source for

anything not just business and then they’ll come to you when when it’s time for business so I love it but tell me

now let me just go back to the money side so um how do I budget for this how

do I prepare I have my emergency fund right I listen to you I’m working on my zero now I multiply that by six I have

it in the bank what’s next uh I have very few original ideas

in my life most of the things I do is taking somebody that I admire and kind

of making my own spin on it but I had a couple original thoughts in my my life and one is called the debit card

Challenge and maybe this existed I’m sure it did before I came up with it but

I was in financial services for like 10 years I’d never heard anybody refer to it um but this is what I did one day

when I came across a client that didn’t they wanted to do everything and they said Jim you’re amazing I love this I

want to do everything but I don’t have enough money to do any of this and so

what I did out of desperation I had her go home and take the last two months

bank statements and put a w next to once and an end next to needs and I want you

to add up the W’s for one month and then I want you to do it again

for another month and I want you to take those two numbers and average them together and I said we’ll meet on

Thursday and the first thing she did when she walked in I said Hi how are you

and she said Jim I don’t like you very much okay she said I would have put my

hand on a stack of Bibles that I didn’t have any money I was living Check to Check like all these

ideas sound great oh yes yes you need life insurance an emergency fund yes I

know all of this but I don’t have any money she is a single mom she found $350

a month that she was blowing on nothing and so

I challenge people if you’re trying to figure out your zero and you’re trying to get into a position do the debit card

challenge for you maybe your spouse and find out how much money is leaking out of your budget it’ll help you better

understand what your zero is but it will also help you understand how much money

you’re blowing that you could be saving towards your emergency fund right and it’s funny because even before you

you and Jay put the idea of fire your boss podcast into my mind I would

jokingly at the kitchen table when I was talking to clients that said well this could be an emergency fund just in case

of emergency or like me it could be called the fire your boss fund because when you get six months of of emergency

fund but I wasn’t talking to them about it in an entrepreneurial way I was saying have you ever been in a job Kiko

where somebody mistreated you misspoke to you looked down upon you told you to

do something that you knew in the back of your mind or in your heart was unethical but you did it anyway right

yeah it’s because you had to have that job right I go but if you had six months

of necessary expenses and somebody mistreated you somebody asked you to do something unethical somebody

discriminated against you somebody sexually harassed you if you could walk away and give them the hand on your way

out the door because you had six months saved how would that make you feel you do

it I always talk to them about just putting a bulletproof Vestor on their

finances that if anything if they passed away if they lost their job if their tire went flat if their boss became a

jerk at some point in time that they would have enough money saved up that they could walk away and not have that

stress but I never used it in entrepreneurial Tunes I used it joking around and I said the fire your boss fun

you got it is your fyb absolutely your fyb fund for sure now and I was I was

super unfortunate guys that I came into a business that had very very low

operating expenses okay I probably needed like my operating expenses were

maybe 500 bucks a month because I think I helped I shared an office so I think I

paid like 200 or 250 for my rent every month uh gas which back then was pretty

cheap and then I think think I I was so bad at Administration I was so bad at

paperwork I say Kryptonite is to Superman as paperwork is to Jim uh my

mentor told me even though I was brand new full-time I hadn’t made any money

yet I didn’t have any business closed yet my mentor said you need to hire an administrative assistant I’m like I

Administrative Assistant for what I got no pay for he’s like when you do you’re

going to screw it up or it’s going to take time away from what your strength zone is which is building relationships

with the clients helping put together Solutions you don’t want to be stuck doing paperwork that’s $10 an hour work

you pay somebody $10 an hour to do your paperwork for you and you can focus on the 100 or 200 or $500 amount $500 an

hour work and so when I was I think just came I might even have been part-time

still but I I was pretty sure when I came full-time I had an administrative assistant that I used for probably 10 to

12 hours a week but I paid money out of my emergency fund because I wasn’t making any money but ultimately that

really wor I still give her all the credit in the world her name is Sue because she was so patient with me she’s

like when people say they’re bad at paperwork you’re like professional like

NFL level bad at paperwork and I still give her credit I like if it wasn’t for

Sue we would have been out of business many many years ago she really saved me early in my career so sometimes it’s you

know just doing the debit card challenge to help you budget and sometimes you know it’s investing in certain areas

where it can free you up as a business owner to do the things that you um are

really good at that that’s important because the concept of investing is tell me more about that I

mean what I was listening to a talk the other day that that was very similar about uh uh Investments as an

entrepreneur and sometimes people can invest directly from the position they’re in sometimes they cannot but

investment is a it’s a it’s a broad concept um it’s not only going to the

stock market and just buying some stock here and there um so what is your advice

and I know let me just kind of go back and say based on your experience because you cannot advise people in a podcast

that is a again a blanket advice to every everybody to follow the rule there’s no rule here and I guess if you

were going to talk to me in private you would say Okay Keiko what is it that you really have um but when it comes down to

the word investment now so you talk about debt you talk about budgeting you talk about the debt

uh challenge what do we say to the listeners about investing as

entrepreneurs yeah well you know when I was new in businesses I kind of

mentioned I used money from my investments to stay afloat in the first

three years that I was full-time you know it wasn’t our

business plan but I also started my business at the beginning of the worst

10 years in the history of the stock market so when you talking about great

timing buddy yeah but I I learned a nugget out of that which check this out

uh businesses are 10 times more likely to succeed if they are started during times of economic uncertainty I love it

that’s a great quote and a reality right so you know um obviously you want to

always avoid cashing in your 401k or anything like that to start a business but some

people I’ve met they cash in their 401K they netted 400 Grand because that’s the

investment required to start an actual business where there was you know

Machinery or a system or maybe like a franchise and that’s a decision that’s a

tough decision but that’s a decision that everybody has to make at some point in time I was fortunate I didn’t really

no Capital was required upfront I paid for all of my licenses and did the heavy

lifting when I was part-time so I didn’t really have any capital investment other than just making enough to pay our bills

and I’m a recovering introvert and I was terrible at sales so the reason I needed that cushion is because I was terrible

at sales and I was introverted so it means like prospecting was like go throw

up you know what I’m saying so I knew that about myself that’s why I built up a cushion but if you cash out your 401K

I mean that’s like 30% off the top so that’s not necessarily you know where I

would start but on the investment side of things some people like if your if your business is going to be your cash

flow machine then that’s like you should be able to get better I mean I I I

cheerlead mutual funds all day every day but you should probably be able to get a

better rate of return in your own business if you reinvest back in your business depends on what it is right and

so sometimes the investment that you need to be investing in is

you like I have people say okay like how much do you think you spent on gas this

past year I mean I don’t know let’s say if it’s a hundred bucks a week or whatever

it is right 50 that’s five grand okay how much did you spend in oil changes 50

bucks a pop maybe I did four though that’s another couple hundred okay so you spent six let’s say put tires on

whatever right you spend six seven 8,000 maintaining your car this year to

make sure it runs smoothly how much did you invest in your

mind how much did you know how many entrepreneurs including me that gave

everything they got man I’m GNA because I was 30 and I was like bulletproof and

next thing you know you know I think they said what the Freshman 15 when you go to college man you like the

entrepreneurial 30 right because you’re driving from client appointments the next thing you know you’re eating a

McDonald’s drive-throughs all the time and next thing you know you’re not as healthy as you were when you started

this thing so you got to invest in your body in your mind those are two things don’t forget when we talk about

Investments people think like gold and mutual funds and real estate and all this say make sure you’re investing a

portion of your income back into yourself because you have to feed the goose that lays the golden egg right

yeah you’re the asset basically we talk about assets and liabilities you’re the number one asset it could be that you’re

putting a million dollars to acquire a factory and that’s your entrepreneurial venture awesome but the

average person the 80% of us started with nothing we were self-employed even

though we said when we we gave our business card I own my own business not really you don’t own anything okay but

all of us started from the same place and eventually I do have a business and we have 5 five licens reps and we’ve got

an amazing office right but when you’re brand new sometimes you are the investment you need to invest in I tell

people in the first three to five years don’t even worry like please don’t worry about anything invest you shouldn’t be

saving anything for the future you should just be make sure you stay in business now once you became a business

owner the world opens up to you for investment possibilities as an employee you have

you know your Roth IRAs and your 401ks and stuff like that but once you become an entrepreneur believe it or not a

bunch more windows open up for you where you can save and invest a bunch more

money than the average employee can and get a a bunch of tax breaks that the average employee may or may not have

access to so there’s all kinds of Windows that you can jump in once you start cash flowing positive that you can

rebuild your wealth whatever you invested in your business whatever salary you gave up for three years as

long as you work the business plan you should be able to make up for that in addition to the value of your business

at some point in time so I tell people don’t worry about investing you invest in you and you invest in your business

and make sure you stay in business for the first three to five years then we can come back and loop back around and

talk about hard assets right yeah because it it sometimes we forget that

this the only distinction between asset and liability is that the liability is costing you money but the asset is

making you money right so your business is designed hopefully to make

money so you’re gonna be you’re gonna be able to if you reinvest in your business

to keep making money whatever the pay is and so I think that’s great advice

sometimes we just kind of forget the fundamentals right yeah yeah and like on a very practical note before I move on

to the next topic is you know when you leave your job your

group coverage is going to leave you as well and what I find is six out of 10 people have no kind of life insurance

outside of work they’re counting on work six out of 10 that’s a lot and the other

40% that do have coverage about eight out of 10 of them probably the wrong kind so I would just say make sure

because if you are the one building the business providing the cash flow for your family you’re investing in you

because you are the future of this business if something happened to you make sure as part of your planning you

get with some sort of coach on the insurance side of things and make sure you have enough life insurance and that

is squared away too that if something were to happen to you all of your um toil doesn’t go in in vain right and

that’s not like a plug for life insurance I’m just saying like if you

are the business and you are the driving factor and the investment is in you and you’re self-employed if something

happened to you all that future cash flow goes away so make sure you have that as at least part of your planning

you know if it’s low cost term insurance or whatever just make sure you have that as part of your planning that if something God forbid happened to you

between now and then that your family isn’t going to lose out yeah now it makes a lot of sense it’s just basically

protecting that asset that you have which is you you are the asset and so then you you have to somehow protect

that make sure that that it’s not lost so you know about that too there are a

couple of other areas where we probably cannot necessarily do things on our own or at least you would say go ahead and

ask for some advice and and and that is health insurance and and maybe even

taxes how do how do we manage this transition because you know I was incorporate I was probably not paying

attention to a lot of these things right right now all of a sudden I have to take care of my own health insurance and my

own taxes so what are your Reflections on those two points I mean that’s what

again keeps a lot of people on the sidelines because that’s the biggest fear I can’t leave my job because I

won’t have health insurance that’s what they want you to

think okay have you actually gone to the marketplace and find out how much health insurance

is like that’s step one I don’t deal in health insurance but find a health

insurance broker tell them that you’re thinking about doing business with them and I promise you they’ll meet with you

and probably buy you the coffee okay and just say hey my plan is

to be out on my own within the next year or whatever your time frame is and I

want to know what it would take to protect me or protect me and my family what are our options do I have to get it on my own can I go through the

affordable health go go to an expert that gets paid to broker what you want

and get a quote and build that into your zero a lot of times you think that your

company is providing so much value that’s their per that’s their grip upon you is that I can’t walk away because I

won’t have where do you think they get the health insurance from they get it from the

marketplace okay that that they have you have access to the same River of

benefits that they buy the only difference is they have a little bit more leverage because maybe they have 50

or 100 employees but it’s it’s not that much difference okay so before you worry

yourself to death about that find out what’s on the marketplace and then you can kind of determine right I have a

friend of mine that wanted to come full-time into my business and his wife has some health challenges right now

they’re trying to figure out what the actual diagnosis is I told them like you have to go get a

job it’s in my best interest to keep you around in my business and your best

interest to go get a job right now but you better be digging when the warden isn’t looking back to the Sha Shank

Redemption right because right now man if he came full-time and they’re not

even sure about the diagnosis that could be disastrous for their finances so but long so like he

would be out of the business anyway so even if I said ah don’t worry about it we’ll figure it out come full-time that would be a very selfish thing for me to

do and a terrible friendship thing to do so I I told him but it took away from my

business because now he’s focusing on other business for a period of time but we’re still talking and we’re still helping him kind of matriculate through

very slowly but that was in his best interest so sometimes maybe the timing won’t be

right because you have a pre-existing condition or something like that but before you give Corporate America too

much credit before you worry yourself to death just go out and find out what it would take might do less than you think

I think that’s a great advice and there are options now that were probably not there years ago more accessible than they used to be

that’s right and um as far as taxes go again when you’re brand new you don’t

have any cash flow what are you worried about taxes don’t worry about taxes now you’ve all seen the commercials

call us today will the tax relief Ser so there’s lots and lots of people

employees and non-employees that don’t pay their taxes you if you’re an adult and you’re listening to this and you

know how to use your thumb to hit the plan a podcast I’m pretty sure you’re well aware that the government wants a

certain percentage of our money to do whatever it is they want pave the roads

put up a bridge whatever okay so at some point in time you don’t

really need to put a massive focus on them there might be a a Tax Advisor listen me now going I yeah consult a Tax

Advisor I’m not a tax consultant nor is Kiko but it’s pretty simple math if you

made 50 Grand in your first year that was your cash flow I don’t know what percentage but

for me mileage and Starbucks and pens and paper in my office Lee probably

would take half of that away so now I’m left with a net income of 25 Grand I

might be at the 10 10% tax bracket at that point in time it means I owe 2500 bucks in taxes right which something is

how it works is you you are an employee you make money you pay taxes and then

you spend what’s left over but as a business owner you make money spend money and pay taxes on what’s left over

so in many occasions like in mine I probably paid less taxes as a business owner than I did as an employee okay say

that again say that again Jim yeah so an employee makes money pays taxes and then

spends what’s left over but a business owner makes money spends money and pays

taxes on what’s left over that’s why most of the wealthiest people in the world are business owners the tax

laws are in tune with business in America that’s why people from around

the world flock to our country and if you are an employee you might shake your fist at

that okay but that’s how it works and so when I PID taxes for the first year I

didn’t cash flow that much so we owed a couple Grand in taxes so all you got to do is just make sure you keep maybe 10%

of your cash flow again I’m not a Tax Advisor consult with somebody but for me

I saved like 10% of my cash flow and we just saved in into a money market account and then we had plenty of money

to pay our taxes the next year and it was no big deal so just you know just use your common sense I don’t know that

you need a professional but if you do if you’re in a big Endeavor if you’re going into a franchise if there’s a lot of

money being spent to buy this business or a lot of cash flow coming in you may need a tax professional way before I did

but for me it was pretty simple I was a loan Ranger financial adviser the first several years whatever I made

I could very easily track what I made and I could very easily figure out what my business expenses were and what I

thought I was going to be my net income at the end of the year and I just put enough aside to pay our taxes so we

never got into trouble well if I I have to tell you this I know it’s episode two

and we’re gonna have tons of aha moments tons over the next few weeks but to me

this should be a huge aam moment for people that as a business

owner only after you spend is when you’re taxed your income

as a business has been reduced by your expenses which is not the case when you’re an employee and that is a

gigantic a hand moment so I know I’m gonna be boring but I’m gonna ask you to repeat it once more and then we move on

how does that work what is the difference between an employee and a business owner when it comes on to

taxes well I had somebody teach this to me so it’s not original thought I saw it

in a presentation I took a picture of it and I saved it in my phone and I still have

it in my phone and when I do talks for our team and sometimes even outside of that in like business world I teach this

concept because I grew up blue collar nobody ever taught me so but all the

people around me were living Check to Check and you don’t know why that is nobody explains to you why that is

nobody explains to you how to get out all they said was go to school and get good grades and get a degree and I

thought magically if I got my degree I would stop living check the check and have a better life guess what my wife

and I got good jobs and guess what we started spending money and what were we doing we made more money but we spent

more money so now we’re living check to check because I did not understand how the socioeconomic system of America

Works which again as an employee you make money right but then before you even can

touch your own money they snatch away a pretty significant amount would you all agree is anybody ever had a moment when

you were like 15 or maybe 40 when you know what effort you put in and you know

what your salary or your hourly income is and you look in your check and you

almost throw open your mouth is anybody is that just me like wait wh what what I

I can only see thousands of hands going up now because that’s how you don’t even

have any say in it right I’m not a conspiracy theorist trust me I’m the most optimistic person

you know about this country and the future of our country and our leadership but that’s just how it is and then

you’re left with whatever’s left over and that’s how much you can spend right but as a business owner if you make five

grand this month and you need to go to a sales Workshop that cost 500 bucks

because you suck at sales and that’s an area you need to get good at you literally write that off on your taxes

you can invest in yourself and invest in your business and if you need a pen if you need to drive from point if I need

to drive from here to zionville to meet with Kiko at Rosies so he can coach me

on how to be a better professional speaker because he’s such a master being a professor and being an international

business guy I literally get to write off the mileage the coffee okay the pen that I took the

notes with the notepad that I take the notes with they take that off and then

after I’ve SP spent the money I pay taxes on whatever’s left over right and it and again I’m sure there’s people

that abuse that system I’m not smart enough to abuse the system I just know

that if I spend a bunch of money now my wife right says well you made 50 Grand last year but you know several years

into the business like you only you made 50 Grand but hell on taxes we’re only showing 20 grand well that was good for

the tax man but really what our net was was like 20 grand it’s like dude you need to step it up next year right so

there’s a good and the bad of that the good is you don’t have to pay as much taxes but I would rather make a 100

Grand and pay 20% than make 50 Grand and pay 10% or whatever right right right so

now obviously our business is much more mature than that but that’s kind of the way that it was and once I understood

that I was like oh okay okay I think that’s a fundamental thing I think it’s

a fundamental principle that we all need to remember uh because a lot of the things that we spending life the the

wants for an individual sometimes become the needs for a business and yeah you know the car right

you the car is an expense that you need for your business absolutely and so the

there there are some things that are completely flipp on our head when you think this way I think that’s brilliant

Jim I I really appreciate you saying it now we’re gonna be closing the episode a little bit with with a couple of things

one is maybe some common mistakes that you seen people make and we’ve talked

about a few and then some closing thoughts I mean let’s let’s uh let’s wrap this with uh with on on a positive

side but first with those common mistakes what is it that you can expect people will do you say oh

man well mentors and accountability I think

are key accountability so if you’re a solo preneur and you have a bad day who do

you go to to with that bad day can you go to your spouse you

could however not a great place to dump your head

trash okay who are you going to go to so early on this really one of the things

that saved my business I got into a Roundtable business form with a group of

businessmen and they in in my particular case they happen to be faith-based businessmen that were all older than me

most of them were older than me and more experienced than me and had been more successful and they could consult me and

Coach me informally and hold me accountable for not only my business

practices but I could ask and lean into them for advice but they also would say

things like how how are you being as a husband dude are you taking care of your

wife are you don’t make sure you don’t trade your business for your wife they really held me accountable for certain

things so so if that’s a mentor or two I think find somebody in your sphere that

you want to get into business and I think there’s some business people you need to have around you that maybe understand your business but I think

also what I enjoy meeting with um Jay Cordova and Lucas Woody and Bob Peyton

and Kiko is people that aren’t in my business that don’t know anything about my business and when I tell them my

problem they can come to me and go oh well you just need to do this and it’s very apparent to them just from a

problem solving standpoint and somebody in my business or my industry or somebody that knows me personally might

take they might just give a different take when they give me very direct advice so mentors but there are there

are groups that you can get around for people to hold you accountable right I think accountability is key because if

you’re the salesperson if you’re the administrator if you’re the prospector and especially

if you’re a recovering introvert like me the thing that I hate the least is

prospecting period end of story prospecting number one doing the actual sale number two guess what I’m out of

business if I don’t Prospect and I don’t make a sale and by the way we will we will have an episode on all this thing

prospecting and and selling because that is a lot of the important things but let’s keep going no that’s fine so I

mean I think the mistake that people might make is again I was young and done

I can do this everything I’ve put my mind to I can do man you know this is not easy for

some people and it’s me especially fortunately I don’t know that I had

the I didn’t have anybody telling me to go create a circle of

Champions before I got started in business I did it as a Act of

desperation so all I’m telling you just like we said to be Forward Thinking with your zero in your budget be Forward

Thinking with your emergency fund be Forward Thinking with checking in with your spouse before you fire your boss

another Forward Thinking thing is your network of people that you surround

yourself okay I met with a gentleman this morning by accident not by accident

kind of thing and he had told me he had launched a podcast called years ago and

it was about Jim Ron five the five people that you hang out

with the most if you average their income together that will be your income like you become the person you hang out

with the most and there’s like five people that are usually influential in people’s lives and so I think it’s I

didn’t I it ended up happening to me and I did that out of desperation but had I

had been a little bit more forethought and a little bit more intentional and somebody telling me just go do

it um I would have created a circle of Champions to consult me in the year and

a half that I was part-time because the amount of momentum I would have created from that the

amount of confidence that I would have had I wouldn’t have burnt through my emergency fund in the first year and a

half because I would have known what I was doing instead of going in cold

thinking you ain’t been anybody Tougher Than Me Kiko I I’ll win whether it kills

me or not well I almost died okay not literally but but you understand

what I’m saying so you need a kitchen cabinet like the politicians do before they jump into the arena right that’s

right so I I think it comes down to that I mean yeah there’s there’s business

planning and stuff like that but I think just if you have the right people around you if you have spousal support if

you’ve built an emergency fund if you have just a solid business plan gosh if you went to that person Ed

what are the odds that person’s GNA win the average person can say man that that person’s got all the odds in their

favor I I mean I would put my money on them to win versus a person that comes

to you and doesn’t have those things just like oh no that guy that guy I’ll be they’ll have a job in 90 days right

so I would just say you know there’s no foolproof way but if you can limit your

mistakes and if you can do a little bit more planning and just prepare to

win okay I’m looking at a poster right now that I got years ago and it’s

showing a hand with a helmet you know backlit in a stadium and it says winners it’s one of those successories and says

Champions are made not born okay champ successful entrepreneurs

are made not born I didn’t know any of the stuff Kiko followed the same

corporate system that I did and he got abused and his former wife got abused

and mistreated by Corporate America when they turned 50 they started getting treated like trash and everybody goes

through it and you’ll either be proactive in your approach or you’ll be like us and it was just reactive because

it was so stressful in Corporate America we decided I think I’m going to become an entrepreneur but I wasn’t even

thinking of it three years before I quit my job and listen I G to tell people what

you said before uh that they can contact us if they want to figure out things we

can probably connect them with others in their Industries I mean we are not the experts in everything but um we are both

big Believers that uh you have to start creating those relationships that are meaningful to you and around you uh

invest in yourself as you said I spend more time with with my clients talking about emotional intelligence and how to

handle difficult situations and you can imagine uh um so Jim this has been

absolutely outstanding I think that you have given us an incredible Taste of the

basics which was the idea uh on things to do things not to do who to talk to

and uh a lot of food for thought so apart from being an amazing co-host you

are an incredible [Laughter] guest well I apologize to the folks

listening man I get a little fired up about this again I just don’t apologize ever ever I’m in

the belief distribution business right and there are some things that I believe

in and that I’ve seen with my own two eyes and I’ve experienced the pain if I

can help you avoid any of the pain that I’ve gone through becoming an entrepreneur and take some of the

Nuggets that I’ve learned from that just would have made things a little bit easier

if that comes out and that guy is crazy well it’s just because I’m so passionate about helping people and I hope that

there’s just one or two nuggets that you can take away from today’s episode that one day you’ll be in a position to fire

your boss there you go well Jim thanks uh this is Kiko Suarez co-host with Jim

uh of fire your boss this was episode two we’re very happy to have you and

we’re looking forward to recording the next one which going to be even better thanks a lot Jim thanks Kiko God bless

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you