048: Paying Yourself Profit First with Mike Michalowicz

Scott Mulvaney — Fri, 10 Feb 2017 17:45:00 +0000

Profit First Accounting and Paying Yourself:

This episode is about stepping out of your comfort zone and flipping your finances and accounting on its head. In business we have been following the same formula for generations, Sales-Expenses=Profit. This means profit comes last, which ultimately means you come last. It is time to flip that formula and enjoy your profit now with today’s co-host. Mike Michalowicz is the author of the book Profit First, a book that I have mentioned many times on LIVETHEFUEL. Mike has launched three multi-million dollar businesses and sold the second to a Fortune 500 company. Mike is also the author of three other great books, The Toilet Paper Entrepreneur, The Pumpkin Plan and the most resent Surge. This is a great episode for anyone who wants to have a little more financial freedom in their life/business.

On This Episode You Will Hear:

[spp-timestamp time=”03:45″] What book should I be reading now? The answer, what is your biggest challenge right now? You will then find the right book to read.
[spp-timestamp time=”05:23″] Where the book, Profit First came from. Mike had start a lot of different businesses and lost a lot of money. Building those companies was not profitable, he was surviving check by check. He sold two companies and one to a fortune 500 company. He thought this was the way to make money and became an angel investor to try and repeat the process but he lost money fast. This was the necessary wake up call he needed. The mentality of being profitable one day in the future is wrong. The classic accounting formula of Sales – Expenses = Profit, which means your profit comes last, is archaic.
[spp-timestamp time=”11:46″] Afraid of change. Mike has literally flipped the accounting formula and put Profit First. It’s the pay yourself first system for your business.
[spp-timestamp time=”15:07″] Parkinson’s Law: As the supply of the availability increases, our demand for it increases, but as it decreases we become more frugal, innovative and use less of it. Mike uses a cookie to describe Parkinson’s Law. When we force ourselves to use less money in our business our behavior changes.
[spp-timestamp time=”21:35″] “Money to brains ratio” and “Keeping up with the Jones’s”. The 401K. When you first adapt to Profit First, it can be painful to begin with. Very quickly, when you see those profits stacking up, it makes it all worth while.
[spp-timestamp time=”25:24″] Dividing up your income into different accounts.
[spp-timestamp time=”32:46″] If you don’t know what you are doing, get help. There is no shame in asking. Scott is visiting Profit First HQ.
[spp-timestamp time=”35:38″] Profit First Professionals: Experts that maximize companies profits permanently.
[spp-timestamp time=”37:01″] Profit First Professionals launched 2 years ago. Profit First Professionals came from people who had read the book but wanted help implementing it and someone to hold them accountable for it. Now they have 160+ bookkeepers and accountants supporting it.
[spp-timestamp time=”38:11″] 99% of Accountants that have come across Profit First have converted to the philosophy. The ones that don’t are the ones that are not willing to change the way they do things. Profit First accountants apply logic and overlay that with behaviors. A lot of accountants just can not make that leap.
[spp-timestamp time=”40:08″] Some people want to go all in when they read Profit First and set aside huge percentages but that’s like putting a frozen mug into a hot oven, eventually it will shatter. One of the important steps of Profit First is to take small steps.
[spp-timestamp time=”42:42″] Taking small incremental steps and relating accounting to the fitness world. Profit First is a Dial not a Switch.
[spp-timestamp time=”45:18″] Quarterly Distributions.
[spp-timestamp time=”47:02″] When the profit comes out, it is for you to experience financial freedom. This is not to be used to reinvest in your business, that’s a whole different envelope aka account. If you are putting it back into the business you are defeating the system. If you cannot pay your expenses, you cannot afford your expenses, so you have to find a better way.
[spp-timestamp time=”48:43″] Final Words

[spp-tweet tweet=”Get comfortable with being uncomfortable with #ProfitFirst @MikeMichalowicz on @LIVETHEFUEL #Podcast, #author #Speaker”]

Profit First Links and Resources

People Mentioned

Final Words

Mike’s life purpose is to eradicate Entrepreneurial poverty, that’s why he does what he does. It’s about stepping into the un-comfort zone. Progress is made when people do something new when something has impeded their progress, what impedes progress is doing what is familiar. Get comfortable with being uncomfortable. That is where growth is. That is where the opportunity is.

Action Steps

Please Submit an iTunes Show Rating & Review, we need more reviews to increase our ranking and appearance. We love 5 Stars!
Join THE FUEL TANK our community on Facebook! – “You are the average of the five people you spend the most time with.” ~ Quote by Jim Rohn
Be sure to check out our Resources and a reminder to “Keep Living The Fired Up Epic Life everyone!” #livethefuel

The post 048: Paying Yourself Profit First with Mike Michalowicz appeared first on LIVETHEFUEL.

037: 2017 Money Resolutions with Whitney Hansen

Scott Mulvaney — Mon, 02 Jan 2017 18:15:00 +0000

Resolutions, Money and your first 2017 CoHost:

Do you set New Years Resolutions? To get 2017 cranking we are bringing on our first repeat co-host. We have brought back The Money Nerd, Whitney Hansen to make the biggest impact on your financial resolutions this New Year!

On This Episode You Will Hear:

[spp-timestamp time=”01:32″] A quick recap on who Whitney Hansen is
[spp-timestamp time=”02:19″] What people are freaking out about this new year. We all want and make the same goals in the New Year, Lose weight and get our financials in order.
[spp-timestamp time=”02:50″] New Year resolutions. 75% of people who set New Year’s resolutions give up within the first 30 days. People don’t spend enough time on who they are and what make’s them tick, and function every single day. It is something that is key to health and finance.
[spp-timestamp time=”04:39″] Profit First. Taking Action. In the fall of 2016 Whitney started teaching personal finance at a College level. Whitney creates little money dates with herself to check in on how her finances are doing. That weekly check-in allows you to align yourself with your finances.
[spp-timestamp time=”07:36″] Whitney would go through the past 30 days of your Credit Cards and your Bank accounts and start to group together common spending habits and remove spending that doesn’t align with your goals and your expenses. Reallocating the funds to the right domains in your life.
[spp-timestamp time=”11:09″] Budgeting and saving for a trip to Italy. Booking trips with Google Flights. Setting up a saving’s account for just travel.
[spp-timestamp time=”12:53″] If there are important things in your life you want to pay for, set up an account and have your money automatically transferred to your account. Even if it is only 2% or 3%. Cut out what does not matter to you and reallocate it to other areas of your life.
[spp-timestamp time=”14:52″] Prioritization. It is really easy to get distracted.
[spp-timestamp time=”16:41″] Digit and other apps
[spp-timestamp time=”18:56″] The power of your success is down to the power of your network. Also discussing using tax refunds properly
[spp-timestamp time=”21:56″] Are we really tracking our budgets? Take your tax refund and put it towards your goals. Taxes and ROTH IRA’s
[spp-timestamp time=”26:53″] Emergency funds and added expenses funds.
[spp-timestamp time=”29:04″] Become more self-aware with money. Track every expense for the next 30 days.
[spp-timestamp time=”30:40″] Challenge people to achieve to boost the income by a dollar amount or by a percentage amount
[spp-timestamp time=”43:13″] Conferences. Getting out there and growing your network
[spp-timestamp time=”47:35″] Final Words

[spp-tweet tweet=”Be more intentional with your financial resolutions @whitneyhansenco #MONEYNERD on LIVETHEFUEL”]

Links and Resources

People Mentioned

Final Words

Be more intentional. You can do anything in the world that you want. But you can’t have everything. Your savings are important. Look at your expenses, does what your spending align with your values and goals? If it doesn’t start to make a few tweaks so that it does.

Action Steps

Please Submit an iTunes Show Rating & Review, we need more reviews to increase our ranking and appearance. We love 5 Stars!
Join THE FUEL TANK our community on Facebook! – “You are the average of the five people you spend the most time with.” ~ Quote by Jim Rohn
Be sure to check out our Resources and a reminder to “Keep Living The Fired Up Epic Life everyone!” #livethefuel

The post 037: 2017 Money Resolutions with Whitney Hansen appeared first on LIVETHEFUEL.

Personal Finance – LIVETHEFUEL

048: Paying Yourself Profit First with Mike Michalowicz

Profit First Accounting and Paying Yourself:

On This Episode You Will Hear:

Profit First Links and Resources

People Mentioned

Final Words

Action Steps

037: 2017 Money Resolutions with Whitney Hansen

Resolutions, Money and your first 2017 CoHost:

On This Episode You Will Hear:

Links and Resources

People Mentioned

Final Words

Action Steps