Cracking the code of profit in small businesses can seem like an uphill battle. But what if you could have the Profit Answer Man himself, Rocky Lalvani to guide you? We sit down with Rocky as he unravels the Profit First system, a revolutionary approach that redefines traditional accounting. He highlights the importance of smart money management and the power of paying yourself first, shedding light on how to avoid dipping into your profit, paycheck, or tax money.
The conversation then shifts gears into the vibrant world of growth and reinvestment. We explore why the allure of marketing promises like 'give me $10, I'll give you 20' might not always be the smartest bet. Understand the crucial concept of paying for performance and learn how the Profit First system can assist in cash flow planning, even if your income is irregular. We also ponder on the misconception that business growth necessitates tightening the belt and share vital insights on building the ideal finance team for a small law firm.
In the final phase of our chat, we dive into the realm of tax and financial planning. From real estate cycles to strategic tax-saving methods, and even how to fund your vacations using tax deductions, we leave no stone unturned. Rocky enlightens us on the benefits of owning an Airbnb, the magic of cost segregation analysis, and the significance of an appropriate corporate structure for managing investments. We also delve into the profound influence of upbringing on finances and parenting. As we wrap up, we touch upon automating the Profit First system using Relay and underscore the importance of guidance and coaching to fully grasp this system. This episode is a treasure trove of insights for anyone looking to master the game of profit and financial stability.
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Brian Glass is a nationally recognized personal injury lawyer. He is passionate about living a life of his own design and looking for answers to solutions outside of the legal field. This podcast is his effort to share that passion with others.
Want to connect with Brian?
Follow Brian on Instagram: @thebrianglass
Connect on LinkedIn
Cracking the code of profit in small businesses can seem like an uphill battle. But what if you could have the Profit Answer Man himself, Rocky Lalvani to guide you? We sit down with Rocky as he unravels the Profit First system, a revolutionary approach that redefines traditional accounting. He highlights the importance of smart money management and the power of paying yourself first, shedding light on how to avoid dipping into your profit, paycheck, or tax money.
The conversation then shifts gears into the vibrant world of growth and reinvestment. We explore why the allure of marketing promises like 'give me $10, I'll give you 20' might not always be the smartest bet. Understand the crucial concept of paying for performance and learn how the Profit First system can assist in cash flow planning, even if your income is irregular. We also ponder on the misconception that business growth necessitates tightening the belt and share vital insights on building the ideal finance team for a small law firm.
In the final phase of our chat, we dive into the realm of tax and financial planning. From real estate cycles to strategic tax-saving methods, and even how to fund your vacations using tax deductions, we leave no stone unturned. Rocky enlightens us on the benefits of owning an Airbnb, the magic of cost segregation analysis, and the significance of an appropriate corporate structure for managing investments. We also delve into the profound influence of upbringing on finances and parenting. As we wrap up, we touch upon automating the Profit First system using Relay and underscore the importance of guidance and coaching to fully grasp this system. This episode is a treasure trove of insights for anyone looking to master the game of profit and financial stability.
____________________________________
Brian Glass is a nationally recognized personal injury lawyer. He is passionate about living a life of his own design and looking for answers to solutions outside of the legal field. This podcast is his effort to share that passion with others.
Want to connect with Brian?
Follow Brian on Instagram: @thebrianglass
Connect on LinkedIn
CPAs don't know how to be profitable. They don't know how to work less right. Cpas are going to come to you and go hey, uh-oh. Wait a minute. Brian made a lot of money this year. Oh wait, I didn't put enough aside for taxes. Brian, get the new bends, get the 7,000-pound one and you can get a massive deduction. But they're not telling you oh, you got to pay for that.
Speaker 2:Welcome to Time Freedom for Lawyers, where the goal is to become less busy, make more money and spend more time doing what you want instead of what you have to Bringing together guests from all walks of life who are living a life of their own design and sharing actionable tips for how you, too, can live the life of your dreams. Now here's your host, Brian Glass.
Speaker 3:Today I have Rocky Lalvani, the Profit Answer man, coming in to answer all your questions about how do we actually find profit in our law firms, in small businesses? Profit is a mysterious thing that is always there on paper but never feels like it's in our pocketbooks, and so Rocky's here to help us solve that problem. Rocky, welcome to the show.
Speaker 1:Thank you so much for having me, brian, excited to be here.
Speaker 3:Rocky, I know that your practice focuses on the Profit First method from Mike McCallowits' book and I know that many people will have already read that book. But can we start with laying the foundation for what Profit First looks like and how most people get that accounting and that bookkeeping wrong until they've learned how to do this?
Speaker 1:So let's talk about what Profit First is first. Profit First is nothing more than a cash flow management system. It is not an accounting system. It is not a bookkeeping system. It is a way to manage your money in a way that works the way most business owners work, all right. So when it comes to accounting reports, nobody's signing into their QuickBooks going how are things going? That doesn't happen. They all look at their bank account. Do I have cash? Do I not have cash? Can I spend, can I not spend? The problem is, when you look at your bank account, you don't know what your obligations are, you don't know what you've already spent, and so you tend to overspend. We all do that. It's life. It's McCallowits.
Speaker 1:Who's the author of Profit First? No different. He literally sold a couple of companies. They actually did the investigation of Enron. Enron was guilty.
Speaker 1:By the way, mike sells his company. By the way, that company was not profitable while he owned it because he thought Profit was an event, so he made all his money when he sold it. He walks away with seven figures of cash, thinks he's the smartest businessman in the world, loses it all in a couple of years. Those nasty bankruptcy attorneys came with. They took his car, they took his house not nice times. He goes, how did I screw this up so bad? And he realized the accountants gave him the wrong formula. They said sales minus expenses equals profit. Where's that lead profit? Last Last Left over, right? That's not what it's supposed to be. You're supposed to pay yourself first. Everyone's told you this. So why not? Sales minus profit equals expenses. By the way, this is not greed, this is not stepping on people, it's none of that kind of stuff. And it's not paying your bills, because I'm not an attorney and I don't want them coming after me.
Speaker 1:This is about just smart money management. It's about the concepts of pay yourself first, and so what Profit First does is it takes each dollar that comes in, it gives it a job and it sends it to do its job. So the job could be profit. The job could be your paycheck, because, especially at the beginning of business, so many business owners are afraid to take money out of their business to pay themselves. And then their spouse yells at them.
Speaker 1:The kids are like, hey, how about a little food on the table? And then there's the money for the tax bill. We all forget that in the beginning you got to pay tax. That one, yeah, that one. And then here's your money to spend on the business and this way, when you look at your bank account and your spending account, you're not spending your profit, you're not spending your paycheck and you're not spending the tax money that you owe the IRS. Okay, that's what this is, and sometimes some businesses will even break it down further and create more accounts for more specific purposes, but in a nutshell, it is a money management system where you get a dollar in, you send it to do its job and you let it do its job.
Speaker 3:So let's talk about this because I think it's an important distinction that's going to go over the head of a lot of people, which is the difference in a small practice and a lot of my audience will be lawyers that are sole owners or they're sole owners with some associates, but at the end of the day, there's not much distinction in many of their minds between my paycheck and my profit. So can you talk about the role that having that distinction from the outset of your business gives you?
Speaker 1:Yeah. So once you all make some money right what are you going to do? You're going to go invest it, maybe in the stock market. You're going to buy a company. You expect that company to be profitable and give you a return. Maybe you get a dividend check, right? It's the same thing in your business, right?
Speaker 1:If you start a business, if you're working in the business, you're an employee of the business. If you're the owner of a business, you deserve a dividend. You deserve a return for that investment you made in the business, and I think a lot of people forget that you put a hundred grand in to start a business. I better get a return on my hundred grand. I don't want to buy a paycheck and a job. Profit is that return. It's that extra money above and beyond that you get because you own this business, and so that's where it's different. So the other way to think about it is your paycheck covers your daily living expenses, your daily needs. Your profit is that quarterly distribution above and beyond that allows you to go on vacation, that allows you to invest, that allows you to pay for that ridiculous debt you might have taken for law school, whatever it is that you need to get out of. That's what the profit helps you do.
Speaker 3:And looking behind you, you have all these books on your shelf, you have traction. 10x is easier than 2X, of course, profit first, 4-hour body, and I'm sure somewhere on that bookshelf is the e-myth right. And so that's what came to my mind as you were going through. That answer is so many people leave law firms and start their own law firms, thinking that they're entrepreneurs and that they're business owners, when really they've just bought themselves an expensive job that they can never get out of. And so when you think, okay, now I've got some money that's going to my paycheck and I've got some separate money that's going to my profit, then you've built in a company cushion there to start to transition yourself out of the job and have somebody else come in and start operating it and be running the paycheck. And now you've actually got an actual business and you can elevate it to the owner's box. If that's what you want to do later in your career, right, absolutely. You nailed it.
Speaker 3:We talked a little bit before we got on about the role of growth in here, because I think so many of us think I have to suffer through these years where there's no profit because I've got to plow every last dollar back into my business, either in advertising or hires that I can't afford yet, or and I see you shaking your head Give me the response to that. What am I getting wrong? What are we getting wrong in the thinking there?
Speaker 1:There's two things. First of all, profit is a habit, it's not an event. So if you're going to say to yourself, I'm going to keep plowing this back into my business, let me ask you a question when are you going to be profitable? Like when you stop growing, right, when you stop growing? So we're going to grow to $10 million and we're still not going to be profitable. Hello, uber, thank you, but no, thank you. I don't want to work that hard and you would be shocked at how many businesses are seven and eight figures and the business owners are making next to nothing. If you're in the bankruptcy area, you know it, you see it, but that is the reality of it. Look, profit is either a habit it's the way you do things or it's not. The second thing is why does growth cost money?
Speaker 3:Because we're reinvesting in advertising and marketing spend and overhead generally.
Speaker 1:So if you're reinvesting, are you supposed to get a return on your investment?
Speaker 3:No, of course.
Speaker 1:If I'm investing in advertising, where the hell is my return if I don't?
Speaker 3:have any profit, that's fair, and why?
Speaker 1:first of all, okay, I have marketing agencies as customers, so I get it. But listen, marketing agencies have this thing. They come to you, by the way, we're going to tell a lawyer joke first, which is why did you go to law school? Just because they didn't have math class, right? So if you don't understand math, we're going to have a big problem, right? So the marketing guys know you don't understand math. They know lawyers make big money or at least they think they do because they saw your fancy car that you can't afford. That's a whole nother discussion. They come to you and go if you give me $10, I'll give you 20. And you think to yourself that's a good bet, right? But wait a minute.
Speaker 3:A return, except that I'm still operating to earn the 20.
Speaker 1:You're still operating to earn the 20 and the operating costs you 12. So now you're negative $2 with the marketing agency. But the marketing agencies, most of them, don't do that math for you. The good ones do, the bad ones don't, and that's the problem. So the other thing is pay for performance. Why do you have to pay them If they can't perform? I'm not paying them Same thing. Like you, right, you take courses on a contingency, not courses.
Speaker 1:A contingency, a contingency, a few basis, yeah, you get paid when you deliver All your marketing people. I pay you when you deliver.
Speaker 3:So that's good. I'm glad you bought up the contingency fee, because I was going to say the only math that I'm really good at doing is dividing by three. Right, because that's how we calculate my fee. And on the issue of getting an immediate return on investment, the cases that come in through my office, it's often on the short end, it's nine months before I get paid anything, and on the long end, it might be 18 or 36 before I get paid anything, and so that's what I think the injury lawyers that are listening to this are going to be thinking about when it comes to growth is, yes, I'm reinvesting it with the hopes that 18 or 18 months or three years from now I get that return, but then, when I'm getting that return, I'm going to still be growing, and so that's the fallacy that's going on in our heads about we can never take the money out, or it's never safe to take the money out, because the money that comes back in terms of fees can oftentimes be lumpy and irregular.
Speaker 1:It can be lumpy and irregular. So there is a way to implement profit first for lumpy and irregular people. Okay, if you're lumpy and irregular, what we tell you to do is, when you get the lump, okay, you take out, you put your normal. So let's just say this my law practice needs 20 grand a month to operate. This month I got $100,000. What I do is I take 20 grand and I put it through my normal operating systems and profit first. I take the 80 grand and I put it in my reserve fund Next. That's my lumpy fund. Next month would $0 come in? Am I freaking out? No, I go to my account. It had 80 grand. I take the 20 out, I cover this month's revenue. And so by building that reserve and building it up considerably, you now know what you can handle yourself through the lungs Without worry. You've got great cash flow.
Speaker 1:Here's the other thing, and this is not profit first. This is a lot of what we do. On top of it we do predictive cash flow planning. So if you've got cases, I bet you we could sit down once a month, lay out all your cases. You know what you're gonna get, what the percentage of win is on that case. I'm assuming you're not gonna take cases. You think you're gonna lose. Right, we start to map.
Speaker 3:Not at this point in my career. No.
Speaker 1:But so we map that out for 18 months and you can start to see 18 months out. This is what our cash looks like going forward, and the more you start to do that, the more you start to use profit first, the more you start to feel your money, you start to feel your numbers, which is it takes it out of this esoteric and it brings it to hey. I feel the rhythm because you feel the frustration and the fear when you can't make payroll or you can't pay your bills.
Speaker 3:Yeah, and so many lawyers will tell you that I can't tell you what any given case is worth because all the cases are different.
Speaker 3:Right, they're all special snowflakes, and it's just not true.
Speaker 3:If you're operating at any sort of scale and injury practice or DUI practice or family law practice, you can group your cases together and come up with an average case fee for that style of case. Is it gonna be 100% accurate? Of course not, but I can tell you, like a soft tissue case, for example, that average fee to us is worth about $10,000, and it's gonna take about six months to nine months from the time that case comes in the door till the time that I get that $10,000. And so, as we start aggregating the numbers of those cases and which months we came in, you can do this predictive analysis. Now, it's not perfect, which is why you wanna have that runway in your cash account, but it can get you pretty close and most lawyers will never sit down with anybody to try to figure out what's in my portfolio and what can I expect out of it. And so for you, if you were setting up the perfect finance team for a small law firm, like who would you have on the roster?
Speaker 1:So, first of all, how many cases do you think the small law firm has?
Speaker 3:So our firm, we have about 120 auto cases in-house.
Speaker 1:Okay, I would create an Excel sheet with 120 cases, each with a value and each with when that money is coming in, and so now I can tell you exactly, on the minimum and on the maximum, what I think my entire book of business looks like going forward. And every month.
Speaker 1:You just move it right. If you sit down once a month, you go let's review these 120 cases. Is it where we said it's gonna be? You can pretty much yeah, yeah, yeah, yeah, no, click, click. So for a team, all right. There's a couple. First of all, I think most people don't even understand. They go oh, there's a person who's taking care of my numbers, right. So we made fun of lawyers, let's make fun of them.
Speaker 1:CPAs, right, don't know how to be profitable. They don't know how to work. Less right, cpas are gonna come to you and go hey, uh-oh. Wait a minute. Brian made a lot of money this year, oh wait, I didn't put enough aside for taxes. Brian, get the new bends, get the 7,000 pound one and you can get a massive deduction. But they're not telling you oh, you gotta pay for that.
Speaker 3:That's if your CPA is giving you any tax planning advice whatsoever Any, tax planning.
Speaker 1:So be careful who you get advice from.
Speaker 1:So your team. You need good bookkeeping. As you grow to a larger organization, you need a good controller, and really what a controller does is they set up controls and systems for your accounting system. They make sure things are appropriately billed, things are appropriately tracked, that if there's an expense to a case it gets properly logged to the right case, and so that you appropriately do all of that. Then you've got your CPA. Who's the tax person, and that's all. They're good at saving you on taxes.
Speaker 1:The easiest way not to pay taxes is to lose money. What a stupid concept, right? There are better ways to do this. So be careful. Who's on your financial team. Understand why they're there and what their purpose are. The really smart firms have the FO on their team, somebody who actually is looking at their finances and, instead of looking in the rear view mirror, is looking forward. What does the 18 months look like? Hey, you said we're gonna do this marketing. Did we get a return on the marketing? If I look at all my marketing channels which are my best marketing channels how do we create marketing that doesn't cost us money until we get paid? How do we create different ways of doing these types of things. Everyone thinks you gotta spend money to make money. You don't right Figure out how not to do that.
Speaker 3:And I love that you said in there is be careful who you get advice from, and I'm curious in your life and in your business how you choose the kinds of people that you're getting advice from. It's hard.
Speaker 1:It's really hard to find good people, because here's the bottom line. People come in two flavors People who know what they're doing and are really good at it but suck at marketing, and people who are really good at marketing but suck at what they're doing. Yeah, and so most of the noise is people who are really good at marketing but they don't actually understand what's going on, and classic of that is there's a whole bunch of people out there telling you you don't have to pay taxes by using these trusts and Delaware statutory this, and blah, blah, blah. They're all. None of them are truly understand taxes, that they're breaking the rules. And if the IRS audits you, at least you got free legal advice, right, because you're all attorneys, hopefully, and so maybe you can fight the IRS. Good luck with that, because it's all BS. You've got to find people who are really good at that, and that is. It takes a ton of digging, and just because your other lawyer, buddy, loves them doesn't mean they're good.
Speaker 3:I think that's a ton of digging. And then really you have to have people that have gone full cycle on these things, right? So in real estate, this is concept of having gone full cycle on a deal and having weathered the downturns and the upturns in the market Because anybody could make a ton of money in the last seven years in real estate right, it's been a while since we've had a crash, and so what did the people that were around in 2008 and 2009, like, how did they get through it? And it's the same thing for anything else. Like, anybody can save you a bunch of money on your taxes on the front end, but it's really not until you've made it the three years and you haven't been audited that the strategy actually worked.
Speaker 1:But they can save it. So here's the thing. Right, I see a lot of this stuff come across because I'm always trying to figure out how to save on taxes. I'm an EA, I hate doing taxes, but what I love is figuring out how to save on them. Oh, invest in this oil and gas lease, right, you'll get 100% right off. Ok, I get 100% tax credit. And then I lose the $100,000. Because the oil and gas lease never paid off and people forget about that. They forget that their investments aren't paying off. Their tax deal didn't pay off. And to spend a dollar to save $0.28 is silly, but yet that's the way we naturally think. Look at people. They go I got a tax refund. No, you didn't, you got change.
Speaker 1:It's like going to the store. I gave them 100. They gave me 20 bucks. Do I do the happy dance? No, that's silliness.
Speaker 3:Yeah, and the easiest way to have more money in your pocket is not to spend time figuring out how to pay less taxes. It's spending time how to figure out how to make more money, because you can only reduce your tax bill to zero, right, but I can increase the revenue that's coming through and decrease the expenses a little bit. But it's easier, I think, to raise the revenue number, the top line number, than it is to find all the little loopholes to not pay taxes, to not pay expenses, and it helps you sleep better at night when you're not dancing on that thin line Like I have friends at Bragg all the time about I don't pay any taxes, and then they share with me the strategies and I'm like dude, you're not a full-time real estate professional. How are you taking that depreciation against your W2 income? And so that's just an interesting space to be in and you must hear all kinds of cockamamie tax-saving schemes. I'm curious what you're doing outside of your primary business investing-wise, if you're open to sharing that.
Speaker 1:So I do have real estate. I do have stocks and bonds and ETFs and all of that as well, so most of our stuff is in those two areas. I will say this real estate is work. One way or another, it is work. We got into real estate in 2011, which was the perfect time to get into real estate. Right now, it's yeah, I'm backing out of my real estate, I'm taking my cash, I'm walking away.
Speaker 1:Real estate goes through cycles of behaviors, and so be aware of that. At the same point, the stock market's ridiculous too, so you have to constantly keep moving and changing. Real quick, though. Let's look back on taxes. There are ways to save on taxes that are actually smart and good. So, retirement planning putting money into your own retirement plan, it's for whatever reason. People don't think about that and they don't maximize their retirement plans. Another one is appropriately paying your kids. There's a ton of deductions available for that. You have to do it appropriately. There's the Augusta rule, where you can rent your house to your business, again appropriately, properly documented. There's a whole bunch of tees, and you got to get cross and eyes. You got to dot your attorneys. You get that. Follow the rules. You can do this, but then let's get out of the normal, let's start thinking about different ways. Is there a particular place you like to vacation, brian?
Speaker 3:Yes, okay, I think I know where you're going, but yeah, so we go ahead.
Speaker 1:Go ahead. Where do you like to vacation?
Speaker 3:For a long time we were vacationing up in Ocean City, maryland.
Speaker 1:So if Brian owned an Airbnb in Ocean City, maryland, travel becomes deductible. I got to go check on my unit. Now there are certain you got to watch the rules. You can't just stay there a lot. There are rules on how much you can stay there. There are different types of things. But you can start playing this game within the rules to make things tax deductible and investments, and do it appropriately. And so now if your kids are teenagers and they're painting and cleaning, your wife or your spouse is doing the same, all of a sudden everybody's travel is covered. You got to figure out the rest of it and find the right way to appropriately do that.
Speaker 3:I'm glad you went there because that's exactly what we did in 2021. We bought an Airbnb up in Ocean City, so now we have deductible travel to do repairs and to do the maintenance on the house. We did a cost segregation analysis, we self-managed in year one, so, yeah, all of that stuff. The other thing that I've been thinking about recently is buying a house, rental property near the in-laws right, because now that makes travel to the in-laws also tax deductible. So, thinking outside the box on how can you manage your investments around the life that you already have or the life that you want to live, I think is really powerful and I think nobody ever really thinks about that.
Speaker 1:No. And then the other thing is the right corporate structure. So you all know the legal corporate structures. How many of you know the smart way to do the tax structures? So here's the problem. You end up, right, you got six partners in the firm, right? How do you handle vehicles? How do you handle meetings I'll call them conferences that are junkets for your own personal pleasure. Sure, how do you start dividing all this stuff up? One guy says I want to fill the retirement account. The other guy goes I want to buy a Ferrari, right? So think about this what if you have your main legal practice but you're not an employee of the legal practice? What if you are all employees of a separate corporation, each one separate? So your corporation works for the other corporation and now each person gets to play their own tax game inside their corporation and it doesn't affect anyone else.
Speaker 1:And so now you've created, you've gotten rid of all the friction between the partners fighting I want this and I want that, and we should have this. Go, it's on you, go pay for it, leave me alone.
Speaker 3:It's really frustrating to me, having gone through this process of exactly that the learning and the trying to figure out how do you structure it so that my financial plan we're not conflicting with the partners, is it? There's nobody out here advising lawyers on that stuff? It's not hard to find people who are advising doctors on it. That's all over the internet, right. There's plenty of podcasts about how to structure your medical practice as a buy-in. There's the white code investor. There's plenty of blogs for doctors, lawyers. I think all think that we're too smart, so there's no audience for this. Maybe, but I haven't found anybody who's niche is taking this message of smart financial planning and transactions to lawyers. Do you know of anybody who's in that space?
Speaker 1:I don't, but I know someone who could be if she'd just listened to me. Your wives never listen to what you tell them. My wife's actually. She works at a very high level, she knows partnerships and all these things and figuring that out, Actually I'll tell you what. I know a guy who I listen to. He's not really in that space, but he is a tax attorney and he understands and he might actually have come. Nobody asks him about that. His name is John Hire. He's the tax reduction attorney. He does mostly work within how do you use your retirement accounts to really maximize profits and do all of that, but he might actually answer those types of questions.
Speaker 3:I just think that's blue ocean and the problem is that your customers are lawyers, right, and so maybe that's why nobody wants to come play in that space. But financial advising on structuring your business to serve your life for lawyers, I think is wide open area. Yeah, I think maybe there is a profit first for lawyers.
Speaker 1:There is, the book just came out, but that's probably cash flow management. It's not entity structure.
Speaker 3:Yeah, interesting. Rocky, you have an amazing story. Your parents came to the US with only $25 in their pocket. I'm curious how that upbringing impacted your view of finances and your view of the world.
Speaker 1:It was good and bad in the sense that and actually sometimes the bad makes for good, because this is really the question that I struggled with when we had kids. So when we came here, my parents had done well where they were, but when they came here they weren't allowed to bring money, so they were starting over the wrong side of the tracks. There was never this attitude of oh whoa, us or we're immigrants or any of that it's hey, we came here for the American dream, let's go figure out how to achieve it. And so they would actually get together and talk about money with their friends, and so those were the conversations I heard growing up how are people doing real estate? How are people making money? How are people spending money?
Speaker 1:So that taught me money skills that I didn't realize weren't normal to everybody else. And the other half of that was I got to see no money and I got to see a lot of money and I'm like I want a lot of money. So that kind of gave me the grit and the determination to focus on how do I make my wealth, build my wealth, how do I learn about money and how do I do this for me. So from that standpoint. It was the good and the bad.
Speaker 3:And how has that influenced the way that you've talked about money with your kids?
Speaker 1:So the biggest thing I also learned growing up is okay, the first generation busts it, but the second generation then is pushed forward and really does super well, and then the third generation is spoiled by the second generation and then they blow all your money and then the cycle starts over. My kids are technically, to me, that third generation. So you know, in our family the rule is your parents are rich, you're poor. You're going to have to figure it out. It is a struggle, because the first time my kid got in an airplane they were sitting in first class, right. So how do you balance this out, right? Yeah, my kid's first car was used Lexus because mommy said, yeah, I want a new car. They can take my life, yeah, but we made them. Have you know? You got to help pay for the Lexus. You got to help do some of these things. You have to work hard. We're going to show you opportunity. We're going to open a door, but you got to step through it. You're the one who has to go do the hard work.
Speaker 1:When my kids, my daughter, got tired of high school at about 10th grade, we actually yanked her out of high school, which gave her the ability to go do other things, like my daughter went to Tony Robbins, my daughter went to Brendan. She went, she met Seth Godin. She did all of these things that put her out in places because she had the time. My son. I was like, oh, college is BS. So we yanked my son at the end of the 10th grade. I go, you just go get college credits at the community college. Go spend your time doing robotics because that's what you love. You can have 40 hours a week on robotics. In the meantime he graduated college at 20, we didn't spend a fortune. And literally my kid. Right before his 21st birthday he said dad, I'm technically six figures with my net worth at that age because we taught them money from the time they were four and five years old. We refused. We gave them money and said okay, now you're in charge of your money, I'm not buying you stuff.
Speaker 1:You buy your own stuff and we would teach them how to do that. So it was a lot of lessons around. How do you create delayed gratification? How do you negotiate? How do you make choices of in the moment versus long term? How do you compare? Like when my daughter got to college, none of these people know how to compare some shop. They don't know anything about money. They don't know anything about how to live life or anything. That's why they call it adulting, I guess.
Speaker 3:I've had that exact same conversation about. You're not rich. I'm rich with my kids, who are 10, 8 and 5. But the difficulty that I have, rocky, is if we were going to a baseball game, this is the same as your first class ticket. I don't want to sit in the 400 levels, I don't want the f****** heats, but that's what I grew up with. Like we're going once a year, we're sitting way up on the top and you're going to.
Speaker 1:like it, and so did I. There's nothing wrong with taking your kids to the hundred level and going hey, I just want you to know these tickets cost x. Okay, and this is not normal. And no, I'm not buying you a hot dog every time you ask for it. You have money, go. Look, here's your ten bucks for the game. You decide how you want to spend it. That doesn't mean you need to go spend. We go to Disney. We go to Disney for two weeks because I believe in time freedom. I'm not rushing through Disney, but at the same point I was smart. I'd buy all the Disney stuff at home on sale after Christmas. Then I'd bring it on the trip, but here's your.
Speaker 1:Disney gift. It cost me five bucks is 50 in the park. They were thrilled they didn't care. You don't have to waste it. You can have good things, but you also have to have the conversation. Daddy works hard for this, or daddy had to do this for this. How can you? It's teaching your kids how to make their own money so that they can do their own things. You decide on the bay if they want to go to something else, that's their problem, it's not yours. You don't have to spend two thousand dollars. Who's that crazy singer? They're all gonna see. I don't know.
Speaker 3:Taylor Swift no, you know, two thousand dollars. You can watch it on Netflix because it's coming out as a special in in sometime in October.
Speaker 1:It's funny because we live next to an amusement park, so my kids grew up in an amusement park but we had season passes. But I noticed if Taylor Swift came to the amusement park you could go hang out outside and not even pay and still hear it yeah you could still hear it and say I was Taylor Swift.
Speaker 3:Yeah, all right. So mom's the CPA, dad's a financial advisor. What are your kids doing?
Speaker 1:My son is a software engineer and it's funny because he actually works for a trading firm. My daughter works in our business, so she works with me doing, okay great. She's still trying to figure out, like, what Her role and what her path is gonna be. Like my son, it was easy for him. My wife, it was easy for her, for her, she's still figuring it out.
Speaker 3:Let's talk about your business. So people are interested in finding you. What kind of services do you offer? Coaching Is, otherwise, what are you doing?
Speaker 1:So we do have. We have courses which teach you how to do everything that we've talked about In how to do your cash flow management, how to set up profit, like all of the stuff we do for our clients. We have a course that teaches at all. We also work one-on-one with a handful of clients where we actually take everything, personalize it, create all your dashboards. It's done for you, helping you figure out how to do it for you and how to be more profitable.
Speaker 1:So it's the full gamut from that and then everything that we do for our clients we share on the Podcast profit answer, man, where we just we share, how do you do this and give it all away? You want to go do it yourself? Go do it yourself. I'm perfectly content with that.
Speaker 3:How difficult is it to get your bank or to operate the profit first system? So in my mind and in many people's minds is like all right, hundred thousand dollars comes in, I've got to manually go in and send it to six or five or six different accounts. Is that the case?
Speaker 1:Yes, but so just recently, profit first partnered with relay and Relay will do it automated for you. So literally every month or every week, or however you tell relay to do it, it'll move your money to whatever accounts you need to. You don't even have to do anything anymore.
Speaker 3:Like this has become so idiot proof, it's beyond comprehend, like it's literally idiot proof and the good thing is for you and I that you could tell people, until you're blue in the face, all of these strategies and you can lay out the entire foundation For how you operate the whole system. But most people don't want to operate the system because most people don't want to do the work, and so that creates plenty of space for you and I to come into and help coach people or guide them through the financial planning.
Speaker 1:That is correct. Yeah, it does work. I mean, that's fine.
Speaker 3:Go ahead. Yeah, hey, where can people find you?
Speaker 1:the website is profit comes first, calm and that I'll take you to both Podcasts. It'll give you the ability to contact us and everything else that they need.
Speaker 3:Oh, rocky, thank you so much. We're gonna link to all of that in the show description. Enjoy talking to you this morning.
Speaker 1:Can we ask your audience a favor? If you like Brian, he gives value. Did you hit the like button? Did you say thank you, because that's how you say Thank you? Did you share it with another attorney who you're like dude? You got to figure this stuff out. Listen to Brian. Brian will help you. Be nice, share, hit the thing, give a little love.
Speaker 3:I'm clipping that and I'm putting that at the end of every episode. Thank you for that.