Serve No Master : Escape the 9-5, Fire Your Boss, Achieve Financial Freedom

SNM178: Fast and Slow Money, Learn How to Take Control of Your Financial Destiny

June 02, 2020 Jonathan Green : Bestselling Author, Tropical Island Entrepreneur, 7-Figure Blogger Season 2 Episode 10
Serve No Master : Escape the 9-5, Fire Your Boss, Achieve Financial Freedom
SNM178: Fast and Slow Money, Learn How to Take Control of Your Financial Destiny
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Serve No Master : Escape the 9-5, Fire Your Boss, Achieve Financial Freedom
SNM178: Fast and Slow Money, Learn How to Take Control of Your Financial Destiny
Jun 02, 2020 Season 2 Episode 10
Jonathan Green : Bestselling Author, Tropical Island Entrepreneur, 7-Figure Blogger

Fast and slow money, learn how to take control of your financial destiny in today's episode of Serve No Master podcast.

As you start building your online business there are several different phases you go through. At first you just try to make some extra money to add to our income stream, but you have to learn to make decisions that will ultimately bring you more income and increase your value as a client. 

So, in today's episode I will walk you through my process of decision making, how I evaluate a potential project and hopefully give you an idea of how you can start making more money and investing in the right projects.

Show Notes Transcript

Fast and slow money, learn how to take control of your financial destiny in today's episode of Serve No Master podcast.

As you start building your online business there are several different phases you go through. At first you just try to make some extra money to add to our income stream, but you have to learn to make decisions that will ultimately bring you more income and increase your value as a client. 

So, in today's episode I will walk you through my process of decision making, how I evaluate a potential project and hopefully give you an idea of how you can start making more money and investing in the right projects.

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fast and slow money. Learn how to take absolute control of your financial destiny on today's episode. Today's episode is brought to you by Blue is choosing the right. Hosting for your online business is critical. Bloo host has a reliable servers and beginner friendly on board waiting for you at serving mass dot com front slash blue. Are you tired of dealing with your boss? Do you feel underpaid and underappreciated? If you want to make it online, fire your boss and start living your retirement dreams now then you've come to the right place. Welcome to serve no master podcast where you learn how to open new revenue streams and make money while you sleep. Presented live from a tropical island in the South Pacific by best selling author Jonathan Green. Now here's your host. As you begin to build your online business, you're gonna go through several phases. The very first phase is the I'm just trying to make a few bucks online, so I have some breathing room face, and that's what we all start. We're all trying to just add a little money to our income streams. For most Americans were upside out the majority of Americans have a negative network. That means that we have more debt than we do assets. And it's harder and harder to leave generational wealth or gifts to our Children because we're trade as a society to pivot. And, of course, this started a long time ago in America. Shift from savings account or credit cards from layaway to have it now and pay later. Unfortunately, it's a powerful mind set. So the first phase week are in is trying to make more money that we spend every month. For most Americans, the difference is $100 or less. It's certainly $1000 or less. So if you could start making $100 profit online every month, where most of us, that means we can stop increasing our debt and we can at least hit break even. And from there we can move closer and closer to decreasing our debt. And so this brings us to a question, Uh, should I take $100 today or make $50 per month forever or even $5 per month? Forever $100 state? That's pretty good. And $5 per month that's only $60 a year, you won't hit profits for a year and 1/2. I worked on a lot of projects in my career, and I can tell you that sometimes have guessed right. And sometimes I've guessed wrong. Some of the projects I've worked on. I took payments up front. I worked on a project, once, took a $2000 payment up front. The client ended up generating $1,000,000. I wish it could have gotten a percentage. Other projects I've worked on, I've got a percentage that over time has become more than $100,000 in residuals. But I've also worked on projects. Whether the client paid me nothing was pure percentage, and then they never launched the product. In fact, that's more and more common. It's that just me. Many people who Duke operating a product creation have clients to do that. They have these big dreams, but they don't have what it takes to cross the finish line. That's how I launched my potty training book. Someone hired me to write it. They never launched it, and I said, Fine, I'm gonna rewrite and put on Amazon became a best seller and really help me launch my writing career, and what we want to develop is the ability to maintain balance. When I look at projects, it's more about controlling the downside. Then it is about maximizing the upside, and I want to explain that to you for a moment. I was working on a project last year about real estate deals, and this was something that a real estate billionaire said, he said. A lot of people could get wiped out by a single bad real estate deal. This is absolutely true. I have a friend who was in short sales. The way short sales works is if you hold the property for more than 30 days, you can end up in trouble. Most people in shorts, especially people in doing the one by one if they hold on to an individual property for too long. All these rules kicking to place. Her taxes start to activate or mortgage activates, and they can't afford it, so they have toe buy and sell the house within 30 days. That's why usually short sellers have the buyer in place before they even find the cellar. It's a crazy market. I remember one time when my friend was quite stuck in this exact situation. So the last thing you want to do is put yourself is part of a project or a deal that if it doesn't work out, you go out of business. And this is where emotion could take over. We're so excited by a big project become so invested that we start to make emotional decisions rather logical decision. So today's episode I'm really gonna work you through my decision making calculus, how I make my decisions, my process in the hopes that it can help you with your decision making process as you grow. Now there's a phrase a term that I used in many of my books. I call it Runway Runway, something we can measure neither money or time. It's how much resource is you have available to grow your business every part of my business. There are two ways I get things done. Number one. This time that means I do it myself. I was experiencing this last night. We're testing something new, and they were a bunch of glitches last night. Two different software platforms had problems. The hosting platform and then the shopping cart. Both had glitches. They both point the finger each other. Whether we found eventually found out to my Tech team that they're both having separate problems, we corrected those. And then all of that stuff happened last night in the middle of the night. Guess who was up the boss? Me and that's okay. That's what it means to be at top. The buck stops here. As the saying goes, when I'm figuring out the best way to do a project, I look at how much of my time will take or how much of someone else Temple taken. It's easy to say, Oh, you know what? This employees $5 per hour to take some 10 hours. That's $50. I could do it myself in four hours, and what we think about is saving $50 not ham spending four hours. So we have to decide what an hour of your time is worth, and you might not be there yet, but eventually get to the point where you go. Okay, I can get paid $20 per hour, so if I could work $20 per hour and I could pay someone else to do that job for $5 per hour. I can afford to have four people working for me the same at a time. I could invest on it, and I know this is a little getting Matthew, and I hate to talk about Matt because it's boring, but unfortunately, a critical part of success as a business person. So when I was first starting out, I had no money. I had a lot of free time, eventually lost my apartment and began living in my mom's basement, where I lived for about a year and I lived on my friend's couch another year and 1/2. So I had very small bills, which is good because that very small income and during that time, my focus was a building my business and I put in massive hours. I put in 14 hour days, 16 hour days, as much they had to just grinding and figuring it out and sitting on that laptop, just putting in the hours, and that can work for a while when you're young and you have responsibilities. If I was starting right now, I absolutely could not start that way. I would not have that much available time because I have a large amounts of my time and large resource obligations because of my family have a wife and Children, so being single living involves basement, so I didn't have a rent issue it enough to pay for food. So during that time, I could spend most of my money reinvest in my business. So when you look at your runway, it could be measuring. How much money do I have that I can pay other people to work for me and how much of my own time can I invest? And if you're the situation like I am right now, we're married, have kids, or you don't have that much time available. Maybe you only work one or two hours a day, and if you're financially tight, you might have a budget to invest in your business of 50 or $100 a week. And so we want to be very agile. But we also want to be strategic about the money you bring in so he can grow as fast as possible. And so we really want to build out your runway. Runway. Means is fast money. I call it fast money. It's money. We get paid fast. Ideally, it's we get paid up front or on delivery. An example of a fast money project is where I do a ghost writing job. I get paid 50 to 75% up front, 25% on delivery of the rough draft, another 25% or 15% on delivery of the final draft. That's fast money. But then I make no money from royalties air from book sales of product sales that all goes away. So you get a larger amount upfront and you trade away a larger amount from the long term. Examples of fast tech projects are a Web design during client work or CEO work. Sarge. Engine optimization, working as a coach or consultants, ghost riding or providing service is there are so many online service is that are constantly exploding anything that you would want to do for yourself to grow your passive income stream you could do for someone else. Anything you would want to do for your own business. For your own passive income streams, someone else will pay you a flat fee or money up front or a service for you to do it for them. I pay someone a fee every single month to run my Facebook ATS. We use an outside firm. Right now. I am looking at hiring someone in house to take over that portfolio because it's growing, and I wanna have someone who's only focused on my accounts and so we can grow in that way. But it's all part of the process when you're looking at building your business. If you don't have a lot of runway, the first thing you need to do is focus on building that right when you need to focus on fast money projects, which is phase one of your development. I cover this in Great Deal on Breakthrough. It's absolutely ah, book. I recommend you read because I get deep into the mass and how you could really build out your runway. But you want to find the asset you have with the greatest amount of leverage. What that means is, what asset do you possess, whether it's a skill, a connection or a resource that you can exchange for the largest amount of revenue for the least amount of your time investment? Ah, lot of people here, this is their first thought is okay, I have a car. I could start driving for a ride share company. The problem with that is you're not leveraging an asset. You're leveraging your time and an asset. The example I like to give all the time is if you have a garage, you can sound proof it, and you could rent it out. The bands and they can practice and no one can hear it and they could have a space. And you don't have to be there. If you do it right and you put like a code on your door. People can come in and do practice during the day when you're not even home. So it's a space. You're not even using your thinking about renting out your house where you live, you have to leave so it doesn't work as well because you have to give up your living space. So what is to find something you can leverage that's scalable and this can be a skill. The first thing I ever did. First leverage I abuse rounds. Billy I'm appraises. My fast money business was I did search engine optimization and video ads and video campaigns on YouTube for small local businesses in Nashville and went really well for about a year and 1/2 before I moved on to the next thing. But it's how we built all my runway. I learned how to do always online skills, working for clients, and then I would use the money they paid me to pay for training. Resource is air. Hire other people to do tax for them and for me, and they don't have more time to find more clients. It's very important to have a deep understanding of your numbers. It's very hard for me while I struggled with this. So I have a expensive bookkeeper who we spend time every single month going over the books together, analyzing, looking, where money's coming in and where money's going so we can be more efficient and I can better allocate resources. So as you grow, the runway concept doesn't change. Instead, it comes OK. I could put money in Project 12 or three. Which one should I invest in? Even I want to do all three. Next. Part of the process is what I call risk management. I mentioned earlier that I tried to minimize the potential downsides and projects I'm working on one of the ways to manage your risk is to mix fast and slow money. What you want is a certain amount of money coming in every week. I had a big conversation with parents about this this morning of the last couple of days because we're at a time where it seems like the economy is on a downturn. She got very worried about our revenue streams and I said, OK, let me give you the exact numbers But I know she doesn't know them. She's runs a lot of the business, but she doesn't see everyone's salary and all those things all the time said Okay, here's what we have to do make every week to pay everyone's salary. So we have a number and this is what we have to generate every single week before I have to start going into the company's savings account, the company's buffer account, and I tried to make I pay everyone every weekend, every weekend. I pay either Saturday morning or Sunday morning to some people some other time sheets late, so we as the business we have a run rate and I know it and I try to make it every week in fact, I try to make it just in the papal account every week so that money goes of the other accounts, never gets touched. And so those accounts keep growing. It's a little game. I play with myself, which means I'm always trying to increase our buffer so that we have more and more space in case we do have a slow week or even a slow month. And that means I will take fast money projects if those are certain goals. So if I have a project and actually last week Ah, fast money project I was working on a delivered a rough draft. They set the payment, and I use that to pay the entire team. There's actually even a little bit of money left over for me. Nice week. So even as I'm growing and even when you become a larger business, you may take on fast money project. Sometimes they take on project that are just to cover the team salary. I'll take an editing project on to cover my editor salary for the week, usually a take on a project of price that covers your salary without using up all over ours. And that means those extra hours she has left in the week are basically free hours for me because I found that client. So I used this decision cactus, even as I'm growing so they can become a point where you don't need to do fast money projects because you have recurring revenues coming in and you may move away from that completely. I like to keep them in place for me. I you have only one or two fast money project in place because it's a risk of Frayer. I like to have that skill out, so people are actively doing something. And just in case something major happens in a major part of business slows down. We still have this other revenue stream that's generating enough to cover everyone's salary every week. That's how I defray risk. The second wave defray risk, besides missing fast and slow money projects, is by creating mixed project. I'm working on a project right now for a client where instead of paying me a flat sea or percentage of the back end, we have a very particular relationship. Well, I get paid, Ah, fee up front. That's good enough to cover my heart costs My editors and my designers, all of those things. And then there's a percentage on the back end that Aiken generate into that could become a lot of money as long as I keep sending people to their book. So that's a mixed project. The project is fast and slow money you can call it Media money generates enough money up front that I'm not upside down. I'm not negative. See, when I write a book for someone else has to go through my editor and someone's got to pay for those hours. So if I work on a book for free, and I spent all my time writing the book and that's been my money on my editor editing the book and then they never launched the book, well, that's just a loss. I don't want that. I would rather have a smaller percentage of the back end was approached about a project last year where someone says, Hey, here's my idea. I'll cover all the hard costs of front. You write the book, you edit the book, you do the launch. You do everything. If there's any Facebook ads, user design fees all paid those into Jonathan. When it's all done. I'll get all the royalties out, and once I'm paid back on my investment, then we'll pay you a percentage. And somewhere between eight and 12 months, I don't take that project is it's all risk. Any time someone else can kill a project through inactive your incompetence, that's a lot of risk. Even people I've worked with who are very, very well known and consider to be low rest people. I've had projects die with them. I worked on a project with someone that, if it peaked, would have generated maybe a couple $100,000 a year. Unfortunately, the project we're working on beside my project quickly hit $100 million a year. So for them, it no longer became worth their time. They pivoted. Now they gave me back all my assets, were very, very gracious about it, very nice about it, but I lost their attention on. Of course I would because I became less than 1% of their potential revenue. When you're thinking about slow projects, it's also what you're building for yourself. So slow project is usually a project that you're doing purely for you. So, an example of a slow project is building a blogger or building a shop by store, launched a Kickstarter campaign or writing a book. Siri's Right now I'm investing a huge amount of money in the service master site. We've done a massive site redesigned, which we're working on for about eight months. We've already redesigned the membership area twice in the past six months and right now the membership area. Boy, it's exactly what I wanted. It's super fast. It's super clean. Every single product on the membership area, it says, enrolled or not enrolled. You know which courses of yours you go to your members, you bury and see how much of each course you've gone through. It's really like my dreams so professional compared to the membership area, which you may have seen if you ever had served master members instead of Ronin school that I built. I designed most of those page templates. I put the each background all that home base that was me that wasn't a designer, cause I only had time, not money. At that point, I'm investing in these slow projects because long term it's worth it. The membership berry is a big posit return, investing because I'm getting less support problems. The old website would crash with glitch. People would lose access and we have way, way lower number of support requests Now that we did last year, support request her down almost 90% and it's beautiful. In fact, I used to handle every support request myself. Now I have someone else on the team do it and we have a developer. They try and fix every problem because they fix it faster than I can. So not only do you get someone whose that's their focus, they're better at it than me. I don't hire people worse than me. Everyone on my team is better neither What they dio. If you're building a Shopify store, it could take time to choose the product's design. The artwork get everything set up on the back end, start getting traffic. All those things take time. And so you need runway to work on your slow projects toe build your slow projects and that never stops. We always have our money coming, and now that we invest in stuff that would generate money long term, I'm investing a lot of money because I want to grow. I want to go for my current number of followers to 10 times that number within the next 12 months. I have a big vision for getting really, really big and requires a big team. If I wanted to stay flat line with my income level and with my audience size, I could just stop having a team it could release. Everyone works for me, get you having a blogger. That's OK, but not great. That's not what I want. The building of a blogger building of ah shot by store, the logic of a Kickstarter campaign or writing your books used to just take a lot of time writing books. I know it takes a lot of time. I'm a fast writer, and I know that I'm an aberration and it could take you months. If you're a good writer, maybe takes you three or four months to write each book. That means you can put out four books a year, so you need money coming in to buy you that time. Now I like to measure projects in hours, not days, because that helps me really figure things out. Like I was talking about any of the other day and she was like all those take four days. I was like, No, no, Tell me in hours because I pay you per hour, No paying per day. I want to really figure it out so that I can really assess how to divert different revenue streams for different projects. It's really important that you see fast money as a phase. If you get into a business that's 100% fast money, you're always looking for clients. An example of this is Web design. If you do Web design for clients, get paid a great deal of money, even if you were the larger firms that charges tens of thousands of $100,000 to build a website. As soon as that project's done, you have to find the next client, which means you're in a perpetual cycle of hunting for new business, and there are plenty companies that do really, really well with this. The difference is a search engine optimization company. The reason that's how I started sells a service that's recurring, and even if I'm only getting paid 500 or $2000 a month per client, if I get 100 clients and they're all being serviced well, by my team. That's $200,000 a month or $2.4 million per year. Gross income. Even if I spend $1.4 million on staff and service's and sales teams, I'm bringing home a cool 1,000,000 a year. So building out things that have recurring income were tailed. Income is where we want to get to the real dream. I saw a quote yesterday, I think not sure who said this, but it's if you don't make money while you sleep, you'll never be rich. I think, uh, Warren Buffett said it. I'm not sure we'll put it in the show. Notes the correct quote. As always, I'm not in front of computer because of my eyes. I'm always outside in the garden recording cause I have no choice. Hopefully, today the gardens not too loud around sunset. Right now, the chicken hasn't gone off next door too much, but it's absolutely true. The best money I've ever made is not when a client hands me check, even though that's amazing. The best money is when I wake up and there's more money in my bank account or more money, my PayPal account or Ivan email that says you made these sales. There's Onley, one app that's allowed to send messages to my watch. I don't have a full fancy iPhone, watches those air too much of a distraction. My watch is mostly fitness tracker. To measure my steps, I realized I'm not wearing right now, even though I'm pacing and walking while I record this episode. So I'm not getting the points unfortunate, but only one app is a lot of send notifications to my fitness. Watch my Samsung Wash that sink to my Samsung phone because I phones stopped having Jack I could put my microphone into, and that's my shopping cart I'm on. Lee allowed to get notified when the sale comes in. No other notifications allowed to go to my watch, so I only want that good news that passive income news and everything I'm building towards is generally passive income because then that's an asset you can pass on. So even if something happens to me, my kids can keep selling my books and keep selling my products on my courses. They still work. The business can still continue to run as long as we put good structures in place between s O P ease and checklists and proper management tools and kind of putting good systems in place, which takes time to build. But it's possible we are working on that right now. And you can use your fast projects to fund growth First Loan money Project as well it can be. Hey, I'm gonna take money and pay someone to work on this project. An example of this is that I used to take jobs, getting books for clients. I'll get paid $2000 a book. This was years ago, and then I would pay someone else $200 a book to write me 10 short books. And then I would launch those onto Amazon and then write passive income. If you want to do create immediacy, I can take fast money project money. You could take money that comes in and use it to run ads to your slow money projects. So you can say, OK, I've got my books. Years have got 10 books out there. I'll take all this money that's coming in and I'll put it into ads for Book one, and you'll increase how much money you're making every month, and then as more money comes in and you have enough buffer now the issue with ads let's say you're doing Amazon ads. That's why I've started to teach about the most is that your money is locked up for three months. So if you're running $5000 a month and ads, which is what I used to do when I was at my peak of running ads, I had to have $15,000 on the table. It feels like you're at a casino. $15,000 is on the table at any given time because you have to wait so long for your return. So there's a 90 day turn between when I spend money. When I get it back. That's a long time. Even if I have enough money to run ads today and they're profitable because I don't make the money today, I need money to cover the next nine days of ads and a $100 a day. It's a lot of money $9000 spending a little more than that, so I need to $15,000. I didn't have that much free cash. $15,000 free cash that you could just put freeze to where you can't access. It is a lot. And so I would take fast money projects and put those into ads until I had 90 days worth of buffer in my ads campaigns. And then I didn't need to express much anymore because the slow money would perpetuate it became a perpetual motion machine. Money would that would come in from my sales three months ago which fund my ads this month with a little profit left over and the next month, I would use the profits from three months before that to fund that month. This is how we use fast and slow money together. As much as I don't want to be 100% fast money, I don't wanna be 100 slow money. I like to balance the different Piper Project they have so that I can balance my risk balance my income streams, and I always have something going on. So example of this is last week was a bad week for my business. You guys right now, last week we were working on a really big project. The client we're working with was a promotion. They did a lot of things incorrectly. They made some mistakes, which I was very surprised because there are much larger firm than me. We're partnering on this issue and they made a lot of sex, and at the end of the week, it looked like we made zero sales and I was really down. I was like, Oh, no, what's going wrong? I've never had something go this bad. I knew they made mistakes that it knows this bad. Turns out when we went back through everything, they made a tracking mistake and I actually made a decent amount of money, so it's very stressful. I didn't find that out until this morning. Okay, it's Tuesday. I depend one on Friday because I had a fast money project. That money came in Friday for that projects. I did undeliverable. They wouldn't pay the team. So even though we actually made enough money to pay her boy because it was a mistake in the slow money there was Ah, yeah, you know me. I don't want to go into the buffer unless I absolutely have to. I try to avoid it, so I'm always trying to increase the buffer I want my buffer. Bigger, bigger, bigger, bigger every month. So I have more breathing room. So my team has more security, so I can hire more people. I'd actually like to increase my staff levels, but I've already grown so fast in the past year. I'm gonna wait maybe another month or two before I do some more hiring. But it's all about that balance so that if one thing goes wrong or if you have a really bad refund, day or product doesn't work, we have diversity Now, First, this isn't how you approach your business. At first, you're just trying to make enough money to stay afloat. So now what I'm talking about a little bit is that next phase where you're trying to catch up to the size of my business, where you're trying to build something that sustained while they're trying to build something that goes from hobby to business that could support your family that were spouse, your loved ones will encourage you when you say I want to quit my day job and really go full bore on this, and that's all process and mechanics and a learning earth. But I want to teach you The big picture is that when you're looking at the money part of the process, it's about at ballots were you always feel in control. There are always gonna be surprises in your business and in life, and you can't predict what they're gonna be at any given time. I'm willing to take on a finite amount of risk between the measurable or limited amount of risk. Sometimes you get approach with projects, the sound amazing, but their massive time investments and they're all slow money. There might be a huge back end. But if anything goes wrong, I don't get nothing. I don't do those very often anymore. If a client has something, it seems really appealing. I'll still do a mixed project just to protect myself or too afraid that risk, because I can only take so much risk. And right now I have so much risk in my business spending a ton of money every week on my team. And that's risk in the sense that I gotta pay that bill every week, Right? That's a guaranteed bill, but I don't have a guaranteed income. Nothing in life is guaranteed. So that's enough risk for me in the same way. The reason I met about 10 employees right now, which is a lot for me last year at this time had to. It's a big growth reason. I don't just hire another person right now. Even though I'd like to is because too much risk. I know what number have to make every week and right now I can handle that. I'm not worried about that. But if that number were to double, I would be stressed out every week. I'm not ready for that next level of risk. So it is a balancing act. It is a learning acted. I want you to see that fast and slow money and managing and balancing risk is part of growing a business. Whether at the very beginning, whether you're further up the mountain, that I am now, maybe to get all the way to the top of the mountain and you're talking about millions of dollars moving around every single week. You have a different approach to risk. But this is how I approach risk. And this is why, even though I've been doing this for a decade, I still make sure that I balance my fast and slow money. Thank you for listening to this week's episode of Serve No Master. Make sure you subscribe so you never miss. Another episode will be back next Tuesday with more tips and tactics on how to escape that rat race. Head over to serve no master dot com forward slash podcasts Now for your chance to win a free copy of Jonathan's bestseller Serve No master. All you have to do is leave a five star review of this podcast. See you Tuesday. Thank you for listening to the serve. No master podcast. Email your questions to podcast at serve. No master dot com and your question with my answer might appear in the next episode.