Are You Ready for Retirement? Great Advice from Kane McGukin, Wealth Management Specialist

Episode 094: Is this the right time for you to retire? Sometimes you're emotionally ready, but might not be financially ready to retire. Vonda interviews Kane McGukin, a wealth management specialist, who has knowledge of the flower business. Kane shares great insight, tips and must know info on retirement readiness, whether you plan to retire tomorrow or 5-10 years from now.

About Kane McGukin
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Transcript

SPEAKER_00 0:03

And there's a couple of things there. People don't get rich overnight. People don't become rock star business owners overnight. And people don't become wealthy overnight. They do all those things by preparing years in advance and making choices on a daily basis that work and forth that welcome to the Business and Pleasure of Flowers.

SPEAKER_02 0:30

We're your host, Fonda LaFever and Lori Wilson, and we believe that business and fun are a perfect combination. I don't like that, Fonda.

SPEAKER_03 0:47

Hey clickers. Thanks for joining me today. It's great to be here with you. You know, this past year I've had a lot of conversations with shop owners that are thinking about retirement. You know, after so many years in business, they think they're ready. There are various reasons, from wanting to spend more time with family, or they're just plain tired and ready to walk away. I work with them on valuing their business now, and we talk about a time frame for making that move. You know, there's so much to think about when you're talking about retirement. And most of it has to do with your future finances. So I ask someone with some expertise on the financial side to answer some questions. My guest today is Kane McGuokin. Kane graduated from Auburn University with a bachelor in business administration in finance, and he has worked in that industry for many years. Technology is his passion, and from portfolio management to digital assets like Bitcoin, he loves to help people progress and help them get to that next level. His creative and analytical mind make him a perfect guest to address our retirement questions. If the name sounds familiar, it's because he is the son of my friend, author and international designer, and actually podcast host of How We Bloom, Miss Sharon McGuokin. Kane is also a fellow podcaster in the financial space. We'll drop the links in the show notes. What I really like about this interview is with Kane's experience as the son of a flower shop owner and designer, he really knows what it takes to run a business. He understands the hard work and dedication that a flower shop owner puts into the business. So it gives us a little different perspective than we would maybe in any other financial planner. So I'm really excited about this. So let's listen in as we hear some suggestions Kane has for us if we're thinking of retiring. Thanks for joining me today, Kane.

SPEAKER_00 2:59

Thanks for having me and happy to be here and look forward to the conversation, Bonda.

SPEAKER_03 3:04

Yeah. You know, we've heard the word retirement a lot lately. And whether it's corporate retirement because of downsizing, some are teachers who've decided to retire because it's increased risk of pandemic and the added work they have. But in our industry, I have to say I've been asked to help value flower shops that they want to sell a lot lately because they're thinking about retirement. One thing we do know that there's a lot that needs to be considered before you retire. So that's why I asked you to join me to share your knowledge on the subject.

SPEAKER_00 3:40

Yeah, well, perfect. It is a good time. Um, I know there's a lot of chaos in the world, but no better time to sell a business than when prices are high and people feel good and those things. So I've spent my years and career in financial services, wealth management, um, also a little bit of technology. So just kind of diverse background, and it's been good to come at things from a lot of different angles. And I think one of the questions that that you're kind of asking is a retirement and b how to retire if you own a business. Uh that's something in my job in wealth management that we deal with a lot.

SPEAKER_03 4:19

Yeah.

SPEAKER_00 4:20

Uh we deal with business owners, we deal with W-2 employees that maybe run in sales teams or kind of management. And at some point, everybody faces that question: what am I going to do next? Can I afford it? So um it's a big question and one that I think we all feel like our situation is different.

SPEAKER_03 4:42

Right.

SPEAKER_00 4:44

But if you break it down at the foundation, it's the same decision. It doesn't matter if you own a business, if you don't, if you make $30,000 a year, if you make three million dollars a year. It's just take it down to the foundation. It can kind of help you walk through that and avoid all the emotions.

SPEAKER_03 5:02

So there isn't a right or wrong answer. Is this the right time to retirement?

SPEAKER_00 5:07

Personally, I mean, I think we all have to sit back and look, and I think to answer that question, is it right or wrong? Depends on what you want to do and what you did. Okay. Because what I think where where we find ourselves in in odd situations and maybe wishing that we had made different decisions is when we haven't thought through what we want to do in the next five years, ten years, one year, whatever that may be. And so our series of choices that we make every day don't take us in that direction. So then all of a sudden we get down the road and we're like, I'm not where I want to be. It's probably because of the choices that you made in the past.

SPEAKER_03 5:47

So it's because we're living in the day-to-day and just really operating on what we need to get done today instead of looking ahead, saying, What do we need to get to the next step?

SPEAKER_00 5:57

Right, right. And that's where one thing that's really can be helpful. Um, because I I get in the habit of just autopilot.

SPEAKER_03 6:05

Right.

SPEAKER_00 6:06

Get up at you know, 10 till 6, get the kids ready, get them out the door, do my thing, get ready, go to work, work, then come home, do dinner, a little bit of kid time, bed, you know, relax, do whatever your hobbies are, and just repeat, repeat, repeat. And so, and this this applies, you know, from the business perspective as well. The way to not do that is to have that running list. What are the top three, four, five things that I really want to do? And then what are the next series of three, four, five things that I might want to do? And then having that list readily available so that every day or every few days, every week, once a month, you're looking at that list. Are these still the top three? And if they are, you just keep making choices that lead towards achieving those three. So that's part of what we do for all of our clients is we have a workbook where we've kind of gone through that whole process. How does money work? How do you have it allocated? So the five you can only do five things with money. That's it. It it has no value, in my opinion. The value comes from either side of the transaction. So we use money as a unit because you know if I give you a hundred dollars, you can go to the store and use it. But if you've got a book that you value at nine and I value at ten, it's because you don't need it anymore and I want it. But if you value the book at nine and I think it's worth eight, it's because you still value it more than I, so I don't need it. Um, so that that transaction is the one where emotionally we all struggle around. And I feel like a lot of that is dictated by not being really, really clear on on the things we really want to do, and so that plays into retirement in a lot of ways.

SPEAKER_03 8:08

Because maybe we don't really want it because we haven't planned for it, correct?

SPEAKER_00 8:13

Or we want it but don't need it. So growing up, uh, it's kind of funny. My dad, you know, is always is that a need or a want?

SPEAKER_01 8:23

Yeah.

SPEAKER_00 8:24

So it's kind of I think ingrained in me, is that a need or a want? Now it's nice to have wants. Sure. But if you go back to your your guide, your plan, your checklist, if those wants are so many that they take you away from the goal, then they kind of damage your retirement. But if if those wants take you towards your goal, then they help you achieve retirement.

SPEAKER_03 8:49

So what are some of the examples that people would have if they're looking to retire? So what would be on that list if I'm like, okay, so I'm gonna retire and I can't just make it an emotional decision. I need to really plan for that. What should be on my list?

SPEAKER_00 9:07

The way I like to do things is one, break it down to the simplest terms, but before you do that, uh figure out off into the future where you want to be and what you want that to look like. So you start there and work backwards.

SPEAKER_03 9:22

So if I want to be able to travel, I want to be able to, you know, travel around to spend time with my family or to see the world, then I know that I need to retire with probably a higher income than maybe I'm even making now, right?

SPEAKER_00 9:36

Yeah, so that's exactly it. So you've defined this is what I want to do. Okay, so now you say, what kind of travel? Is it to Florida? Is it to Europe? Is it to Asia? Okay. Now let's step back. How many times a year do you want to do it? Do you want to be a nomad?

SPEAKER_03 9:54

Right.

SPEAKER_00 9:55

Do you just want to take two trips a year? And and you say, what is that cost?

SPEAKER_03 10:00

Okay.

SPEAKER_00 10:01

Just back in the, you know, we're doing cocktail napkin math here. Sure. Uh it's twenty thousand dollars a year for travel.

SPEAKER_03 10:08

Yep.

SPEAKER_00 10:09

Correct. Yep. Okay. So I know if I get up in the morning, I have these costs, which is X doll a month, which is whatever, $30,000 a year. So now net after tax, I need $50,000 a year.

SPEAKER_03 10:26

Right.

SPEAKER_00 10:27

Five. So if we you know divide by twelve, you know, that kind of gets us, we need four thousand dollars a month or really forty five hundred or so. And then we have to say, okay, uh I still need to save some money too, so maybe I need five or six thousand dollars a month is my burn rate.

SPEAKER_03 10:49

For the what ifs, right? So what if this, what if that?

SPEAKER_00 10:54

Because there's one guarantee in life accidents are gonna happen, things come up that you didn't expect. We know we have birthdays, we have Christmases, we have grandkids, and all those things. Um, and so we put all that together and and we just figure out what's our burn rate, which is if you want to call it the nasty B-word, what's our budget?

SPEAKER_03 11:16

Right.

SPEAKER_00 11:17

Um, but you look at your your burn on the annual, you break it down monthly, and and then the other B-word is balance sheet.

SPEAKER_03 11:26

Okay.

SPEAKER_00 11:27

So uh if I want to do this, how many years do I expect to do this?

SPEAKER_03 11:32

So if I say for the next five years, I'm going to do traveling, then after that, I'm not. So so for my burn rate for the first five years is gonna be you just said about six thousand a month, so we're looking at 72,000 a year, right? And so that's for the first five years, and it could drop down to mid-50s at that point.

SPEAKER_00 11:55

So you're looking at like 400,000 for the next five years, and that's that's after tax money. So 400 divided by 0.7 gives you the pre-tax estimate.

SPEAKER_03 12:10

And I'm probably gonna bring in twelve hundred dollars from Social Security, is about it.

SPEAKER_00 12:16

Right. So that's step two. What does my income look like? Not today. So what does my income look like today? Helps me save for that 400,000 burn.

SPEAKER_01 12:29

Yeah.

SPEAKER_00 12:30

But when I turn that off, because I'm you know no longer have a business or I don't have a W-2 or whatever that looks like for each individual, where is my income going to come from? Because unless you have, you know, north of three, four, five million dollars, you kind of have to you make substitutions, you make a different set of choices because you can't simply divide out and know that you can comfortably make it. So that's really the big question for everybody that wants to retire is how much is enough?

SPEAKER_03 13:03

It's kind of scary, Kane. It really is. I mean, you look at that and you go, whoa, because you know what you're going through now. And as a business owner, as you and I've discussed, it's a lifestyle business, right? I mean, my cell phones coming out, you know, so much of that technology, whatever the case is, sometimes maybe car, gas, I mean, the fuel, you know, those type of things that you're just like running them through the business. Now you're gonna have to put that on that budget sheet to see you're gonna have to pay for that.

SPEAKER_00 13:36

And you're gonna have two different burns. You're gonna have business burn, you're gonna have personal burn, you're gonna have business balance sheet, and you're gonna have personal balance sheet. But the good thing is when you own a lifestyle business, it's all yours.

SPEAKER_03 13:48

Yeah.

SPEAKER_00 13:48

And honestly, you've made it through the hard part. The 55 to 65 years prior, you got there. It's just a different set of choices and decisions. You just have to get clear on what does the next 30 to 40 years look like? So, how much do I need? How much is enough? You answer that question. What do I want to do with the rest? So, do I want to give it away? Do I want to run it down to zero? There's no right or wrong answer. As somebody that's in the wealth management business and advising clients, there don't feel bad that you didn't leave your kids money. Some people's parents left them monies, others didn't. Some people's parents paid for colleges and helped them along in life, others didn't.

SPEAKER_03 14:36

My parents did a charitable trust. My dad's thought was if you haven't made it by the time I die, you're not gonna make it with my money. I always thought that was kind of interesting, right? And I agreed. So it was a charitable trust. So when they passed away, that went to a charity.

SPEAKER_00 14:53

Yeah. And my parents, they pay for our colleges, they, you know, it was ultimatum. Once you turn 21, a lot of these, all these expenses become yours. So that was not fun paying insurance at 21. But um they paid on the front end, they did the college thing, and then now they're on the back end where they're kind of winding down. They both own businesses. None of my brother, sister, I took them over, which for some people that's an option. Sure. Um, great option. None of us went that route, so they're more or less in you know what I call deaccumulation phase. And you're running that math to figure out what I want to do, how much it's gonna cost, and how long will that last? And for some people it's a lot, for some people it's not a lot.

SPEAKER_03 15:36

Well, and I think that's what we're talking about right now, right? Deaccumulation, because that's what's happening here. I want to retire. What do I want to downsize on? What do I need to do? What do I need to sell? And that's kind of the flower shop owner.

SPEAKER_00 15:50

Yeah.

SPEAKER_03 15:50

Or anybody who's a business owner for that matter.

SPEAKER_00 15:52

And flower shops are unique. I grew up in one around one, it's hard, but any business that you own is hard, but the benefit is that lifestyle. And the scary part of having a lifestyle business, when you turn it off, you generally don't have huge 401ks that have grown for 30 years. Your social security is generally lower because you don't have that W-2 number that gets thrown to the IRS every year and kind of pads that social security, and you didn't really like earn out, so to speak, the way that you do when you climb the corporate ladder. Right. And so that math is all lower. But from 25 to 55, 60, you maybe had a better life than what your peers did for the most part.

SPEAKER_03 16:46

Right. Because you were making decisions based on that business, and you were be able to run things through your business, like you know, a lot of places they can't.

SPEAKER_00 16:55

And you were able to have family experiences because you set your work hours. So the number of times that I saw my parents, if we went on vacation, well, while we're on vacation, they weren't making money.

SPEAKER_03 17:06

That's right.

SPEAKER_00 17:06

So the week prior, they work from 6 a.m. to 3 a.m. for five days. Because you crammed two weeks of work into one. But you are able to have different experiences. Maybe it's more time, maybe if you work in a business that's grown really well, you do more, you know, quote unquote better trips. You know, it's just different opportunities. And that's something, you know, we get back to the dollars and the value of money, you can't place value on that.

SPEAKER_03 17:33

Right, exactly. And that's what a lot of shop owners do, or business owners, is like, hey, I'm gonna take off this afternoon because I'm gonna go to my child's ball games, or you know, to be able to participate in what's going on in the family. Irreplaceable times. You're right. That's that's what it's about, and that's what I think so many have enjoyed, and especially spending time with their grandkids. That's what most of them that I've been talking to are like, I just want to be able to walk away so I can spend time with the grandkids. And my question a lot of times then, Kane, is maybe you should just find somebody to manage the business, and then you just continue to own it, and they're like, I think I just want to retire. So that's where we're kind of like that balance.

SPEAKER_00 18:13

Yeah, and that that's a different answer for everyone. Sure. And you find out which answers are wrong a lot later. Yeah. So you have to do your homework, and it takes more than just getting on Twitter and reading 280 characters a couple of times. It takes weeks, months, years to print, plan, and prep for that answer, and and kind of some soul searching about what do I want that to look like. And so when you when you make that decision and you're confident, just ripcord and go whichever way, but to your point, you have this asset that you've built for 20, 30 years, so there's no need to make a rash decision and just hit eject because you got senior itis. I was recently talking to a client, 65, W-2 employee, but at the end of the day, it's just senior itis. Like, I'm tired of working, you know. Can I retire? Well, if you can make it one more year, it would make things better, you'd have the income. But if you're if you're done, you're done. But just be clear on what done means and what that income looks like. And so, for a lot of people, if you're a business owner, in my opinion, if you still enjoy, because who really wants to go sit on the porch and watch traffic go by? Some people do. Some but if you if you enjoy doing something, then you call it re-dash tire instead of retire. Meaning, like, I'm not going to just sit at home, I'm going to retread and do something part-time. And so if you have that opportunity to pass that business down to a family member, a relative, a friend, maybe somebody that's 25 or 30, really loves the floral industry and wants to be an owner, but doesn't have the financial capital and can't get the full amount of the loan to let them do the sweat equity. Every year you get X percent as long as we meet these goals. And then that way you've created a runway for you to extend out another five or 10 years, not have to do all the work, not take that scary zero for income, still have an asset, though you're you're selling it off over time. That probably doesn't work out a lot, but you can do it that way or you know, sell outright. But I think as long as you can kind of keep that asset working for you, in a lot of cases, it's it's a good approach if it'll work.

SPEAKER_03 20:47

If it'll work, and it's really hard to find that right person. I think in any business, it's like, oh, if it's a family member, yeah, that's a little bit different. But if it's someone who is like a like you said, a 25, 30 year old person who's in the business, they love it. Yeah, it's still really tough to turn that over unless you know for sure, you know.

SPEAKER_00 21:06

And some of that comes back to, you know, you know, you have people that work in the business with you over the years. And so though, again, those choices are these people that I can mold. For a lot of people, they wake up and say, I'm ready to retire, I'm ready to be done. Yeah. But again, if if you're not at that point and you're maybe three, five, ten years out, start thinking about do I have the person in the business? Can I hire the person to be in the business and and set it up?

SPEAKER_03 21:37

Right. Yeah, if you could set it up. But what if I'm like that person who's you just said, I have senioritis, I am done, and and I just want to walk away. And I think that's where so many of them are because they're just plain tired. They're just they've been working their tails off because of you know the pandemic, and there's not been enough help, you know. So we're always looking to hire someone. And so physically. Physically and emotionally, they're just tired.

SPEAKER_00 22:03

In that case, which is probably, I would guess, most of them.

SPEAKER_03 22:08

Right. I think now.

SPEAKER_00 22:09

And so in that case, it comes back to what we started out on burn rate and balance sheet. And so you have to look, you know, do I still have a mortgage? Do I not? Do I have multiple properties? Do I not? So what are all the other assets on your balance sheet that you can liquidate? How fast can you liquidate them? And what's the pecking order of which you would liquidate them? What are my costs for getting up in the morning? Because there's a base case. Technically, we don't need cell phones and internet and all the, but we we do.

SPEAKER_03 22:49

Right, right, exactly.

SPEAKER_00 22:50

But you know, we might need the hundred dollar TV package and not the three hundred. True.

SPEAKER_03 22:55

There you go.

SPEAKER_00 22:56

Because you say, do I get three hundred dollars of value out of that, or do I get a hundred? And if you get a hundred, so that's where a substitution comes in. And so you look through the requirements to live, whatever that is for your lifestyle, is basic substitution. I've got product A and B. They have different costs, they have different uses, they have different applications to my life, and and you get the best mix. And so now you've got your cost, and then you have some kind of liquid assets, and then so you say, okay, well, those assets will last X number of years if I never make another dollar.

SPEAKER_03 23:33

Right.

SPEAKER_00 23:34

Because that's really what you're doing. You're never gonna make another dollar other than Social Security, and let's just pretend that doesn't even exist. With the mistake happens when you go through this exercise and you assume that you're going to sell your business for top dollar, your investable assets, every single one of them is gonna work out. They're always gonna grow.

SPEAKER_03 23:57

Right.

SPEAKER_00 23:58

And you're gonna get top dollar for Social Security. Odds are that will not happen that way at all. Half your investments won't work out. Or there'll be a big dip right at the time when the most of your expenses come, or your biggest expenses come through. To one question we talked about that sale of that business, you're gonna lose 40-50% of it right off the bat.

SPEAKER_03 24:21

Because of taxes, right?

SPEAKER_00 24:23

Yeah, yeah. Uncle Sam is he's there, he's ready, he's willing and able. Um, he's not gonna let you sell that thing and not pay him a large chunk.

SPEAKER_03 24:34

So if I sell my business for $500,000, my walk away could be three.

SPEAKER_01 24:39

Yeah.

SPEAKER_00 24:40

Yep.

SPEAKER_03 24:41

And then that's that's the shocking point, I think, for people when they go, oh my gosh, how can that be? I've worked all my life and I've been able to do this, and I've you know, could sell the business, and now I have this chunk of money and and so great point.

SPEAKER_00 24:55

So if you walk home with 300,000 earlier, Vonda, you told me you're gonna travel for five years, and we just quickly made up, and I mean we made them up, but they're pretty fair numbers. Right. You're gonna need 400. So now you're a hundred in the hole.

SPEAKER_03 25:12

Yeah. Wow.

SPEAKER_00 25:14

So do you have other real estate and illiquid out assets in the business? Can you sell them separately? They're probably gonna go together, but can you sell them separately? Uh, does that change the number? Do you have personal assets that you don't love or maybe uh they require more upkeep than you really want to deal with? How quickly can you sell them? And that's just cash flow uh management.

SPEAKER_03 25:39

Yeah, but I think a lot of people don't really look at that. I think they think, okay, I'm selling it for X amount. So that 500,000, I'm gonna give 500,000. So sure, I have my five years because I only need 400,000, instead of going, wow, okay, so I forgot about Uncle Sam. That's got to go to him first, and then this is what I have left. So, like you said, do I have any rental property or do I have a really nice home that I'm willing to sell and downsize and live in, you know, something smaller that would cost me less. All of those things play into this one question is can I retire? Or I want to retire and do it. The other thing you mentioned earlier, Kane, which I thought was so good, is you said don't retire when you're on an emotional low.

SPEAKER_00 26:29

Yeah.

SPEAKER_03 26:30

That's like a knee-jerk reaction, right?

SPEAKER_00 26:32

Yep, because you're gonna take a lower number. You're probably on a low because the business is at a low, which your valuations aren't gonna be that high. Um, and so the best way to make financial decisions and to keep in mind, and it's really hard because emotions play into all parts of our lives, but particularly in our financial decisions.

SPEAKER_01 26:54

Yeah.

SPEAKER_00 26:55

And so even as bad as you look at how 2020 was, and how 2021, with all the chaos and all the things that can distract you and create this fear and anxiety and you know, or excitement, whatever how whatever it is for you. When things feel really good, you technically should be selling. When things feel really bad, and you just feel like you want to pull the covers over, you should be buying. That's just the way it's 100% against um human psychology, but the math and the profit comes from doing the opposite. So there's a great saying, I think it was JP Morgan, when there's blood in the streets, buy. And that's when asset prices are annihilated, 2007-8, March 2020, uh, 2003, plow in. Because the beauty is humans for the most part are up and to the right. It's not linear, we don't go just 45, it's up real high, down real low, up real high, and and we progress. And if you think if you're a business owner, you've seen those cycles. Oh, yeah, for sure. Um, how are we gonna eat next month? Because I've seen four people come in the door.

SPEAKER_01 28:11

Right.

SPEAKER_00 28:12

I need more help because I've had 64 people come through the door. And so what you do is is if you're on that high, that's kind of when you should be thinking, hey, do I have senioritis? Are people willing to pay more than maybe this thing is worth, or can I just get top dollar? Um, and when you've got senioritis and you're just like, I'm out, and the asset prices are down, you might want to think through it. And a bigger part of that is do you have a team in place? Do you have accountants that you've been talking to openly about this for more than you know, since last Friday? Um do you have a financial advisor that's kind of walked you through that you're fine, you've got plenty of assets, you can spend all you want and make it, or hey, maybe we need to push this thing out for two, three, four years, or cool, sell it, but we need to go get a job that makes roughly this amount of income each month. Um, and then legal advisors, that's another expense that maybe that 300 turns into 260, 280, something like that, because they've got time, effort, and energy. But if you set that up months, years in advance and pay on the front end for what you expect on the back end, uh, it'll make that easier and keep those emotions out.

SPEAKER_03 29:38

Yeah. And so if somebody's thinking about retiring now, they really hopefully have already done all that backwork. If not, if you're thinking about doing it in the future, five years, ten years, you need to make sure you have all these people on your team so that you're making the right decision. You don't want to look back and go, ooh, that wasn't a good decision. You know, it wasn't the right thing to do.

SPEAKER_00 30:01

And there's a couple of things there. People don't get rich overnight, people don't become rock star business owners overnight, and people don't become wealthy overnight. They do all those things by preparing years in advance and making choices on a daily basis that work them towards that. And so if you look at it, we all need coaches. If we want to be good, we need a coach.

SPEAKER_01 30:28

Right.

SPEAKER_00 30:29

And your accountants, your attorneys, your financial advisors, even though you hate paying all those fees for them, if they're coaching you on a weekly, monthly, annual basis, then it's worth it. If they're not, and and you haven't been open with them about what your true goals are, uh, then it's probably not worth it. But you need those people and those coaches and those advisors. I mean, even you know, what we've talked about that you kind of help other florists do. It's not cutting stems, unpackaging boxes, and selling product. It's taking the years of knowledge and all the hard work that you put in and saying, hey, this is what generally works and what worked for me, here's a path, here's a plan. So you're effectively just being a coach.

SPEAKER_03 31:15

We try to coach them, but you're exactly right. A per everybody needs a coach, you know. And if you're looking at this going into another phase of your life, especially, you do need the coach to help you do that. And I don't think that a lot of people do have a financial planner. I think they're just like their own person. I mean, they most of them probably have an accountant because they have to do the the work for the shop, but they need both. They can't just have their accountant answering all those questions. They need somebody who can really have their best interest in mind.

SPEAKER_00 31:46

Yeah, and you made a great point there. Phases. So there's kind of three distinct phases of life. You're acquiring knowledge in that first portion, you're building and growing in that middle portion, and then you're decelerating into that last portion, and in that portion, that last portion, you're passing down all the knowledge and wisdom that you learned uh through the hard knocks, through the business, through whatever your hobbies are to that middle and early generation. So I think what I see a lot, and it's not just business owners, um, but it's individuals as well, is struggling with that. I'm not in that upward ascent anymore. And so the the beauty of that as a as a person that's selling their business, well, first you have to come to terms with income becomes zero. Sounds cool, a lot harder in reality.

SPEAKER_03 32:47

Yeah, that's a that's a tough one. Living on your own dime is very nerve-wracking. That's what a sentence I pulled on there. I was like, oh my gosh, yeah, very nerve-wracking because you don't have that check coming in.

SPEAKER_00 32:59

Yeah, and I mean, I've done it myself for a little while. Um, and it's hard. It's more fulfilling, but it's hard. And so you first things first to add some emotion instead of just taking it all out. So this is applicable to a business owner looking to sell. People that came and they're like, hey, I want to buy property, all you know, this, that, the other. We're gonna use it for this, it's gonna be a stretch. And I said, Okay, don't buy it today. For the next six months, put every dollar in an account that you can't touch, that piece of property would would cost you, and go spend the money like you would have to spend if you had that beach property. And if after six months you feel comfortable and it wasn't a stretch and you weren't stressed out because of these additional expenses, go do it because now you have a down payment built up and you know what it feels like. So for someone thinking about selling, take your income, whatever it is, and turn it off and pay yourself whatever that social security number is for six months. Wow. If you're freaked out then, then don't do it. Because that's not gonna be six months, it's gonna be 30 years.

SPEAKER_03 34:11

Wow. That's a really good exercise. You were mentioning about the three phases, and that I have a friend who always said, you know, once you get a certain age, you're in the fourth quarter.

SPEAKER_01 34:21

Yeah.

SPEAKER_03 34:21

And so it's like, okay, what do you want to do in that fourth quarter? Do you just want to sit on your porch in your rocking chair watching the traffic go by? Probably not. You want to be like it is in the fourth quarter of a game that's exciting, right? You want to be out there enjoying life. And if you retire, are you able to do that? So set yourself up for success before you get to the point where you kick that last field goal.

SPEAKER_00 34:44

And some people prefer to play the fourth quarter in the first quarter. Totally fine. Yeah. You're probably not owning a business. The point of that is you have to be comfortable with the decision you made and the impacts it has within the four walls of your house. Whatever that looks like, and whatever that needs to be. What you hear a lot is what are other business owners do? Great. We want to do kind of like what the average is, but we have to realize a high level of those are above the average and a high level are below the average, and we can't make decisions for you or for me based on what Vonda's doing because Vonda has a different set of top three.

SPEAKER_01 35:26

Yeah.

SPEAKER_00 35:27

Vonda has a different balance sheet outside of those fixed costs that we pay because we get up and breathe every day. Vonda has a different set of discretionary choices and decisions. So uh it's good to know what other people are doing, but we don't want to keep up with the Joneses.

SPEAKER_01 35:43

Right.

SPEAKER_00 35:43

I think we all know the downside of doing that. You end up with cars you don't like, clothes you don't like, joining country clubs, you really don't have anything in common just to put that presence. But when you're selling a business, it's the same thing. Because what the Joneses next 10 or 20 years look like, it may not be what you want. Right. And so you've got to do in this case, we'll just say what Vonda wants.

SPEAKER_03 36:07

So your suggestions, our takeaway today would be what are your top three? What is it that you want once you retire? Have your balance sheet ready. Yep. Know what it looks like now, and what you need to live for the next, you're just saying five years because the investments then should grow and take me longer than that?

SPEAKER_00 36:27

I think you look at it in pieces.

SPEAKER_03 36:29

Okay.

SPEAKER_00 36:29

So in our example, you wanted to travel for the next five years, so we established a budget for that. But five years after that, so 10 years, I mean, look, let's just say most people are gonna live on average to 80, 85. Women tend to in financial plans and the algorithms that run behind them tend to live longer.

SPEAKER_01 36:49

Yeah.

SPEAKER_00 36:49

So you have to say, what's my expected and who knows? Right. We're throwing darts, yeah. But you have to make some assessment of how long do I think I'm gonna live. But if you're spending $10,000 a month now, if you end up in memory care, you'll spend $10,000 a month. But if that's not something that's, you know, it's a probability for everybody, but if it's not generally on your radar, you're not gonna be spending ten, fifteen thousand dollars a month in retirement. Right. At eighty. Sorry. At eighty. Because you shouldn't have a mortgage, you shouldn't have stuff for the most part, you're not going to be driving. So all those ancillary expenses that we get from participating in life, they they go away.

SPEAKER_01 37:32

Right.

SPEAKER_00 37:33

So, yeah, you look at the immediate term, because that's the here the now, what I have decided, these are the three things like when I'm on my deathbed, I want these done. So you get clear on that, and then you kind of look five, ten-year chunks out to run that math. And it's just simple math. What do I think the annual cost can be divide by twelve? Okay.

SPEAKER_03 37:58

Yeah.

SPEAKER_00 37:59

Number one, how much is enough? Yep. And then what's my top three?

SPEAKER_03 38:03

Okay. And then make sure it's not an emotional decision that you're like, I'm done, I'm out of here. Do all the math. Make sure you have all your numbers in line before you you make that final here you go, it's for sale.

SPEAKER_00 38:16

Yeah, and if you're at that stage, uh you're probably not gonna be talked out of it. But I'm sure there's some sort of 12-step program that you can go through to try to bring you back in to make a good decision. And exiting is not a bad decision at all. And if you're not done, you're gonna be like Brett Favre, and they're like, hey dude, you're done. Like so, so you don't want to ruin your reputation by overstaying. Right. And that's a hard battle. We're all done at some point.

SPEAKER_03 38:51

Yeah, for sure. If you're saying today, I'm done, just take a step back and go through all these steps still and see if you're financially going to be set for the next five years.

SPEAKER_00 39:03

Right. Yeah. So you mentally are done, physically are done, but are you financially done? And and that's just it's not hard math. It does, it's gonna take you a week or two if you don't already have it in order to get it all together. But that's the only way to make a good decision.

SPEAKER_03 39:23

That's great advice. Thanks, Kane, for joining me today. Now, one last question that we always ask all of our listeners, and that is what's giving you inspiration today? What's inspiring you?

SPEAKER_00 39:35

Twitter.

SPEAKER_03 39:36

Twitter.

SPEAKER_00 39:40

So I and it's funny because I bash on it. Um attention spans are very short, too short, people don't go deep enough. But through Twitter, whatever your topic. So for me, it's cryptocurrencies, it's money. That's kind of my passion project within the realm of what I know. So you can go on Twitter for whatever your thing, whether it's flowers, um, different businesses or selling businesses, find really smart people that you're not finding on CNBC, CNN, Fox News, whatever your choice. You're not finding them there, you're finding them on blogs, Twitter, various social media that give you really good information because it's boots on the ground. You know, it's not the here's the educational theory that I learned from college. It's like, here's what I learned from the grind day to day, or here's what I learned failing my way through life.

SPEAKER_03 40:39

So interesting. Yeah, I've never had anybody say they were inspired by Twitter, so that's pretty cool. And also, I think when you're reading those blogs and things, then you have to take that and you have to decipher that yourself and say, okay, this person said this and this and this, and you have to come up with a decision based on what you're hearing.

SPEAKER_00 40:57

Yeah, what you're hearing, and then it goes back to does it fit my top three?

SPEAKER_03 41:02

There you go.

SPEAKER_00 41:03

And if it doesn't, just move on. That's when you're done.

SPEAKER_03 41:07

Love it.

SPEAKER_02 41:09

Thanks, Kane.

SPEAKER_00 41:10

Thank you.

SPEAKER_02 41:12

Thank you so much for listening to our podcast. We hope you enjoyed spending time with us because we enjoy spending time with you. If you did, make sure you hit that subscribe button or add the Business and Pleasure of Flowers to your Google morning routine or your flash briefing on Alexa. We look forward to seeing you next week.

SPEAKER_03 41:33

So please come back and join us and discover how a bit of knowledge and one small change in your mindset can take you to new levels in your life and business.