January 3rd, 2023
The Wealth Mentor
With Jackson Millan, also known as The Wealth Mentor, who is an award winning entrepreneur and wealth coach. Jackson is the author of the international best selling book ‘Enjoy The Journey: Creating Wealth & Living The Life You Desire’ that has been featured on best seller lists in 8 countries across 15 categories. He has spent the last 14 years helping service businesses understand the language of money and manufacture financial freedom for themselves and their families having worked with over 1,000 clients to help them build over $1.2B in combined wealth. He has also personally scaled multiple 7 figure businesses and has helped many of his clients do the same.
He is a master of helping business owners make money work for them and turn their business profit into personal wealth. (Check out the bonus resources including free copies of his best selling books, wealth calculators and his financial performance scorecard.)
Join us for this fabulous conversation where you will hear Jackson share his tips on increasing profit and building personal wealth. He shares insights from his own journey through traditional financial planning and how he shifted to financial coaching and wealth building for entrepreneurs. You will also hear him discuss the biggest mistake people make with money, how we should really be spending our time, as well as what he wishes people knew about money that most don’t.
Stick around to hear about the financial freedom formula and more. This is an essential conversation for entrepreneurs who want to look beyond the boundaries of their business and focus on wealth building strategies.
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Biggest takeaways (or quotes) you don’t want to miss:
- “If we’re going to create a system, we need to make sure that the default outcome is an appropriate action.”
- The only two tradable commodities.
- The best use of your time is to grow and scale your business and live your life.
- The language of money is universal.
- “Focus on progress over perfection.”
“You don’t need to be actively involved in managing your wealth. The system of wealth creation should take care of itself for you.”-Jackson Millan
Check out these highlights:
- 03:26 Jackson shares how his entrepreneurial journey started.
- 12:20 The biggest mistake people make when it comes to money?
- 15:18 What is Parkinson’s law?
- 19:00 Why is bandwidth the most often overlooked aspect of financial management?
- 25:18 Three things that we need to improve as entrepreneurs.
- 29:28 Jackson explains what a financial freedom formula is.
- 35:08 What does it mean to have an advisor in the driver’s seat?
- 42:51 What Jackson wishes people knew wherever they are in their journey that many don’t.
How to get in touch with Jackson:
On social media:
Learn more about Jackson, by visiting his website http://www.aureusfinancial.com.au/
Special offer for listeners: You can get free copies of his best selling books, wealth calculators and financial performance scorecard here.
Imperfect Show Notes
We are happy to offer these imperfect show notes to make this podcast more accessible to those who are hearing impaired or those who prefer reading over listening. While we would love to offer more polished show notes, we are currently offering an automated transcription (which likely includes errors, but hopefully will still deliver great value), below.
GGGB Intro 00:00
Here’s what you get on today’s episode of Guts, Grit and Great Business®…
Jackson Millan 00:05
You need to learn the language of money because it’s not taught, we don’t learn at school, we learn through firsthand experiences we learn from observing our parents, it’s a subjective experience, and it’s not holistic. So you need to take it upon yourself to learn it. It’s not complicated. The industry has made it out to be complicated. There are very simple systems that you can learn that are going to be life changing, and actually enjoyable. And two, it’s never too early or late. Like, the sooner you start, the better. But I’ve had clients come to me in their 60s, very similar to the story that you just shared, and have been able to manufacture financial freedom very, very quickly because they understood the roadmap. They understood how to create and make money work for them. And they learned how to manage their money effectively so it could continue to build and grow. So I think those are really the two key things you can’t abdicate financial responsibility no one will love your money as much as you do. You need to learn how to manage it for yourself.
GGGB Intro 01:05
The adventure of entrepreneurship and building a life and business you love, preferably at the same time is not for the faint of heart. That’s why Heather Pearce Campbell is bringing you a dose of guts, grit and great business stories that will inspire and motivate you to create what you want in your business and life. Welcome to the Guts, Grit and Great Business® podcast where endurance is required. Now, here’s your host, The Legal Website Warrior®, Heather Pearce Campbell.
Heather Pearce Campbell 01:37
Alrighty, welcome! I am Heather Pearce Campbell, The Legal Website Warrior®. I’m an attorney and legal coach based here in the United States, serving online entrepreneurs throughout the US and the world. Welcome to another Guts, Grit and Great Business®. I’m so happy to have today’s guest, Jackson Millan. Welcome, Jackson.
Jackson Millan 02:00
Good day, how you doing?
Heather Pearce Campbell 02:02
Excellent. Oh my gosh, I just love the good day. I know. We’re all feeling happy right now right off the bat. So this is perfect. For those of you that don’t know Jackson, Jackson is the wealth mentor. And he has spent the last 14 years helping service businesses understand the language of money, and manufacture financial freedom for themselves and their families. He has successfully helped over 1000 clients build in excess of 1.5 billion in combined wealth, and has scaled multiple seven figure businesses. He is the master of helping business owners make money work for them and turn their business profit into personal wealth. So welcome, Jackson. I’m super excited to find out more about you more, about your journey and really have you share some insights for people listening that will help them on their journey as well.
Jackson Millan 02:56
Yeah, appreciate you having me here. I’m looking forward to diving into it.
Heather Pearce Campbell 02:59
Right now, this will be so fun. And I know like there are other things that we can get into along the way you and I share a massive love of animals and nature and some other things that will be fun to chat about. But share with us a little bit. I always love to hear people’s entree into the world of business or entrepreneurship. Can you share a little bit about your own journey?
Jackson Millan 03:20
Yes. So I was very fortunate that I had very good role models from the very beginning. My parents were business owners that are incredibly hard workers. My mom was a hairdresser. She was very, very good at what she did. My dad was just amazing with his hands, he could build anything, he could fix anything. And he had lots of different trade and home services businesses over the years. But as a kid, I really observed them working incredibly hard. And always telling me wearing is a badge of honor Jackson, if you want to be successful in this world, you need to work hard for it and work hard they did. I saw them work 16 hour days, seven days a week for as long as I could remember. But they never had much to show for it. There was always enough to survive. We never went without anything. We always had a roof over our head. And we always had food on the table. But there was always just an ass. And there was never any abundance. There was definitely no financial freedom. And I come to realize that they were working for money as opposed to money working for them. And I’ve also realized pretty early on that just because you’re incredibly good at what you do, it doesn’t necessarily presuppose that you’re going to create financial freedom and have that flexibility that most business owners get into business for. So I started trying to work out a way that I could break the mold and I started training to become a financial advisor at 19. And I very quickly became disheartened because what I thought financial advice was helping people like my parents navigate these difficult financial decisions, ultimately was just product pushing and selling commission based products to people like my parents who didn’t need them and I hated it. Now I nearly threw in my hat. But as I was just about to exit the door, I asked myself a question. I said, Jackson, if you were going to do this the way that you wanted to do it, what would it look like? And I’d been to the term financial advisor. I don’t the term wealth coach. And I started educating my clients around the language of money, and working with them to be able to master their money and work towards financial freedom. And over the better part of the last 15 years, we’ve been able to help 1000s of clients, the world around us billions of dollars in wealth, and I’ve been able to create financial freedom for myself at 33. So we now live on our Animal Sanctuary and final to Queensland. We’ve got 70 animals now, and we’re practicing what we preach.
Heather Pearce Campbell 05:30
That’s amazing. So I’m really curious at the point in your journey, where you decided like, oh, this path is not working. Right. The financial advisor path is not what I thought it would be. Did you immediately make the leap? Or were there shifts that you had to make in the way that you counseled people? Coach, people thought about money yourself? I’m curious, because you obviously had the perspective to know that was not the fit. But did you go seeking additional information and education? Or did you just make the jump? Yeah, it’s a really good point.
Jackson Millan 06:04
The tipping point for me was that at the beginning of my career, I was a very much do what I say not what I do, advisor, okay, and I inherited that from my dad, my dad was a big dreamer. He was always very good at giving advice. He was very wise, he was very well read. But he never implemented all of the stuff that he was teaching me. And I think subconsciously, I probably looked at it skeptically, because he didn’t have the experience to be able to talk from from doing the same things. But he was obviously just trying to do the best by me. And I kind of inherited that trait. And I got to a point, probably in my mid 20s, where I realized that I’d been living hand to mouth myself, I’d been spending all my money. And I just really struggled with this fundamental concept of traditional financial planning. And if you want to be wealthy, you need to defer gratification, and you need to sacrifice. And unlike stuff, this is boring, like, I don’t want to eat cat food for dinner in order to squirrel away every last red cent until I’m 65. So then I can reap the rewards. That sounds terrible. And particularly in 2017, I lost my father at the age of 66, to pancreatic cancer. And even though he hadn’t been incredibly smart with money, he did try and put money away in order to prepare for his golden years. But when he did finally retire, and start reaping the rewards of his hard work, and he didn’t even get an opportunity to enjoy it. And that was really a catalyst for me. That catalyst made me ask the question, well, what if the opposite were true? What if I could have my cake and eat it too. And the idea of shrinking yourself wealthy and this is what resonates most with entrepreneurs and why our system works so well for business owners, is because as a business owner, we are manufacturers of wealth. We manufacture wealth every day with our business, we are actively involved in turning our skill set our expertise, our IP, our time and knowledge into money. So what if we apply that same philosophy to our wealth creation, and you only need to shrink yourself wealthy, meaning you need to make a scarcity based choice if there is an absence of means. So the precursor to solving that is having a better plan, what we call a three dimensional plan, because the vast majority of people are one dimensional planners, they work towards one goal at a time, I want to buy my home, I want to pay it off, I want to send the kids to a good school, I want to buy a new car, I want to go on a holiday like a horse with their blinders on. And what inevitably happens is they have this one goal, a conflicting goal comes out of the periphery that competes for those resources, and they now need to make a scarcity based choice. However, if we were just better at planning, we could have planned for all of it and we could have it or we can have our cake and eat it too. And that’s how I went from living hand to mouth myself to being able to create financial freedom in a very short period of time. And why we’ve been so successful in helping our clients do decide.
Heather Pearce Campbell 08:55
Hmm, well, first, I want to acknowledge I’m so sorry about the loss of your father. I think so many people can relate to that like having watched a parent myself included, work so hard, trying to do the right things right. I feel like very few people are just naturally excellent with money like it is something that most of us have to learn right? It’s a resource to manage it. There’s so many things that tie in to the creation of money and wealth right our mindset you talked about like scarcity mindset versus what could another approach be right. But the motivation that came out of that of like watching your father walk that path and just really thinking there has to be a different way. I love that you were able to do something with it that was so meaningful, not only for you, but for your clients. I’d love to hear more about the three dimension plan versus the single dimension right I think we got the point around like so many of us have blinders on when It comes to like achieving this goal in relation to our money or this goal in relation to our lifestyle. But it sounds like you have a way of addressing it. That’s much different.
Jackson Millan 10:10
Yes, I definitely do. So when it comes to realize for myself, and selfishly, I built all of our systems for me, because I needed them. What’s been interesting, Heather is that I’m in recent times, I’ve actually been formally diagnosed with ADHD. And with that, it actually explained a lot of things that most people with ADHD really struggle to defer gratification, they have hyper fixation on things that they get deeply obsessed with and just throw immense amount of energy effort. And also financial means towards it, only just to lose interest and move on to the next thing. It was incredibly frustrating through my earlier years as I was kind of navigating that. But what I’ve come to realize is that I myself had an extreme, but to some degree, most other people, their financial operating system is subjective, knee jerk, reactive, and the default outcome is not appropriate action. Appropriate action is the outlier. So I started working out, okay, if I was going to fix this, what would it need to do? And I credit a signature system that we call the Wealth Mastery machine. And the reason why we call it a machine is let’s think about what a machine is. A machine produces a regular, repeated, consistent result. That and if you’re in your experience of working with so many entrepreneurs, how many entrepreneurs didn’t get explained their finances as a machine?
Heather Pearce Campbell 11:30
Right, didn’t know the whole systems concept, right? Even, you know, and I’ve talked to people who are truly systems experts who are like, No, that’s not a system, you got to process but it doesn’t run itself. It’s not automated, you know, to mean, like, so long as it requires a human to do each of the steps, it probably is going to fall apart. Right?
Jackson Millan 11:54
Exactly right. So what we basically did is we said, Okay, if we’re going to create a system, we need to make sure that the default outcome is action, the appropriate action. And the idea here is that we all want to create financial freedom. And there are three pillars of what we need to create, a three dimensional plan to have default actions, and have the ability to optimize and improve those financial results over time. So the first pillar of what we need to do is we need to defy, the biggest mistake that people make is that they believe that money is the destination is not, it’s the vehicle, it’s the hammer, it’s the screwdriver, it is the tool that is required to get the job done.
Heather Pearce Campbell 12:33
And when you say money, money is the destination, are you thinking of like the folks that are like, Oh, when I make my first million dollars, or whatever, like they’re thinking in terms of like, that’s the arrival point.
Jackson Millan 12:44
Exactly, it is typically an ego based guess. And it is not tangibly linked to anything, which means that they are not invested in that number. And it is likely not going to be enough, or they’re not going to be connected to it because they actually haven’t done the work to define what that amount of money could produce for them, or how they should actually do it is reverse engineer. So what we go through with our clients is an exercise of creating a 20 year roadmap, which sounds really scary for most people. And the idea here is we document all of their lifestyle and financial goals over 20 years. We then quantify each of those goals, and reverse engineer them into a tangible action plan, which defines the income target they need to achieve, how much surplus that they would need to have, where would they need to allocate that surplus to free suppose each goal would be achieved. And the cornerstone of this header is that if we can link the outcomes that are intrinsically important to you, the home you want to raise the kids in the school, you want to send them to the holidays, you want to go on the cars, you want to drive the hobbies you want to pursue whatever else you want. These things that you’re deeply invested in and reverse engineer that into a tangible figure. So let’s say for example, you need to earn $250,000 a year, in order to achieve all of these goals, how much more invested are you in hitting that target. So that’s the cornerstone. And that’ll then allows us to connect the activity that you do in your business to all of your financial goals and metrics. Defining is really key. We work on some money mindset help us shift some of those self limiting beliefs and behaviors. And that basically forms the key to everything that we do moving forward. The second part is create the it’s not the money that you make, that matters, it’s what you keep that counts. So wealth is created with cash flow. Most people, their business and their personal finances is a cash eating monster. They make money and before they know it, the money has slipped through their fingers and they have no idea where it’s gone. So what we need to do is we need to create a cash flow structure that leverages a behavioral principle that we call Parkinson’s Law. Have you come across Parkinson’s Law before heard that?
Heather Pearce Campbell 15:12
I am sure that I have, I should know it.
Jackson Millan 15:14
Let me explain to that to those who are listening who haven’t heard of it. So Parkinson’s Law is a behavioral principle that governs all of us as human beings. And it basically states that as a human being, the more means that we have, the more means that we use, we always use the means that we have available. So the example I really like to use is the assignment back at school, when the teacher gave you eight weeks to do the assignment…
Heather Pearce Campbell 15:36
It will take you eight weeks, right? So I think I’ve heard this principle in relation to time, right? You want yourself whatever number of hours to work. And that’s what it’s going to take to complete that thing.
Jackson Millan 15:48
Exactly. And what’s interesting is that in this world, there are only two tradable commodities, there’s time and there’s money. And they operate on very similar rules. So Parkinson’s Law plays out in your time, as much as it does for your finances. And what we need to do is we need to create a structure that presupposes surplus. So instead of having income minus expenses equals surplus, we go income minus surplus equals expenses. It’s a simple shift about by limiting the means that we have we limit the means that we use pretty simple, right?
Heather Pearce Campbell 16:27
Right. Yeah, simple. And yet, when you think of how many people would naturally arrive to that, right? Not many, I think most people are like, what does it take to survive? What does it take to get this business up and running, I’m just going to pay those expenses, and then they end up living on whatever’s leftover.
Jackson Millan 16:47
Exactly. And the big issue here is that most people believe that cashflow management requires the dirty b word – budget. No one wants to budget, budgeting, achy, hate it. As an entrepreneur, particularly when you’re successful, you’re good at what you do, you don’t want to have to budget. But what you want to do is you want to be able to work out what does your lifestyle realistically cost? And then in turn, based on what you’re trying to achieve, and the income that we’re producing? How do we make sure that we presuppose that surplus, so it is basically guaranteed, and then it’s a matter of having a system to allocate that surplus, whether it’s paying down debts, or whether it’s building wealth, and we keep this super, super simple?
Heather Pearce Campbell 17:31
Well, it’s just reminds me of how important it is for us, because the way that I think about it is we all have limited time and attention, right? And just like right now, one of the things I’m trying to tackle in my life, because we’re a few weeks away from starting a new school year, right? My kids are both going to be in a full time school schedule. But it’s like, okay, how do we get, are we as a family get our mind and our schedule around? Meal planning, right? Planning, because it’s one of the things that consistently has slipped through the cracks that I’m like, Okay, we’re handling this. And I have limited time and attention to do it. Right. So I’m calling on some experts and some resources to help us figure out a system that will work that we can stick to money is the same like all I think we all have areas that we’re naturally inclined to. But for many of us, it’s not money, and the importance of sitting down with somebody like yourself, my husband and I connected with a financial advisor this past year, who walked us very much through the process that you’re talking about that it really gave us the structure that we needed to be having the right conversations about our money, right. But without getting the help, we wouldn’t have gotten there on our own. I can just say that.
Jackson Millan 18:50
Exactly. It’s so important. And the key part here, and I’m glad you mentioned this around bandwidth. This is the most often overlooked aspect of financial management. And the reason why so many people put it on the backburner and defer it and don’t think about it, it’s because they believe that it requires so much bandwidth, and where they’re actually investing their time is what we call life raft activity. So when we get to the third pillar, which is management, our whole entire system takes our clients less than 30 minutes a month to manage. And it’s built off a principle that I wrote about in my first best selling book that I actually took from Barack Obama. So President Obama in his presidency, only wore Navy suits and white shirts. And the reason why he did this is because he realized that he only had so much capacity for making decisions each day. And there comes a point in his day where he reaches decision fatigue where his ability to make good decisions is exhausted. And he didn’t want to use any of that decision making power to decide what he was going to wear in the morning. Right. So when you’re talking about running a family and running a business and trying to live a life, you don’t wanna have to think about coming home and have an evening and working out. What am I going to cook for dinner tonight?
Heather Pearce Campbell 20:04
Yes, that’s exactly it. My brain feels irritated, wasting time on decisions that I feel like should already be handled. It’s things right. Like my own paperwork, I’m fine dealing with other people’s paperwork, I don’t want to have to put that much effort into managing my own receipts or whatever, right, which is why we need a system to do it.
Jackson Millan 20:25
Yes, it’s all of this kind of stuff that I call life raft activity. Yeah, because there’s two types of activity in the world. There’s life raft activity, and there’s yacht activity. And stuff like managing your cash flow, doing this paperwork, putting food on the table, or thinking about what you’re going to cook, and all of these kinds of stuff. It’s not needle moving stuff, it’s necessary stuff. But it’s not necessarily needle moving stuff. It’s not the big strategic decisions that are going to catapult you forward. So we need to be able to systemize, commoditize, automate that life raft activity to the best of our ability. So then we can save that bandwidth for the yacht activity. It’s the stuff that’s really going to move the needle forward the enjoyable stuff, which once again, it comes back into those tradable commodities, there’s only two. There’s time and there’s money. Sometimes we need to know how we buy back our time. So we can then go and invested elsewhere for a high yield for greater benefit.
Heather Pearce Campbell 21:19
Yeah. Oh, it’s so true.
Heather Pearce Campbell 21:22
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Heather Pearce Campbell 24:00
My husband and I were having conversations even recently about this because he’s like, I don’t mind doing the grocery shopping and I don’t mind doing like some things that really irritate me, right? But I said, I know you don’t mind it, but should we still be doing it? That’s my question because our priorities in life are to maximize the time that we get together to maximize you know, that’s been extraordinarily limited as parents during COVID with little people right? Our date nights basically shrivel down to like nothing. You know, should we be doing it? Yes. You don’t mind doing it and I hate doing it. But should we be doing it at all right and so I’m really pushing for like, what are some creative ways and I love your description of the life raft up activity, or we can stop doing all these life rack life. Can’t even say raft activities that annoying me right? In lieu of what’s the alternative? Adventuring together spending more time with our kids doing, you know something else other than that.
Jackson Millan 25:07
100%. And we do an activity with our clients around this. Because we believe that we need to understand the triple bottom line, there are basically three things as entrepreneurs that we’re trying to improve, which is profit, our time, and our wealth. So those are the only three currencies that we should really be thinking about. It’s about maximizing the profit in our business, time disconnecting our effort from our income. So how can I increase profit in less time? And then how can I systematically build personal wealth, which becomes my number one employee that will work tirelessly for me 24/7 365 with no sick days, no annual leave all of it, basically, it’s going to work for me. So the activity that we take our clients through, and I do this myself, personally, once a quarter is what’s called the time sucking monster. And what it requires me to do is to do a complete time audit of every single minute of my day. And it sounds cumbersome, but it’s actually quite easy. We’ve created a system to do it. And the first thing that I do is I work out, well, what is my time worth? So I work out? What’s my annual earnings? Let’s say it’s $500,000. Okay, and then I work out to two numbers, I work out. What are the number of hours that I work per week and the number of weeks I work per year. So I work about 40 hours a week, I work about 44 weeks a year. So that means that my effective hourly rate is $284 an hour. And then I’ve worked out my life hourly rate. So there is 8760 hours in a year. So I divide 500,000 by 8760, which works out to $57 an hour. So that basically means that with these two numbers, it allows me to evaluate what are the tasks that I should delete that I’m just I shouldn’t be doing anymore? What are tasks that I should be delegating? Because they’re still valuable? But that is not valuable for me to do? And what are the tasks that I should dominate the things that I should be really focusing on allocating that time, but sometimes that’s just taking that off the table and just taking it to enjoy and chill out. Because this is the biggest issue in the entrepreneurial space. We don’t have a triple bottom line, we trace the only quantifiable metric, which is more profit or more revenue or more, more, more, more, more. And that’s not sustainable. It’s about having balance, running the marathon and not doing it at Sprint pace.
Heather Pearce Campbell 27:32
Yes, yeah. No, I think it’s a challenge for people to get out of the sprint mindset.
Jackson Millan 27:38
Yes. And giving yourself permission to say, hey, if I don’t want to do the cleaning anymore, let me hire a cleaner a couple of times a week or once a week to come in, hey, if I don’t want to cook meals, there are so many good services out there that you can order nutritious meals in that gives you diversity, even just get your your these food boxes where you can just have all of the groceries and ingredients and everything that you need to cook it in 15 minutes, whatever. Get a personal chef, if you’re successful enough to warrant the investment, there are so many things that you can do that make your life just so much more enjoyable, that you can focus on the things that really matter.
Heather Pearce Campbell 28:16
For sure. And I’m curious, because when I think about, you know, folks listening, I imagine there’s a lot of people that have some other systems in place, right? They’ve got some of their money working for them, they maybe they’ve got a savings plan, maybe they have an investment plan, they’ve got part of the structure, but they’re still not at the place of like, Oh, I really have this sorted out. Right. So for folks that are kind of midway down that path, what do you see them struggling with most to kind of take their plan to the next level?
Jackson Millan 28:47
Yeah, it’s a really good question. I think it’s knowing the magic number. And the magic number. The financial services industry globally complicates this, because traditionally, the industry wants you to work with a financial advisor with a fiduciary who makes these decisions for you, because they’ve made it out to be too complicated. Now, for most entrepreneurs that have just want to hand over the keys to the vault, they want to be involved. They want to have a done with you solution I want to work on how do they apply the same principles like what they do in their business? It’s like, you’re not gonna just hand over your business to a stranger. Why should you do it with your money? So I try to simplify this and we’ve got a really simple formula, we call it the financial freedom formula. So what you firstly need to do is you need to define based on the dream lifestyle that you want, it’s gonna allow you to have the experiences and do all the things that you want to do. How much income do you need per year to live that lifestyle? So for me personally, it’s about $200,000 a year. And the financial freedom formula is the passive income divided by five and multiplied by 100. Passive income divided by five multiplied by 100. So for me 200,000 divided by five multiplied by 100 is $4 million in net wealth. So if I have $4 million in net wealth outside of my home in my business, I am financially free. And we need to work towards that cool, okay, well, for some people, they’re gonna have a come to Jesus moment when they work at that number three, negotiate, that’s a big number. And that’s okay, we need that. What we then need to define is the levers that we pull to get from where we are to where we need to go. And there’s only three levers. Number one is how much you contribute. So what is going into your wealth creation to allow us to achieve that? Number? Two, how much risk are you taking to get there? So if you keep all your money sitting in cash, it’s not doing you any favors? It’s probably going backwards after inflation? If you got it in the share market? Yeah, on average, we’ll make 10% a year, but it’ll go up and down in the process. Right. So it’s about finding, what’s your tolerance to risk? What is the assumed rate of return? Or three? How long are you prepared to wait? And out of those three levers, the one that we can influence the most, is how much we contribute? Yeah, make it simple.
Heather Pearce Campbell 31:08
That yeah, and I’m really like, you know, thinking of it in terms of the Levers, I do think when you say like, some people are going to have a come to Jesus moment, when do you actually figure out especially moving forward, because obviously, you have to take into account inflation cost of living, you know, moving forward, it’s because we did this, right, we went through this exercise, and it was eye opening to think like, and if we wanted to leave, you know, whatever X number of dollars for our children or like it, the numbers get pretty big, pretty fast, right? Even on a moderate, on a moderate, you know, annual expense basis. So with that in mind, and you just pointing out that the thing that we can most impact most quickly is the contribution. All right, you walk me through some ways that you help clients figured out how to do better at that lever, right? Because that’s more than just making a decision that’s like, strategy and business. And like, there’s a lot that goes into that one lever.
Jackson Millan 32:17
Yes. So the typical financial planning way about this is that you cut your expenses, you trim the budget, so you’ve got more surplus, bullshit. As an entrepreneur, don’t shrink yourself wealthy, it is not sustainable. You might be able to do it for a week, or a month, or a year, or even a few years. But there is inevitably going to come a point in time where you fall off the rails, and I’ve seen in my experience, that you will end up doing more harm than good, because you will, you’ll fall back into old habits, and you’ll compensate for lost time and missed opportunity. And it’s miserable.
Heather Pearce Campbell 32:50
This, I feel like this needs a double underline right here, right? Because I think people sometimes don’t understand, really the nuance of what you’re saying. And I heard somebody else say it a different way. Really early in my career, I had a business coach, and she said, you can’t get fat and skinny at the same time. Yes. Right. And it really is a mindset shift, but a way from scarcity into more of an abundant mindset, right? So Exactly, yes. So help, because some people are going to struggle with that they’ve been told their entire lives, watch the expense column, skinny down, do all of this other stuff. That’s very traditional advice. Exactly.
Jackson Millan 33:31
And I use a very similar analogy is that there comes a point in time where you’re cutting the fat, you start cutting into the muscle, and without the muscle you can’t operate. So we need to make sure that we’re running, we’ve got the structure, which to the structure basically takes care of the expenses and what we call cashflow creep, because what we want to avoid is as the income increases, the lifestyle increases proportionately. And as a result, we have no more to show for it. In some cases, we have less to show for it, we’ve seen in some circumstances. So what we need to do is we need to understand okay, for me to achieve the goals, how much do I need to contribute? Therefore, based on my lifestyle, and what I want to do, if I add the surplus required and the lifestyle, what’s my income target, then in order for me to hit that income target, what’s my profit target? Then based on that profit target? What’s my revenue target? Then based on that revenue, Target, what’s my client target? And then based on that client target, what’s my lead target? So we can link all of the activity to the outcomes and quantify the gap. And now all that is the only variable here is you? Are you prepared to do what is required to hit those numbers? Do you think it’s possible? And some cases it’s not right? I’ve had some people come to me that is super ambitious. And when we go through this exercise, they go, Oh, shit, that’s a big number. I don’t think I could do it. At least now. I think what’s possible. Okay, great. Well, based on what you think is possible, this is what the likely outcome watch Objectory is. It doesn’t mean we can’t play catch up later on down the track. But let’s do start setting a realistic of what you think is possible, and what’s reality, and then set a trajectory based on that. So this is where we start calibrating people from dreaming into really doing and managing and manufacturing wealth and manufacturing financial freedom with being in the driver’s seat and having control.
Heather Pearce Campbell 35:23
Well, the thing that I love about being in the position of having somebody like you and an advisor seat, right, we went through putting a plan in place, right, what you’re talking about, like actually turning it into like a practical step by step, how do we achieve these numbers starting on the plan, and, you know, year two into it, having like, some major expenses come up, right? We’re like, okay, you know, some things we can plan for, some things we can’t. But what does this mean for our plan, and having somebody who is comfortable helping people create these plans be strategic about the trade offs, I just have found immense comfort in being able to have somebody to call to say, hey, this came up, what do we do now to kind of fix our plan, right? Or to adjust for this? Do you find that you are having those conversations with people once they’ve got the plan in place? And what are the things you most often?
Jackson Millan 36:25
Yeah, there’s always stuff that comes and hits us for six or throws a curveball at us. It’s just lies, it’s just business. And these things happen. So what we try and do is we try and use these experiences to better adapt our plan, and how do we create better margins of safety and build a war chest that ensures that we can factor for these unforeseen events, which are inevitable, they’re going to come up. And this is about what we call our plan A and plan B philosophy. Our plan A is everything we’re trying to achieve assuming everything goes to plan A, and plan B is what happens when the wheels fall off? And how can we use our experiences, our intuition, our insights, to be able to forecast what is possible, and work out? What risks do we self insure for? What risks do we outsource? Or what risks do we just accept, if they happen, they happen, but the probability is low. And we just recognize and make risk adjusted decisions on that basis. What’s really important about what we do is we teach people how to better think when it comes to their money. And so they can make better decisions for themselves and continue to improve and calibrate their own roadmap. And I think that’s what’s really important, and knowing how to adjust for these things and factor them in. So they don’t become detrimental anchors that kind of hold you back from what you’re trying to achieve.
Heather Pearce Campbell 37:44
Yeah, it’s so true. And I think with money in particular, we really can punish ourselves around like, oh, I stopped doing the plan, or I missed the mark, or, you know, I wasn’t able to achieve X, Y, and Z. And what I love about having an advisor on board is like, we’ve been able to look really creatively like, Well, what about if you do this over here, this thing that you didn’t even think of that you’re sitting on as an asset, because like, we had a $20,000 furnace replacement that we had to deal with, you know, in the middle of winter, last year, and so, you know, that was one of those things like, okay, yeah, we didn’t have $20,000 in our budget for this thing that just has to happen. But we quickly figured out how to make it work and to not impact the trajectory of our plan for the year. Right. But I don’t know I just having experienced trying to do finances without somebody like yourself, it’s, it’s hard. Can you speak a little bit to that, why that is for most people?
Jackson Millan 38:50
What this boils down to Heather, is that most people assess their finances based on a black and white pass fail strategy. It’s okay, I set out to achieve this goal. I didn’t achieve it. The worlds come crashing down, I may as well give up. And that’s not how it works. This is a momentum based plan. So the idea here is that we’ve created we understand what’s the Northstar? Where are we actually trying to get to reverse engineer that into the milestones. So we set quarterly targets across six key categories, what we call our money metrics for our clients, that allows them to see how they’re progressing towards that. And then we use a momentum based plan that we say, okay, cool. Over the 12 months, we’re trying to get from here to here, Q1, we should be about here. Okay, maybe we’re a little bit short call. This is what we’ve got to do to recalibrate for Q2 to play catch up. Maybe we’re still a little bit short. Okay, cool. What are we going to do Q3? And if we’re constantly having these back to back shortfalls, we then need to reassess. Are we being realistic, and maybe we just need to recalibrate our trajectory, because there’s no point saying to yourself, hey, like for me, I’m five foot six and I weigh 60 kilos. I’m not gonna go and compete in Mr. Olympia, right? It’s not possible and it’s one of those things, right. So we’ve got to get out of dreaming and making ego based decisions. And having what we call a feedback loop. The idea of a feedback loop, and it’s been used for hundreds of years. And it’s one of my most powerful tools that I use personally, and that we use with our clients is that we all have a perspective of what’s possible, think about that, like a circle. And then we have another circle, which is the reality, and they don’t very closely overlapped. And the problem is for most of us as entrepreneurs, we then once we see the reality, we then make a new perspective. So we’re always looking forwards, as opposed to taking the time to reflect as to why the overlap of those two circles was only what it was, let’s say the circles overlap 25%. So you were 25%, on track for what you thought was going to happen. Why? Okay, what could I do differently next time, what changed that I didn’t perceive sitting out. And by doing this kind of thing, over time we bring this circle is actually very closely overlapped. So over a period of 12 months or 18 months working with our clients, we have them so like detailed calibrated to what is possible, and the sensitivity of the levers in their particular situation, that what they perceive they achieve?
Heather Pearce Campbell 41:14
Hmm, well, I love that. I mean, and one of the questions I had for you is how far off even are people frequently with their North Star, right? Like having that match reality of what they actually need? Or because I can imagine, some people don’t even really know how to get there.
Jackson Millan 41:35
No, I don’t. I promise and 90% of people flying completely blind. And the analogy I like to use is that majority of people are walking in the dark financially, like visualize yourself that you’re in a strange hotel rooms first night, and you wake up in the middle of the night and you’re trying to like what are your way to the toilet without waking up your partner or turning the lights on? How do you walk, right, you’re like shuffling you’re filling out. You don’t want to kick the coffee table, you’re tentative and everything you do. And this is exactly what people do in their finances for their entire lifetime. So what we need to do is we need to turn on those lights financially. Sure, we’re still in a strange place whilst we’re getting used to it. But we can at least make decisive steps in the right direction.
Heather Pearce Campbell 42:19
What do you wish people knew? Right, especially earlier in the journey, or you know, and I’m sure that there are plenty of people like I had one guy on the podcast who talked about, you know, he went through financial catastrophe after financial catastrophe. Through midlife, he was like, I did not figure out wealth creation until I was in my 60s, right and now teaches other people about it. But what do you wish people knew really wherever they are in their journey that many don’t?
Jackson Millan 42:51
Yeah, I think there’s two points here. The first point being that you need to learn the language of money, because it’s not taught, we don’t learn at school, we learned through firsthand experiences we learned from observing our parents, it’s a subjective experience. And it’s not holistic. So you need to take it upon yourself to learn it. It’s not complicated. The industry has made it out to be complicated. There are very simple systems that you can learn that are going to be life changing, and actually enjoyable. And two, it’s never too early or late. Like the sooner you start, the better. But I’ve had clients come to me in their 60s, very similar to the story that you just shared, and have been able to manufacture financial freedom very, very quickly, because they understood the roadmap. They understood how to create and make money work for them. And they learned how to manage their money effectively. So it could continue to build and grow. So I think those are really the two key things you can’t abdicate financial responsibility. No one will love your money as much as you do. You need to learn how to manage it for yourself.
Heather Pearce Campbell 43:52
I love that super, super important. How much and I would love to hear next, like the various ways that you provide support and services to your clients. But I am curious how much of what you do, like talk to us a bit about accountability, what the what the role is how much of how much accountability is involved in the ongoing support of your clients?
Jackson Millan 44:16
Yeah, it’s interesting. I probably used to provide more accountability to my clients years ago. But now the systems take care of the accountability, keeping in mind that when we need accountability when the default outcome is not action, yeah, because it’s like, hey, Heather, have you done that thing? Hey, Heather, have you implemented that? Hey, have you done your suite today? Have you put money into your investment operating system? Accountability is there as a gap filler when the system is not automated, and the default outcome is not action. So 80% of the work that we do with our clients is all about implementing the wealth master machine. It’s about getting the systems in place and yes, we hold them accountable to set it up. But once it’s in place, it literally takes them 30 minutes a month to manage. And where we play the role is the yacht based conversations. Cool, we’ve got the system in place, we understand the sensitivity of the Levers, we know, are the indicators where things are on track or off track or need to be adjusted. Now, how do we elevate this thing? How do we scale this thing? How do we correlate the growth in your business to the growth in your wealth? And how do we super supercharge and fast track our way to financial freedom? Those are the types of conversations that really lights me up. But the precursor to all that the system needs to be in place first, which typically takes about 90 days.
Heather Pearce Campbell 45:36
Awesome. Well, and I love that, like, even the confidence that comes with like, the system does the work, right? Like how many people are sitting here going, oh, I need that system? I don’t have it yet. like certain things are working, but not all of it. Are there things that are unique to entrepreneurs? Like when you’re having? Yeah, when you’re having some of these, you know, yacht level conversations, talk to us about kind of the unique twist that entrepreneurship throws in?
Jackson Millan 46:06
Yeah, I hate to pick fights with the financial services industry, but it’s just true. The vast majority of financial advisors and fiduciaries and even many accountants, they don’t understand business. They ignore business as an asset class.
Heather Pearce Campbell 46:21
Like, if you’re an employee, great, let’s talk.
Jackson Millan 46:24
Yeah, like, how many business owners I’ve seen go to a financial advisor, and they only say, hey, once your business has paid you, the money will only deal with the money that you’ve been paid, right, we’ll just ignore what’s in the business and what you’re doing in your business completely. And let’s be fair, that if you look at any rich list around the world, every single person on there has either got their because of a business, or because of a business that was created by one of their family members that they’ve inherited, right. So business is the most valuable asset class that you will have to create and manufacture financial freedom, it is remiss to ignore it when it comes to creating a financial plan and building wealth. So what is critically important is that we understand the opportunity cost evaluation of when it makes sense for you to invest in your business. And when I say invest, this is not about saying, Oh, I’m reinvesting in my business. And you’re using that as an excuse to pour more money back into a casualty monster. No, this is about how do we invest to maximize that business’s value, position it for sale or some sort of liquidity event, and ensure that we can use that as the best possible vehicle that will help you create financial freedom faster, coupled with the fact that business owners are incredibly time poor, you have far less resource in terms of time available to manage your money. So stop stock picking, stop trying to be sexy and sophisticated with your wealth management, you are not the next Warren Buffett, it is not the best use of your time, your genius is your business, we need to make sure that your personal wealth is vanilla, it is boring, it is set and forget. Because we need you to focus on your business and make sure that everything else is happening behind the scenes without your involvement or as little of your involvement as possible.
Heather Pearce Campbell 48:16
And the thing that I want to point out about this piece about like It’s vanilla what’s happening over here. It’s vanilla from the standpoint that like you set it up according to certain rules, right? Like taking into account risk tolerance, etc. When we met through this activity of like, what lanes are we going to be in? Yet, once we did that and got everything going, systematize, et cetera? Like we outperformed anything we had ever done in the past. So it’s the nilla. And it’s absolutely thrilling right when it’s right, and it’s doing the right things for you.
Jackson Millan 48:56
Exactly. And this is the thing, you don’t need to be actively involved in managing your wealth. The system of wealth creation should take care of itself for you. And like even for myself, I don’t stock pic more all of my personal wealth goes into businesses into real estate, good quality blue chip real estate with quality tenants that aren’t going to give me headaches. That’s in highly desirable areas that is going to continue to appreciate and index funds and ETFs. And it’s simple. This is why it takes me 30 minutes a month to manage. Because it is not the best use of my time. The best use of my time is to grow and scale my business and live my life. And this is where so many business owners get it wrong.
Heather Pearce Campbell 49:42
So true. The best use of your time is to scale your business and live your life right again back to what should our highest priorities be given who we are our strengths, our talents, our goals. I mean, you live on a wildlife preserve. Right? Like, of course, you want to be spending some time enjoying your life. Oh my goodness, I feel like there is just so much good stuff here. And it sounds like your resources and the systems and the training that you provide within your services. So many entrepreneurs meet, right. And that piece about like, so often, the traditional financial world really doesn’t understand entrepreneurship. So true. So I’d love for you to share, I know you had a resource that you I think you wanted to share with listeners do you want to talk a little bit about.
Jackson Millan 50:34
So we welcome clients the world around, because the language of money is universal. We’ve got clients as far as Bahrain that come far and wide to work with us. And we work with business owners from just getting started up to nine seeker businesses. And the system is exactly the same, it doesn’t change. All the changes is the magnitude of money that the system deals with. So what’s really key to what we do is that we teach people how to fish and manage their money for themselves. And so then they can be an informed and educated position to if they want to hire a financial advisor or a fiduciary, they can at least hold them to a higher standard, because they know what they’re doing, as opposed to abdicating that responsibility and just hoping and praying that that person is going to look after your best interests. And in many cases, our clients end up managing everything for themselves, and doing so very, very confidently. So if you want to find out more, I’ve got a free resource for you guys. That is going to give you a 40 point financial performance scorecard. So we’ve looked at this 40 things that get in the way for business owners manufacturing financial freedom, the average score is 18 out of 40, which is pretty scary. The interesting thing is that the vast majority of people who complete the scorecard can add between five and 10 points to this score in 90 days or less. So complete the scorecard. I don’t care if you’re five, or you’re 35, just look at what are the things that you’re not currently doing that you could be doing, and focus on those low hanging fruit? Do you get copies of my best selling books and some other tools, calculators and cheat sheets that are going to help support you in implementing some of the stuff we spoke about. So if you go to wealthhealthcheck.com.au, that’s wealthhealthcheck.com.au and go get all those resources, and we’d love to support. There’s some details on there. If you want to reach out and have a chat, how we might be able to help you and love to see how we can support you in pursuit of financial freedom.
Heather Pearce Campbell 52:19
That’s amazing. So if you’re listening, we will share that link and anything else you want us to share, like including the link to your book, congratulations. We will share that at the podcast notes page, which is legalwebsitewarrior.com/podcast, find Jackson’s episode and there’ll be there. Jackson, if people do want to connect with you, is the best way through that resource first, are you other places online they can go seek you out?
Jackson Millan 52:46
Yeah, so I’d be on Facebook. As a friend, I produce hateful content every day about finance and wealth on me running around the farm. And I try to be as entertaining as possible, just to give people a different spin on how to get on top of their money because it should be enjoyable. So feel free to connect with me there. And all of the other details of how to connect with me are on that link.
Heather Pearce Campbell 53:06
Oh, I love that. Thank you so much. So what would be one final action step aside from going and clearly we all need to get this 40 point checklist. But one other action step that you would like people to take that have stuck with us and are here in this conversation?
Jackson Millan 53:22
Yeah, I think the most important part here is focus on progress over perfection. And I look at this as creating what we call money, muscle memory. Think about going to the gym, you’re not going to go to the gym for the first time and deadlift 500 pounds. It’s just you’re gonna hurt yourself if you even lift the bar at all. So what we need to do is if you’re just getting started, start with the bar, let’s get the form right. And then we can start adding weight over time. This is a momentum building exercise. Stop trying to focus on getting it perfect. Finding the right time, the right place, the right system to start, just get started and we can optimize as we go.
Heather Pearce Campbell 53:58
So good progress over perfection. Yes, we need to remember that in multiple areas of our lives. Jackson, so great to see you again. It’s been such a pleasure to connect with you and learn a little bit more about what you do and the way that you came to doing it because you you have a very unique way of approaching it. So I really appreciate you I’m so grateful to be connected.
Jackson Millan 54:19
My pleasure chatting.
GGGB Outro 54:23
Thank you for joining us today on the Guts, Grit and Great Business® podcast. We hope that we’ve added a little fuel to your tank, some coffee to your cup and pep in your step to keep you moving forward in your own great adventures. For key takeaways, links to any resources mentioned in today’s show and more, see the show notes which can be found at www.legalwebsitewarrior.com/podcast. Be sure to subscribe to the podcast and if you enjoyed today’s conversation, please give us some stars and a review on Apple podcasts, Spotify or wherever you get your podcast so others will find us too. Keep up the great work you are doing in the world and we’ll see you next week.