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Ben had a big goal the last time we met: he wants to make $500,000 in a year. I told him it’s doable, but I insisted we set the foundation.
In e233, we talked about the importance of focus and managing your time.
In e234, we talked about building business assets the smart way.
This is the third and final episode of our series you’ve been waiting for.
There are five critical things you need first. We talk about what those are.
Then, we reverse engineer exactly what it takes to make $500,000 this next year with your business.
Are you in?
Highlights, Takeaways, Quick Wins
- The moment you learn to understand that a million dollars isn’t a lot of money is the moment you will make your first $100,000.
- Money is a tool.
- You have to normalize what feels big because then it becomes accessible to you.
- By thinking big, you force yourself to be creative.
- Respect money but be indifferent to it.
- Source your confidence from your care of making other people successful.
- Say no to good clients so you can say yes to great clients.
- Generate cash upfront so you can approach client work with selectivity. Then you have the option to invest long term in a product business.
- If you’re charging enough, all you need is one client.
- Fail grandiosely rather than succeed at a mediocre level.
- Think at a bigger level and reverse engineer how to get where you want to go.
- Systemize, automate, create processes, and replicate your asset.
- 01:56 Sean: A couple episodes ago, we did a show called Get More Time in a Day, Increase Your Focus, and Accomplish All Of Your Goals. This is a really powerful one, so definitely go back and check it out. We talked about the importance of focus, because you will not make your first $500,000 doing many things at once, splitting your focus, and spreading yourself thin. This one was all about time management and focus. The next episode was on How to Build Business Assets the Smart Way. In that episode, we talked about generating cash and using that cash to build assets. If you’re trying to do both at the same time, you have split focus, which means stress or Scarcity Mindset about the cash, and possibly building weak or unfinished assets.
Playing the Business Game
- 02:45 Ben: That was an exciting episode for me, because one of the things Rachel and I decided when we were talking about this goal was this idea of buckets. One of these buckets was all of the money we would need to make for the entire year to cover our minimum bills, our very basic needs. The next bucket was all of the money we wanted to save during the year for various things. We had other buckets, but the rule we gave ourselves was that we could only fill up one bucket at a time. I like thinking about it that way, because I would really love to be building assets right now, but the fastest way to fill up that first bucket and get myself as far away from Scarcity Mindset as possible is to work with clients and get some cashflow going.
- 03:41 The sooner I can fill that first bucket, the sooner I can start thinking bigger, thinking outside the box, and focusing on building assets. I said it earlier and I know Sean doesn’t like this, but it feels a little bit like a game to me. How fast can I fill that first bucket, knowing the reward that’s on the other side, which is the freedom to think longer term, to think bigger?
- 04:10 Sean: I love thinking about life as a game. I think of entrepreneurship as a game, and that was one of the topics I want to do at some point—something like Entrepreneurship: The Game. I love video games, but I have to refrain, because I get so invested and so caught up in trying to win and be the best and get all of the achievements. I realized that applying myself similarly in life to business builds real assets, things that can continue to serve me. My video games don’t make me money when I don’t play them. That’s why I stopped, because I would rather play the game of entrepreneurship. The achievements you get actually serve you. I like seeing things as a game.
- 05:22 Ben: I’m thinking about my business as play, because I don’t want to take it so seriously and be so emotionally tied to the outcome that I don’t let myself fail when I need to let myself fail. I’m too hard on myself and I get stressed out. All of those things are going to work against me actually accomplishing my goal. I’m trying to take a piece of that mindset, without the negative associations with play.
Two Ways to Make $500,000/Year
- 05:51 Sean: Today, we’re talking about reverse engineering a $500,000/year business, and in our meeting, I said that there are two ways to go about this. The first way is to do it once, and the second way is to do it sustainably. For the latter, you have to think in three to five years, building up a business that will continually, consistently make half a million dollars a year. For the sake of argument, let’s say you want to make $500,000 this year, no matter what. Even if it isn’t guaranteed the next year and you have to work the next year—it’s not recurring—you want to make $500,000 this year. That’s where we’re going in this episode.
- 06:45 Towards the end, I do have some thoughts for the people who want to think three to five years down the road, who want to build up something that consistently makes that much a year. Initially, I want to help people think a little bit bigger right now. I want to explore this from the perspective of, if you’re starting from where you are now, how could you do this in the next year, practically?
- 07:19 One of the questions is, “Can anyone do this?” From any point, wherever anyone is at, can they make $500,000 in the next year? The answer is no, because you need these five things. If you don’t have them but you can acquire them, then it’s very possible. We’re going to talk about the practical steps on how to do that. The five things are:
- 08:15 We think at a bigger level in the Community. If you think the podcast stands apart from other podcasts, join the Community. That’s the next level. If you come in here, people are talking on a big scale like it’s normal. At first, it’s a little weird and intimidating, and people think, “I don’t think I can make $500,000. That seems like a lot of money to me. I don’t think I could ever make that—I’ve never thought at that level.”
- 08:46 That’s basically what I’m here for. If you think a million dollars is a lot of money, you might make $100,000. If you think $100,000 is a lot of money, you might make $10,000. You have to normalize what you feel is big because then it becomes accessible to you. As long as you think it’s big, you’re not going to get there. You’re only going to get a fraction of that. You have to upgrade your mindset.
- 09:21 Ben: There’s this weird thing that goes on where, after a certain point, the size doesn’t matter. I just put that into a Monopoly money category. I don’t think of it as big or little. I know that I’ve said that $500,000 seems like an insane goal, but it’s also because of the units I put that in. I’m thinking in terms of, “That’s ten times what I normally make in a year.” At a certain point, the amount is tied to what I know it affords me in terms of my needs and wants. Beyond that amount, it’s all Monopoly money. If I had that much money, I wouldn’t spend it frivolously, but I wouldn’t think about it in terms of something being a lot or a little bit of money. I would think of it as a tool that would allow me to make better business decisions, invest, and grow.
- 10:35 Sean: When you’re small minded, you think in small terms. You think in XBoxes, because that’s all you know. That’s all your dream is. Maybe you think in MacBooks, $4,000 cars, or $12,000 cars. You have these things that you feel like are big, these dreams, focuses, and desires, and you anchor your thinking to whatever is big to you. A million dollars seems like a lot because you can’t picture that many XBoxes. It’s not a lot.
The moment you learn to understand that a million dollars isn’t a lot of money is the moment you will make your first $100,000.
- 11:24 You have to normalize. I literally believe that in that moment, that’s the moment that you making $100,000 is actualized. You may not have it in your bank, but it is actualized in that moment. It’s just like how I talk about the value of your time now being worth what you’ll make in two to three years. What you’re making now is a representation of what your time was worth two to three years ago, when you were investing it. When you change your mindset, there is a lag time of years for reality to align with your mindset. I made about half a million dollars last year, but it wasn’t what I wanted to make. Do you see how I said that sentence? That’s the same way Matt talks about a million dollars on the Lambo Goal podcast.
- 12:19 That’s why we make that money. We don’t think it’s a lot. We’re thinking at a different level, and the money is a byproduct. You have to think at that larger level to be able to accomplish a fraction of it. Thinking of a million dollars as a lot of money limits you. You have to normalize what feels big to you right now. The way you normalize is by repeated exposure, by listening to this podcast, the Lambo Goal podcast, and other business people who are making a lot more than you do. Over and over, hear them talk about money as an objective commodity, not as something they’re emotionally tied to or that they feel strongly about.
Money is a tool, something objective.
- 13:08 Once you learn to think on a larger scale, the base units you think in become larger. Maybe now you think $100 is a lot of money, so when you picture $1,000, you picture ten $100s. For some people, $20 and $100 bills are pennies to them. They’re fractions, because they think in $1,000 or $100,000 units. They think, “That’s opening up another branch,” or, “That’s starting a new franchise,” or, “That’s getting this new equipment.” They think on a different level, so it becomes normalized to them. Just like on every other level, these are just units, building blocks. Picture a cube made up of 100 other little mini cubes. Take that big cubes made of 100 mini cubes and turn that into an even bigger cube, using 100 of those. Keep building off of the building blocks, so the base blocks you use get bigger and bigger.
- 14:21 Ben: Sean shared a video in the chat earlier, and there was one example from the video that’s really applicable to what he’s saying. It was illustrating this idea of how we think about money. The guy put a $20 bill down, and then he put $100 bill down, and then he put $1,000 down as 10 $100 bills. Then he put down $5,000, and he kept asking the camera man, “What do you think about that?” At the end, he said, “The money doesn’t think anything of you. It doesn’t matter if it’s a $20 or 50 $100 bills.” He put down the amount of money I need to make to take care of my family for a month.
- 15:25 He said, “That’s not a lot of money. You can’t think about it like that. Respect money for what it is, but you’ve got to get away from this emotional attachment, these ideas you have about how big or small money is.” That was powerful for me. I’m still wrestling with that, and there’s a part of me that thinks, “Man, if I could just have that.” That’s Scarcity Mindset trying to fight it’s way back into the way that I think. There’s another part of me that’s taking over that says, “That $5,000 could be invested in something and could grow into something much bigger.” Eventually, it can be a tool I use rather than something I feel subject to.
Reality Aligns With Your Mindset
- 16:15 Sean: He said that you have to respect money but be indifferent to it. He said that those sound like contradictory things, but they’re not. You need to respect the objective nature of this commodity, and as a result, be indifferent to it emotionally just as it is to you. Reality aligning with your mindset—that’s how I like to think. To me, I have a Lambo. That’s my dream car. Since I was a kid, it was my dream to own a Lamborghini. I grew up and I came up with a smaller version of that goal, and I bought a Mustang. When I got that Mustang, I realized that I had achieved my goals.
- 17:02 I set out all the criteria of this Mustang, and I waited years until I found the one that fit exactly. I bought it in cash. I showed myself that I can accomplish anything I set my mind to. I can hold back until I get that. I thought, “If I can accomplish anything, why should I limit myself to small goals?” I revisited my goal. Since I was a kid, I wanted a Lamborghini. That was my goal, so I said, “That’s going to be my goal now.” That is my mindset. To me, I have that. It is as real as being outside or sitting in a garage, and it’s mine. I’m just not driving it yet, because I have work to do. That is how real and actualized it is to me.
- 17:51 I’m simply waiting for reality to align with my mindset, and that just takes time. That’s the first thing you need, mindset. Austin says, “Are we talking about 500k/year take home profit or revenue?” I think, for the sake of simplicity, we’ll keep this at gross. The way we’re approaching this for Ben’s situation isn’t going to have a ton of overhead anyway, so I figure we should keep it simple.
- 18:26 You need to be good at something. You need to have a skill, and you need to be able to create value for people. If you don’t have a skill, you need to start with acquiring the skill. You’re not ready to be thinking about how to make $500,000, because you need to hone down on one particular skill and get really good at it.
- 18:56 Ben: If you can create value, but it’s not enough to offset the goal that you have, you need to sharpen that skill.
- 19:06 Sean: Give me an example. Unfold that a little bit for people to relate.
- 19:11 Ben: Let’s say you’re a logo designer, and you’re skilled enough to solve a problem using design. The objective value of that is, maybe, up to $10,000. Clients who would pay $100,000 wouldn’t use you because your skills aren’t as refined.
- 19:48 Sean: The objective value of your work is only realized or quantifiable on the client’s end. You don’t know the cap, the limit of the value of the work you create, until you consult with a client. There isn’t an arbitrary cap of $10,000 worth of value that you can create—it’s about selectivity and who you choose to work with, where you employ your skills. The same skills that make you $1,000 or $10,000 as a logo designer could make you $50,000 or $100,000. Rather, they could make a client $50,000 or $100,000. If you’re pricing on value, you would see a fraction of that.
- 20:50 Ben: I guess the question is, can you quantify your skill level? Can you say, “I know based on my skill level the kind of clients I can provide value to, who would hire me based on my skill set, and I can make about this much money”? I know that it isn’t that simple, but is there some kind of ballpark there? If you want to get into the big leagues, you’ll have to be more selective, but you’ll also have to sharpen your skills.
- 21:37 Sean: It’s really hard to quantify, because if you are pricing on value, it’s very possible to create substantial value for certain clients on a certain level. This is where it gets cloudy, because what it takes to work with clients at that level are the things we’re talking about—skill, understanding, confidence, and selectivity. If you’re a level one person and you’ve put in a few hundred or a thousand hours at your skill, are you going to have confidence, skill, understanding, and selectivity? If you do, theoretically it’s possible, but most likely you won’t until you gain that experience, which comes over time.
- 22:22 Because of that reality or likelihood, it’s probably going to be something where we go by the 10,000 hours rule. If we say that 1,000 hours is a level in your skill, you may want to be at least, on the low end, a level 3, 4, or 5. By that point, you probably have these other things we’re going to be talking about. I see it being possible to happen sooner, but that’s the most I can pin it down.
- 23:04 By understanding, I mean understanding that you, the listener, can create value in this world. You must understand this and acknowledge it, because your confidence comes from understanding. When you know something, you can be confident. When you don’t know, that’s where the lack of confidence stems from. Understand that you can create value. The only difference between someone with skill making $1,000 and someone with skill making $100,000 is their understanding, confidence, and selectivity to be able to work at the level that clients who would be able to realize a ton of value would be willing to work with you, attracting them, and communicating with them.
- 24:01 You have to price on the value that you create for people. I like this reverse engineering approach, because it forces you to be creative. Instead of thinking, “I couldn’t ever create $1,000 worth of value for people,” when we start with $1,000 as a given, this exercise becomes, “How can I create $1,000 worth of value for people?” I like the reverse engineering aspect, because when we start with high numbers, it becomes a question of how. We aren’t starting from nothing and looking up infinitely saying, “I could never.”
- 24:38 Ben: When Sean and I met, we were talking about one of my strategies, which was putting on some workshops. I was planning on doing those for free as a way of attracting potential business. When Sean saw my plan, he said, “Why don’t you charge for that?” In my head, I was thinking, “Okay, I guess I could charge $20 admission or $50 admission.” Sean threw something out like $1,000. One, it’s a great way to validate the market. If there’s really a need for this, people would be willing to pay $1,000 to get that information. He also challenged me.
- 25:27 The reason people would come out is, one, because they need the information, and two, because they believe they will receive ten times the value of what they’re paying to attend the workshop. It started making me think, “How could I provide $10,000 worth of value for somebody? What kind of business would they have to have, and what kind of problems would I have to solve for their business?” I love that approach. The other way I was thinking was, “How much could I charge for this?” This way is much better. It forces me to provide even more value, and the compensation for that is much better than I would get doing it for free. It could also still lead to me getting clients.
- 26:27 Sean: I’m really glad Ben brought that in, because it’s a perfect teaser. In a moment, we’re going to talk about how I talked Ben out of doing free workshops and into charging $1,000 for them, how we’re going to get to that point and what that’s going to do for his situation. We’re going to work our way up to there and make sure we cover these five points, and then we’ll look at the $500,000 figure and work our way backward to this workshop and show Ben exactly what he needs to do.
- 27:03 I like reverse engineering, because it creates the number you need to make and it forces you to be creative on how to get there rather than forcing you to think up and deal with Imposter Syndrome, feeling like you’re not good enough, or like you can’t create that much value. Chat room, I want you to answer the question, “How can I create $1,000 worth of value for someone?” Give me business ideas right now in the chat. Give me an idea of a business that’s making money but has a problem you could fix, and you could create $1,000 worth of value. Be creative.
How to Create Value
- 28:18 Ben: When you say $1,000 worth of value, do you mean creating something valuable enough that someone would pay $1,000 for it, or that it’s worth $1,000 to them?
- 28:30 Sean: It could be either. Which one do you like?
- 28:33 Ben: I like the one where they pay $1,000 for it, because it’s worth ten times that much.
- 28:48 Sean: Uber for groceries! Ed Williams, excellent idea. Let me tell you why Ed’s idea was great. If I wasn’t married, I wouldn’t leave the house. I would have food delivered. That’s worth money to me. I shouldn’t say what I would pay, because I could say, “Yeah, I’d pay $100 a month for someone to bring my groceries,” but I would pay $100 every time they brought them. That’s what it’s worth to me. That’s how much I don’t care and don’t want to do it. Uber for groceries is a great one. Everyone is thinking at scale, so they think, “If it’s Uber, look how big Uber is now! If I want to do that for groceries, I need to come up with a business model that’s going to serve everyone in America. Everyone in America wouldn’t pay $100 for grocery delivery every time.”
- 30:18 You’re still paying for all the groceries, but they’re just buying them for you. I would pay that in a heartbeat, but everyone gets blocked by thinking about the people that wouldn’t. People get blocked by thinking about the people who wouldn’t do this rather than thinking about the people that will. Find the people like me. I’m serious here. Someone in San Antonio needs to do this business. If I would do it, who do I know?
- 31:04 Ben: Here’s a real example I experienced recently. There’s a client who came to one of my workshops that I did up in Spring Branch, a guy who runs a pest control company. He was asking me about what he could do to make his business more efficient. We identified that what’s really working for him right now is customer referrals. That’s where he’s getting most of his business. Instead of focusing on this other stuff, he needs to focus on what’s already working. I gave him some examples of how he could work on his customer loyalty program and build that into his onboarding process. Based on his numbers, if I came up with a custom solution for him, it would probably be worth an additional $30,000 a year to his business. I can’t guarantee that, because he’s got to do the implementation. If I can show him how that could work and he could actually make $30,000, I think he would be willing to pay $3,000 for that.
- 32:32 Sean: Kyle says, “Mailchimp adding the ability to target audiences within a list better and more contextually.” No kidding—it’s called ConvertKit. Nathan Barry made it. It’s in between Mailchimp and Infusionsoft, and it’s for people who don’t want to hire a full time person to build out Infusionsoft systems but have outgrown Mailchimp and their ridiculously simplified way of doing things. It’s awesome for many people, but if you want to run a business and sell things to your customers, Mailchimp isn’t what you want. You want to use ConvertKit. Nathan found that, and he built a system for it.
- 33:21 You start with something big and you try to reverse engineer it. Ed came up with groceries, and I told him what I’d be willing to spend. That seems high, but how can you start with what seems high and justify getting there?
By thinking big, you force yourself to be creative.
- 33:40 No one would ever spend $100 per grocery trip. No one would ever spend $1,000 a month for grocery delivery. Who’s going to do this? It doesn’t make sense. Who might do it, and how can you make it make sense for them? The way you do that is by adding value. What if you not only picked up groceries, but you picked up whatever else they had—prescriptions, etc? Figure out how you can do things more conveniently. “By the way, when I come in, I always pick up your mail.” All of these little things put someone at ease, so they don’t have to think about anything. You’re doing it for them and you’re adding value. “By the way, I did research on your favorite thing you always got. I found it at this other place for a better price, so I swung by there on the way home and saved you some money.”
- 34:49 Confidence, again, comes from understanding. If you understand that you can create value, it’s going to make it easier for you to be confident in yourself and in your solution. If you feel like you’re lacking self confidence, the number one way to improve this situation is to stop thinking about yourself. It’s counter-intuitive, because you’re thinking about yourself. You’re thinking, “I don’t feel self confident,” so you’re hyper-focusing on yourself when, really, you should be focusing on other people. If you lack confidence, you’re doing people a disservice. Your goal is to make them successful. You want people to be happy, fulfilled, you want to help them grow their business, and you want to help them have success. Whatever version of success this person has defined, you want to make them more successful.
- 35:42 If you aren’t confident, you can’t perform. If you lack the confidence to perform, you can’t actually help people. Again, reverse engineer that. Say, “If I want to help people, create value in the world, and perform, I have to be confident. If I’m not confident, I can’t help people.” It’s kind of a chicken and the egg thing. If you can figure one out, which one do you care more about? Some people care more about being confident, and they are confident. It’s easy for them. Other people don’t have that natural aptitude, but they do care about making people successful. Dive into that.
Source your confidence from your care of making people successful.
If you want to make them successful, you need to carry yourself with confidence.
- 36:38 Make sure you understand, and if you don’t understand, seek out that understanding.
- 36:43 Ben: Your confidence comes in the service of their success. When they see that you’re confident in the service you’ve provided, they feel more confident and they’re more likely to implement it the way they should in order to be successful.
- 37:01 Sean: If you want to build a $500,000 a year business, we’re going to get into the practical steps in just a minute, but you have to say no. Say no, say no, say no, say no. No to other opportunities, no to other pursuits, no to things you could do but aren’t going to have the best results. What was the skill from the second step that you’re focusing on? What is that one thing you’re honing down on? You have to say no to the wrong clients, clients that don’t fit your criteria. Say no to good clients. What do I mean? Say no to good clients so you can say yes to great clients. Only working with great clients is going to get you where you want to go. Otherwise, you need to start trying to find a cube farm to hire a bunch of people to do hundreds of thousands of really cheap client jobs. Then, maybe, you’ll make $500,000.
- 38:14 Think about it. If you’re doing $5 client work, do the math. You need to work with a lot of clients. This is where I need to get into what you need to make. Again, if you haven’t gone back to the last two episodes, you have to focus. Stop doing everything else and pick one thing. Pick one person, and you’re only serving this person. You’re not going to get to $500,000 trying to do all the things. You’re going to get there by narrowing down and serving one person, having one focus.
What You Need to Make
- 38:57 Let’s reverse engineer this. Monthly—you need to normalize this—you need to make $41,666. That’s what you need. Don’t think about your annual salary last year. Don’t compare. This is an objective number that thinks nothing of you. What is that weekly? It’s $10,416 a week. It’s $250 an hour.
- 39:34 Ben: The $40,000 doesn’t seem so big, but when you break it down into smaller pieces, it starts to feel bigger and bigger, because I know how long an hour is.
- 39:44 Sean: The reason you need to understand these units is because you need to think of the value of your time in this regard. That doesn’t mean you can’t be longer term. That doesn’t mean that you can’t meditate, go for a run, or brainstorm and come up with a list instead of working on client projects for an hour. “My time is worth $250 an hour and I didn’t make $250!” That’s not what I mean. It’s not on a totally micro-level. In the back of your mind, you need to know these relative units, these numbers you need to be making, so you can invest your time wisely.
- 40:26 Ben: Normalizing it is the biggest thing. If you’re thinking about it in terms of, “I didn’t make $10,000 this week,” you can start to become self-defeating. Sometimes, the solution you need to reach your big goal and make those numbers work out requires you not to make any money for a month or two months. That may not be the case, but it might be. Give yourself the freedom to think that way, so you’re not looking at that hourly number and thinking, “I’m failing, I’m failing. I’m not making it.”
- 41:19 Sean: In the episode 10X Your 10X—Thinking Bigger, I gave the logo designer example. I said, “Some people charge $250 a logo, and they’re struggling.” Let’s say your bills are $2,500 in a month. You’re single and you have an apartment in an inexpensive part of the country. You need to do 10 logo jobs at $250 in that month to be able to pay your bills. You have to do a logo job every three days to pay very meagre bills. Think about the kind of work you would be doing, the kind of logos you would be making every three days, the kind of stress level you’re at, and the fact that you need ten more clients the next month. 10Xing that would be saying $2,500 per logo.
- 42:39 That’s looking a little better. You can spend four weeks on this project and do a really good job. You can maybe even think about planning the next month ahead of time. A lot of people struggle to think 10X their 10X. Okay, now a $25,000 logo. That’s where people think, “Woah, woah. I can’t do this. That’s not me. I can’t create that kind of value.” In that episode, which I recommend you go back to, I talked about how the highest I got was charging $8,000 for a logo. A lot of designers I tell that story to say, “Oh my gosh, that’s a lot. $8,000, wow!” I was telling my friend who consults with startups this story, and he said, “Yeah, we paid 25 for ours.” It’s nothing. He doesn’t even bother to say thousand, because it doesn’t matter.
- 43:38 You have to think at that level. Once you think at that level, you can reverse engineer what it takes. This is where I pose to someone this hypothetical scenario where their bills are only $2,500 a month, maybe they’re single. They wondered, “Can I do $2,500 logos?” I said, “Try and think on the $25,000 level.” What does that mean? It means that every day you wake up, Monday through Friday, week after week and month after month, for ten months, all of your day and your time is spent trying to get one logo, one client job for $25,000. What would your life look like? What would your day look like if your full time job for ten months was trying to reach out, relationship building? Who do I know that knows someone else that works with big companies that consults at a high level that knows a bunch of companies that may need a redesign, a new logo?
- 44:50 That’s how you need to think. Think about relationships and reach out to these people. Maybe you do pro-bono work for four out of the ten months, and you do these epic jobs that are worth $10,000 or $20,000. You do them for free, like we’ve taught in other episodes. You do them for free and write case studies to establish your expertise for that one client. Everyone is worried about the number of visitors coming to their website. “I only have 40 visitors a day,” or, “I only have 1,000 visitors a month.” All you need is one, the right one. That person is going to come along, the CEO or the head of the design department of this company, they’ll see your site, and they won’t even read your case studies.
If you’re charging enough, all you need is one client.
- 45:39 What if your whole job for ten months was getting this one client job? That’s how you need to think. If we’re thinking this way, Scarcity Mindset kicks in and you think, “That’s great if I had ten months to do this, but I need to make money. I need to pay my bills.” You have to set yourself up. You could work your butt off for half a year or a year, simplify your lifestyle, get rid of expenses, and pay off liabilities. Downsize, and then make more. Hustle. Save the money, and then you have time to be able to level up. Once you make the $25,000, maybe it doesn’t take you ten months. Maybe it takes you two months to find it, but then you’re good for ten months to find the next one. You start thinking at a higher level and overlapping, and eventually, you’re doing a $25,000 job a month.
- 46:41 Ben: That’s why I’m a big fan of this bucket idea. If I get into this rhythm, the approach I want to take is to fill the necessary bucket first. With whatever’s left of the year, I spend that time building assets. The year starts over, and I focus on filling the bucket again. The time it takes me becomes less and less because my assets are working for me, and eventually, I get out of that rhythm. It helps me to feel like it’s okay to do work that isn’t building assets.
- 47:29 Sean: Go back an episode, episode 234, where we talk about asset building. Everyone wants assets, things that serve them and make them money and don’t suck money away from them. We all want assets, but when you spread yourself thin and try to build assets at the same time as making money, you get into Scarcity Mindset and you have stress on both sides, and it’s not good. That’s why I recommend generating cash first, through client work or anything that gets you money now without putting money in. Do work somewhere. Maybe it’s at a day job that pays you well, beyond what you need to get by, and you save the money. You can do this. Kyle did this.
- 48:15 He saved up a whole year’s worth of income. He could have upgraded his lifestyle while he worked at this job. He could have acquired liabilities up to his annual salary divided by 12. He would be stuck there forever. This is what people do. Instead, he set aside money and built himself a nest egg to where he could quit his job. Now, he’s working on building his business in an intentional way. He’s using this savings to pad that transition.
Generate cash upfront so you can approach client work with selectivity, or so you can approach a product business with the ability to invest long term.
- 49:21 This is what Ben and I talked about at our meeting, where we were going to reverse engineer the $500,000 a year business. Ben, at first, wanted to do free workshops. Let’s talk through this.
- 49:40 Ben: What I’m focusing on right now is video content marketing. It’s taking the idea of content marketing and those principals and focusing primarily on the medium of video. I wanted to do two things. One, I wanted to work with clients who wanted to put out valuable content but didn’t know how to do the video part, who saw the value in doing that and wanted to hire someone to help them. I would either do that through consulting or by actually doing the shooting, editing, and posting. That’s my client work. One of the ways I was going to get the client work was to put on workshops where I talk about principals and techniques—setting up your video shoot, doing it in a cost effective way.
- 50:53 I had a lot of different ideas for what I would present in these workshops. My thinking was, if I could do a couple workshops a month and get a good turnout out of that, I might get two or three people interested in being a client. If I could land one of those, that could be another monthly income stream for doing regular work with them, or at least a one time consultation fee. Maybe I could get an ongoing consultation, who knows?
- 51:22 Sean: What did Sean say at this point?
- 51:24 Ben: Sean said, “Charge $1,000 for the workshop.” I don’t know why. Aren’t we doing the Rule of Reciprocity thing, where I offer something for free so they take advantage of my services?
- 51:45 Sean: What Ben’s doing makes sense if he has a slightly different goal, which would be, “I want to make good money someday, but not this year.” As I’ve learned, giving away things for free doesn’t make you a lot of money. That was the problem with my goals last year. I wanted to give away all these things for free. It’s a great idea and a great strategy, but it probably isn’t the best strategy if you also hire half a dozen people in the same year. In the long term, it will pay off, but notice that I said long term. There are two ways to build a $500,000 a year business. You can do it once or do it sustainably, and doing it sustainably means thinking long term, taking three to five years to get it to that point.
- 52:39 If you had no timetable and you were willing to invest and see no returns from your efforts for three to five years, to just break even and survive for three to five years, you could be really well off in that time. That’s not Ben’s goal, what he wants to focus on. He wants to focus on making money. Relationship marketing works really well for building a loyal audience, but what we often forget in this content marketing bubble is that all kinds of businesses exist outside of relationship and content marketing. Any lawyer you go to in this city doesn’t have 10,000 Twitter followers.
- 53:22 He doesn’t have 100,000 email subscribers, because he doesn’t need it. He also doesn’t say, “Yeah, come on in, I’ll give you a free consultation.” As soon as you walk in the door, you’re wracking up $1,200 an hour. He’s never even met you. Maybe he’ll tell you that you won’t be a good fit, that he can’t help you, here’s the bad news. $1,200 an hour, and that’s the reality of it. He can do that because he has skills. The reason you went to him was based off his reputation, a recommendation, or testimonials. Those are things you can leverage on your own right now.
You don’t have to start off doing relationship or content marketing to make money, especially if you want to do it in a year.
- 54:12 That’s why I said, “Don’t do anything for free.” Ben has a skill. All he needs to do is convince people, and he can charge for something. Number one, The Magic of 7—it takes seven times for people hearing new information to retain it. It takes seven times of offering for someone to be willing to buy. There are a lot of people on that sixth time. You didn’t put in the credits, but they’re there as a result of someone else’s efforts. You just need to hit enough people to find a few of those people who are ready. They’re going to assume that, if you’re charging $1,000, you know what you’re doing.
- 54:51 They don’t have time to ask, “Have you ever charged for this before?” It’s about your track record. How can you establish a track record, build rapport, and make recommendations? These are the kinds of things you need to be thinking about and the way you need to think. Maybe you work with a few people personally. Maybe you do pro-bono. Maybe you build up some case studies, and then you show those case studies on your website. You don’t have to say they were pro-bono. You just say, “These are projects that I did. This is value I created.” You go meet with people. Go to a convention, go to a meetup, or join a local group. Maybe it’s paid, maybe it’s not. Decide what you want to invest and how long term your thinking is.
- 55:35 Go there, build relationships, shake some hands, set some coffee meetings, set some business cards, tell them about your website and tell them about your workshop. This is where we started talking about pricing the workshop. Let’s look at $1,000 for a workshop. What’s the goal here? The goal is $500,000 in a year. At $1,000 a workshop, you only need 500 attendees a year. That seems like a lot, but let’s keep going. How many is that a month? 42 a month. What if you did two workshops in a month? That’s about 20 people at each workshop. It’s starting to seem a little bit more reasonable.
- 56:17 Could you spend an entire two weeks planning a workshop and get 20 people out? It is becoming a little more feasible, a little more attainable, when you break it down like this. None of that even accounts for one of the people there working for this company, seeing you as an expert, and saying, “I came because I was supposed to learn all of this stuff, and obviously you’re a teacher, but I thought I would ask—do you do this kind of thing for clients? My company could totally use this.” You think only the free people would turn into clients, but even the people who pay $1,000 will know the people at the level you would want to work with to make serious money.
- 57:06 Ben: Mark Sawyer in the chat said, “Only serious people will come when you charge.” I like that thinking, because the people who will come get free information will be grateful, and some of them may take me up on business, but the people who spend $1,000 on this video stuff are the ones who are serious about their business. They’re at least at the level where $1,000 isn’t a lot of money for them, and those are the kind of clients I would like to work with. $1,000 isn’t a lot of money to you? Okay!
- 57:41 Sean: Let’s say you did a free workshop and 20 people come out. Two people follow up with you and one of them wants to work with you. You do a little bit of work and some consultation, so maybe you make $1,000, or they possibly decide to move on. Free people are flaky. Best case, you make $1,000. When you start out that way and you follow it through, you’re not going to get 20 clients from 20 free attendees, so it’s going to be a few. Some might fall through of the people who call you. Maybe you meet one and make a little bit of money with them. We’re so afraid to fail.
We would rather succeed at a mediocre level than fail grandiosely.
- 58:30 Now, let me show you what failing grandiosely looks like. You have a goal to get 20 workshop attendees out at $1,000 a piece. Maybe it’s a two hour workshop. Two hours? I thought it would be all day. If you’re charging $1,000 it better be all day. No, it better create more than $1,000 worth of value for them. Can you do that in that amount of time? I hope that you can. If you can’t, I hope you see this as a challenge and figure it out. How can you do it? You want to get 20 people out at $1,000 a piece. You work your butt off. You have 13 days to get 20 people to this workshop. You wake up at 6am, and your job for today is to get 20 people at a workshop 13 days from now. You have the same job the next day and the day after that.
- 59:27 Think creatively. Drive around town. Set up some meetings. Find people, figure out who they know. Ask them who they know and call those people. Set up more meetings. Get 20 people out to this workshop. What happens if 19 seats are empty? Guess what—you just got one person, for a two hour consult, to pay you $1,000. Compare that to the other scenario. It’s the same thing if not better, because you have a more serious candidate. You “failed,” but you actually did better than when you succeeded at a mediocre level. That’s how you want to be thinking. Now that you’re failing at something big, you can see where you went wrong.
- 1:00:19 Did I get 19 people to say yes and only one showed up? Maybe the directions were wrong. There’s some disconnect here. Zoom in on that. Did you only get one yes? That’s probably why you only have one person there. How can you get more yeses? “Well, I only talked to two people.” You have a 50% success rate! If you want 20 people, talk to 40 people. Figure it out and keep going from there. It’s not like, “If I need to do two workshops a month with 20 people each to make $500,000 a year at $1,000 a piece, so if I have one attendee at my first workshop, the whole year is shot.” No! You learn from it. Maybe three months from now, you have 40 attendees.
By thinking at a bigger level, you can reverse engineer how to get where you want to go.
- 1:01:08 It’s all about the “how,” thinking creatively, and thinking outside the box, instead of saying, “I can’t.” Micah says, “I can confirm as a business owner that I would happily, easily pay $1,000 for a course that would benefit me. No-brainer.” I bought multiple $1,000 courses this past year. It’s a no-brainer. I got 18X return on one and 100X return on another that was $1,500. I’m not making up round numbers. I sat down and calculated over three days exactly what the return was, because that’s how I do things. I put money in to get money out. I pay to play. You want to find the people who pay to play. If you can’t learn to think like these people think, like someone who would pay $1,000 a month to get their groceries delivered, than you’re not going to make it. Even if you aren’t there yet, you need to understand that people think this way. People say 25 when they mean $25,000 for a logo, because that’s how little it means to them. If you want clients who are willing to spend real money, you have to learn to think differently.
- 1:02:35 Ben: I still hear the voice in my head saying, “That’s going to be a stretch for some people you know.” Some people I know would hear $1,000 for a workshop, and they would say, “Could you really get away with that?” It’s not just my voice, but it’s my voice projected on other people. I have the capacity, the creativity, and the imagination to picture somebody who is sitting at their desk doing their work when their receptionist comes in and says, “Some guy is putting on a workshop for video content marketing, and it’s $1,000.” He says, “Okay, send Bob, Jim, Frank, and Ed, and have all four of them go,” like it’s nothing—$4,000. He doesn’t even look up from his computer.
- 1:03:42 Sean: He’s almost angry that the receptionist didn’t just know and tell the guys to go, because she just interrupted him. What are those four guys going to your workshop going to learn, Ben?
- 1:04:07 Ben: They’re going to learn how to use video content marketing, storytelling through video content marketing, and various forms to increase customer and audience engagement, which is going to mean more profit. They’ll get more customers and their existing customers will share more enthusiastically. It’s got multiple benefits.
- 1:04:38 Sean: Would you say that you could both help them use the equipment they have to make something big but also consult with them on what might be good equipment to invest in in the future?
- 1:04:49 Ben: Absolutely. It’s going to be anything from having the confidence to get started and create that marketing channel, so it can begin to benefit you, to optimizing what you already have so it works more efficiently and is more profitable.
- 1:05:10 Sean: The people in your mind who might be scoffing at this, laughing, or saying, “How could you possibly get away with charging $1,000?” aren’t the audience. They aren’t the people you’re trying to get out to the workshop, and they aren’t thinking to the level of the boss who is bothered by the receptionist coming in. It’s a no-brainer to him. He knows what their sales are this year, and it’s really big. Maybe he can increase that by 5% or increase the number of leads they’re getting through video content marketing. Maybe he’s looked at hiring a firm and he knows how much that costs, but he also knows that he has smart, creative people already on staff who just need some education. You just have to find the right people. Find the people for whom the thing you’re offering is a no-brainer.
- 1:06:04 If it’s not workshops, you could do client work. It’s the same thing with logos. You have to reverse engineer. Don’t break this down until it’s a number you’re comfortable with. Break it down when it’s a number above what you’re comfortable with, if not two levels above. You need to grow. If you want to make $500,000 in a year, what are the options? You could have 500 $1,000 clients, which means that you’d need to have more than a client a day, every day, seven days a week. That doesn’t sound too fun. Automatically, you know that you’re going to be charging more than $1,000 for every client. You have to, unless you have 500 in a year. Your options are everything from that up to one $500,000 client.
- 1:06:52 Those exist, too. It’s just the level at which you’re thinking. For some of us, that’s probably a bit much. We can’t think in those terms because we aren’t there yet, but we can think in $5,000 or $10,000 clients. It might be a stretch, but I encourage you to start there and get creative about the value you can add. Come back to these five points, and make sure you’re honing, if you don’t have your mindset on point, your skills up to par, the understanding of the value you can create, confidence in your ability to deliver, and then selectivity on the clients you choose to work with.
How to Project What Your Income Will Be
- 1:07:40 This was a comment from the chat, “The topic is making me realize something about myself I’m not very proud of, but I need to improve. I don’t know how to project what my income will look like. I usually make things to the best of my ability, price accordingly, and then hope sales happen. I don’t know how to balance the weight with the push. I would compare it to being bad at fishing.” A lot of people are in this situation. The easiest way to know what your income will be is to have recurring income. That’s the ultimate place to be, to have recurring income through residual sales, retainer clients, subscription revenue, some kind of software as a service SAS app, where you know that not everyone is going to stick around but you have an idea of the churn rate. That’s the number of people that cancel their subscription, but new people are also coming in.
- 1:08:46 You factor all of those numbers in, and you have a pretty good idea of what your revenue is going to be every month. When it comes to clients, the good thing about client work is that it’s the quickest way to make the most money. You can quickly get money because you do work and get paid, or even get paid and do work. It’s all really close together. Products, building apps, and building subscriptions services are all a huge investment, and it’s an ongoing investment. Nothing is ever truly passive. Even people who say they have passive income know it isn’t truly passive. Everything needs an oil change at some point. Even the most evergreen content needs some kind of updates and maintenance. Hopefully little, but everything needs something.
- 1:09:34 There’s a wide spectrum of maintenance that’s required for different kinds of recurring or passive income. With client work, it’s the least passive of all the types of income, but it’s the most powerful in being able to generate upfront cash. If you’re doing all client work, keep in the back of your mind that in the future you want to build some kind of asset. Maybe that’s a course. If you’re doing client work, that means you’ve learned things. You’re hopefully good at your skill. If you have people asking you for advice or help, they already see you as an expert, and that’s all the confirmation you need. Most likely, it’s because you’re curating what you share.
- 1:10:31 If you aren’t getting those questions, it’s because you’re not curating. People don’t know you’re a computer guy because you talk about games. People don’t know you’re a musician, because you post memes. You have to curate your output. You have a lot of interests; we all do, but selectively project a focused thing you want to be known for. When you do that, people will come to see you as an expert. You know when they’re asking you questions. If they’re asking for help or advice, they see you as an expert.
You know whether you’re ready to make money in the area you’ve been curating if people are asking to pay you money.
- 1:11:06 They’re saying, “Hey, will you work with me? I will pay you for your services. I will compensate you. I want to give you money.” That’s how you know people see you as an expert. If people see you as an expert, you have something to teach. If you’re doing client work and getting paid for it, you have something to teach. 99.9% of people in the world are not making a living doing what you’re doing, so you have things to teach. You think, “There are so many people who do this already,” but you aren’t looking at the people who don’t. If, right now, you’re making all your money with client work, start thinking about assets. Start thinking about teaching a course on something that you know, because that’s a very powerful asset.
- 1:11:55 In the meantime, there is a way to be able to more accurately project what your income will be. That is with a client waitlist. Start thinking in more selective terms. Work with fewer clients for whom you can create greater value and charge more for. Start doing one client a month instead of four clients a month, or one client every two months. That’s only six clients a year. If you have six clients a year, more than likely, you’re going to be getting six inquiries a week. You’re going to be getting a lot of inquiries, which means you’re going to be saying a lot of nos if you want to get to this point.
- 1:12:38 It doesn’t have to be, “No, I won’t work with you.” You can say, “No, I can’t do your project right now because I have such a focus on quality. Just like I care about your project, I care about the project I have right now. This is my current client, and I want to treat your project with the same respect and focus because I want to enable you do be successful. For me to give you that, we need to put you in the queue. I’m not available this month, but I am available next month. If you really care about your project, you’ll wait.” Build up a queue. The initial start of building up a queue is what’s difficult, and here’s where I’m going to issue a challenge. Start by practicing with a waitlist before you need to do it.
- 1:13:39 You’re available right now. Your desperate Scarcity Mindset wants to kick in, but you’re thinking, “I could take this client right now and feel okay for this month, but we start all over next month, and I’m going to be scared again. I’m going to go back to Scarcity Mindset. More than I want to satiate that gratification immediately, I want to think a little bit long term, and I’m going to say, ‘I’m available for projects starting in X plus two months.'” Start them there. You now have two months to get your second client, for whom you do the same thing.
Build a queue before you need it, because it gets you in the habit and gives you the runway you need to think longer term.
- 1:14:31 You’re thinking ahead of time. Yes, that does mean that you need to make ends meet now. Maybe that means working a part time job. Before you start practicing this waitlist approach, you need to find a way to save up two months of income. That’s one way to do it, if you’re only doing client work. Try to get to the point where you can put a waitlist in place and you aren’t getting into Scarcity Mindset every month. You’re thinking longer term, but in the back of your mind, remember to work towards building assets.
- 1:15:07 Ben: We used a word in the previous episode that I really liked, which was “earmarking.” Even doing these workshops, I can earmark that information as an asset I can build at a later time, especially if I take the extra time to set up a camera, record it, and eventually edit it. Maybe I just record it and I have the raw footage, and I don’t do anything with it, but I can earmark it and set it aside as an asset.
- 1:15:47 Sean: You can use it to make a course or something later on.
Sustainable $500k in 3-5 Years
- 1:16:08 Dane is willing to think in three to five year terms, and he’s okay with not making it in the next year. He says, “When reverse engineering out 3-5 years, what are the certain stages of focus you must go through each year? What’s the most important when it comes to that first year when you’re first starting out making money? What do the following years require?” Like we talked about in the last episode, you need cash first. Then, build assets. You want to focus on building one asset to bonfire level. Make it huge and sustainable, something that is systematized and automated.
Generate cash and then start building assets.
- 1:17:08 Maybe the first of the five years is all about cash. You’re doing things to get money, but you’re living off of less. You simplify your lifestyle and your expenses, and don’t allow them to come up to what you’re making. Simplify and set it, and be content with that. Then, invest all of the money back in. 100% of the profits goes back in. Upfront, you’re getting cash, so maybe in year two you’re getting assets. When you start building assets, the temptation that will arise is the desire to build multiple assets. You’re starting to see the power of it, and you have the freedom to do what you want, so you’re going to be tempted to do multiple things. I’ve done this.
- 1:17:58 I’m in the position I’m in now because of building multiple assets. Ideally, focus on one asset. Build it up to bonfire status (Related: e121 Seriously, Am I Screwed if I Have Multiple Passions?). We’ve talked about the fire pits representing your passions and all these things you want to do. Most people are running around trying to keep the embers warm and stoke the fires, but they’re really tiny fires. What you really want to do is to build one up to bonfire status, and then you can build the other ones because you have this asset. You can transfer fire to the other pits, other people can see it for miles around, and you can turn away from it without it going out any time soon. It’s a big, roaring fire, and that’s where you want your assets to be.
- 1:18:57 Build one asset really big, really solid. Before you go off to something really different, this is how you 10X it. Systemize, automate, create processes, and replicate your asset. All of the things required to make this operate that you are doing personally or that you’re delegating and managing personally, come up with processes and systems that other people can follow. You’re going to have to do the work yourself at first. You’re going to have to vet, critique, and proof the work, but eventually, you teach other people to do that and to teach other people beneath them. They take on ownership and responsibility. Eventually, they’re doing the thing you were doing.
- 19:49 Eventually, they are the overseer. You can check periodically, but you no longer need to babysit because you have processes. You were in it personally, you were doing the work personally, you set the quality standard and then you built processes that support that quality standard. Everyone else is able to do this.
Once you have a system of processes that support the quality standard of your asset, it is incredibly easy to replicate.
- 1:20:19 I’m not saying that it’s simple, but it’s easy. That’s how you have chain restaurants. That’s why there are so many McDonalds, Subways, Burger Kings, and Pizza Huts. It’s a chain. They have systems. All you need now is capital. In theory, if you built an asset, that means you already had cash. You’re building assets intentionally, so the byproduct of that is more cash. You can wait over time, or you start building other things to make more money, and you keep investing that capital into replicating. Then you have an empire.
- 1:21:06 Ben: These things, the process, the automation, and any system you establish to support your first asset is an asset in and of itself. You can use that for the other assets you create. Now, instead of creating an asset from scratch like you did with the first one, you have all these systems you can use. It makes that second asset even stronger, but you wouldn’t have that if you didn’t spend the time and the focus on building those systems for the first asset.
- 1:21:40 Sean: The systems themselves become assets. Those systems can be replicated in other instances of this business, or even other businesses entirely. Those are assets to you personally, but also think about the possibilities and the potential. When you have a system that works, that’s value. Other people have similar businesses to you, and maybe they aren’t working as efficiently. If you can implement those systems for them, you create value. That can come in the form of client work, products, or SAS solutions. You can turn those systems into more revenue by leveraging that asset and helping other businesses. It’s huge.
- 1:22:34 This was for Dane and he says, “It’s really resonating right now.” That’s good. The main thing was to generate cash first, then focus on one asset and build it to bonfire level, systematize, create processes, and replicate. That’s a lot right there. Here’s the second part—your investment mindset must be one of expecting no return for five years. Dane, you want to build a sustainable $500,000 a year business and you want it to really be sustainable, not just right now, so you have to think five years. Everything you’re investing right now is for five years. Right now, your goal is survival—set your lifestyle and pay yourself a fixed salary. Don’t change it with the growth of the business.
- 1:23:27 Invest 100% of the profits back in. If you want to make $150,000 or you want to make $200,000, you can just quit whenever you get to that level. If you want to scale, you have to keep reinvesting what you make. You won’t have more to reinvest if you allow your lifestyle to creep up. That’s why you’ve got to set that. Set your lifestyle in stone. The business is totally separate. Keep reinvesting and reinvesting, and you have to think five years. Don’t expect anything out of it for five years.
Making $500,0000 This Year & Sustainably
- 1:24:03 Ben: Is there a hybrid of the two? If my focus is on making $500,000 this year, are there checkpoints along the way where I can zoom out and say, “Here’s where I am and some things I can be mindful about for the next three to five years”?
- 1:24:30 Sean: If you want to set yourself up for the next three to five years and eventually build something sustainable, then have your primary goal of $500,000, but the secondary goal would be to save as much of it as possible. Set your lifestyle wherever you want. Maybe you’re minimizing, but you have a comfort level ideal goal. Set that, whatever it is, and satisfy it, and whatever’s beyond that you would invest.
- 1:25:07 Ben: $500,000 is double what we need to meet. It’s not the minimum, but all the things we want to spend money on this year. If we get to $500,000, I have to start making decisions about what I will do with that money. The more I think that way, the more I’m prepared, the more real it’s going to feel for me.
- 1:25:47 Sean: Most people don’t know this, because it’s hidden back in my blog. No one ever goes back in a blog. Before I made my first $100,000 with the Learn Lettering launch, which is when everyone notices things and cares, to me it was always real. I didn’t know I would make that much. I thought I might make $30,000 or $50,000. I had goals, but I blew them out of the water. I was working towards those goals, and it wasn’t real for anyone, not my family, not my wife, only me, until that happened. I knew it was coming, and I wrote an article two months before it happened. The title was Have You Ever Thought About What You’d Do With an Extra $100,000?? I wrote an article about it before I got there.
- 1:26:53 Take ownership of it. Make it real. Normalize it, visualize it. This is all that stuff that people tune out. They say, “Millionaires are always talking about thinking positive and thinking bigger. Silly stuff.” Well, for the people putting that advice down, look at their life! Are they cashflow poor? Are they asset poor? Are they in debt? Then look at the people giving advice who are where you want to be. It’s not that difficult. There’s a reason people think on a bigger level. There’s a reason they’re visualizing and normalizing these big goals. We have the Lambo Goal because we’re trying to normalize what was previously big to us. I like that. Take ownership of the second half of the money you’re going to make that’s beyond your family goal, and set that aside. Don’t get to that point and say, “Wow, we’ve got a lot more. We can go on two Disney World trips!”
Set your goal, and invest the rest to start building assets.
- 1:28:12 Ben: This is where the game thing comes back in for me. If we make $500,000 this year, I don’t want to go into next year feeling the cushion of that. I want the challenge of how to do it again and replicate what happened the last year. This year is unique for us in terms of financial needs, just because of some of the things we have to take care of that we haven’t yet for our house and for other things like that. Next year isn’t going to be as much of a crunch, but I still like the challenge of trying to reach the goal and not thinking about the extra money as cushion for that. That extra money can go toward something else.
- 1:29:02 One of the big things I’ve thought about is getting rid of one of the liabilities we have, which is our home. The only liability we have is our house. We don’t owe payments on anything else. It would be nice to get out from under that, because that makes our minimum requirement different, which gives us some cushion. That way, we have freedom, which is another asset. I love the idea of going into the following year with that kind of freedom, saying, “We don’t owe anybody anything.”
- 1:30:00 Sean: Ben, I would just encourage you to write it down. You’re reverse engineering this. You’re planning on doing it, so when it happens, you have to think, “This is what I will do.” Think about it, and write down what you’ll do when you get to that point. Let’s say you don’t reach the goal, but you need half of it for your family goals and you make 60% of it total. It’s weird, we change as people over time, and you don’t know it if you don’t write. You could get to that point and say, “Well, I didn’t meet my goal,” so that extra 10% just dissipates. It gets sucked into everything else, which expands to devour it.
- 1:30:57 Rather than saying, “I set my family goal, and this is how much I made beyond it, so I’m going to set it aside for investing in the business.” Write down what you will do ahead of time. I hope this episode has been helpful for others, too, and they’ve gotten something out of it. If you’re taking on the same challenge as Ben and you want to make the same or a similar amount of money, I encourage you to do the same thing. Write it down. Write out your plans, what you will do with that money, ahead of time. Write down what you will limit your lifestyle to in the meantime.