In this insightful episode, Nika hosts Derick Van Ness, a Wealth Strategist who specializes in empowering small business owners through tax incentives, rebates, tax strategies, and cash flow banking.
Together, they delve into effective methods for retaining more of your earnings by wisely investing while ensuring these investments remain liquid and accessible for use as needed. Derick brings his expertise in assisting business owners not only to conserve the money they earn but also to employ it strategically to support and grow their business operations. His approach focuses on educating entrepreneurs on how to optimize their finances to enhance liquidity and flexibility, enabling them to make the most of their assets without locking them away.
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*This podcast and its contents are for informational purposes only and are not intended to replace professional medical advice, diagnosis, or treatment. Always consult your physician or a qualified health provider for any questions concerning a medical condition or health objectives. Additionally, the advice and strategies contained herein may not be suitable for every individual and are not guaranteed for business or personal success. Use discretion and seek professional counsel when necessary.
In this insightful episode, Nika hosts Derick Van Ness, a Wealth Strategist who specializes in empowering small business owners through tax incentives, rebates, tax strategies, and cash flow banking.
Together, they delve into effective methods for retaining more of your earnings by wisely investing while ensuring these investments remain liquid and accessible for use as needed. Derick brings his expertise in assisting business owners not only to conserve the money they earn but also to employ it strategically to support and grow their business operations. His approach focuses on educating entrepreneurs on how to optimize their finances to enhance liquidity and flexibility, enabling them to make the most of their assets without locking them away.
CONNECT WITH THE GUEST:
CONNECT WITH NIKA: https://mtr.bio/nika-lawrie
Instagram: instagram.com/biohacking4babes
TikTok: tiktok.com/@biohacking4babes
YouTube: youtube.com/@NikaLawrie
Facebook: facebook.com/biohacking4babes
SUBMIT A QUESTION OR REQUEST A TOPIC:
I would love to hear from you! Please record your question or topic request to be featured in a future episode: https://www.speakpipe.com/NikaLawrie
DISCLAIMER:
*This podcast and its contents are for informational purposes only and are not intended to replace professional medical advice, diagnosis, or treatment. Always consult your physician or a qualified health provider for any questions concerning a medical condition or health objectives. Additionally, the advice and strategies contained herein may not be suitable for every individual and are not guaranteed for business or personal success. Use discretion and seek professional counsel when necessary.
Hey everybody, welcome to the show. I'm very excited today we are going to learn so much about such an important topic, so let me welcome my guest, derek Van Ness. It's nice to have you here. Thank you for joining me.
Speaker 2:Super excited to be here. I think we're going to cover some cool ground today, yeah.
Speaker 1:I'm really excited about it because I think it's such an important topic for people to learn about, especially the small business owners. So, as a company, so you own Big Life Financial and this is kind of a wealth strategy firm, and my understanding is that with the firm, you really focus on financial education, so you're looking at helping people remove the mystery or kind of the misinformation surrounding money. Am I correct in saying that?
Speaker 2:Yeah, I mean we are a financial firm, but I'm a firm believer in education. I just think one of the big problems around money is nobody wants to educate you on how it works. They just want to do it for you, like, oh no, no, you're not smart enough to know about your own money or make your own decisions. Just come to me, I'm really smart, I'll take care of it.
Speaker 1:Even though I'm 23 and I've only had this job for six months, I got you. Yeah, yeah, definitely. It's always been kind of an easy spot for me. It's just like handing all of my wealth over to somebody else. That's kind of a scary, intimidating thing. So I love that you guys are doing financial education alongside your other services.
Speaker 2:Yeah, yeah, I think it's just so, so, so important. What I find is a big part of what we are trying to accomplish, like the company's called Big Life Financial, because we want people to get money out of the way so they can live the life that they're here to live, and a big part of that is just empowering you and, if you know anything, about empowerment when you don't feel in control or you feel like you don't have the ability to impact things.
Speaker 2:It's disempowering, and if you become disempowered in one part of your life, you can't help but have that roll into the other areas of your life. And so the very first thing I cover with clients is just the idea that you are your greatest asset. Every single decision we make in your life, whether it's health or whether it's money, or whether it's relationships or whatever, we're really doing our best to align those decisions in a way that they empower you, they make you more powerful, they make you more excited about life, more energized, expansive, you know, just to be a contributor. If we're missing that long-term, everything else is going to kind of take a dive, because if we're disempowering you, you're not going to be as big, strong, capable, whatever, and that's going to impact you everywhere else.
Speaker 1:Yeah, and just the stress that comes along with that as well, it can be really overwhelming. So how did you get started in finance and how did you come up with the idea of kind of the big life and investing in that sense?
Speaker 2:Yeah, so it's a long story, but I'll give you the short version. I was a real estate investor full-time from 2001. In 2001, I left my corporate job, started my own business, really out of frustration. I was working my butt off in LA bad commute, long hours, not making that much money and I just needed a breather. And I thought, oh, if I could just buy a house, fix it up, live in it for a while and then resell it and just do that a couple times a year, I could make as much money as I'm making it my job. And that sounded a whole lot easier and I really just wanted to do that as a break from like getting up at 545 every day, grinding through the traffic in LA, working all day doing 200 to 300 like cold calls on the phone and then getting back in my car and grinding at home and getting home at seven o'clock at night. You know that just after a couple of years that'll really tear you up.
Speaker 1:Yeah, I very much relate to that kind of story. So yeah, yeah, so.
Speaker 2:So I got into real estate investing, and what real estate investing taught me was a couple of things. One it taught me what it was like to be in business for myself, but it also taught me to invest in myself and that when I learn new things like my life gets better invest in myself and that when I learn new things like my life gets better assuming that I learn good things Right. And so I made a lot of money. So I was able to invest a lot of money in myself and what I discovered is I really love marketing, I really love working with people and solving problems and I like I like numbers and crunching and being creative with all of that, and so I learned all that along the way. And then when real estate kind of turned on its head back in 2008, I'm sure people have heard about that it was a really messy time for me and I had to shift gears and a good friend of mine, who's very successful financially, brought me in as a coach to coach entrepreneurs and business owners, and that was kind of my first step into that.
Speaker 2:Even as a real estate investor, I love doing mentoring. I loved training my employees. I loved helping other investors become successful. So I kind of already had an inkling that I wanted to go that direction. I was actually working with someone to learn how to be sort of on the side, because I was making several hundred thousand dollars as an investor so I didn't necessarily need any more money but on the side just to be like a personal coach, life coach, whatever, because I've just always been drawn toward the spiritual side, helping people, making life better, work-life balance, all that stuff. And so I was already kind of on that track when the economy crashed and real estate like flipping houses didn't really exist in LA. Yeah.
Speaker 2:Nobody could get a loan.
Speaker 1:Yeah, right, yeah.
Speaker 2:So I was out of a job and just ended up finding my way to this firm where I got to use all those skills. I got to use all the stuff I learned in business, but I also got to learn all the purpose stuff and the personal development and all of that side of it. So that kind of got wet my appetite for hey, I can really help people live a bigger life, a better life, and a lot of them are being held back by money and that was part of what we did at that firm and really the evolution from that firm to what I do now is over. There I was a 1099. I was, you know. They would bring in the clients.
Speaker 2:It kind of had a curriculum that I would teach and help educate people, and then there came to a point where there was just a ceiling on it. Right, I couldn't earn any more money because they were only paying so much per client and they were generating most of those clients. I did a little of my own stuff on the side, but the truth was they were keeping me good enough and busy enough that I couldn't really focus on my own thing. So at some point I had to make the jump and do my own thing. There was actually a brief stint in there where I flipped a couple of houses to get a bunch of cash to be able to start this business, but that's really what it was is. I started doing it working for someone else and I realized like I just really love teaching and helping people.
Speaker 1:Yeah, I think that's what sucked me in too is just that watching people kind of the transformation, and in a way it's a selfish thing for coaches because we get to see like that awesome moment of people, you know, changing their lives, and so I love that. I really connect to that story.
Speaker 2:Good yeah, I love that too, that's. My favorite thing is when I see someone, a client of mine or someone who's just hit it huge and I'm like, I'm like a small piece of that.
Speaker 1:Yeah, right, yeah, I totally celebrate, yeah, yeah. So, along the way, what are some of the biggest misconceptions that you've seen people kind of think around money or finances, and what are some of the misconceptions that you're seeing right now?
Speaker 2:Well, there's a couple. I think one of the biggest misconceptions, or a really common one, is the idea that you can shrink your way to wealth. Right, if I cut all my expenses, if I play really small, if I live well below my means and never buy a new pair of shoes or a new car or any of that kind of stuff, that I can become wealthy that way. And it's true that you can save a lot of money that way right. But if we stop and we think about, like, why do I want money? Right, the bigger philosophical question of why you want money, it's really for two things, what for most people.
Speaker 2:One is I want to survive and be protected and safe and take care of my family Right, like the basic survival instinct. And the second one is I really want to have experiences with people that I love. I won't want to be able to go and do stuff that I want to do with people that I want to do it with Right, like like that's really all we want money for. If you have those two things, you'd have no need for money. Right, yeah, right.
Speaker 2:And so when we stop and think about this idea of shrinking your yourself, you're accomplishing the first because it is a very protective survivalist we call it scarcity minded mode but it doesn't do the second. Right now you can't go do the things you want to do because I don't want to spend the money or I'm afraid, or whatever. And so the big misconception is that saving, saving, saving, cutting, cutting, cutting will get you the second and it won't. Some of these people, even people who acquired a good amount of money by doing that, they aren't spending it, they aren't enjoying it, they're not having the experiences they want to have. So, by the very definition, that's a real problem, and so we really try to help people recontextualize that. The first one is fine. I mean, it's like ingrained in your survival right.
Speaker 2:And you don't want to do anything stupid. But you really have to expand and create and grow your way to wealth. There's no way to shrink your way to it.
Speaker 1:So in a very simple you know, I know this is a very kind of complex thing and it's really unique to each individual situation, but what are some of the things that you would suggest people to kind of look at or maybe think about when trying to change their view of how to save money or how to spend money or what to spend money on those kind of things?
Speaker 2:Yeah, I think it's really important to draw the distinction between an expense and an investment and an investment. So, for example, when I was learning real estate, the first education I got in real estate was about $1,500 to buy a couple of courses. Now a lot of people would say that's a $1,500 expense. I spent that money and now it's gone. The thing was I was spending that money so that I could learn how to make a lot more than $1,500. And I would say over the course of my real estate education life I spent probably $4,000 before I actually made any money. But then, as I made about $50,000 or $60,000 in the first year, then I was able to reinvest another $6,000 or $7,000 and maybe $10,000 that year and that made me another 120, 150. And over the course of time I think I spent about $60,000. So a lot of people would say, god, that's so expensive, but it made me about $4 million, so was it really expensive or was that just a really good investment? Yeah?
Speaker 2:And so distinguishing between those two things and one of the rules I have for people not to go too far off track, but it kind of goes with. This is the only time that I think it's a good idea to go in debt outside of, maybe, um, a house, Cause the house is just kind of it's, it's kind of its own weird thing in the financial world. Cause you have to have a place to live. It's not always a great investment, but you got to pay for it anyway. So anyway, aside of that, the only reason you should incur debt is if it's going to make you more than it costs you. So if you buy a new TV or you buy a motorcycle or whatever, it's not going to make you more than it costs you.
Speaker 2:So I would say you should be able to pay cash for those things. But if you want to go into debt to learn a new skill set, to get a new certification, to become better or learn, meet the right people who are going to bring business to your bottom line, to me that's an acceptable reason to go into debt or use debt is I'm spending a dollar to make two, three, five, 10. It doesn't always work out that way, but when it does, it usually pays in spades. So if you continually make those bets, you're going to win.
Speaker 1:I love that because that's very much so. When I was, you know, late teens, early 20s, I went into kind of like everybody else, I went into credit card debt. You know it's my first kind of experience and then I found that I, you know, took me years to pay those things off. And once I paid them off I was like I'm never doing this again and so I'm very adamant about I will not spend anything that I can't afford outside of my mortgage. And I've done some educational classes where I have done, you know, debt for those. Besides that, if it's TV, shoes, clothes, you know, dinners out, whatever, if it's not cash it doesn't happen. And I think that was such a life changing lesson for me to learn.
Speaker 2:So I love that you teach that, yeah, I think. I think it's really important and that that distinction that, hey, if something's costs a lot doesn't necessarily mean it's expensive. That might just be an investment, right, and so the caveat to that is you have to be responsible about it. If you're going to spend the money to learn a thing, you need to ask yourself am I going to use this education Not just like learning stuff to learn it right? Like I see these people this isn't to rip on anybody specifically, but I see it all the time where people get like a psychology degree and then they don't have any intention of working in psychology and it's like.
Speaker 2:Well, that that's great. That's a nice use of a hundred thousand dollars, but I hope you got some other skills along the way or you're in trouble, right? You better be a marketer or something, because otherwise that's just a really expensive entertainment session.
Speaker 1:Yeah, absolutely. I mean, I can attest to that personally. I have a double major and part of it is in psychology and I did not go work in psychology, though I do use what I learned now in my career. Primarily what I used was my other side of the dual degree, which is communications and marketing, and so it really know it really is don't waste your money unless you're really focused on that area.
Speaker 2:So yeah, don't go spend $10,000 to see. If you want to do something, right, if you, if you're not sure you know what, go get an internship, go volunteer, go be an understudy, you know for someone, or find a mentor and just work for them for free. Try it part-time, see what you think. If you don't like it, then you saved yourself a whole lot of time and money. Absolutely. Yeah, if you're sure it's what you want to do, though, I wouldn't hesitate.
Speaker 1:So what are two or three of the top suggestions or you know things that you would share with a small business in order to help them kind of get closer to financial freedom or have a little bit more peace of mind around their finances?
Speaker 2:All right, we're going to knock this one out of the park.
Speaker 1:Okay, I'm excited.
Speaker 2:So, depending on where you're at as a business, the first thing, if you're making much money at all, is you need to be tax efficient. Taxes are the biggest cost in your life and if you're not paying attention to them, you're getting smashed. Once you start making over a hundred thousand dollars a year, right, you really start paying a lot.
Speaker 2:So if you don't have a tax strategy, you're probably massively overpaying. So I and people ask me all this, this all the time, like at what level should I get a tax pro? Right, I can do it on TurboTax for 79 bucks or whatever, right. So I would say once you start paying seven, eight, $9,000 a year or more, you really need to get serious about it, because now a pro it's probably going to cost you $3,000 or $4,000 on the low end and $6,000, $7,000, $8,000 on the higher end until you really start making a lot. So there needs to be enough tax savings there that it's worth having a pro. But I would say, once you're paying $10,000 a year or more in taxes.
Speaker 2:You need a pro and you need to be proactive and you need to think about it. Every dollar you save in taxes is the same as a new dollar made, and most people don't want to pay attention to it. They're scared of the IRS. They just kind of want to do this, and we know how that works in every area of life, right? You just don't pay attention to it and it gets better, right? That's how it always goes. Yes.
Speaker 2:So taxes are the same thing. You have to pull it out in the light, you have to look at it and for a lot of people the typical business owner that we work with they're overpaying $11,300 for $100,000 of income. So $11,300 per 100,000 of income. So if they're making two, three. I work with a lot of medical people doctors, dentists, chiropractors, orthodontists, these kinds of people. You know they make two, three, $400,000 a year. So a lot of them are overpaying 20, 30, $40,000 a year.
Speaker 1:It's a big deal.
Speaker 2:And then on top of that, we actually help that particular group do a lot of research and development credits. A lot of them don't know they can qualify for it and a lot of them are getting another $10,000, $20,000, $30,000 a year back from that. So you start swinging that and it's like oh, that's $50,000 a year that pays for a lot of college right Even at its current rates. So, at its current rates, so, um, so that's the first thing I would say. The second thing I would really say is you need to systematize savings. There's uh, there's a system out there that's become really popular.
Speaker 2:I'm not necessarily an advocate for it, but I'm not against it. It's called profit first and the the main idea of that is you have to pay yourself first, and most business owners don't. They take money out of the business to pay their bills, but they leave all their profit in the business and they reinvest, reinvest, reinvest. I get that, but the problem is just like if you were gambling at a casino you don't always know what's going to happen with the economy or whatever. You need to be taking chips off the table every time you win. And if you just systematize that every single month, you get wealthier. And if you just, if you just systematize that every single month, you get wealthier. And if you don't systematize it, you're on the treadmill, you're running, running, running, but you're not getting ahead. And people keep thinking oh, when I make a little bit more, then I'll start saving.
Speaker 2:But as they make a little bit more than they, reinvest a little bit more, and they just never get to the part where they're saving. And if you never save, you never have enough money to invest to the part where they're saving. And if you never save, you never have enough money to invest. So if you really want money to work for you, especially outside of your business, you have to have a systematic savings plan, and we teach something called the money maximization model that helps business owners to systematically take the chips off the table, put them in a place where they always go up. That's very, very safe. So they're never going to have to ride the ups and downs of the market because I'm not a stock market fan and then the money is still available for the business. So you kind of get the best of both worlds.
Speaker 1:That's awesome. So one of the questions I was really curious about to ask you is we've watched the stock market go up and down exponentially over the last few months and it really seems to have a complete disconnect from reality over the last few months. And it really seems to have a complete disconnect from reality, you know. I mean, people are out of jobs, people are facing the pandemic, yet the stock market just keeps going up pretty much. And so I guess my two questions there for you is one why does it feel like it's so disconnected from reality? And two, are there ways you kind of touched on it, but not in detail?
Speaker 1:you know, are there ways to grow your assets, to grow your money, without investing in stocks and 401ks and IRAs and so on?
Speaker 2:Yeah. So the first question money. Does it have a good trajectory? Is it well-funded? Does it carry too much debt, like real ratios, real numbers?
Speaker 2:In the 90s, a lot of that changed and it started turning into a very speculative market. Oh, I think this company is going to do good, oh, I'm going to get about that. And so what happened was you get a lot of people who are gambling essentially right, it's a game of chance and we've gotten to the point where everybody's very much playing the greater fool game. Right? If I buy Tesla today and it's about to go into the S&P 500, and so I think it's going to go up, so I'll buy it today in hopes that it'll go higher, and the next guy will be a bigger fool than me and he'll buy it Right now.
Speaker 2:Tesla certainly has some good things going for it, so I wouldn't say it's a bad investment. But if you're just buying it, not based on anything the company's doing, just thinking, oh, it's really hot, I think it's going to go up, you're playing the greater fool game. And that's kind of what things have turned into. And we can see that with every time president Trump makes a tweet. The market went up or it went down Right, or trade war with China. Market went up, went down. It's the same company today as it was yesterday. Why is it up 30%? Because people think it might go up more. Right.
Speaker 2:And so that's why it feels really disconnected. In reality is because it's turned into a trying out guess the next guy kind of game, and that's the real problem is, for the average person, you have no ability, in my opinion, to effectively compete with the smartest people in the world with millions and billions of dollars of software generating all this information for them, right? So at best you're playing like at a casino, you're gambling with your money, and at worst you're being really foolish with your money. There is something to be said for the fact that the market people don't want to hear this, but the market adjusts for inflation, right? As dollars are worth less, so stocks go up, everything goes up in price. So you have to see this general upward movement of four, three, 4%. Right.
Speaker 2:And then the market on average goes up. You know there's ups and downs and the average is a whole lie and I won't even go into why. That is the ups and downs of that volatility. But if the market average is 6% and three to 4% of that is inflation, are you really doing that? Well, well, and you got to pay your broker, so maybe he makes a percent or two. So are you really making 1% to 2% on your money? It's better than a savings account because that's not keeping up with inflation, but it isn't really the same kind of growth that you think it is.
Speaker 1:Yeah, and I think we've all been sold with the expectation that if you leave your money in, depending on how it's invested, you'll get between 8% and 10% return over your lifetime, kind of thing. But it seems very unstable to kind of put that kind of trust into it.
Speaker 2:Well, and the reality is the numbers show that it's closer to somewhere between 6% and 7%, the market as a whole over time, and then when you adjust for inflation, it's less. And then when you take out fees.
Speaker 2:it's less. And then people think, well, another reason I'm going to do it is my IRA or my 401k, and it's got tax advantages is what they think. Here's the thing. There's a big difference between tax savings and tax deferral. Tax savings means I don't pay taxes. Tax deferral means I'll pay them in the future. Here's what a lot of people aren't thinking about. They're socking all this money away and like, yeah, yeah, I'll pay it later. I'll pay it later. I'll pay it later. Based on where we're going with universal healthcare. Based on the deficit, Because you know all those stimulus checks, you got that ain't free money, you got to get it paid back. Social security is woefully underfunded. Do you think taxes are going up or down in the future?
Speaker 1:They're probably going up quite a bit, yeah, yeah.
Speaker 2:Everybody thinks that's going to be the case. It could be wrong. I mean, who knows, maybe there's a way around it and I can think of some ways that they can potentially do that. I won't get into that today, but realistically, everybody seems to think and the history says we're at a very low historical tax time. So why are you putting off taxes until later, and especially when people get into retirement? They don't realize.
Speaker 2:The government forces you after age 72, right now, to pull out a certain amount out of your 401k, out of your IRA, because they want to get their taxes on it. So you don't have control of when and how you take that income. So you can find yourself in a really bad situation where you're forced to take all this income when tax rates are not great. I just don't like that. For people, once again, it's disempowering. They have no control over the market and their money. Once it's in there, it's stuck right. They can't pull it out without a penalty, and so it creates this thing where people are retirement account rich but they're cash poor. They don't feel empowered in their life, they can't chase their dreams. They can't chase their dreams, they can't build their business and they hope that when they go to cash out, the market's high instead of low. But that's not generally how it works, especially if you're taking money out over a long period of time. There's going to be highs and there's going to be lows.
Speaker 2:But when you look at volatility, all you can really pull out of a stock market account in retirement is three to 4% of your principal and have it be sustainable. And the reason that number is so low is because when we have the 2001s and the 2008 and nines and we'll see what happens with this particular iteration of that if you have to cash out and take money out for retirement, it cripples your ability to recover because you sold low and now, when the market goes back up, you have less stock to go back up with it and so it really cripples you. So you can really only pull three to 4% out. And three to 4% of a million dollars means you've saved a million dollars but you only get 30 to $40,000 of income. You have to pay taxes on it, but let's say you get 40. You buy the time, you pay taxes. You end up with 33. If you've saved a million dollars, do you think living on 33 grand a year is going to cut it for you?
Speaker 1:Probably not yeah.
Speaker 2:No, no, I've done the math and and to get to that million, and if you save 10% and the whole thing you were living on about triple that on average throughout your lifetime. So you're taking a massive haircut and you're still scared to death, right, you don't know? So it's, it's just a really bad system for everybody, except for the people who get paid by telling people to put their money in there. So I don't mean to be like a super downer, I just. I just think there's a lot of no, I actually absolutely agree with you.
Speaker 1:I have a. I have an uncle. He passed away several years ago, but he was a big investment guy and he said the same kind of thing. One of the things that he told us before he passed away was don't invest in stock market. You know there's other options and other ways of doing it, so that's always kind of sat with me. Sure, you know. So my question are what are these other options? How do we grow our assets, grow our money outside of the stock market?
Speaker 2:Yeah, so there are some that are really obvious, right, I'm a big advocate of real estate, like cashflow real estate. What I was doing was fixing houses up and reselling them, and if their value went down it was a problem. But the thing is with rents if the value of a property goes down, people still need a place to rent and live, so rents don't really get impacted that way. So cashflow real estate is a great asset, in my opinion, to have. We also teach.
Speaker 2:The money maximization model utilizes the specific type of life insurance policy. Now, that sounds crazy because I'd never heard of this before 15 or 20 years ago. But, like most people think, life insurance is, when I die, it pays. But if you have the right kind of life insurance and I will say that I'm not a fan of something called universal life or the popular one right now is indexed universal life. I don't love that one.
Speaker 2:What I'm talking about here is whole life insurance is that you can put money in there and it gets a guaranteed rate of return. Right now that's at 4%. That may change over time, but right now it's 4% Plus you get a dividend. So if the insurance company is profitable, you get a couple of percentage points or whatever 1%, 2% or whatever on that additionally. But all that growth that's in there. It grows like a 401k or an IRA. It grows tax deferred, but if you do it the right way.
Speaker 2:There's something unique to life insurance where you can access the money through a loan provision and you can actually get access to that money and you don't pay taxes on it. So if you can get five or 6% without taxes and after all the fees, all of a sudden, that's like getting like eight, nine, 10% in the stock market every single year without all the risk, and they're super liquid. So you can get to your cash within a couple of days and you can use it for your business. If coronavirus comes along, you can pull that money out right away, keep things afloat or whatever you need to do. So it's super versatile. It does happen to come with the death benefit, so in the worst case scenario there's payout there.
Speaker 2:But it's literally where a lot of banks store a ton of their cash, like they have to have a certain amount of cash on hand to be able to do loans and everything. They keep a pretty large percentage in life insurance policies for these exact reasons, Because it's the only place you can get guaranteed returns, guaranteed tax efficiency and guaranteed death benefit all at the same time. So we really love that as a baseline strategy and then we teach people actually how to turn it into your own banking system to really supercharge the results of that. And we don't have time to get into that today, but it's just a really nice place to get a return similar to the stock market without all the risk.
Speaker 1:Yeah, that's fascinating. I mean, I've heard about similar things to that, but I didn't know kind of the details and how exactly that works. That's really interesting.
Speaker 2:Yeah, yeah, there's some nuance to it, but the general idea is it's kind of like a supercharged savings type account where you can grow your money and then, when you need it, you can get to it, and I just think it's really really hard to beat until you start getting into some really tax-advantaged alternative investments. And usually you have to be an accredited investor to qualify for those right, meaning you have a million dollar net worth outside of your primary residence or you make 200 grand a year or more. So for a lot of people who are a little below that, this is a great place to start and just start stocking up that cash, building up those accounts, and then you can use that when opportunities come along. You can use that when the Like. Right now, I think the big opportunities in what's going on with the pandemic are to be able to acquire great talent for your business. Yeah.
Speaker 2:There's a ton of people who are unemployed. Like for the last couple of years, it's been hard to get good people. Right.
Speaker 2:Because they all had good jobs and now a lot of those people who wouldn't have been unemployed and are unemployed by no fault of their own, are looking for work. So there's a lot of good talent and then also acquiring other competitors, a lot of people are retiring, a lot of people are going out of business. If you can pick up their equipment, their employees, their office space, whatever super, super cheap, you can really get some nice assets and I think those are some big opportunities we're seeing right now for people who are well-prepared.
Speaker 1:Yeah, I love that. I think that's you know there is. I mean, it's kind of sad, but there are some positive aspects from all of this.
Speaker 2:There are ways to you know come out of this more in a spring or summer thing, opposed to you know being stuck in a winter, if that makes sense I actually think because I know you teach work, work-life balance and a lot of that you know I actually think people, once they figure it out, working from home is so much better than many workplaces and being able to be close to family and not having a commute and not having the costs and not having to have to always pay for childcare, especially as kids get a little older, and all these other things like it's going to be so much better for people in. This pandemic accelerated that by probably 10 years Cause nobody had a choice to see like does this work? It's like we just have to do it.
Speaker 1:Figure it out. Yeah, yeah, I absolutely agree. I think I think there's. You know, even though it's been stressful and kind of an emotional rollercoaster for people. Now I, I agree, I do think that there are going to be some advantages that we take away from all of this. You know, removing the, the um commute to the office. I know that is one reason why I left Los Angeles. I didn't want to be stuck in the traffic anymore, so I came back to Albuquerque, yeah, and so I think you know there are people all over this country facing those kinds of things.
Speaker 2:to get that hour or two or even three hours a day back is so you know it's life changing and so we're going to be back until like 2023, 2024.
Speaker 1:Yeah, that's what I think, too is 2024. Yeah.
Speaker 2:And so a lot of people like they'll never go back and a lot of offices are going to remain vacant and companies are just going to say we don't need that lease anymore, we're done. So there's going to be a massive shift in a lot of that this over the next couple of years.
Speaker 1:Yeah, and I think, and I think also outside of the pandemic, I know there are a lot of small business owners and a lot of people doing things online even prior to the pandemic, but I think that's going to grow even more. I know, you know, I left working in kind of a corporate place to work for myself and I have no desire to get a corporate office, I have no desire to rent a place. I can do everything from home, everything online, and so it saves so much money, it saves anxiety and stress and I get to invest that revenue somewhere else, and so I think there's a lot of people looking at that that will continue to do that going forward.
Speaker 2:I agree a hundred percent. Yeah, I think it's. It's going to be a really good thing long-term.
Speaker 1:So you touched on it a little bit earlier as well. But what are some of the biggest mistakes people are making outside of? Maybe not doing, you know, not paying attention to their taxes and things like that? But what are some of the other mistakes?
Speaker 2:Well, the other big one I mentioned was not saving right. If you don't save, you just, you never get ahead. It's really, really important, Like if people could take one message out of this maybe. Two is pay attention to your taxes and just save automatically. I can't emphasize that enough. The other big mistakes I see is people get stuck in doing things the way that they've always done them. I see I work with a lot of chiropractors, for example, and a lot of them haven't changed their prices on what they charge for an adjustment for 10 years. Yeah, yeah, used to be 59 cents and to now it's 79 cents. That's like 40% increase and your rent's gone up and your bills have gone up and everything's gone up, but your prices haven't. Don't be afraid to bump it $5, $10, $15 in adjustment over time. That's a really big one. Or businesses building their whole business around one or two key relationships. So they've got this one huge customer and they service them and they take care of them, but if that customer goes away, they're dead. Right.
Speaker 2:Right and that's a really dangerous way to build your business. I see that a lot because you think you're in business for yourself but you're not, because that one business or that one person kind of controls your whole business and it's a little scary. I mean, if you have to start that way, that's fine, but as quickly as possible you want to not be owned by any one individual person, lead source whatever, or you could be in trouble.
Speaker 1:Yeah, I absolutely agree with that. I think it's also important to look at diversifying your revenue streams, so not just this one specific service that you offer, but maybe doing you know two or three different services, or having a product and a service or something that you can create revenue from.
Speaker 2:Yeah, so I'll share. We definitely have done that right. So a lot of. When I first started, I was really teaching the money maximization model, the life insurance strategy that was like our main focus, and I did other types of life insurance and disability insurance and all that. And then what I realized was I wanted to be more than just a one trick pony, right Like we wanted to be able to do more, and so I started thinking, like Amazon's done this.
Speaker 2:Amazon is like a lot of people are talking about this, but they took everything that was an expense on their balance sheet oh, shipping's an expense, oh, packaging's an expense, oh this and oh that and they developed a business model around that. They essentially created their own business to fulfill that. And so when I was looking at, what does my business dovetail with a lot of? It was the two biggest things that we found business owners wonder about is one, how do I pay less taxes? And two, what do I do with my money when I make it? What am I supposed to be doing with all this? And so we really wanted to build a process around that. So we now have I call it the potential to profit process, where we take people and we kind of go through their cashflow and clean that up to help them find money. We go through their taxes, help them clean that up, then we show them this model of how to save it.
Speaker 2:And then we even have a model beyond that of like, once you get into alternative investments or tax incentivized investments and other kinds of things, how do you do that outside of the stock market, in places that you know about, care about and control? Cause those are kind of my three rules of thumb with investing. Yeah, so we created a process that started with a product and I just looked at what's the vertical, what's the supply chain, what do the clients who I serve? What else do they need? That's related to my business. I don't want to go off and do something totally unrelated, but if I can stack these services cause the people are looking for them anyway then yeah, it's made a huge difference. It's like tripled our customer value. So it's been a really, really big deal.
Speaker 1:That's fantastic. I love that. So you also going back to the education piece, you you know you're a big advocate for people being financially educated. Where would you suggest people go Like, how can they learn about this and become more comfortable and become more savvy? Where?
Speaker 2:where are your favorite places to learn? Well, um, there are definitely some good podcasts out there, right? Um? A couple that I like are the prosperity podcast, um, uh, the wealth standard podcast, which both of those are done by a couple of people. That I like are the Prosperity Podcast, the Wealth Standard Podcast, which both of those are done by a couple of people that I've learned quite a bit about. And then there's a lot of books out there.
Speaker 2:One of my favorites is Heads I Win, tails you Lose. We also give away a book on our website called what Would the Rockefellers Do. That talks a little bit about, of course, the the um banking strategy, the insurance strategy, but also how to determine which debts to pay off first if you're in the hole, and how do I? Uh, you know, how do I create multi-generational planning and how do I do different kinds of of things that are out there. Um, and I guess a lot of it now comes down to finding people that you identify with, their ideology, because so much of it is coming down to, especially if you watch YouTube or you're looking around, you know everybody's kind of teaching what they think the right method is. Right.
Speaker 2:And you have to find somebody that really resonates with you and you want to make sure that the goals that they teach are aligned with what you want to create. Now I'll give you an example here of one that a lot of people follow. That, I think, is misguided, so I just did a video on this on my YouTube channel. But I talk about Dave Ramsey, and if you're deep in debt, dave Ramsey is your guy. Right? He's all about cutting the expenses and being smart and mindful with your money, and those are all really, really good skills. The problem is, all they do is get you to zero, right? He's very against borrowing money and being in debt, so the problem with that is he'll never be able to expand your way to wealth. So he'll help you cut your way out of the hole, but he'll never get you to building wealth, because if you follow his rules, you'd never get an education to borrow money for that. You'd never borrow money to buy a car. You'd never borrow money to buy a house. And the problem is, if you don't borrow money or get an education, you're never going to have enough money to buy a car and cash and you'll never be able to have the education to like buy a house and so there, like we talked about, there's a good use of debt. But you listen to him and you have to like kind of ask yourself is the promised land that they're taking me to, is the picture they're painting what I actually want? Yeah, or are they? Are they using these abstractions? Like freedom, I want freedom. What does freedom mean? Right? People think that it's a little bit like the guy from South Park who says I do what I want, right? Like just the ability to do anything you want, anywhere you want. But truly, if you're talking about being totally debt free, it might mean you don't have savings, it might mean you don't have a lot of these other things that are working for you, and so you have to be really careful. Is the picture they're painting, is the life that they're helping you create, the one that you want?
Speaker 2:I know Gary Vee was. For a long time I was not a huge fan of his because he was just hustle, hustle, hustle. And he's doing these videos where everybody's out there having a party in his office and he's like I'm back here and we're making the master plan and I'm like that's cool if you do that once, but if that's all you ever do. You never celebrate, you never enjoy life, you never do these other things and so you really have to ask yourself, like that's cool and sexy and I kind of get it, you it you got to put on the theme music like Rocky and Train and do all the hard work and you have to do that stuff.
Speaker 2:But the balance like what I'm sure is who I'm listening to is what I'm reading, following whatever taking me in the direction that I actually want to go, because a lot of things that are being sold that are glitz and glamour, you know, like you're living this champagne life at the club, like nobody wants to live that way all the time. I get it when you're in your 20s, but the truth is most people are much happier when they have a really great relationship with a person and sure they can go out and cut loose, but nobody wants to live that way every night thing, like once. If you've done it and I did it a lot in my twenties in LA like it's, it's tiresome. There's a reason that the rock stars are like 65 at age 35.
Speaker 1:Yeah, absolutely.
Speaker 2:Yeah, it's taxing.
Speaker 1:Yeah, I love that. I have real mixed feelings on Gary Vee as well. I mean, I think he's got a lot of great marketing ideas and I think he has good intention to motivating people. But reading his books I've always kind of wondered the same thing when do you hit that burnout point? And is the burnout point worth the money? Like I mean, where, where's that balance? And and you kind of have to each their own, I guess, but figure out where that point is and and I find a good middle ground there- yeah, so if you listen to Dan Sullivan, are you familiar with him, with the strategic coach?
Speaker 1:I'm not actually, no.
Speaker 2:Yeah, so he's, he's awesome.
Speaker 2:And he's, he's coached entrepreneurs for I don't know 30 something years. I mean I went through his program 15 years ago and it had been around a long time then. But he really, he really has a scheduling system for that the entrepreneurial plant time time planning system, something like that. But he talks about focus days, which are, like you know, make the sale time planning system, something like that. But he talks about um focus days, which are, like you know, make the sale, close the deal, money generating, um. And then like uh focus days I forget what they are. They're like support days, the days that you do the admin and you do the followup, you do the marketing, you do all that kind of stuff.
Speaker 2:And then he talks about free days and he says, as an entrepreneur, you have to take a minimum. He wants you to do more than this eventually, but in the beginning, even if you're slammed for time, a minimum of one 24 hour period per week where you disconnect completely from work. And he says what happens? He says you should schedule it like a work day. Don't just like sit on your couch and suck your thumb right, like do things that excite you, do things that remind you why you're working so hard, spend time with people you love, do things that charge you up, and he really makes the case that if you work, work, work all the time, your ability to produce goes down over time.
Speaker 2:Absolutely so what used to take eight hours now takes 10 or 12. So you have to work longer and harder, and then you're more worn down, so it takes even longer. By by taking these free days and scheduling them with things that fire you up, it expands creativity, it expands your ability to focus, it expands your excitement and energy toward life, and so you get more done in less time. And if you can't afford that one day, it forces you to like jam seven days into six, you know, and get more done in less time. And if you can't afford that one day, it forces you to like jam seven days into six you know, and get more efficient and more effective.
Speaker 2:So, yeah, so they've got some science behind that. That in a lot of years of studying entrepreneurs, that says that's the direction you want to go, not the work all the time, because work all the time just means you become really worn out.
Speaker 1:Yeah, you know, I I've really found that in my own business as well. I mean, that's something that I teach clients, but also in my own sense. When I was first starting out, you know, I was like got to go, got to get it all done, got to focus, you know, get all the work done. You know, 50, 60, 70 hours later I was like, what am I doing? And what I realized is, when I forced myself to actually work closer to 30 or 35 hours, I became far more productive. I got a lot more focused. I got a lot more done because I was requiring myself to really get those tasks done, opposed to looking at all the little pieces and getting distracted by things and being burnt out. And so I think that's a really valid thing that a lot of business owners overlook, especially when and being burnt out. And so I think that's a really valid thing that a lot of business owners overlook, especially when they're starting out.
Speaker 2:Yeah, and you talk about health, right. If we compare this to building strength, a pivotal and almost the most important thing of building strength is recovery time. If you don't have the recovery time, it doesn't matter how hard you lift, you'll just beat yourself up, right? So it's the same thing, and I worked with a lot of entrepreneurs who are like trying to only sleep four hours a night and all these other things, and it's like, no, you're doing yourself a disservice.
Speaker 1:Right, exactly.
Speaker 2:Becoming less effective because of your unwillingness, and it's hard to think of being unproductive as being productive, but really it's true, and especially when you're in business. So much of it is relationships. Like we.
Speaker 2:we have this formula that I didn't make up, my friend Garrett Gunderson made it up but but we live by which is relationship capital. So who you know plus mental capital, which is what you know equals financial capital. So who you know and what what you know equals financial capital. So who you know and what you know determines your income. And a big part of the who you know is social and going out and doing things that you love in the world. Those relationships like when I first got into the financial services world I was selling health insurance early on I sold way more health insurance going out swing dancing than I ever did knocking doors. It's all relationship, friendship.
Speaker 1:That's the same thing I used to teach my staff when I was a development director, and fundraising is that it's not about just going out and ask people to donate money. It's about building friendships and relationships and joking with people and having a good time, and those are the people that donate. Yeah.
Speaker 2:And I think that's becoming much, much more important because I think, because of our digital world, there's a lot of fake relationships and I think people's radar is really up. Is this person just trying to get something out of me, or does this person someone I have a genuine connection with? So I think you have to find your people and you have to find people you genuinely want to spend time with and connect with and build a relationship with them, totally outside of whether that's going to profit you or not financially. You really, you really, I mean you know you have some people who are professional relationships. You have to work with them. You develop those. That's a different thing. But but in your, in your building your life, if you build your life aligned with things and the people that you love, a lot of that starts to overlap. Absolutely.
Speaker 2:But you need to come from that authentic place or you kind of lose your power.
Speaker 1:Yeah, I absolutely agree. I love that. So I have one last question for you, but before I get to that, where can listeners connect with you?
Speaker 2:How can they find you online? Do you have resources that they can check out? What's the best way to get in touch? Yeah, so obviously the baseline is just our website, biglifefinancialcom. If you want a copy of one of the books I mentioned that talks a lot about our money maximization model or in the book we call it cashflow banking you can go to biglifefinancialcom forward slash free gift F, r, e, e, g, I, f, t. And then the other big way to kind of get to know me and see if we're a good fit is our YouTube channel, and the easiest way to do that you can either Google my name or you can just go to biglifefinancialcom forward slash YouTube. It'll take you to the channel. There's buttons on our website where you can um, we've got a blog with a bunch of stuff. We've got a button up in the corner that says work with us, so you can set a free appointment.
Speaker 2:One of my beliefs is I've got an hour for anybody. I invest in people, so even if you're not a super bazillionaire, it doesn't matter. Like I, I work with people who are, you know, barely rubbing two nickels together, and we work together and get them going, and I know that when I help them be some more successful. They're going to be able to do more stuff with me and I've definitely seen that over the years. Clients who started off just barely broke and now they're socking away thousands of dollars a month and they're building their assets and we have tax strategies and all kinds of things going for them because they've really gotten to the other side. So yeah, if you wanna talk to someone, if you're really interested in some of the things we talked about at Resonate, go there, set up an appointment. I can direct you to the resources that make sense, or follow us on YouTube for a while and see how that goes.
Speaker 1:Perfect, and I'll be sure to link to all those in the show notes as well. Cool thank. Linked to all those in the show notes as well. Cool Thank you. All right, so the last question I have for you is what advice do you have for someone who either wants to make change in their life, in their community or around the world?
Speaker 2:Yeah. So I kind of. I guess the short answer is clarity is the key. If you know what you want, it's really clear whether you need to turn left or right, right Beyond the clarity. Once you become really clear that this is what you want, I think you want to determine what you're willing to give up to get it, because most people's life is full. So sacrificing the lesser or the greater for the greater. What's the lesser? What are some things that I can let go of so that I can create space in my life for this to become a real thing? And then you need to block out time to take action. If you don't block out time, if you just do it when you feel like it or when you have extra time because we all have tons of that laying around you'll just never get to it. So I think you need to know exactly what you want to do, you need to know what you're going to give up, where you're going to create the time for that, and you need to block it out and take action.
Speaker 1:I love that. Thank you, I think that's such a such an important thing. Finding clarity can sometimes be the hardest thing, but it really is a game changer.
Speaker 2:Yeah, I find usually people are really clear on what they don't want long before they're clear on what they do want. So if that's the case, that's fine. But you got to keep having experiences to figure out what you do want to. You got to go through all the don't wants.
Speaker 1:Absolutely, totally agree. Well, derek, thank you so much for your time and your knowledge and your experience. I just want to acknowledge you for all that you're doing for your clients and helping to educate people. I think it's such an important thing, so thank you very much. Thank you, I think it's such an important thing.
Speaker 2:So thank you very much. Thank you, I really appreciate it. We're doing the best we can.
Speaker 1:Keep it up and stay safe and just do great things.
Speaker 2:So I appreciate that.
Speaker 1:Thank you.