What Do I Need to Know About Money, Accounting and Entrepreneurship? – Ask Clay Anything

Audio Transcription

Do you have questions? America’s number one business coach has answers. It’s your brought up from Minnesota. Here’s another edition of ask clay. Anything on the thrive time business podcasts. Oh yes, nation.

Welcome back to another exciting edition of ask me anything. We have a thriver out there by the name of Jeff who lives in east Tennessee. Who sent us the following question there to our business coach studio. So my friend. Let’s hear it. Alright, so jeff asks, he says, so I’m one of those ignorant people who know very little about money in terms of business. Here is what I do know. Don’t spend more than you earn, have no debt in. Save all you can. These things. My wife and I have done very well. I’m looking to start a business in the next six months and I fear I understand too little about money. I intentionally want to be one of the 10 percent of business podcasts and of businesses who do survive and want to be in the five and 10 percent of businesses who thrive. Okay, so let’s go through now. He has a lot of questions here.

So let’s go through the following three questions here. Let’s do it. Got It. First number one. Question number one is, what books would you recommend reading for money and money entrepreneurship, etc. What books would I recommend that you read in terms of money and entrepreneurship? Right? The first book I would recommend. Well, what we’ll put on the show notes is rich dad, poor dad by thrive time, show guest. Uh, sharon lechter. Sharon lechter wrote the book with robert kiyosaki and andrew, have you read that book yet? I have. It’s one of my favorite books. Okay. And it will explain this concept called the cash flow quadrant. Now let me explaIn to you have a cashflow quadrant works. You got a sheet of paper, you break it into four equal boxes. All right, so make a square, break it into four parts, right? So the bottom square, the first square in the bottom left is e, which stands for employee.

That’s where everyone starts. We all started there. I was, I used to work at target direct tv, applebee’s, all at the same time. My wife’s working at office depot at oral roberts university. We’re living in an apartment and we’re doing exactly what you’re doing here. My man. We’re saving money, jeff. We’re just save live living below our means doing what you were saying, just saving everything we can live in cheap. Alright, that step, that step one, employee. step two is self employed, so step two is self employed. I mean you. You really don’t own a business which you own a job. I’m a good example. That would be like if you bought a oxi fresh franchise today, when you first start out, if you’re the one who actually is cleaning the carpets yourself, that would be a self employment. If you’re a plumber and you actually do the plumbing, that would be self employment.

If you are a remodeler, if you’re a real estate photographer or a realtor, you are self employed. You employ yourself, but you really are not a business owner because the business doesn’t serve you. You serve the business. The third step is you want to become a business owner. Now, business owner means that after all of the job, all the tasks are completed, all the jobs are completed, all the processes are completed, every step of the chain is done. As an example, if you were a real estate photographer, uh, after the marketing is done, somebody has to answer the phone and do the sales. After the sales are done, someone has to do the scheduling. After the scheduling is done, somebody has to take the photos after the photos are taken, somebody has to charge the client, somebody has to deliver the product to the client, the photos to the client.

Someone has to make the flyers. Someone has to build the website, somebody has to do the accounting for all of those things are done. Should be about 20 to 25 percent left. And if there is 25 percent left and that’s enough for you to achieve your financial goals, then you own a business. So if there’s four employees and each employee generates a profit for you, have $250 a week and therefore you make a thousand dollars a week without actually working. You own a business. But if not, you’re still self employed. That’s where everybody stops. By the way, everyone, everyone stops, not everyone, but 90 percent of business owners never get past the self employment a phase, and that’s because they don’t have systems and processes. Now, once you have a business podcasts that exists to serve you, then you can take the profits that you have and you can live below your means and you can take the excess profits and you can reinvest those into other ventures.

And uh, uh, if you do it right, they should all bring in a little bit of profit. And then now you are an investor. So you go from employee to self employed to business owner to investor. And that is the cashflow quadrant written by sharon lechter and robert kiyosaki and rich dad, poor dad. Andrew, does that answer the question? Yes, it does. Let’s move onto the next question, my fRiend. All right, so he asks, how soon would you say in the corporation of accompany should one hire an accountant? I Think he says in the conception and the conception of the company. We’ll get one more time.

How soon would you say in the conception of accompany, should one hire an accountant? Well, if we just talk about conception, I’ll just to. I’ll tell you what you want to do is you want get some coconut butter, coconut butter. Do you want to get them a candle? Roman candle? That’d be like fIreworks and fireworks. We have thought about what you want. Seriously,

what’s you’re going to do is you want to have an accountant from the very beginning. Uh, the numbers should be viewed as a compass and not a rear view mirror, a compass and outer rear view mirror. Okay? But you as the owner have to stay on top of your own accounting. Um, so my wife, we use the accounting firm that submits the documents to the irs and make sure we’re in compliance with tax law, but she’s on top of that on a weekly basis and week. We track all of our income and our expenses and we live within that budget. The budget is kind of like a road, like the interstate highway and every week if we’re going into the shoulder bubble, bubble bubble, you know you’re driving down the road, having a good time and someone asks you a question and you look over and over, blah, blah, blah, blah, blah.

That’s basically where I. Andrew, you’ve driven behind me. It’s pretty much the only place I’m driving as the shoulder or the middle lane that to notice that he had that no blinkers. So, but yeah, right away because the numbers should be viewed as a compass and not a rear view mirror. Now let’s go back to the question one more time. Read, read the entire, the very beginning where it says, so I am read that. So I am one of those ignorant people who knew very little, who know very little about money in terms of business podcasts. Here is what I do now. Don’t spend more than you earn. Have no debt, and save all you can. Well, first off, let’s talk about ignorant people right there. We’ll put it on the show notes. The average american has less than four hunDred dollars saved. Regardless of income, and we’ll put a link to that.

The federal reserve has determined that the average american has less than $400 saved. We’ll put this on the show notes too. According to all the stats out there, only 47 percent of americans check this out. Forty seven percent of americans don’t pay any taxes. Wow. 40 seven percent. That’s crazy. So you’re not ignorant. Dumb. you’re actually, in my opinion, in the top half of the american economy right now, so good job, right? They’re now saving money. Almost nobody saves money. if you can’t save money than the seeds of greatness are not within your. If you can’t save money than the seeds of greatness are not within you. That’s jim roan, the best selling author. If you can’t save money than the seeds of greatness are not within you. Jeff, I appreciate you so much for emailing and your question to [email protected], and if you ever have any other questions again, just email us to info at thrive time. Show.com.

F, f from Tennessee. Big shoUt out from the seat of the z. Start with physical cash in sync on these business podcasts. They all big staples with consistency. The cashflow quadrant stuffed with delayed gratification cuts. You need a seat and you need the focus. No distraction. You emailed your question, got a wrap for free and all big. Shout out to jeff. Jeff. I didn’t. I don’t know. I don’t know if you’ve ever email again after this. You’re like, I just. I just want to be my question. I didn’t want to rap song. Okay, weLl that’s what happens. Okay. You like to surprise you, share it with a  business coach friend. We’ll see at our next in person workshop three, two, one. Boom.