This week’s Misfit Entrepreneurs are Adam and Kerry Anderson. Adam and Kerry are at the forefront of helping with one of the biggest challenges entrepreneurs’ face - how to create a successful relationship with your spouse and family while devoting yourself to and building a business. In fact, their business is called Whole Life Entrepreneurship, because that is what it takes to succeed on all these fronts, a whole life approach.
Adam and Kerry help entrepreneurs and their families work through the side of entrepreneurship and family relationships that most don’t want to talk about or deal with that eventually causes major issues in their lives.
In fact, they started Whole Life Entrepreneurship because they went through major challenges with Adam building his global business and eventually selling it. Everything looked good on the surface, but it really wasn’t. Their journey to regain their relationship and learn to thrive as an entrepreneur family is full of amazing lessons that I can’t wait for them to share with you.
The journey for Adam and Kerry started when Adam was building an amazing company that he was desperately in love with. And unbeknownst to him, at the end of the day, it was causing a number of ripples across his life that he wasn’t aware of until he and Kerry reached a breaking point. He didn’t realize that he had been a whirlwind of destruction. His years of building the business took him away from the business.
This focus on the business created anger and resentment with Kerry. The business was the sun and the other things, like family, revolved around it. Their marriage began to fall apart. Adam was traveling a lot and they couldn’t work on themselves until Adam had a breaking point and after a few years of working deeply on themselves together, they made their ways through and created the life they really wanted.
What was the darkest point of your journey that you had to overcome and what kept you together through all of this?
What is Whole Life Entrepreneurship?
What are the different challenges that entrepreneur families face?
What are the things entrepreneurs should be sharing with their family?
What should the spouse or significant other be sharing with the entrepreneur?
At the 23 minute mark, Adam and Kerry talk about the board of directors for Family Inc.
What are the 3 C’s?
If an entrepreneur wants to implement Whole Life Entrepreneurship, where should they start?
Kerry, what are a few of the biggest takeaways from your book that could share with us?
Tell us about A.S.S.
What is the one thing someone can do today to get on the right path?
Best Quote: "If you are not on the same page with your spouse, it is very difficult to succeed. You have to share the vision and build your business and family goals together."
Adam and Kerry's Misfit 3:
1: Adam: Take care of yourself.
1: Kerry: Let it go. Stop blaming. Learn to let it go. You cannot move forward carrying the burden.
2: Adam: Take care of others.
2: Kerry: Look up from what you are doing. Look at how you show up and how you are working with those around you
3: Adam: Change the world.
3: Kerry: Be willing to share and be authentically yourself for you person, yourself, your people, and your business.
Blinkist - www.Blinkist.com/Misfit
Smile - www.TextExpander.com/podcast
Hello Misfit Nation! Welcome to another edition of "Lessons for Hannah!" In November of 2016, we introduced a new format that we are putting alongside our regular episodes called “Lessons for Hannah.” Hannah is my daughter and one of the main inspirations for the Misfit Entrepreneur. I wanted to have a place where she could go and learn from her daddy and his Misfit friends throughout her life….even after I am gone. If you haven’t listened to the first episode of "Lessons for Hannah," I urge you to as it gives some more background and tells the amazing story of how Hannah came to be in our lives.
"Lessons for Hannah" are short, very useful, and sometimes comical lessons, that I have learned which I want to share with you and give to Hannah to help in your lives. Because I want Hannah to have these for her life, I’m going to speak as though I am talking directly to her. These episodes are a lot of fun and if you think there is a lesson that we should include in these episodes, please don’t hesitate to send it over to us at email@example.com. We’d love to share it.
This week’s Lesson for Hannah
Hannah, I want to talk to you about 5 very important financial lessons that I wish I learned earlier in life. I’ve done my best and will continue to do my best to teach these and others to you as you grow, but I wanted to put them all in one place for you in this episode.
Your financial education is probably the most important piece of your learning journey. Understanding the language of finance and how taxes, income structures, debt, and how a host of other financial areas work is something that most people never put much time into. This may be because our school system doesn’t really teach these things, unless as an elective or unless you make your career in finance. But, even then, much of the financial education required to thrive in the real world is not taught. There is so much I can share with you about financial education that I could spend months just doing episodes on it. Thankfully, I’ve got years to teach you, but here are 5 very key lessons that are at the heart of what you need to learn.
#1. How You Make Money is Much More Important Than How Much Money You Make
Most people just focus on “making more money” in their lives when, it is never how much you make, but how much you keep that matters. And because most people make their money as employees, there is not much they can do about this because they don’t have any control. A W2 is the highest taxed form of making money. And not only is it the highest taxed, but you must pay the government before you get any of your money.
Let’s contrast that with being an owner of a business and deriving your income from that business. Now, there are a lot of different business structures that differ by country around the world, but as I teach you this, there a few predominant ones for small business owners in the U.S.. These are an LLC, closely held S-Corporation with 1 or 2 owners, and a partnership or limited partnership. These entities all have about the same tax benefits, but from a legal standpoint can be used in different ways. When you are an owner in one of these entities, the tax laws favor you. First, you don’t have to take all your income as a W2 type income. In fact, in the case of the S-corp, you take what is called a reasonable salary as a W2 and then the other income you earn from the profits of the business are taxed differently – effectively almost 15% less.
More importantly, the business allows you to deduct expenses and items that you use for it. So, for example, if you are a W2 and you want to buy a computer for your work at home, you really can’t deduct that, or maybe only a small portion on your taxes. As a business owner, you can deduct the full amount.
On top of that, you get paid first – not the government. For the profits your business earns through the year, you get to utilize that money as you see fit and then at the end of the year, you pay tax on the amount left after investing in and paying for your business. This allows you to have your money work for you instead of being taken every paycheck.
I know this is a very simplistic example of the difference between a W2 vs. deriving income as an owner of a business, and there are actually many other benefits to creating income as a business owner- what I most want you to understand is that it is not how much you make, it’s how you make it that matters. If I make $100,000 from my business, I will take home a lot more than if I make $100,000 as a W2 employee.
#2: The Super Wealthy Make their Money Predominantly Using 3 Mediums: Owning Businesses, Real Estate, Stock Market
Following on our last example, if you study the Forbes 400 wealthiest that is listed each year, you will see they overwhelmingly make their money in either being a business owner, investing in real estate, or investing the stock market. Most do all three to some degree.
As I got into my career, it dawned on me that if that’s how the super wealthy make their money, I might want to pay attention to it. I was already on the path of entrepreneurship, but It was then that I started to study real estate and the stock markets. And what I learned about these areas was shocking. There are so many opportunities and ways to create wealth. In real estate, you can purchase rental real estate, or buy tax lien certificates, invest in developer projects, flip houses, and host of other types of transactions. In the stock market, you don’t just have to buy a stock or mutual fund, you can use options or sell and write option contracts. You can do all kinds of different trades, including my favorite, selling naked puts and credit spreads, which pay you up front for even taking a risk with your money in the market, as well as put the odds of winning in your favor. Buying a stock or mutual fund gives you none of that.
It literally pays to learn about these different areas of finance and business, so learn all you can.
#3: Rental Real Estate Offers the Best Tax Benefits
Owning businesses and investing through tax advantaged business owner specific IRAs gives you some great tax advantages and leverage, but unless you have an army of lawyers to pour through the tax code each year and find every little thing you can do to maximize your wealth, the best tax advantages I’ve found are in rental real estate.
Real estate has incredible advantages as long as you are willing look at things long term and are willing to hold. That doesn’t mean you don’t get a benefit in the short term in creating cashflow from rents, it just means that the biggest benefits come over time. For example, rental real estate allows you to deduct an expense each year called “depreciation.” Basically, what it means is that you can deduct 1/27 of the value of your property each year for 27 years. Now, why does this matter, first, it is an expense you get to take without actually paying money from your pocket. You are essentially taking a deduction for your property getting older each year. This will then act like an expense against your rental income alongside your mortgage (if you have one), taxes, other expenses, etc. And like a business you get paid first and take deductions and expenses before you pay the government. Depreciation is almost like phantom income as it allows you to keep more of your rent tax free. Now, there are rules that when you go to sell a property, depreciation comes back to be taxed as part of your profits, but even then there are things like carryover than can go against it and one of the biggest tax benefits of real estate, the 1031 exchange.
1031 is an area of the tax code that basically says, if you sell a property and take the proceeds and invest them into a new property of greater value, the proceeds or profits can roll into that property tax free. In fact, many investors just keep using the 1031 laws to roll their gains over and over into new and larger properties over time.
Now, why does the government allow this with rental real estate? Because people need a place to live and the government incentivizes investors to help make that a possibility.
Again, these are simplistic examples and there are a ton of other tax advantages to real estate, but these two alone make it one of the best investments out there.
#4: 401k’s Are Not as Good of an Investment as You Think
If you are a W2 employee, you pretty much have no other choice but to invest in a $401k for retirement and when the market is good, then your 401k is good, but have you ever looked at how broker fees and expense ratios eat away at your profits over time? Tony Robbins did a great job exposing this in his book, “Money, Master the Game.” A good read for those wanting to improve their financial education. But, did you know as a business owner, you have a lot more options. You could do what’s called a Solo 401k in which you can choose the investment choices, lowering the fees, and put over $50k per year away tax free? Or you can do a Simple or SEP IRA that allow you to have total control over how you invest and what you invest in including things like real estate or physical gold. And these IRA’s allow you to invest 10’s of thousands as well each year.
What I want you to understand is that when it comes to your retirement, there are much better ways to save and grow your money than a 401k, but you need to be a business owner to use them.
#5: Keep Your Cash Working for You, Otherwise, It’s Basically Worthless
We’ve all heard the phrase “Cash is king,” and while yes, in rough times, cash can be very useful in a number of ways, the realty though, is that if you are not putting your cash to work for you, it is losing its value every day. It’s called time value of money and every day; money is worth less than it was the day before if it is not generating enough to keep up with inflation. In fact, since 1913, the dollar has lost 96% of its value. That’s right one dollar in today’s dollars is worth $.04 priced in 1913’s dollars.
So, if you are stashing a ton of money in the bank at effectively 0% interest, each day it loses some of its value.
This doesn’t mean you shouldn’t hold some cash. I advocate having a “rainy day fund” that you don’t touch unless for emergencies that is at least 6 months’ living expenses, preferably one year if you can do it. But, once you have your rainy-day fund in place, you should look to put your money to work for you.
And you must be diligent about it. I’ve shared a number of concepts in this episode, but each one of them takes knowledge, skill, and good judgment to execute successfully. Just because you have been able to make and save some money, doesn’t mean you can’t lose it. And there are always those out there looking to separate you from your money – so make sure you keep up on your financial education.
Hannah, If I had learned these lessons even one year earlier in my life, they would have made an even bigger difference for me than they already have. It’s important that you commit to your financial education and learn all you can starting as young as possible. The lessons you learn, whether you use them immediately, or at all, will still prove to be invaluable for you and help you throughout your life. And I’ll be there to help you and teach you as your grow.
I love you,
Best Quote: Most people just focus on “making more money” in their lives, when, it is never how much you make, but how much you keep that matters.
5 Minute Journal: www.MisfitEntrepreneur.com/Journal
This week’s Misfit Entrepreneur is Mitchell Levy. Mitchell is a global Credibility Expert, TEDx speaker and international best-selling author of over 60 books. He is a serial entrepreneur who has created twenty businesses in Silicon Valley including four publishing companies that have published over 800 books. Mitchell and his teams help clients with positioning, establishing their credibility, marketing themselves, and creating best-selling books.
He’s provided strategic consulting to over one hundred companies and has been chairman of the board of a NASDAQ-listed company.
Needless to say, Mitchell knows a thing or two about how to stand out and share your value in the world. And that is exactly what I’ve asked him to come on the show and teach you how to do.
Mitchell starts by talking about what he does today. He works with busy professionals that want to increase their credibility with a book, but don’t have time. His firm makes you a best-selling author and does everything for your book with you putting in 8-10 hours of work.
Before he got into publishing, he was an e-commerce/business strategist in the Dotcom boom. In fact, he was labeled “Mr. E-commerce” during that time. It was great during the boom and not great when everything went under. Almost overnight, he lost a lot of revenue streams. In the early 2000’s, he saw the democratization of book publishing on the horizon and capitalized on it. His firms published over 800 books from 2005-2017. But he says that he was serving the wrong audience. He wanted to change the world, but was doing it in the wrong way.
He did a Ted Talk and a Kickstarter to fund a company that was not serving people who wanted to write a book, but for people that wanted a book and had great ideas, but didn’t have the time.
During this time, he started to become a thought leader on global credibility. He currently has a initiative to interview over 500 top minds on credibility. The information being gained on this initiative is driving his next decade of business solutions.
What’s your process for finding a market and maximizing how you succeed in it?
At the 14 min mark, Mitchell and I discuss partnerships…
What is the #1 thing an individual or business can do to cement credibility?
What is a book?
What is an “Aha” message?
Are there specific sections that every book should have or does it vary by author?
What has to be done to become a best-seller?
What is a CPOP?
At the 44-minute mark, I dig one of Mitchell’s old principles, the HELP principle and we have some fun with him remembering it…
At the 47 min mark, Mitchell talks about other patterns/thing he’s learned from the hundreds of interviews on credibility he’s done.
Best Quote: "Develop your CPOP - A 3-5 second answer on how you solve your "customer's point of pain."
Mitchell's Misfit 3:
5 Minute Journal: www.MisfitEntrepreneur.com/Journal
This week’s Misfit Entrepreneur is Jay Abraham. Jay needs no introduction as the world’s top marketing and business growth expert and founder of the Abraham Group. Jay has worked with most of the Fortune 500, been featured just about everywhere on TV throughout the world to Forbes, Entrepreneur, and Investor’s Business Daily and he’s helped increase the bottom lines of over 10,000 clients working across a 1000 plus industries.
Jay’s become who he is because he looks at things in a totally different way. He has an uncanny ability to find overlooked opportunities and create significant profits where not else can see them.
Jay has probably forgotten more about how to succeed in growing a business than most of us will ever learn in a lifetime and I’m going to do my best to squeeze every ounce of wisdom I can from him in today’s episode.
Jay got started in an unusual way. He was married at 18, had two children by the time he was 20 which meant he had the needs of a 40 year old in his life. He was fortunate and challenged enough that a bunch of entrepreneurs found him interesting and gave him commission only positions. As Jay says, “When you only eat when you earn, you find out very quickly what works and what doesn’t.”
That experience was his “trial by fire.” He began to jump around from industry to different industry over the next 4 years taking things he had learned in one industry and bringing them to other industries where the strategies were unfamiliar. Jay notes that he was sort of the one-eyed man in the land of the blind. He imported ideas from outside industries and combine them with other ideas to turbocharge results. It wasn’t that Jay was that great, but he had an uncanny ability to bring different strategies together in new and never before-seen ways.
At the 8:30 mark, Jay talks about “best practices” in the context of seeing beyond “best-practices” in your industry to create new ways of generating and growing revenue.
What is Pre-Imminence? Why is it so important?
Patterns of success you’ve seen throughout your career?
Biggest problem with business growth?
How can someone use the Socratic method to close more deals and grow their business better?
The first thing Jay does with a new client is look at how a client is performing in all areas of their business because most of the time, they are not optimized in any of the areas.
At the 46 min mark, Jay talks about how to sell better.
It’s best to just listen.
One thing you can do now to grow your business?
One way to improve your processes is to look at the people doing the work in your business, see how the best is at certain things, and then take what they do and teach it to the others doing the role, the whole group will improve. When you find who is better what, you can take all the best practices, put them together and teach everyone making them better.
At the end of the day, there are 3 ways to grow a business:
Working on one will make a big difference, but you get geometric increases by improving all 3 together.
Best Quote: When you only eat when you earn, you find out very quickly what works and what doesn’t.
Jay's Misfit 3:
5 Minute Journal: www.MisfitEntrepreneur.com/Journal