21 Jul 174 | Lessons From a Money Hoarder & Forbes Billionaires
Welcome to episode 174 of Profit Boss® Radio! It’s true, I haven’t published a podcast episode in over half a year—and today you’re going to find out why! You’ll hear all about how I ended up in a complete state of burnout, and the mindset shift I had to make to turn things around.
I had something brewing in my business that turned out to be a BIG mistake. I let a limiting belief around money stop me from hiring new staff when I needed it the most—preventing me from effectively scaling my business.
Yes, of course, even though I don’t tend to make them very often anymore, you can count on me to be honest about my own financial mistakes. And if you have your blinders on (like I did) you may have limiting beliefs around money that are getting in your way too!
With these hard lessons in mind, today’s episode of Profit Boss® Radio takes a look at the 7 Steps to Wealth Framework. I want you to see which of these critical steps are working for you in your life and business right now AND which you need to put in place before financial mistakes—or even tragedies—occur. Then, I review the Forbes Billionaires list, and show how your reaction to it can give you insight into your own (potentially) broken mindsets.
Here’s what you’ll find out in this week’s episode of Profit Boss® Radio
- Why it’s so easy to forget what you know–and how being attached to profit ended up hurting me.
- Why growing a profitable business is always about personal growth (what got you here won’t get you there!)
- The 7 Steps to Wealth–and how to use this blueprint to build (and protect) a fortune.
- What it means if you have a negative (or positive) emotional response to seeing stories about the Forbes Billionaires list.
Resources and Related Profit Boss® Content
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Hilary Hendershott: What? We are back! Welcome to Episode 174 of Profit Boss® Radio. I am Hilary Hendershott. This is your virtual wealth mastermind. I am your profit mentor, your wealth champion. You are in the right place if working so hard seems to come easy for you but money still seems a little bit elusive. There are SO many shows about business and marketing and all the freedoms that are supposed to come along with being your own boss, but this show, this show, Profit Boss® Radio, right here, I am showing you how to keep it for yourself. All that hard work? All those business revenues? You got to learn how to keep them for yourself and that is what we’re up to here. Well, I can’t believe we’re back. I’ve been off the air for almost six months. It feels so good! I have missed you, and if you’re listening to this, thank you for staying subscribed. I am so happy to be back, and of course, I’m going to share with you today why I’ve been off the air for six months. Frankly, because it’s cheaper for you to learn from OTHER people’s lessons than to have to make them yourself.
It’s no secret that I’ve made big mistakes and learned big lessons in my life. The origin story of this podcast is one of the bigger mistakes I made in my life, really the biggest lesson I had to learn, and that was the rules of money. I very nearly financially ruined myself. I mean, truly I did financially ruin myself. I had six figures of debt. I had a leased BMW convertible but I had absolutely no ownership in. I had a mortgage where the principal balance went UP every month! I was a financial train wreck, and I was a financial train wreck who graduated from college with a degree in economics with very nearly a 4.0 GPA, no joke, Phi Beta Kappa, honor society, silver key, the whole thing. I got good jobs. I just refused to hold on to my money. Finally, I got so sick of having financial emergencies. I was like embarrassed and ashamed. I was always asking for loans and paying credit card interest, and I really just decided to shed all of those habits and mindsets of the past. I pulled myself up by my bootstraps and got really committed to financial success. I worked my butt off to reverse my results. I paid off the debt. I really became a connoisseur of profit. I worked hard to build my business and here we are. I am now financially independent which means I work because I want to, not because I have to.
All that is to say that I deserve to be your wealth mentor. I decided along the way to give away what I learned, to systematize it, to make it learnable, downloadable, teachable, and I did that. So, if money isn’t intuitive for you, I got you. If the language of wall street isn’t understandable to you, I get you. If the idea of investing for compound returns is intimidating to you, I hear you, and I can help. These are the topics we cover on Profit Boss® Radio. We’re also going to be talking more about profitable ways to run a business more and more on this show because it turns out I’m pretty good at that, too. First, let me just say that it’s been hard to be off the air for six months. Last year, the coronavirus pandemic began in March. It was emotionally hard for all of us. I happen to manage a wealth management firm where we manage our clients’ investments. So, those suffered briefly and we needed to put our attention on those clients to make sure that they were emotionally and fiscally alright. I’m proud to say that everyone has survived and thrived since then, that our client accounts have been up between 50% and 55% since then, pretty significantly. Since then, of course, in the US, it’s been a time of particular negative energy for so many of us. It’s been really hard. However, I really had something brewing in my business that was bound to take me out regardless, and here’s what it was.
First, I’ve been so blessed that many of you have hired us to work with you whether that be as your comprehensive wealth management team or as your money coach in your business. Our loyalties are to you first, to our clients. When the rubber meets the road, as business increases, so do the obligations on my time and I just didn’t hire team members in time to do both, to continue to prep and air podcast episodes and also service the high level of business we’ve brought in. It’s a good problem to have but it frankly became quite painful. My calendar started to look pretty consumed. My calendar isn’t a 2-dimensional thing outside me that’s not attached to me, and neither is yours. My calendar is how I use my time, which is my LIFE. So, there’s almost no white space on my calendar. I’m sacrificing personal commitments and peace of mind and I’m like starting to get pretty unhappy. I’m sacrificing time with my family for work, and I had brought in so much business that I did that for nearly a year. I’m just being honest. I was pretty unhappy about that. I dropped the podcast for a while, frankly because I had to because it was the situation I created. When I really looked at what’s really going on, when I got miserable enough about it that I was willing to look honestly and insightfully, I had the experience that the world was doing it to me for a while. And that is really false thinking and I’ve taught that on this show before, but even I am subject to it. You know, so much of business ownership is personal growth or business growth is personal growth.
It’s just interesting to me how you can teach something and know it at your current level but that when the world or your business calls for you to expand into a new level, you can forget the same things that you taught. And so, I looked really insightfully and honestly at the limiting beliefs that got me to where I was, and what I saw was I was attached to the money. I didn’t want to spend money on staff. So, in a way, being attached to profit really hurt me because, see, your business is a hungry entity. It is an entity that’s separate from yourself. And just like your car needs gas, your business eats one of two things, money or time. And that could be the time of your team, your staff, your employees but until you design it with enough standard operating procedure so that the business can run without you, it’s a lot of your time, right? So, there’s this push-pull. It’s like a seesaw. The business either eats time and money, and I had gotten unwilling to give the business more money, more of my money in the form of hiring people. So, again, it was a problem that I really created and there were a number of things that led me to this limiting belief, and I’m hoping you’re seeing yourself in this.
One, there is a person in my industry, he’s an expert. He’s absolutely prolific and he’s a thought leader. In my industry, he publishes excessively. He says that firms above my firm’s current size, which it has grown to pretty quickly, tend to not get more profitable. So, I had internalized that. I read it. I believed it like a rule and I internalize it. Okay. I can’t get much bigger. Two is I have this thing that I will say to anyone who will listen, which is that I’d rather work with clients than mentor staff. Actually, what I’m really afraid of is what I call an HR problem. I think you know what I mean. Right now, my team is lean, I know that phrase is lean and mean, but my team is lean and kind and lovely, and we work really well together. I just don’t want to run a big organization that starts to get inefficient. Look, I enjoy the efficiencies of the way my team works together now but it turned into a very limiting belief and I ultimately did have to give it up. And the third strongly held opinion or mindset that led me to this problem was, as you know, I run a wealth coaching program for business owners and I was attached to it being offered in cohorts that start and finish together. And this kind of program becomes impossible to scale because I had to lead everything and I have to do the one-on-one coaching. And what I really got is that if I want to make a million women millionaires and, men, you can come along, too but that if I didn’t redesign my thinking, I was only going to be able to impact about 80 people a year and that I was going to be working as hard as I could possibly work to do that.
So, I had all these limiting mindsets acting like truths, like rules in my brain, and I hope you’re starting to see some of your own limiting beliefs at play in this conversation. And ultimately, I had to give it all up. I hired more staff than I’ve ever employed before. I do believe that we’ve redesigned how the team works that we have people, that saying goes, the right butts in seats now. And what I see now is that I was attached to paying myself a high wage because I talk about and teach how business owners should pay themselves a high wage everywhere I go and I didn’t want to be a hypocrite. I wanted to be a leader of leaders. I didn’t want to be someone who – Warren Buffett said, “When the tide goes out, you can tell who’s been swimming with no shorts on.” I wanted some shorts on people and frankly because I want to earn a high wage. I mean I enjoy it and it’s fun for me. It makes me feel well-compensated for my hard work. It’s a measure of how much value I’m providing. It’s something that makes me feel like I’m doing the right thing in the world. I’m fulfilling on my vision and that the world, the universe is compensating me well for that.
And even though I have asked you on this podcast not to see wealth as a zero-sum game, I was seeing my business revenues as a zero-sum game. You know, that thought leader in my industry had me convinced my profitability was capped out so I thought if I hire more people, it’s just going to come out of my personal bank account. I mean, not literally, but it means less revenue, less profit, and therefore less wage to me, which affects my personal bank account. But you know what, that thought leader doesn’t know me and he doesn’t know my business. And unlike most wealth managers, we do offer a program that’s scalable so we are different. And scale is where leverage comes in and I just decided, you know what, I’m going to make this thing a runaway success. And it’s actually easier to pay yourself a high wage if your revenues are higher because your wage is a lower percentage of that! So, I really got that I needed to take my own coaching and that no matter what level you reach as an entrepreneur, you are not subject or not-not subject to your own limited thinking. Like I said, it’s just amazing to me how much of business growth is personal growth. Every time it hits me in reality and the reality, it kind of gob smacks me.
So, let’s review the 7 steps to wealth and then I want to talk to you about something that’s been in the news lately. So, I have the 7 Step Money Blueprint that I’ve been using and talking about on this show for the history of the show and essentially what I did was after I transformed my own financial life, I looked back and I isolated the key beliefs, practices, and realities that had to be in place in my life. And, of course, I was acting as a wealth manager so I have insight into many people’s financial lives so I know what has to be in place in order for people’s financial life to be thriving. And most people, all they talk about is one of these steps to wealth, which is number 4, earn. So, I’m not giving up the farm here. We’ll talk about all seven. But it’s no surprise to me that if all you’re talking about is earning money, that your financial life will probably still continue to be a mess or it’ll be hit and miss or it’ll be volatile because you’re not managing everything you need to manage. So, let’s talk about the 7 Step Money Blueprint.
First is decide. This is your mindset. In all of the most significant aspects of your life, you have to decide to have that aspect work for you. You know, the aspect of career is separate from money. They’re interrelated but, of course, if you don’t decide to have a successful, fulfilling career, you’re not going to. You have to pursue that. You have to construct it. You have to design it. You have to have mentors and you have to have tough conversations. You have to make phone calls you don’t want to make and you have to call people out on things you don’t want to call them out on. And you have to brand yourself as someone in a member of that career. And these are all artifacts of the decision to have a successful career. Or having a successful marriage, you have to be willing to be loyal and humble yourself and to be empathetic and compassionate when your ego doesn’t want you to. These are all artifacts of the decision to have a happy marriage. So, there are artifacts of the decision to have a lucrative, opulent financial life. And I can’t name for you all the things that all the indicators of wanting to have a successful financial life but like, are you willing to say, “I’m committed to financial freedom. I’m going to do what it takes to get to financial independence.”?
I’m earning $100,000 a year now. What is it going to take for me to earn $150,000? I’m earning $150,000 a year now. What is it going to take for me to earn $300,000? Like those are the kinds of what is it going to take? How do I need to design? What conversations do I need to have? That’s the kind of conversation or activities that you would be engaging in if you have decided to be rich. You would be actively looking to bring in and hire and work with financial professional financial advisors, including tax and wealth management investments if those aren’t the same person, but perhaps attorneys, whatever is the appropriate advisor. For you business owners, absolutely, a good bookkeeper. You know, these are things you don’t scrimp on. You don’t look to get discount financial advice if you’ve decided to be rich. Why? Because you’re going to be rich. You need the best. Okay. So, it’s mindset. The first step is get your mindset right. Decide that in the area of money, you are pursuing financial freedom.
The second is about your vocabulary. It is speak. What are you saying to yourself and other people about money? What are the things that you say on a daily basis? And frankly, until you’ve begun your wealth journey, which is intended, where you will take on the intention to transform yourself, enlighten yourself in the area of money. Most of us don’t talk to anyone about money like you have some internal conversation about money. Occasionally, you negotiate for price or wage in the area where you’re earning and like maybe you talk to your partner. But for most people, we have contentious conversations with our romantic partner about money. So, this area is the most broken for most people. What are you saying about money? And, you know, I teach specific empowered things to start saying about money if you don’t know where to start. We’ll talk about that more in this season in Profit Boss® Radio but, of course, there are past episodes you can go research.
The third step in the 7 Step Money Blueprint is plan. You need a plan for money. We need to know how much are you spending to live a life that you love. What is your retirement or financial independence number that it’s going to take for you to achieve that number? And then we need to reverse engineer your success through a consistent savings rate. Sounds boring but it is absolutely effective. It is 100% effective if you do it right. You know, tightening the belt it’s never like, “Woo! She tightened her belt! She stops spending money!” I’ve never seen anyone celebrate that on Instagram. However, it is the way.
The fourth step to wealth is earn. This is the one everyone likes to talk about. This is the one that’s exciting. This is the one people feel raises the roof. This is the one that implicitly gives you freedom. However, if you earn it and spend it all, you’ve earned no freedom. So, being a high earner is just one of the seven steps to wealth.
The fifth step is save. Save goes back to that third step, which is plan. You know, I’m addicted to saving money. I love saving money. I have auto transfers to a lot of savings accounts happening at all times. I actually enjoy saving it more than I enjoy spending it, which is a complete reversal from the way that it was. In the past, I couldn’t fathom saving money. I always told myself, “I’ll save it next year. I’ll save it when I get a raise. I’ll save it when I’m in my 30s.” So, saving money and we have talked and we’ll talk more about the technical ways that business owners need to save their money, their specific accounts that you need to have at specific times. It’s pretty complicated in the US. What kind of accounts you need to be saving in, whether that’s a simple IRA, a SEP-IRA, a solo 401(k), or a traditional 401(k)? And at this point in my business, I have an offer, a traditional 401(k) with matching to my employees but it wasn’t always that way. I’ve had versions of all of the accounts that I just mentioned to you, and those accounts were appropriate for my business at that time. And so, the point is to get the right account for you.
The sixth step is invest. You absolutely must invest. I highly recommend low-cost, passively constructed index-type mutual funds. A mutual fund is a collection of stocks. And it is just absolutely the best way to take your pro-rata share of all the profits being earned by the highly competitive and ambitious CEOs of publicly traded companies around the world. I know the stock market can be a very intimidating conversation for people but once you know how to play in the stock market and I do relate to it like playing, and that’s not to say I don’t take it seriously because I follow very strict rules. I have an investment philosophy that I want to say at play that’s running and working in my accounts and my client accounts and has been for years but it does occur like a game for me in terms of it’s just fun because I’m not intimidated by it anymore and I can teach and share that with you too. The stock market is really the only way, one of the only ways on the planet to earn truly passive income. I don’t know why more people don’t talk about it that way. I guess it’s not exciting if you didn’t build it with your blood, sweat, and tears yourself but it’s a pretty great way to earn profits. It’s one of the greatest generators of individual wealth in human history, absolutely, more so than any of the other popular things you hear people talk about, which I do get into specifically on this show.
And the seventh step to wealth, the seventh step of my 7 Step Money Blueprint is protect. Once you’ve built it, you have to protect it. Like a castle, you would build a moat around it and pull up that drawbridge. Once it’s yours, it’s yours. Don’t let it go into the world. Don’t make mistakes. So, this includes some behaviors like avoiding lawsuits, doing things to not piss people off in your business like taking the high road, not getting into contentious situations with people. Also, having the right insurance including insurance for your business, insurance for your personal life, and sufficient insurance. Again, this is something you don’t scrimp on but also don’t do dumb stuff with your money. Once it’s yours, take it off the table. Don’t give other people access to it. We all have heard stories of someone who’s built up a fortune and then lost it. I don’t want that to be you. Okay. So, those are the seven steps to wealth.
I want to talk with you about one last thing that’s been on my mind, it’s been in the news, and then we’re going to wrap up today’s episode. But I want to talk with you about the Forbes Billionaires List. So, I don’t know if it’s just my demographic data on the socials but, man, have they been pushing these articles about the Forbes Billionaires List to me. And it’s just like, I don’t know, it’s a little voyeuristic to me but I want to point something out to you. So, in no particular order, Kate Wang, who’s the CEO of the Chinese vaping company called RLX, is a massive billionaire. Jeff Bezos, who recently announced that in the third quarter of this year, he’ll step down as CEO of Amazon. It’s big news that Kim Kardashian is now a billionaire. And Whitney Wolf Herd, the founder of Bumble is a billionaire. Altogether, Forbes is listing 2,755 billionaires. It’s not a complete list because I happen to personally know two billionaires who are not listed there. But of course, I don’t know Forbes’ methodology but I promise you Kim Kardashian is not sending her personal financial statements to Forbes so they are estimating at best so it can’t be 100% accurate. Again, I also sort of think it’s voyeuristic, like why do we really care? But the point is this can be a perfect opportunity to take stock of your own relationship to money. Because if you resent wealthy people, you won’t become one of them.
So, let’s take this as a learning opportunity sort of like an MRI, which lets you see what’s inside your body that you can’t see from the outside so that you can work with your doctor to fix your internal injuries. Let’s take this as a money mindset MRI, so we can see what’s at work in your financial life, so you can go to work to fix what’s limiting you financially. And I get that being a billionaire is probably out of reach for most of us but that’s not really the point because right now even being financially healthy is out of reach for most people. So, what’s your reaction when you see the Forbes Billionaires List? Do you envy them? Do you put them on a pedestal? Do you celebrate them? Do you resent them? Do you feel wronged, like it shouldn’t be possible for some to have so much while others have so little? In this case, your negative emotions and thoughts about this can serve as a diagnosis of sorts. I would say the healthy, empowered, matter-of-fact reaction ought to be, “Well, that’s a remarkable feat. If they can get to a billion, I can certainly get to 3 million,” or whatever your number is like 3 million is 3, wait, it’s not 3%. It’s 0.03% of a billion. Like, let anchoring bias work for you, right? And that any other emotional reaction to that you could see as an indicator of financial dysfunction and that should empower you because if you pull that thread and really unwind that ball of string, you’ll get to the core of what are the money mindsets, the limiting beliefs that are holding you back.
Hilary Hendershott: All right. We are going to now wrap up this episode of Profit Boss® Radio. Again, I am so excited to be speaking with you again. We have some amazing guests and episodes scheduled up for you. I’ll be talking more about investing in Bitcoin. I’ll talk more about the economy and what’s happening there. We’ll be answering your questions. Let’s connect on Instagram. Find me at Hillary.Hendershott. You can feel free to DM me your financial questions. I’ll do my best to answer them here on the show and I would love to connect with you there. If you like this episode and appreciate Profit Boss® Radio, please do leave us a five-star review on iTunes. I would just love and appreciate that. And we will see you next week.
Hendershott Wealth Management, LLC and Profit Boss® Radio do not make specific investment recommendations on Profit Boss® Radio or in any public media. Any specific mentions of funds or investments are strictly for illustrative purposes only and should not be taken as investment advice or acted upon by individual investors. The opinions expressed in this episode are those of Hilary Hendershott, CFP®, MBA.