Edmonton Accounting Firm | 3 – 2019.02.02 #BeatTheOdds Boot Camp – Finances

3 – 2019.02.02 #BeatTheOdds Boot Camp – Finances | Edmonton Accounting Firm

Read it aloud by two four five, four two nine two four two tickets I want. Again, I know it’s not like the hockey game. You don’t get billed by four two nine two nine two totally yet. Nope. Jacket. Can I have $100 cross all the ones we did. Okay, I’ll, I’ll, I’ll be in charge. It was just those two were the first question. So the next one, so this is a question for Kevin, Kevin, Kevin, what are the three biggest mistakes you made in the electrical industry over there? Reading a book. When I started to heal a power solutions, the company cable power because I was doing the exclusively hazardous location work in an industrial environment, very much a niche kind of area and I was going to corner the market in that first year a contracted to one customer. I did no promoting games.

I didn’t have a, I don’t even think I had a Facebook page. I had no devils on my truck. I didn’t even have a shirt with my name on it. After one year that work dried up, coming to pipelines, pulled the pin on the projects and I nothing, I almost lost my business. So dumper, that’s the biggest, biggest mistake is that I didn’t want to get all right. Number two, I did not begin implementing systems into my business until about the last six, seven months. Like real hard systems. Everything was off the cuff and I became the victim of my employees. Create a flair. I’ve got a lot of, I’ve, I’ve got great electricians but we all do things a little differently and it created chaos on the job sites and cost me a lot of money and frustrating for the guys because they’re like, wow, you didn’t tell me to do it that way. Nothing that they did it wrong, but it didn’t jive with the overall plan. But how are they supposed to know? So since then, put systems in place. Thank you for your business that if you can hand someone instruction men, here’s how we run. He will power. Can we get sell it to you? Otherwise, if you want to buy hail, Viacom, wicked.

And the biggest mistake I made and we did not discuss this, but I’ve known John for three years and I waited two years until we started using this [inaudible] but I can tell you right now, Josh is still cleaning up the mess, the accounting mess from my third year in business and thank you for that. And so that’s it. That’s my, my three bays mistakes and I’m happy to share that with you. You want to talk about any more? Come see me after I’d, I’d love to tell you some more stories. Okay. In some industries answering the call first gets the customer, how do you deal with that balance? Who asked that question?

Asked me to call for. Okay. Um, during a fitness. Okay. Are you the only one in your shopping? You go to one. One is like, are they another mechanic that evening? Um, higher costs service. Our call answering service. I held an office here in everything for the pretty well and when I started out that’s exactly how I did it. So hired to call stairs and you can walk them right through the script. We’re going to come up with a script. We have s section coming up on checklists and templates and template I gave you. I’m pretty sure how it is, the exact template that I have. That will be how we answer the phone. We do client calls, so all the things, they don’t even need a mechanic camps in this school. It’s going to get you on your phone somehow. So that’s key for you.

You gotta look at your highest and best use. So what is your highest and best use? And as a heavy duty mechanic, you’re worth more than someone you can pay. As you recall the meeting, you can come off that. So you might want to look at it call service and that can bridge the gap into getting a receptionist that, that cost yet, right? Yeah, you’ll pay more, but you’ll have more time on the tools. You can just output. Makes Sense. Um, how do you best build a schedule in a fast pace retail environment? Who’s this one? Okay. Uh, what type of retailer clothing products for emergencies here? Hold. Wow. Okay. Clothing products for emergency services. And how many people in your team, you have three staff on your team, so you should have very set times on when you’re on the floor. So you don’t necessarily have to be off the floor all the time. But it should be really key about when you are on the floor and when you’re off the floor. And so, so I’ll show you,

you can do this.

These are our team workstations. It as open as you can get. So, and we have that focus solitary work in the morning. So they’ve literally have to know that if they interrupt you to block its customers, interrupting you. So customers are coming to you, you need, you need a physical location. If your, if your customers are interrupting you, that’s not uncommon at all. That is not uncommon where lots of business owners struggle working on their business when they’re at the business. It’s probably a real challenge where you need a location, whether that’s a Home Office to work on those initiatives. Um, but you are going to need a physical space here. There’s a reason why I don’t sit at the front desk. That’s bro Associates. Right. Um, so it’d be the same year. You’re going to need to make that investment at some point probably, but maybe in the interim, just, you know, when you’re in intentionally building that schedule, whereas when I’m working on these initiatives, I can’t be here.

You probably need to think critically. It makes sense. Okay. Okay.

Any others from the last section?

Okay.

Okay. So section three is sure you have enough cash for life and assuring you pay will be past. Uh, alright. How the hope from Robert Kiyosaki, author of Rich Dad, poor dad, um, anecdotical story of rich debt or they weren’t ever read Rich Dad, poor dad book the story, his account and wrote the book Sharon Lechter just as if he gets the credit, if people share shared luxurious and it was the instruction manual or a board game and it’s pretty good stories. But um, so he said good debt is a powerful tool, but bad debt team kill you. And that’s what we’re going to talk about here today. So the average Canadian, according to the Fraser Institute phased 43% of their income or the tax tax will be your single biggest expense in your entire life. That will be more for your cars and your house several times over. That’s the hard thing for people to wrap their heads around taxes.

The tax expense is going to work the expense of your cars and your house several times over. That will happen. That’s about the fact that, put that in perspective, you’re only going to spend about 37% of your income on shelter, food and clothing for some tax, 37% of our shelter, food and clothing. That’s what the average pastries, um, the small business tax rate in Alberta is going to go down to 11% for 2019 what? 12%? It’s gonna be a lot of content. That’s great tax rate. So, you know, we have clients, even clients who are high net worth five taking significant amounts of money. We’re paying less than 20% tax if they have an active business. So, uh, fortunate camp to be a real estate investment, but it can be an active business. So, uh, activism thing, less than 20% tax. There’s not a lot that we can do for employees.

I mean, if you’re an employee, you want to buy some RSPs or by flow through share. I mean the options are limited, but if you own a business hacks planning in Alberta is worth its weight in gold. Um, how were the second most common reason for visit going out of business is that they’re going to run out of cash. Sometimes they run out of cash because it kept my customers. One is who are kind of tied sometimes. Sometimes they have customers and they make some money and they spend the money and now they can’t afford to pay the tax on that money you spent and they go out of it. And this happens a lot. Um, so know people were running out of cash lots of times if they’re running out of cash because they got hit with tax cause they can defer tax and delay tax and it’s not top of mine.

And they were avoiding it. Um, so also what people are doing business planning. They’re not considering their personal circumstances. You know, they’re looking at their business and their personal circumstances in back. If you can’t do that as a business owner, your personal circumstances are tied to your business as a small business owner. If you’re doing business planning for a coca cola or apple as completely different ballgame, but it has a business owner that has to make sense with your personal life. If you need x number of dollars out of your business that needs to be visited by, um, you can’t ignore one without the other. So we’ll, step one is you need to keep separate business and personal counseling. You have to keep separate Bissell’s professional [inaudible] I do not care how she, Kathy, is it, I don’t care if it’s five bucks or 50 bucks a month.

You need separate business. Personal accounts don’t care for that. Savings is you need a separate business and personal credit cards and like, this is like the one where like I need to stand up on the chair and you need, you need separate business and personal credit cards. I don’t care how your points and you don’t care about the flight points, you need separate business credit, personal credit cards. So that’s kind of the one that you, you need. If you can get good points on your business card, great, but do not do that. If it’s going to cost way more to go back and reconcile it. I don’t care if you get an extra hair while you need separate business and personal credit cards and don’t commingle those expenses. You’re going to take funds from the corporation and the form of a monthly around shareholder draw.

Do not declare it a salary. So you’re going to take funds from your corporation and a monthly round Cheryl, they’ll draw a thousand dollars $2,000 $3,000 $4,000. You’re not going to write anywhere that this is salary too, so it’s going to be a year old drop. That makes sense so far. Okay. Um, the most efficient way to get the money in the corporation will normally be a combination of salary dividends. If you want to know if you’re tackling efficient, if you’re paying yourself from your business with all salary, we’re all, it is, it’s probably the wrong way. It’s that easy. Yeah.

All right. So I don’t want like, I don’t really have like an incorporated business. Just basically just I am a contractor and then I get paid from multiple people. Yeah. And so where does that line starts with me and my business and myself, like

separate, separate business and personal account. For sure. I, whether you’re corporate or not, that wouldn’t change that recommendation. Okay. So separate business and personal accounts. Separate business and personal credit card. You can be a second personal credit card that you use only for business. That’s fine. Just don’t pull me lit with the other.

Okay. Okay.

Oh three we did. Oh, we must in this one. Yeah. If you didn’t receive free, they’ll come on, give you a free, um, you’re gonna let your accountant figure out the most tax efficient metro salary. You took it out of the Sheryl alone. You’re going to let your accountant figure out what the nature of how I can get it. You are not going to learn it yourself. I’m not going to teach you yourself. I have people that have been teaching for two or three years and they’re almost there. I’m not going to teach you that today. You’re not going to learn it today. It’s not going to work out that way. Um, do not use payroll tables, ADP or quickbooks to pay yourself from the business. They’re great tools to pay your employees. They are bad tools to pay yourself in the business. Do any sort of tax, but they’re not tax planning. They’re texting clients. So you want to pay 43% you can use Soria, ADP or quickbooks and you want to pay less than 43% you can take it out of here on the draws and comes to the account. Okay? You really just can’t learn that subject. Go ahead.

What exactly how so? Yeah. Your business banking and your personal bank account, do you need a $4,000 a month to pay your mortgage, car payment, buy groceries, and take $4,000 from account a to account B? You can do it by electronic fund transfer, right? Check. As long as you don’t write anywhere at salary units, put it in your personal account. Okay? And that’s what you’re gonna use to live off of your personal expenses. And where are you saying this is not salary or some, if you were to write a check, do not. If you were to read, if you do an electronic filing transplanter and don’t put it on the note or anything. If there’s a memo of some banks have the mental space, right? Just chill. The drama, all the drama, but your count. Oh yes. Oh yes. What you say about the high on you might go in, he has anyone else in their business school, my corporation snapchat yet, how am I going to pay myself as, uh, how were you going to use? So you can use the apps to pay your employees, but when you take money out, don’t put it through those, those parameters. Don’t put it through those applications. You’re going to take it up. This was a shareholder draw.

That’s it. If you ever asked someone, should I pay myself a salary? Dividends and they asked you that question right away. They don’t know. They just don’t know. They’ll answer it for you. They’ll tell you yes on a salary. And if they can actually do that, you know, we have anyone who’s been through our planning process, it’s probably the best in the city. And we get pulled it all the time and it’s very systematic and we could tell you, but it will take them three hours to tell you that answer. So, um, I know as much as there is no, and it would take me that long to tell you what’s the right way to pay you out of your business can answer you be like, does this planning process or like financial planning. So we have to find for the individual, okay, so here’s the exercise that you need to go through because your business has to make sense with your personal life. So the first part is understanding what your personal life, what’s actually happening in your personal life. I have Manhattan firms, Denise’s financial, whew. So I think Matt Hamon, they just, financial advisors are a dime a dozen and lots of them worked for a bank.

Matt, do you own your own business? Yes. Twice to the own funny cities. This financial, um, and you don’t eat the choice of that I’ve seen him help people make are fantastic. Right? He, he’s the guy who was there and really actually understands business and he actually has an accounting background too. So I want you to tell us a little bit about your, I taught business and financing management online for Awhile and now that school folded, I did some tax accounting for a couple of years, actually three years. And a I found I liked sitting in front of people a lot more than behind a computer, which know the county, you do that after about 10 years, but uh, it takes a long time to build that up. So I want to get the financial business. I really liked finance. I really like making people money. I really like saving people money.

Um, and I love the analysis of all of that. That’s really where a lot of value that I provide is there’s a difference between saving and investing and most financial planners just focus on investing, not on saving first. And then the other aspect of that is most financial planners can under don’t understand the difference between a business and a personal tax. So I have a lot of people that come to me and say, I don’t know my financial guy saying this. My account was saying this. I don’t really know what’s going on between them. I put them in touch, they’re not communicating, they’re just confused. So I’ll often tell them, I say, what are your account? And say, we’ll say, oh, he said something about taking you know, money on my account, but not paying. He always had dividends. Yeah, okay, well we’re not going to use RSPS or we’re going to look at that. We’re going to figure that out. So I can translate what the accountant says with their front of their personal financial plan. That’s what a lot of people appreciate about that.

So we have this, you know, the balance sheet, the household down sheet. That’s sort of going to talk about theory now. So if you want to make sure your business life is going to be congruent when you first, first step is actually understanding your personal life. Um, and if you can’t write this down really quickly, this is a bit of a, uh, an issue. So where do we start first? Is the real estate one real estate? You want to, you guys can feel this through. We’re not going to ask those back, but you should test yourselves right now on where am I stuff, where am I certain on these answers? So try filling in right now and Z, you know, how many days you can get and how many are like, man, I don’t know, within 100000 bucks with this and then, um, we’ll see what it is.

So the first thing is a real estate. We have info in that call. So the info in the call means like the address, if you have two houses, you know, differentiating postwar on how to do same with RSPS. And I wanted a bank of Montreal when at Scotia Bank. Um, that meaningful along with the fair market value, um, RSP Steve to say is those should be self explanatory. Bank account one and bank account too. Those are your personal bank accounts. So let’s write down what the personal bank accounts are, not the corporate accounts, vehicle one, vehicle two. This is the fair market value of your vehicle, not what you pay for it. Uh, but what, what, what it would actually be worth and self value. Kijiji valley and other one and other to, so I’ll give you guys a few minutes there right now and we’ll see how you guys can make up until Jado.

I don’t think when you’re filling this,

anyone need more time for the assets, the liabilities. So mortgage one, a mortgage to explanatory tied to one of the properties, the lines of credit they get. It’s the balance, not the limit that we’re looking for in this exercise. Uh, the credit cards as well. A balanced student loans are going to be a one. Uh, especially with the venue we’re doing here today and vehicle loans and other loans as well.

Good Info to put in there as the interest rate that you’re paying, whether it’s variable or fixed

ass telling you how to get 110% it’s all he knows how to do Josh.

Okay,

everyone good with the personal biology? Flip it over to your household budget. Actually, we’re going to go back there and that’s got a couple of things to say about it and it’s important to know this because if I’m doing a business plan for someone else, but when I do a business plan, I’m going to treat someone who has an $800,000 mortgage. She’s only going to make $80,000 a year differently than I’m going to treat someone who’s gonna make $80,000 here and is renting for 400 bucks a month. I can’t take the same risks with that. The business has to make sense according to, you know, what their risk factor is and their personal balance sheets in the show a lot about what the risk factor is and what’s available for the business.

Yeah. It’s kind of wanting to run through some items in terms of just some tips and tricks. Um, in terms of your, you know, if you have a rental property here, has rental properties, um, but I’ve seen a lot of people who have mortgage debt on the personal home and they’ve got a paid off rental or something like that where they’ve got equity and their personal home or, and the personal home wait other way around. They’ve gotten equity in their rental home, nothing in their personal home or low equity. You’re basically losing out on a ton of tax deductible interest. So if you do have that issue, there’s something you definitely want to look at. Uh, looking into a [inaudible]. If you’re a business owner and you’ve got, you know, cashflow cyclical type, uh, income, that’s something look into, if you’ve got the equity, do a he lock or do a split.

He Rock Manulife has a product where they can do a split the walk with you. They’ll do partial [inaudible] partial mortgage so you can lower your fixed monthly payments. Um, RSPS. A lot of you might be going, getting into first time home buyers plans are already been, one of the things people don’t understand is you do not need to pay that back. It will just be added to your tax return, one 10th per year over those years. So you’ll pay a little bit of tax, but you don’t have to pay it back. So if you’re looking at going bankrupt your business or paying your RSP long back, forget the RSP loan. Just pay that 600 bucks. You’re paying the tax on it. Um, vehicles, uh, this is the number one killer to a personal balance sheet. Number two. And businesses you’re running out of cash. Number one personal balance sheet or income statement is a vehicle.

They will just destroy your, if you don’t need it for your work. I had a 2002 Ken Day accent, no power steering, no AC, no power windows, power locks, literally no power steering. I didn’t know that existed for 1500 bucks when I came up here. I drove it for five years. I sold it for $1,000 four years later and put 60 bucks into it for a tire off. That was it. Um, mortgages or his insurance, worst product out there. All right. Uh, talk to somebody about that. If you have mortgage insurance, creditor protection on your liabilities, not saying it’s not necessary if you’re uninsurable, fine. Um, if you have to take that type of insurance, do it, but you’re paying way more than you need to for insurance. It’s not protecting you and your income for what you might need is protecting the income that you’ll have to pay to pay the bank back.

Not necessarily. Maybe keep your business afloat, your household book. Um, oh, credit cards, pay them off weekly, not 60 days later. After the last time you made a transaction and off weekly, you know where you’re at at any given time where you’re spending your checking. A balance doesn’t look at $5,000 worth of credit cards. Racking up eight. Your checking account goes down to three and you go, oh shit. Right. So you know, on a weekly basis where you’re at, if you pay them off weekly and you think, well that’s a lot of credit cards, you probably need less credit cards. Okay.

Yeah. That’s one of the big ones that I, uh, Matt put on a really good financial that I, that I usually give to clients when they come in and, and this list is like two pages long. It less accounts like streamline your life. It’s if you want your hundred 68 hours a week or counsel will make work of your hundred 68 hours. Yeah. Is it a consumer proposal worth my time or should I just pay them off one at a time and just deal with it on my own?

That’s something that a credit counselor can really answer a lot better. Okay. I mean, consumer proposals can be effective because you can raise a lot of interest back then.

Very individual choices to specific to the announcement. Um, then we’re moving on to the next page. That household budget and you knows the order we’re doing this, you know, what was the business mind come after the personal finances. You can’t do a business plan for you. You know, your, your personal clients as our, it’s a dream plan before that, it’s not a business plan. So we were very intentional about the sections we’re doing here today. Uh, number one is the myth number two is your schedule. And number three is what’s happening in your view, your personal household finances. Uh, that’s, that’s the order. Um, so we’re looking at the budget so people make budgets that are, in my mind, they’re overly complex and they’re, they’re a little bit too hard for fall. What I find really useful cause you use to determine what your fixed costs are and be very intentional about your fixed costs because your variable costs are much different.

How would you drive one week to the next? You can sometimes affect that change. You know, how much do I spend on groceries? You can affect that change by your choices each and every week. But what did you pay in rent every month? You can’t really affect that depending on the day, anything that unless you make pick up the move places, you can’t change that. So we’ve gone through some of the really important fixed cost, starting with what’s your mortgage or rent, what are your property tax? What are your condo fees, what are your car payments? What is your required credit card payments if you, if you’re carrying a balance, um, required loan payments. So this is an extra loan payments. This isn’t what I want to pay. This is what I have to pay. Start there first. Make sure you’re differentiating those. Um, what is my electricity payments?

Natural Gas, Internet phone, cable, house insurance, life insurance, disability and or critical illness, insurance, childcare and support payments, and other costs that don’t significantly change from month to month. So again, these are fixed costs don’t significantly change from month to month, not to be confused with the variable costs, you know, uh, food, entertainment, Gospels, shopping, holding his travel, and other costs that vary from month to month. So the exercise to do is act. I want you to right now approximate what your fixed monthly costs are and then we’ll for your variable cost, believe it or not, it’s really not worth going that deep into them. You need to track them to know what they are every month. But you know to go line by line item and create a 200 line personnel budget discipline, this will be more meaningful all day of the week. There’s a reason why we put financial statements for big corporations. They should be on one page. There’s no reason why your financial statements or your own personal life and been on one page. Um, you don’t, you’re making it overly complex and you can’t actually do any analysis on it.

Well there’s also flexibility. Like if you’re talking groceries versus eating out, do you eat out a lot more? Your grocery bills probably of your last winter I did really well on my grocery budget is [inaudible] wrapped up in terms of the lifestyle expenses that you need. If you don’t think of how much money goes out of your cash, you know, disposable income on a daily basis, multiply that by 30 and that’s about it. If you’re at $30 a day, $50 a day, $100 a day, that’s a pretty easy judge and what your variable budget is, or weekly.

So then I, I, we get to the total household budget. Anybody need more time to get to the total household budget? Everybody there were good and then okay, now you’re going to deduct the pay of your spouse. Lots of the most common thing in business is one person’s working in the business and the person has another job. If that’s not the case here, both in the business, there’s this line is blank for you. If you’re single, this line is blank. But if you have a spouse, you know what is their net take home pay per month, that’s the lot number that’s going to go in there. And then you might have another job, another secondary form of AECOM. You need to know what that is, your net income from that every month because if you deduct those from the household budget and you’re going to get total monthly funds will fire from the business. And if you can see is the starting point for visit by, I can’t even start a business. People want to come to me. Can you build me a business plan? I can’t build your business plans. I know how much you can take out of the business because it’s a dream of mine until that this, so does everyone have that number now? Your total monthly funds required from the business. Good. Okay. Matt, you got any more on this area?

Yeah, I’ll run through some things here. Um, you know, one of the things I see the most common quite, quite often now that people don’t understand the actual costs are pain is your fault. You know, what kind of phone do you have? Do you have the latest and greatest? Do you have the biggest, you know, package type phone. We don’t understand that. You might not just be paying for the phone like I have Kudo. So it’s an extra, you know, you pay your monthly tab or whatever, but it also depends on the phone. For what type of plan you have to purchase. The exact same plan from an iPhone six s to the new iPhone or the new Samsung galaxy is about $50 a month. Same exact plan. There’s about $50 a month. That’s $1,200 over that 24 month contract and we’ll work through how much money you actually need to make to generate that.

And I know that’s somewhat the deductible inside your business and things like that, but it’s cash. You know, the worst thing I hear people say is, oh, it’s a write off. It’s still cash, doesn’t really matter. Sometimes it can make sense, but it’s still cash. Um, home and auto insurance quoted every two to three years. Um, even if you love your agents and you love working with them, quoted somewhere else, bring it to him and say, Hey, I’m getting this here. Getting up, getting magic. It’s a very competitive industry. They might do it. A life insurance term insurance. We’ve had this discussion in terms of there are uses for permanent insurance, but generally they come and there’s a five before your age. All right, that’s about the time or perm insurance works. Get turned for now, maybe convert later. You always have the privilege to do it later on.

No matter what anybody is telling you, it’s not a great investment for you. Um, disability and critical illness insurance. Critical illness is like a distant third in terms of what you need. Disability insurance in my opinion’s more important than life insurance. How many expenses do you have if your dad then you do when you’re alive, if you’re married, what’s your spouse’s life gonna be like? If you’re dead versus your alive, very different. They’re probably not going to move on. They’d probably have to take care of you. Take a different job. Those types of things. Disability insurance is very important. You can’t afford the 50 to $300 a month that it can cost you. You can do critical illness insurance. It does cover some things. It’s kind of a, you know, three to $400 a year. Um, you know, that’s something that you can put in place of generally recommended cause you can get some pretty cheap disability insurance out there.

There are a lot of pro products like that. Um, okay. Groceries, meals and entertainment, um, meals our team and everybody always underestimates or fudge, I think by about 50%. I have people literally come to me saying, a couple, I just spent $150 on the other entertainment and I say it and I’m like, that’s a lie. All right? There’s just no possible way that’s happening. So the way you map it out is not what your budget is. Okay? If I’m gonna spend $500 on meals or entertainment, how am I going to spend that this month? When am I going to go buy my beer? When am I going to go out for that date? How much am I going to spend at that date? Tally it up. That’s your budget. And then it also is a planning exercise in terms of, okay, I’m going to spend this money, then I don’t need to go spend money tonight.

I don’t need to take an impromptu date night and go blow $200 or something like that. Cause I know when one’s coming up and I know I’m going to spend this much and it’s already in the budget. Plan your expenses on your variable expenses and it really helps you out. Um, groceries, I’ll give you a kind of a raw kind of base figure. If you are just a, a single person, four or $500 is a really nice budget. You can make it, um, married couple, six, $700. If you’ve got kids, you’re up to about, you know, 900 to a thousand to give you an idea. I’ve got four kids married, I’ve got four bill at who live with me. These are high school baseball players. They’re not small men. That’s 10 people in our household. Our, and our monthly budget is $1,400 for groceries with about two to $300 extra per month per meal for me cause we buy cows.

So we do that about once a year. If you’re shopping at sea, uh, so will be save on, you’re paying a 20 to 30% convenience factor superstore. I know it’s not pretty, but it’s cheaper. Okay. They do it much better. Um, so this is some ideas there. A chicken, you can buy a chicken for 15 to $20. That thing can provide you three to four, a family, three to four meals with lunches. Okay? You Cook it, you make some potatoes, you put a vegetable on, you know, eat that chicken a really nice dinner that night. You’ve got the sandwich meat for the next day. You’ve probably got leftovers for dinner. You’ve got sandwich mean probably for the next day two. And then you’ve got chicken soup that’s like 30, 30 to $40 per meal. When you’re looking at groceries, make premium. How much does this meal costs me?

If you’re buying boxes, you’re overpaying. Okay. Learn how to cook. It’s not hard. You know, buy some chicken breasts. I don’t, I don’t. A guy in high school, he bought a 40 pound bag of rice, 40 pound bag of beans and a chain, and you live on, you live in a month on that, all right? I’m not saying it’s the best way, but your entrepreneurs, all right? The best advice I ever got when I was looking at was actually considering going to the commercial real estate industry. And the guy said they’re gonna make $30,000 a year for three years. You’re going to eat and shit, pies and cakes. But after that, it steak dinners, all right? If you want to be an entrepreneur and you want to be in business, we have 14 doesn’t A’s as a family. And for my first three years in business, a week like we had a chipped in by a farmer every single week, 14,000 eggs, it cost us 52 bucks.

I was all our breakfast, some lunches, some snacks, 52 bucks. All right? You gotta be an interest with your personal budget if you want to make it successfully in business. Now, if you have the money to do with and sure live that lifestyle, you earned it. But if you haven’t yet, you haven’t earned it. All right? And what happens if you get disabled? What happens if you can’t work anymore? What lifestyle do you live in? Then you may as well start living it now while you can build into your business and live the dream that you actually want

with that’s the, that conversation happens. Gosh, I can’t make my payroll took $7,000 or your business this month, 7,000. So you can’t pay your employees and they’re going to wait and they’re going to ask them to roll back the wages. But you took $7,000. If you’re not willing to make that cut today, that sacrifice, that might happen to me at some point with the beginning or top beer in your business, you know, Polish off your resume. I’ll keep saying Polish, offer it. If I taught one person out of running your business here today, I’ve done like good benefits. Society does not need to run a business. Like if this is true. Um, so if that sounds scary to you, if you looked up the uh,

okay.

The Instagram of it. I love looking at this and I think entrepreneur that this sounds great, right? This is the Instagram Hashtag entrepreneur real science people told me, don’t ever feel good. We’ve got some books, polar vortex that is more books. There’s always going to be stacks of cash. So like every time you do it, there’s going to be cashed everywhere. Um, we’re going to get a rocket ship of course, but that happens in business all the time. But you know, your weekly walk your shit. What?

Yeah, you’re, I mean you’re on the entrepreneur page. Go to Hashtag Entrepreneur Hashtag out for sure. Yeah.

So search Hashtag so back out, go back and forth things yet it’s Hashtag there. It was like, well, this stuff in her life, there you go for lifestyle. Pretty, pretty grounded here.

Kaitlin.

Lamborghinis [inaudible] top of the mountain. This is what you’re thinking. First Year of business. Lambos going to work out all the time as an entrepreneur, like 12 hours a day. And then they’re always working on new lashes. There’s always girls clothing, all the tigers under the capital lion. We have to address the girl ever walked into the clothing like that. We’d have to send her home. Like we can’t have that. Can’t have that. Just it. Bill Gates, Bill Gates. You only want, you work out six hours a day. This guy here who’s working out, he’s broke and he says he doesn’t have enough time. I Dunno, very personal of time to run his business because he’s at the gym. Um, so it’s going to be a little bit different and that vacation, Huh? It’s a life that you don’t can really leave that sort of thing, but you’re going to go back to, you’re going to overestimate what you can do, eat in a year and underestimate what you can do in Kenya.

So for that,

okay, for those of you who are starting a business, you can also know what is your cash available, what is your credit available roughly? It’s going to give you some operating capital and divide that by the monthly funds required from the business that’s going to give you the number of months you can go. Before we have to start paying yourself from the business. That’s important, dude. It’ll take me two years to get profitable. Okay. How are you going to pay your mortgage? That’s the question, right? That has to make sense. And why would you have to, some of the sacrifices are more than what you think. So I want you to flip over. Um, so what $1,000 in the business actually looks like. People Think, oh, the thousand bucks, let’s just go sell another thousand dollars. So $1,000, look at that top line. Additional monthly sales, 4,365 let’s assume you have a business with a 33% gross margin.

That’s a healthy margin. And lots of businesses, it could be more, could be a little less, but you have a marginal like that. So that means you have a gross profit of 1,441 customer paid you 4,365 you think you can think back from the bank? No, you got to pay your suppliers. 2,924 you have a gross profit of 1441 you’re going to pay some corporate tax, 11% pretty good at, but it’s still and present 158 bucks. That means the company can give you a good and ended at 1,282 tax on the dividends. 282 bucks. Now you $1,000 so if you want to take $1,000 out of more of your business when you’re making these choices and what your personal lifestyle is, remember I got to sell $4,365 more per month. Take $1,000 up. Maybe I don’t need the Ford f two 50 with the leather and the lift and the $1,300 a month payment. Maybe that’s not going to make my electrical business home.

Makes Sense.

So that’s what it needs to come down to that, that that is kind of the

one thing I’ll add is if you’ve got kids, I’ve got four of them, got kids. You’ve got to add to these figures because we have this wonderful little thing that you don’t put in the budget called child’s came the child dining set it now cause back and go going make over $35,000 up to $65,000 for kids. If I take a dividend out of my company, it actually cost me 48.9% tax because I’m going to lose my child benefits, I’m going to lose on my tax bracket and that’s what I get. Okay, so you’re going to repeat back. So every dollar I take out of my company over 35,000 lose child Canada, Canada child benefit. Sorry. So when you see that, you mean he earned over 35,000 or it starts at $35,001 35,000 change to core engine. 90 some odd. Yeah. Okay. So to get my net bottom line more by $1,000 I’ve got to take out about $1,500 or actually about $1,900 out of my company because it’s going to claw back on all those benefits.

Right? So I’m not saying leach off the Canadian government. That’s not what I’m saying, but I’m saying be smart about what you’re doing as a business owner because as a business owner, you choose the tax rate you pay. You don’t have the right to complain about tax rates, especially when they’re lowering and for certain brackets because if I choose to live a certain lifestyle, then I also get all those benefits of having that tax bracket that I choose to take money out of my company. I’m not an employee and not getting paid and I have to pay that tax and even then you can use RSPs now, go to your tax bracket too. Okay. As a business owner, especially, you’ve got kids, be cognizant of that fact of how much this thing actually costs you. I always kind of point out, I’ve got, I’ve got a butterfly clip is my wallet. All right, because I don’t want to pay, if it’s going to cost me $300 of top line revenue to get a wallet, that’s about 60% of my average client. Do I really want to do that? No. Okay. This works just fine for me.

No. Someday I’m going to do that. Some of the, I’m going to have a wallet, but I’m not there yet. 10 more years and I will be, I will have the wall, I guarantee your wallet for right now, that $300

way too valuable to the future of my business and then a wallet. All right,

or are you going to end up like Josh and Josh has the money to buy a wallet, but he values his time. He will treat one of those time blocks in the schedule. That’s actually why we’re in these shoes. I wear a hole in my last pair of shoes or literally a finger through the ball of the foot, and I’ve got a gift certificate to go get free shoes and my brother and hard copy. What the time is two pounds

[inaudible]

plug around. So I wear jeans and these shoes. New New Hashtag entrepreneur, we’ll start posting nude pictures.

[inaudible]

that’s crazy.

[inaudible].