00;00;05;18 - 00;00;25;28

Unknown

You're listening to the Profit First for Real Estate Investors podcast. This show is all about helping real estate investors and entrepreneurs bring clarity and structure to the financial side of their business. In these sole episodes, we focus on practical financial strategies that real estate investors and business owners can actually implement, whether it's profit, cash flow, forecasting or mindset.

00;00;25;29 - 00;00;43;10

Unknown

The goal is simple to help you run your business with more confidence and less financial stress. Enjoy the episode. Your business should fund your wealth, not drain it. A lot of people get into business and then it becomes this big cash eating monster where they're just like, what is going on here? I don't know where my cash is going.

00;00;43;12 - 00;01;03;11

Unknown

I can't pay myself. Why did I get into this thing? I don't understand the financial side of this business. We're doing so many deals now that this stuff is starting to get bigger than what I can really handle. If you're in that position, I totally get it. But I also want you if you're in a position where you might have watched some of these videos, maybe you've implemented profit first.

00;01;03;11 - 00;01;24;12

Unknown

Maybe you've gone down this road and you start to get the finances in order. I don't want it to just be a paycheck for you, and I don't want it to just get you out of debt. I want your business to really fund the wealth that you've always wanted for starting a business. You started the business not just for debt elimination and not just to pay a paycheck.

00;01;24;14 - 00;01;41;00

Unknown

Some people, their first big goal is to eclipse their W-2 income and to go full time. And that's you. Great. But from there. What do you want to do with your business? What are those big goals and those big aspirations? If you have a system like profit first in place, I have lots of videos about profit. First, go watch one of those.

00;01;41;04 - 00;02;03;05

Unknown

This one is all going to be about the strategies of making sure that you have long term wealth, not just out of debt and not just a paycheck. So what are the three strategies that I'm going to give you here? Strategy number one. Strategy number one a real distribution.

00;02;03;08 - 00;02;32;07

Unknown

So what do I mean by a real distribution. I mean that you don't just pay yourself whatever's left in the profit first system. You should have an owner's comp bank account. What is that owner's comp? It's to pay yourself a compensation for the work you do. So that way, you're putting yourself and your paycheck first. So this is only strategy number one, because if you're not paying yourself first and you're not doing the profit first system, that's where we have to start.

00;02;32;09 - 00;02;51;06

Unknown

I need you to take a real distribution, but I need you to know the numbers that you can take a real distribution. So what does that mean? If you have the system and you have an ownership account, have you been able to put actual cash in there and you can take a real distribution? Not just I have one big bank account and there's some money here at the end of the month.

00;02;51;13 - 00;03;06;09

Unknown

Maybe I'll take some of that money. Well, you don't know. Is that your money? Is that for marketing? Is that payroll? Is that tax money? Like, I want you to have a very clear picture. This is my money versus this is everything else for the business. So that way I could take a real distribution in the business. That'd be number one.

00;03;06;09 - 00;03;34;02

Unknown

Because if we're not doing that, we can't even do the advanced strategies or we can't build real wealth with this. So number two, strategy, I want you to direct a portion of your profit towards outside investment. So if you're paying yourself first then I want you to invest very simply. I want you to invest outside of what you've got going on.

00;03;34;02 - 00;03;56;03

Unknown

Now you say, but my business is my best investment. I'm not even saying you can't invest in your business, but having an account that's dedicated to investing in your long term wealth, whether that be maybe your real estate investor who's a fixing flipper but you want to get into buy and hold. It might be an investment into buy and hold where you take that leap, but you actually have the cash to do it.

00;03;56;03 - 00;04;19;17

Unknown

Now, it's not just a cycle of, well, this property doesn't fix isn't in a fixed and flip bucket anymore. I need to make it a buy and hold. So I'm just going to put it over here. That's not what I'm talking about. I'm talking about you making an intentional decision, whether that's in real estate, whether that's in stocks, whether that's in crypto, whether whatever it is for you, I want you to have some type of long term plan could be infinite banking.

00;04;19;17 - 00;04;36;05

Unknown

There's a lot of things out there that you can research and learn about, but if you have profit first and you're paying yourself, the next big thing to do is I would set up an investing account and start investing in the things that you care about. That could be, like I said, properties, but it could also be investing in yourself.

00;04;36;06 - 00;04;55;20

Unknown

Maybe you want to become a better business owner. Our business is only as big as our ceiling is on leadership. Do you need to invest in yourself in some leadership training courses? I'm personal mentor to break through a mental ceiling that you might have. Number two is investing in those things outside of your business that will bring long term wealth.

00;04;55;23 - 00;05;13;15

Unknown

Sometimes it's alerting the new skills. Sometimes it's learning what's going on between our ears in order to break through some of these ceilings and barriers. Sometimes it's literally picking up, you know, like your computer and saying, what do I want to invest? And what do I like? What do I want? Do I want to do some more real estate?

00;05;13;15 - 00;05;40;07

Unknown

Do I want to do stocks? Do I want to do anything else out there? That would be another strategy for you as a business owner, for you to be able to build long term wealth, because this video also is one of my more advanced videos, because I've talked a lot in recent videos, or if you want to look at all the videos I have out there of the foundational pieces to get to number one, where you can have real distributions.

00;05;40;12 - 00;06;07;20

Unknown

Number two, I don't talk a lot about, but number two is okay if you have profit first in place. Now I need to have accounts that are set up to be able to really get what I want from my business. So number two is all about investing and directing some of that profit towards those outside investment investments. Then number three, if you're going to pay yourself first and then you're actually going to invest systematically outside of what you've got going on.

00;06;07;26 - 00;06;32;24

Unknown

Then number three, I want you to separate out okay. So separate your business reserve versus personal reserve I'm going to put that here in big letters. Your reserves.

00;06;32;27 - 00;07;03;23

Unknown

Why do you need to separate that out. I do see this trip people up where they're like, oh, I've got some extra money in my business. And I just take that when I need it. If you don't have personal reserves, how are you building real long term wealth for you, and especially if you have a family, if you have a family, this becomes even more important because then if you have that personal reserve, then you're able to do the things that only you could do with your family, like going on those trips or doing the things you want to, or investing in college and education if you want to do that for your kiddos.

00;07;03;25 - 00;07;26;06

Unknown

But this business reserve a lot of times does double duty for a lot of entrepreneurs. Well, I've got the visitors, and if I ever needed money, I could just take money out of there. But what about the tax implication? What about that money if you needed it really for the business? Because that business reserves are there to make sure your business can continue pumping money into your personal reserves.

00;07;26;06 - 00;07;44;23

Unknown

So I would separate that out, because if you are taking real distributions and if you are able to invest outside of your business, then you tracking the your business and personal reserves, you should see this is what this one's all about. You should see your net worth.

00;07;44;25 - 00;08;19;23

Unknown

Your net worth climbing. If you're on this video you can see this big arrow here, right? You can see that because I want your net worth to go like that in your business life. You're going to make this money and you're going to start directing it with something like profit first. And if you have that profit and then you start investing that money outside of just your business and you start to build those personal reserves, you should see your net worth growing up, whether that's in cash and you just put it there, or if it's in gold or if it's in the stock market, if it's in real estate, you're trying to get your net

00;08;19;24 - 00;08;44;20

Unknown

worth to grow. But there's a difference just because you have business reserves. Have you ever tried to do a net worth plan and your factoring in your business accounts? Unless you have business accounts that are just separated out for you, it's harder to understand what really to go into your net worth unless you do a business evaluation. Let's just say one day in the future you sell everything, you sell your business, then that goes into your personal reserves.

00;08;44;20 - 00;09;10;04

Unknown

And are there places to protect that money? Are there places that you've been setting up that can house money? If you did sell your business at one point and got a big lump sum, I want you to just have these options where if you're putting profit first in place and you are building a business that you love, that yes, you're investing in outside things strategically and systematically, but then you're also knowing that your business reserves are not really funding your net worth.

00;09;10;04 - 00;09;29;06

Unknown

Those personal reserves are. And I just want you to separate that out as well, too, because if you just reinvest 100% of the profit back into the business, that is going to get you into the cycle of I make money, but I feel broke, or I make money and I'm just pouring every dollar back into the business. But when am I going to feel like this was actually worth it?

00;09;29;13 - 00;09;46;17

Unknown

Or if you're like, no, I want to grow this business. I want to scale it. I want to sell it. No one is going to buy your business at the size it's at. If it's like 1 to 5 million, unless you have reserves, you have good profit margins, you have business reserves, you have this type of thing. We've gone through this process with several people.

00;09;46;17 - 00;10;04;12

Unknown

I've gone through this process just to see this process in place. They want to see that you're a healthy company. So if you're just reinvesting every dollar and you have no bottom line and you have no cash reserves, that is bad for your long term wealth. It's also bad. It's a bad play if you're also looking to sell your business in the future as well too.

00;10;04;18 - 00;10;22;15

Unknown

So these are really three simple steps to be able to build the long term wealth. Number one, you make sure that you have profit first in place. Pay yourself. Make sure you're investing in the things that you care about that you can understand, and that will bring you the long term wealth and making sure you separate out the business and the personal reserve so you can really track your net worth.

00;10;22;15 - 00;10;40;06

Unknown

And if it's going up and you're giving yourself some outs for when if you ever want to sell your properties, your business, whatever it might be that you have as assets in place, I want you to have a business you love that actually pays you, and that actually, for the long term, gives you the money that you really want from the business.

00;10;40;11 - 00;10;59;01

Unknown

Thanks for spending time with me today. If this episode gave you clarity or a new perspective. Be sure to like, subscribe, and comment below if you're ready to apply what we talked about today with real guidance and accountability. Visit profitrei.com to schedule a free discovery, call with us to create your path to financial clarity and freedom.