Creating Wealth and Managing Your Money

Building Wealth and Managing Your Money Episode #41 Show Notes and Highlights

Many people dream of “being rich”. Sadly most people don’t have the right relationship with money to make that very achievable dream happen. Rocky Lalvani take on your relationship with money and give practical advice on you can begin creating wealth and managing your money no matter where you are today. You can Listen to the episode here or under “BowTies and Business” on your favorite podcast service. Prefer video then check out the interview about Creating Wealth with Rocky on YouTube.

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Transcript from the Creating Wealth and Managing Your Money Episode

Rocky Lalvani 0:00
So I’ll tell you how I became a multimillionaire. It’s a real simple process, it’s guaranteed to work. All right. First of all budgets are like diets, they suck. Nobody wants one.

Tim Kubiak 0:11
That was today’s guest, Rocky Lalvani. Today we’re going to talk about managing your money and building wealth. It’s an episode you don’t want to miss. So stay tuned to bow ties in business.

Today, we’re talking with Rocky Lalvani, he started with nothing when his parents immigrated to the United States, when he was two years old. His parents were in the 40s. It was their second time starting over in life, they moved here to experience the American dream, in spite of a lot of struggles, and Rocky’s mom passed away when you’re seven, he’s been able to achieve financial success. We’re going to talk about two things. But they all relate to money. We’re going to talk about personal finance, and setting some structures there for yourself, no matter where you are in life and your career in finance, from the perspective of business owner. With that we have rocky levani with us, who’s a profit first person and Rocky, welcome to the show.

Rocky Lalvani 1:13
Thank you so much for having me, Tim. It’s pleasure to be here.

Tim Kubiak 1:16
So before we talk about anything else talk about the concept of profit first, because that’s what grabbed my attention when you first reached out.

Rocky Lalvani 1:24
So the concept of profit first is essentially that you pay yourself first. And it’s it, you know, it’s the same principle, whether your personal or whether you’re a business owner. Profit first is actually it’s a book that was written by Mike mccalla wits. And it, it started as a chapter in another book. And it just so resonated with business owners, that it just kind of blew up on its own. And it turns out that most business owners don’t look at their financials, they don’t understand the business, a business, they love what they do their technicians, right. So they might love making pizza, they might be a plumber, they might be whatever it is that they’re doing in their business, they love their craft. But when it comes to the numbers and handling that it’s it’s a foreign language to them. What profit first does is create a very simple system that ensures when money comes in, it has a purpose, and you put it where its purpose is and you get paid first, your business is always profitable. And what’s left is what you spend. And so that’s kind of the concept might change the equation. So most accountants use the equation sales minus expenses equals profit, which means profit is a leftover. It’s, you know, something crumbs at the end of the year that your accountant tells you about at tax time. He said, How about we do sales minus profit equals expenses, which means we take our money up front, and then we spend appropriately because just like we have lifestyle inflation, business owners have business style infliction, they they overspend in this system ensures that they don’t overspend.

Tim Kubiak 3:08
So if we were starting just at a personal level, fundamental financial practices, most people actually aren’t taught that in school. So if you’re coming into the workforce, if you’re mid career, wherever you are, what are some places to start looking and things to start thinking about? Frankly, people probably have never told you.

Rocky Lalvani 3:31
So I’ll tell you how I became a multimillionaire. It’s a real simple process, it’s guaranteed to work. All right. First of all, budgets are like diets, they suck, nobody wants one. So let’s throw that out the door. automate your savings. It’s really that simple. So if you’re an employee, call up your HR department, say I want you to put 1% in my 401k, you will not miss the 1%. And 1% won’t even come out of your paycheck because it’s tax free. And so it’ll actually be less than 1%. And you all know that when you get a 1% raise, you don’t even notice the 1% raise, you’re not gonna notice the 1% going out. If you don’t have a 401k call up one of the brokerage houses and say, hey, I want you to set up an automated savings plan with me. My paychecks are twice a month, you know, on the day after my paycheck, I want you to take out 50 or $100 and just just hide it from me so I never see it again. And there’s plenty of places that will do it. Your bank might do it your credit union, fidelity Vanguard, whoever you want to use, find somebody who will suck your money away from you and hide it. Over time, increase the amount that you’re saving, right so we won’t miss 1% today, three months from now, six months from now. Add another 1% Little by little, if you keep doing that, over a period of time, you’ll be at 10%. And before you know it, you’ll be at a 20% savings rate. The second way you can bump it up is when you get a raise, split the race. So you get a 4% raise, you take 2%, go have fun, add 2% to your savings rate, you have a car loan, when you’re done paying off the car loan. Don’t Don’t take all that money to you just start saving it so that the next time you buy a car, you can stroke a check, because you’ve been making your auto payment to yourself. So that the next time you need a car, you’ve already saved the money. So it’s just kind of hiding money from yourself is the key. And automating it so that you don’t have to think about it just the reason that the federal government takes taxes out of your check, is because when they first started the system, they didn’t have taxes like they do today. But at the end of the year, you had to pay taxes. Well, they found out that everyone struggled to pay taxes, they couldn’t make the payments. And so the federal government just said, well, we’re just going to take it every every time you get paid. And you’ll never notice it, you’ll be fat and happy and you won’t know that we’re screwing you over and life moves on. Well, you can do the same thing to yourself, right? Just be like them, take a little bit and just keep sucking it away and hiding it. The key is never spend it and forget you have it.

Tim Kubiak 6:30
So should you put things to talk about the car payment, you paid the car off? You get your $500 a month or whatever? Now? Should you be putting that in a separate account? And not looking at it? How should you handle that?

Rocky Lalvani 6:42
So it depends what so here’s what I always tell people, what are your goals? And what’s the purpose. So if your purpose with that $500 a month is to save up money so that in four or five years, you can buy another car, well then sure, put it in a savings account where it’s set aside on the savings account, you can write car fund, right, you know that it has a specific purpose, and let the money just go there. And it’ll grow. And when it comes time to buy a car, you’d be like, Okay, I have the money, I can just stroke a check. Okay,

Tim Kubiak 7:17
so what one of the things you hear people talk about all the time, and the joke is the side hustle, what’s your side business, you can’t just have one business anymore. If you’re younger, and you’re starting to look at that second income stream, right? Or you’re getting later in life, and you’re starting to look at a second income stream is transitional, you know, what are some considerations people need to have as they do that?

Rocky Lalvani 7:45
So I think you need to understand what your skills are, what your desires are, and what your wants are. And what is it that’s your unique talent that works for you. Just because something worked for somebody else doesn’t mean it’s going to work for you. We have multiple streams of income. So some of them are, you know, I used to have side businesses, W two income, real estate coaching. We have tax practice, like I have all these different income streams. You really have to take a deep dive and say, Who am I as a person? What is my job? Right? Where’s my main income coming? Is there something I can do that would allow me to increase my main income? So for example, I’m your software engineer, right? What if you started a blog, talking about a particular new type of software that’s coming out, a couple of things happen. Number one, you can start to monetize your blog. And you can make some money from that possibly. Number two, you start to become the expert in that particular software. So even if you have to leave your job. Now you’re a sought after expert because you have the blog, so you can get more at your next job from that standpoint. And then maybe you create courses on teaching people that software and so so you know, but that’s specific to a software engineer. Somebody else may have a totally different skill set. You have to you know, are you a writer? Are you good at that? Are you better at podcasting? Is that a better? Do you love video? Are you better on video? Like what’s your medium? Maybe you’re just a hands on guy. So maybe you’re you’re working as a repair technician somewhere and on the weekends, you’re doing side work helping people with their home repairs. Who are you? What skill do you have that the world values and is willing to pay you for? That you enjoy doing?

Tim Kubiak 9:54
Good advice. Sometimes it turns into real business. So I’m going to transition the conversation now. So whether you’re running a business today or you started side business and it’s grown, you know, financially, is it the same set of guidelines as you look at how you control your business expenses, how you determine how fast you want to grow, or how large you want to grow?

Rocky Lalvani 10:19
gravity is gravity everywhere. Right? Right.

Financial principles are financial principles. So when you look at profit first and how they do things, it’s the same principles as Dave Ramsey uses, right? It’s just applied slightly differently. So Dave Ramsey’s got, or you know, you have wine app, you need a budget, you give every dollar a job, in the business, you need to do the same thing. You need to keep your expenses low. This is the biggest mistake business owners make. Number one, they don’t pay themselves first. They they stand last in line. Number two, they they reinvest everything in the business. And then then they grind it out. And they wonder why there’s no money coming in and their spouse yells at them. They overspend on their business, because we get distracted by so many shiny objects. You know, most of us are very resourceful. So one of the principles of profit first is Parkinson’s Law. And what Parkinson’s Law basically states is, businesses will use up all the resources that are given to them, right, whether it’s time or money. So let’s go back to school, you had a term paper due? You had four weeks to do the term paper. You didn’t take four weeks, right? You waited for 27 days, and on the last day, you got it done in six hours.

Unknown Speaker 11:43
Right? We’re gonna go with me, I didn’t realize that.

Rocky Lalvani 11:47
So but here’s the thing, if you’re in business, right? If you’ve got $100,000 to spend, you’ll spend it. But if I give you $10,000 to spend, you’ll find a way to get it done for $10,000. And you’ll save $90,000. But you got to stop and take a breath and say, How do I saved $90,000 on this project. And that is not a principle that’s taught for business owners, they’re like, you got to invest. The biggest thing I think that I tell business owners is, hey, if you have a business that has a 5% profit margin, for every dollar additional you spend, you need $20 in revenue. So $1 spending is not equal to $1 revenue. This is what happens, you know, business owners guy got $100,000 business, I can buy this $50,000 car. No, you can’t. No, no. And but that’s that’s the problem with the mentality, you’ve got to realize that you don’t have as much money to spend as you think you do. Even though you look at your business bank account, there’s always money sitting in it. So what profit first does is it splits everything out, it creates a system, the money all flows into the income account. And then on a set basis, it’s allocated, you have a business plan, your business plan says we’re going to make 5% profit. Okay, but 5% in the profit account, your business plan says you’re going to make X amount per year, well figure out what that percentage is of sales and put it in your owner’s pay account. So you’re always getting paid. Right? You You know, taxes are going to be a set amount, we go with a 15% off top line. So set aside 15% for taxes. So when tax time comes, you’re not freaking out. I just had I had Todd on my podcast today. Todd started using profit first. And the main reason he started using profit first was when tax time came. He was always blindsided. He was full of anxiety and fear. He was like how am I supposed to pay taxes, I never have money for taxes. He started using profit first. And now he’s like, I am ready for whatever the tax bill is. Whatever they tell me, I can handle it. I know I’ve got money, I can stroke a check. And as much as I hate to pay taxes, I can pay them. And it it’s there’s no fear, there’s no anxiety, I can sleep at night. I just feel comfortable in my business. And that’s a big part of it. You know, business owners have enough anxiety with things The last thing you need is money anxiety.

Tim Kubiak 14:28
It’s hard to talk about what you do, because a big part of what you do is work with business owners to help them structure this right.

Rocky Lalvani 14:34
I do so I call myself the chief profitability officer, right? My job is to help make you profitable. We structure and every business is slightly different. So they need to be set up slightly different. We set up bank accounts and we give each bank account a purpose. And so like I said the money comes in and you literally as the money comes in, it is put into all the accounts. So that’s step one. The reason This is important is to go back to Parkinson’s Law, the leftovers after you’ve paid everything you’re supposed to pay end up in your operating expenses. Now, when you look at your bank account, number one, you know how much you really have to spend. The problem is most of the reports that you get from your financial people, whether it’s your accountant or bookkeeper, are all 3045 days old, you don’t know what you’ve got today, looking forward. So this system, you can look at your account and see how much cash you have at the moment. What I do is I go through your financial reports, so you don’t have to, and I start questioning everything you’re spending on asking if you’re getting value for the dollar. Is it worth it? Is there a cheaper way to do this? does it drive the bottom line? Is this a vanity expense? Like? Are you just spending it because you’ve felt good about it? So it’s a lot of negotiating, getting you to negotiate with your suppliers, getting you to cut costs appropriately, getting you to look and say, you know, are you getting value out of your employees. And believe me, I prefer to play employees more. So this is not about squeezing your employees. It’s about making the appropriate choices for your business in working on your business instead of in your business. So making sure that you’re getting a return for every investment, and your return is appropriate. The other thing we do is we look at where you’re selling stuff. So your business might sell 10 products, well, one product might have a 70% profit margin, one product might have a 10% profit margin. Well, if you’re spending all your time on 10% profit margin items, how much more work do you have to do, versus that 170 percent profit item. So it’s helping you to shift your focus to where the market is saying it’s going to give you the most value, and the most return on your investment. And so it’s just doing smarter business is really what it comes down to. And if you don’t look at the numbers, you don’t know these things. And most people, I have an MBA, they never trained me to do this in the MBA program. My wife’s a CPA, she doesn’t look like that’s not what her focus is, you know, her focus in most accountants focuses getting your tax return done. They’re not focused on making you profitable. Your bookkeeper is about making sure all the transactions are locked. They’re not about making you profitable. There are some bookkeepers and accountants who understand that concept, the vast majority don’t.

Tim Kubiak 17:35
So I come from an industry that’s heavy on inventory. So I come from technology distribution traditionally, right? So is that the kind of thing where, you know, you walk in and you look at somebody days on hand inventory, their payment terms versus the terms they’re granting, or those things that owners often haven’t looked at?

Rocky Lalvani 17:57
I think you know what, most owners are busy in the day to day in the business. They don’t have time to look at all those things. Plus, they change, right? The terms change, you don’t even notice it half the time, half the time we’re paying for software that we no longer use your input. So one of the other things I talked about, so if you’re in a larger business like that, right. Were you an employee there? Are you? You were? Yes. Oh, as an employee there. Did you care how much you spent from the business’s account?

Tim Kubiak 18:31
Yes, because I got paid on EBITDA.

Rocky Lalvani 18:34
Oh, so that’s rare, isn’t it?

Unknown Speaker 18:36
Yeah.

Rocky Lalvani 18:38
If you weren’t paid on EBITDA, would you care how much you spent?

Tim Kubiak 18:42
Nope. I spent every nickel my expense account and then some.

Rocky Lalvani 18:46
And so that’s one of the things is, that company was smart enough to incentivize their employees in a way that they focused on the bottom line, that is a werritty. Do you know a lot of companies that do that?

Tim Kubiak 19:01
I don’t and it was only once you got to a certain level, and your accelerators are based all on EBIT. Ah, and boy, you watched it. We we sweated basis points at times.

Rocky Lalvani 19:12
But that was only when you got to a certain level, correct? Yeah. What about everyone below? You was blowing your money.

Unknown Speaker 19:19
They didn’t have budgets.

Rocky Lalvani 19:21
Yeah. But they’re still spending. They’re like, Hey, we need this. We need that we need this. Right.

Tim Kubiak 19:26
Yeah. I mean, you would see you talk about software and unused subscriptions. It was unbelievable. You know, and even some of my current clients, you go in and you walk in, and we’re like, okay, your technology company, you don’t use the technology you’re paying for. Mm

Rocky Lalvani 19:40
hm. And that’s what it is. So, I mean, you know, it This happens all the time, unless you’re focused. With that hyper focus on the bottom line. This stuff doesn’t get done. Yeah. It’s just, you know, it’s like we get busy in if it’s not burning, they don’t Pay attention to it.

Tim Kubiak 20:04
So how did you choose money as a career?

Rocky Lalvani 20:07
So as a kid, I’ve always been interested in money. Like when I was a kid, I wanted to be a millionaire. So it’s like always studying money. And then computers were just coming out when I was a kid. So I got my first Apple two, he and I got the first spreadsheet program, which was visicalc. And I was teaching accountants in corporate America how to go from their paper Ledger’s to electronic spreadsheets. So like, those were some of the natural skill sets I had, I got out of college, and I looked at the money space, and back then it was all like, go to work for these big brokerage houses, sell crap products, and screw people over and I was like, I’m not doing this. And so I kind of went a different direction, had a great career. But in the background, I was always like studying money learning money. I also grew up with it. Like in our family, people talk about money, like even with their friends. So money was a normal conversation. I couldn’t understand why people in America struggled with money. And it was much, much later that I learned about behavioral psychology, which is, now it’s becoming much more of a upcoming field. But we are not taught to talk about money. And so we’ve all got money mindsets, you can tell me stories, right? What did your parents say to you as a kid about money? Don’t spend it, keep it. Okay. So you know, don’t spend it money doesn’t grow on trees, we can’t afford that rich people are evil. All of those things are affecting the way you think today. They are driving the decisions you make. And if you don’t examine your own scripts, and we have all kinds of scripts, there’s money scripts, there’s love scripts, there’s self worth scripts. If we don’t go back and evaluate those, and ask ourselves, does this still serve us? We’re running the software code have an eight year old? Uh huh. Well, that’s not serving you today. So you got to go back and reprogram yourself, and upgrade yourself and change those scripts and make better and wiser decisions. If you’re the kind of person who thinks rich people are evil, I guarantee you, you will blow your money, because you don’t want to be evil and rich, you’ll even if you get money, you will quickly give it away. That’s why lottery winners usually end up broke, because they don’t know how to handle money.

Tim Kubiak 22:36
It’s the windfall and they didn’t learn to manage it along the way.

Rocky Lalvani 22:41
It’s partially that it’s partially they’re uncomfortable with it. And they may not think they’re worthy of it.

Tim Kubiak 22:50
Yeah, it’s interesting, you say that. So I talked to a gentleman a few weeks back, that was a former NFL player runs a successful business now. And he’ll be on the show, actually, a week before this comes out. And one of the things that came up is how many people he saw blow through their money and had no plan in their case to transition from what is a short career to the rest of their life.

Rocky Lalvani 23:13
And the NFL is a very short career. Most of the guys don’t make a ton of money. A handful make a lot of money. But if you don’t hold on to it, like especially at that level, I mean, everybody’s taking a cut, and everybody sitting there glommed on to your money, and you think you’ve got friends, and

it’s not real right? You need.

Just because you know how to make money doesn’t mean you’ll be wealthy, because most people will outspend their income. And you’ve got to create that gap. You have to create as much of a gap as you can between what comes in and what goes out. And you know, for a guy in the NFL, even an average guy me NFL, if he does it, right. The NFL can be his ticket for the rest of his life. In other words, he can have enough money that he never has to work again. But at the same point, you can leave the NFL broke.

Tim Kubiak 24:13
Yeah. Yeah. And most guys do, right? I’ve seen the studies, I’ve seen the reports even before that conversation.

Rocky Lalvani 24:21
It’s true. And it’s, you know, and if, if they can make that much money and be broke, what about the rest of us who are making a fraction? You know, yeah, but that’s where compounding comes in. The power of compounding is massive, and I don’t think people realize how important the compound interest curve is, how powerful it is, and how it works both ways. So compound interest works both ways. It works on the upside, and then it works on the negative side in the sense that debt can very quickly compound in crush you over time. And so you’ve got To kind of truly understand the difference between between all of that and understand where you stand and run the numbers,

Tim Kubiak 25:09
does the debt side crush you faster than the positive side? grubs?

Rocky Lalvani 25:16
No, each side, so yes and no. In other words, well, slightly. And here’s why. If I started saving $250 a month, right, I could earn so much on it. If I was smart, and I did well, with the stock market, I might earn more. If I just put it in the bank, I wouldn’t earn much right on the debt side, you know, depends on what your interest rate is, the higher the interest rate, the faster that it’s going to curve up. I think what happens is, is we don’t accidentally increase our savings. But we accidentally increase our debt, you know, we sign up for the Oh, one year, no payments. Oops, I forgot about that. Or you sign up for something, oh, it’s only a couple of bucks a month. This is a couple of bucks a month, you don’t notice. And before you know it, it’s piled up quickly on you. So it’s the math is the same both ways. It’s just, we tend to ignore the math on the debt side. And we don’t take action on the other side. So that’s kind of I think, where that problem comes from.

Tim Kubiak 26:25
Okay, so question from my personal background. At one point in life, I had a deferred compensation plan where I could defer up to 99% of my compensation never quite hit that mark, by the way. Right. And so for those of you that aren’t familiar how it was structured for me, anyhow, was right, the company didn’t pay the federal taxes or any of the matching, but I got to invest the full dollar amount until I had to withdraw. If given that opportunity, from a risk profile perspective, how do you view that?

Rocky Lalvani 26:59
So the first question I would ask myself is, is there any possibility I could lose that money? Like, where was invested? If my company became, you know, world calmer, and Ron, does that create a risk? That’s the number one thing I want to know how safe companies stocks, single asset high risk, high risk, or just where they’re putting that money? Like, is it sitting on the company? Like if the company went bankrupt? Do you still get your money? That’s what I want to know. Number two is if if you can do that, I would do it because number one, you’re not paying taxes. Right? You’re not seeing the money, what you don’t see you don’t feel you don’t miss. Right. So as much as you can do if you can do it safely. I think that’s, that’s a phenomenal thing to do. If you can do it.

Tim Kubiak 27:53
Yeah. It for me, it was good, good pair of golden handcuffs, right, because I was able to invest it have market funds that were major funds, and I’ve been out to touch it for years. So the catch the catch was you had to take it within I think two years leaving the company. So.

Rocky Lalvani 28:10
Okay, so it worked out well for you.

Tim Kubiak 28:13
It worked out well. Right. So so right, but I was sad when they discontinued the program.

Rocky Lalvani 28:19
Is anyone gone through what a compound interest curve looks like? And how money compounds over time on this show?

Tim Kubiak 28:25
No. So please do that.

Rocky Lalvani 28:27
So let’s do that. So I always like to tell a story. Tim, I’m going to hire you. Alright. You got two salary choices today, Tim? I’m going to hire you for 32 days. That’s it, and I’m going to pay you for 32 days. Option one is I’m going to give you $100,000 a day for 32 days, which is what 3.2 million.

Tim Kubiak 28:49
sounds right. Nice paycheck. Good paycheck.

Rocky Lalvani 28:53
Option two. I’m going to give you a penny today. And I’m going to double it tomorrow. And I’m going to double it every day for the next 32 days. And that’s what I’ll pay you. So today you get a penny tomorrow you get two pennies. day three, you get four pennies. day seven, you get 64 pennies a day 14 you get $81 and 92 cents, versus the 1.4 million which would you rather have the pennies the double or the hundred thousand dollars a day?

Unknown Speaker 29:31
Wow.

Rocky Lalvani 29:34
So get here, day 20. Yeah, I’ll pay you $5,242 and 88 cents, because that’s what the double comes to. You got 12 more days, the 12 more days, huh?

Tim Kubiak 29:46
It’s got to be the compound rate.

Rocky Lalvani 29:49
You tell me you want you want the 3.2 million you want this Penny thing.

Tim Kubiak 29:55
So just running the math on paper and looking at it. Want the penny thing?

Rocky Lalvani 30:01
What number did you come up with?

Tim Kubiak 30:03
I haven’t totaled it all the way out yet. So I’m still doubling. I’m doing it by hand. I’m old school. Sorry.

Rocky Lalvani 30:12
You got to do 32 of them. Yeah,

exactly. just round it as you go.

Tim Kubiak 30:19
You have the answer, why don’t you give it to me?

Rocky Lalvani 30:22
So here’s what’s interesting.

On day 28. Yeah, it’s about 1.3 4 million is what you would get on day 28. Which, adding up all the previous money I paid you per Matt, you’d end up with just under 2.7 million. Okay. But on the other plan, you got 2.8 million. So here we are at a 28. And you’re barely breaking even. But here’s what happens from Dave 28. Day 32. On day 32, you get 21 and a half million dollars, your total payout is almost $43 million, versus 3.2 million. The compounding kicks in and it hockey sticks. This compound stuff works in everything in life, right? You build your skills, they compound, you build your money, it compounds. But here’s the problem when you’re early on, you know, when you’re sitting there at day, 10, day 15, you’re like, I’m getting nowhere and this guy’s got all this money, right? It looks like he’s winning the game. It’s not until the end that things really change. And that’s why you’ve always got to work on your own self improvement. You’ve always got to make your money compound into it well, and you have to give it time. Because what seems like a little now, isn’t that dramatic, but over time, you’ll win the game. But here’s the real lesson that I tell people. And this comes down to savings, right? At the end of 10 days, you had $10 and 23 cents, you’re like, yeah, that’s nothing I skipped the first 10 days, if you skip the first 10 days, you don’t get the last 10 days. Right? Unless you start you’re going to give up the last 10 days, which are millions upon millions of dollars. So show up, do the work, save the money, invest in yourself, compound your skills a little bit consistently. And understand it’s like an airplane taking off, right? You’re halfway down the runway, you’re going 120 miles an hour, you think you’re you know, doing everything, the airplanes still on the ground, and you’re nowhere. But if you keep going, the nose is going to come up and you’re going to take off and you’re going to soar unless you decide to give up and start that whole process over which is what everyone does. They don’t take it to the end and they miss that tremendous result at the end.

Tim Kubiak 32:59
You know, it’s interesting to my financial advisor for years has been showing me here’s the difference if you walk away at 6062, or 67. So I’ve seen that hockey stick, just with flatline investment. Yeah,

Rocky Lalvani 33:12
yeah, it makes I mean, if you look at your Social Security check, and you look at what it is, it’s 62 and 70. It’s a dramatic difference in those eight years. So whatever you can do, to suck it up for those eight years to push off is a big difference in how much you get paid out at the end.

Tim Kubiak 33:30
Yeah, huge difference. altered plans. Mm hmm.

Rocky Lalvani 33:34
And nobody talks about this, like everybody should know these numbers. You can run these numbers for yourself. There’s calculators online, that you can you can run them and you can put in where you’re at today. You can play around with savings rates, growth rates, play, like my whole life, I played around with this calculator. Always plotting where when how.

Tim Kubiak 33:57
So you talk about resources. So talk about what you have first, because you have a great podcast, or you have a couple of websites. So talk about what people can find there.

Rocky Lalvani 34:07
So there’s there’s two podcasts one is profit Answer Man where we talk to business owners strictly about how do you make your business more profitable. And we talked about it’s an ethical profit. This isn’t about gouging people or you know, doing anything like that? How do we ethically build a profitable business that serves our customers and our employees and ourselves? The other podcast is called richer soul. So richer soul is about living an abundant life. So what’s your purpose? What do you want out of life? define what you want out of life. have the right mindsets. And then we create harmony with your health, your wealth, your time, your relationships, and your spirituality. And so how do they all fit together? How do you create your puzzle because we’re all different? Right? Your plans not gonna work for me Tim. If it’s your plan, it’s what you want it. And so stop chasing other people stop chasing their dreams, and start looking at what do you want out of life, take the time to think about it, and design the life on your terms, and then figure out what’s important. And then figure out how to have what’s important to you learn to say, no, it’s when you know what you want, it’s so easy to say no, because you know what you want. But when you don’t know what you want, you are constantly tempted by everything. And that’s difficult. When you have a target, it’s easy to hit it, or at least get close, when you have no target. You’re just you’re playing the lottery game. And too many people in life are playing a lottery game. They don’t have clarity of what they want in life.

Tim Kubiak 35:47
So how do you begin to have those type of conversations, frankly, with your kids as they grow up as they become young adults as they enter the workforce.

Rocky Lalvani 35:57
So I think, here’s the thing. And this is a massive shift. So I came out of college in the late 80s. What I was told back then was you go to work for a company and you work there your entire life, and you get a gold watch, and you retire and they take care of you. That was a lie. Right? You know, job hopping was frowned upon. But if you job hop, it actually dramatically increases your salary. Because each time you job hop, you get a much bigger jump in pay and that compounds. So it goes back to that, that principle. The rules of the past are no longer the rules of the future. So for my kids, the jobs they’re going to do and 20 years from now don’t even exist, the companies are going to work for him. 20 years from now don’t even exist. So what are the things that I can teach them that serve them? critical thinking, learn how to learn? figure out how to communicate, figure out how to collaborate, learn how to look out at the landscape and see what are the opportunities? How can I take advantage of these? What is it that I can do to constantly pivot and grow. And I think that’s something that that kids are the future really need to learn how our technology in the world is changing so much faster, and an ever growing rate, that you really need to be able to pivot and to constantly be improving your skills. So learning how to do that without going back to college. Because what gets a college degree? That’s 10 years old, but like, the principles 10 years ago are outdated. Right? They no longer like the whole world was different and years ago. So stop thinking about school and start thinking about how do you learn the skills. And so I coached robotics for my kids. And that’s the one thing we saw, because we were in robotics, and we had freedom, we were always at the cutting edge. Like we’d go visit colleges. And they’re like, we got a 3d printer. I’m like, so do we hope they do? Right? This is five years ago, this is not today. This is, you know, we were constantly on the cutting edge of learning what’s new. You look at social media marketing. By the time a college creates a curriculum for social media marketing, there’s already something new, like, tick tock, you know, they can’t keep up with that. So you’ve got to learn how to learn and how to pivot and how to keep growing yourself. So it’s compounding right? The skills of pivoting, learning, and growing. So I think that’s the biggest thing you need to teach kids, there is not a track anymore. You put kids on a track, they’re screwed, because the track is going to dead end.

Tim Kubiak 38:54
Yeah, get the track just has to be the ability to build to your point, build skills, gather knowledge, and learn how to apply them differently.

Unknown Speaker 39:01
Mm hmm.

Rocky Lalvani 39:04
And pivot

Tim Kubiak 39:05
and pivot. Right. So you talked about not getting distracted and having goals. So if you’re looking at how do you pivot? How do you tell what is an authentic opportunity? So you’ve run businesses, I’ve run businesses, right? You always have due diligence there. But if you’re the average person, what is the due diligence they should do before they consider a change or a move or a pivot?

Rocky Lalvani 39:31
I think that’s a difficult one, right? Especially if you’re so the question is, is, Are you the type of person who wants to be at the leading edge? Because if you’re going to be at the leading edge, you have an opportunity to hit a Grand Slam or strike out. But except that I’m at the leading edge. I’m going to strike out here’s the thing in life, you only need one Grand Slam, right? You can strike out 10 times but if you have one grants I’m in life, you’re done. So you have to have the mentality that that’s the game you want to play. The second game is follow the leader, right? So let those people go out. When you start to see that they’re creating success. Don’t follow them to this instead. Right? What happened when the Gold Rush was in California? Everyone out went out there to panhandle dole, but who made money? The guy selling the shovels? Yep. Right. So there’s a new iPhone, don’t, don’t try and compete with the iPhone, create cases, for iPhones, create chords for iPhones, create mounts for iPhones create a something that can plug into, there’s a new software out there, teach people how to use the new software in their particular niche business. Right? And you can create the same course and change the beginning and end of it, and now have 10 niche markets. Right?

Tim Kubiak 41:04
That’s brilliant.

Rocky Lalvani 41:05
Yeah, like, follow that. Because that’s where the money is. First of all, there’s no competition, because nobody else is doing it yet. Right? You’re in a brand new market, you have opportunity. And if that’s your grand slam, great, you’re done, move on.

Or just make a lot of money and wait for the next pivot.

Tim Kubiak 41:27
Obviously, say I know several very successful serial entrepreneurs, because they just can’t stay out of the game. But you’re right, they swing and miss to, right. You don’t read about or hear about, or they’re not bragging about the latest one that went down in flames.

Rocky Lalvani 41:42
So today’s episode was the fail coach on my podcast. And so, you know, the opening comment is, is now that you’re the fail, coach, do you still fail? And his comment was, if I don’t fail, in a couple of days, I start to get worried because it means I’m not trying. Right. That’s what we went, my kids were learning to ski. It’s like, if you’re not falling, you’re not skiing, because you’re not going out to the edge and learning where the edges are and what’s out there. And if you’re young, you can take a lot of false, right? It’s easy to take falls when you’re young. That’s the time to take the most risk, not when well. So now at my age in life, I can fall all I want because I built well. So it doesn’t really matter, right? I don’t have to like I can afford to fall, you’ve got to figure out where you are in that scheme. And there are different ways to do it. You got to figure out where you are and how you want to do it.

Tim Kubiak 42:41
Yeah, yeah, it’s interesting. So I spent 25 years inside of essentially the same company through a series of acquisitions. Right? So I guess the old technology joke I’ve worked for five companies have 22 business cards and haven’t changed desks. And, right, but it’s interesting, because you do get to a point where you do have to even you know, late career change, you have to pit right, I don’t mind telling people, I’m 50, I made my pivot at 48, I left, you know, got acquired was a great company that acquired us, blah, blah, blah, I didn’t want to be a number. So I want this smaller company that was, you know, private equity funded, and it’s a different game. But I learned more in 16 months there than I would have been 10 years in the other role. And it’s part of the value of taking that risk.

Rocky Lalvani 43:35
So I tell people leave with a parachute. Right? Yeah, take the risk leap. But don’t take risks that are going to blow you up. Right, take risks that are appropriate. And then life is fine. I mean, there is no, I struggle with this, because I very much like certainty. But it’s been impossible to find. Now, so I’m learning to accept uncertainty. It’s it’s tough, that some people are much better at it than others. You’ve got to learn what is your personality? What are the things you’re comfortable with? And how do you get better at the things you’re uncomfortable with?

Tim Kubiak 44:17
That’s the hardest. One of the hardest things is pushing outside of that comfort zone. Right? Especially for people who like certainty.

Rocky Lalvani 44:25
Yes. So if you had told me five years ago, that we’d be sitting here and I’d be on video, and I’d be doing like that that was outside the outside the realm of thought it just went like, that wasn’t even on the radar screen. You know? And now I look at it and I’m like, What a fool was I had I started a podcast 12 years ago, I be Joe Rogan, you know, but

Tim Kubiak 44:54
I think you’re a little too practical to be Joe Rogan. But I might be wrong.

Rocky Lalvani 44:58
But people would listen to me because by now they’d all be wealthy.

Tim Kubiak 45:01
That’s right. That’s right. And that’s part of it right? You’re part of your own progression was building that expertise in that brand that you reference for other people.

Rocky Lalvani 45:12
Exactly. So yeah, just try. So tell me like, what is it that your audience really needs? What do they need to hear? How do we help them and serve them and maybe encourage them?

Tim Kubiak 45:25
So my audience are two sets of people distinctly different, right? A large percentage of my audience is young, professional women. So mid 20s, frankly, through mid 40s. In the business world, the other percentage of my audience are people that are running businesses, and they might be million dollar businesses, with, you know, that 5% profit margin, and it’s getting squeezed to three and four, or they might be 100 and $50 million businesses, right. And they’re watching the large competitors take away the market space, and technology shifts, frankly, put them out of business.

Rocky Lalvani 46:04
So let’s talk to the women. First, I have a 20 year old daughter, okay. Um, and I see this in her partially two. If someone puts up a job description for an opportunity, if a guy meets 60% of the criteria, he will apply. Women need to hit 100% of the criteria before they will apply. Which is why the guys are all beating you. Because they’re just going out there and BS in it and shooting for the moon while you’re off going, but I don’t have the perfect resume. Just go take the shot, go in and sell yourselves. You guys are much better. You know, our culture has shifted. I grew up, Tim, you probably grew up in the old days of culture, you do what you’re told, be happy you have a job. You know, it wasn’t the Kumbaya culture, culture today has shifted. Women are much better at that, than our skies are right? My daughter is very good about having conversations, listening to different points of view, and helping bring about consensus. Figure out your skills, stop letting your male female thing drive you don’t let society I think right now. Women have more college degrees than men do. They’re more driven. You know, the conversations now or when she makes more, right? Because she’s making more than her husband, you have the opportunity to go do things, stop limiting yourself, because that the number one thing that limits everybody is the reflection in the mirror. So push through that reflection, take a shot. And women build your networks. Like I hear a lot of times, oh, these guys have this mastermind group. They don’t let women and there’s a reason for that. Partially, why don’t you go build your women masterminds. Like there’s your side business right there, build your network, learn how to find women who want to support each other who don’t tear each other down, build your networks, pull each other up, you’ll blow the guys away, just go do it. So for your other, your business owners that are three or 4%. Look, if you’re in a tight margin business, the thing you got to do is figure out how do we cut our spending? How can we do things better, faster, cheaper, differently, and get out of the box. Like if you can get out of the box and figure out a way to do something that is radically different? You can win by picking up three, four or five percentage points, which is not a lot. But it doubles your income. Right? So figure out how to pick up those percentage points, optimize everything, figure out opportunities, figure out what’s important and what’s not. And if you’re going up against a big company, you guys can pivot faster. So that’s your strength, learn to pivot, figure out you know, what, what is it that you have as a unique advantage that they don’t. And you know, if you’re smaller company and you’ve got tight margins, you’ve got the ability to play around with things, play around, redesign something figure out a way to do it better, faster, quicker.

Tim Kubiak 49:27
Yeah, and it’s, I’m watching people just to share a little bit some of the people I work with, I’m watching them pivot from I’m competing against Amazon and Microsoft to, I’m no longer selling against them. I’m now I went from a low margin business to selling services, integrating their stuff, so I’m making my thing X percent on the backside, but now I’m charging 40% making 40% margins on the front side.

Rocky Lalvani 49:57
Right so it comes back to selling shovels to the miners, there are a lot of people who are selling services to people who use Amazon to be able to track the numbers, do other things, figure it out? Like there’s opportunity there. Don’t figure out the opportunity. It’s there. It’s there.

Tim Kubiak 50:15
Yeah. And that’s the thing. I think a lot of people, and I’ve seen this with small business owners, they become dependent on a brand, or product that they sell, and they tie their own identity to it. And literally, that brand tanks and they’re out of business, or that technology shifts in my case, and they’re out of business,

Rocky Lalvani 50:33
or they cut you out.

Unknown Speaker 50:35
Like, yeah,

Rocky Lalvani 50:36
the brands can squeeze your margins, you know, and that’s one of the things I’ve been dealing with, with some of my customers is how do we figure out how to get higher margin products into your pipeline? So you know, if you’re working with a brand, and you’re making a small percentage, and you can bring in a high margin product, to your existing customer base, all of a sudden your profits up three 400%. Yeah, and find something that they can’t easily buy somewhere else. You know, it’s not easily comparable to what somebody else has. And now the price point goes away. Yeah, yeah, that’s

Tim Kubiak 51:16
the other thing, right? If you build a bundled as a solution, they can nickel and dime in a line item. Yeah.

Rocky Lalvani 51:24
Just think of different ways to do things.

That’s all.

Tim Kubiak 51:28
Yeah. And that’s business, right? So finding different ways to do things and improving your profits along the way.

Rocky Lalvani 51:38
And you need to be intentional, I think more often than not, so I’m reading a book right now. It’s called the road less stupid. by Keith Cunningham, chairman of the board, I think our CEO, it’s funny because each chapter is literally two pages. All right, and at the end of each chapter is the same exact phrasing. Now go think, right? Here’s something now go Think about it. Like sometimes he’s like, go Think about this for 10 hours, like, you know, two pages of insights. Go Think about your business, instead of being in your business. When you back out from your business. And you can see the forest, it’s a lot easier to make decisions. And it’s a lot easier to prevent mistakes. But you’ve got to go think, don’t most of you are smart enough to do that.

Tim Kubiak 52:32
Yeah, don’t buy your own hype. Yeah.

Rocky Lalvani 52:37
So and that’s it. You know, when that happens in the money space all the time, the smartest people are constantly sharing their plans and asking for feedback, constantly sharing their ideas, and asking for feedback from other people so that they can learn to make it stronger, better, or make sure that they’re not blindsided.

Tim Kubiak 52:59
That’s an interest. I didn’t realize that in the money space.

Rocky Lalvani 53:03
It is. So in other words, let’s say I’m a wealthy person, right? Well, I want to go talk to everyone I can about money to learn. Well, what do you think? What do you think? Does this seem good? What are the pluses and minuses of this plan? What is your plan? What are the pluses and minuses your plan? Go to the next guy? Well, he said this, what do you say like, and little by little, you start to get an idea that most of these guys are charging a lot of money and providing very little value. But you learn that over time, right? At least in the money, space and other spaces. It’s different.

Tim Kubiak 53:37
Yeah, no, I think I think you have some similarities and a lot of spaces.

Rocky Lalvani 53:43
It is just because that’s the other thing. I think a lot of times, like in businesses, we what we were always told, you know, you never got fired for buying IBM. You never were profitable for buying IBM either. Right? They made all the money. So learn to learn to take risks and cut costs, like today, there’s so much software that’s free. Yeah, you know, get rid of all the costly subscription services and figure out ways to do things for less.

Tim Kubiak 54:14
Yeah, open source is a brilliant thing. If you’re really willing to just take a look around and spend a little uncoding it’ll save you a fortune in many cases. Yeah. So Rocky, thank you for being here. I’ve really enjoyed the conversation. I know it’ll be valuable to people. So all the links for all of your sites will be in the show notes. They’ll be on the feed in the podcast service. So thanks again.

Rocky Lalvani 54:41
Thank you so much for having me, Tim. I know I took you away from the beach. And so I apologize for that.

Tim Kubiak 54:46
You know, I’ve never used the beach before, so I had to do it for you.

Thanks again to listen to both ties in business. We hope you enjoyed this. Rocky is a great resource. So his links to his podcast. His sites are all in the show notes. They’re also in Tim Kubiak calm as well as the bonus material. Until next week. Happy selling

Tim Kubiak

Business Geek, Nomad, Aging Metal Head, Nerd, & Coffee Addict. plus the only big guy at Hot Yoga with 25 years of Sales and Leadership experience in organizations of all sizes.

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