How Bookkeeping Tripled My Revenue in Two Years and Other Unexpected Cash Flow – Jesse Mecham

0:00I don't know if Rob thought this when he responded in my email but I wrote him I said Rob I want to I want to speak again and I want to talk about bookkeeping and his email came back you know positive like it sounds pretty good we worked out a flashy title you know but I don't know what he was thinking when he was agreeing to it like I don't know if he knew what he was really agreeing to but I want to kick things off with a rousing picture of this man this is this is Pacioli he was the first man to document the Venetian merchants method for

0:43accounting and I know all of you know this this is the double-entry method of accounting you got debits and credits debits on the Left credits on the right and we still use it today so when you go through accounting they teach you debits and credits and that's what we'll talk about today just kidding so if I were smarter and this goes perfectly with the time block with with what we just just hit on so I appreciate the segue but if if I were smarter I would have had my titles say something like this right for secrets to spend less time getting more done and then as a nod to every single

1:21Facebook thing that goes through my feed I added a subtext of I didn't believe the third secret but then I tried it unbelievable so this title you guys would think oh oh I'm I'm excited about that I could code more I could get more done be more productive sell more and you'd be just jazzed about it bookkeeping maybe not so much I could do another one a title I just randomly pulled off just off the top of my head but I mean this this is a killer title right it's short and it implies this mecca of productivity the 4-hour workweek I love that it's not I mean 40

2:01is the norm right the 40-hour workweek so they just lopped off a digit and cut it by what night I don't know 90% is about 90 I don't know what that is anyway so the 4-hour workweek and that's in that escape nine-to-five lynnie live anywhere enjoy hold on picture I'm scared I won't do that again Eric I'm just kidding I'm stop I'm just kidding Eric was in Costa Rica with us so he and I go way back with the company meetup that was that was cool stuff so here's another one I could try to be a little closer to the bookkeeping title how time management tripled my revenue in two

2:38years and then I had and other unexpected hacks to maximize your time every single day and you'd see that tied and you say oh that does sound pretty I could use that but when I change the title to something like how bookkeeping tripled my revenue in two years I'm surprised you all showed up I mean especially since Rob made me kick off the nine a.m. one but but this is true so there's I'm gonna get a little bit deep here for just a moment and then we'll get out of that quickly but when you think about all of the effort that you put into being productive and you

3:20just picture yourself with the Pomodoro Technique this time block there are great ways to get more things done right and we're always looking for ways to maximize our productivity to maximize our time and then if things work well our time is converted into another form of currency that we call money right and then once it's converted from time into money suddenly we don't care about it like we did when it was time and that's where there's a massive disconnect so if you could think for a moment that your time just converts into money and then think about the way you manage your money it's as if you're double-dipping

4:04right it's as if you're able to say I was put up I was productive with my time I got a lot of stuff done I was nailing it I was in the flow like we just talked about and then if you convert that over to money and you just squander it well okay you were productive but what did you do with that productivity with the end result of that productivity what did you do you squandered it or you can double-dip and that's where you are maximizing all of your past efforts now represented as time or as money this is getting meta for me so this is deep but

4:37you're maximizing that money and basically you're just able to say all of my efforts that led up to having this money I'm now maximizing those one more time and that's where you get the double dip that's why it's important and that's why I've always been shocked when people will say oh yeah money I just don't get that I don't I don't have time for that you don't have time for time because that's essentially what you're saying money is time and we've heard awesome stuff about lifestyle businesses or these these business I don't even want to call net businesses that let you basically have more time right and time

5:14is really what we're after not money I mean as long as I'm healthy and I have time and I can be with my kids and my wife and what else do I really want so the money is just a way essentially to get us more time at least that's how we first think of it so I'm just surprised when I see a lot of you and he's you're super smart super savvy and when it comes to the money you just kind of say oh I don't have time for that that doesn't sit well with me let me tell you a little story this is revenue numbers I

5:45rounded them slightly but she's I started the business in 2004 last year I talked about how it was a spreadsheet it was no longer a spreadsheet as of 2006 right we we switched over to software pretty smart move then we in 2008 four hundred fifty grand in revenue we were profitable 2009 we're up to three quarters of a million 2010 we broke the million mark which is a big deal I guess and in 2011 I'm staring at the 2011 it was January and I'm sitting there thinking I am stressed out of my mind I was stressed in oh eight when it was only 450 only that was great back then I

6:30was stressed to know nine when it was only three-quarters of a million and I was stressed when we crossed the million mark it's it was all stressful no matter what you know level of revenue there was and we were always profitable so it wasn't that we were burning through a ton of cash or anything well oh nine was was horrid but besides that it was it was just that I was stressed so if stress was the constant and revenue was the lever that I was constantly moving and I couldn't manage to get my arms around the stress what was the problem and now I'm not big on quoting myself but every

7:08once in a while you got to do it so I remember I remember thinking to myself it was begin in 2011 I was using QuickBooks no knock on QuickBooks but it's horrible horrible software okay so I'm just kidding but I'm not it's it's awful and I'm using QuickBooks because I was a trained accountant I had been a CPA I was going through my detox phase of that and everything and and I and I mean I understood everything about accounting I could amortize bonds I could talk about revenue recognition if you were an oil driller or something like that I mean I knew all that stuff yet my business where it was just cash

7:46in they bought the software and at the end the cash was it super simple just cash in cash out for expenses simple yet it was stressing me out I was using QuickBooks this behemoth of a piece of software and I was using it well and I was able to do my taxes and all that but I realized I was an idiot because the same principles that I was using to teach hundreds of thousands of families at that point just hundreds of thousands of people I'd transformed the way they manage their personal finances and for some reason I thought because I was being a businessman and was being

8:22official I had to use some official piece of accounting software to do official accounting things and it was adding no value to me what so ever it was keeping me out of jail because I was able to do my taxes but that was it and so I finally had the idea and this is where I thought I was an idiot I finally had the idea I could take those same rules that I had applied personally and I could apply them to my business so for the rest of this time I'll jump back and forth I'll be on one side of the stage and want me to be talking about the

8:52personal side I'll be on the this out of the stage and we're talking about the business side it's all the same a lot of you here have these small businesses and for you you're like dude it is the same thing this is all my money this is what I'm working on it that's perfect just think about it it's readily applicable these rules business and I don't care if you have ten million dollars of revenue a hundred million this still applies these principles so if I had one kind of theory that I could give or one I don't know hypothesis I would just say imagine if if we as entrepreneurs could be more

9:30purposeful with our money the root word of purposeful I checked is purpose right so you'd be healthier you'd be happier and you would be richer but being purposeful that's the key to the whole thing now we have to clear up one thing or at least agree to agree right here bookkeeping adds no value to you as a business owner it really doesn't it does keep you out of jail because you will file your taxes so bookkeeping allows you to comply you're just in compliance you're looking back I talked about this last year you're looking back there's a dead body and you're the crime scene investigation unit that comes on and

10:15you're saying okay we have the dead body that's bookkeeping person died we wish it wouldn't happened but it happened and now you're just gonna try and gather clues and figure out what this and that meant and it's the equivalent of handing your account in a shoebox of receipts or now you guys just send them emails or forward invoices or whatever that's all fine what I'm talking about here is not bookkeeping I would hate bookkeeping just like you do if I did it wrong just like all of you do so we're going to do it right and you can forget about my accountant does it this way that way

10:47it's fine your accountant can do whatever he or she wants it doesn't matter at all what we're talking about here is a completely different way of thinking about your money now there are only four rules anytime you're selling something and you can teach and have that be your competitive edge that you'll you'll get instrument and this is our competitive edge as a company there are four rules you cannot make them more complicated than what I will do up here on stage okay no you will you'll be tempted to please don't we'll keep it simple you give every dollar a job and you don't forecast you don't project you don't say

11:32if I can land one more client than this if I can just launch then that no projections at all I want you to look at your bank account not right now because people behind you will be peeking and they'll everyone's leaning in checking or and I should have had slack going to scheduled maintenance I read a little bit how much people use slack I wanted to write slack and say can you do scheduled maintenance from 9:00 a.m. to 10:00 a.m. Pacific and just do me a favor but I'm just kidding so you you give every dollar that you have on hand a job no forecasting the reason you

12:10don't forecast is because you will start to wave a magic wand of revenue and you will destroy the one thing that we're going for with this rule you will destroy scarcity and I want you to feel that your resources are scarce whether it's a hundred thousand dollars or a thousand dollars or a hundred dollars everyone does the same thing they take that pile of money and it's what they have on hand right now and you say what will this money do before more money comes in that's all you cannot when you start to forecast you start to remove the scarcity and when you remove scarcity you remove another thing that

12:51rhymes with scarcity and that's clarity and when you lose clarity then you don't have your your purposes start to become just muddied and you don't you you aren't exactly clear on what the money has to do I tested this with Harrison my eight-year-old and I said Harrison what would you do with now these are all relatively scaled right to him could have been fifty thousand dollars I said what would you do with $5 okay what would you do if you had $5 he's like ah I would go to the gas station Scottie's it's called right and they go down there and they buy stuff at the gas

13:31station I said okay now we know and then I gave him $5 said what do you do with the $5 he didn't go to the gas station he changed his mind why did he change his mind what was the difference one was pretend money and one was real money and when it's real and he's holding it suddenly it matters and suddenly the purpose that he has in mind I'm crossing my fingers for Lego Mindstorm okay suddenly that purpose that he has in mind he's saying oh no this can go toward that right when it was make-believe could have been anything and when you forecast you are

14:12just doing the mr. Rogers make-believe it was like a picture frame right jump into the picture frame and just do whatever you want but it doesn't your purpose your rule your these jobs that the money is supposed to do they don't they don't come up and you end up just kind of pretending and we don't want to pretend here so you relish that scarcity and you just answer that one single question I think I skipped that slide so now what should this money do before you're paid again or before new money comes in it's completely personal okay you're talking to a guy this is not a

14:47frugality thing at all no frugality I personally feel and I know I'm right that saving money just for its own sake that to me is the most just empty type of pursuit possible saving money because you are wanting to buy a home now we're talking saving money because you don't want to be a consumer and you want to help the environment now we're talking but saving money just to save money where's the end how do you how do you reach your goal there so that's this is not what we're going for it not cutting back nothing like that this is coming from a guy that uses a a

15:26three-time fork at the office the fourth time broke it's a plastic fork I wish i which I could tell you is to save the environment it's not I wash it every day and I put it back in its spot and then I use it again the fourth time broke I'm still using it why because I don't want to buy another fork right but that's my value I'm not going to tell you not to buy Forks I also like nice dress shirts like this one right and they cost more than a couple Forks the point is it's it totally matters only to you and so you can't pass judgment on people with what

16:01they're doing with their money you can't say oh I can't believe that guy wasted money here that guy wasted you should just worry about yourself a little bit and make sure that your money is lining up with what you truly value if you walk up to me and say and I don't even like giving examples I don't even like saying oh if you were to say I blew money on golf been there done that that already is passing a value judgment on anyone because I said blew money I didn't say spent money or my wife who wants to invest in furniture she switches the word around right she doesn't say spend

16:33she says invest I don't even like giving examples because then I'm already passing a judgment on what you value the key is this is all about what you want and that exercise I can stand up here for ten minutes and talk about it but you have to sit down and really be honest with yourself and if you're sharing finances of the spouse or a partner it takes two right and you really got to figure out what do we care about the nice thing I think Patrick mentioned this was it Patrick that talked about the minimum financial what was it was uh I was I took a note and

17:09then I forgot to review it but he was talking about you have to have some kind of a minimum financial goal or something and then that allows you to basically jump ship right and go full-time I am so glad that my money was doing what I wanted early on that I was using a budget I was making sure that my money was lined up with my values because I wasn't wasting a ton of money and naturally you'll find as your money lines up with your values you do start spending less not because you're saying I'll spend less but because you're saying I'll spend more purposefully it

17:40just works that way but I am so glad it was 11 years ago where I thought I need $350 to be able to cover my rent that was my minimum financial goal that gave me the motivation to start why nap now if my minimum bear-like my minimum level of financial solvency or whatever would have been 3000 or 4000 this is the kicker I never would have started the business because trying to sell a spreadsheet and make 3 grand it actually we ended up making more than that with just the spreadsheet but my small thinking at the time never would have entertained the idea that I could start

18:26a business and I needed only 350 bucks to really make it valuable to me and so one huge advantage to you as you start to incorporate these rules we've only talked about the first one the next three will go faster when you start to incorporate the rules and your spending will naturally kind of fall in line with what you value and usually will go lower your barrier for jumping ship and doing your own thing just got a lot easier and that right there is worth it because there are a lot of you out there that are hooked to doing things you don't really want to do because you're not

19:03managing your money well and I'm pretty sure this is a group that manages their money better than the normal population but I don't think it will be much better and so I'm pretty comfortable saying that most of you could be doing a lot better on the money side and if you master that personal side suddenly the business has all this flexibility and there's there's just white at the end of the tunnel so to speak okay everybody stand up for a second one stand up because it's time it's time okay now find a neighbor and just share with your neighbor an expense just say I spend this got no rent no mortgage a different

19:42expense and it sound like I'm not having you confess anything okay remember this is like whatever you want me to say here's an expense I have just go ahead and share really quick

20:06all right that's enough okay all right no tears no weeping no confessions I cannot believe there's that much chatter about a single expense okay you guys should talk about money more especially with people you're sharing your money with okay the next rule we call it embracing your true expenses we don't actually call it that yet we're renaming it this is the debut I'm kind of field testing us a little bit we used to call it saving for a rainy day rainy day has all these other definitions attached to it we didn't like it so we're changing it and when we relaunch our new site we'll change it to this everybody and I've

20:55tested this not Anna's not in large crowds but I've tested this and most of the time when I tell people hey list a couple expenses for me they list expenses naturally that are top of mind so their frequent expenses normally monthly their regular expenses normally fixed they'll talk about their cable bill their cell phone bill they'll talk about groceries maybe if I let them they'll say rent or mortgage for sure it's a big bill it comes all the time car payments sometimes so I should say there's I'll do a little side workshop on designing beautiful slides if anyone's interested seats are limited but this was my attempt to give you a

21:33representation of every month and your normal expenses and we've talked about prioritizing giving every dollar a job only with money that's on hand and that's all the information you have is what do I want my money to do with the money that's on hand right now what happens is you overlook key expenses that don't happen very often so these less frequent larger expenses end up tripping you up and then you start to say things that are not true like budgets don't work I just don't get money or it was you know my spouse's fault or something like that so this is a representation of all of your expenses

22:13as you perceive them and then I always like to add this expense because it's color coded on purpose strategically chosen and it's in December right these are the holidays like they happen every year I'm pretty sure on the same day of the year and everybody is always surprised by this and so this doesn't look like that big of a deal but you would say okay these are my normal expenses so when you're giving every dollar a job you're planning with these these black blocks that's all I could do so you're planning with those black and you're saying okay here's what I've got this is what I'll

22:51do okay everything's worked out just perfectly all my money is lined up and then December hits and you've got holiday spending and there's a problem so what we want you to do is make every expense a monthly expense every one of them so it looks a little bit like this blowing your mind with my skills and I added over here in January out of this little staple or something and then you can't even see it it looks like a smudge on the screen but if i zoom in this is what it looks like there we go and that gap we call it the true expense gap

23:33trade mark just now that that gap right there is what causes all the problems you feel like everything's going really well business-wise personalized whatever the monies clicking and then a big expense surprises you and you got a scramble a lot of times people will scramble by using a credit card and they'll say I'll pay it off it's just a little hit or they'll scramble by selling something maybe which is fine or they'll just have to juggle or they'll just stress a lot guy like we're right on the wire we got 200 bucks in our checking account this is freaking us out it's just a lot of

24:06stress this gap here is why people will say things like I make good money I don't know why I'm not getting ahead this is the reason because the planning you were doing where you were giving every dollar a job was based on your perceived normal expenses and I need you to give every dollar a job based on your current situation and with a nod towards those larger less frequent expenses that will come at you so I spent I don't even want to tell you how long creating that selfie my I'm in my office I'm gonna give a little nod to john d rockefeller back behind me that's

24:44his portrait I'm sure most of you knew that but that's the man and he and I are doing selfies in my office and I'm just trying to get it just right head tilt my assistant walks in and she's like what are you doing and I just said working and then that was all I didn't give her anything else except that and then I changed her contact info on my phone to say future you I assigned that picture to her picture and then I had her call me and I screenshot at it so that was the most effort I gave toward any single slide and this presentation was that one

25:19so I hope it was worth it now this is like a conversation with you and future you right and you see I was I was trying to go for like she my assistant called it like a duck lip thing I was I didn't appreciate that I was trying to go for like pursed lips and like a strict teacher you know with like crazy glasses and like a tight bun or something like someone coming down on you a little bit really strict and not liking how you're behaving so future you will call right when you're doing your planning when you're giving every dollar a job future you

25:55might call and you pick it up and you're like hey what's it like you know how far ahead are you I'm six months out you're six months out okay for what Christmas right what are we spending twelve hundred we're spending twelve hundred are you serious yeah twelve hunt okay better than last year twelve hundred it is including the Christmas lights that I pay someone else to hang I don't want to die falling off a roof right he's always like yeah including the Christmas life okay twelve hundred I got it so for me I got six months out I need to save twelve hundred bucks so when I'm planning this is easy math

26:30right when I'm planning is just two hundred bucks a month giving every dollar a job it's like I've got to eat I've got to pay the electricity I've got to feed these kids and Olli at Christmas because future you called and reminded me future you cause again what is it hey car repairs how much I have no idea you don't know how much no when will it happen I don't know how are you even helping me you know like what is going on here all I know man is there are going to be car repairs be ready how much should I say as much as you can

27:00throw me a bone that would be the response you don't know how much you'll pay for car repairs right who knows you go to a good mechanic not that much a bad mechanic a lot more it's like black box of spending right so you don't know how much and you don't know when now you can start to kind of guess and get a feel for things over time but wouldn't you say I mean if you had scenario a scenario B scenario a the car breaks down scenario B the car breaks down scenario a you've happened to save a thousand dollars scenario B you haven't saved any okay now you can

27:35just pick which one you would rather have as your scenario and I'm saying just throw money in the direction of car repairs and just give a nod toward future you right throw yourself a bone a little bit a lot of you hopefully not too many of you but there there are probably a lot of you that are having to deal with past you right is dealing with mistakes you've made no guilt but just mistakes it happens everybody makes those mistakes and you're still having to maybe fund a little bit of past you paying off some credit card debt you wish weren't there stuff you know bad stuff that happened

28:08to you life happens that's normal too and so some of you are dealing with that what I want to try and do is transition you away from having to deal with the past and look toward the future and that's where it's basically rule one where you're giving every dollar a job with a nod toward the future makes pretty good sense the third one call it rolling with the punches you're going to set up a plan you're gonna feel really good about it you're going to feel like all my money is doing exactly what I want it to do and then what will happen your plan will

28:42be really bad right you won't have foreseen all of these different events and it's totally okay it would be like sitting down across from a grand master chess player in the the chess player has a plan right this grand master knows I'm gonna lead with I have no idea I don't know the pawn moving out to the King's pawn right the King's pawn moves out very standard opening move and then there's a counter move now the grandmaster could say no no I'm sticking to my original plan I wanted to do some random Spanish opening right I'm gonna do that and they could keep just saying I'm gonna keep doing my opening because

29:28that was what I said before the game started I said I was going to do this and they'd lose the game the adaptation is where the win happens it's the same with something like basketball here to watch your favorite team playing basketball in the first half the the coach has been prepping for a week for this game right the coach has a plan and charts and everything is just dialed in and then the tip-off happens and the first half is played you think the coach is just like guys no no regardless of whatever the team does we're just gonna no we're not changing our plan you'd be

30:00screaming at the TV right every coach goes into the half and you have the media person that goes up and says what's your plan for the next half because the coach is needing to make adjustments final analogy and they'll stop with the analogies you have okay it's the end of work you want to go home so your priority rule one your priority is get home okay and you're driving and there's a detour you know construction on the road a lot of people if this were budgeting and this were planned they'd say oh my gosh driving a car home doesn't even work I can't believe this here's this unbelievable just I'll just

30:38sit here then I guess my whole desire of going home is now different I mean it doesn't make any sense but people will do that all the time I wanted to spend five hundred six hundred seven hundred dollars on groceries and I spent 750 this doesn't work it's ridiculous of course if your desire is to go home and you run into a snag you would just go around you would adjust and that's what I want you to do with your budgeting with your planning as you're giving every dollar a job you're giving a nod toward the future you're able to say oh wait okay hold on that contractor they

31:10had said they were gonna take this many hours at this rate and the project this never happens right the project took longer okay you would just roll with the punches okay I've got a juggle I've got a shuffle things around your reprioritizing I spent a lot of time early on saying I don't want you to care about what other people have for their priorities I don't care about what you spend your money on so why would I care that you suddenly changed what you're spending your money on right budgets can change any time you want for any reason good or bad you can change it it's your money it's all totally up to

31:51you I thought of this one example it's like reef like code right you write code is it always perfect the first time no and if you say differently then I want you to work for me so okay finally last rule we've also renamed this one and it's like your money's in a silo right I couldn't think of the word a grain silo and as you get new money you pour it in the top and then when you need money you have a little dispenser and it comes out the bottom right so the oldest money is the stuff that sinks down to the bottom and then when you need it you grab some

32:35that's kind of how I want you to think about your money I want you to essentially be spending money that you earned maybe 30 days ago at least and there are some tactical reasons for this one is it helps you in your monthly process as a business owner looking at your business money that's on hand it helps you to dial in exactly what you have to work with because you're not forecasting so if it's April by the way tomorrow taxes are due anyway weren't one big downer there on that note I'm done questions no I'm just kidding just thought of that tomorrow taxes so sad um

33:16I forgot where I was what is I even tuck ok silo money grain so you earn money in your business in June and you don't even you don't even plan to spend that money until July 1 right or maybe even August you we call it a buffer sometimes but all we want you to do is just spend money that you got at least 30 days ago and it means you have to save a little bit a lot of times some of you already have this because you're naturally risk-averse which is I mean I could be president of that Club and you could just say I don't

33:52feel good about just having this limited amount of money available so you're building up a little bit of a buffer everyone needs to have that it gives you more clarity on what you have to work with at the beginning of each month it lets you completely eliminate the valueless activity that is timing your bills to when money comes in you think about on the personal side right it's like okay I get paid now okay here comes a bill when does that bill do okay it's okay and then when am I getting paid okay and then another bill comes okay what about that bill and I've got bill a that came

34:24in earlier what and then another bill comes in okay when can I pay okay you think about the value that there is zero value to that whole game of timing when bills are paid zero the only value is you keep the lights on you keep the services running all of that but you think the provider cares that you're doing this song and dance with your paycheck before they get their money it's no value at all you're just simply paying the bill so when you're a month ahead then something when a bill comes you're just paying for it we talked about instead of having a pile of bills

34:57and waiting for the money you have a pile of money and you're waiting for a bill and just flipping that around will ease so much stress in your life it is unbelievable your money management time and I'm like a money management just love it love doing it I guarantee I spend less time managing my money than almost every one of you and the ones that I don't spend less time doing you're probably not doing anything and you're in bad so I guarantee I just don't spend a lot of time doing it and the reason is because we're following these rules every month I sit down with

35:31Julie not with the business money but with Julie with the personal money we sit down and we say okay what do we want this money to do a lot of the answers are the same stuff for the kids vacation investing in furniture you know done just those three big priorities in life but in the business it's the same thing I do the books I reconcile my accounts they do take a while because there's just mountains of transactions but it usually takes me about three hours and the last bit I have this pile of money and I simply ask myself what does this money need to do in the business before we

36:05bring in more money now we're always bringing in money because people are buying it all the time but I that monthly and take that new pile of money and say it wasn't to do that question alone is what eased all of my stress back in 2011 that is how the revenue went crazy for us the last couple of years and I'm not overstating it when I say that I was so nervous about investing money in the business I didn't know how much to reinvest my CTO would come to me and say we need another developer and I would just freak out because I feel like that's getting

36:38married I feel like you're seriously marrying every person you hire and I'm just like I don't know if we can commit to that I don't want to overextend I don't want to have to let people go it was so stressful or we would come and say this marketing opportunity this looks fantastic we should try this and I would look and just say okay I've got this pile of money it's like I don't know what I can do I don't know how to reinvest and I have that same stressful cycle every single time and a lot of you most of you deal with the exact same thing you don't know how much you can

37:06reinvest you don't even know how much you can pay yourself reasonably and that alone is stressful so you're giving the stress on the business side I've got to grow this thing you're getting the stress on the personal side I've got to also eat and things like that it's just it's a not a fun place to be so I was able to outline with my planning and say these are our priorities growth we do need to hire as I started breaking up that pile of money into those discrete jobs suddenly everything flipped on its head and I wasn't this risk-averse guy that was so afraid of spending money because I just

37:39didn't want to mess things up suddenly I thought oh my gosh Jessie again my quote you're an idiot there is money here there is plenty of money here and you're not hiring I was just being slow about it so suddenly we go from I don't even know how people we had back then but suddenly was like we need to hire we need to hire again we need to hire again we need to reinvest in marketing I mean I could take money off the table and invest it in the stock market but I I'll get a better return on my own than I will in the stock market I know this thing I can

38:08do this so I was able to reinvest reinvest in myself reinvest in the company I was able to finally form a meet-up where we could all get together once a year I would have been petrified to say oh we're gonna spend 50,000 60,000 80,000 dollars on this big company-wide meetup and all come together I just thought no way that's too scary there's no way we can do that but when I broke that up that that rule to that larger less frequent expense like an annual meetup when I broke that up then suddenly I thought oh of course we want to do it that's a priority of

38:39ours to bring everyone together when the money was lined up with the priorities it was magic and that was basically how I tripled my revenue in those last few years just able to have my money lined up with my actual priorities with that I think I'm done I'll go ahead and take questions thanks everybody [Applause] first off a huge fan started using YNAB also two years ago revolutionary for my life what are the three biggest action items you'd recommend people here today take away to improve their finances or improve their planning okay two things one is you don't have to use myself I don't want to hock software right so the

39:26rules are free you can apply them in lots of different ways that's number one number two is you should come absolutely go check out one of the webinars we run almost daily I think more than daily at this point there are two reasons you should one is it will reinforce the rules and I'll show you how it's applied but two you can see how a really well-run webinar goes and I mean I'm serious like the people that run it Erin and Todd on our team all of our teachers they have them dialed in better than I've ever seen so it would be good for you to see how that how that's run as

40:01well from a you know from a business standpoint but the webinar itself would teach you a lot and kind of reinforce these rules if there were a third one honestly login to your bank account just towel you know tally up what you have on hand get out a piece of paper and write down what you want that money to do before new money will come in you will feel better it's I wish I could say it was magic it's not but it's a simple principle but just being intentional like this time block thing or other time management techniques just being intentional about what you want to do

40:34with your day this is the same thing it's just with your money there's those are the three other questions so so some of the things that I spend money on every month they vary a lot and some of the things I spend money on or about the same every month or they may grow a little bit so if I'm planning things out and I know that a you know I'm gonna spend a certain amount this month but next month it could be a lot higher a lot lower how do you figure that out do you just wait until you have that information or a lot of times you're

41:10just waiting to see a good example and on the personal realm is like heating bill or something so he you know costs are way high in the cold months and then they drop way low in the summer months you find that average we're in the winter months you're depleting it and in the summer months you're building a surplus that's then depleted in the winter months again so it applies to business as well when we're looking at things like ramping up dev costs or ramping up any number of things you could say all around this time of year costs are always higher because I'm sprinting toward whatever goal you just

41:40kind of pad that you're you're creating that expense you're having that expense be felt right now in your planning even though you know it's not for you know not it's quite a ways off I should say I had kind of the inverse of that question so I think many of us as entrepreneurs struggle with the fact that our income varies a lot from month to month and it's really hard to make a budget I mean I've made Excel spreadsheet budgets I even have your program but it's difficult when sometimes your income is $2,000 because you had a ton of business expenses or business wasn't going that

42:15well that month and sometimes your income is $20,000 a month and then those $20,000 months do you feel like the ultimate high-roller oh yeah like vacation done absolutely and then there's the $2,000 months that hit after that you're just like well you know and then that's when the debt builds up and so I find myself in this constant cycle of like Oh things are going really well I've paid off all my debt oh no now I'm back in write again because I've put money back into the business so what do you recommend in situations like that in those surplus months it's easier to give advice when there's surplus right when

42:46things are you know when you're under the gun what advice do you have except kind of like grin and bear it but when there's a surplus month you set aside for someone that has a very very variable income you naturally are going to pad way more than someone that's working for the government on a salary right just super steady so if your expenses are normally let's say $5,000 and you've got this big windfall of a month you just said you know what all of that I'm just gonna squirrel it away now eventually you are supposed to take the vacations and things you're supposed to have the fun but you've got to make sure

43:22you equalize that income first by being able to set aside a healthy amount whatever that is because it would totally vary we could discuss it one-on-one and get to it but for someone that's has a very fluctuating income you probably want to have two months on hand of it of an average maybe even three and then when you have lean months you draw from it when you have surplus months you replenish it that would be I mean there's no way around it it's until your business can get to a point where it can just fund you regularly and your business absorbs a lot of the fluctuation that's that's what we've

43:59done on that end but it takes a while to get there we have time for two more so it's really easy to say like this month I made 20,000 I'm gonna not spin that right just like I'm gonna get up at 4:00 a.m. tomorrow yeah absolutely I do you have any of those like okay yeah it'd be nice you know the the logical side says I should do all of these things but that I don't like do you have any kind of like just practices or kind of like is it bringing in your wife or bringing in a partner to look over your shoulder like things that make us

44:34make the decisions we want to make but never end up actually making those decisions the key what we try and do the end game for us is a company with every single user is to try and increase awareness so we have this fine line we walk between trying to do everything for them and making sure we don't do everything for them because they won't be engaged and the the key is the frequency when you're anytime you're trying to acquire a new habit one is you make it small and two as you try and hit it frequently so in the instance where I'm dealing with someone that just can't

45:08seem to get the behavior change down the best thing we will almost always tell people to do is don't even worry about planning I just want you to after you sign when you spend money after you sign for the credit card or whatever you know sign on the receipt I want you to pull out your phone and record what you spend or plot a piece of paper whatever but just starting to build the awareness in and then because I don't want to tell you to cut spending because that's useless when I can get you to frequently be aware of what your money is doing it will naturally start to fall in line

45:43with what you care about but the awareness like you're saying you'd have the best of intentions but if you're looking at it every six months nothing's happening it's got to be something where you're there's there's a rhythm to it and it's what's one of the reasons we compete well with free software like mint where mint is technologically probably far superior to what we offer but you have people that just set it up and then forget it and their behavior doesn't change and we want people to actually change their behavior and so we we ask them to be a little more engaged one is with the phone recording the

46:16spending and another one is monthly sitting down and setting up those numbers asking yourself what does this money need to do when you start to see your money lined up with priorities you really care about you'll find that there's motivation you're like oh yeah I know these are the things I actually want it's not me saying you need to exercise at 4 a.m. it's me saying yeah that trip you want to go to Spain like make it happen and we usually find there's pretty good motivation there time for one more Rob yep any other questions got two over on the right here

46:56hi I'm awesome content I just wanted to ask and you obviously you know you're teaching and giving a lot of stuff away for free and then I can see for this audience here where we are but largely you're looking after our own finance it works really well can this approach of like teaching these rules and you hold the mic a little close or another hard time hearing I'm sorry I've been talking too much last few days and I was just asking your content you're giving a lot of great content for free and I can see how that works really well for people who are like us who are lounging around finances

47:26but this approach cannot work with larger companies as well like you know someone in an accounting department or hmm yeah I don't I would never try and sell to an enterprise I think you guys are all I'm just kidding yeah b2c all the way I do think that I do you think the idea of teaching still I just don't I can't think of a way that that could be beat aren't their sales books like for sales people about how teaching kind of you end up at a yes anyway I think there's there's a book out there that's all about that but the idea that you can instruct and give away

48:09I think it adds a ton of goodwill when you get to the actual sale I think the sale ends up being a bit of a just it's an automatic thing you know it's a slam dunk in that way I've never tried to sell Enterprise so I'm just I'm theorizing at this point but it works really well on the consumer side I can't imagine that the same consumer that just happens to be operating in the body of an enterprise would be different except all the tape you got to navigate thanks again Jesse okay thanks everybody you