Episode 46: Manufacturing Financial Freedom with Jackson Millan, The Wealth Mentor – Transcript

Rennie Gabriel  00:10
Hi, folks, welcome to episode number 46 of the Wealth On Any Income Podcast. This is where we talk about money tips, techniques, attitudes, information, and provide inspiration. In past episodes, we spoke about how to build an income and expense report, how to measure the level of pleasure based on where you spend your money, how to track your money in 5 - 10 seconds, and what to look for in a net worth statement to see how close you are to Complete Financial Choice®. And last week, we had blind skier Krista Giannak. Today we have as our guest, Jackson Millan. Jackson is a Wealth Mentor and spent the last 14 years helping service businesses understand the language of money and manufacture financial freedom for themselves and their families. He successfully helped over 1000 clients build in excess of $1.4 billion in combined wealth, and has scaled multiple, seven-figure businesses. He's a master of helping businesses - business owners - make money work for them and turn their business profit into personal wealth. So welcome, Jackson.

Jackson Millan  01:24
Thanks, Rennie. Thanks for having me. Looking forward to chatting today.

Rennie Gabriel  01:27
Yeah, so tell us what you do and why you do it.

Jackson Millan  01:32
So we work as wealth coaches, and we ultimately help service-based business owners understand the language of money, maximize their cash flow, improve their profits, and systematically turn business profit into personal wealth. And I use the term manufacture for a very specific reason, because I believe that business owners should be able to manufacture financial freedom as we have. And I'm a big believer in practicing what we preach. So, as I talk to you here, Rennie, I'm now five weeks into our year traveling around Australia, in a four-wheel drive, as our business basically runs itself. So, this is something that many people only dream of, and wait for achieving their retirement goals at 65 or older. And it's one of these things that as business owners, we have the ability and freedom to do this now. And that's what we practice, practice teaching our clients. Now, I got started in this space because of my parents. Now, I'm not your typical finance guy. And I never wanted to be. I wanted to help people - like my parents - who were business owners. My mom was a hairdresser. She tried very hard to scale a successful salon with very little success. And my old man was a bit of a dreamer. He tried his hand a lot of different businesses, but never really stuck to anything long enough to to see the fruits of his labor. And they always taught me from a young kid, they said, "Jackson, if you want to be successful in this world, you need to work hard for it." And this is coming from people who work 16-hour days for as long as I could remember. But I remember as a kid, recognizing that there was something wrong in what they taught me. Because if what they taught me was true, they would have been zillionaires, but they weren't. They worked very, very hard for every dollar they earned. So I realized that the problem was that they were working for money, as opposed to money working for them. And at the age of 19, I started going down the path of learning to become a financial advisor and I realized that I'd made a mistake, because it was just commissioned-based salespeople who were selling crappy products to people like my parents who didn't need them. So, I very quickly binned the term financial advisor, and I started designing this idea of what I thought financial advice should be called, Wealth Coaching. It was about educating people around the language of money, helping them design a roadmap, teaching them the fundamentals, and giving them the tools that they needed to manufacture financial freedom. And we've now been doing this for over 14 years, and I've been loving every step of the way.

Rennie Gabriel  03:38
It's so funny too because, while we're on two different continents, we've both taken very similar paths. And as an example, one of the things that I do is donate 100% of the profits from my work - because I don't have to work anymore - to a charity called Shelter To Soldier. Is there a particular charity you support, and if so, tell me what they do?

Jackson Millan  04:01
Yeah, we support a couple of charities in different areas. So, I've got I've got a couple of dogs. We're very passionate about rescuing animals. So we do donate to the shelters that have a no-kill policy. One of our dogs, Dobby, we rescued who would have otherwise been put down. So we were very, very happy for that. But we also believe in empowering people in less fortunate situations. We've got an outsourcing business in the Philippines. And we we also want to support entrepreneurship in those communities, because there are people who are less fortunate, who aren't afforded the same opportunities that we have in Australia or in the US. And we want to give people a platform to use entrepreneurship to escape their financial situation and be able to achieve financial freedom themselves.

Rennie Gabriel  04:42
That's fabulous. And it's funny too, because it seems like I'm meeting more and more people from Australia. And my wife happens to be working with someone right now. On, you know her stuff. And she's from Australia, planning to go back, and very much encouraging us to move to Australia. So who knows, we could end up being neighbors if you get out of the four-wheel drive vehicle.

Jackson Millan  05:06
100% mate. I look forward to it.

Rennie Gabriel  05:08
So well, tell me, okay, service-based business . . .tell me more about the target markets you focus on.

Jackson Millan  05:16
Yeah, so we primarily work with coaches, consultants, advisors, agency owners, health and wellness businesses, and trade businesses. The reason why we work with these businesses is because these are the businesses that we've grown and scaled ourselves. We understand how they work, we understand the financial models, we understand how to create profitable service businesses. The big challenge here is, Rennie, is that most service business owners typically get into their service business because they're expert technicians. They're normally very good at what they do. They're a good carpenter, or they're a good electrician, or they're a good consultant. And they go, "Well, I can make more money for myself if I start my own business." And then all of a sudden, they inherit all of these extra responsibilities that they didn't sign up for, and then they end up becoming a jack of all trades, a master of none, and they essentially don't know how to create a profitable and scalable business, their business becomes a cash-eating monster.

Rennie Gabriel  06:08
Yeah.

Jackson Millan  06:08
And what we help them do is we help . . .

Rennie Gabriel  06:10
I'm sorry, I was just reminded me of what you said your parents were doing - 16-hour a day work and not having the results from it.

Jackson Millan  06:18
Exactly. And the problem here, Rennie, is that most people aren't taught about money management. They're not taught how to be a good business owner. And they think that just because they're a good technician, that's going to guarantee their success. And unfortunately, it doesn't. So we just teach them very simple financial operating systems, we give them structures and frameworks to follow that allow them to do what they do best, and have confidence around their numbers, and that they're on track for being able to use their business as a vehicle to achieve their goals.

Rennie Gabriel  06:45
And it's so important because I've surveyed 1000s of people in the United States, and so far, what I've discovered - and this has been over 40 years - 9 out of 10 people have learned nothing about how to handle money in the ways that you and I both teach them. Let's get to something else. Let's talk about what was your biggest failure, whether it was personal or business, and what was the biggest insight you received from that?

Jackson Millan  07:14
Yeah, my biggest failure was my first business. And my first business was started out of necessity. My father was the primary breadwinner of our household. He was earning big money at this particular point in time where he'd escaped his business and he started working as a contractor in another business. And he was never very good at planning. He was always kind of hand-to-mouth in terms of his income. And he had a big mortgage, he had a homemaker wife, and he had a school-aged daughter at the time. I'd left home and I was working for a big bank. And I went through my first corporate restructure. And in that corporate restructure, I had a very significant pay cut. And I kept my job, but I had a pretty big haircut on my income. And my father was diagnosed with stomach cancer, and he was basically given weeks to live. And he managed to pull through with chemotherapy. However, he couldn't work. And that was extremely detrimental. He didn't have the appropriate risk management strategy, he didn't have the appropriate protection. He didn't have the appropriate war chest in terms of his cash flow. So the household responsibility of keeping the family home afloat and paying the bills fell on me. Now my genius idea, instead of using it as a time to go out and step into my own Wealth Coaching business, I decided to set up an ecommerce business. It was a men's fashion brand when I had no experience with fashion designing, no experience with product procurement, no experience with logistics. And I basically built an entire business driven by ego of proving what I could do. But I wasn't passionate about the business. And we had some success. We were in GQ. And we had some big name features. And we created a multi six-figure business. But it was a cash-eating monster that I hated. And I threw money into it, and money into it and money into it. And always felt like I was pushing something up a hill. And we got through. We saved the house. The family survived. We're all okay. But I'd resented this business. And what something clicked for me one day, and I realized, am I going to be passionate and happy if I do this for the rest of my life? And the answer was immediately, no. And although I was multi six-figures in bad debt, at that point in time, I had stockpiles up to the ceiling, I decided I needed to wipe my slate clean. I needed to clear my conscience from having a, I guess, a selfish pursuit. And I donated all of my stock to charity. And I decided from that day onwards, I would only focus on one thing and that was the one thing that I was really born to do. And that was teaching people about money and helping them manufacture financial freedom. And I was really embarrassed because I had all of this bad debt. I was in a terrible financial position. And I had a choice I could either declare bankruptcy and throw my hands up and allow myself to be a victim of my circumstance or I could earn my way out of that position. And I did. And I went from being multi six-figures in the red to creating a multi seven-figure business that I've been able to manufacture financial freedom at 32.

Rennie Gabriel  10:05
That is so wonderful. And again, another comparison to the fact that I was certified as a financial planner and broke by age 50. But you know, turned it all around, modeling what works. That is one of the keys. So it sounds like you knew what to do as long as you got into a business that was passionate. Am I saying the right thing?

Jackson Millan  10:29
Yeah.

Rennie Gabriel  10:29
Okay.

Jackson Millan  10:30
Exactly. Nailed it.

Rennie Gabriel  10:32
Well, I'm going to guess these are kind of like typical feelings that your prospects experience. Is that right?

Jackson Millan  10:39
Definitely. I think the typical feelings that they're overwhelmed, they have lack of clarity, they've got no peace of mind, there's a no sleep at night factor. And the analogy that I like to use, Rennie, is that most business owners are walking in the dark financially. Visualize yourself being in a hotel or a house that you're not familiar with. And you wake up in the middle of the night, and you can't turn on the lights, and you're trying to walk to the toilet or to the fridge or wherever you're trying to go. You're tentative. Right? You don't know where anything is. And every footstep you make, you're not quite sure if you're going to kick the kitchen table, or what you're going to do. And this is what most people are like in their business when it comes to their finances. They're in a foreign home in the dark. And what we try and do is we try and turn on the lights for them financially. Because as soon as we turn on those lights, we give them a clear line of direction. We give them confidence around where they place their footing. And they know they're not going to get hurt and their decision making fundamentally changes. And if this is what we need to do, we need to turn on the lights for people financially so they can walk forwards with confidence.

Rennie Gabriel  11:40
Oh, that makes so much sense. It's a fabulous analogy. Let's see, well, let me ask you this . . . do you have a case study of a particular business where they were making some mistakes and you turned on the lights for them? And what was the result?

Jackson Millan  11:55
Yeah, I've got a really great case study of a client of mine called Ivo. And Ivo was running a very high-end joinery and cabinet making business. He'd been in business for close to 30 years. He poured his blood, sweat and tears into it. And his business had been very successful. But he came to us because his business was in a really dire situation. So, he was in a position where his business was actually burning about $30,000 a month in cash flow. He had maxed out his overdrafts. He maxed out credit cards. He owed money to the tax department. He had to sell a piece of land that he and his wife were going to build their dream home on, and it was crushing. And he was at a crossroads as well. He had to make a choice to wind up his business and go broke or find a better solution. And he came to us. So we took him on after many other advisors just basically sent him running because they didn't want anything to do with him. We took him on, and we helped him understand what the problem was. And the big problem was is that Ivo didn't understand his cash conversion cycle. At this point in time, his accounts receivable days - how long it took him to collect money from his clients - far exceeded his accounts payable days, meaning that he needed to have money in his bank account to float that cash shortfall between when he's here to pay suppliers to when he got paid from his clients. And what that basically meant is that as he scaled up his business, his cash burn amplified. And for that reason, that was resulting in the deficit. So, what we did is we did a couple of things. We implemented an increase in his pricing. It allowed him to run a more profitable and sustainable business model. We implemented a strategy whereby people paid on time, they were able to get a discount, but if they wanted to pay beyond the accounts receivable policy, they had to pay a premium. We also negotiated accounts payable days to get an extension to allow him to take more time to pay his suppliers. And we implemented payment terms that were much shorter for his clients, meaning that he would collect money faster. And all of these things resulted in us making sure that we could take him from burning $30,000 a month to then scaling to seven figures and having 27% profit margins.

Rennie Gabriel  14:01
Hmm.

Jackson Millan  14:01
So we took him in the space of about nine months, it was about a $60,000 per month turnaround in cash flow, which is life-changing.

Rennie Gabriel  14:09
Yeah. Oh, absolutely. And the man feels relieved from the standpoint of where he was to what you did for him. So that's just so great.

Jackson Millan  14:18
Exactly.

Rennie Gabriel  14:19
What was the name of that business? Because when we get to the show notes, and I'm going to have to transcribe something, I'm not going to be able to spell that business name. Or if it's confidential, and you know, how is that business spelled?

Jackson Millan  14:34
The business name is, IS Joinery.

Rennie Gabriel  14:37
IS Joinery. Okay, great. And is there some resource or some free resource that you can provide that will support some of the people listening to improve their businesses?

Jackson Millan  14:51
Definitely. So we've developed a 40-point business performance scorecard. And the idea of this is to help people understand how they're tracking towards financial freedom. After serving thousands of clients, we work out that the average score is about 18 out of 40, which means that on average businesses are below average, which is pretty scary. But the good news is that we found it from people who've done the scorecard, they can actually improve this score by at least 10, in 30 days or less, because they now understand the low hanging fruit that they can be prioritizing that they just haven't even realized in the past. So there'll be a link in the show notes. It's just https://bit.ly/AureusScorecard. And so we'll include a link in the show notes. It'll take you about five minutes, and it'll give you some clarity around how you need to charge forwards and what you need to do to make sure you're on the right path for financial freedom.

Rennie Gabriel  15:37
Yeah, and since I wouldn't be able to spell or even pronounce that business name scorecard, yes, it will be in the show notes. And so people will have that free resource available to them. Now, is there a question I should have asked you that I didn't? And if so, what's the question and the answer?

Jackson Millan  15:56
The question is, what are the biggest mistakes that business owners make when it comes to achieving financial freedom? And there's really three biggest mistakes. One, they don't have a plan. They need a three-dimensional plan that allows them to use their business as a vehicle to achieve financial freedom, because that's why we're in business for the first place. Second thing is no cash. Stop putting your business before profit. Profit should be presupposed. So, we flip the formula. We go from a formula being revenue minus expenses equals profit, to revenue minus profit equals expenses. It means that we put profit first. And the third one is consistency. The reason why you're in a vicious roller coaster ride in your business is because you do not understand the levers that need to be pulled in order to get a consistent outcome. So by understanding your KPIs, your lead and lag measures, the things that influence the outcomes that you want, you can better control those outcomes in your business,

Rennie Gabriel  16:50
The key performance indicators . . . Thank you, Jackson, for being on the show. And to my listeners, thank you for tuning in. You can listen to the Wealth On Any Income Podcast on your favorite platform. And please rate, review and subscribe. If you'd like to know how books, movies, and society programs you to be poor, and what the cure is, then log on to wealthonanyincome.com/TEDx. You'll hear my TEDx talk and can request a free 27-page roadmap to Complete Financial Choice® and receive a weekly email with tips, techniques, or inspiration around your business or money. Again, that's wealthonanyincome.com/TEDx. Until next week, be prosperous. Bye bye for now.

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