How do you make the most of the guidance and advice out there, especially if you’re a business owner, and get a clear sense of where you’re going to be in three, 10, or even 20 years?
Today, I’m excited to talk to the wealth mentor himself, Jackson Millan. Jackson has spent his entire career shaking up the wealth industry. He’s crafted his very own values-based advice model based on what he learned growing up, and he has a deep understanding of how to think effectively about the long term.
In this conversation, Jackson and I discuss how he empowers business owners to work toward financial freedom, how to scale and take your business to the next level, and how to create a three-dimensional roadmap designed to make your dreams come true.
In this podcast interview, you’ll learn:
Andrew Rafal: Welcome back, listeners, to a brand-new episode of your Wealth & Beyond. Yes, it’s been a little bit of time we’ve been on a hiatus, but we’re back. And I have a wonderful guest to get this show going again here in 2022. For those of you who’ve been listening to the podcast, you know that building wealth and finding purpose is the name of the game to this podcast. So, who better to have on the show than the “wealth mentor”? Yes, Jackson Millan has spent his entire career trying to shake up the wealth industry and proving what a real wealth coach and strategic advisor can do for you, especially if you’re a business owner. He’s crafted his own values-based advice model and really taken from his experiences of what he saw growing up at home, as well as some of his first entrees into the financial space. He knew what he didn’t want to do and how to shape and build a company that’s going to help each and every one of you take stock of where you are, focus on the long term and vision out where you’re going to be three years, 10 years, 20 years, that strategic coach-type mindset and setting the stage for success. This show is action packed. I enjoyed it. I think you guys will as well. Without further ado, my episode with Jackson Millan.
Andrew Rafal: And Jackson Millan, welcome to the Your Wealth & Beyond podcast. How are you? I guess, this morning for you here in Australia.
Jackson Millan: Yes, this morning. I’m doing very well. We just come off the back of a long, long weekend, however, a little bit worse for wear with some scars on my beautiful face. So, I’m sure we’ll talk a little bit about that.
Andrew Rafal: I mean, all your fans are probably going to want to know what’s going on here, since this is a Zoom we can’t hide behind. My wife likes to say I have a face for radio, but when we go Zoom, we got to get out to show what happened, what’s going on?
Jackson Millan: Yeah. So we live on a 70-acre property, and I was doing the chores mowing the lawn and I ran over a poisonous toad, and one of my chickens picked it up, and I was chasing after it so I didn’t eat it and wasn’t paying attention where I was going and popped a face of corrugated iron sheeting, and it could have been a lot worse. I managed to save the chicken; however, my face came off second best.
Andrew Rafal: I’ve heard about those toads. Those poisonous toads, it’s a hot commodity these days, huh?
Jackson Millan: They’re definitely, comes with the territory.
Andrew Rafal: Yeah. It’s a whole nother show, right? That’s a whole nother show. So, Jackson, you spent almost– has it been two decades now? We like to call you the wealth mentor, but you have been focused on helping individuals and helping business owners really build wealth, find purpose, exactly what our show is about. So, before we jump in, let’s talk about you, like the purpose, what gets you up every day? What is your purpose?
Jackson Millan: Yeah, my purpose is really about empowering business owners to work towards financial freedom for themselves and their families. Everyone gets into business because they’re bright eyed and they’re bushy tailed and they want to create that freedom in abundance that gives them the ability to provide experiences to their family and those they love that maybe they didn’t have when they were growing up, and that was definitely my story growing up as well. But what I’ve come to realize is that most business owners are very good at what they do, but they’re not very good money managers, they’re not very good fiduciaries or architects of their financial journey. And for that reason, they end up living hand-to-mouth, they end up trading time for money, and they end up creating this kind of subconscious cage that they have to operate within. It means that they’ve got these golden handcuffs to their business, and financial freedom is more of a dream than a goal. So, what we’re really passionate about is helping teach people the language of money so they can get in their financial driver’s seat and create freedom for themselves and their families.
Andrew Rafal: And so, you saw growing up then your parents were hard workers, but what did you see that kind of ingrained in you that I want to change this?
Jackson Millan: Yeah, my parents were both tradespeople. My mom was a hairdresser. My dad had a number of different tried businesses, handyman businesses, waterproofing businesses that were incredibly hard work because they worked 16-hour days, seven days a week for as long as I can remember. And they always said to me, growing up, “Jackson, if you want to be successful, you need to work hard for it.” I took a lot of pride in how hard they worked, but as a curious kid, I remember realizing that there was a disconnect between the activity in the effort and the financial results because we never really went without anything, but there was never enough. There was always a sacrifice and a compromise that needed to take place.
And I come to realize that they were working for money as opposed to money working for them. And the problem was they didn’t come from money, they had inherited this long track history of working-class values and they weren’t able to escape the matrix. So, I realized that when people can learn the language of money, then they can play a more active role in escaping the financial constraints of their situation and live abundant. And that’s what I’ve been working out the better part of the last two decades.
Andrew Rafal: And the key is it’s not just about making the money, the money is just an ends to the means.
Jackson Millan: Correct. This is the biggest problem here, Andrew, is that for so many people, they haven’t actually defined what financial freedom actually means. It’s a superficial, very surface level idea, and it keeps them going. It is this romantic idea of being free, but very few people have actually taken the time to step back from the chaos of their everyday life to define what financial freedom truly means to them, and more importantly, how much wealth they need to create in order to achieve financial freedom. And when we can crunch those numbers, we can reverse engineer that into an action plan and we can link all of your daily activity to those outcomes that are truly tangible and real, then we can start shifting that trajectory and achieving some pretty cool stuff.
Andrew Rafal: So, is that how you start working with each of your business owner clients? You start with that, the financial freedom, and then you take that and build it as the foundation and you build everything up from there?
Jackson Millan: Exactly, yeah, because I think one of the biggest challenges that many business owners have, Andrew, and I’m sure you’ve experienced this in your conversations as well, is that as business owners, we love our business. We’ve got so much purpose and fulfillment that we get from our business because we have poured so much blood, sweat, and tears into it. But as a result of that, it’s reframed itself as the destination, it’s not a vehicle, it’s not a wealth creation vehicle. It consumes more than it provides in many cases.
And what we actually need to do is we need to reposition that business as a vehicle because it’s the best vehicle, it’s the best wealth creation vehicle in history, in my opinion, to create true generational wealth. But there’s a big disconnect between the battlers, the people who have created a job for themselves and those true entrepreneurs that are on the rich list around the world who have been able to unlock that wealth and use it to achieve amazing things. So, we first make that reposition, and then it’s actually about asking ourselves sometimes very confronting questions around what actually does financial freedom mean to you. And that can sometimes leave us with the blank stares because most people just haven’t stopped long enough to ask themselves that question.
Andrew Rafal: Yeah, and I think when we’re running a business 24/7, the bigger it gets, the more selfish it is because it needs more of your time, and then it’s the commodity of time, and you’ve been not able to focus on your family, you got more customers or clients and you don’t know what to do with your staff, there’s nobody leading them. So, when I come find you, am I already got a nice scale business? Or are you working both with those with the dream that they’ve got this vision that they don’t really know how to get there and/or the ones that have 15 employees, they have revenues coming in, but they’re just now lost? How do I scale? How do I get to the next level? And more importantly, why am I doing?
Jackson Millan: Yeah, look, I do have clients who have proven business model. So, they normally come to us when they’re already at multi-six figures, early seven figures, and they’ve got an economy of scale, but their business is a cash-eating monster. It’s not the profit-making machine that then now it should be at this stage of the game. It’s because their financial goals and aspirations have typically taken a backseat and it’s at this point, they say, hey, with everything that I’ve got in terms of these vanity metrics, these great top-line revenue, this team that works for me, all of these other great opportunities because they’re not working for them, that’s normally the catalyst for them to reach out and have a conversation because they feel they need to play catch-up. And what we help them do is renovate their finances, get their business from a cash-eating monster into a profit-making machine, and then systematically start turning that business profit to personal wealth.
Because I think the scary point here is, as most of us, as business owners, we like to think our business has real intrinsic value, but the scary statistic is that less than 6% of businesses are ever sold for a profit if they’re ever sold at all. So, one of the first principles that we install for our clients is let’s pretend like your business has zero face value, and putting yourself in that position where your business is just a cash flow machine, how do we build financial freedom independent of our business? And that creates a big shift in the way that we view and use our business for wealth creation.
Andrew Rafal: So, let’s jump back to a little bit of what influenced you and how you got to this point. What are those? So, let’s talk about some of those things. What would that look like? Put us in somebody who’s not a client of yours, but how do we think outside the business?
Jackson Millan: Yep. So, there’s a couple of questions that we facilitate, and we take all of our clients through an exercise called the 20-year roadmap. And to give you a little bit of a backstory on this, I always struggle with deferring gratification, even as a kid. I wanted everything yesterday and I didn’t want to work for it. When I’ve made the decision to do something, I wanted it then and there, and the idea of having to wait just was always a friction point for me. I’m sure for many kids, but for me, particularly.
My parents always try to teach me good values. Jackson, put money aside for a rainy day, save 20% of everything you can earn, right in theory, but never worked for me. They were all built on the principle of shrinking yourself wealthy, which is a very old-school parents’ approach to money. And after years and years of struggling with this difference of gratification, I asked myself the question, what if the opposite were true? Like, what if this wasn’t an issue? What if there were answers out there that allowed me to have my cake and eat it too? And I discovered the marshmallow experiment. Are you familiar with it, mate? Have you come across it?
Andrew Rafal: I haven’t.
Jackson Millan: For the listeners, I want you– maybe you haven’t heard of it, there was a study that was done by Stanford University to work out, are we born with the ability to defer gratification or is it a learned activity? And they worked out that two out of three kids could not defer gratification, and one out of three could. And they tested that by giving them a marshmallow, keeping them in a room for 15 minutes. And if they didn’t eat it, they’d give them a second marshmallow. Yep, I would have eaten the two marshmallows before the person stopped talking. How about you, mate. Which kid do you reckon you are?
Andrew Rafal: I would have eaten them as well, yeah.
Jackson Millan: I love it. So, my reframe of that question was who writes those rules? What if I could write rules that allowed me to have half a marshmallow now and still get two in 15 minutes? And I developed this exercise called the 20-year roadmap. So, the reason why people have to make a scarcity-based financial decision is due to a lack of financial means, and that’s actually a lack of planning. Most people have a one-dimensional financial roadmap, one goal at a time. I want to buy my dream house, I want to send my kids to private school, I want to go to a holiday to Cabo San Lucas, wherever I want to go. And what happens is another goal comes out of the periphery and competes for those means so you need to make a scarcity-based decision.
Now, what if we could create a three-dimensional financial roadmap that documented all of your goals, dreams, and aspirations that we could reverse engineer that into an income target, a financial target, and then other KPIs that if we hit those KPIs, it means we could have everything. Light bulb moment for me. So, we actually map out all of our lifestyle goals and financial goals of the one, five, 10, 15, and 20 years. How we map this out is we ask three questions.
Question 1, what is fundamentally important to you? Or what are your non-negotiable needs? Question 2, assuming that your fundamental needs are met, what then becomes your goals, dreams, and aspirations? What do you want? What would you like? And question 3, for each of those goals, dreams, and aspirations, what is the significance of that goal, dream, or aspiration? Why is it important? And if we do that from the frame of lifestyle goals, goals that add quality to your life – holidays, experiences, cars, boats, hobbies, things like that, and your financial goals, the quantitative goals that set you up for the future allow you to have security and peace of mind – owning your home, paying it off in full, building a property portfolio, creating passive income. And using the frame of those three questions, we can create that three-dimensional roadmap.
Andrew Rafal: So, when you take somebody down this exercise, most of the time, I would assume because we deal with it on this and here, they’ve never really dug that deep, never gone to the emotional side, never correlated it with maybe childhood. And what is it that they’re striving for? And what do they want to leave as legacy? So, do you do it where you’re letting? Is it your speaking with them and interviewing them, talking through? Or are they doing it, and you’re giving them the questions and they’re writing it down and coming back to you? What do you find the best way for somebody to be able to go through those three very critical points?
Jackson Millan: Yeah, it’s the latter because you’re right. Most people, we met with blank stares, and I know the first time I did this, I was sitting for hours and I couldn’t get past one year, but it was about creating a pattern, a system. I did it the first time, I let it sit for a week, I come back to it. And then I let it sit for a month and I come back, and now, I revisit this every 90 days, and it gets more clear. Things shift, change, added, removed. And it allows me to recalibrate what I want at various stages of my life. So, most people are going to have a come to Jesus moment where they do this exercise and they get, oh sh*t, what do I even want?
But it’s through this iterative process of thinking big, giving yourself permission to think big and getting over those little voices in your head that say, hey, you’re not worthy. You’re never going to make this happen. You’re always going to fall short. We all have those self-limiting beliefs that come in our ears. But it’s through revisiting this exercise over time that it continues to evolve, shift, and change when we actually get more emotionally invested in this plan.
Andrew Rafal: And it helps to find the purpose and driving the purpose, but also for the employee, building a purpose-based organization seems to have its weight. It isn’t just fodder, it’s real. And so, if the owner can come to those things and then figure out how each and every day the employees have a purpose and a mission, boom, all of a sudden now we can create something phenomenal.
Jackson Millan: Exactly right. And to give you guys some real-world examples of this, I do this in my own business. We’ve got a team of 25 now, and I share with every single one of my team members, my 20-year roadmap. I show them my own personal cash flow, the money that I take out of the business. I show them how much I need to earn to achieve all of my goals, dreams, and aspirations. And I celebrate the wins and I also communicate the losses because I probably achieve 90% of all of the goals of my roadmap. The 10%, they’re like stretch goals, and I explain to them why we don’t achieve them.
Now, my job as a CEO is to create intrinsic drive and motivation in my team. So, I get them to facilitate the same exercise. Hey, let’s create your 20-year roadmap. Let’s understand your cash flow. Let’s look at how much income you need to earn to be able to achieve everything that you want. And that’s going to leave this in one of two positions. One, I can show you how much value you need to drive in my business to warrant earning that amount of income. Or if you start to set too high that it is too ambitious for my business to be able to fund that, I’m going to show you how to use my business as a stepping stone to get where you need to go because it would be selfish of me to think that all of my employees are going to stay with me for the rest of their life. My job is to make sure that they leave in a better position than when they started. And it creates a really great symbiotic, cohesive relationship that’s built on trust and mutual respect.
Andrew Rafal: That’s great. How often do you share the roadmap? Is it each individual employee? Or is it as a team because you’re kind of looking at the strategic coach mindset of how do we get here in three years or five years? But you’re sharing them personal side to end the financial, which is a lot of business owners don’t do that. How is the best way for somebody to go about sharing that once they determined and realized what it is for themselves? How do they bring it out to the employees so that they’re on this and…
Jackson Millan: It’s really great question. I do this every 90 days and I do it in a group environment, and we facilitated in a group environment, and I’m lucky to have a general manager who is able to facilitate the one-on-ones and kind of the on-track management of this. But how I started with it within one-on-one conversations, I would book one-on-ones with my team on a monthly basis, we’d sit down, and the first fundamental conversation is about, hey, why are we both here? And because it’s calling out that elephant in the room that most people don’t talk about. It’s like these invisible, unspoken rules that you don’t talk about what your personal goals are and your personal income, or all of those kinds of things in a business. Why not? The business is a vehicle for you as the business owner, as much as it is for your employees.
So, if we can overcome these taboos, we can have these straight-to-the-point conversations that it actually gives us something to work with to drive real, tangible results. And in my opinion, this is one of the fundamental reasons why most households underperform financially because these taboos govern how they live their lives, and also why many businesses have underperforming employees because they don’t understand that intrinsic drive, and so much of that is tied to purpose and remuneration.
Andrew Rafal: Yeah, and showing your employees to how you’re doing it is going to help them because they’re going to practice what they preach and they’re going to learn from you, then they’re going to be able to take it as a– and I assume out of these 25, you probably have half of them are coaches themselves that you’re trying to emulate and get more of you training out there to work with the business. How many businesses are you working with right now?
Jackson Millan: So, we have about a thousand clients across our businesses and we’ve got about 200 coaching clients.
Andrew Rafal: Wow. Congratulations. So, let’s take a step back then. Financial services, has that always been once you got out of university, is that where you knew you wanted to be? You just didn’t know what kind of place that would look like.
Jackson Millan: Yeah. Funnily enough, I must say or I have to thank my dad for teaching me to be ambitious because I didn’t go to University Stratton School. I didn’t get good marks at school, and I knew that if I went to university, I’d be running everyone else’s race, and it would be a race of smarts, not street smarts, and I would be behind. So, it’s like, how do I beat all of my peers? While they’re wasting four years at university, I’m going to go straight out into the workforce and get real-world, real-life experience. And I managed to score a traineeship as a trainee financial advisor in basically a call center in as a heavy sales environment. It was great experience because it taught me what not to do. Like this is Wolf of Wall Street-esque.
And I was selling commission-based products on the phone on an automated dialer. You could feel the toxicity in the room, and I hated it. But it got me my start, and it helped me start crafting my values. So, I was lucky enough to get a role as a financial advisor, get qualified, and then I very quickly pinned to the term financial advisor because I realized that the industry in Australia only wanted to serve two types of people. It wanted to serve people who were already wealthy to make them more wealthy through a funds under management approach and it wanted to sell commission-based products to people like my parents who some of them needed it, but the majority do. So, I said, “Okay, I want to be a little bit different. I want to be a wealth coach. I want to teach people how to manage their money for themselves and essentially, offer it done with you solution.” So, I basically crafted my value proposition and started my business before my peers had even finished university, which is practicing what I preach.
Andrew Rafal: Yeah, and a wealth coach, now that’s a term that’s people– it’s synonymous almost with what we’re– especially in the States, it’s the planning, it’s the emotional side. But back then, 10 years ago, 15 years ago, again, I don’t know exactly how you guys do it over there, but I know it is, the government came in, and more so, it’s taken by the commission and more of the planning where the real value that we do. So, you brought in the emotional side before people even knew what that term meant, that wealth coach. Does that mean, though, that you are, are you guys advisors as well? Like, are they paying you to build out the plan, but you’re not managing the assets?
Jackson Millan: Yeah. So, we’ve got two basically value propositions. We look at clients globally in terms of wealth coaching because really, the fundamentals are universal. And for people who don’t want to abdicate responsibility or hand over that responsibility to an advisor, then we could teach them how to do it for themselves and give them a framework to follow. Now, in Australia, we do have licensed advisors in our business who have got some clients. Once we teach them the system, they say, hey guys, we’d actually like you to manage this part for us, or we’ll outsource this to you, but the main thing is we want to make sure that they’re in the driver’s seat and they’re making an informed decision as opposed to actually saying, hey, I’m handing over the reins before I even understand how it works. But given compliance, we can only do that for Australian clients.
Andrew Rafal: Awesome. And so, you talk a little bit about your million-dollar mindset is finding the North Star. How do we get that person to find their North Star? What’s the process there? And it goes into the purpose, but just talk through on how we can get there.
Jackson Millan: Yeah. So, we have gone through that 20-year roadmap. We’ve got all of our goals and aspirations. And what we now need to do is quantify those because each of those is going to comprise of two tradeable commodities – time and/or money. And if we can define the time, we can work out, what do we need to do to buy back our time to be able to have that freedom and flexibility? But then it’s about defining the financial means that we need to bring these goals to life. How do I buy my home? How do I pay it off? How do I create passive income?
So, we go through two exercises. We go through what we call a personal profit and loss. Let’s work out what your life costs you now. So, for you to be able to pay your mortgage, send the kids to school, put food on the table, live a great existence, let’s assume that it’s 10 grand a month. That becomes our baseline. Now, say the second version of that, and we’re going to come up with what we call our financial freedom figure. Okay, when I get to find it being financially free, let’s say in 10 years’ time, kids are out of school, mortgages paid off, what do I want my lifestyle to look like? So, we bolster up holidays. You have got more hobbies and interests, and that will allow us to use that baseline scenario to actually work out a real figure.
Let’s assume that it’s $200,000 a year. A really simple formula that we use, we call it the financial freedom formula. As we take that annual income, we divide that by five, and we times that by 100. It’s $200,000, it means that we need about $4 million of net wealth in order to provide that $200,000 in perpetuity. It’s a back of the envelope calculation, but it gives people a North Star, and they can work with a financial advisor or a fiduciary to actually crunch those numbers and work at tax structures and products and all that kind of stuff. But the problem for most people is they just don’t even have a figure that they’re working towards. So, by doing that calculation, once again, it can give us a come to Jesus moment of saying, oh sh*t, how the hell am I going to build $4 million in net wealth? Or say I feel pretty confident about that, but at least we’ve now got something that we’re working towards. The idea of a North Star is that it doesn’t necessarily dictate the destination, but at least keeps us heading in the right direction.
Andrew Rafal: Yeah, because that number could be daunting to somebody, so we try to get out of that realm of it’s just a number, but it is just helping to point you in that direction. And most people, especially business owners, want to have some type of goal that they can try to achieve. Yeah, and I mean that the things seem so simple when we talk about it, but it’s as you know, it’s not, that’s why you built the business around it. It’s amazing how complicated that whatever country that you’re in, it’s complicated. It is less complicated. How do we simplify it? That’s the value we can bring.
Jackson Millan: 100%. The principle that I use here, the metaphor that I use of my clients is what we call we need to create money muscle memory. So, let’s assume that we wanted to start training at the gym, we want to get stronger. And we decide that we’re going to go to the gym and we’re going to start doing squats or deadlifts. And we go up to that bar and we pack 500 pounds of plates onto that bar. And when we’ve never lifted before, what’s going to happen? You get it off the bar at all, you’re going to hurt yourself.
Andrew Rafal: You’re going to buckle.
Jackson Millan: And this is what so many people try and do financially. They feel like they’re falling behind, they’re not as financially fit as they’d like to be, and they feel like they need to make up for lost time so they do things that, because of that fear of missing out, that wanting to play catch up, that actually hurts them, it causes physical pain. So, what we should do is we simplify it, and let’s just do the reps with just the bar, let’s make sure we’ve got the movements right. Cool, great. Okay, we’re confident, let’s put 50 pounds, let’s put 75 pounds. Let’s work our way up over time, learning this money muscle memory so then we can create a repetitive framework because there is never going to be one decision that you will make. It will skyrocket you to financial freedom, as you know, and what we teach our clients each and every single day is that it’s repeat, regular, consistent decisions over time that will get you where you want to go.
Andrew Rafal: And I bet it was, especially two years ago when you see all these people getting very rich from– we saw the meme stocks and crypto and these easy way outs. And yes, all of them could still make money, but you and I both know that, and the majority of people did lose because there’s no quick fix. You’re a big believer in building the business the right way, but also passive income, having not all of your eggs, we always talk about not all the eggs in one basket. In too many business owners, 98% of their wealth is the business. So, what do you teach then a business owner as you’re teaching them not only how they can manage their purpose and their team, but then how do we take some of that off the table so we don’t have all of it in one bucket because ultimately, yes, that’s where we’re going to have the biggest wealth? We generate the biggest wealth, but are you from everything that I’ve seen that you guys believe in is this having some of this passive income, even for business owners?
Jackson Millan: Exactly. Yeah, for sure. Look, I’m very boring in my approach to investing. I stick to tried-and-true stuff on my personal belief. And there’s only three ways to build wealth in this world, this business, and we’re going to talk a little bit about that. There’s property and there’s sh*t. Now, before we even focus on building value into the business because so many business owners think that they’re building value in their business, but they’re not. It’s an excuse they give themselves for money management. We assume the business has no value and we try and build as much wealth through blue chip, good quality real estate as we possibly can in affluent areas with good tenants, places where they want to raise their family, but they actually want to aspire to buy property themselves because we know that that’s what provides us with the most consistent performance and minimizes the downside. But as we’ve seen through the GFC, as we’ve seen through credit crunches, property is illiquid, and it does mean that we’ve got a lot of money tied up in a single bucket.
So, the second part of that is share. So, my personal philosophy is that I’m not a stock picker, Andrew. I don’t see myself as being a portfolio manager or somebody that can outperform the market. I’d like to be boring and I like to be systematic. So, we teach our clients what we do personally, which is to accumulate wealth using low-cost index funds and exchange-traded funds, making sure that we can guarantee that we get the average market performance and we keep our costs very low. For sure, there are some really good portfolio managers out there, but we’ve only got to look at the sliver report that’s released every year to know that 80% to 85% of all active managers underperform the market. And that doesn’t include nonprofessional investors, your mom and pop investors who are just picking stocks like throwing darts at a dart board and that is setting themselves up to failure. And so, we’re trying to teach that fundamentally sound tried-and-true approach, keep it simple.
Andrew Rafal: And this philosophy, which sounds simple in nature, when you’re a business owner and you’re trying to drive the wealth of the company, what do you say to them when let’s say, well, I got to plow the money back in the business. So, if we use these three quadrants, the business is the one that they’ve got to look at the most. So, you don’t look at option two or three until business is generating enough, or you can pay yourself a nice income, and the profits then can be used to not go into the business all the time that ultimately what you want to teach them.
Jackson Millan: Exactly. And we bring that forward a lot faster than many business owners think they can because there’s a behavioral principle called Parkinson’s law. That means that as human beings, we use the means that we have available, and a business is the most means that we typically ever have our hands on. So, what happens is cash flow correct? The business grows and the expenses grow proportionally. And for that reason, we typically don’t have much more to show for it. So, what we teach our clients to do is to presuppose profit.
Profit First is a great book by the author, Mike Michalowicz. And we use a very similar methodology, but for the purposes of wealth creation where we say, cool, let’s take this 20-year roadmap, let’s set an income target, and let’s work out what the profit needs to be for the business for you to earn that income. Then to earn that profit, what is the revenue need to be? And then to earn that revenue, what are your KPIs and metrics need to be? So, then we can link all of your activity to those outcomes and make sure that profit is presupposed and we run the business on what is left. And in the vast majority of cases, business owners keep going from paying themselves a minimum wage to being able to earn more than they’ve ever earned before in a matter of months just because a package is more.
Andrew Rafal: That’s a great philosophy. Too many times, the CPAs and the bookkeepers that work, they’re more of just thinking, what did you guys do last year versus being proactive there in setting these metrics? And you call the cash flow group, I like that. It’s similar to lifestyle creep that we see, whether you’re a business owner or not, the more you make, the more you want to keep up with your peers. And then all of a sudden, you’re thinking how 10 years ago, there was no way that I couldn’t be able to live off of $250,000 a year, and now you’re barely getting by because of that lifestyle creep. So, for listeners that aren’t business owners, there’s still a lot of good takeaways here. Being a business owner obviously means you can build wealth. Being an executive or working for a company, it still means you can make very good income, but you have to have those same goals. You have to look and say, what can we afford to live off of? What are we going to put away? Pay ourselves first. And that’s where ultimately, we can get in a lot of trouble if we don’t. So, if you think back over your career, what are some of the best advice you’ve received? Advice-wise, what’s been some of the best advice for you?
Jackson Millan: Yeah, I think the best advice that I’ve ever gotten, I’ve been very grateful to have some really quality mentors. And my first mentor was my father, and my father gave me one last piece of advice on his deathbed. So, he worked incredibly hard to be able to retire and live a great lifestyle in his retirement. And when he was 66, he was diagnosed with late-stage pancreatic cancer and given weeks to live. And after a lifetime of hard work and sacrifice, he didn’t get a chance to enjoy it. And as he lay there in the hospital bed, he said to me, “Jackson, every person in this world gets two lives. And your second life starts when you realize that you only have one.”
And my second life started on the day that he died because I realized that we can’t just defer gratification indefinitely into the future, and I adopted the mantra of live fit today and plan for tomorrow. So, construct a financial plan, whether that be personally or in your business or both that allows you to have your cake and eat it too. Doesn’t matter if you’re an employee, you are running a corporate entity called You, LLC. And if you apply this entrepreneurial mindset to controlling these levers to be able to get the financial outcomes, you want to have the freedom and flexibilities, then you’re always going to be in the driver’s seat of your life as opposed to being a passenger to whatever gets served to you. And this is the problem because people don’t know the rules of finance, but I know the language of money. They’ve never been taught how to plant. They don’t know how to reverse engineer their finances. They don’t have real, tangible metrics and KPIs. They are forced to just take what they’re given financially. And we will need to get people back into the driver’s seat financially, and that’s what is the best lesson that I’ve ever been taught, that I’ve ever implemented, and that I’ve ever shared with my clients.
Andrew Rafal: That’s fantastic. And it’s not until those life experiences when something hits you like that, that you realize what’s important. I think, with COVID, a lot of people realize what was important, but now, all of a sudden, two years later, we get out of that crux. So, it’s staying consistent in the messaging of why we’re here. What are we doing? And knowing you can have your cake and eat it too, you just have to do it in a matter because you and I working with business owners, we see it’s constant chaos for them. And they’re built that way. We, as entrepreneurs, there’s less than 5% of us, probably 1% to 2%. Most of us in businesses don’t even make it, but those that are entrepreneurs just beat to a different drum, and they like the chaos. They probably got a little ADHD, attention all over the place.
For me, doing a podcast, it’s six o’clock in the evening, it’s Jackson, this doesn’t happen, I know. Fresh in the morning, so it’s one of those things. So, you’ve got to dial in and you’ve got to focus on the energy because our energy, like whether it’s creative, whether it’s doing the best work, leading the team, we know as business owners, we teach, you only have so much time that you can be on the top of your game. And so, all of these things are what we have to learn that memory muscle. What did you call that? Money muscle memory. So, money muscle is important, but then on the CEO side, it’s being able to leading that, and we’re all learning. I became an accidental business owner as I’ve grown my practice and it is challenging in itself because you get away from what you love doing, which I love getting with clients and meeting with them and building their plans and now, building out as the CEO of brand and the processes and the systems, but the key is we’ve got to get better every day. And that’s just like me going on my bike every day, you got to keep practicing, and so…
Jackson Millan: 100%, mate. We wake up from the same cloth he made and we’re on a very similar journey. And I’ve been guilty of falling into these bad habits myself, like I got stuck into working 70, 80 hours a week. And then when COVID hit, I realized I needed a catalyst for change. And I need to use this as an excuse. So, we fitted out a four-wheel drive and we spent a year traveling around Australia, running the business from a road.
And then one of my childhood dreams, it was my father’s dream, and we’ve looked at, we embodied it together was to own a farm and to create an animal sanctuary and to have this. Why can’t I have that now? And on our journey, we found a property that was our dream home that ticked all of the boxes. So, I found out waiting till I’m 65 years old and potentially be diagnosed with a death sentence to bring my dreams to life. So, we now live in a dream home. We’ve got this beautiful animal sanctuary that we’ve set up, and this is the important thing. We’ve got to teach the values and we’ve got to teach the strategies, teach the lessons, but we’ve also got to call ourselves out. So, we’re not the plumbers of the leaking tub. So, something that I’m always striving to do, and to shift my narrative around who I am and how I need to level up so I can keep lifting the lid on, on my potential.
Andrew Rafal: And so, it’s a 70-acre farm that you’re on?
Jackson Millan: Yeah.
Andrew Rafal: This is just a great testament to your employees and to your clients that you had a dream and you made it happen and you didn’t give up the other dream. You’re still running the business, and this farm takes time, though, right? So, you have to put time into both.
Jackson Millan: I do, yes. And my mantra, and one of the things we teach our clients, as well is what we call the F4, build a business that produces $400,000 a year in income for you, personally, allows you to work four days a week and 44 weeks a year, and fast tracks your way to $4 million in net wealth. Now, I don’t just have a love affair with the number 4, it’s through looking at thousands of client situation. We know that if you’re earning $400,000 a year, there’s a diminishing impact of that income from that point on. You might go from drinking a $20 bottle of wine to a $100 bottle of wine or go from driving a Lexus to a Ford. The quality doesn’t get any better.
Now, if you can work four days a week every week, you can recharge the batteries, you can come back energized in your business. If you can then take two weeks off a quarter, once again, you can have a fresh set of eyes, you can approach your 90 days with energy and with passion to be able to drive that business forward. And if you can build $4 million in net wealth out of your business as we spoke about before that you produce your $200,000 a year in passive income. Now, I have no intention to ever retire, but with $600,000 a year in total income and $200,000 of passive, it gives me freedom to choose what I do with my time, true freedom.
Andrew Rafal: Yeah, true freedom, that’s the key. And with your team that you have the 25 employees, do you allow them to take time off? Well, obviously, you take time off, but to have the ability to find their own passions or on managing the team and having them have the ability to recharge.
Jackson Millan: Yeah, I’m a big believer in KPIs and hitting metrics. So, if they can do their job in one day a week, then the rest of their time is this. We give them full freedom and flexibility around where they operate. So, one of my team members, he’s got a partner in the Philippines and he’s been working between here in the Philippines and doing his job remotely. So, as long as activity is being done, I have no constraints on geography of where they are and I have no constraints around what they do with their time as long as they’re hitting their targets. So, we have a very flexible approach.
Andrew Rafal: And you were probably well before your time as now that’s becoming much more commonplace. And businesses that don’t do that, it’s going to be much more difficult to thrive than those that are allowing the workforce to have life outside of work. And here in the States, that has been a hard adjustment for a lot of these businesses, but there’s learning that you have to, especially the next generation, the millennials, which I have half of my team that are millennials, they’re hard workers, but they still want purpose and they want experiences and they want to have all of that. And it’s not just about the money, it’s about what am I doing day to day? But then can I have time to go do my thing and come back recharged just like you and I go on a vacation and we come back recharged? The 44 weeks a year, yeah, I think that’s a great goal. It’s hard for business owners to think that way. So, that’s part of your job to help them understand that they can do that and they probably have a good team out there that they just need to delegate more to and let them run and have the freedom.
Okay, so we were chatting about the delegation, so us as business owners and providing the opportunities for our employees to grow both personally and professionally, and that’s one of those areas where we talk about recharging and being able to get out there, but what are you doing as an owner for your own team as well as teaching your clients in how to get the best out of their employees, especially in the new world that we’re in that it’s not just about the 60-hour workweeks where we’re going to die on our desk? We’re going to have three years out from retirement, we want experiences. So, what does that look like? How can we get our employees engaged?
Jackson Millan: Yeah, I think the big part of this and I found this myself, I’m guilty of this myself, is that we’re the biggest bottleneck in our business, right? And we need to be able to hand over those rights. And once again, much like we have cash flow creep, a lifestyle creep with our finances, we have time creep as well. We always find things to fill our time with. And we’re always going to be busy. So, one of the things that I do is I always block out two weeks every quarter. So, actually, from next week onwards, the next two weeks, I have two weeks off. We have three days of intensive with our private clients in a couple of a mastermind this week. And I had two weeks off afterwards and I tried to switch off completely. And I used that time to see what breaks in my business. What are the things where I was a bottleneck that I’ve overlooked? Where did my team need support, they won’t ever handle things without me? And what are other things that have gone wrong?
And then when I come back into the business, I fix those things because so many people talk about systemizing, and we’re not any experts in systems, it’s not really a jam, but the idea here is that we often get stuck into creating systems that actually don’t contribute any value, they’re not critical to the running of the business. So, the best way to work out what systems are needed is to see what breaks because systems are made to be broken and you only know how good they are when you test them. And the best way to test them is to not be present. And we don’t just do that ourselves, we do that with every single person in our business.
So, when a team member has time off, if that time is any longer than three days, we get everyone that has a relationship with them in the business or has interactions with them in the business to do a survey. What did you see what happened when that person was away? What broke that needs to be fixed? Where were you inconvenienced as a result of their absence? And we use this 360-degree approach to not only systemize myself as the owner out of the business, but also to make sure that we reduce key person reliance because the last thing we ever want is for one of our team members to say, “I’d love to go on leave, but I don’t feel like I can go.”
Andrew Rafal: I like that. So, the survey goes out, somebody is gone for three-plus days, anybody who’s in their world, they’re spending X amount of time. Five questions, how was it? And you don’t send that till the person is back?
Jackson Millan: Till they get back.
Andrew Rafal: Yep, that set open communication that we, sometimes as business owners, just don’t get it, put ourselves in their shoes. We get to get it done.
Jackson Millan: Exactly.
Andrew Rafal: Get it done. That’s great. Yeah, I think so many times, owners just don’t have a pulse of what’s happening out there. And that’s great. You got to stop and smell and just– yeah, and when people come to find you, how do they find you? Is it referrals? Is it through your network?
Jackson Millan: So, we get a lot of referrals from business coaches and people who are working with them in the business, and they’ve realized that money now needs to take a priority, so they need some support there and they’re referred by our clients. I try and do a lot of speaking and things like podcasts because what we do is so intimate. So many people don’t even talk about this stuff with their significant other, let alone with a bearded guy that’s got a cut on his face that they found on the internet. So, what’s so important is that I can transfer trust, I can share value and get people to have a light bulb moment when they get aha, I get this. This makes perfect sense. I can go and implement this. And then some people are going to say, hey, cool, I can implement it, but imagine if I actually paid to get help. And then we start a conversation, and a lot of our conversations start from there where they say, I wish I did this 10 years ago, but I’m ready to do it now.
Andrew Rafal: And I assume most clients will stay with you for two years plus, hopefully, longer.
Jackson Millan: Yeah, we typically find most of our clients stay three years plus, but our whole mantra is how do we get them in a position that in 12 months, they can comfortably and confidently make us redundant? Because I want to give them the tools and I want to get them to a point where they don’t need myself in a team anymore, they can choose to work with us because they believe that they can get tangible, ongoing value as a result of that, but they’ve got all of the tools and they can run it themselves.
Andrew Rafal: So, as we wind down today, Jackson, one question, where are you in 10 years? What does that look like?
Jackson Millan: Where I am in 10 years is very much doing more of this. I’m a visionary in this space, and my whole mantra, my legacy that I want to leave in this world is that I want to change the way that wealth education is done for business owners, the world around, because it’s my personal belief that if I can help more business owners create financial freedom beyond that, create financial abundance where they can create true generational wealth, not only passing money but values and knowledge to the next generation so they become financial stewards. Those next generations can go and solve the real problems that we’re being plagued within this world. And the reason why more people are going out and solving them is because they need to make a choice of whether they put food on the table and they provide for their loved ones, or whether they go out and pursue their passions. And if I can remove that decision from the table and allow people to pursue their passions because they’ve got the financial means to support it, then this world and the human race is going to be hopefully around for a much longer amount of time than our current trajectory. So, that’s my mission.
Andrew Rafal: And that would help keep the families from going from short sleeves to short sleeves and three generations which, unfortunately, we see too much on family-run businesses.
Jackson Millan: Exactly.
Andrew Rafal: So, we’ve got that dream, be able to then, for you, with the farm too, I assume that that is something you’ve already jumped full force into, and it’s not only passion, but you’re making some money on it and bringing the family involved. So, those are things that intrinsically probably center you and give you this purpose that waking up every day, except when you’re running into the pole is a good day on the farm.
Jackson Millan: Yeah, again, we’re doing this purely with a passion. So, it’s an animal sanctuary, and we want to use this as an environment where we can bring entrepreneurs and their families, teach them some just different skills, but create an environment where there’s a catalyst for them to truly rediscover their purpose. There are so many business owners burn the candle at both ends and all of them invest in their business at the detriment of those that really matter. And so, I want to create an environment that allows me to foster those connections and reignite those fires and keep entrepreneurial families together. So, yeah, there’s a lot of passion in what we do, mate, because my old man always said to me, if you do something that you love, you never work a day your life. And this is not work for me, this is just fun.
Andrew Rafal: And you can’t hide from it. It’s one of those things that when it exudes from you, your people know, and that’s key. And in the show notes, there are going to be ways to contact you and your firm. So, we’ve got a couple of different brands. You’ve got the Jackson Millan brand, but then the company you founded with your partner, is it pronounced Aureus?
Jackson Millan: Aureus Financial. So, aureus is the gold coin at the peak of the Roman Empire. We come from an Italian background, so it was a little bit of a throwback to the old country. But yeah, if you want to find me, search for me on Facebook, search for Jackson Millan, add me as a friend. I produce content all the time. It’s a little bit of farm stuff. A lot of it is about financial lessons and systems that will help you to level up your financial toolkit. There’s a link in the show notes called a Wealth Health Check. So, if you go to WealthHealthCheck.com.au, we put together a 40-point financial performance scorecard that is the top 40 things that get in the way of you in achieving financial freedom. The scary thing, the average score is about 18 out of 40, so that means most people are below average. But the aim of this exercise is let’s turn the lights on financially and discover the top three or five things that you can turn from a no to a yes in the next 90 days. So, that is WealthHealthCheck.com.au. And then if you want to have a chat, hoping to reach out to us and love to have a conversation, we work with clients the world around just to get them in the driver’s seat financially, learn the fundamentals, and start playing an active role in creating financial freedom.
Andrew Rafal: Financial freedom, listeners, that’s what it’s all about. Financial freedom to be able to do the things that give you the purpose and to give your family the ability to know what you did, allow them to do those things. And that’s something that we got to work on each and every day because days get away from us. Today, it’s Monday, it’s going to be Friday before we know it, and then all of a sudden, end of 2022. So, this was a fabulous shot. I’ve enjoyed it. I could probably go on another hour with you, but great stuff.
So, listeners, if you have any questions at all, Jackson and his team will be there for you. And the key is just focus day to day on what you need to do and then think long term of what’s going to make you happy, but don’t go at it alone. You have clients that you coach, you need to have coaches as well. We all do. Everybody. Michael Jordan needed a coach. Jackson has its own coach. I have business owners and masterminds that I’m part of. We have to continue to get better. Jackson, thanks so much. Appreciate you being on the show.
Jackson Millan: My pleasure.
Andrew Rafal: Happy planning, everybody, and stay tuned for a new episode of Your wealth & Beyond later this month. We’ll talk to you real soon.