Paying Yourself First: The Key to Financial Freedom for Business Owners – Anne Gannon: NYN E6

April 4

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About our Guest:

Anne Gannon is the Principal at The Largo Group, which offers innovative accounting and

bookkeeping solutions to businesses and individuals and has over 500+ customers. The uniqueness of our firm is that Anne is the sole owner as most accounting firms are partnerships. We are set up as a corporate model. If we win, the team wins. Anne’s audience on social media is greater than 1,500+ and she is happy to share your episode with her fans!

Why this episode matters

Financial freedom business owners understand the importance of achieving a balance between personal and professional financial success. This post looks at different tactics to help entrepreneurs reach their fiscal ambitions while keeping a successful business.

We’ll discuss the significance of paying yourself first as a business owner, ensuring you recognize your value and build financial security through consistent income. Diversifying investments is another crucial aspect to consider for attaining financial independence; we’ll delve into real estate rental properties and other alternative investment opportunities.

Beyond these strategies, aligning with expert advisors on your team plays an essential role in navigating towards financial freedom. We will highlight the importance of hiring experts who share your vision and selecting the right CPA or advisor based on aligned interests.

Additionally, saving more money by developing essential skills such as effective budget management and implementing cost-saving measures within operations can contribute significantly to reaching your goals. Lastly, we will examine the role of accelerator coaches in supporting your journey towards becoming financially free business owners by offering industry expertise and experience-based guidance.

Table of Contents:

Paying Yourself First as a Business Owner

As a business owner, it’s essential to prioritize your own income and pay yourself first. This practice not only leads to financial freedom but also provides stability during uncertain times, such as the COVID-19 pandemic. Giving yourself a fair wage acknowledges your hard work and sets the groundwork for sustained success.

Recognizing the Value of Your Work and Setting an Appropriate Salary

To determine a fair salary for yourself, consider factors like industry standards, company revenue, personal living expenses, and your level of experience. Researching average salaries in your field can help guide this decision-making process. Remember that undervaluing or overvaluing your work may have negative consequences on both personal finances and business growth.

Building Financial Security Through Consistent Income

  • Create a budget: Establishing a clear budget helps ensure that you allocate funds appropriately between personal expenses and reinvestments into the business.
  • Avoid overspending: Be mindful of unnecessary expenditures by distinguishing between wants versus needs when making purchasing decisions.
  • Increase savings: Regularly setting aside money from each paycheck allows you to build up an emergency fund or invest in opportunities that contribute towards achieving financial freedom.
  • Diversify income streams: Explore additional sources of passive income (e.g., investments) to reduce reliance solely on earnings from your primary venture.

Small business owners often face unique challenges when it comes to managing their finances. However, achieving financial freedom means taking control of your business finances and personal finance. By prioritizing consistent income, building financial resources, and diversifying investment options, business owners can achieve financial stability and become financially free. Successful entrepreneurs understand the importance of paying themselves first and taking steps towards retirement savings, reducing bad debt, and increasing cash flow. By implementing these strategies, people achieve financial freedom and become financially independent.

Diversifying Investments for Financial Freedom

To achieve financial freedom, it’s crucial to diversify investments beyond just one industry or asset type. By exploring various investment options, you can mitigate risks associated with market fluctuations and create a more stable financial future.

The Importance of Diversification: “Whether it was myself or my clients, that you have everything on the table here. There’s no, like, oh, if this doesn’t work out, this has to work out… I think definitely changed the perspective of thinking about the future and thinking about whether it’s investing in real estate or other investments just to be diversified.”

Anne Gannon

Benefits of Investing in Real Estate Rental Properties

Real estate rental properties are often recommended as an ideal way to generate passive income and achieve long-term appreciation. As a business proprietor, real estate investment provides the capacity to capitalize on existing capital while constructing equity in the long run. Additionally, owning rental properties provides tax benefits such as depreciation deductions that can help improve your overall financial stability.

Other Alternative Investment Opportunities

By diversifying your investments, you can build a more resilient financial foundation that supports both your business and personal goals. Successful entrepreneurs understand the importance of diversification and use it to achieve financial independence. Small business owners can benefit from exploring alternative investment options beyond their business finances. Achieving financial freedom means having access to a variety of financial resources that can help you achieve your goals. It’s important to start paying off bad debt and building retirement savings in addition to investing in alternative assets. By doing so, you can create a more stable financial future for yourself and your family.

Aligning with Expert Advisors on Your Team

Having expert advisors like CPAs on your team is essential for small business owners seeking financial freedom. These professionals can guide you towards smart investments while ensuring that your business operates efficiently from a tax perspective. Their expertise will help maximize profits while minimizing liabilities.

Importance of Hiring Experts Who Understand Your Vision

By enlisting the assistance of experienced professionals who understand your objectives and can identify potential pitfalls, you will be able to maximize returns while minimizing risks. By aligning with professionals who share your objectives and possess the specialized knowledge necessary to address the unique issues facing entrepreneurs, you can ensure that decisions made are informed ones leading to long-term prosperity.

Selecting the Right CPA or Advisor Based on Alignment of Interests

  • Evaluate their experience: Choose an advisor with a proven track record in working with businesses similar to yours. This ensures they have relevant knowledge about specific regulations and market trends affecting your industry.
  • Determine their specialization: Some CPAs specialize in certain areas such as real estate or technology startups; selecting one whose expertise matches your needs can provide valuable insights tailored specifically for you.
  • Gauge communication skills: A good advisor should be able to communicate complex information clearly and concisely, helping you make sense of intricate financial concepts without feeling overwhelmed.
  • Analyze compatibility: It’s important that both parties feel comfortable discussing sensitive topics openly; choose someone who shares similar values and work ethics as this fosters trust between all involved parties.

Incorporating expert advice into decision-making processes enables small business owners to develop strategies aimed at achieving financial freedom while mitigating potential risks. By aligning with the right advisors, entrepreneurs can optimize their investments and ensure long-term success.

Saving More Money by Developing Essential Skills

Learning how to save more money is vital for small business owners aiming to achieve financial independence through their businesses. By developing these skills, they can direct more funds towards growing their ventures while still maintaining personal wealth accumulation goals over time.

Strategies for Effective Budget Management

To ensure a successful budgeting system, it is important to monitor expenses and recognize areas where cost savings can be made without compromising quality or productivity. Utilizing budgeting tools and software designed specifically for business owners can help streamline this process. Additionally, setting clear financial goals will allow you to prioritize spending and allocate resources efficiently.

Implementing Cost-Saving Measures within Operations

  • Negotiate with suppliers: Regularly review contracts with vendors and negotiate better pricing or payment terms when possible.
  • Outsource tasks: Consider outsourcing non-core activities such as administrative work or marketing efforts to reduce overhead costs. Focus on your key skills while utilizing the expertise of experienced service providers, like a remote helper or digital marketing firm.
  • Increase energy efficiency: Implement energy-saving measures in your office space, such as using LED lighting or installing smart thermostats, which can result in significant cost savings over time.
  • Leverage technology: Adopt innovative technologies that improve operational efficiency and reduce costs, such as cloud-based software or automation tools.

By mastering these essential skills, small business owners can save more money and allocate resources towards achieving financial freedom through strategic investments and growth initiatives. This includes exploring investment options like real estate, passive income streams, and retirement accounts. Successful entrepreneurs understand the importance of maintaining healthy business finances and personal finance habits, including managing cash flow, avoiding bad debt, and start paying off any existing debt as soon as possible. With the right financial resources and a solid plan, people can achieve financial freedom, which means being financially free and having the financial stability to retire comfortably.

Role of Accelerator Coaches in Achieving Financial Freedom

Accelerator coaches play an important role in helping individuals reach their desired level of wealth by providing guidance around accounting services, bookkeeping, and tax services. These experts help create a clear path forward for business owners to achieve financial freedom by offering tailored solutions that suit their unique needs.

How Accelerator Coaches Can Support Your Journey towards Financial Independence

An experienced accelerator coach can provide valuable insights into various aspects of your business operations, such as budgeting, cost management, and investment strategies. A coach with experience in the field can offer tailored advice to help you reach your objectives and foster sustained prosperity. Additionally, they offer personalized advice based on your specific goals and circumstances, which ensures maximum effectiveness.

Selecting the Right Coach Based on Industry Expertise and Experience

  • Evaluate credentials: Look for professionals with relevant certifications or degrees in finance or business administration.
  • Gather recommendations: Seek referrals from trusted peers who have successfully worked with an accelerator coach before.
  • Vet potential candidates: Conduct thorough interviews to gauge whether a candidate’s approach aligns with your vision and values.
  • Prioritize communication skills: Choose someone who communicates clearly and effectively so you can easily understand complex concepts related to achieving financial freedom through investing.

Incorporating the guidance of an expert accelerator coach is essential for small business owners seeking lasting financial freedom. For lasting financial freedom, it is paramount to secure the services of an expert accelerator coach with exemplary communication skills. Achieving financial freedom means having the financial resources to support your lifestyle without relying solely on your business finances. It’s about having enough passive income to cover your expenses and provide financial stability. Successful entrepreneurs understand the importance of cash flow and the role it plays in achieving financial independence. They invest in real estate and other investment options to diversify their portfolio and increase their retirement savings. They start paying off bad debt and contribute to retirement accounts regularly. By taking these steps, people achieve financial freedom and have the peace of mind that comes with having a healthy bank account.

Conclusion

Diversifying investments with real estate rental properties and other alternative opportunities can also contribute to long-term wealth. Aligning with expert advisors who understand your vision and implementing cost-saving measures within operations are additional ways to save more money.

Working with an accelerator coach who has industry expertise and experience can provide valuable support on your journey towards financial independence. By taking these steps, one can gain greater economic autonomy as an entrepreneur.

If you’re ready to take the next step in achieving financial freedom as a business owner, contact Investor Mindset today for guidance from experienced professionals.

Paying Yourself First: The Key to Financial Freedom for Business Owners – Anne Gannon: NYN E6 Transcription:

Steven Pesavento 0:00
Hi, I'm Steven Pesavento, and welcome to the name your number podcast presented by the investor mindset. As someone who comes from a challenging childhood, I've spent my life seeking financial security, personal growth, and ultimately freedom, the freedom to not wake up worried about the next paycheck, but rather, with the confidence of knowing that my passive income pays my bills without the need to think about it. When you name your number, that you will learn passively, that creates your ultimate quality of life, that I believe you've achieved real freedom. Welcome to my show, it's time to name your number. We're looking at making money, we're looking at managing money, and we're looking at how to multiply money. A lot of us are earning money in our career, our business, that's our main focus, it's very active. We're running an active business or working in an active job. And that's really what, you know, society's taught us, hey, that's how we get by. And then we put money into a retirement account. And at some future date, we finally hit that goal, and we're there. Welcome to the name, your numbers show presented by the investor mindset, we're on a mission to create financial freedom for over a million investors. And when you name your number, that number that you want to earn passively, every single month that creates your ultimate quality of life, then I believe you've achieved real freedom. And if you're ready to name your number, and to create your passive investment plan that you'll follow step by step to get there, then head over to investor mindset.com/number. To download a free guide to get started. And for those of you who are ready to build this plan together with me and a community of other like minded investors, just like you, you'll be invited to schedule a call with one of my top advisors to see if it's a fit. So let's get into the show. I'm excited to have Anne Gannon on today. How you doing today Anne?

Anne Gannon 1:56
I'm good, thank you so much for having me.

Steven Pesavento 1:58
Yeah, and for those of you who don't know, and she is a very successful CPA and accelerator coach, working with folks in the hospitality industry, on everything, accounting, finance, and really getting their financial house in order. So this is a perfect time to be talking about this. So many people run into challenges with their finances. But I'm personally excited to talk a little bit about kind of your own financial journey. Before we get into that, let's start on a personal note, by looking back at your life, what events or influences from your childhood shaped who you are today. And how does that play a role in your money or your investing journey?

Anne Gannon 2:38
Oh, that's a really good first question, though. So I would say I grew up in a family that didn't have a lot of money. My dad had been an entrepreneur and his business failed when I was in middle school. So we had been Okay, before that, and then that was, you know, definitely a struggle. So I think, you know, when I got to be an adult, and looking out into the future, I think a big part of it was wanting to be in control of your own destiny, right, that to not have control. So I think, you know, a lot of my decision to go out on my own and have my own business was shaped by the fact that, you know, you just want to make sure that, you know, you can achieve what you want to achieve. So I think I definitely have the mindset of, you know, wanting to provide for my family wanting to make sure that we're stable, it said, Well, I think a lot of times, if you haven't grown up in that environment, you have you don't think things like that. So it definitely has shaped, you know, my viewpoint, I think, especially when COVID hit, we were, you know, 90% restaurants as a company. And so it was almost like, the nightmare that, you know, I had always been fearful of happening in real time, because all of a sudden, 90% of my, my customers had failing businesses. And so, you know, our business model was always set up for, you know, monthly, like, we're almost on a monthly retainer, it's a flat fee cost, and that covers, you know, tax returns and all these other things. And so in April 2020, I was as much at risk as anyone as a business owner, because I didn't know, people could just turn off the credit card if they wanted to. I mean, we don't have long term contracts. And so, you know, I really think that helped us in a lot of ways, in a weird way, looking back, because it made us so aware of what everybody else was going to wear a lot of accountants who just are on, you know, billable hours used to return at the end of the year. I mean, they just weren't as impacted as our model was. But what was crazy of it is, you know, we actually grew during that time, and I think a lot of that was just, you know, really focusing on delivering and making sure we add value because we know people are choosing to stay with us when they don't have to, and all the things so, you know, I think a lot of I do believe that your childhood, you know, shapes a lot of what you do, but I think for me, it's just really always wanting to make sure that I show up and I deliver I've always been someone who believes in hard work. Art and hardware paying off. And I think that that's, you know, pretty much my mindset.

Steven Pesavento 5:04
Well, it's so interesting because when we grow up and we have some type of connection to money being a challenge, or kind of the lack thereof, it, you know, either people go one of two directions, they either get fearful and they really hold on everything, or they go the other direction where they go forward, they do whatever they possibly can to be able to create that financial security themselves. A lot of business owners, a lot of successful people have a story like that. And it's also really fascinating to hear about your own business, right, you're running a successful business, you're helping other entrepreneurs in the in the hospitality business be able to succeed and create the life that they're looking to create. But then all of a sudden, something pops up. And that security that we thought we had in our business is not necessarily there. I think a lot of people experience this and 2020, whether it was with a job, whether it's in their business, and when that pops up, it's a it's a beautiful reminder of why it's so important to be able to build passive income outside of the business, right? I know, so many business owners, me included, who have everything poured into their business, at least at one point in time in their career, and it's important to go all in. But that's there's a certain point where you want to actually start taking some of that off the table and creating some other income streams. So that if something changes in the world, like we experienced, because change is inevitable, that we're in a much better place. So from that perspective, from a financial freedom perspective, which I really define as having enough income that's coming in every single month to really fuel the ultimate life that you want. You know, have you achieved financial freedom? Or is that a goal that you're working towards? And tell me a little bit more about why or why not?

Anne Gannon 6:55
No, I think you're right. I mean, I think, you know, for me, you know, I joke that like, the latter group is like my third child, right? Like, I have two boys, or girls, really the third child. So I think for me, I think that was the biggest lesson of COVID. Right? Whether it was myself or my clients that like you have everything on the table here, like there's no like, Oh, if this doesn't work out. So I do think that's a lesson. You know, I wouldn't say that I'm there yet. But I think it definitely changed the perspective of, you know, thinking about the future and thinking about, you know, whether it's investing in real estate or other investments, you know, that just to be diversified? Because I think that's the hardest thing as entrepreneurs is that, you know, passive income just is different. So yeah, for me, I don't think I'm there yet. But I definitely think it has changed the way that I look at how important that is. And, you know, I think even when I come down to doing tax returns, now versus before, you know, it's a huge question to ask if you see a company that has $100,000. And the bottom line, let's say, you know, I think before it would have been like, Oh, what are you doing with that? Like, what did we grow it? You know, and I think after COVID, you realize, you know, if you have $100,000, you know, that owner should take 70 80% of it, right, and just move it off the table, whether it's in a separate, you know, savings account, wherever it is investment, whatever it is, you know, because I think that that is setting you up for success. And I think it was a very scary time when you looked at people who've been in business 2530 years, and they really haven't done that. Right. And I think the thing you realize in business is how quickly it goes, right? You can always say, Oh, I'll do that next year. And then you don't. And I think that that is that's important to see.

Steven Pesavento 8:42
Well, it's so important because the power of compounding doesn't work. If we start next year or the year after the year after right, we've got to get that power of doubling working for us. I'm curious. So, you know, we all experienced some craziness that happened in COVID. Did you feel like you were financially secure, and free before COVID Being meaning, you seeing this income come in from your business, you're feeling good? Was that kind of the mindset, and then it was kind of a rude awakening that oh, well, this actually kind of shut off? Or was it always this feeling? Like I'm still on the path? I'm still I'm still working towards that.

Anne Gannon 9:20
Yeah, I mean, before COVID We were growing. So we were definitely still in growth mode. As an owner, you know, I think we were still trying to figure out where we wanted to be revenue wise. So when COVID hit, you know, I definitely felt like Why was not in a place where there were so many options had to work out, because we just had invested so much in being a growing business. So no, I think you know, had COVID hit at a different time. I still think our reaction would have been the same just because of how you know I think the two biggest things for me as an owner as we obviously were not diversified because we had 90% of our Our clients were in hospitality. But I think for us, that is always where we want to be. We want to be strong in hospitality. So I don't think that even looking backwards as much as that was a risk, I wouldn't really change that. Because I think in order to do it, right, you have to be industry specific. But that definitely would have meant that whatever size you are, you are always going to be incredibly impacted by this thing, right? It's the same as people being in real estate in 2008. Right, like, there's nothing that you can do. But that's okay. I think, you know, definitely more aware of that as a decision now. You know, and then I think the other part is just, whenever you're in growth mode, and I see this with our clients a lot, too, it's like, you know, you're you're just in a growth period where you know, that you're, you know, labor is sort of outpacing your sales, but you're building a team, and there's all this thing. And that's okay. But I think, you know, the biggest lesson of COVID is we just always have to look at the flip side of those decisions, right? And I think before, if you would have asked anybody in hospitality and like, 1819, it was just this thought that things were on fire, right? Like, you just thought growth, and people are coming around to appreciating hospitality and my craft beer stuff. And, you know, all of that we just had this wave of in being invincible. And I think now, when you look at growth, I think whether it's myself or clients, everyone looks a little differently. It's like, oh, great, like, I that's a great growth path. But let's also look at, you know, plan B as well.

Steven Pesavento 11:29
Yeah, I think it's really important, because, you know, I focused my career on building a business that grew my net worth, and we were just always focused on growth. So it was very much an exit mindset. One of oh, I'm gonna exit these, you know, I happen to run a real estate, private equity firms. So we buy, you know, large multifamily projects, we buy a bunch of other types of real estate investments. But in that mindset, everything was always about this exit, okay, I'm making money now. But in the future, 80% of the profit is going to come and I'm gonna have to wait for that I'm willing to be patient wait, because I see what I'm building. And it was always about building more and more, but I grew up, you know, with a challenging childhood of, you know, finances and struggles around money. And so I was always like, Okay, I just need to create this, but it was so easy to get distracted, focused on that. And exit number versus Hey, what am I getting paid today, and that's really weird name your number was born out of was realizing it for myself, and then talking with a lot of my clients and realizing so many other people are in the same boat. So what I'm curious for you is what are you seeing that your clients are now doing differently, as a result of these lessons that they learned in the last few years? Around? You know, the all of the experiences that just happened?

Anne Gannon 12:50
Yeah, I mean, I definitely think the being more aware, especially, like you said, about real estate, I think being more aware of how real estate plays in to their business, you know, definitely more of an interest in buying a building, you know, buying a piece of property just to have something that is yours versus the ones where before, it might have just been like a 10 year lease. So that's great. Like, I think there's definitely more of a awareness of the difference between a lease versus buy, you know, and I think also looking at a lot seem to be fairly more aware of exit rate, because you knew in 2020, well, I can't sell like, there's no chance. And I think being more aware of planning an exit strategy versus, you know, just assuming it's going to happen. So I think those are the two biggest things, but by far it's real estate is, you know, seems to be something that everybody seems to be paying, you know, more attention to,

Steven Pesavento 13:49
well, especially when you own a restaurant, you've got that really amazing spot, and you're like, hey, I can go and get, you know, some debt that I can put down on this property. And I know I can make the payments. And, you know, over time, I'm gonna see that appreciation, it definitely doesn't lead towards passive income, right, because the business is paying for that business's lease, but it is absolutely something that's going to end up building more of that wealth, again, very much an exit focus type of view. For you personally, what role has passive income played in your own world? Or is Are you fully focused, build the business, build the active income stream, one focus until some certain point talk to me through how you're thinking about that, personally, you know, from the CPA standpoint, the financial standpoint, and then also kind of that vision standpoint about how it plays a role.

Anne Gannon 14:45
Yeah, so I think you know, I've always been aware of the importance of passive income I joke with, you know, friends and peers and everything that you know, as a CPA, you see what works in retirement, what does it because you know, a lot of your clients are older so it's inch You're staying to, you know, and have the opportunity, which is why I love what I do is that you can literally like sit down with someone who's you know, 75 or 80. And see, right do they have for investment properties, they have rental income. And you can see very quickly, what works and what doesn't. And I think, you know, someone once told me, I think it's great advice that for the entrepreneur, you know, setting up some sort of real estate, you know, rental property, I mean, that really is your retirement plan, right, because you're not gonna get a pension as a self employed individual, for the most part unless you set one up for yourself. But you know, if you have this rental property that is maybe even breakeven. Now, when you retire, that's a huge benefit. And I think you when you look backwards, as CPA, you really get a lot of insight. So for me, I've always been a lot more aware of like, hey, I really want to follow some of what

this couples done, because they see they have a good life, but they're off on a cruise, you know,

so you just kind of learn a lot from that. And I think it is very much, you know, being aware of what's changed in retirement, right? The people who are even on pensions now versus 20 years ago, it's just a different world. And so being aware of that now is really important, so that you can still set yourself up for success.

Steven Pesavento 16:14
Yeah, it's super important. And it's amazing for all of us to acknowledge, hey, I know about this thing. I know that it's beneficial, but I'm not doing it. And then it's like, okay, well, why am I not doing it? What I found is, oftentimes, it's because well, I don't know exactly which ones to choose, or I don't really have a plan built around this. And I'm not connected to a bigger vision that will drive me out of my comfort zone to go and learn these things. So I'm curious for you personally, are you running assess successful business? You're working with folks in the hospitality industry? What is your vision of the life that you're creating, both through your business? And eventually the the other strategies you might add on top of that, like, what is it that you're ultimately working towards? And like, what's beautiful about that life?

Anne Gannon 17:05
Yeah, so I think for me, again, taking the lessons of COVID, it was a crazy few years, I do want to always continue to learn. And really, I try to learn a lot from my individual clients. So for me, you know, definitely want to learn more about past weekend real estate, I've tried to read some books, it's on the 2023 wishlist because I do think, you know, it's important to kind of explore it, that. And, yeah, I mean, for me, I just want to keep, you know, learning about other areas, outside of, you know, CPA and entrepreneurship.

Steven Pesavento 17:40
Well, awesome, I'm glad we can actually, we can definitely talk more about what some of those strategies look like. And just for all the listeners, it's really important to understand the difference here, right? When we're looking at money, we're looking at making money, we're looking at managing money, and we're looking at how to multiply money. A lot of us are earning money in our career or business, that's our main focus, it's very active. We're running an active business or working in an active job. And that's really what, you know, society's taught us, hey, that's how we get by. And then we put money into a retirement account. And at some future date, we finally hit that goal, and we're there. But what's really powerful is understanding Hey, well, I've got my active income, this is what I'm earning, this is what my business is doing anything that you've got to manage as active. And so contrary to many people's understanding, if you go and buy a rental property, or you buy an Airbnb, or you buy a commercial building, and you're the active manager, operator and decision maker, you've got another active income stream. Now some of those might be semi passive. But if you've got to make the decisions, then you're really just creating another active stream. And that's what really turns a lot of people off from hitting the button and going towards creating that income is because they're, they often believe that's really the only path maybe they can invest with their financial advisor. And that's passive because somebody else is doing it. But there's also a whole nother path, investing in a private equity, whether that be business or in the case that we talk a lot about, you know, real estate and energy and, and notes and things like that, that once you learn some of these skills, you only have to invest that time upfront to vet that opportunity. And when you pair that with a passive investment plan where you've already made a bunch of decisions in advance, then it's much easier to be able to go through this process. And you know, I didn't mention this at the beginning, but my mom owns a bar and in western Wisconsin and and, you know, fortunately for them COVID only existed for a few weeks in Wisconsin before everything was back open because the tavern League has so much power they're able to literally open the state back up. But seeing from her experience, like she makes great cash in the business and she runs That bar and it's her whole life, but she can't really pull herself out of it, it would be very difficult for her to be able to do that just because of the size of the bar, and just the way she runs and manages it. So in her eyes, it's an exit of the business. And she's put some money into some land and some other things like that. And she's now starting to get down that path towards, you know, pulling some more money off the table and putting it into things that actually pay passively. But for a lot of business owners, we just focus on doing all the work doing what we know how to do doing, what our identity says, and who we are. And we just keep going down that path. So what advice would you give to your clients, if they're listening to this, about what they need to start thinking about now? From that money that they're earning, so they can start putting some of it away towards something that'll get them to that future vision that they're working towards? In the first place?

Anne Gannon 20:57
Yeah, I mean, I really think it's an unwavering sense of your worth, if that's so like, I think it's really looking at the value of your time, because I think a lot of times as business owners, the starting point to not having some of this passive income or retirement or whatever it is, is that you're not paying yourself enough. Right. So you're like sacrificing today for the future? And saying, Well, you know, I business can only afford to pay me X amount of dollars? Well, I think we need to change that mindset. And I think that is such a lesson of the last three years, that really, it should be the starting point of, you know, if I were hiring someone with my skill set off the street, what would I have to pay them. And I think we have to be unwavering in that in that, okay, if it's 50,000, more than you're paying yourself, 100,000 Whatever that is, then we need to make the business work with that. And that, I think, is where entrepreneurs go wrong, because then they beat themselves up, like, oh, I should have saved for retirement. Well, how, like, you didn't pay yourself, anyone he felt like you were like blowing it. Because most of the time, I know, you hear the stories of it being different. But most of the time, it's not like you're doing crazy things and just being irresponsible. Most of it is the starting point of not paying yourself that true salary. Because if you're, you know, running three locations, or whatever it is, like, you know, go on indeed and see what that would cost you because I guarantee it's a big number. And that is what's missing. And you could say all day long, well, visitors can't afford it, or I was you're literally leaving money on the table. And I have done this exercise this morning. And I mean, the number that's getting left on the table is huge. And if you had that amount of money, you wouldn't be doing all of these other things, because you're a smart person. So that's where I think we get lost is like we start with this all like, okay, maybe I could save 500 bucks, no, like start with what you're worth and what your business should be paying you make it work in that business, find a way and then you can set yourself up for the future. It's so

Steven Pesavento 22:58
so so important. All your business owners listening to underlying this and all of you that aren't business owners are looking going down the same path from passive investing standpoint and applies the same the lesson is you need to have really great expert advisors on your team, you need a great CPA like and who can support you and challenging you to ask those questions to make sure that you're investing in the right things, or you're running your business well, because a lot of us as business owners, we get sold on this idea that an exit is going to come. And for a lot of people, they have great exits, I have many friends and many clients who've made 10s or hundreds of millions of dollars as a result of an exit. But often those people are also running that business like it's a business. And sometimes when we're running the business, and we're sacrificing our income in order to create something, we're not running it like a business because if we got hit by a bus and we're in the hospital for a year, the business doesn't keep running without us when we're in that small business Operator mode. And so it's so critical to make sure you do have enough cash to be able to hire somebody else. If you were to step out, maybe it's not your vision, maybe you want to work in your business. For me, I'm on a mission to help a million people become financially free and and I love what I do. I could stop working today. But I would never want to I don't ever see that as part of my life, but many people do. And so it's critical and talk to us a little bit about some of the stuff that you do with your clients. Now I know you work specifically with folks in the hospitality industry, but anybody listening should be thinking about their balance sheet in their personal p&l to be thinking through, hey, how do I have a good understanding of my finances and financials?

Anne Gannon 24:43
No, I think you're 100%. Right. I think what you know, what we really tried to do is be that advisor that to not just look at where it is today, but to really look at what should it be and where could this go? And I think the two key elements of that is being Be willing to look forward, right? Like, as a business owner, it's scary sometimes to look forward because we don't know what's going to happen. And we find like, oh my god that stresses us out. But we have to look forward in order to be comfortable and have the peace of mind of where we actually are that if you don't have the target, you're always going to feel overwhelmed. So if you're driving around, and you're stressed out, and you hate accounting, you know, I think the two biggest things that I try to pass on to people is first accounting is a skill, right? So if you, it's just like taking a free throw shot, if you don't know how to do the feature shot, you're not like mad at yourself, it just means you need to go practice a three zero shot, right, then you'll do it better. And accounting is the same thing, right? The whole idea that you're born as a good accountant is not true, it is truly a skill, just like everything else. And it's something that you have to master as a business owner, you have to find a way to make it make sense. So a lot of what we try to do is just to put it in the language that you're used to hearing, because it's so critical as a business owner, that you're not intimidated by it that you're not told by your CPA, because I hate the CPAs out there that just like intimidate people and make it sound really complicated just to justify their bill. It's really what they're doing. But I really think that as a business owner, you have to know as much about that tax return, or financial statement, as any of your advisers do. And with that as a place to start. The second part is not being afraid to build a target, right? It's scary, because sometimes it's it's self worth. It's like oh my god, like I'm comfortable here. But I'm not that comfortable here, we have to make sure that you're comfortable here. And we have to set that target and not be afraid of it. Because so many of the great companies out there, they're not perfect, right? They've just been unwavering in their pursuit of going forward. And I think between the two of not being intimidated by accounting, and really setting a good target, you know, your future can be yours, you can do all of the great things that you're advising people to do. And even more. Look, I'm

Steven Pesavento 26:53
not a numbers guy, I don't love being in the numbers all the time. I don't love thinking about what are my expenses? And what are my revenue as I want to go out and just create more, but it's such a critical component both personally, as well as professionally in your business to be doing this work to have great people around you that can support you, as you're moving down this path.

Anne Gannon 27:16
Yes, definitely. It's, it's some of the most worthwhile time that you will spend in your business.

Steven Pesavento 27:23
So let's talk about you personally, just as an example, for listeners, right? So you're building a business, let's, let's talk a little bit about what your passive income target could be if you were going to set it. What what is to live the life you're living today, what is your current expenses? What do you spend every month on average?

Anne Gannon 27:44
I don't know. Yeah, I would say my passive income is zero.

But I know that I need to so I would say you know, I mean, I think if I look at, I would say in retirement, because that's what I really tried to focus on, just from what I learned on the tech side,

Steven Pesavento 28:00
you've got zero passive income today, and you're a financial person, you're an accountant, your CPA, you know, the value of this stuff, what's held you back, let's get let's get into the the feelings or the decisions that have led you to kind of hold off on going down the path of starting to create some of those other income streams.

Anne Gannon 28:22
I think like you said, for some of the listeners, it's really not being as aware. You know, for me, I love real estate, like I read validated. I like you know, I watch TV shows or real estate, like I love real estate, and yet, I have no idea what to do with that. So, you know, I think it's just where I'm just more comfortable, like I know more about businesses, I deal more with it. You know, I think there's just an element of fear, I would say on that.

Steven Pesavento 28:51
Totally. And so many people have that fear. We're always more comfortable with what we know, we're always more comfortable with the thing that we've done over and over again, what's cool, just to draw parallel is that within the world of investing, whether it's real estate, whether it's oil and gas, whether you're in you know, you're doing promissory notes, whether you're investing in businesses, all of them are simply a business, right? When we go buy a 200 unit apartment building, we're essentially buying a business that has existing cash flow, and we buy it on a multiple in the real estate world, that multiple is called a cap rate. And usually it's as a percentage of noi, and you kind of back into what that value is. And what's so powerful about it is that when we raise rents or we reduce expenses, we end up driving the value of that property and therefore driving the value of that business because when we're buying the business, we've got management in place, we've got, you know, maintenance staff, we've got all these people and then we've got all of our clients, the residents that are actually living in that building, and we're really going in Like a private equity shop would into any business and we're looking at, hey, well, what strategies can we apply in our business plan to get us closer there. And so for all you business owners out there, when you can recognize that it's not that far off from what you're doing today, what's beautiful is that I believe the best path is focused on doing what you're the best at making money doing and earning in your areas of expertise. And then hiring or partnering with experts who are really good at what they do. So for us, you know, we are great at finding funding and operating these businesses. And we'll bring in pool of investors will crowd fund it. So it might be $10 million. And everybody is investing 100,000 to a million each. So everyone owns a percentage of this business. And typically, those investors are getting 60 to 80% or more of the profit, right. And so the folks with the money, the people who are writing, the checks are often getting the best deal. But as an operator, we want to go operate that business and use other people's money because it allows us to scale to build a team to be able to do it more efficiently, and then the dollars we invest are compounded at even greater rate. So it's a really powerful alignment of interests. And I would just offer that to all the listeners to think about, hey, if you've thought to yourself, I'm hesitant on on getting into this thing called investing because I don't want another job. Well, I wouldn't want another job either, right? Especially if you're not excited about it. The key is you got to learn the skills on how to select the right people to work with. And then everything else is taken care of by them after it's not something where you just simply write a check, and you're done. Although that is literally what it is. But it's about understanding the vision of okay, if I make this investment today, for example, let's say your passive income number was 10,000 a month. Okay? Well, if we back into that add an 8% rate of return, we are going to need this amount at a 10% rate of return, we're going to need 1.2 million of investable assets. So if I think, hey, at some point in the future, I want to get to that point where I'm financially free. And if my number was 10,000, then I'm going to back into that financial freedom. And I'm going to say hey, well, I need 1.2 million. And I can make 10% a year because now I've seen all these examples of how it can be done safely, securely. Of course, it's an investment. So there's no guarantee, but there's a lot of ways you can greatly reduce risk. And then we think, Okay, well, hey, well, how do I get there? Well, cool, I could just save up the 1.2, I could move it from a retirement account, or maybe I'm starting off, and I don't really have a huge balance sheet to work with. So you know, maybe I'm gonna invest $200,000, and then I'm gonna invest into something that's going to double in three years, so that 200 is four. And in six years, it's eight. And in nine years, it's 1.6. So I've surpassed my number in a 10 year time horizon, with a $200,000 investment, when directed correctly, will get you to that point of being financially free. And so this is the big thing that we really want people to understand is that no matter where you're at, you can get started. And there's a clear path, but it's all about you got to learn the skills. And then you got to get the right people around you to get in the right community. And you can get there. So I'm curious, from your perspective. What do you believe that business owners need to do to start saving more of that money and then directing it, whether it's into a strategy like this or something else, so that they can be in that position of having a little bit more freedom in case? You know, life happens? And, you know, the business isn't operating? Like they thought it would?

Anne Gannon 33:45
Yeah, I mean, I think you're I think the biggest thing business owners need to do is be aware of what they need on there to make their life work. And like said, I think that really goes back to not sacrificing like we're not saying what you need as a minimum. We're saying what you need to be comfortable. And I think so many times it's the lower amount. And then we miss out on opportunities for investment with that other stuff that just we never received. So I do think, you know, just being aware that you need to have this element of your life, and it's very important.

Steven Pesavento 34:22
It's super critical. It's super critical. Talk to us a little bit about how people can get in touch with you. And if they want to work with you if they know somebody who'd be a good fit, you know, talk to us a little bit about what that looks like before we kind of wrap up on this final question.

Anne Gannon 34:39
Yeah, so I think, check out our website, the lager group.com We offer, you know, accounting services, bookkeeping, services, tax services, but really with a guide to building a path forward. So we always include budgeting, forecasting, planning, you know, really making sure it's not just looking backwards and providing you with you know, finance See if it really providing you with guidance and ideas to help get your business to the next level.

Steven Pesavento 35:06
Yeah, it's so critical to have expert advisors around you. If you don't, today's the day you take some action, and go out and find somebody that knows your business can really help support you getting where you want to go. So this has been a great episode, it's been fun hearing about your experience, on your path towards financial freedom, how you're really focused on your business now and really helping supporting these folks. But maybe you had a few epiphanies on how you might be able to start going down that path yourself. What's your advice for listeners who are on that path? And they're, they're looking to, and they're creating their ultimate vision for the life that they want financially? What advice would you give them?

Anne Gannon 35:50
So I think, you know, some great advice I got a couple years ago is just, you know, your business is a living, breathing thing, right? It just like a child, it's going to go through stages. So if you feel like you're not there yet, I mean, you're probably in like infant or toddler stage, but there should be a time where your business turns into the adolescent young adult that can go and do things on their own. And I think if that hasn't happened, then I would really look at what is going on in your model, because like you said, the last thing you want is to 2030 years later, you can't leave because there's your business can't run without you. And that is, you know, as much a risk to your future as anything else. And so I think, you know, that's good advice, you know, just being aware of hopefully every year, you're able to step back a little more able to think a little bit more, and then eventually it does turn into passive incomes.

Steven Pesavento 36:41
Exactly. Well, this has been a lot of fun. And thank you so much for joining us. For all of you guys listening. Absolutely go take some action on the lessons we talked about today. And and look forward to the next time we get to have you on.

Anne Gannon 36:56
Yes, thank you so much for having me. This is great.

Steven Pesavento 37:00
Thank you for listening to today's episode is sponsored by Vaughn Fitch capital. If you're interested in investing alongside me in the same type of real estate opportunities that I personally invest in that head over to Vaughn Finch capital and join their private investor network. You can do so at Vaughn fitch.com/invest. Join me on that next deal. I look forward to seeing you on the inside. Thank you for listening. If you liked what you heard, make sure to rate review, subscribe and share with a friend. Head over to the investor mindset.com to join the insider club where we share tools and strategies from the top investors and entrepreneurs and how they take it to the next level.


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accounting, active income, advisors, balance sheet, business model, crowdfunding, Diversification, exit strategy, Financial Freedom, financial goals, hard work, overcoming financial challenges, pandemic, Passive Income, pension, PNL, private equity, Real Estate, rental properties, retirement plan, saving money


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