[00:00:00] Hello, my friend on today’s episode, I am back with fellow business unicorns, coach Ben Pickard, and we are talking about a topic. I think all of you will really like us talking about and appreciate, which is we’re talking about building personal wealth as a gym owner. And if you’re like the many gym owners that I talked on a regular basis, you might find yourself pretty often stressed about money, not just for your gym, but for yourself.
Personally, and it has a real impact on your ability to show up every day and focus and feel good about your, your present and your future. And so if you’re in that spot and find yourself often very stressed about money, keep on listening to this podcast because if you stick around to the end, we walk you through the first steps we recommend to our Unicorn Society members to start to find a path towards financial freedom.
So if you want some financial freedom and we all do, let’s be real. This is a great episode for you. So keep on listening.[00:01:00]
Welcome to the business for unicorns podcast, where we help gym owners unleash the full potential of their business. I’m your host, Michael Keeler. Join me each week for actionable advice, expert insights, and the inside scoop on what it really takes to level up your gym, get ready to unlock your potential.
And become a real unicorn in the fitness industry. Let’s begin.
Hello, fitness, business nerds. What’s up. Welcome to another episode of the business for unicorns podcast today. I’m back with Ben. How are you, my friend? Hello. Hello. Good to be here. Good to see you as always. And before we dive in. To today’s conversation. I just want to do a quick shout out to our social media has been crushing these days, specifically our Instagram.
I just want to let you all, you listen to this, to listen to the podcast. If you are not following us on the Instagram, like what are you even doing with your life? There’s so much good content we’re putting out on there from videos of Mark to Pete’s wisdom. To excerpts from the [00:02:00] podcast. Like I think it really is a steady stream of good shit that I think we’re really proud of these days.
So dear listeners, if you haven’t yet go follow us on the gram, it’s at business for unicorns, and I think you’ll be glad you did even click the little bell button to know when we post new shit, I know that bell button, button, at least for me is very like. Exclusive, I don’t click the bell button for everybody, but I clicked them for places like us who have content that are, is constantly high quality that I don’t want to miss.
Then I want to know when it comes out. So click the bell button and don’t miss anything that we put out on the ground and share with all your gym owner friends. Okay. I’m done. Pitch is over. I just want to let you know, we’re putting out some good shit. So don’t miss it. Today’s topic. I’m excited about, cause I think this is a really important one for our listeners.
We’re talking about money and specifically building personal wealth, which is let’s be real. One of the main reasons. Everyone starts a business. Yes, there’s altruism. We want to make a great impact in the world. So we want to do something we’re passionate about. Some of us do it because we want to be our own bosses.
There’s lots of reasons, but [00:03:00] let’s be real. If you’re being honest, anyone starting a business is at least in part doing it to make some frigging money, at least have some safety and comfort in your financial life for you and your family. And so That’s what we’re talking about today. Let’s start with talking about Ben, why this is so tricky for lots of people.
So you can start with yourself if you want to, or why money is so tricky for building personal wealth for gym owners specifically, right? Cause I think there’s a lot to say about like how you run your gym’s finances are often impacts how your personal finances look and vice versa. I don’t know. Maybe just share your own experience about what makes building personal wealth as someone who’s self employed so tricky.
All right, we’re taking a cork off a big bottle at the beginning. Yeah, it’s a big one. All right. Yeah. I didn’t grow up in like a low income, like I wasn’t broke growing up, but I had a lot of, I was responsible for things in my life that had some finances attached to them at an age that seemed normal to me, but might’ve surprised other people.
Like I was in charge of my own clothes [00:04:00] shopping when I think I was 13. Things like that. And it was like, We weren’t screwed. I knew we weren’t going to, I didn’t believe we were going to be homeless. Um, so a lot of my financial acumen comes from the fact that like from an early age, I was forced to figure that shit out.
If I wanted a new pair of shoes that cost more than the cheap ones, I paid the difference. And it was my first job. I was actually working illegally. Which sounds so weird to say. I think everyone’s first job was doing a little child labor of some kind, right? Yeah. This is what like babysitting. I worked at a butcher shop after school for my first job and it was so good and so terrible in so many ways.
But fast forward a bunch. It made sense that I had learned. Some of the stuff from entrepreneur, or they could be benefit beneficial as an entrepreneur because like my dad was teaching me how to do my own taxes in university. One of my takeaways is don’t do your own taxes, pay someone for that, but it’s still a process I went through to understand how that thing works.
And I guess the reason I think being [00:05:00] financially self sufficient is so important, especially in the fitness industry is if you’re strapped for your mortgage payment, are you sure you’re going to be able to over deliver for your clients? And I think the answer is no, right? If you’re in a place where you don’t know if you have a roof over your head for the next month, or you can put food on the table for your family, are you able to give 110 percent every day for your clients?
Fuck no. No, you’re in survival mode. So yeah, it’s critical to be able to show up and have the impact, make the impact you want to make as an entrepreneur is relying on you having some shit together at home. Yeah. And I’m not suggesting you need to become a Warren Buffett for investing or better than your accountant for doing your taxes, but Maslow’s hierarchy needs shouldn’t be checked.
If you’re going to show up in the way you want to the way that I hear so many people say they want to and how important it is for their communities. I think we have a responsibility to make sure that we’re serving from a not empty cup. I think that this is a great first point, which is, I think this is if I had to [00:06:00] summarize what I heard you say is that one of the reasons it’s hard for a lot of entrepreneurs to manage their finances personally and build personal wealth is in some cases, they didn’t learn valuable lessons about money.
Early on that translates to good habits, right? And you’re someone who actually did. You’re responsible for your own money early on your, your parents taught you some good lessons when it comes to money and that’s translated for you. And I think if people don’t have that and learning from their parents or grandparents or.
Someone in their life, a teacher, then they wind up forming often bad habits, right? That’s not as black or white as I’m making it sound, but more often than not, you’re going to not have good habits. And I’m much like you. I think I came from a little bit more of a broke household. I was raised by a single mom in a trailer park in New Jersey, but.
Uh, that bitch had a system for managing her money. We didn’t have any, but she had a system and that system was an envelope. And when she got paid, there was a certain amount she put in it that we could spend on like fun things. And once that envelope was empty, there were no more [00:07:00] fun things. That was it.
But it was a really consistent, I remember the envelope in the, her drawer of her nightstand next to her bed. And she would put on there, like how much she put from each paycheck and what it went to. That was our max budget. It was like, once those dollars were gone, there was no more ice cream or sneakers, like all the rest of it was spent on putting a roof over her head and food on the table.
So even when we had nothing, I learned early on to spend less than we make. And with no exception, like there’s, there was no, Oh, but I also have money under my mattress. There was it was just the envelope and then nothing. And because she was also saving. She also was diligent about saving anyway, long story short, this whole podcast, we could make probably about our upbringing and our parents lessons, but long story short here is that if you didn’t form great habits early on in your life by learning about how money works and how to build wealth for yourself, it’s really hard to pivot as an adult.
And a lot of those bad habits translate into your gym. And we see people who just flat out [00:08:00] don’t have any systems in place for budgeting or managing their money or paying themselves. And I’ll just pull that straight stream for a little bit, just one more minute here, which is, and when that happens, you just say a little bit of all the trickle down negative effects.
That has on a gym and on a person, then I want to say everything and I think that might be true, but more specifically, I think you’re going to be operating from a scarcity mindset because you’re always going to feel like you don’t have enough and you’re going to be really hesitant to give and over deliver for your clients.
As we already talked about, I suspect that will also trickle down into your staff, that your staff might not be appropriately valued and. Outside of the actual physical dollar amount that’s in their bank account every pay period. I think that mindset might also trickle down a little bit too, that the staff will start thinking the business is tight on money and then they’re going to be like, is my job secure?
And then if they’re starting to second guess their career, that they’re going to build over deliver for the clients. My face is doing the, it goes on and on movement. I imagine that would trickle down into pricing as well. It wouldn’t surprise me if the [00:09:00] people who are, and I see this actually in the interview calls, the people who do have some financial challenges in their gym are also undervaluing their services, which means you’re often getting people at a lower price point who cash is a little bit tighter, who they’re going to be a little bit more needy.
We all know the joke that if you charge someone a hundred thousand dollars a year, they just ask, where do I sign? If we charge somebody. 150 bucks a year. They’re like, what do we get for that? And how does that work? And then I also think that’s going to show up in your personal life. And fitness is one of those things that you do take it home with you a little bit, as much as we try not to.
But if you’re having those same stresses at work, but in a different bucket at home, a method, that’s just going to wear on you. The stress and anxiety that causes in relationships and marriages. I still, I think I read recently that the number one, number one kind of friction amongst couples that get divorced are its finances.
It’s one of the things that really drives a wedge between folks. So I think, I think you had a great list there. We could keep going the whole podcast about the trickle down negative impact of not building [00:10:00] enough financial security and wealth for yourself. And the good news is that we can help. And we help Unicorn Center members do this all the time.
We have a whole playbook and for Unicorn Center members about building personal wealth. And while we don’t have time to go through the whole playbook today, we wanted to at least give you all the first step. Yeah. So for context here, we think of. Building personal wealth as both like a mindset and a skillset, right?
As Ben just mentioned a minute ago, like you probably came to the mindset you have about money and personal wealth from all the things you learned or didn’t learn so far at this point in your life, and you either have a scarcity mindset or somewhere on the spectrum of a scarcity mindset, this kind of abundance mindset about money, and you’re somewhere on that spectrum right now.
So we could probably talk this whole podcast about the mindset. portion, but what we’re gonna do is we’re gonna talk about the skillset and the skillset starts with you actually getting clear about a few key things. We, we call this first step here, taking your financial temperature, and there’s really four questions.
Maybe I’ll read them out loud, Ben, and you can elaborate. So the first question that we want you to think about or not just think about, but [00:11:00] actually get the answer to is how much do you currently make from your gym per year, which sounds like a very straightforward question, but, um, Ben, do you want to elaborate on what we mean by that?
Yeah. A hundred percent. So this is not just the profit on your PNL after all the shit’s been paid on a monthly basis. You’re taking your financial temperature is three real pieces. The first one, and they all fit into sorry, one bucket, which we consider total owner’s compensation or TOC. So the first part of that bucket is your regular salary for doing your job at your gym.
Now, some of you may pay yourself a salary and you’re on payroll, other people may pull distributions or dividends as we call them in Canada, but it’s the regular pay you get for doing the things you’re responsible for on a monthly basis. The second piece of this is your distribution. So it would be the chunk of the profit that is yours at the end of the month or at the end of the quarter or the end of the year, however you calculate it.
And the [00:12:00] third piece is what we call owner perks, and those are things that the gym pays for using before tax money, such as insurance, home internet, phone, transportation, continuing ed, et cetera. So you’re really, again, adding up what’s your regular recurring pay for doing a job? What’s your share of the profit?
Some goes to Uncle Sam or whoever, but some of that is yours. And the last piece is what does the gym pay for on your behalf to save you some taxes? Great. Yeah, that’s the first step, my friends, is figuring out what is your total owner compensation on the year? How much do you currently make total from your gym per year from all those three categories?
Ben just mentioned how much you pay yourself regularly, how much you take out in profit, and how much you’re basically passing through the gym in the form of owner perks. Uh, paying for your cell phone, et cetera. So that’s the first step. It’s question number one. And you want to write down that answer.
Question number two is based on that, what is your current hourly pay rate? Yeah. I do want to walk through this, Ben. Yeah. [00:13:00] Yeah. This one’s relatively straight simple is take that dollar amount from step one, exclude the taxes that you owe to the government. If you already haven’t already and divide it by the total number of hours you work.
So if you’re going to do that as an annual basis. For this, I made X many thousands of dollars this year. You want to divide it by the number of hours you work in an average year. So you want to like, you don’t have to be like to two decimal points here, but if you typically take two weeks of vacation, you work 50 weeks a year.
Probably an easier way to do this is to take your total dollars you make in a year and divide it by 12 to give you your monthly pay and then divide that by the typical number of hours you worked in a month. But it is important to be honest with yourself here. Don’t divide by your busiest week you’ve ever worked when you just did shitloads of overtime.
But also don’t divide it by like your easiest week. Try to take my average week is probably 52 hours. So divide by that or 40 hours or whatever, but you want to make [00:14:00] it realistic for you to get a feel for what’s, what am I actually making per hour to compare it to a comparable market rate? Because if you’re making minimum wage and all your staff are paid more.
There might be something to impact there, either make more money or very likely delegate some stuff, but it gives you a really good feel for like, where actually am I now on the spectrum? Because as owners, we often think about our pay last, if at all. 100%. Yeah, great. So those are the first two questions.
And those first two questions are about where are you right now? The first one again was how much do you currently make from your gen per year, your total owner compensation. The second one is Based on that, how much is, what is basically your current hourly rate? And so once you have those two numbers, we’re cool to move on to the next two questions here, which are forward thinking.
So the third question here is what is your dream hourly rate? What would you like that hourly rate to be? You want to talk us through this one, Ben? I love this one because it’s so fucking scary, right? Do we [00:15:00] like it whenever I’ve done this or I’ve talked to people about it, it’s always the. The answer to the question of what’s your dream pay or dream hourly rate is always like, I do a lot of coaching and I pay my coaches 25 bucks an hour.
So maybe I’m worth 25 bucks an hour and it becomes this like logic ing out what we think we’re worth or what we deserve that comes from all of the mindset stuff around financials that we had in our upbringing or all the other places. And what I love about this money, this question about money is you get to take all of that stuff and just set it to the side and for a brief moment, just be like, What do I want to make?
There’s no how, there’s no what am I worth, there’s no logic, just what’s your number. And you can either think about this as an annual salary or you can think about it as a dream hourly wage. Both are just different math versions of the other, but I want to really encourage you to dream. And in the land of influencers and everything, I say that kind of tongue in cheek because I’m not as old as I sometimes behave.
Like you [00:16:00] might be like 50 million dollars because that’s what this person I follow makes. But I want you to really dream for, for you. What’s your dream amount? And again, all you’re answering is that question. As soon as you catch your brain trying to solve a problem or learn a thing or logic your way through it, just be like, Oh.
I’ll do that right now. Yeah. What do I want? This is totally one of those magic wand questions, right? If you had a magic wand in a perfect world, how much money would you be making from your business and come up with that kind of annual income? And if you want, you can divide by the same number of hours from the previous question and come up with a new hourly rate.
And that’s your dream hourly rate. It might be just a couple bucks more per hour. It might be double or triple what you’re making now is really what your dream is. But if you don’t identify this. gap between where you are now and where you want to be, then there’s no other financial net financial habits.
We can tell you that will be helpful, right? You have to identify the size of the gap between where you are and where you want to be. And that’s exactly what these four questions help you do. So we’ve got question number three, which is what is your dream [00:17:00] hourly rate? And then number four, another forward looking question here is how much money do you need to retire?
Comfortably walk us through this Ben. I noticed again, this could be a whole nother podcast in of itself, but in big picture terms. Yeah. Knowing that there’s an entire profession dedicated to this of financial planners. This is the high level view. The simplest way to do this is take how much money do you need to live comfortably and multiply it by 25.
And that’s because generally speaking, that’ll give you, generally speaking, if you have 25 times what you need to live and your money makes 4%, You’ll be making that amount of money every year, provided average market conditions. And this has been shown pretty solidly to track even with inflation. So if you need to make whatever 100, 000 a year to live comfortably, you need 2.
5 million in investments accounts working while you’re not. Now, not [00:18:00] a financial planner, definitely an enthusiast, but there’s a really good book on this, Tony Robbins Money Master the Game. It’s one of many books out there that we could recommend, but it dives a little bit more into this, and especially for the Americans out there.
A lot of it is USA focused for the fellow Canucks or anyone in Europe, Australia, anywhere else, still some really valuable takeaways. There’s just some paragraphs you might be like, okay, that doesn’t really apply to me, but we have a similar vehicle. But obviously to get to that number, the first step is actually knowing how much money do you need to live comfortably.
So for some of you. This might take a little bit of work. Would you make last year minus how much of that was extra or plus how much more did you need to cover bills? But you’re just taking like an average year for this. So it does take a bit of introspection. When I did this, I actually just math that out in a spreadsheet, mortgage, property tax, car, food, and just did the average.
And we’re like, okay, about this amount of money and we’re comfortable. The piece that really matters with this is you don’t need to include any savings or investments, because if we’re going to [00:19:00] fast forward X number of years and you’re retired, you’re no longer contributing to your investments. They’re giving back to you after the long, hard work you did.
So I don’t want to encourage anyone to think small, but this number is often not as big as you initially might think the people that they’re like, I need 10 million to live comfortably. How many yachts do you have to make that a reality? Yeah. When you really think about what you really need to live and live well, right, I’m not suggesting that retirement needs to look like.
You not going anywhere or doing anything, but ultimately being honest with yourself about what you want that retirement to look like is a really good first step to it. Like I said, identifying the gap here between where are you at now? How much are you currently making and what’s your hourly rate? What do you want that hourly rate to be?
And how much do you need to be putting away for retirement? Those are four just basic questions. That all of you have to start with before you develop a strategy for what you do next and we’ll probably continue this podcast And talk more about this topic and tell you more strategies once you have those numbers, but those are the [00:20:00] four steps I’ll just repeat them just to the purpose of summarizing here Question number one is how much you currently making from your gym your total owner compensation number two is based on that What is your current hourly pay rate?
How much are you making per hour? Being honest about how much you’re actually working. Number three is what’s the dream hourly rate? How much do you really want to be making given what your current expenses are to live well? And then the fourth one here is how much money do you need to retire comfortably?
As Ben said, just taking your target retirement income and multiplying by 25 is a good kind of back of the napkin math of place to start. But once you have your answers to those four questions, what you’ve done is you’ve started to identify the gap. Between where you are and where you want to go, then you can find the right strategy that helps you get there.
In some cases, some of you who are listening, who are younger, you can have a really aggressive strategy. Cause you can take lots of risk when you’re young. For those of you who are older, like me in your mid forties and fifties, we’d probably want to be able to maybe a little less risky because retirement isn’t that far away and again, we’re not financial planners.
We’re not financial advisors. This [00:21:00] is not financial advice, but coming from two people who’ve been in self employed for a while and have had successful enough gyms, we’ve had some money we’ve had to learn how to manage. I think this is a really great place for all of you to start. Anything you would add in closing?
Yeah, I was just going to ask that this podcast is unintentionally coming to a beautiful first full circle. Although we don’t typically use like actual paper envelopes anymore to manage our money. That principle is a wonderful idea to learn how to do it. If you’re someone who doesn’t feel like you know how to keep a budget or money maybe causes you a bit of anxiety like it does honestly most of us on different degrees it’s a spectrum not a yes no give yourself buckets open up a savings account and put x many dollars a month in there and that’s your fun money and when it’s out it’s actually out you don’t just put it on your credit card and balance it because i think the underlying theme here is these are steps you can take But there’s also going to be steps that you need to take in order [00:22:00] to make these things a reality.
And I mean, you shared it beautifully that you learned a lot when the envelope is empty, it’s done. That’s it. That’s how a budget works. That’s how it’s supposed to work in your gym. And that’s honestly the profit first system that we use ourselves. I recommend all of our Unicorn Society members. It’s like a version of what my mom did.
It’s just different envelopes, right? You have different envelopes in your business that keep track of different amounts of money for different purposes. And once that money is out of each envelope. Then crap, you do not have a functioning model for how you spend your money, right? It’s immediate feedback.
And so whether you’re doing that in envelopes and your dresser nightstand, or you’re doing with multiple bank accounts, which probably let’s be honest, better at this day and age, but listen, no shame. If y’all want to start with paying yourself in cash and putting that shit in envelopes, go nuts. You got to start somewhere.
I wouldn’t be mad at you, but yeah, let’s leave it there. I think this is a hopefully a good first step to all of you who want to improve your, um, Personal wealth and get some more financial freedom a good first step is taking your financial temperature And I’m sure we have a more podcasts on this [00:23:00] topic and official has a lot to say on this topic And I’m sure we’ll continue but thanks for listening friends.
I hope you’re walking away with a great exercise So they’ll bring you at least the first step of clarity for where you need to go And thanks has always been for a great conversation If you all love this, please leave us a review everywhere you listen to podcasts and go follow us on the Instagram We’re doing great shit.
We’ll see you there. Bye Ben. Bye. Bye