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If you feel like you're not likely to skill set, then you're lacking a character trait or you have a belief about the world that is false, right?

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It's just false. And so you have to figure out what that belief is. And sometimes that investment comes with going into communities,

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connecting paying to have access to people who can break that belief for you.

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The wealthiest people in the world see business as a game. This podcast, the game is my attempt at documenting the lessons I've learned on my way to building acquisition.com into a billion dollar portfolio.

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My hope is that you use the lessons to bring your business and maybe someday soon partner with us to get to $200 million beyond. I hope you share and enjoy.

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I wanted to talk about something that's a little different than the actual business, but very important, which is just about the money of the business.

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So I'm just calling this one to take chips off the table. So as business owners, you know, we're always trying to grow, we're always trying to reinvest in our businesses.

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And a mistake that I see happen many, many, many times and something that I made earlier on in my business career was reinvesting in the business.

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And so there's a difference in my mind between reinvesting in the business versus reinvesting in yourself.

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I think you should always reinvest in yourself, but reinvesting in your business, your business may come and go, but you will always stay, right?

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I mean, as long as you stay alive, right? And as long as you keep playing the game.

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And so the whole idea here is a lot of people were like, wow, I didn't take anything out because I wanted to reinvest it and grow.

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The thing is, if you really think about it, you're reinvesting growing because you're trying to make money, but the thing is they're kind of counter to one another.

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Which means that at some point you have to decide, I'm going to take this money and keep it for me, right?

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And it's hard because you're like, man, some of that money that I'm taking out is money that I could be using to grow.

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The thing is, what is the end game, right?

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And so if the end game, let's say, let's play out a couple different alternative because what I'm having my one day's, the VIP days that one guy's are coming out, a lot of times we'll get into this, which is like, what's the goal?

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Right. And so if you have a gym, right, a single location, and you want to, like, you enjoy running the gym, you enjoy that business,

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then the objective should be to make as much money from that business in real time, which means month over month, you take as much money as you can out of the business of the business serving you, right?

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That's the goal. Now, if your goal is then, you know what, I'd rather have multiple locations.

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For me, in my opinion, the only reason to have multiple locations is because you're trying to have proof of concepts so that you can then go into licensing or franchising.

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There are very, very, very, very, very, very, very few people who make a substantial amount of money through owning multiple brick and mortar service businesses.

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It's typically made on the licensing and franchising side because with these new locations, you take on more overhead, you take on more, it costs capital to open them.

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And so like that nest egg that you had then gets blown into this new thing. And if you have a hiccup, all of a sudden, the nest egg and all you built at one disappears in two, right?

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And so the objective of a business is to make a profit. That is the point. That is what separates it from a nonprofit, right?

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And so it is my belief that you should take as much money as you can out more than you probably feel comfortable with.

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And that'll put you into a place of needing to make more money to pay you, which is good because then it means you'll actually think like a business owner like you're trying to make money rather than just trying to build something, right?

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And what's weird is that a lot of times when you think from the frame shift of shoot, I really need to make money, you tend to make money, right?

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And that means that your business actually is better. It's kind of backwards, but it's true. I mean, I'm sure most of you guys at some point have had to make payroll in three days or had to make rent in a week or had to get hit with a tax bill or who knows, right?

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And you've had to make five grand, 10 grand, 15 grand in a week, and then you do, right? And here you are still breathing.

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And the thing is, is you still always have the skill set. You just don't utilize it to feed yourself. You only use it to feed other people, which you can, I can dig more into later, but you can think about that for yourself.

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So back to when to take tips off the table, the only outcome besides, you know, opening in a location for the desired to franchise or license that model would be an exit, meaning you're selling the location.

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The thing is, is if you're selling the location, you're going to want to show as much profit as possible. If you're consistently putting money back into the business, now this comes into accounting stuff, but when you're buying more equipment, things like that, a lot of that stuff's not going to be considered reinvestment that's going to be considered, you know, equipment costs or upkeep,

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which will take from the multiple that you would get from that business. And so if you're desires to exit your business at some point, then you want to take as much profit out of that business as you can.

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Now, mind you, big full disclaimer, I do not know your business. I do not know your situation. Everyone is unique, having self-awareness is key to making big decisions in your life, but just from like an overarching standpoint, this is something that I see all the time. And so I figured out, at least speak to it.

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So back to the chips, if you're like, you should try to run as lean as possible, you have to be incredibly disciplined to not just spend the access on fun stuff or things that you think might make money, like you have to make an argument for like, how is this thing going to make me this amount of profit?

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So if it's like, I'm going to go by $4,000 worth of equipment, I'm using the example.

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Now, if you know what your profit margins are, which the average gym runs 12.5% margins average, I'm not saying it's certainly you guys, but the average gym, I have a CPA friend who runs just gyms.

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And it's as 12.5%, which means to make $4,000 in profit back, right back, then you're going to have to make eight times that in in revenue to make the 4,000 back.

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So you have to make an equivalent argument, it's not, can I just make $4,000 more, it's, can I make $32,000 more because I'm taking this off of bottom line, I'm taking this off of profit.

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And moreover, if you wanted to sell your facility, you'll probably get three ish, three to four depending on the buyer, but three times your earnings, your profit at the end of the year, right?

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So if the profit at the end of the year is $5,000 less, right, that is actually losing you $15,000 on your actual sale number, right?

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Which again, so you're losing on the actual real profit in real time, but you're also losing on the actual valuation of your business, all right?

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And so it's really difficult to make that money back, especially if I'm being real for the majority of people who are small business owners, the things that they choose to spend money on are stupid, right?

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Now, that being said, I think that when you take the money out of your business, you should not just spend it on yourself on shit, right?

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Spend it on learning more skills so that you can make more money, right?

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That's typically, like leveling up your skillset is going to do more for you than probably anything that you can invest in the actual business itself, right?

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In terms of buying stuff, your skills will make you money, right?

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Way more.

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Hey guys, real quick, if you're new to the podcast, I have a book on Amazon called $100 million offers that over 8,000 five star reviews has almost a perfect score, you can get it for 99 cents on Kindle.

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The reason I bring it up is that I put over a thousand hours into writing that book, and it's my biggest gift to our community.

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So it's my very shameless way of trying to get you to like me more and ultimately make more dollars to that later on in your business career, I can finish the part with you.

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So that's my gift, go check it out, Amazon, and back to the show.

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And so that's what you should invest in beyond that, it is my belief, and I made a podcast about this that, you know, really unless you're making $100,000 a month in profit or more, this, like I'm just been row with you, I think you should consistently spend money on acquiring skills because that's the problem, right?

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If you're not making the money you want, it's because you're lacking a skill set, right? And if you're if you feel like you're not lacking a skill set, then you're lacking a character trait or you have a belief about the world that is false, right?

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It's just false. And so you have to figure out what that belief is. And sometimes that investment comes with going into communities, connecting paying to have access to people who can break that belief for you, right?

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I'm not saying me, do whatever you want, but I'm just saying like just having that approach. And so back to chips off the table.

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I'm like, I'm going to go make sure my ADD stays in check. When you are running the business every month, take as much as you can out, have a number that you drain the bank account to every single month and do that religiously, all right?

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You drain it and you rip the cash out and you stack it and you do that every single month, all right? You don't give yourself an excuse to not to, to not take out money one month or it's all kind of close.

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If there's only $800 above the line, you take the 800 out, like you have to be disciplined about that. You drain the account and the thing is, is it'll keep you on it. One of the habits that that that I did for a very long time that was extremely useful before, before cash flow became kind of crazy.

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Basically until we until we were doing more than a hundred thousand a day, I looked at the total bank accounts of all assets, my personal, my savings, my everything that was cash that was liquid across all accounts every morning, and I told it up.

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And so every morning, I do exactly how much money I had across everything and the thing is this, if you look at that in the beginning, you're not going to do it, it's going to be uncomfortable.

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And if you do this religiously, you'll have a mind for where your money is going. You'll see a big pop and you're like, hey, where did that go from? And then you'll start to start, there's a rhythm that starts happening. You'll start seeing it, this pattern on Tuesday's payroll hits on Wednesday, we get our credit cards on Thursday, we get our ACH deposits, right?

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You'll start seeing these hits and you'll start feeling the rhythm and then you'll start seeing if something seems high or something seems low, right?

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And just by being mindful of that, you will make more money. I promise you because you'll see how hard it was for you to make the money that you made and see it actually come into your account. You won't be as quick to spend it, right?

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So rip the couch out as much as you can every month because both that's going to increase your net worth, right? Because at the end of the day, if you keep going and I saw someone have this happen to somebody, and this is why I'm making this for you, I saw someone who, quote, reinvested in their business during the good times, right? They're just making tons and tons of tons of money, right?

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And then bad times hit, right? Something happened, trainer leaves takes half the clients, whatever, right? And they had nothing, right? And they ended up having to close their facility after three years of what was good times, but they didn't have a dollar to show for it.

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Now, if during the good times they had been consistently stacking cash, consistently stacking cash, one, you have a parachute that if you need to switch opportunities, you have it there.

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Two, from an emotional standpoint, you feel like you have something to show for what you've done. I can tell you, after having sold the gyms and then having a partner at one point, basically essentially drain the funds out of the account and then send it to somebody offshore.

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The person been indicted for fraud twice and I just didn't know. I saw six, all my locations, all the money that I had made, vanish. And I can tell you it's soul crushing and I don't want that to happen to you.

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And so don't, don't do that. Just, just take money out every month so that you have something to show for it, no matter what, what you have to show for at the end of this entire game is who you are, right?

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Is the character you've built is the beliefs that you have and the skills that you've acquired which create your reality, right? That is truly going to always be the end goal.

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But in the real material world that we live in, there are some things that money can do that can help make like money can't buy you happiness, but poverty can't buy you anything.

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I heard that the other day says not my quote, but the other side of is that money can't buy you happiness, but it can sure help you avoid pain.

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Right, I'll tell you that much like it can help you avoid pain in your life. And so if you can smooth transitions out for you, for your family, for whatever, your kid has a learning disability and it costs $2,000 a month to get some special tutor for them to learn how to read.

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Like that shit happens, right? And for you to be able to be prepared for that will allow you to be prepared, right? For when those types of things comes up, take your chips off every month.

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It's not helping you grow your business for most of you for the vast vast majority of you, the things that you're investing in are not actually things that are going to help you grow your business.

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So make it a priority to profit as much as you can every month and stop buying stupid shit.

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All right, if you want to exit, it's still going to increase the value of your business by being disciplined in that process because then you're going to show lower overhead, higher profit, and it's going to be more attractive to a potential investor in the future.

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All right, so just don't make this mistake because I'm just telling you, when the times are good is when you need to take money out, that is when you need to do it.

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That's when you rip your cash out. Like you think it's going to keep going, but the game of business is cyclical, right? After every good time, there is a bad time, right?

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Every up cycle is followed by a down cycle and every down cycle is followed by an up cycle, but don't be like everyone else and think it's always going to be this way, right?

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It's not like there's probably going to be something that's happening on the horizon, right?

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Like the yield curve is flipped, like we're on borrowed time right now.

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So right now, things are still good, economy is still frothy, take some chips off the table, because you don't know what's going to happen.

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So anyways, I hope that was useful. I hope right now, if you could think to yourself, man, there's some extra money in my bank account right now.

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What should we do with it? Take it out, right? Run a paid and full play every once in a while, right?

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Just take some, scrape some cash off, make sure you run internal plays to your existing clients, at least four times a year, because that's just pure excess profit.

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And you shouldn't reinvest into the business, you just take it right out and you put it in the bank of you, all right?

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Because number one thing that is guaranteed to make you more money is more money.

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So if you take the money out, it's guaranteed to actually increase your net worth, whereas if you invest it, it is not guaranteed to do that.

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And likely, if you look at it from a profit standpoint, if you're doing 12% margins or even 20% margins, you have to make five times that investment just to make it back.

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Just to make it back.