January 2021 - Lisa Duke Coaching

Three Steps to Financial Freedom

Jan 29, 2021

Just because it's simple doesn't mean it's easy.

Based upon all my study and my personal experience, there are three steps to financial freedom.

Step 1: Stewardship

I personally believe the first step toward financial freedom is doing a good job managing what you have.

Imagine being a mom of a kid with a pet goldfish (that you take care of) who now wants a puppy. Wouldn't you think, “first, show me you can take care of a goldfish. Then we'll see about the puppy.” I think money is the same way. If you can't manage the money you have now, for most people more money will just mean more problems (the rappers know from personal experience that this is the case).

If you are working a full time job as a professional, your biggest problem is not an income problem. It's a lack of intentionality with and attention to the money you have. It's a spending problem. It's wanting to make yourself feel better through stuff (which never works in the long run).

So the first step to financial freedom is learning to spend less than you make, running your life like a profitable business. When you open up a little margin, you can use that margin to pay down high interest rate debt.

Step 2: Investing

If your company matches your retirement plan contributions, this match is the biggest ROI with the lowest risk.

The next best rate of return is paying off your high interest rate. Historically, the market returns about 7%. If your credit card is at 28%, you are digging the hole faster than you are throwing dirt in it.

The third best rate of return is investing. I like very boring ETFs and index funds. I don't believe day trading is investing – it's speculation and gambling. If you are looking for excitement, go to Six Flags. Don't try to get excitement from investments.

I'm not licensed to give investment advice, so talk to someone who is before you make a decision, but this boring approach has worked for us.

Step 3: Earn More

Now that you've proved you can wisely manage the money you have, focus in on earning more. Look for opportunities at work to help the company spend less or sell more and negotiate a cut of that for yourself as compensation. Ask for a raise. Negotiate a bonus.

If you have truly maxed out the opportunities at your job and you've been there at least a year to a year and a half, sometimes the best way to increase your income is to move to another employer. If you do, be sure you don't accept the first offer that is presented to you. Employers make their offer artificially low because they expect you to negotiate and have left themselves room to do so. If you don't do what they expect, you've left money on the table.

If you don't want to change employers, consider ways to make money outside your day job. Most wealthy people have multiple streams of income, so this can be your opportunity to set that up.

Entrepreneurship has a steep learning curve, so expect to have failed businesses and even within successful businesses to have failed launches, failed products, and failed offerings. Expect people to tell you no. Be resilient and keep going.

Most of school is about learning information and retaining it until the test, but math and foreign languages are skills. Likewise, entrepreneurship is a skill. Learning to walk and to ride a bike and to drive a car are skills. Falling down and getting it wrong is normal. Hang in there.

Once you get your business working, look at ways to increase revenue. Add new clients. Sell more to existing clients. If you are in demand, raise your rates.

At each step, you will need to learn new information, develop new skills, and practice new behaviors. You will essentially need to become a new person. This is where my coaching can help you. I specialize in helping you uncover and move past the thoughts you have that are in the way of becoming the person you want to be. To learn more about my coaching or my money management course, schedule a free one on one call today.

Secrets Network Marketers Don’t Want You to Know

Jan 22, 2021

If you knew what network marketing leaders know, they'd have no business model at all.

I've always been interested in running a small business, but starting a business from scratch seems overwhelming. What do you need to do? How do you get clients? If only there were someone to teach you and train you and cheer you on when you are feeling down.

Enter network marketing. These companies promise you big income with little effort. They business is already made! You just need to show up and collect big checks!

So you sign up. Or at least I did.

I joined a multi-level marketing (MLM) company because I loved the idea of being able to go as far and as fast as I wanted. I always felt held down in corporate America and hated the idea of having to wait for someone else to pick me for me to move up. The fairness and the freedom appealed to me.

Within a year and a half I rose to Directorship – the top 2% of the company. Shortly after that I was promoted again, to Senior Director. Sounds pretty impressive for someone whose last title in corporate was “Senior Business Analyst”. I'd gone from analyzing business to directing it!

Shortly after rising to that level, I started to realize things were not as they had seemed on the path to get there. In our director's meetings we had the “big girl” discussions. About how we weren't actually going to be focused on working with our team and helping them be successful, becuase most of them would be quitting over the next few weeks. We had to keep recruiting.

Secret #1 – the turnover is incredibly high, and if you want to make any money at all, you need to not care that over 99% of the people you talk into signing up will fail. You need to be constantly recruiting and hoping the new people stay in long enough that they can't return the product from their initial order, because if they do, that gets deducted out of your paycheck. Which leads us to secret number 2.

Secret #2 – 99% of the people in your upline working their businesses full time are broke. The flashy lifestyle they are living that is supposed to be proof they are successful is fake. Their lifestyle is financed by a spouse, from savings, and from credit.

When I was in network marketing, we were actively encouraged to “fake it until you make it”. Shopping was encouraged. Expensive purchases were praised. Some day very soon our big payday would come, and we could pay off our debt then. Woohoo! In the meantime, our fake lives helped us and our upline “prove” how successful we were, thereby luring more people in.

“But my upline person showed me a copy of a check! They showed me a company publication that showed they'd earned a lot!” Yes, absolutely, that was probably true. But they show you that knowing that they can use your employee thinking against you. Did you see that big monthly check, multiply it by 12 months of the year, and compare it to your salary?

Yeah, so this is one thing network marketing and real entrepreneurship have in common – irregular income.

When I was a network marketing leader, the person at the top of our pyramid would give us copies of her income in the back of the magazine to hand out to prospects in an information packet. Some times the proof of income was from the latest issue, but sometimes it was quite old. When we ask for a newer version, we were told, “oh, my assistant made a lot of copies of this one, and we don't want to waste them. We'll give you the new one when we run out of the old one.”

So… you are making the big bucks, but you can't afford copy paper?

The real truth was, the reason we couldn't have a newer version is that was the last time she'd gotten a big check. If you didn't make at least a certain amount that month, your name and earnings didn't appear in the magazine.

So yeah, that big check was real, but the next month she might have gotten a bill from the company instead of a paycheck. That's right. If you had a company car and you didn't meet your quota for the month, the portion of the car payment you didn't earn would be deducted from your check. So there were some months as a Senior Director (not even the bottom of the top 2%) where I owed the company money for the privledge of having worked for them all month (oh, yeah, and with no benefits).

This kind of fake accounting continued on. The very tippy top level in the company was National Director. National Directors often did earn millions of dollars. But they had an unusual method of calculating this. When they brought these leaders on stage at our conference, they were presented with a plaque for lifetime earnings. So yes, she might have earned $1,000,000, but how many years what that spread over? $1,000,000 over 20 years is something you can do in corporate, and they'll give you health insurance to boot.

Now, to be fair, are there people who love the product, share them with friends, and make a little side money ethically? Absolutely. Is it possible for someone a bit more focused than that to naturally build and retain a customer base? Sure. Is it possible some of those clients want to resell the companies products and will join the team? Absolutely.

There are good people doing it the right way who can rise to the top, but like The Hunger Games, the odds are not in your favor.

99% of the people who sign up will quit in the first 30 days. Out of those who remain, 98% will never make it to leadership. Out of those in leadership, about the same ratio will make it to the level where they make a six-figure income consistently.

All of us think we are special. We think we will be in the 1% who don't quit after our friends and family mostly tell us no. Out of that 1%, we think we will be in the 2% of those people who get to leadership. And we think if we do, we'll be one of the handful of people who make good money long term.

The truth is, you are more likely to be hit by lighting.

If you want to start a real business but you want a mentor like what you are promised in network marketing, I can help. I know everything useful they will teach you, plus the stuff they won't. I've run successful businesses, and I'd love to mentor me. Yes, you'll have to pay me for my time and expertise, but at least you won't get stuck with a garage full of products you can't sell. If you are ready to get started, schedule a call and ask me about business coaching.

My Friend Raided Her Retirement, and I’m Fine With It.

Jan 15, 2021

When is it ok to break “the rules” with money?

A new friend confided she'd raided her retirement fund. “I'm not mad at you for that,” I said. Want to know why?

My friend “Sue” (not her real name), recently confided that she'd withdrawn money from her retirement fund to pay for training. Normally taking money from retirement when you aren't retired is a huge money mistake, because you lose not just that money from your retirement fund, but also all the growth that would come on top of that money. She expected me to chide her.

So why did I, as a money coach, actually think it was ok?

You see, Sue has a background in working in banking. She knows all “the rules” of how money works (the rules I teach in my Change Your Financial Operating System course). She's seen first-hand the “Millionaire Next Door” types who live in blue collar neighborhoods below their means and become self-made millionaires. She's also see the middle class and upper middle class professionals who earned good money, yet were drowning in debt because they'd committed themselves to loan after loan for toys (RVs, boats, jet skis, second homes) or shopped til they'd dropped on clothes, shoes, and jewelry and had the credit card debt that came as a consequence.

So what's the difference between “Sue” and most people?

Sue fully understands the rules. She understands the risk she has taken in breaking them. But she is making an informed and conscious choice to take a financial risk now in the hopes of making a career change that could lead to a better quality of life and, oh yeah, the opportunity to make more money in a new field.

It may not work out. She may have set herself back. But in my mind she hasn't liquidated an investment, she's shifted a small portion of her overall portfolio from one investment to another. It's a higher risk investment, but it also has the potential for outsized rewards. And because she understands enough about money to know she's taken a risk, she's going to be very focused on making that investment pay off and on re-building her retirement fund as soon as she can.

Your money is your money and you are allowed to do anything you want with it. I just want you to make an informed choice the way Sue did.

Are you ready to learn the rules of money – and when to break them? If so, I'd love to work with you. Schedule a call for a free session in which we will uncover your #1 money block and lay out a solution.

Debt and Guilt

Jan 8, 2021

Debt isn't your fault, but paying it off is your responsibility

Imagine you are at the top of a slide. Behind you are people pushing you and telling you to slide down. To either side a people pulling you down and telling you to slide down. So you push off, slide down, and get to the bottom.

You made the choice to slide down, but that decision was not made in a vacuum. How guilty should you feel as you sit at the bottom of the slide?

My answer would be – not very.

Yes, it was your choice. But you had a lot of forces encouraging that choice, and very few voices warning you of the consequences.

I think for most of us, debt is the same way. Every marketer in America is trying to separate you from your cash. Everyone says you MUST go to college, and with the escalating costs, few parents can afford to pay out of pocket. So loans it is!

Your friends, who are lovely, often help separate you from your money. After all, your friends want to spend time with you, so they invite you to the fancy restaurant. They want you to be happy, so they encourage you to buy the thing.

But here's the deal – the marketers don't care about your personal financial situation, and your friends likely don't know the truth of your finances. They probably aren't even paying much attention to their own financial situation.

It's not just the external voices – it's literally our own minds. We've evolved to want pleasure and instant gratification. When literally everything in your life is saying yes and when buying on credit feels like it has no immediate negative consequences, how could you not end up at the bottom of the slide?

Sure maybe some part of you knew better and threw a red flag. But that's one voice in a sea of thousands.

So cut yourself some slack. It's actually totally understandable that you are in debt. You'd be weird if you weren't. Let yourself off the hook for all the guilt and shame. You probably never had a personal finance class or in depth training on money from your parents. Past you was just doing what she thought was best. She didn't mean to screw you over.

Now, just because it's not your fault, that doesn't mean it's not your responsibility. Yes, you were influenced, but you made the choice. But if you can let some of the guilt and shame go, you can take a clearer look at where you are and where you want to go and map out a plan.

So if this sounds like you, take a deep breath, forgive past you, and take a step so future you can have a better life. Sign up for my money course or schedule a free consultation today to get on your way to a better financial life.

The Vital Signs of Your Business

Jan 1, 2021

Guest post by Diana Miret

The Vital Signs for Your Business

Note from Lisa: while as a money and business mindset coach I work with a lot of entrepreneurs to help them earn more, I'm not really a numbers person. For that kind of coaching, I recommend Diana Miret. She can be reached through her website at https://dianamiret.com This article is from her.

When you go for your annual physical, the nurse takes a set of vital signs, or measurements. They take your temperature, blood pressure, pulse, and listen to your heart and breath sounds. They also measure the oxygen saturation in your blood.

The medical profession knows that by assessing this small number of vital signs, they will be alerted to potential problems. It gives them a starting point to assess your health and condition.

What about taking the Vital Signs for your business and assessing if it is “healthy”?

Business owners tend to put their nose to the grindstone and that can cover up an unhealthy business. See if any of these thoughts run through your head (like they do mine):

“I just need to work harder.”

“I just need to get organized.”

“Something big is going to happen one day and the business will be fine.”

“Something just like magic will wipe away all the debt, financial stress, and worry.”

Sound familiar?

Is your business surviving check to check? Do you manage your business by checking the bank balance, rather than how you are spending against a budget? Or the worst mistake of all: are you listening to your accountant and “minimizing” profits, so you don’t pay taxes on them? Don’t get me wrong; I adore accountants. I graduated with a double major in Accounting and Finance for pennies sake. But their view of your numbers SHOULD NOT BE YOUR VIEW OF YOUR NUMBERS!

In other words, you must take your business’ Vital Signs differently – and not from your Profit & Loss Statement.

In his 2014 book Profit First, Mike Michalowicz reveals why the traditional accounting formula: Sales – Expenses = Profit is not only contrary to human behavior, but a recipe for exhaustion because it throws you into an ever-ending cycle of selling more and profiting less.

It treats profit as a left-over. And undesirable. That is CRAP. How does it make sense to spend $10 so you don’t have to give the IRS $ 3? Wouldn’t you rather have the $ 7 in cash PROFIT than nothing?

Besides teaching you to run your business differently, Mike flips the accounting formula to:

SALES – PROFIT = EXPENSES

He has you take your HARD EARNED, WELL DESERVED Profit out FIRST, and run your business on what’s left. Remember Warren Buffet’s “Pay yourself first!” mantra? Exactly like that but for your business.

And the gold doesn’t end there. He also gives you a quick assessment tool to use to take the Vital Signs of your business.

Get ready to find out your business’ health …

This chart is from page 68 of his book and provides, at a glance, a quick assessment of your business’ financial health. Take out your last P&L and see how your business compares.

Real Revenue Range: $0-$250,000
Profit – 5%
Owner's Pay – 50%
Taxes – 15%
Operating Expenses – 30%

Real Revenue Range: $250,000 – $500,000
Profit – 10%
Owner's Pay – 35%
Taxes – 15%
Operating Expenses – 40%

Note: It is important to note that he uses the term “Real Revenue” not Sales. If you are a manufacturer, retailer or more than 25% of your sales are derived from the resale or assembly of inventory, you must deduct the amount of the materials (not labor). If subcontractors deliver the majority of your service, deduct the cost of the subcontractors from Sales to get Real Revenue. Read the book for more information.

In my business coaching practice, I begin all discussions with a client by having them do this assessment. It helps them see immediately what areas are “bleeding” in their business.

Because numbers don’t lie. Just like your blood pressure number can signal a problem or good health, these percentages can help you pin-point what the business needs to focus on.

So how is your business doing?

Interested in working with a coach to help you get on track with your money or your business? Contact me to learn more about my coaching programs so you can get support in your financial life.