In episode #666, Eric and Neil discuss what to do with your success. Tune in to hear what your next steps should be.
TIME-STAMPED SHOW NOTES:
- [00:27] Today’s Topic: So You’re Making Money Now… What’s Next?
- [00:48] Neil’s current salary is $0 and he dumps all profits back into his company.
- [00:55] He has no other passions, so what would he do with the money?
- [01:10] Neil thinks a business is like a baby and they only want to nurture their baby.
- [01:30] Take the absolute minimum salary that you would need. Don’t forget you have to pay taxes on your income!
- [01:45] Putting your profits back into your business is the best ROI.
- [02:15] The best bet is always the one you take on yourself.
- [03:05] If you have other aspirations besides your business, that’s cool, but if you want to further your business, always reinvest in it.
- [03:32] If you’re content and don’t care for more money, take the money and do what makes you happy.
- [03:50] OR you could hire people to run your business and take it to the next level.
- [04:22] If you want more, but aren’t a great leader, hire the right people to run your business.
- [04:45] Be ok with letting go of control.
- [04:56] Read the book Rocket Fuel for inspiration.
- [05:10] The COO Alliance is the only organization in the world that wants to help the number 2 leader in every company.
- [05:37] Invest in your number 2, because they will be the driving force of your company.
- [05:44] That’s it for today!
- [05:47] Go to Singlegrain.com/Giveway for a special marketing tool giveaway!
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The post So You’re Making Money Now… What’s Next? | Ep. #666 appeared first on Marketing School Podcast.
Full Transcript of The Episode
Eric Siu: Welcome to another episode of Marketing School. I'm Eric Siu.
Neil Patel: And I'm Neil Patel.
Eric Siu: And today, we're going to talk about well, you're making money, and what's next? And this topic actually came from a video that Neil has on his YouTube channel about someone actually asking this question, "Neil, what do you do with the money? What's your salary?" All this kind of stuff. Maybe you could just answer that question again for this podcast.
Neil Patel: Yeah, my current salary is zero, and I just dump all my money back into the business.
Eric Siu: Yeah, so what's the reason for that?
Neil Patel: I have nothing else that I really am passionate about in life, other than business, so it's like, "Yeah, what am I going to do with it? Buy a car? Buy a bigger house?" That shit doesn't make me happy. You get a nice home and then you're like, "Oh cool."
Eric Siu: What now?
Neil Patel: Yeah, "What now?" It's never ending but for me, a business is like a baby and it's the same for Eric as well. We care so much about our companies, sometimes a bit too much, that we're willing to do whatever for them. If you already have money and you're making profit and you only need a certain amount, and Eric's in a similar boat too because he doesn't need much to live, you take the minimum salary you need to live because you're paying taxes on that. So after that, you use that money to live off of, the rest, instead of paying taxes on your money, reinvest it in your business because that's the best ROI. Why would you pay 50% to the government when you can dump that money back into the business, grow much faster and increase your overall net worth?
So instead of thinking short term on how much money can you pocket? Think long term and look at how much net worth can you increase? So that way when you sell your business, or potentially even take it public, you're out with a much bigger check and of course your tax bracket on these sales are much less than ordinary income.
Eric Siu: Yeah. Neil pretty much hit the nail on the head but call me naïve, I think the best bet is always on yourself. You invest all the time in yourself, you're listening to this podcast right now, I think we're well over 600 episodes, we've been doing this for close to two years now. Look, you're continuing to put time into yourself, this is what Warren Buffett says, "You invest in yourself, nobody can ever take that away from you." So naturally, you can say, "Naive, no you're arrogant." But I like putting the money back into myself because I think the internal rate of return is much better than putting it into the stock market, where I'm releasing control to somebody else. This is what Elon Musk said as well. He bets on himself because SpaceX, PayPal and Tesla and all that and yeah, they're going through some turbulent times right now but at the end of the day, it all works out.
So I think that's the ... You bet in the Neil Patel index fund, which is himself, you bet in the Eric Siu index fund and it's going to work out for you. If you don't have aspirations to go bigger, that's completely fine, if you want to travel the world, if you want to be a nomad, that's completely cool, figure out what works for you but if you have higher aspirations and you don't want to pay big taxes, just keep reinvesting the money over time and keep deploying it and you're going to see things grow. For me, and for Neil as well, we see this as a game. We see it as also a really fun competition with other people as well. It's just really fun for us so I really don't have much more to add beyond that.
Neil Patel: If you're content in life and you don't care for making more money, or you don't care for growing your business more, take the cash, save it and travel the world or do whatever that makes you happy but what I recommend is, if you don't have the aspiration to grow something really big and you don't necessarily need the money and you have enough in savings, go hire some operation people, put them in your company and let them take it to the next level. So you have two options, or technically three. One, you can dump it in back to yourself and grow faster. Two, if you're just happy, you can take some time off, travel the world and go back and forth. I know someone named Tim Grittani, he'll trade for a few weeks, make a shit-load of money, travel for a few months then work for a few weeks or a month and then rinse and repeat. He works, travels, works, travels et cetera. You can do that.
The last one, of course, is if you want something bigger but you don't want to put in the time and energy ... I suck at managing, I don't want to go into a office. Mike, he runs my whole company, he has a aspiration to create something huge. I do too, but I don't want to do the work and I just go and let him run with it because he's doing a better job than I could.
Eric Siu: Yeah, Neil makes a really good point. I think you have to be self-aware of what you're actually good at and be okay with letting things go, letting go of control. To Neil's point as well, if you're looking for a number two, you're looking for operator, or we call these an integrator as well, I recommend that you read the book Rocket Fuel, it's about visionaries and integrators. Both Neil and I, I would say we're more on the visionary side. We have ideas all the time, we just want people to go out there and execute on them but also, if you have a number two, it's also in your best interest to invest in them as well. So there is this group called the COO Alliance and as far as I know, it's the only group in the world that is dedicated to helping the number twos in your company. I believe it's like 20 grand for the year.
Also, I talked about Entrepreneurs' Organization, EO just came out with a key executive forum where they give your ... maybe your number two, the forum experience where people can kind of share their war stories with each other, personal problems, business problems. You want to build that around them, you want to invest in your number twos because these are the people that are out there executing your vision and I think it's ... At the end of the day, it's a drop in the bucket and I think it's going to help. Anything else, Neil?
Neil Patel: That's it from my end.
Eric Siu: Alright, so that's it for today. Go to singlegrain.com/giveaway to check out marketing tools that will grow your business and we'll see you tomorrow.
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