This transcript is hosted by Thrive15.com, a first-rate Ohio business college and features Clay Clark, US Small Business Administration Entrepreneur of the Year, and Tim Redmond, the manager that grew Tax & Accounting Software from 2 to 400 employees.
Clay: Tim Redmond, how are you, sir.
Tim: Really good, Clay. It's good to be here again.
Clay: Hey, so we are talking today about the 7 principles to powerfully manage your money. Now, my understanding is, as a business coach, as an executive coach, you have helped clients all over the world. When I say "over the world," literally, you've traveled all over the world helping people, whether it be churches or businesses or anybody kind of get their finances together. Is that right?
Tim: Yeah, cash is king, Clay, and so, if we don't learn to manage the cash inflow and outflow, we're going to build anything of lasting value. It's kind of like the basic life skill that we've got to nail down as Thrivers to really begin to succeed.
Clay: Now, my son, he's just down getting into that age 7 zone. What's he's doing is, as soon as I pay him any type of compensation for work, I don't give him allowance, I pay him for a compensation for services rendered.
Tim: Yeah, very good. Very good.
Clay: He wants to spend it immediately. As adult, it seems like we want to keep doing that, too, so I'm excited to hear kind of how we-
Tim: We still have a 7-year-old mind in our spending today even as grownups.
Clay: Tim, when Thrivers start implementing these best practices, and we get emails all the time from people that you've coached and I've coached all over the country, and they say, "Oh, my gosh, I'm making more money than ever." Their marketing is taking off. They're making more money, but we have to learn in order to ... In order to build wealth, we have to learn how to control our money, whether upside down in our finances, swimming in abundance of money or, basically, completely debt-free.
Tim, in your mind, why don't more people know how to control their money?
Tim: There's just the steps of learning how to do it, and that's why we, in today's episode, we're talking about the 7 principles, and they're really 7 steps towards really getting a grip on your money. There is that. There is just an ignorance of how to do it, and then there is this huge emotional thing that swirls around money and our negative associations with money. "Money is the reason my parents got divorced," or, "My business partner betrayed me." We've all these negative things swirling around money and our need for instant gratification. All these things are swirling around and it makes a mess with our money.
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Clay: Tim, here are some crazy stats. If your brain explodes at any point, let me. I'll go get some duct tape and we'll kind of hold it together. Here we go.
27% of all households who make over $100,000 a year say they can't afford to buy everything they need.
Clay: Now, I know that some people who are watching this live in New York, where for $100,000, you can get like a corn dog, and then some people live in Tulsa, where for $100,000, that goes a long way. The principle here is that the majority of our US population say they can't afford what they need.
Tim: They can't afford what they need. That is just bizarre, especially those people over $100,000 because that puts them in the top 2% of all wage earners in the whole world. Why is that going on? You start with how do they define what a need is. A lot of our cash management issues are, because the way we look at wealth and poverty, it's more of a relative thing. On this stat, I think the operative word there is they don't have enough for what they need. I think that's something that we kind of blow up in our mind, Clay. That's the challenge.
Clay: Tim, in 2013, there was a study that was conducted about the dependence that people have on the government. It says, "America is increasingly moving away from a nation of self-reliant individuals where civil society flourishes toward a nation of individuals less inclined to practicing self-reliance and personal responsibility."
What does that mean, and why is that beginning to happen?
Tim: This quote is really and the study is really talking about how people don't want to take personal responsibility for their lives. They want the government, the "big brother" to take care of them. They want their company and their retirement to take care of them. They want their relatives to take care of them. People don't want to take personal responsibility, and that's just the opposite of our Thrivers. You're not going to thrive if you throw away responsibility on somebody else.