Have you reached your Freedom Day? Do you know what it truly takes to achieve it? This episode dives into the importance of having predictable income sources in order to achieve financial freedom. Jeff Kikel shares his own story and over 25 years of finance experience on what it takes to become free from day-to-day operations and create a business that isn't dependent on the owner. He shares tips on how to pay off debt, improve finances through tax returns and subscriptions, create additional income sources such as businesses or real estate investments, and build a bucket list to enjoy life along the way. Tune in to learn more valuable advice for achieving financial freedom!
[00:01 - 11:35] Achieving Financial Independence and Predictable Sources of Income
[11:36 - 18:48] Jeff Kikel's Tips for Small Business Success
[18:49 - 22:54] A Step-by-Step Guide to Freedom Day
[22:55 - 24:10] Closing Segment
Connect with Jeff through his email jeff@jeffkikel.com. You can also reach him through LinkedIn https://www.linkedin.com/in/jeffkikel/.
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Tweetable Quotes
“Freedom Day is looking at not only creating a business, but also looking at other ways that you can create income streams within that business.” - Jeff Kikel
“You have got to be able to extract yourself from the business. It's always tough as an entrepreneur to do that. You have to be able to step back and say, okay, there are people that can run this business better than I do.” - Jeff Kikel
[00:00:00] Freedom day is that first day that you have enough income to cover your, living expenses, not necessarily your salary. And at that point you're truly free and you can go on to something else. But what I want people to do is you've got to find predictable sources of income.
[00:00:18]
[00:00:49] Hello and welcome to another episode of the Straight Talk, my Small Business Success podcast. I've got an amazing guest with us. His name is Jeff, Jeff Kiel. Jeff, welcome. Hey. Thanks Omar. Appreciate Celine. , I appreciate you, uh, inviting me on today. Awesome. Great. Looking forward to this. Jeff has been in the finance business for over 25 years doing personal and business owner financial planning, wealth management, and exit strategy planning.
[00:01:16] Starting in 2010, Jeff began to talk to his clients [00:01:20] about Freedom Day. Freedom Day is the first day that you get up for work and have enough money or income. Coming in that you do not, you do not actually have to be at work. And, uh, so I am really excited to learn more about what Freedom Day is and all that.
[00:01:37] Jeff, perhaps the best place to start is give us a quick. Backstory, what brings you here? What whatev you know, your life up to date in a minute or less. That's a challenge, isn't it? Alright, good deal. Minute or less. So let, let's start back. Uh, 1995 I got, or 1985 I got into the financial services industry.
[00:01:57] I did not. Start that way. I actually got a degree in psychology with a minor in English literature, so it was obvious that I'd get into finance. But I'd been in another career, , ended up getting into the financial industry and of course when you're starting out and you're learning about financial planning and investing and you're in your twenties, you're sitting here thinking, well, you know, if I just work hard and if I do the math, if I just put money in, I'm gonna be able to retire by the time I'm age 55.
[00:02:24] Then, you know, you go on to, life kind of happens during that time period and you start to realize, and you start to learn that the math just doesn't work. The math worked out that if I worked for about 40, 45 years, yeah, I'd probably have enough money to [00:02:40] basically buy a lesser house than what I have today.
[00:02:44] Buy a not so good car and take a few cruises a year and that was gonna be my life for the rest of my life. And that. It just didn't excite me. Mm-hmm. So about, uh, seven years ago, I actually, , had written my first book. It was a book on financial planning for police officers. And I was looking for ways to market that.
[00:03:04] So I started looking at YouTube and podcasts and things like that and decided, well, maybe I'll start a podcast. Well, I'd never listened to a podcast before, so I decided, well, maybe you need to listen to a couple and figure this out. And I actually bought a book on podcasting, and it was a gentleman named John Lee Dumas.
[00:03:21] He had the first. Daily podcast ever. And I started listening to his podcast and it was all about people that had gone from working for somebody to starting their own business, and a lot of 'em just started their own business. A lot of these people were. Kind of at the point of time I started listening to it, they'd already become famous at this point and were making lots of money.
[00:03:45] And I realized that they weren't any smarter than I was. They didn't have any better skills than I had. They just learned a method and I kept seeing this kind of consistent method. So I, you know, was not happy at the job I was working at at the time. [00:04:00] I had started other businesses before I'd started seven prior, and they all failed, , because I really wasn't committed to 'em.
[00:04:07] And I decided, you know what? I hate what I'm doing so much. I, I don't care what it takes. I'm gonna start a business. And my first business that I started that was successful was a co-working space. Now I was still in the financial services industry, and the challenge that we have in the financial services industry is I can't start another business without informing my employer.
[00:04:31] Well, this kind of really got into a big fight with my employer. It was not a good situation to begin with, and it made it worse. And I ended up in March of 2016, quitting my job. I just walked in one day and said, okay, I'm done. I can't take it anymore. And that led me to starting a co-working space.
[00:04:52] I started a financial practice, and started three or four other businesses during that time period. We'll talk about this later, you know, and some of the other stuff. But there were some tough years and then some good years. And then I finally reached what I call Freedom Day, which is the first day.
[00:05:08] That I had amassed enough money and enough income coming in that I didn't have to get up. I had a work optional lifestyle, and I really wanted to start sharing that with other people. I, I wanted to share those concepts, and that's really [00:05:20] where Freedom Day came from. Yeah. So what is it? What is Freedom Day?
[00:05:25] Well, freedom day is that first day that you have enough income to cover your, living expenses, not necessarily your salary. So, you know, a lot of people are like, well, I make $120,000 a year. Well, do you spend 120? A lot of clients are like, no, I spend like 60. Okay, well then you just need to make enough to get to 60.
[00:05:46] And at that point you're truly free and you can go on to something else. But what I want people to do is you've got to find predictable sources of income. You can't just go out there and go, oh, well I, you know, won the lottery and I made $60,000. Well, okay, great, that'll get you for one year, but what's gonna be that consistent thing year and year out?
[00:06:06] And that's where I saw the break in my training as a financial advisor. My training as a financial advisor and I, I came to realize this later on, is most of the training for financial advisors comes from asset gathering organizations. So, you know, I was with a large or several large financial firms that had mutual funds.
[00:06:28] Well, what's the object of those firms gather as much assets as possible. Mm-hmm. So what did they train us to do? They trained us to get people to save lots of money and put that away into mutual [00:06:40] funds or into other financial products. And then, at some point they'll be able to draw income out of there.
[00:06:45] Usually only about four, three and a half to 4% is what we would say you could succeed at. Well, the math doesn't work. You can't get there, uh, doing that. So I started to focus on cash flow. , not only with individuals, so somebody that was working a job, but also business owners. Cuz a lot of times business owners aren't much better off.
[00:07:07] They've just bought themselves a job versus, you know, starting a business. Yeah. So what's the equivalent of Freedom Day for a business owner? What does that look like? I, it is very much the same. It is looking at, for a business owner if I own a business today, I've got to look at what are my sources of income from that business.
[00:07:29] If my sources of income or my primary sources of income are from my output, so I'm actually the one who has to go out and do the work. Let's say I become a plumber and I'm the only plumber in the business. Well, that business, it's just a job. I'm self-employed. I don't own a business. I become a business owner when I start to hire.
[00:07:51] A bunch of plumbers to work for me, and I have a staff that runs the operations and I'm there directing that organization. And [00:08:00] I also have developed some form of processes and things like that for the business. At that point, I become a business owner. You know, very much if you know Robert Kiosaki, the, uh, I was just going to go there.
[00:08:13] Right. Very much so that right side of the column, which is business owners and investors. Once I reach that point where I have created a true business, I can take a month off and the business will continue to run without me being involved. That's Freedom Day. And it's also that income that's coming in, paying myself, cuz a lot of business owners don't pay themselves.
[00:08:37] They might hire some people, but then they're like, oh crap, we're not making enough money, so I'm just not gonna pay myself and I'll pay my staff. Well, that doesn't work either because now you're just, you own a job that's not really, that's not paying you well on top of it, which is terrible.
[00:08:53] So that Freedom Day is looking at not only creating a business, but also looking at other ways that you can create income streams within that business. Let's say I'm a plumber. Well, is every person out there. Gonna hire me to come out and, you know, maybe spend $150 to, come out and. Stop a leak in their faucet?
[00:09:16] Well, maybe, but a lot of times somebody could fix that [00:09:20] on their own. So maybe I create a YouTube channel or a short course on plumbing, home-based plumbing things. Okay, well that's something that works for me and it's another source of income that doesn't require my physical input into it, except for one time.
[00:09:36] Does that make sense? Yeah, totally. So you're talking about, becoming an investor when the business owner, creates a business, a system, a business that's not owner dependent, then that frees up the owner to Yeah. Invest their time in however they want.
[00:09:54] And some of the ways they can do it is, I guess online marketing with a training course of sorts, or other ways? You know, I, I, I'll give you an example in my business. So I started a business seven years ago in the co-working industry. So we own co-working spaces, well, you know, shared office space.
[00:10:13] The problem with that industry is one, the margins are really low. Cause it's hard to mark up over and above my costs. , so I was sitting there a couple years ago going, Hmm, what am I, what else can I do within this business? And I'd been taking some courses on real estate. And I came to the realization that I wanted to create, I mean, in inherently, we're kind of a real estate company to begin with.
[00:10:37] So I said, well, let me start to [00:10:40] do things within that business that are outside of what I can control. I can only get to a certain amount of people in a building and that's gonna be the limit of my revenue. But if I start doing something in the real estate industry and investing in real estate, Then that's over and above and outside of that.
[00:10:58] And so we started a, a wholesaling operation. So we go out, you know, I basically have a team of people now, uh, was originally just me. But we have a team that coal calls, people that, have houses that are kind of in the range that we want. I have an acquisitions team that goes out there and they actually negotiate these with the sellers.
[00:11:19] We have a distributions team that actually goes out and finds investors that wanna buy those properties. And then we profit the difference between what we bought 'em for and what we sell 'em for. So another way of generating, it's still in the real estate industry, but in a total different animal of the industry.
[00:11:36] Mm-hmm. Interesting. Yeah, so the first thing is to really free oneself from the business they're in. And so then they're not involved in the day-to-day operations, and then now they've got now the time, energy, and hopefully the money to invest in other. Absolutely. Well, and like I said, and, we didn't start, you know, that the wholesaling operation started on a shoestring.[00:12:00]
[00:12:00] But it was a way that we could then generate some additional revenue, which then we've taken that revenue and done some other investments in real estate. And so, you know, more sustaining investments in real estate. So it's, it doesn't have. Take a whole lot of money. It just, first off, you've gotta be able to extract yourself from the business and that was tough.
[00:12:19] And it's always tough as an entrepreneur to do that. You have to be able to step back and say, okay, there are people. That can run this business better than I do. I've gotta pay those people. And that's a big problem that people have. And, and one of my, one of my favorite business gurus, uh, Brad Sugars puts it, if you pay peanuts, you get monkeys.
[00:12:39] So you've gotta pay for people that are gonna be there to run your business, and they'll do it more successfully than you. And that frees you up to be able to look at other things. So if I had not freed myself from being. You know, running those co-working spaces on a day-to-day basis, I wouldn't have taken the time to look out at different ways or different other places that I could have generated revenue.
[00:13:03] Right, right. So the, the fundamental point is to really free oneself from the day-to-day operations, and is it important for that? For the owner then not to work in their business. And so they, you know, because they may have in their mind that their [00:13:20] business is not gonna succeed or it's not gonna sustain its success when they step out and start diverting their attention to other things.
[00:13:30] Hmm. Well, I think the biggest thing, I mean the fear that most business people have is, well, I can do everything better than everybody else. Well, I hate to tell most people we don't, we suck at most things. , what we are good at is being visionaries. What we are good at is being able to go out and find, that next bit of business.
[00:13:49] So a lot of times we're one of the best salespeople in our business. We need to be able to train other people to do that, but we're still always gonna be that one that's out there seeking and finding and coming up with new ideas. The key is making sure that you've got good KPIs in your business. I mean, this was a challenge for us cause at the beginning I just said, Hey, you know, just everybody kind of do your own thing.
[00:14:11] I expected them, you know, those employees to be as committed to the company as I was. Well, they're never going to be, they're an employee. So you have to have very clear KPIs for them So you've got to sit down and say, all right, here's, you know, expectations. , an example in the wholesaling business, it's pretty, I mean, it's a numbers game.
[00:14:31] So, on our cold calling operation, we might have 2000 leads. Okay. Well, I need them to be making 50 calls a day. And I know [00:14:40] out of that 50 calls a day, we might get two people, three people that are interested. Out of those two or three people, you know, we might close one deal out of that.
[00:14:49] Okay, well if we're not getting the 50 calls on the front end, we're probably not going to get that. And so we can diagnose issues or problems and we can also see, all right, who's succeeding, who's not. And you can diagnose it down. Uh, but it also makes people aware that, okay, this is being watched and we need to make sure that.
[00:15:07] If we do these things we'll all be successful in the end. But it's very, very, very important that people have those very clear cut KPIs and so that I, I run all my businesses off of that now. Yeah. Yeah. I really love the concept of Freedom Day, for sure. That's, that's really unique, and I know you're writing a book about it, and we'll talk about.
[00:15:29] How people can get their hands on and all that in a little bit. Yeah. What are some mistakes that you've made in your entrepreneurial journey? You know, two or three things, that after you've made the mistake, you're like, yeah, this is, man, in my next go around, I gotta make sure I don't make that mistake.
[00:15:49] Mm-hmm. I, I will say every successive business I've gotten better. You know, I think the biggest challenge, and, and this is very common amongst business owners, [00:16:00] I did, I had very clear cut goals of what I wanted. I did not watch the financials close enough. although I come from a financial background, I don't come from an accounting background.
[00:16:10] So there's a difference between finance and accounting, and I didn't watch the numbers right. for the first. Year of our business. We had a lot of input cash at the beginning, and we blew through that faster than I ever imagined. And honestly, it was 2017. , right around March-ish time.
[00:16:32] So we'd been in business theoretically as a business for a year at that point. And I started for the first time to really start to do the math. And I was like, oh crap. We're gonna be running outta money in the next three or four months. , what I didn't realize at that point is that was our first full summer as a co-working business.
[00:16:51] And one of the things when your business is based around, Entrepreneurs and small business owners. What I didn't realize is just because they were paying for a space, I thought, Hey, they kept working 12 months out of the year. Well, what I found was with a lot of small business owners when summer hits, it's like, oh, it's time to take time off and I don't really need an office at this point, or I don't need a space.
[00:17:18] And they all took off and [00:17:20] I'm still stuck with paying the bills, the rent and all the bills and everything else and staff. , so I went into panic mode and ended up having to lay a bunch of people off. My wife and I didn't take any money out of the business and we just barely survived through that first summer.
[00:17:36] And this also corresponded with launching my financial practice, my, my new financial practice at the exact same time, which, you know, we were launching so we didn't really have any revenue coming in. And so I went from making some money to literally making absolute zero money. In a very short period of time, like about a month.
[00:17:58] Mm-hmm. And I still had bills like a house and the bills around the house here, um, and had used a lot of my resources to get the business started, so I just didn't have it. And that's one of the key things. It forced me to have to work a whole bunch of little side gigs and stuff like that, just so that we could survive.
[00:18:17] And I knew if we could tighten the business down enough. We would get that better, you know? And that was really from that point on every business I've had, yes, I build a business plan and I'm great at building business plans, but now I build a very specific p and l and I go, all right, what if we make half of what we think we're gonna make and we spend twice as much?[00:18:40]
[00:18:40] Will the business continue to work? In those cases. Right. That's awesome. That's fantastic. I'm looking at the clock, the time is flying. Yep. What's, what's a question, Jeff, I didn't ask you that I should have asked you? I think the, the biggest thing that I would say is that the question I'm asked most is, okay, I'm here today, how do I get to my Freedom Day?
[00:19:04] And you know, basically what I would tell people, First thing you know, the, the principles behind freedom day. It's pretty simple. So the first thing is you gotta know where you're at today. So you really need to sit down, write out a budget. Not that you're gonna have to follow this rigid budget, but right out a budget and see what you actually spend.
[00:19:23] Cuz I will tell you 80% of the people that are listening to this right now, even if they're a business owner, they have no clue what they spend in their own personal life. They may know what they spend in their business, but they have no clue in their personal life. So that's the first thing. The second thing is if you have debt, lay that out.
[00:19:44] You need to understand what your debt is. And then from there, step three in the process is you need to find ways, first off, to improve your financial situation. So if you are, you know, if you get a huge tax return at the end of the year. [00:20:00] Okay. You spent, you, you gave the government a loan. Figure out ways to adjust your taxes so that you maybe come out about even, and then all that savings, all that money that you have, you need to apply towards your debt first.
[00:20:14] Then you look at your budget and things that you can eliminate out. One of my favorite sites is a site called Rocket Money, uh, where they'll actually, you can go in and pull up in your rocket money. It'll find all those subscriptions, the the 4 99 to death that you're getting, and it will find all of those, and you can unsubscribe through that.
[00:20:34] And what you need to do is you need to write down every single one of those, you know, whether it's 4 99, 12 99, whatever. And as soon as you have that, you need to apply that towards either debt or savings. From there, once you've cleaned that up, your next step should be, all right, let me find ways to generate additional income.
[00:20:55] Uh, whether it's real estate, whether it's creating a business, whether it's selling something online, selling your ideas. Everybody has knowledge in their head, and that knowledge, that unique knowledge you have, people are willing to pay for it. So go out there and figure out how to sell your knowledge, not your time, but your knowledge.
[00:21:15] And utilize that knowledge to do things that don't require you [00:21:20] get passive income coming in. Apply that passive income towards getting rid of your debt. Once the debt's gone, now you can build up that passive income and wealth to the point where you reach your freedom day Now. In the interim time, you need to be building a bucket list.
[00:21:37] That's one of our key tenants is we build a bucket list because we are giving ourselves the permission to enjoy life. And if we don't give ourselves the permission to enjoy life, and if we don't give ourselves little rewards along the way. We're just not gonna do it. You won't save. I mean, there's a reason why people mostly do not retire at 55.
[00:21:57] The large reason is because they don't have any drive that puts them to that point. What does retiring at 55 mean to you? , I realized early on there was no way in hell I was gonna make it. And, you know, if I stayed on the path that I was on, I would never make it. The fun part is, I got truly my financial freedom this year because I sold one of the businesses that I grew from seven years ago.
[00:22:23] I sold one of those businesses and I. Today at age 55, I turned 55. This month I actually am financially free. I never wanted to work again. I wouldn't have to, but I would've never been able to do it. The traditional saving, you know, 15% of your [00:22:40] income, invest it and get a single digit return and all that.
[00:22:44] Mm-hmm. I did it through, Investing in real estate. I did it through businesses. I did it through a lot of different things beyond what the traditional way of saving is. Yeah. That's awesome. Great. Good stuff. What's the best way for our listeners to reach out to you, Jeff? Easiest way, couple ways.
[00:23:03] You can either email me at Jeff, Jeff kle, so it's j e f f k i k e l.com or the best place usually is to find me on LinkedIn. So if you've heard me on Celine show, , just shoot me a connection on LinkedIn. It's Jeff Kle. And just mention in the comments that you heard me on the show and I'd love to connect with you.
[00:23:26] that's where most of my life is on LinkedIn. I share most of the, my ideas and things like that. You can also hear me on the freedom nation podcast.com as well. Awesome. Great. Thank you so much, Jeff. This was so informative. Thank you. I appreciate you inviting me on the show.
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