Wealth Podcast Post

Financial Freedom with Jackson Millan

George Grombacher April 28, 2022

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Financial Freedom with Jackson Millan

LifeBlood: We talked about financial freedom, why it’s essential to define what that means to you, how to develop a plan for reaching it, and how to make it a sustainable part of your life, with Jackson Millan, the wealth mentor and CoFounder of Aureus Financial.  

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You can learn more about Jackson at AureusFinancial.com.au, Facebook, Instagram, YouTube and LinkedIn. You can find the ScoreCard HERE.

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Our Guests

George Grombacher


Jackson Millan

Episode Transcript

george grombacher 0:00
Come on leopard, this is George G. And the time is right welcome. Today’s guest is strong a powerful Jackson, Mullah Jackson, are you ready to do this?

Unknown Speaker 0:18
I’m really looking forward to it might let’s get stuck in.

george grombacher 0:21
Let’s Let’s go. Jackson is the wealth mentor. He’s the co founder and head of strategy for Orius financial, you’re helping business owners scale their business, increase profits and supercharge their wealth. Jackson excited to have you on tell us a little about your personal life’s more about your work and why you do what you do.

Unknown Speaker 0:40
Yes. So anybody who looks at me knows that I don’t look like a typical finance guy. And that’s probably why you and I get along. So well George is because we’re, we’re I think we’re cut from the same rag. But I’m Jacksonville animal town as the wealth mentor and I look at money differently because I’ve come from a my parents who were business owners who struggled and really tried to make ends meet worked incredibly hard for it, but were always living hand to mouth. And they were always deferring gratification to try and create financial freedom, but it never worked out for them. And what I’ve come to realize is they didn’t understand the language of money. So I’ve been spending the better power the last 15 years following my mantra of relief for today and planned for tomorrow. And currently, we live on a 70 acre farm in far north Queensland that we’ve turned into an animal sanctuary. We just rescued another bullet last night actually. And we tried to combine a little bit of nature with about creating this sustainable lifestyle and existence around money to help business owners enjoy the journey.

george grombacher 1:36
Nice a lot, a lot of good stuff there. We’ll circle back on the language of money thing, an animal sanctuary, how many? How many? How many animals? Are we talking?

Unknown Speaker 1:45
Oh, gosh, I’ve lost count. Now. I think we’ve probably pushing about 30 at the moment. And we are surrounded by a lot of wildlife. As you probably heard George, there’s a lot of things that try and kill you in Australia, many of those being their native wildlife, and that native wildlife roams through our backyard at all times. So there is a Yeah, a prehistoric bird that’s a direct relative of the Velociraptor called a cassowary. And they call our backyard home. So we’ve got to coexist with their with the modern day dinosaurs.

george grombacher 2:13
Okay, well, that’s a whole nother podcast right there how to visit let’s let’s, uh, let’s talk about the I think he’s language money language. Well, tell me more about that.

Unknown Speaker 2:26
Yeah, I think for many of the previous generation, and many people who are self made in business now, they’ve learnt hard working values from the people around their parents, their other family members, their friends. And I think at a previous time, hard work was synonymous with success, but it didn’t guarantee it. And I observed that firsthand. And just because you work incredibly hard doesn’t necessarily mean that you’re going to create financial abundance for yourself and those around you. And I very quickly saw that in the actions and outcomes of my parents. They worked incredibly hard in their day jobs, but they didn’t understand the mechanisms, the system’s the frameworks to allow them to turn their earned income into true personal wealth. And I’ve realized through researching and spending so much time working on this, that this was commonplace, like, we’re not taught this at school, and you learn through the school of hard knocks, or if you’re lucky enough to get a mentor who has actually got experience. But this is not commonplace, it seems to be a rare commodity, that people get access to this information. And by the time they get access to it, they typically made so many mistakes that they’re already three or four steps behind.

george grombacher 3:34
So is there a specific delivery mechanism that the that y’all are focused on?

Unknown Speaker 3:42
Really, it’s about creating repeatable systems. And we refer to this as the Wealth Mastery machine. Because like when we think about a machine, a machine produces a regular, repeated, consistent outcome. But anybody listening to this or watching this today, like can you refer to your money management as a machine right now. And for the vast majority of people, it’s not it’s knee jerk. It’s emotional. It’s reactive whenever they’ve got a spare moment. And it’s for this reason, because they don’t have a plan. They don’t have the cash or they don’t have the consistency, that they are eons away from creating financial freedom. They don’t even know what financial freedom could look like, let alone how to get there. So what we share with our clients is really a repeatable system to focus on three things that we iterate over time. First thing we focus on George’s, we focus on getting crystal clear on defining what financial freedom actually means, and more importantly, why they’re trying to achieve it. Because this is not about chasing a number. You can’t just pluck a number out of the sky or take a recommendation from your uncle Bob at the Sunday barbecue. Money is just a vehicle. So we need to define what it is that you’re trying to create, what lifestyle you want to live, what opportunities you want to have available. And then once we can define those with clarity, we can actually reverse engineer that into a wealth target into an income target. And once we clear on that, it gets a heightened sense of accountability, because we can see exactly what financial freedom looks like. The second part is create, we need to have a mechanism to turn our business profits into personal wealth do good as you know, it’s not your earned income that will make you wealthy, it’s what you do with it, that counts. And what most people lack is a cash flow operating system that allows them to maximize this surplus, and actually commit that surplus to work for them so that for the vast majority of people, they they live first, and they save what’s left, if there is any less. And they want to make sure that they’ve got confidence in terms of how they allocate that money, should I be paying off debt? Should I be building wealth? Should I be doing both? And understanding how to evaluate things like opportunity cost, and risk greater returns. And then lastly, we need to manage we need to be able to nurture, optimize, and improve our wealth ecosystem as we progress on our journey, because I think so many people beat themselves up, because they think wealth is pass or fail. It’s not black or white. It’s this constant recalibration, and optimization, as we’re tracking against this roadmap, where we say, well, maybe I’m one step ahead, or great. Or maybe something’s happened. And now maybe I’m two steps behind. Okay, cool, what have I got to do to course correct. And it’s by using this type of momentum based money methodology, that we can actually enjoy the journey, and makes it really easy. And we can almost presuppose our ability to achieve our goals.

george grombacher 6:41
Nice. Alright. So step one is really defining what, what, what real financial freedom means what, and then getting clear on what our wealth and income targets are. And that makes sense to me why that’s the starting point. Because probably when you ask somebody, what does it mean to be financially free? They’re like, Oh, well, I’ve never really thought about that, actually. Right. So getting clear on that. And then the second one, can you tell me more about that created a mechanism to turn profits into wealth?

Unknown Speaker 7:15
Yeah. So the there’s a fundamental principle that governs all of us as human beings, that’s called Parkinson’s Law. And Parkinson’s Law states that as a human being, you use the means that you have available so the more means you have, the more means you use. A great analogy I like to use is a tube of toothpaste, when you’ve got a brand new tube of toothpaste, you’re pretty frivolous with it, you’re splashing around, don’t really care, right? But when you get to that end of that tube of toothpaste, how long do you make that sucker last time you do anything not to have to go to the shops and buy another tube. And this is Parkinson’s Law playing out. So the problem is that as you increase your income, particularly as you’re growing and scaling a business, this is the most money that you’ve ever had your hands on in your entire life. So we suffer from this phenomena called cashflow creep, that as that income increases, our expenses increase, often proportionately, you’re working harder, but you don’t have anything more to show for it, in some cases less to show for it. So the idea of having this cash flow operating system is that we use Parkinson’s Law in reverse, we actually limit the means that you have available, we presuppose the profits, we allocate that first, and we run your business, and we run your life on what is left. And look, this doesn’t mean eating cat food for dinner, right. And this is still about living a really great existence. But it’s just about making sure that we limit those means we put a lid on it. So it just doesn’t continue to increase as you grow and scale on your wealth journey.

george grombacher 8:45
I love Parkinson’s Law. I appreciate the the example use the toothpaste. But I think it’s it’s such a human thing to do as I make more money. Well, if I’m not putting parameters on it, I will I will spend all of it. And there will be none left over for me at it unless I do put those parameters on it. So I think that that’s awesome that that makes sense. And then tell me more about step number three.

Unknown Speaker 9:09
Step number three is about managing. So the idea here is that so many people when they think about wealth creation or investing their psychology around it is about how can I get to my destination as quickly as I possibly can, but that’s fine. But they’re normally relying on external macro variables that they have absolutely no influence over the like, hey, if I can just go and buy the next cryptocurrency if it’s going to 10x I’m going to achieve financial freedom in a year. And it’s just unrealistic because you have no control over that. So what we typically do is we shift the frame on this and we work out what is the least amount of risk that I need to take in order to get to my outcome, as opposed to pedal to the metal trying to get there as fast as I can. And then it was all about the the psychology and the mantra of understand what you cannot create trol and influence what you can. So for example, for most of our clients, our assumed average rate of return is between six and 8%. And the reason why we do that is sure there are wealth creation opportunities that can make us more than that. But I would prefer to have a really conservative forecast that we can under promise and over deliver upon as opposed to assuming that we’re going to get 20% year on year returns, and then end up falling short. So what this data allows us is that we’ve got a net wealth, a passive income and an active income target that we need to achieve every year. We break that down into quarterly sprints. So let’s say for argument’s sake, Giorgio, we say, Hey, we’re going to accumulate $100,000, in additional net wealth over the next 12 months, simply, it’s $25,000 a quarter. So if we only accumulate 10,000, this quarter, all we do is we just adjust the remaining three quarters and we play catch up. The idea this is a similar methodology to if you’re in the gym. Most of us the reason why we don’t build muscle mass, and I can’t really talk, I’m 60 kilos dripping wet. But the reason why we don’t do it is we don’t squeeze out those last few reps. When you’ve got a personal trainer with you, who can actually say, Hey, George ate one more rep, Come on, push that rep through, they give you a little bit of a hand they support you, that’s where you get the growth. And we do the exact same thing with money. We call it money, muscle memory, where if we can create an a momentum based plan where we’re always working towards a target and an outcome, it allows us to squeeze out that last rep and get more results as a result.

george grombacher 11:43
Nice. I love it. That makes a lot of sense. And based on six to 8% returns, I think that that’s certainly something that people can get their arms around. You know, we need to you need to, as you’re working with people help people understand what the risk profile is, and having realistic expectations on the kind of returns that are available and that it’s lined up with the things with the amount of risk that they’re comfortable taking on. So I appreciate that. Are you agnostic as to the actual investment vehicles? Or how does how does that work?

Unknown Speaker 12:21
Definitely, I have no real bias. I believe every asset class has pros and cons. And from my perspective, from my own firsthand experience, and having built $1.5 billion in combined wealth for our clients, there are only three predictable ways to build wealth in this world, there is business, owning your own business, building that into an asset, a saleable asset that has maximized its cash flow that reduces key person risk, and has the ability to be sold. Second is property, good quality blue chip property where affluent people want to live and raise families. Because we know that affluent areas where there’s good quality property that supports the lifestyle that asked what people want to live, they are always going to be prepared to push up the price of property over the long term. And the third way, is chairs. And I’m not a stock picker, I’m not a day trader, my personal strategy is index Based Investing, where I accumulate a share market index, so I get the average return of whatever that index does. And I don’t focus on the stock picking I focus on getting money into the market, because my personal view is that the s&p 500 and the ASX 300, and the global index are all going to be better in 1015 20 years time than they are today. And sure, some of those companies are going to fall out of those indexes, they’re going to be replaced with new companies, but getting the average of all hell those companies perform over the next 1015 20 years or more, is going to help me build wealth for the future. So what we teach our clients, how do they build wealth using all three of those vehicles?

george grombacher 14:04
Nice. So for folks who are coming to you who are not business owners, are you helping them become business owners or

Unknown Speaker 14:13
not necessarily, that’s not our sweet spot. We typically work with established business owners who already have a multi six figure or maybe a seven figure business, they’ve spent a lot of time effort energy investing back into that business to get it to that point of scale. And they’re typically got some some turning point, whether it’s that they’ve started a family, and they’ve had an increased emphasis on wanting to buy their home, upgrade their home or they feel like they need to play catch up on their wealth journey. And that is the time and where they start looking for us. And we don’t specialize in helping people who are already immensely wealthy. We help people who have built that business foundation, play catch up and accelerate this trajectory on their wealth journey to get them on track for financial freedom and use that business asset that they’re built as a cash flow mechanism to fuel Okay, radicals,

george grombacher 15:01
I love it. It makes sense. It strikes me that a lot of the time, it’s this chicken or chicken or the egg sort of thing. And he talked earlier about how a lot of folks that we all know if it’s my family members or your family members didn’t understand how money works. So it’s the financial literacy that’s missing. And there’s a lot of folks out there who are incredibly educated and they have an MBA in finance, but they lack in the behaviors, or they, they, they don’t have that mechanism in place. And so it, I don’t think it matters, I, you know, where somebody is at, because they need to bring it all together, not just have one or the other, or not just have, you know, we need help in making it real.

Unknown Speaker 15:48
I agree with you completely. But without the plan, how do you navigate the decisions you need to make without the cash, you can have the best plan in the world, but you’re not going to be able to pull the trigger on those opportunities when they come up. And probably most importantly, it’s about consistency of action. Because I think one of the biggest problems is most of us think that it is one great decision that’s going to skyrocket us to financial freedom. And you and I both know that that’s not the case. It is regular, repeated consistent decisions over time, that are going to get you on track for financial freedom. And the great thing about reframing it that way, is that it reduces and lowers the stakes. And you don’t need to make perfect financial decisions every time. You just need to make decisions.

george grombacher 16:30
Yeah, I love it. That’s that’s the thing, too, right? Because people can be paralyzed, they can be afraid of making a wrong decision. And that paralysis can go on for years and years. And you mentioned opportunity cost earlier, because there is a very real opportunity cost awaiting

Unknown Speaker 16:48
100%. Yeah. And what we do is really create a catalyst for this. And this is a simple back in the envelope formula that you guys can calculate now is the week creative financial freedom formula for our clients. And what we work at is, firstly, look at per year, how much income you need to be able to live the lifestyle that you want, that will give you freedom to choose whether or not you work. So let’s say for argument’s sake, it’s $100,000. So you take that number, we call it f3, your Financial Freedom figure, you divide that by five, and you times that by 100. So if it’s 100,000, you need $2 million of net wealth. And that should allow you to produce that $100,000 in passive income or realizable investment assets in perpetuity, you should always be able to retain that capital. And most people go wow, okay, that’s a big number. How am I going to do that? So what that then allows us to do is we break this down well, okay, what, how much wealth have you got right now, that’s the first contributing factor. You can’t really influence that, because that’s a lag measure for what you’ve done previously. But the things that you can control is well, okay, how much are you prepared to contribute moving forwards towards that goal? What is your return expectations? How much risk are you prepared to take? Is it that 60%? Is it less? Is it more? And then lastly, how long are you prepared to wait? And if we understand these levers, it then allows us to work out what are we going to do to bridge that gap. And the longer you wait, the less time you have until you need to realize that goal the harder you’ve got to pull those other levers in order to bridge that gap. And and sometimes that results in a bit of a come to Jesus moment. But we need it. Because I think so many people differ making these districts like ah, well, that’s a thing that I can deal with when I’m old and gray. Now, the sooner you start, the easier the journey is going to be.

george grombacher 18:32
Mm. Jackson, the people ready for that difference making tip even though that one was really solid? What do you have for them?

Unknown Speaker 18:39
So look, I think the first thing that you need to realize is that the best time to plant a tree was 20 years ago, and the second best time is today. I want you to sit down and document all of your lifestyle and financial goals. So your lifestyle goals are qualitative goals. It’s holidays, his experiences, cars, jet skis, boats, hobbies, interests, and map all of those down over one 510 15 and 20 years. Push yourself as hard as you possibly can to map out as many as you can try and get at least one goal in each box. Then go to the financial side, the quantitative goals, the house you want to live in. When do you want to have it paid off? Yeah, bad debt you want to get rid of? Do you want to build an investment portfolio, passive income goals. Similarly, one 510 1520 years, push yourself to really quantify those goals. And just like doing that exercise and having this three dimensional plan that you’re going to put together for yourself, this now creates an extra emphasis on actually reverse engineering this into a plan of action. Because the difference between a dream and a goal is a plan. And most people haven’t been taught how to plan financially. And this is step number one. If you get good at doing this, your wealth journey is going to be a lot easier as a result.

george grombacher 19:55
I think that is great stuff definitely gets come up. But hopefully The best time to plant a tree thing was. That’s that’s definitely one of my favorites. So thank you for that. Well, Jackson, I appreciate you coming on where can people learn more about you? How can they engage with you and Orias? Financial? Yes.

Unknown Speaker 20:12
So we’ve developed a 40 point performance scorecard for your finances to help you work out how close you want to achieving financial freedom. And we’ve done this with 1000s of business owners the world around the average score is about 18 out of 40, which is a little bit scary means most business owners are below average financially. But I don’t want you to dwell on your score. I want you to work out what’s your score now? And what are the things you’ve answered no to that you believe you can turn into a yes, over the next 3060 90 days, we work with clients all around the world to teach them the language of money, help them define what they want, create a repeatable mechanism to allocate that business profit into wealth, and then manage it effectively in less than 30 minutes a month. So once you do that scorecard, you have the opportunity to reach out to us and we can have a conversation to help you level this up and get on path for what you define as financial freedom. So I’d love to support where we can

george grombacher 21:02
love it. And what’s the site? Or where can they get the access to the 40 points scorecard?

Unknown Speaker 21:07
Yep, I’ll include the link so it’ll be dot l. Y Ford slash Orius. scorecard. If you go into the show notes, you’ll be able to find that link. It’ll take you about five minutes and and hopefully give you some clarity around what your next best moves are financially.

george grombacher 21:20
Excellent. Well, if you enjoyed this as much as I did, so Jackson, your appreciation and share today’s show with a friend who also appreciates good ideas. Find that 40 Point scorecard in the notes of the show, click on it, it’ll take you right there. And I mean, take advantage of the opportunity to find out where you are and the thought of being on track to reach all your financial goals and objectives and only having to spend 30 minutes a month. Sounds pretty good to me. Thanks. Good Jackson. Thanks, Mike. And until next time, keep fighting the good fight. We’re all in this together.

Transcribed by https://otter.ai

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