Ep 49: How to Make Financial Freedom a Reality

Ep 49: How to Make Financial Freedom a Reality

In this episode, Dawn looks at how you can set yourself up for financial stability in the future and live the life you want, NOT the one you think you want. From smart saving to budgets, making a number of small changes to how you manage your finances can have a valuable, meaningful impact, raise your quality of life, and make you happier.

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Here are the highlights from this episode:

{2:55} It’s all about balancing budgets

{4:07} The power of a simple spreadsheet

{8:22} What do you want to pay yourself?

{10:00} Every action has an impact

{12:09} Future-proofing your retirement

{13:52} The Power Circle

{14:40} Using apps to help you save

{17:16} What is financial freedom to you?

{19:11} Stop trying to keep up with the Jones.

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Dawn McGruer’s Marketing * Motivation * Mindset Group    

Speaker. Author. Podcaster. Strategist.
Multi-award-winning speaker, strategist & best-selling author of Dynamic Digital MarketingHelping to inspire entrepreneurs to rise to meet today’s challenges and be powerfully present to shine online.
Connect with me and let’s Dream Big * Work Hard * Make it Happen
 Facebook | Twitter | LinkedIn | Instagram | YouTube 

Ways to work with me
Read My Book | Speaking | Training | Strategy | Retreat

Welcome to Dawn of a New Era, a business and marketing podcast with a difference, ranking in the top 5% globally for people who want to start, scale and grow their own business. Dawn McGruer shares tips to improve marketing, motivation and mindset, as well as her own real life challenges and experiences as an entrepreneur. Guests include some of the world’s most inspiring leaders, too. So if you are an aspiring, established or serial entrepreneur, this is your go-to podcast to fast track results and rise to meet today’s challenges, and master the art of online influence and business success, and avoid common pitfalls along the way. Never miss an episode, and subscribe and listen at dawnmcgruer.com. 

Dawn McGruer:

Welcome to episode 49 of Dawn of a New Era, the business and marketing podcast with a real difference. Because, guess what? I’m going to share some real life home truths about the world of being a business owner, an entrepreneur, or even a corporate leader because it’s not always easy. To show up authentically and share my advice in the world of marketing, motivation and mindset makes me so happy because it’s something that I craved when I started my business back at 21. 

Now in today’s episode, we’re going to talk about how to make financial freedom a reality. Now, you hear this jargon banded about day in, day out. But, what does it actually mean? Is it true that we can achieve financial freedom? And, what does that actually mean to you and your world? 

It’s all about balancing budgets

Well, it’s all about the factors of leveling up and understanding money, because we were never taught about money in school. I certainly wasn’t. It wasn’t something that I was ever shown to do. Talking about budgeting, and talking about how to save money and also to invest. If you’re like me, I grew up with the mindset and the ethos that work ethic was everything. And then, I grew to realize that it is an important factor, but work life balance doesn’t mean that I have to be in work nine until five, working 16, 18 hrs a day to just show that I am successful. Actually, the opposite is true. I’ve learned how to break down some of the challenges and mindset barriers about working and how to show up in a way that I’m working smarter but not harder. 

The power of a simple spreadsheet

This is what we’re going to cover today. I truly believe that you need to get a principle in your mind about what you feel about money. For me, I am definitely a spender. I am not someone that you would ever think about in terms of budgeting. But, what I am good at is planning. What I have to do is balance my love for spending, because I do like buying clothes, I like going on holiday, I love experiences. For me, I find money gives me choices, but sometimes I can overspend and not really think things through. So I have to have a way that is sensible to me to keep everything in good shape. All I do is I just have a one-page spreadsheet, where I have all my profit and loss forecasts for my businesses in just one view, and I have all my expenses in one view, too. This really helps me, because to see it all on one spreadsheet I have literally all the outgoings, and then I have estimated forecasts for what I’m going to earn. I’m constantly looking at how do I save more money and how do I make more money, and this is something that I would really, really encourage you to do. 

Just get control of your finances by getting one spreadsheet, and just charting out everything you spend in a month. Doing it across your business, your personal, your joint, or your multiple businesses and just get it into view. And then, just go through and do an exercise where you cull some of those expenses, you reduce some of those expenses. And then, start looking at your sales forecast and looking at what your profit and loss is. Now, this is an easy way without getting into real financial reporting, of just getting a grip on being able to spend less than you make. Because if you’ve got an eye on, and you feel that you’ve got control of what you’re spending, and you’re tuned into to what you’re driving through the business as revenue, then it starts to make sense. Because, guess what? There’s this saying that we probably hear a lot, which is all about revenue is vanity, profit is sanity. It is so true. 

What do you want to pay yourself?

You hear people talk about six-figure businesses, seven-figure businesses, eight-figure businesses, and do you know what? None of that matters because it doesn’t matter if you’re a startup, you’re a business in growth, or you’re a multi-million, huge, huge, huge enterprise, the profit is still the key. Because what makes a successful, sustainable business is profit. Would you rather be earning six-figures and have an 80% profit, or do you want to be eight-figures and a 10% profit? It’s just all relative to what’s coming in and what’s going out. So forget getting caught up in the size of business. When people throw these figures out, it doesn’t mean that they’re taking home anything maybe more than you are. It might mean that they’re not even paying themselves a salary. I have seen six, seven, eight-figure businesses where business owners are absolutely maxed. They’re working all the hours, they are not even drawing the money they are worth. 

I hope that makes you feel better because, for me, I concentrate on what I want to do in my business, and yes, my businesses are successful in terms of what they do across property, agencies and things like that. But, it’s all about what you want to be paying yourself and also the spend less than you make. So chart everything out, start getting a sense of control and honestly, it’s such a cathartic feeling when you start dropping the expenses and you can start to see a little bit more, a little bit more. Because these small, steady actions, if you’re getting this done even through weekly or monthly, you imagine that even just five pounds saving a day, what that tops up to across a year. You start making these shifts, and you start to feel positive because you start to feel in control and you become the driving force of the success of your business. 

Now, this energy should shift from, if you felt a negative mindset about money, this should start to make you feel like you are moving forward in a way that’s comfortable to you. Now, you’ll have challenges along the way. You’ve got to think about what do you want to pay yourself, because it’s not what’s left comes to you, you have to think about paying yourself first. Your time is money. The easiest way of looking at this is, if you are doing something and spending an hour of your day on a task that doesn’t earn you money, can that be delegated? If you are the revenue generator in your business, then you are the critical part of the success. Even if you have passive income, recurring income, things like that, you have to think about whatever you are doing in your day, whether you work a six, or an eight, or a four hour day, that time is money. 

So number one, think about what you’re doing in your day, chart it out. Can anything be moved out, to free yourself up so that you can actually earn more cash? The second thing is, what are you going to pay yourself? Now, if you want to take home 10,000 pounds at the end of the month, and you want that to be automated, and you want to pay that out in one sum, how is that going to happen? This brings us on to what the maths of selling is. The maths of selling is something that I’ve used ever since I started my first business at 21, because you need to understand what you need to earn in a year, in a month, absolutely, in a week. But me, I work on a daily basis. What money needs to come through the door of my businesses, each and every day? What are the activities that are associated with getting that cash in, each and every day? Those are the only things that I want my team and myself to be focused on. 

Every action has an impact

As soon as we start a working day, nothing else matters. Because, guess what? When the money’s coming in, then you have a far more creative, flexible, freed up day to be doing things you want to be doing. So forget doing the things that you think you need to do and focus on what really matters, the maths of selling, what money needs to come in the door. What can you do, what are the actions that you need to be doing, that are going to absolutely make sure that happens? Focusing on if there’s a lead that came into the business, that’s got to be your priority of how do you move them further to becoming a paying customer. Posting on social media is lovely, but only if it’s actually driving revenue into the business. Every action has to have an impact. 

This is something that I would encourage you to do. Slow down, stop. Look at what you’re doing in a day, take out some of that waste time, make sure you’ve got some of me time, and start time blocking. Make sure that you address the important things, head on, first of all. Prioritize them that they are do or die. Normally, three tasks a day will help you get closer to that goal. So where are you getting leads from, what is actually converting customers right now, and you have to think about those actions. So chart it out and get an understanding of where people come from, how did you get your customers, and then start looking at what you charge for your products or your services. 

Don’t think about what people will pay for them, think about the value that it gives that person, the ultimate goal. Pricing should never be done on, “Well, the competitor is charging this, and I think the customers will pay that, so what we’ll do is we’ll undercut the customer.” That is not a sensible price strategy. You would rather operate maybe in a premium market, where there is no competition, but carve out a niche. Think about what your pricing strategy is going to be. 

Future-proofing your retirement

Now, coming onto a couple of more tactics, things that I think that will really help, things that I do in my business. This hasn’t changed over the past years. At the moment, I’m working on a financial plan, and this sounds crazy at the age of 42, that I’m charting out my life with a view of dying at 100 and looking at my retirement. But, I have to think about this because my partner’s 11 years older than me so when I am 55, my partner’s going to be retired. I need to think about what my working day is going to look like at the age of 45, 50 and 55, so that I start making plans now so that I don’t just rock up at the age of 55 and think, “Oh, my partner’s retired now. I’ve got to be working a lot in my business.” So, what can I make now, in terms of provisions and planning, to make sure that I have financial security but also financial freedom? 

This is something I started looking at, things like pensions forecasts. I didn’t even know that you could do this. You can actually go onto the government’s website and make sure that all your national insurance contributions are present and correct, so that you’ll get the maximum state pension, looking at what personal pensions you have. What policies do you have? Do you have critical illness, do you have life insurance? Do you have pension pots that you’re topping up? And more importantly, what do you need to be putting into those pension pots? So get in control of a financial plan, so that you know where your money’s going to be coming from. That it’s not going to be a surprise that when you retire that you think, “I haven’t got enough money to cover me.” It sounds crazy to do this now, but honestly, for me, I need clarity. 

The most exciting thing is, is knowing that I have that vision, that excitement, that I’m going to be able to live the life I want to with my partner, and do the things that I want to, and not have to live on a budget that is unreasonable. But, have money, have savings and have pots of certainty so that, if things do crop up, that I don’t have to panic. That is a huge, huge mindset shift. It motivates me on because I know that I will always have money, I will always have security and I will always have choices. I can continue my journey to be enriched, and to lead a life that I feel that I deserve, and that I want to do other things. I don’t just want to exist. This is something that I’m really passionate about. 

The Power Circle

Something that really has come into play in my new program, and by developing this new program, which is called The Power Circle. It is launching in September ’21, I am so excited. It’s just something so different. It really does bring everything in my podcast into an actual program, where it talks about financial freedom, it talks about how to have a powerful life and how to really, really get the all-important influence that you want, the ascendancy, and to leave a legacy in life. And, how to show up in a way, on social or online, that is elegant to you and that suits your personality. So all about challenging the status quo, which brings me on to my next point. 

Using apps to help you save

If you’re used to budgeting and thinking about saving, try switching it up a little bit and automate some of your savings. Now, you can use tools like Moneybox, or you can have Chip, whereby you connect these apps to your bank account, and you put your card details in. For everything you spend, it rounds it up. You can choose to round it up in a low capacity, like to the nearest pound, you can five times it, 10 times it, 20 times it. This mechanism of this automating and auto-saving, you don’t tend to miss these little increments of money. 

But, you imagine what happens, that you’ve got really good interest rates on accounts like Chip. I think it’s 1.25 at the moment, if you go through Money Saving Expert, there’s a code. You imagine, then, that your putting these little savings in, it’s not really causing you any issue, not really missing it. But then, it comes to the end of the year and you start thinking, “Oh my goodness, I’ve got 5000 pounds.” For me, having a pot of money, which is your financial security pot, might be three times your salary. You can set a goal to try and top these up. If you do have money left at the end of the month, pop it into these accounts. Start thinking what makes you feel safe, what makes you feel certain. 

Having a pot of money that’s three times your salary is a good idea. Having things like critical illness, so that if anything happened to you, that you would have money to pay your bills and to help your family, et cetera. And, to pay yourself money. You have to think about your insurance policies. I have a policy in my business with Hiscox. It means that if something happened to me, it hires someone in my place. There’s provisions to get other team members on board. All of these things are vital to your success because you can’t live on the “it’ll never happen to me,” because we know with the pandemic, anything is possible. I don’t want to frighten people, but you need to have things in place like wills, you need to be thinking about the worse case. Because honestly, I would rather have something in place knowing that I was covered, and maybe nothing happened, great. But, you don’t want to be relying on other people if something happened, you need to have that financial security yourself. 

Now, again if you’ve got credit cards and things like that, paying down debt. Just make sure that, if you have a card, that you’re paying naught percent and start trying to think about how much you can clear down, and how much you would need to do that until maybe the naught percent came off, and break it down into chunks. 

What is financial freedom to you?

And then, think about what is financial freedom to you. We’ve talked about financial security as well, but freedom is basically how much money has to come into the business. Now, I have myself and also clients who have recurring income, people who are paying monthly, subscriptions or payment plans. That’s a really nice way of knowing that money’s coming in each and every month. Financial freedom is basically knowing that the money that comes in each month covers the bills, and anything else in addition is extra. So when people talk about financial freedom, it doesn’t necessarily mean not working. Financial freedom is about having an element of income that’s not just around your time. So having online courses, or some form of passive-ish income. Nothing’s every truly passive, because there’s an involvement along the line, but having something that is low intensity in terms of your time is what we’re looking for. So if you’re working one-to-one, start thinking about group programs, thinking about online instant access, pre-recorded programs.

It’s not about changing the world in a day, it’s about really thinking through your business model and thinking, “Does this work? Does this give me the flexibility and freedom that I wanted when I became an entrepreneur?” 

And, last but not least, this is something that I’ve very passionate about, which is compound interest. Even if you’ve got a certain amount of money to invest each day, let’s say even if it was five pounds, and you’ve got a 10% annual interest on that, and you did that every day, you imagine in 40 years time, you’d have nearly a million. It’s huge. For me, when you talk about savings and investing, it’s not taking big chunks and going, “Right, I’ve got 10,000 pounds to do here.” That’s great if you do, if you’ve got dividends at the end of the year, but this is about daily incremental saving and investing. 

So auto-saving every day and maybe investing every day, just small increments. Where can you put your money that’s going to work the hardest and smartest for you? It could be that you really want to get into property, but it feels really difficult to save that deposit up. Don’t just stop. Think about something different that you could start saving. By doing daily auto-saves, if you get to the end of the year and you had 5000 pounds saved, and you could take another 5000 in dividends, that 10,000 pounds can go a long way. 

Stop trying to keep up with the Jones.

Start making a life plan. Start thinking about what makes you happy and what you want to do. And last but not least, don’t fall into the trap where we think that we have to buy bigger houses, better cars, everything is driven by materialistic objects. If you’ve got a house and you love that house, why on Earth do you need to move? Why can you not just make it your forever home? People talk about it, “Oh, you know this is a short term gap. I want to get to the next big thing.” But, do you really? Everyone is different and it’s relative to what you want. Why go and get bigger mortgages when maybe, actually you want more money to go on holiday? Think about not what everyone else is doing and keeping up with the Jones’, because it only matters about what you want in life. Do not care about what others think. Too many times people are so quick to judge, so quick to give you their life vision. It’s your life. Don’t care about what other people think.

If people judge you about something and they think that you’ve bought a nice house, and they think you’re all flash because you’ve got money, it’s not. It’s just honestly the trigger for them is its jealousy. You have to think about if you want to do something, and you want to go and buy that amazing sports car, do it. If you don’t and you’re happy with just a lot of run around, that you can go on holiday and you can go and have lots of free time, and 17 weeks holiday in a year, then blooming well do it because life is too short. If the pandemic has taught us nothing other than the fact that life is important, the people around you are important. Well, you want to be able to show up and spend time with your friends, your family. It’s not all about work. Work should be something that spurs you on, motivates and inspires you, but you have to have that all important balance. 

My final thought here and my final word to you is that whatever you want to do in life, it’s all possible. But, you have to save and invest money, even if it’s a nominal amount a day. If you want to achieve financial security, and ultimately finance freedom, then you’ve got to think about what your life plan is going to be. Start getting control, chart it out. Get a spreadsheet. Start thinking about, remember, save less is not the right tactic. Saving more, yeah. Saving money, in terms of on your expenses is great, saving money on an auto-save is great. But, not doing anything is not going to move you further forward. You’re going to stay stuck in that position. If you have a big pipeline dream, start saving now. Make little, incremental changes. And remember, spend less than you make. Start looking at what you’re earning and what you’re worth, and making sure that you have daily revenue or profit goals and targets in place, that you can start seeing these changes. 

Because honestly, if you get this right, it means that you have got years, years of fun to have. It doesn’t have to start at retirement, it can start in a matter of months, in a matter of days. Because these small changes, even if it’s about taking two hours out of your day, just push things into a tighter time scale. Honestly, the tighter that I have my time scales to do things, and I time chunk and time block my time, I still get all the work done, I just do it in a really efficient way, because then I know I’ve got Wednesday afternoons off, I’ve got Friday afternoons off. Because you made a business, you made a career, you made life choices, and life is for living. Do not get caught up in this whole entitlement trap. If you want something, go and do it, make it happen and dream big. 

I’ll see you in next week’s episode and I hope this was useful. And remember, get control. Just get a chart out, or whatever makes sense to you, a spreadsheet, and just get these ideas down. Start making changes, three things a day, one thing a day, and make the changes that are going to make that momentum to make you happy. 

Thank you for listening to Dawn of a New Era podcast. For your free checklist to find out how to boost your business for growth, profit and success, and join our community, go to dawnmcgruer.com. 

Remember to join me and all my Podcast Guests on Facebook
Dawn McGruer's Marketing * Motivation * Mindset Group

Speaker. Author. Podcaster. Strategist.

Multi-award-winning speaker, strategist & best-selling author of Dynamic Digital Marketing - Helping to inspire entrepreneurs to rise to meet today’s challenges and be powerfully present to shine online.

Connect with me and let’s Dream Big * Work Hard * Make it Happen
Facebook | Twitter | LinkedIn | Instagram | YouTube

Ways to work with me
Read My Book | Speaking | Training | Strategy | Retreat

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