Pay Yourself First | Do It Scared Podcast with Ruth Soukup

The Do It Scared™ Podcast with Ruth Soukup provides weekly motivation, inspiration, and practical instruction for anyone tired of settling for “good enough.” Each week we tackle topics like goal-setting, overcoming procrastination, finding the time, energy & know-how for accomplishing our dreams, and overcoming the challenges that stand in our way. Don’t miss an episode; subscribe here.

I’m pretty sure we’ve all been there at some point…by the time we’ve paid for all.the.things—mortgage, groceries, utilities, childcare, you name it—there’s hardly anything left over to save.

The thing is, it’s SO important to have savings. We need to save for emergency funds, and fun money, and money for our futures- but how do we save when there’s nothing left over at the end of the month?

The trick is to pay YOURSELF first.

Sounds a little counterintuitive, right?

Pay Yourself First: 4 things I learned from Mike MichalowiczMike Michalowicz doesn’t think so. The bestselling author of Profit First and one of the smartest people I know, Mike is my guest for Episode 20 of the Do It Scared™ Podcast.

A successful entrepreneur since college, Mike had a HUGE ego. He built businesses just to sell them and he sold them for large profits, just to afford his lifestyle. But, the reality is, his ego almost destroyed his family and Mike eventually ran out of money. On Valentines Day, he tearfully admitted to them that the money was gone. He lost the house, the cars, and almost everything else.

It was this financial ruin that gave him the clarity he needed. He decided to fix himself first, lose his ego, and then help other people who struggle with money just like him.

While working to better himself and his finances, Mike discovered a simple financial trick that’s totally changed his business and life!

In this episode, Mike talks about why you need to put profit first, killing your ego, and learning from your biggest mistakes. I guarantee you that his story is will change the way you think about money!

Get the synopsis below or listen to the whole podcast on iTunes or on Google Play. (Or just search for “Do It Scared” on your favorite iPod app!)  Never miss a new episode by subscribing on iTunes. You can also find the full show notes at https://doitscared.com/episode20/.

Here are my 4 favorite takeaways from Mike’s interview:

It's time to put paying yourself first for all of your hard word and dedication to running and growing your business

PAY YOURSELF FIRST

Pay yourself first might sound like an odd concept, but in reality, it is pretty simple. In traditional accounting, your profit is your income minus your

expenses. You essentially take your profit last, making sure everything gets paid first. BUT, If you take profit last, your expenses will expand and whatever potential money for saving just disappears. When profit comes last, we’re also subconsciously treating it as insignificant. And, it’s not magic; it’s Parkinson’s Law. The greater the supply, the subconscious response is to use that supply. We can apply this to any area in our life, especially personal finances. If we have money left over after our bills are paid, we WILL spend it.

That’s why Mike wrote Profit First. He wants to show people that whether in life or in business, all you need to do is set aside your profit right away. From there, whatever is left over is what you have left to spend in your business (or on your personal expenses). Profit now comes first.

FEAR IS A POWERFUL MOTIVATOR

Mike explains that fear is a powerful motivator for survival, and played a key role in making his business successful. When he first started out as an entrepreneur, he thought sales would come knocking at his door. What he realized was he needed to hustle and make money, fast, to support his family. “It was, like, I need money. It’s a survival mechanism. I literally walked door to door, knocking on doors, getting kicked out, rushed out of buildings, trying to sell my computer services. “ The fear of not having enough or providing enough was a wonderful asset to him for a period of time.

Mike believes in using your fear to push you. Sales did not come naturally to him, but it was fear that made him get out of bed and walk door to door to support his family. “Fear is a powerful motivator to do what makes you survive and get out there. It made my business successful.”

Transform the negatives into motivating positives.

TRANSFORM FEAR INTO CONFIDENCE

Unfortunately, there’s a point at which fear becomes detrimental. Fear most often goes hand in hand with stress, which can be physically harmful. You have to figure out how to transform your stress into something more manageable. Mike states that he realized that the “stress and the sense of compression in my chest every day, like, “I need to survive,” was […] compromising my health and my physical wellbeing.”

At a certain point, stress needs to transcend into confidence instead. For Mike, confidence took the form of hiring people and allowing people to do some of his work so that get could get beyond survival mode. The thing is, we all experience stress and fear in our lives, but when we can transform that fear into a feeling of “I’ve got this,” that stress becomes confidence.

SHOOT FOR ASPIRATION

Fear is constantly being reshaped. From fear to confidence and then from confidence to aspiration. Mike states that “I very much feel I’m in the aspirational stage of my life, and I may revert back when I face new challenges, but in the aspirational stage, I am out here to serve others, to impact the world positively, to right my own wrongs.” For him, this aspirational stage is SO powerful and freeing. He knows what living in fear and stress feels like, but he also knows how to use his past experiences to grow out of fear.

If you experience fear, that’s OKAY! The key is to embrace that fear and let it guide you, let it give you that extra energy, and over time realize that fear will serve its purpose, but it’s not meant to be there permanently. So over time, we want to build out of it, thank it for its services, but it doesn’t need to stick around forever. Fear is the gateway to confidence and aspiration.

Pay Yourself First - It's time to put your hard work and dedication first. | Do It Scared Podcast