1 00:00:00,000 --> 00:00:06,160 Welcome to Milestone Moments, the show where we explore the journeys that lead to success. 2 00:00:07,040 --> 00:00:14,000 I'm Sheila Slick, your host and founder of Five Milestones. In every episode, we will bring you 3 00:00:14,000 --> 00:00:21,520 insights from the minds of entrepreneurs, leaders, and experts who will share not just their expertise 4 00:00:21,520 --> 00:00:27,440 but the milestone moments that have reshaped their journeys and led to significant achievements. 5 00:00:27,440 --> 00:00:33,120 So if you're looking for motivation, you're in the right place. Subscribe now and discover the 6 00:00:33,120 --> 00:00:36,160 milestones that mark the path to success. 7 00:00:40,640 --> 00:00:46,480 Welcome to another episode of Milestone Moments in Business and Leadership. I'm Sheila Slick, 8 00:00:46,480 --> 00:00:54,720 your host, and today my special guest is Dan Nicholson, a serial entrepreneur, founder of 9 00:00:54,720 --> 00:01:02,720 Nth Degree CPA, an accounting and financial consulting firm. Dan is also author of Rigging 10 00:01:02,720 --> 00:01:10,000 the Game, How to Achieve Financial Certainty, Navigate Risk, and Make Money on Your Own Terms, 11 00:01:10,000 --> 00:01:17,360 deemed a best seller by USA Today and the Wall Street Journal. Dan has been named a top 40 under 12 00:01:17,360 --> 00:01:24,960 40 accounting globally four times and has created and run multiple small businesses, including 13 00:01:24,960 --> 00:01:33,680 CertainTU and CertainTNews, a platform that's syndicated to over 1 billion monthly users. 14 00:01:34,000 --> 00:01:42,480 Dan also hosts the Rigging Game podcast and is a consulting producer for PBS Opportunity Knox. 15 00:01:42,480 --> 00:01:44,960 Welcome to the podcast, Dan. 16 00:01:44,960 --> 00:01:47,040 Super excited to be here. Thanks for having me on. 17 00:01:47,920 --> 00:01:54,960 I'd love to start by asking you, was there a milestone moment, a catalyst that led you down 18 00:01:54,960 --> 00:01:56,000 this career path? 19 00:01:57,280 --> 00:02:03,520 Absolutely. Absolutely. Thank you for that question. So growing up, I was always iconic, 20 00:02:03,520 --> 00:02:08,960 cliche kid, scheming on business ideas, mostly bad business ideas. But if you can imagine that 21 00:02:08,960 --> 00:02:16,640 kind of entrepreneurial kid with idea after idea. And so I went off to college at the time I was 22 00:02:16,640 --> 00:02:21,440 planning on being a marketing major, hard for people to believe when they hear I'm a CPA and 23 00:02:21,440 --> 00:02:26,640 done all this finance stuff. It's like marketing and accounting folks are often like the polar 24 00:02:26,640 --> 00:02:32,720 opposites. So down this marketing path and first person in my family to go to college, I'm living 25 00:02:32,720 --> 00:02:40,720 at home, I'm commuting and borrowing a bunch of money to pay for tuition. And I get this email 26 00:02:40,720 --> 00:02:45,840 from business school, sort of mentee that was assigned to me and they sent it out to everyone 27 00:02:45,840 --> 00:02:52,400 that UPS, United Parcel Service, the shipping company had these scholarship opportunities and 28 00:02:52,400 --> 00:02:58,720 they were having this career fair on a Saturday, listed out all these business positions that were 29 00:02:58,720 --> 00:03:03,520 open. One of them was marketing. So I see the scholarship money that they're proposing. It's 30 00:03:03,520 --> 00:03:11,840 like, I could really use this. I'm working a 20, 25 hour a week job in addition to being a student 31 00:03:11,840 --> 00:03:16,640 and I could really use the scholarship money and I want to get my foot in the door in a marketing 32 00:03:16,640 --> 00:03:24,880 position. So I print everything off. I have my resume. I've got a suit on. I go to this hub 33 00:03:24,880 --> 00:03:31,120 where they handle all the parcels and everything in the city nearby, show up. I'm the only person in 34 00:03:31,120 --> 00:03:38,560 a suit. It's a group of other folks in jeans and t-shirts and all that. So a room of 30 35 00:03:38,560 --> 00:03:45,360 age folks around my age. I'm 19 at the time. And they proceed to show this video about the benefits 36 00:03:45,360 --> 00:03:51,120 of working in the hub and being a loader and unloader and how you can get a night shift and 37 00:03:51,120 --> 00:03:55,680 all this sort of stuff. And so I watch it and at the end, I kind of sheepishly raised my hand. I'm 38 00:03:55,680 --> 00:04:02,800 like, Hey, this sounds really interesting, but these all sound like positions here in the hub, 39 00:04:02,800 --> 00:04:08,640 kind of manual labor type stuff, which is not at all below me, believe me. But I've got this print 40 00:04:08,640 --> 00:04:14,080 off here that talks about these marketing internships and stuff. Maybe I'm in the wrong 41 00:04:14,080 --> 00:04:21,440 place. Okay. Well, there's a booth outside with a couple of guys from finance, but otherwise, 42 00:04:21,440 --> 00:04:27,680 I don't know anything about what you're talking about. This is a career expo to recruit people to 43 00:04:27,680 --> 00:04:34,480 work inside the hub. Okay, cool. I go out, I talk to the finance guys. I show them the same thing, 44 00:04:34,480 --> 00:04:41,200 same sheet of paper. Hey, look at these marketing internship. We don't know anything about that. 45 00:04:41,200 --> 00:04:47,200 We don't really even have a marketing department based here in the Seattle area where I was. I 46 00:04:47,200 --> 00:04:53,440 proceed to talk to them for the next hour and show them the resume, all of that. And they go, 47 00:04:53,440 --> 00:04:58,080 you know, we actually have this open position for a part-time finance supervisor 48 00:04:58,800 --> 00:05:03,920 and we think you might be a good fit. We're going to pass your resume off to our regional controller. 49 00:05:03,920 --> 00:05:13,200 And fast forward a month, somehow in 19, I get this job as a finance supervisor, managing 20 to 50 00:05:13,200 --> 00:05:18,800 25 people as part of the finance department, still inside the hub, part of this department called 51 00:05:18,800 --> 00:05:26,240 revenue recovery, where we were auditing shippers for basically billing compliance. And it was that 52 00:05:26,240 --> 00:05:32,480 moment getting this job and getting all this work started, and I was like, I'm going to go 53 00:05:32,480 --> 00:05:37,840 to this job and getting all this responsibility that one, I proved to myself that I was capable 54 00:05:37,840 --> 00:05:44,080 of really doing anything that I set my mind to. But it also set me on this path to changing my 55 00:05:44,080 --> 00:05:49,920 major to ultimately be accounting. And everything has sort of fall from there. I ended up getting 56 00:05:49,920 --> 00:05:54,880 this fellowship at the board that writes all the accounting standards here in the US, sort of the 57 00:05:54,880 --> 00:06:00,480 most prolific fellowship you can get in my industry. And I think I got it not because I 58 00:06:00,480 --> 00:06:06,080 went to one of the top accounting programs. The other five fellows went to the top five accounting 59 00:06:06,080 --> 00:06:13,920 programs in the US. I think I got it because I already had a ton of work experience in finance 60 00:06:14,480 --> 00:06:21,200 that didn't seem ordinary for someone who was in their early 20s. So completely changed the 61 00:06:21,200 --> 00:06:28,240 whole trajectory of my career and life. And then from there, you founded your own CPA firm. 62 00:06:28,240 --> 00:06:34,320 That's right. Yep. Yep. After years of sort of struggling with and going back and forth of, 63 00:06:34,320 --> 00:06:37,440 okay, now I have all this accounting experience. I've got this fellowship, 64 00:06:38,720 --> 00:06:44,160 worked in these kind of prestigious jobs, at least on a resume. Really what I wanted to be 65 00:06:44,160 --> 00:06:51,280 was an entrepreneur. And so I was struggling with how do I reconcile all of this? And again, 66 00:06:51,280 --> 00:06:58,960 first person in my family to go to college, my parents, we were poor to early stage of a lower 67 00:06:58,960 --> 00:07:06,400 level of middle class. And I've got this great resume and making more than my parents ever had 68 00:07:06,400 --> 00:07:12,080 with their 70 hour a week jobs. And I'm going like, I'm not happy. I want to be an entrepreneur. 69 00:07:12,080 --> 00:07:16,400 What do I do? So finally, I kind of realized that I could have the best of both worlds and 70 00:07:16,400 --> 00:07:22,320 start my own firm while also kind of leveraging the skills that I developed over a decade plus 71 00:07:22,320 --> 00:07:30,880 at that point. Interesting. Well, so your book and your podcast are both great resources for 72 00:07:30,880 --> 00:07:38,080 entrepreneurs. Can you share some of your top strategies to win a business and life on our own 73 00:07:38,080 --> 00:07:45,120 terms? Yeah. So the book is really my, what I call operating system, my series of principles 74 00:07:45,120 --> 00:07:52,080 around how to win a business on your terms with less effort and less risk. It is kind of the 75 00:07:52,080 --> 00:07:56,800 culmination of all the things I had to unlearn. So I just told you about all this great fortune 76 00:07:56,800 --> 00:08:03,600 500 experience at UPS and some other fellowship. Obviously went to business school, did pretty well 77 00:08:03,600 --> 00:08:10,160 with that. And then I'm in my own business now realizing I have to unlearn everything that I 78 00:08:10,160 --> 00:08:16,000 thought I knew about business. See what you learn at business school prepares you to work at a 79 00:08:16,000 --> 00:08:23,920 fortune 500. Working at a fortune 500 job is much different stating the obvious than running a small 80 00:08:23,920 --> 00:08:30,000 business. And what I realized after a number of years, and this is one of the kind of core 81 00:08:30,000 --> 00:08:38,640 lessons in my book is that a fortune 500 company is focused on maximizing. You have to maximize 82 00:08:38,640 --> 00:08:44,560 shareholder value. That is the fiduciary responsibility of the executive team. Maximize. 83 00:08:44,560 --> 00:08:51,920 Maximize is about having the most, most amount of clients, employees, market share. Now, as fast as 84 00:08:51,920 --> 00:08:57,840 possible, maximize. As a small business owner though, we don't have the resources to maximize. 85 00:08:58,480 --> 00:09:04,480 We have to optimize. Optimize is not about having the most of everything. It's about what is the 86 00:09:04,480 --> 00:09:08,960 most important priority to you right now and putting all your resources towards that. 87 00:09:09,920 --> 00:09:13,760 Once I realized that, I started pulling at the string of all these different 88 00:09:13,760 --> 00:09:18,160 rules and principles I learned business realizing a lot of these just don't apply 89 00:09:18,800 --> 00:09:22,880 to small business owners because we're playing a different game. We're optimizing. 90 00:09:23,440 --> 00:09:29,200 What are we optimizing for? What we want. Our ideal life. If there's one thing I hope that people 91 00:09:29,200 --> 00:09:34,960 take away from listening to this episode with me today is that the biggest risk in life other than 92 00:09:34,960 --> 00:09:42,800 death is not living the life that you want. Your business, your investments, all of that exists to 93 00:09:42,800 --> 00:09:47,200 serve you and living the life that you want. They're just tools. They're just assets, 94 00:09:48,000 --> 00:09:54,640 facilitating living the life that you want. So many of us aren't following that path. 95 00:09:54,640 --> 00:09:59,600 We've created a job really out of our entrepreneurial path and now we have all these 96 00:09:59,600 --> 00:10:07,520 obligations because we've overextended ourselves. We've taken on too much risk and now everything 97 00:10:07,520 --> 00:10:13,600 has to work in our business because if it doesn't, we're in dire straits. And so now we work for 98 00:10:14,000 --> 00:10:21,440 the business rather than it working for us. And that's the wrong paradigm. That's not likely the 99 00:10:21,440 --> 00:10:27,760 reason why you got into business to begin with. So how do you help the entrepreneur solve that issue 100 00:10:27,760 --> 00:10:35,200 or like you said, optimize? Yeah. So step one is get clear on what I call your solvable problem. 101 00:10:35,200 --> 00:10:40,080 Your solvable problem is your unique definition of wealth. Take that vision board that maybe 102 00:10:40,080 --> 00:10:46,400 you've worked on of all those things that you want, the six pack abs, the great parent, the house, 103 00:10:46,400 --> 00:10:53,360 the cars, and put dollar values. How much will each of those items cost and dates? When do you want 104 00:10:53,360 --> 00:10:58,240 to fund those goals by? Once you have that, now you actually have a solvable problem. We can use 105 00:10:58,240 --> 00:11:04,720 math to calculate how much more you need to make to fund all of those goals. I built a tool that 106 00:11:04,720 --> 00:11:11,280 you can do this for for free at certaintyapp.com. You can calculate the resources you need. Once 107 00:11:11,280 --> 00:11:16,800 you know that, now you have a Google sort of Google maps for yourself to measure your progress. 108 00:11:17,200 --> 00:11:25,520 Most of us are driving to a destination, but we haven't set a time limit. And so we think we're 109 00:11:25,520 --> 00:11:30,640 getting closer, but oftentimes we're just driving in a circle or we're driving in reverse. We're 110 00:11:30,640 --> 00:11:37,680 getting further away from our goals. The objective is to get closer. We think more is always the 111 00:11:37,680 --> 00:11:42,320 answer, but the objective is to get closer, closer to our solvable problem, our unique definition of 112 00:11:42,320 --> 00:11:48,400 wealth. So we need to get really clear on what we want. And now we can figure out the most efficient 113 00:11:48,400 --> 00:11:53,680 path with the least amount of risk rather than guessing and doing a bunch of different stuff 114 00:11:53,680 --> 00:11:56,960 that's unknown. So that's the first step in the process. 115 00:11:58,960 --> 00:12:03,920 And then you help them map that out. Do you offer consulting? Do you have a group program? I know 116 00:12:03,920 --> 00:12:08,960 you've got the book and you've got the podcast. Yeah, absolutely. So what I would tell folks is 117 00:12:08,960 --> 00:12:13,760 that there's several different, what I would call wealth types. Some of us are hustlers. Some of us 118 00:12:13,760 --> 00:12:21,920 are gamblers. Some of us are optimizers by nature, savers. So we have these different tendencies. 119 00:12:23,040 --> 00:12:28,400 And based off your tendency, I would say that dictates the risks that you face in terms of the 120 00:12:28,400 --> 00:12:33,600 path, the ways in which we're going to blow ourselves up or the ways that there's a risk 121 00:12:33,600 --> 00:12:37,200 that there are assets and liabilities at the same time based off our tendencies. 122 00:12:37,200 --> 00:12:43,680 And what I would say is that we need to shift our mentality, at least in terms of wealth and our 123 00:12:43,680 --> 00:12:51,440 business, to having a net worth based focus, net worth. All the decisions that we're making 124 00:12:52,160 --> 00:12:57,840 should grow our net worth. Now I can tell you, looking at the data over the last three years, 125 00:12:57,840 --> 00:13:03,360 most of us have gone backwards. Our net worth has decreased because we've taken on a bunch 126 00:13:03,360 --> 00:13:10,080 of debt. Things like the EIDL, the economic injury disaster loan. We've taken on a bunch of debt, 127 00:13:10,080 --> 00:13:14,400 spent it. Our net worth has decreased. We didn't grow our business enough, 128 00:13:15,280 --> 00:13:20,560 but we spent all the cash. We need a net worth focus. We have a net worth focus. 129 00:13:20,560 --> 00:13:26,320 Then what that says is step one, how do we recover a bunch of resources? Where are we 130 00:13:26,960 --> 00:13:33,200 spending in areas that aren't giving us a rate of return necessary? One of the biggest factors 131 00:13:33,200 --> 00:13:39,520 is tax, way overspending on taxes. Oftentimes what I can show people is they can fund their goals 132 00:13:40,160 --> 00:13:45,440 on the timeline that they want if they recover things that they're already spending money on and 133 00:13:45,440 --> 00:13:52,080 reallocate it towards their goals. So reengineering your expenses, recovering, which you're 134 00:13:52,080 --> 00:13:59,040 unnecessarily paying in taxes, repositioning your financials. The most important financial statement 135 00:13:59,040 --> 00:14:03,200 is not the profit and loss, it's the balance sheet. That's what shows you your net worth. 136 00:14:03,920 --> 00:14:10,240 80% of small business owners if not higher are either currently illiquid, they don't have enough 137 00:14:10,240 --> 00:14:15,120 cashflow to pay their short-term debts, their expenses over the next 12 months, or they're 138 00:14:15,120 --> 00:14:20,320 insolvent. They don't have the means to pay their debts that are more than a year out. 139 00:14:20,960 --> 00:14:27,360 So you got to reposition your balance sheet so that you can actually scale and grow your net worth. 140 00:14:27,360 --> 00:14:31,920 So just to summarize, recovery expenses that aren't giving you a sufficient rate of return 141 00:14:32,240 --> 00:14:38,400 don't unnecessarily pay in taxes and then reposition your financials so that you're not 142 00:14:38,400 --> 00:14:43,760 illiquid or insolvent. That's what's going to put you in a position to actually scale your net worth 143 00:14:43,760 --> 00:14:50,400 and fund that solvable problem faster. Well, those are great recommendations. And from the CPA 144 00:14:50,400 --> 00:14:55,680 standpoint, of course, it all comes down to the numbers. So what is your next milestone? 145 00:14:55,680 --> 00:15:02,800 Yeah. So I love that question. And what I tell folks is that I am more theme-focused than goal-focused. 146 00:15:03,680 --> 00:15:12,000 So I usually will pick a theme for the year. Last year was joy. How can I do more things that give 147 00:15:12,000 --> 00:15:17,840 me joy? And then I kind of try to build my life around the things that I'm doing that are giving 148 00:15:17,840 --> 00:15:26,000 me more joy. This year, my focus is on, this is a term that I learned from this guy, Dr. Michael 149 00:15:26,000 --> 00:15:32,400 Gervais. He has a podcast called Finding Mastery. And in his recent book, he talks about the first 150 00:15:32,400 --> 00:15:39,280 rule of mastery. And he talks about how you can never achieve a level of mastery if you have 151 00:15:39,280 --> 00:15:46,960 FOPO, fear of other people's opinion. And he says the biggest pathway to FOPO is when you have a 152 00:15:46,960 --> 00:15:53,200 performance-based identity as opposed to a purpose-based identity. When you're performance-based, 153 00:15:53,200 --> 00:16:00,080 you're always focused on comparing yourself against others, which puts you right in that fear of 154 00:16:00,080 --> 00:16:07,280 other people's opinions stage. So this theme for me for this year, my next milestone is becoming 155 00:16:07,280 --> 00:16:14,960 much more purpose-focused. I would say that that's been an emphasis. But if I'm being truly honest 156 00:16:14,960 --> 00:16:21,120 with myself, the last 20 plus years has been all about performance. And I've spent too much time 157 00:16:21,120 --> 00:16:27,680 comparing myself against not just others, but this mythical level where I'm supposed to be, 158 00:16:27,680 --> 00:16:31,520 which I've invented in my own head, where I'm supposed to be at this stage in my life. 159 00:16:32,240 --> 00:16:37,680 And then of course, it's always further away than where you are now. So where you're supposed to be, 160 00:16:38,480 --> 00:16:43,200 you keep moving the goalposts out. So even though you've exceeded your wildest dreams, 161 00:16:43,200 --> 00:16:48,640 you're still not to where you were supposed to be. And so my next milestone is really 162 00:16:49,280 --> 00:16:54,320 this theme for this year, which is to be much more in alignment with being purpose-focused. 163 00:16:54,880 --> 00:17:02,000 So where can my listeners learn more about you and your services and your book and your podcast? 164 00:17:03,760 --> 00:17:08,400 Yeah, so probably the best place to go would be to go to riggingthegame.com. 165 00:17:08,400 --> 00:17:13,760 Now that's going to have a reference to my book. It's going to have a reference to the different 166 00:17:13,760 --> 00:17:18,880 businesses that I'm involved in. You can sign up for a newsletter that I have called Unconventional 167 00:17:18,880 --> 00:17:26,000 Wealth and a bunch of other cool resources. Before we wrap this up, and you've given 168 00:17:26,720 --> 00:17:34,320 so many different tips and perspectives, can you offer one tip to our listeners that they 169 00:17:34,320 --> 00:17:40,960 can implement right away to create asymmetric opportunities and take action? 170 00:17:41,520 --> 00:17:46,960 Yeah. So creating asymmetric opportunities, just as some quick context, asymmetric, 171 00:17:47,840 --> 00:17:52,080 when I use that term, asymmetric risk, it means we have significantly more upside 172 00:17:52,720 --> 00:17:59,280 than downside. The great, if you study the great entrepreneurs, people who are 173 00:17:59,280 --> 00:18:04,720 wealthy in many different ways, whether it's financially or just spiritually, they've followed 174 00:18:04,720 --> 00:18:11,360 endeavors that have way more upside than downside. For whatever reason, they're naturally attuned to 175 00:18:11,360 --> 00:18:18,240 identifying these opportunities. Most of us as small business owners, we are oftentimes making 176 00:18:18,240 --> 00:18:23,440 bets, making decisions that have way more downside, way more risk than upside. We'll bet $1,000 177 00:18:23,440 --> 00:18:32,480 on Facebook ads to make $1,500. But if we aren't able to make that money back, that $1,000 might 178 00:18:32,480 --> 00:18:39,600 put us in a really deep, tough financial position or $10,000 to get $15,000 back. It's not a 179 00:18:39,600 --> 00:18:46,400 significant enough return to be considered asymmetric and resources are finite. So every 180 00:18:46,400 --> 00:18:51,200 time you tie up your money in one investment, you remove the ability for you to invest in something 181 00:18:51,200 --> 00:18:56,080 that would have a much higher rate of return. But when I say investment, I'm talking time, 182 00:18:56,720 --> 00:19:02,320 influence, energy, money, reputation. There's more than one currency. So we have to think 183 00:19:02,880 --> 00:19:06,640 about all the different currencies when we're making a bet and weighing, does it really have 184 00:19:06,640 --> 00:19:13,840 significant enough rate of return? The greatest traders in the world understand this. They 185 00:19:13,840 --> 00:19:20,640 eliminate all the downsides, so they're only left with upside. So go through all your expenses by 186 00:19:20,640 --> 00:19:26,400 vendor. Just run a report. You can do this from QuickBooks. You can run it by vendor for the last 187 00:19:26,400 --> 00:19:33,920 12 months. Identify all those expenses is either, is it a core expense? Yes or no. Core means your 188 00:19:33,920 --> 00:19:40,640 business can't exist without it. We have to have it. Anything that you say, no, it's not core, 189 00:19:40,640 --> 00:19:44,960 is an investment. It's a bet you're making something that's going to give you more time, 190 00:19:44,960 --> 00:19:50,800 influence, money, energy, reputation. And it better be giving you a significant return on that 191 00:19:50,800 --> 00:19:56,320 investment, at least the return you need to fund your solvable problem. If it is not meeting that 192 00:19:56,320 --> 00:20:04,160 return, then you have to ask yourself, should I cancel it? Or what would it take for me to make 193 00:20:04,160 --> 00:20:08,960 this investment something that is meeting my desired rate of return? And am I willing to put 194 00:20:08,960 --> 00:20:13,840 in that effort? That's where we're going to recover a ton of resources, time, influence, 195 00:20:13,840 --> 00:20:18,640 money, energy, reputation. We're going to recover all those bets that we made that aren't giving us 196 00:20:18,640 --> 00:20:23,520 a significant enough return. We're going to reallocate it towards the big returns. And 197 00:20:23,520 --> 00:20:27,120 that's how we're going to create the home run opportunities and live the life that we want with 198 00:20:27,120 --> 00:20:33,920 less effort, less risk, and more options. Well, thank you so much for that. Thank you for joining 199 00:20:33,920 --> 00:20:40,800 me today and being part of this episode. My pleasure. Thank you so much. And thank you all 200 00:20:40,800 --> 00:20:48,000 to our listeners for tuning into another episode of Milestone Moments in Business and Leadership.