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