7 Mins Read

Know When (And How) You Can Walk Away From Corporate Sales. It Starts With Building Your Financial Freedom Operating System

Brandon Fluharty  |

Brandon Fluharty |

⚡️ Today’s level up ⚡️

Today’s edition includes golden insights from Rob Cook, a recent Make More Hustle Club guest. It breaks down the components of building your Personal Financial Operating System so you can understand how and when to break free from corporate sales and explore the next stages of your life on your terms.

Let’s go!

Read time: <7 minutes (+23 minute summary video)

If you missed last week, read it here.

 

Is your money working for you?

As a tech seller, you’re in a strong position to drive the direction of your future because of the high-earning potential of your role.

But managing money and making smart, strategic, and purposeful decisions with your variable income can be confusing, overwhelming, and challenging. That’s why you must set up a Personal Financial Operating System to make sense of it all and gain more control over your financial destiny.

This week, I invited Rob Cook on Make More Hustle Less Club to run us through his Financial Freedom Framework he uses with his billionaire clients at EY. Rob is a CPA, CFP, and CFA (Lvl 1) and comes from the tech sales space too. He knows his stuff and knows your struggles.

I want to make this knowledge widely accessible and break down the one-hour session into key components you can walk away with and start using immediately.

In a space filled with tons of sales tactics and techniques, I aim to equip you with knowledge and resources beyond outreach sequences, pitch meetings, and the negotiation table and help you turn your increasing income into independence.

Let’s dive in.

Getting more purposeful with money

I had to learn fiscal responsibility and proper money management the hard way.

Growing up, I wasn’t exposed to sound savings habits and responsible spending. I certainly didn’t learn it in school either (because it isn’t taught in the American education system). Throughout college (before ultimately dropping out) and into early adulthood, I accumulated over $35K in personal debt.

In 2008, as a 29-year-old, I had to declare Chapter 11 bankruptcy.

Not my finest moment, but looking back, it was one of the best teachers of fiscal responsibility I could get. I had to educate myself on how to save, diversify, and rebuild my credit. Luckily, I had supportive people around me, like my wife Lisi and her parents who helped us out when we moved from NYC to Florida to start and build the next chapter of our lives together.

It wasn’t so much the clean slate that helped (although it was a huge relief to no longer have creditors breathing down my neck), but it was more so the constraints that were put on me. I had to be smart about where each dollar went. I had to concentrate on getting better in my sales role and climbing the ranks. I had to gain new knowledge and skills to put my money to work.

In short, I became more purposeful.

While I had my head down in my first decade of my career, learning and failing, I didn’t lose sight of the long-term goal: freedom. Living life on my terms. I knew sales was the right vehicle to get me there and money was the best tool to speed it up.

The Financial Freedom Framework

According to Rob, here’s what the financial freedom framework looks like.

– Stage 1: Build your foundations

– Stage 2: Accelerate your wealth and options

– Stage 3: Generate the freedom you desire

Our session focused on stages one and two.

Stage 1: Financial Foundations

This stage is about helping you answer the following questions:

– How am I doing?

– What should I do next?

– Am I ready to jump (into something bigger)?

With his clients, Rob uses a tool called Elements to gather pertinent data and provide a financial “health score” on how you’re doing against not only his top-performing clients but the general public.

At the heart of this is the Elements scorecard. Think of it like a baseball card – it’s all of your key financial stats in a single place.

For the session, these were the core components of the scorecard that Rob focused on that help you answer the key questions outlined above.

To answer “How am I doing?” and “What should I do next?” you should focus on the cash flow scores.

Cash Flow Scores

– Savings Rate: How much do you save?

– Burn Rate: How much do you spend?

– Debt Rate: How much debt do you carry?

– Tax Rate: How much do you spend in taxes?

If you know these numbers well, they should add up to 100. Elements provides ideal ranges and Rob works with his clients to get each category into an optimal range, which he shared those numbers with us and they look like this:

To answer “Am I ready to jump?” you need to focus on term scores.

Term Scores

– Liquid Term: How many months of spending do you have available in liquid assets?

– Total Term: How many years of total spending do you have saved where you could withdraw 4% from it annually and live comfortably?

Term means time and they’re designed to help you think about how you can leverage money to buy back your time. So maybe you’re asking yourself if it’s time to start building your side project, coaching or consulting, or scaling back – these numbers will help you make a smart, strategic decision.

As a general rule of thumb when you’re ready to make the leap into doing your own thing, you want to have at least six months worth of spending immediately available to you, while having 25 years of spending at a four percent annual withdrawal available in your portfolio.

Stage 2: Financial Acceleration

Once you’ve built a solid foundation for yourself and are aware of the key baseline scores to aim for, the next stage is getting purposeful with how to accelerate your wealth and pull the right strategic levers.

Instead of “financial planning” that most financial advisors focus on (which tends to over-index on retirement and a stocks and bonds portfolio), Rob focuses on “freedom planning” using five components. They all need to work together and interchangeably to help you accelerate your wealth building strategy as quickly as possible.

1. Purposeful Design

This is the intersection of your Values and Vision so you can create a solid Mission Statement.

Here are some key design tips:

Values

– Concentrate on no more than five

– Come up with your list, and if you have a partner, have them come up with theirs

Use this if you need some help or inspiration

Vision

– What do you want in your life?

– What do you NOT want in your life? (sometimes easier to identify these)

– What do you want an average day to look like?

– What do you want people to say at the end of your life?

Mission Statement

– Should be three to seven sentences long

– Should inspire action

– Be concise, each word matters

– Make the statement as personal as possible

Use this if you need some help or inspiration

2. Asset Selection and 3. Portfolio Design

These two strategies work hand-in-hand. When it comes to building wealth, there are two distinct approaches – creation and preservation and each has their own set of principles and considerations.

According to Rob, the key is you need to select assets and design a portfolio for each approach, otherwise you will fall short in building the freedom you want.

When you’re creating wealth, you need to concentrate – go all in. For instance, many of you have gone all in on tech sales as the path to building the majority of your wealth. Speaking from experience, it’s a fantastic accelerator. But you have to focus and concentrate on the right skills and in the right environment to do your best work.

Next, you need to figure out what’s more important – cash flow or building equity (like real estate that could then be later turned into cash flow or building your personal brand or a business that focuses on gaining attention that you then can later monetize).

After that, you have to be purposeful in defining decision criteria as not to get distracted in the millions of directions you could take with your concentrated areas of wealth generation. Rob recommends creating no more than five to help you maintain the right level of focus to make quality decisions and not get bogged down in the minutiae.

Lastly, you need to identify, understand, and use your risk levers. You’ve likely heard and seen that your returns are directly proportional to your level of risk. According to Rob, that’s not always true, as he’s seen many of his wealthy clients, from professional athletes to business professionals, gain high returns on minimal risky moves. That’s because they’re hyper-aware of their four risk levers:

– Knowledge (about what they’re investing in – time, energy, attention, or money)

– Control (having more control vs just investing and hoping)

– Speed (what will get a return sooner than later)

– Money Invested (better to make micro bets than put 50% of your net worth into a single investment)

Once you know what you care about and where you want to go, it’s then time to start selecting assets (or a combination of assets).

For instance, here’s an example of one of Rob’s client’s portfolio:

4. Tax Planning

It’s important to note that tax planning is not tax preparation. You can rely on your CPA for a lot of helpful advice and they’ll prepare your taxes, but as your income increases it will be important to get more sophisticated around your tax planning strategies.

Rob dove deeper into a couple of tips in the session (for instance if you own real estate) and provides 13 tax-savings strategies that you can download and use immediately as a W2 employee (members can access it in the hub page).

5. Risk Strategy

Once all of the other strategies are in place, the final component is risk mitigation. Like a suit of armor, you don’t want to be protected everywhere but have your underside exposed.

The best and simplest place to start is with estate planning. If you haven’t done so already, be sure to instill a will, trust, and powers of attorney. Check with your HR department, as you may already be paying for legal benefits that will give you access to an attorney who can draw these up for you. I did this after I left my old employer and I was covered under MetLife. The attorney fees cost me nothing.

Ultimately, the end game looks like this. Rob works with his clients to work backwards from this structure to design and implement it. He recommends subscribing to How Money Works if you’re interested in learning more.

Want more?

Below is a highlight reel of our session.

If you want to access the full workshop, including thoughtful Q&A with other tech sellers and bonus resources, join the club (Members: look in your hub page if you couldn’t join us on Monday. It’s waiting for you there).

 

YOU MAY ALSO ENJOY READING: Defining Your Skill Stack: What Jay-Z Can Teach Us About Strategic Sales & Financial Freedom

That’s a wrap. See you next week!

Disclaimer: I am not a certified financial professional. None of the above is meant to serve as investment or tax advice. Please speak to a certified professional before making any major financial decisions or moves.

 

 

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3 | Book a 1:1 coaching session right now

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