What does a wealthy, healthy, and fulfilled life look like to you? How can you plan for the life that you want to live for yourself and your family? Why should you invest in yourself?
In this podcast episode, Joe Sanok offers 10 money tips.
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This is the Practice of the Practice Podcast with Joe Sanok, session number 875.
I’m Joe Sanok, your host, and welcome to the Practice of the Practice Podcast, where at least twice a week we are talking all about private practice; how do you start and grow a solo practice, when do you get a group practice going and how do you do it, how do you rock out being a group practice boss, and even if you’re ready to leave and you want to go launch e-courses, how do you build that audience and how do you do that well? So we have so many awesome things in our membership communities; Next Level Practice, Group Practice Launch, Group Practice Boss and Audience Building Academy, as well as one-on-one consulting so many things over at practicethepractice.com if you need help to grow in any area where you are looking to thrive. We just love doing this work.
Today I’m super excited because I’ve been receiving a lot of questions around money and I actually hosted a two-day intensive here at my house in April. I’m hosting another one in October where consulting clients were invited to come hang out. We had, I think eight people that came and they stayed here at Cambria Suites and then Cambria dropped them off at my house and we just dove into their businesses, their dreams, their big ideas, their systems, and it was just a lot of fun. And a lot of the side conversations we had were not at all about private practice. One of the biggest conversations was how do we think through money outside of our practices? What do we do with that money as we build wealth, as we build savings, as we pay off student loan debt, as we invest in vacation rentals, all sorts of things.
So it was really fun and interesting to talk, and I’m going to be sharing 10 tips with you today on money. But you know, for me, I want to try my best to live a grounded life, live a life that’s not just unnecessarily spending or using resources of the world. My posture and values towards the world, the globe, the environment is I don’t want to just buy into the marketing that these big companies have done at me over my lifetime to make me think that I’m not enough so I have to go buy things. So when I talk money it’s not about getting rich so that I can just buy more junk. It’s about making money so that I can live what feels like a healthy lifestyle where I can volunteer in the ways that I want, that I can have the hobbies in the areas that I want. I can raise my daughters in the ways that I want.
So even how I schedule my week is based around walking my youngest daughter to school every single day. And that I’m ready to hang out with them when they’re done with school. Even just right now it’s 30:5, my 11-year-old just got home on the bus, and I know this is going to air sometime in June, so school’s probably out for most people at that point. But she got home, I said hi to her getting this podcast recorded, wrapping up my week, and being able to then know that in less than 20 minutes, I’m going to be down there hanging out with her around 3: 30, go pick up the eight-year-old, take them to tutoring, be involved. We’re going to go out to eat tonight because tomorrow they go with their mom for a little bit.
That’s the life I want to be able to live. And yes, that’s a position of privilege, but it’s also a position of planning where I have to know some really basic things about money for my own family. Like how much does need to come into this family to keep the Sanok afloat. Having a vacation rental that I purchased a year and a half ago, how much can I invest in making it look really nice versus this season we’re not going to do that. We’re not going to do that extra upgrade yet. Like, actually just today my contractor was over there and there’s been this darn leaky bathtub that the leak from it, the water is a little bit rusty and I got a new water system, but it’s like stained the tub. So he has to replace the whole thing, like back to the pipe, tear a hole in the wall and then patch it up. I have renters coming in a couple weeks and it’s just like, oh, I don’t want that. But that’s part of saying, okay, I’m going to put money into this house and let other people help me pay it off by coming as vacation renters, taking that gamble, taking that risk, but then also saying it’s a strategic risk.
Northern Michigan properties tend to go up in value. It’s on 15 acres of old growth hemlocks so there’s some preservation of nature there as well as this cool little private pond lake that’s there. So there’s value that comes from that too and when we have some money and when we think through our money, we’re better able to do some of those things that maybe our parents couldn’t do, maybe we never thought we’d be able to do as counselors, social workers, MFTs, psychologists and say, okay, I’m going to determine for my life what I want it to be. So I’m going to go through 10 money tips. As a reminder, I’m not a financial planner, I’m not your accountant, I’m not your bookkeeper, I’m not your professional. I’m speaking from my own opinion. Be smart with your money. Talk to a professional. I am not your professional advisor. Just got to get all that legal stuff out of the way.
One of the first things to really think about is creating a budget for both you and for your business. Because creating a budget and sticking to it is telling you where you want your money to go, to have a general idea of where it’s going. Some people need to have a very clear budget if they have tons of debt, if they want to walk through different things to track your income and expenses to make sure you’re not overspending. There’s times in my life when I have to reign it in a little bit more and I’m more budget conscious and there’s other times that I’m like, no, like things are going pretty well.
But that ties into number two of setting financial goals. For me, I know how much I want to put into retirement every single month. I know how much I want to put into my HSA. I know that I want to set aside money for taxes into my profit account and all those things and I know how much it costs for me to survive in the world and how much I want in a savings account. So having financial goals helps you stay motivated, helps you focus on achieving your desired outcomes by having short-term and long-term goals. So it may be a year from now you want to take a cruise in Alaska and maybe you do have to set aside money for that because you don’t have that money just sitting around.
Number three is make sure you separate your personal and business finances. If you haven’t done this, you need to do that right away because for one, it’s way easier when it comes to taxes as to what you spent. And also having that separate entity of a business protects you legally in different ways. So in some states that’s a corporation, other states that’s an LLC. You want to talk with an accountant and an employment lawyer in your state as to how you’re supposed to do this. Is it a PLLC, is it an LLC and then having that business have bank accounts.
Number four is we want to monitor your cash flow. So your cash flow is how much money is actually coming in. So looking at your profit and loss each month is your payroll more expensive than what’s coming in in your private practice? Are there adjustments you need to make there? Do you need to add extra people because you’re spending too much time on things that really you shouldn’t be spending time on.
Number five around money is we want to look at managing your debt. So looking at your debt you want to consider maybe paying off high interest debt or negotiating lower rates with creditors. With inflation, it’s interesting right now because for example, my savings account, I just signed up for a savings account that gets almost 5%. I mean, that was unheard of years ago. So I’ve put a lot of my money into that savings account. And then I have debt, whether it’s on houses or a car, things that when I was a big Dave Ramsey follower, I definitely wouldn’t have done. Like I have the money to pay off some of these things, but the amount that I’m making in the savings account is more than the amount that I’m paying for that debt. So there’s a lot of arguments and discussion around when you pay off debt. I think for me it’s what can you sleep at night with? Like if you’re freaking out about debt that you have or you’re worried, oh my gosh, I don’t want to lose my house.
Oh my gosh, excuse me, that yawn snuck up on me like the previous episode. Like I guess I’m recording yes, or two days ago’s episode and today’s the same day and I was saying the previous episode that I stopped drinking coffee this morning at 10:00 AM because I have to go to bed. Really, I should go to bed early because I have a flight at 6:00 AM to go down to New Orleans Jazz Fest. But boy, that’s whipping me. I mean, I’ve had a whole day of consulting and glad I don’t have a consulting client right now. But managing your desk, your debt, what can you live with? What can you sleep at night having a hangover your head and thinking about some of those worst-case scenarios with debt and best-case scenarios.
Number six is building an emergency fund, having an emergency fund for both your business and for you personally. I never want a decision that I make in the business to negatively affect my personal life. For example, I’ve been doing some testing with Google Ads and over the last couple months I spent like $2,000 in Google ads. And as I look at the numbers, I don’t know what happened. I actually submitted a ticket to Google. Somehow the keywords I selected only about 140 of the 500,000 clicks went through my keywords. So there’s something weird happening there, but we need to know if, when we do these gambles and try these new things and our learning new technologies, like if it goes wrong, we don’t want it to our family or make it that you can’t make your mortgage or things like that.
You want to be able to say, okay, like what, what’s going on here? We screw things up in businesses and that’s where having three to six months of your business expenses saved up can really make sure that you’re not going to hurt yourself or it’s not going to harm your business. You’re not going to go under or make some dumb decisions in your business just because you made some mistakes. Same in your family. If a car breaks down, if a furnace goes out, any of those things that happen, we don’t want to put those on credit cards for 20% interest and pay them off over time. Having an emergency fund when for when you may have a sudden drop in revenue or unforeseen expenses can be really helpful. I mean, I think about March, 2020 when the whole world shut down. I’m really glad that I and a lot of our members had those emergency funds.
Providing great therapy day after day can be challenging even for the best of us. At Blueprint, they believe that nothing should get in the way of you doing your best work, which is why they created a platform that provides therapists with an array of clinical tools, things like therapy worksheets, intervention ideas, and digital assessments that are designed to help you and your clients stay connected and confident throughout the care journey. Even better, Blueprint helps streamline your documentation so you can spend less time on your notes and more time on the things that matter. To learn more and request a 30-day free trial, visit blueprint-health.com.
Next, we want to, number seven is save for retirement. I mean, when you look at compound interest on even just like a whole market index fund, which puts money across the market instead of looking for individual mutual funds, it is insane to look at whether it’s an IRA or a solo 401K or things like that where you can set up matching for yourself. Working with a accountant to get those set up properly for your tax situation is usually a good thing. From what I’ve read, typically working with a financial advisor is not advised. Tony Robbins had a great podcast. I’ve looked for it and I think that they took it down because he sold a book about it and I think it was mostly to just sell the book. But I remember he said, for every 1% that you pay a financial advisor throughout the lifetime of the fund, that’s the equivalent of about 10 years of retirement income. So even having a low-cost Vanguard fund is a great way to be putting money into the market over time. Every single month I put money in monthly on a Monday, because I read this research study that if over the lifetime of a fund you invest on Mondays and sell on Thursdays, you end up getting about 1% more over the lifetime of the fund because people on the weekend go home and then they unnecessarily sell on Monday, so those things.
Number eight is to hire a professional in specific areas. So hiring an accountant to look at your tax situation, tell you should you be putting those tax money, should that be into quarterly, should you be putting that aside in a high interest savings account? Are there things that you can do to reduce your tax liability? That can be so helpful with an accountant, having a bookkeeper that’s going through and accurately doing the bookkeeping of saying, here’s what you spent, here’s where you spent it, and can just send those details to your accountant. Hiring a financial planner on a cost per maybe hour basis to help you get things set up can be a really smart use of your money or I hired a Profit First professional to help me with understanding my business numbers and where I could optimize things and what Sam and I can do to really run this business differently. Having a professional help in the same way that people hire us for coaching and for consulting, hiring someone to do that same that’s an expert can be so, so helpful.
Number nine is to review your expenses regularly. So reviewing your expenses regularly can, can help you identify areas where you might be overspending, areas where maybe your business is doing well. Maybe there’s specific insurances that are reimbursing better. Knowing that is really important. Knowing if you’re putting too much into marketing, knowing where those expenses are can be really, really important to keep track of. And number 10, invest in yourself. So investing in yourself by attending workshops, doing continuing ed, hiring a business coach consultant to help you improve your skills. I was actually just talking to someone who’s going to be working with one of our consultants and he’s charging $275 a session and he’s raising his rates to $325 a session and he’s looking at bringing on a associate or a clinician to start a group practice.
So we ran the numbers that at $275 a session, which is going to be $50 less than what this person’s charging. If he had one associate that was doing 20 hours a week and did that for 48 weeks a year, it’s $264,000 gross. If his takeaway was only 20%, which would be really low that’s an extra $52,000 a year. So for each new person, for him that’s $50k a year. And when we look at the amount that that consulting’s going to cost him for the package, I recommended, I want to say it was five or $6,000. So we’re talking in year one for every dollar he spends on consulting, he’s going to be making five. So finding those things that really help you to grow, expand, and learn from people that help you, can you really do that.
Those are my tips for today, of the 10 things that are, 10 money tips. Let me just go through those again quickly. Again, we have number one, create a budget, number two, set financial goals, number three, separate your personal and business finances. Number four, monitor your cashflow, number five, manage your debt, number six, build in emergency fund, number seven, save for retirement. Number eight, hire a professional, number nine, review your expenses regularly, and number 10, invest in yourself.
Speaking about investing in yourself. If you want help from one of our consultants, please head over to practiceofthepractice.com/apply. We have consultants for every phase of practice to help you grow your solo practice, grow your group practice, leave your practice, and start some sort of passive income. We have consultants at every single phase and I will jump personally on a call with you for 30 minutes, talk through where you’re at, recommend where I would spend my time and money because to me, if you look good, that makes us look good. So we have enough people applying at every phase of practice. We just want the right people in the right programs as we won’t ever oversell you or upsell you into something you don’t need. You just fill out the form over at practiceofthepractice.com/apply, then you automatically get an email to schedule a 30-minute call with me. You do that, we talk for 30 minutes, you get the recommendation, and then pretty much right away you can get started with your consultant and start growing at your phase of practice.
We could not do this show without amazing sponsors like Blueprint. At Blueprint they believe that nothing should get in the way of you doing your best work. They want to help you take your clients through their care journey. They are going to help you spend less time on your notes and more time on things that matter. You can try them totally for free over at blueprint-health.com. Again, that’s blueprint-health.com.
Thank you so much for letting me into your ears and into your brain. Have a great day. I’ll talk to you soon.
Special thanks to the band Silence is Sexy for your intro music.
This podcast is designed to provide accurate and authoritative information in regard to the subject matter covered. It is given with the understanding that neither the host, the producers, the publishers, or the guests are rendering legal, accounting, clinical, or other professional information. If you want a professional, you should find one.
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