Mike Michalowicz: Stop Living Paycheck-to-Paycheck and Build Lasting Wealth in 2026 | Finance | YAPLive | E386

I could just get a big chunk of money. But then people come upon this money and they don't have experience controlling that money and they blow it. Yeah, fans, today we're welcoming back Mike McCalloliss. He teaches everyday people how to finally stop worrying about money and build a system around their natural behaviors so they can break the paycheck to paycheck cycle and build real cash confidence as he calls it.

I did research around Lotteries and the average payout is $2 million.

Do you know if you make an average salary of $50,000 a year for 40 years, that's exactly $2 million and the average worker, at least in today's society, works about 40 years, everyone is already a millionaire. You've already won the lottery.

“Dad is a big problem for people how to pay down your debt, what not to do, what to do, what's your thoughts about that?”

If you have a lot of debt, sort your debt out by the amount to do and if you can wipe out some early debts, that's a beautiful thing because you'll believe truly that you can wipe out debt. But if you continue that pattern, when we have a certain life standard, it is very hard to reverse that. And so, we will go to extreme measures to keep it and sometimes, a logical. The better move is not to gain the things you can't really afford yet, it's to slowly build toward it.

The most predictable expense for everyone is an unpredictable event. We all need emergency account because I can guarantee something unexpected is going to happen. What's the number one thing that people can do in the new year to optimize their money habits? I think the first thing is to realize that. Yeah fam, today we're welcoming back somebody who needs no introduction, Mike McCallolitz.

You know him from profit first, clockwork and all the frameworks that have truly transformed how entrepreneurs run their businesses.

“And if you want Mike's full origin story, the rise, the fall, the rebuilding, and everything you need to know about the profit first framework for businesses, which we follow here at YAP Media,”

we're replaying his very first YAP interview this Friday. And by the way, guys, that conversation changed my life and the way that I run my business. So I highly recommend it. If you don't know about the profit first framework, it will change your business.

But today's all about his newest book, The Money Habit, which is about personal finances, and it might be his most important book yet.

Because he teaches everyday people how to finally stop worrying about money and build a system around their natural behaviors so they can break the paycheck to paycheck cycle and build real cash confidence as he calls it. So let's jump right into this conversation. Mike, welcome to Young Improveding podcast. It is awesome to be here with you. Do you have the last time I saw you as in Massachusetts gathering of titans? Oh my god, I can't believe that I forgot that we met in person over there. I totally forgot that I just felt like I was so familiar with you because of all the times I've interviewed you, but I totally forgot that we met in person.

You rock the show. So that group, just to give you a little bit of sense, that is an entrepreneurial group that I joined in 2000, 2001. And the idea was it was 80 entrepreneurs came together to learn from each other, but to really be the next level entrepreneurs. And that group came wanting to get junk, was there as Brian, the co-founder of Berts B's, all these massive companies. And we bring in experts, experts, speakers to share on topics. And there we are. And like, here she comes. Hollisaha. And you freaking rocked it.

Oh my god, I can't believe you reminded me of that. That was such a big event for me at the time. It was at MIT. Yeah, it was such a big deal. Yeah. We'll replay that on the podcast just because you mentioned that. I'm going to replay my speech. Yeah.

And we're also going to replay my first interview with you because I first interviewed you like.

“Pretty beard, I think. I think so is like three, four years ago. Yeah, maybe.”

I talked all about your come up story. We talked about profit first, which is a classic. So we're going to replay that on the podcast this Friday after this gets released. So everybody can get your background. Thank you. But you're back with another book called The Money Have It. Yeah.

So curious to understand, what was the genesis of this book? You've written several finance books. What's different about this one? And why did you decide to write it? Because this call from this guy Tommy Melo and he owns a garage door repair service. He used profit first. Made his business permanent profitable. And he calls his I have another problem that presented itself. Because my book is very profitable. But he goes, my employees are struggling financially.

And so what they do is they say, hey, can't borrow some money or can he get a raise when it's a little bit early to get a raise yet again. Because I want to accommodate them. They're great workers because I can't afford to do this. My business will go under. He's like, I need to teach them profit first for the personal finances. I'm like, oh, okay, I said it. How many employees do you have? Like, you know, a five or six? He doesn't know I've 900. And I go, pardon me, why? He goes 900. So it's a national brand. And this is a systemic problem.

The thing is Henry David Thoreau, who said the mass of humanity lives their lives in quiet desperation. Now, that's not the exact phrase, but that's basically it. Well, the quiet desperation is most people are not making enough money or don't have enough control of their money to feel comfortable.

And that's what Tommy was sharing with me. And I've lived through myself. So I said, this is the time I finally write this book.

“And so that was about three, maybe four years ago, started doing my analysis and research, deployed it for his company and others, and said my gosh, we have it.”

So it's basically it's profit first, but it's translate the personal point. Yeah, and profit first is amazing. I mean, we use that strategy at my company. Yeah, yeah, we do. Yeah, I can't wait to kind of, you know, unpack all this and see how I can use it for myself because profit first really is like a business focused framework and this is more for personal. So talk to us about this company with 900 employees. You saw a couple patterns coming out of this company like even when they got more money.

Yeah, they still didn't feel like they were like their lifestyle basically just caught up with them. Talk to us about that. Yeah, so I interviewed people who are making very modest salaries to people, grown their organizations and we're making what most people consider a significant salary. So to give context, the average American worker makes $50,000 a year. That's the average income for the entire of the United States. So if anyone listening right now makes more than 50,000, you are greater than average. That's the middle point.

And there's employees that were making more than that. And they were struggling just as deeply as people that were at perhaps just a starting salary. And so how can this be? Because the number one desire people have is if I could just win the lottery. You know, if I could just get a big chunk of money or we observe someone else, you know, like, oh, she's got a nice car.

And she had all these successful things. If I had that money, I would have the life that I've always dreamed of.

But then people come upon this money and they don't have experience controlling that money and they blow it. So there's this belief that if I just get more, I will finally arrive.

“But you don't have the context of managing that money. And so just collapses.”

There's a behavioral theory called Parkinson's Law, basically states as a resource expands in availability. We consume more. The more time we're given to do something, the longer it takes, the bigger the closet and our home, the more stuff we have that fills up the closet. The more money we have, the more we spend. So what the understanding I came across was I need to give people control and authority over the money they have. Regardless of how much it is. And once you have control and understanding of it, then you can direct it to what you want.

Then adding more money helps. But if you try to make more before you can control more, you're in trouble. Yeah, I learned that collectively out of these 900 employees, they saved like $280,000. It wasn't up 900, that was up 25 people. Okay.

So we started with a batch group. So it was 900 that we served, but they said, let's just try this out.

So we did a 25 employees go over this process for six months and collectively they saved a quarter million dollars.

Now these were people, the thing about that, that's $10,000 per person in additional savings. These were people that were living checked by check, by check. And so, and they didn't get a single dime in an increase in salary to do this, they simply asserted control over it. The interesting thing is Parkinson's log, I shared teaches us that the more money we have, the more we spend. The reason we spend more is most people have a primary checking account.

So for me personally in the past, my money would come into one account, all my money. And then I'd say, oh, I need to spend it on the next thing. I need to buy a piece of furniture for the home or something like that. But it's falling victim to think called the primacy effect. And the primacy effect is whatever is our immediate need is our primary need.

And we disregard the future. So I have a mortgage payment coming up our rent, or I said by groceries. But I don't think about that when I need a new piece of furniture because that furniture cracked or broken. And I look at my account, I say, have enough money to buy the furniture, but there wouldn't be enough to then pay the rent. And then panic ensues.

So we did as we put people's money into buckets. And we also did it at their bank. This is the other little trick. It's called a behavioral intercept. And when you want to do something with consistency, don't try to change who you are using willpower.

Instead, look where you're already doing. Instead of the system where you're ready to go. Most people log into your bank account, see how much money they have. And if they see they have enough money to cover that furniture, they buy it. So we said, keep going to your bank account.

But we're going to step into account that says furniture. We're going to get something to account that says groceries. And we're going to carve out that money when it comes in to each account accordingly. And now when it's looking to buy furniture, I look at the furniture count. And if there's not enough money there, can't spend it.

“Yeah. So that's the concept of channeling your habits instead of changing them, right?”

Exactly. So most of us are told to try to change who we are. So traditional personal finance is one of two methods. Deprive yourself of a lifestyle comfort today so you can live one tomorrow. So live in deprivation.

Humans can't do that for a sustained period. But we become resentful. Like if you love, I love chocolate chip cookies. If I don't eat chocolate chip cookies and I see one laying out,

And the longer I go without chocolate chip cookie, the more I'll desire it.

“So the longer it sits there, the more I'll desire and test prove this out.”

They did a test with children where they said they put a little treat down and said, If you don't eat this, you'll get two of these treats when I come back. The researchers said that and left the room. And you watch these children shaking and sitting on their hands and do all the things not to do it. And they couldn't stop and they ate the treat.

Even though a bigger treat was coming, they simply resisted. Let's true not just for children, it's a few true for adults. Yet most personal finance principles tell us the privacy. So that works for very few people. The other one is to use budgeting systems or technology or something that is outside your normal pathway.

So don't with your bank account instead, accept this other system to do things. And those can work but it requires you to change your habits. It's very difficult for humans to change. So what I argue is don't change who you are, channel who you are. If you log into your bank account, the budget needs to be at the bank level.

And we accept these accounts there. Because now you don't have to change the thing about yourself. You continue to behave here. But the system is showing you what's available for what purpose. And I feel like the dream outcome of all this is to have something you call cash confidence.

Yes. So I think most people are pursuing financial freedom. And I think that's a great aspiration by think there's a step of for it. So financial freedom is where I don't worry about money. I decide, you know, I want to go to Caribbean, get a little cold here in the winter.

Let me hop on a jet. Maybe my own jet and go to the Caribbean and I don't have to worry about a single dime. That's what financial freedom is. I can do what I want at the whim of a thought and I don't have to worry about the cost. That's a great aspiration.

I think there's a step of for it. I call it financial independence. Financial independence is where I'm not beholden to my money. I have control over it. It doesn't have control for me. And I know we can achieve financial independence at any level of income.

“What you need to do is have cash control.”

What cash control is is nowhereness of what money is available for what purpose. I believe even at $50,000 a year, you can go to the Caribbean on a private jet. If you're willing to wait about 200,000 years.

But we can start allocating a dollar a week or whatever it is to ultimately get there.

At least you'll have an understanding that you can't do it now. But if you keep saving, keep saving, maybe you can do it in a long period of time. Maybe you say that's such a long wait 200,000 years. It's not worth it. But that is cash control.

Because now you see what money is available for what purpose. And you can make controlling decisions around that. So you may not be able to live financial freedom yet. We start as cash control. Once you've cash control, you've the ability to decide, you know what?

I'm going to live a little more, I'm going to go out to dinner less, for example. And that $100 I'm spending going out to dinner every week. I'm going to allocate that toward these trips I want to go on or whatever. That's cash control. Hmm.

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And when you think of $2 million, that's a huge lump sum of money. That's like winning the lottery. Can you imagine that? Yeah. So what kind of identity shifts happen when you start to realize that in your lifetime you

could make $2 million? It's fascinating. So I survey audience is teaching this now. It's each proper first of all, but also teach the money habit.

“And I said, who here, honestly, would be really thrilled to win the lottery.”

And almost all the hands go up. And me too, I'd love to win the lottery.

Well, I did research around the lottery, and the average payout is $2 million.

So there's these grand bucket winners we hear about that win 600 million or something crazy. But the average win is 2 million, and most people take an installment plan. And that can be 20, sometimes 40 years. So most people are going to get $2 million if you win lottery and you're going to get it over up to 40 years. Do you know, if you make an average salary of $50,000 a year for 40 years, that's exactly $2 million.

And the average worker, at least in today's society, works about 40 years. We start in our 20s, we end in our 60s. Maybe that's going to change, but everyone is already a millionaire. Like you've already won the lottery. That's the way to be aware of the thing we need to do is a certain control over it.

And that's what we're not doing. We're hoping to make money. Well, you've already made it. We've got to control it. And that payment installment plan is coming in.

Yeah, and for our young and profitors listening,

“I think our average income across the board is more than $150 or something from $150.”

Or a million dollars or $5 million. Yeah, I think people aren't considering that. Yeah, we're just saying, I'm not making enough now. Well, that's the privacy effect kicking in. We got to a certain control over what we have.

And there's this freedom once you do. Yeah. So you were mentioning how, you know, even if you're not making a ton of money, you can still save for big purchases. Yeah.

You talk about saving for, I think your son's wedding, you saved like $36,000. How did you save for that? And what can people learn from that? There's some events, I think that are very predictable in lives. People will get married, people will die, and there's cost with that, a few rules.

There's different things that happen. Emergencies will happen. In fact, the most predictable thing in life is there will be something unexpected.

And I three children, I'm likely they're all going to get married at some point.

So my wife and I talked about, we're going to start saving money for this. When our children were born, saying the average marrying age at the point was 27 years old. And coincidentally, my son, my oldest son who got married got married at 29. So it's pretty close. And we started saving.

And we didn't save it the same rate. It wasn't like we're going to save, you know, $1,000 a month every month. We started saving this 10 bucks. Hmm. It's called behavioral momentum.

Once you start doing something, even in small pieces, you start becoming

“wire to repeat that. That's how our brain works.”

Kind of exercise. I think the biggest, excuse me, the biggest mistake that people make with exercise is saying, I got to start working out. I'm going to work out an hour at the gym every day. I'm going to go for a run.

Now, just day one by assess sneakers or something and put them on day two, put on your gym clothes and walk down a gym and walk back like start up very small. And then day three is go for a little walk and stretch and you slowly build your way up. And you start wiring. This is who I am.

So the first thing is identity shift.

Then it'll be a real shift. So we wanted to have an identity shift for ourselves that we're going to save for children's weddings. As our income increased, because we do something on percentage basis, automatically the percentage stayed the same, but the dollar amount increased.

Because it's the same piece of a bigger pie. By the time my son was 25, we had $50,000 saved up. And we said, okay, that's the number. And for every one of our kids, we have $50,000. And if one of my kids is watching right now, that's not married.

I'm not, this is supposed to be a secret. So it's no longer a secret. When my son got married, we told him, well, when he was about to get married, we said, we have a check for $50,000. We like to give it to you.

Now here's what it is. It's for your wedding, or if you decide to have a lower budget wedding, the remaining check is for you. They found a way to have a wedding for a hundred people for $14,000. They rented a whole restaurant.

It was on the lakefront. It was amazing. But they were searching and navigated to deal. At the end of the wedding, my wife went up. My wife and I went up to our son Tyler and said,

here's a check for $36,000, the difference. And he's sitting there. He's hand shaking.

He's like, I've never had this much money in my life.

So much so that his wife, Kora, they didn't deposit. Like a month later, I'm like, this check hasn't cleared. What happened? Like, we don't think we can deposit check this big. Trust me, you guys.

You can. And they finally did. Aww. It was, it was such a great gift of ours. But there was also no cost to me my wife.

The money has been allocated. So my wife and I are still living our life standard. We're still living the way we want to live. It didn't feel like we had to take a chunk out of our life to give to them. It was something we had built for.

Yeah. That's so beautiful. And so smart. And I'm sure, you know, putting aside 10 bucks a month, 100 bucks a month. Probably didn't feel like anything.

And you would have just wasted that on some other junk. Yeah. So it's good to just kind of put it aside. And maybe even pretend like it's not even there. I remember looking, this was back 20 years ago.

So this is like around 2000.

“So what's the average cost per plate for a wedding?”

I remember it's $70 the time. It's standard wedding. Every guest you had it pay $70 to feed them plus it's just one cost. Every time I start putting $70 away. And it was $70 a week.

I'm like, one more guest in the table. One more guest in the table. Yeah. It felt so good. Yeah.

And then I asked myself, once we had 200 guests covered. I was 14,000. I then said, okay, what's a band cost? And a band would cost $10,000. Or whatever it was.

I said, okay, we got the drummer. Once I hit $2,000, we got the drummer. Now we got the bassist. Now we got the lead singer, you know? And so it's important for these little milestones.

So we feel that we experienced the progress. Yeah. Yeah. That's really beautiful story. And like awesome that you did that.

Yeah. Okay. So let's talk about why traditional budgeting doesn't fail. So like you budgeted for this wedding. Yeah.

And you said it aside.

“What was different about what you did there versus traditional budgets?”

Usually have a common pot at the bank. So it's a separate documentation. Usually a spreadsheet that says, I'm going to save X number of dollars for this wedding. Say $50,000 in so forth. And then we got singular pot where the money stored may be.

It's in a money market or some form of investment, which is fantastic. Here's the problem. We have to enforce willpower not to take from it. And we will justify taking from it. We will resolve, I should say, the cognitive dissidents that we have when we take the money.

By giving some form of justification. So let's say in my pot, I have $200,000. $50,000 for one kid's wedding. $10,000 for auto repairs and home maintenance and just some things. And now, I think comes up and my roof is leaking.

And so I got to replace the roof. And I'm like, oh, I got pot here $200,000. Yeah. Some is for the wedding. But the wedding's like you're not going to happen.

And I'll start justifying it in our place that roof. And now I'm back to square one. Conversely, and we actually have an account called the roof. Because roofs need to be repaired or replaced in this entire city.

So the 25 year vision for it.

“And it's replaced our roof for thinking it's going to be a big budget.”

So we have that dollar amount set aside. If my roof is leaking and I want to replace it. And there's enough money in the roof account. I can still take it from my son's wedding account. But I can no longer subconsciously ignore that.

I have to say myself, I just stole from my son's wedding. So now he subconsciously becomes a conscious awareness. It's a much more disciplined one. Consciously aware that I'm stealing for something as opposed to a common pot. Yeah, you realize that like some other goal is not happening.

Yeah, you can't deny it anymore. Yeah. And okay, sometimes you may choose to do that by can no longer deny it. Yeah. If you've multiple people involved in the finances, so we have my wife and I both manage our finances.

It used to be, I was the primary lead and my wife was secondary. So she'd ask almost like permissions. Hey, I'm thinking about going out friends. Do you mind if I go out? Do we have enough money?

With the accounts divided up as we have them. She's lives in the bank and says, yeah, there's enough money. We have her name's Chris. The Christopher Funding Count. I've a Mike Funding Count.

She doesn't have to ask me. So there used to be this weird parent child relationship. I'd say, well, you can't go out. Or here's your Lali pop. You can go out.

It's like bizarre. It's kind of creepy.

“And now we're a team looking at the count.”

And there's enough money in the count. There's a conversation about it. We see. We can't do this now. Do we decide to override the system or not?

That's how it works. Yeah. I know that you mentioned there's a bunch of behavioral things that humans just are, you know, likely to do if you have one big bucket of money. Yeah.

And you don't split it out. Yeah. So let's talk about those. You've got one of them you mentioned, but I'd love for you to go deeper on it. You call it Parkinson's law.

Yeah. So Parkinson's law is based on a theory by the guy North Coke Parkinson from the 1950s. And he observed something really interesting. And we're already alluded to it. Is that when a resource expands the availability, we consume more.

The classic economics curve says that demand dictates supply. So the more people want your podcast, the more you're going to produce podcasts. The more people want to sponsor show them more, more you're going to charge for it. And he argued that is true in this certain number of economic cases financially. But in most cases, humans behave in the reverse.

It's not demand dictates supply, it's supply dictates demand. And the classic example is with, well, you can do it soda cans 100 years ago or 200 years ago.

“And soda came out soda cans were what we consider like almost a shot glass.”

Like it was a small little can. Then they got to these. I think they're 16 ounces or something. But I don't know if you've seen cans recently, it's like a huge. It's a freaking bazooka.

You could kill someone with this thing. It's crazy. And the thing is human behavior hasn't changed. The container dictates consumption. We used to drink that small shot.

We used to drink full can. We are now drinking this full container. It's society. The, the clerk intake is massive and our waistlines are expanding massively as a society. The interesting thing about Parkinson's.

He said, if we simply went back to a shot glass is, you won't drink the whole can. And you won't get multiple shot glasses. So shot glasses, you'll just finish off the shot glass and you're done. So the container dictates the supply. When it comes to our finances, if you've won the bank account,

that is your shotgun bazooka of a container. We need multiple small shot glasses and you'll just take that little shot. That's a Parkinson teach us. That makes sense. And then there's loss of version.

Yeah, loss of version is so interesting. Loss of version is once we possess something, we'll go to extremes to retain it even though it's a logical. But we won't go to the same extremes to gain it. Well, so we'll do more to retain than we will to gain.

Class of example, you drove up in a nice car. I was admiring your car. No, thank you. Yeah, I love it. Hot pink Porsche.

Yeah. Probably pink Porsche. Yeah. It's gorgeous. And so Porsche pulls up.

And a Porsche will be a dream car for me. I do have another dream car I love. But if I bought that Porsche, I would put it into my garage and save it. But say I, and drive around and show it off and polish it. If I didn't have enough money saved and couldn't pay for it.

And the dealer calls me says, we're going to call the claim the car back. And take the slips back.

I will maybe take a second job.

Maybe I'll drop insurance. Maybe I'll stop driving. I'll just keep it in my garage because this is my baby now. But here's the thing. I'll do extraordinary things to retain it.

Second job. Dropped insurance. But I want to do this things to get in the first place. That's loss of version. When we have a certain life standard.

It is very hard to reverse that. So now I live in my new beautiful home. I'm not going to lose that. Yeah. And so we will go to extreme measures to keep it.

And sometimes, illogical. I'll take on debt. I'll borrow money. I'll ask my parents. They're going to just lend me a little cash.

I'll ring up the credit cards. And it will crush us.

But we wouldn't do things again in the first place.

We either realize this is wired into us. And with an awareness you have some control in authority over it. The better move is not to gain the things you can't really afford yet. It's to slowly build toward it. And have a cushion that when prepsure income drops that you can sustain because you have some kind of savings.

Because you willologically try to retain some of you have that you can't afford.

As your income increases, build a cushion for yourself. As you're moving along, let your life increase. That's our natural tendency. We want better and better. But save a cushion so that if you ever have a dip, you can sustain that for a reason.

“Is there some sort of rule like I should be able to pay for this ten times?”

Or like, is there some rule that we could follow? Generally, the optimal rule is minimally three months of full life expenses covered. So whatever your life expenses are that you have is sitting in savings, ready to spend minimally. Six months is ideal.

Here's what the research indicates.

If I save for three months, I'll live in the loss of version state usually for about one to one and a half months. About half that time spent and start saying, my gosh, I'm eating the savings. Then we'll start adjusting our lifestyle. So that remaining one and a half months of cash I have will stretch for another three or four months. So three months of savings can usually last six months.

Six months of savings can usually last a year to a year and a half. Today is a much more volatile economy. I'm encouraging people to have six months of full expense savings minimally so that you can sustain if you go into it. That's good advice. Okay.

The transgressive motive. What is that about?

“Yeah, so we have a natural tendency to rebel.”

So if, listen, if you came in here and tell me this is how it's sort of to speak. Yeah. I'm like, oh, so I'm going to see you. By the way, the way you dress, you could be a little more professional wearing a suit. In your mind, you'd be like, who the f for you?

Now you will say to my head, oh, thanks for the advice. That was very kind of you. But inside we were a bell. If you said to me like, what are you doing? Like this is the worst outfit ever.

Like Mr. Padley White, wearing this. Like you're reflecting. Why don't you wear a better collar for yourself? I was like, oh, that's so great in my head. I'm like, what a total pain in the butt you are.

We rebel against advice. And we rebel against any authority asserted to us. I was saying with businesses, if you as an owner tell your business employees to comply, they will seek to defy. So when we're given instructions, we resist. So when we are put in constraints and budgets do this inherently, we often resist.

Many budgets I've seen systems will have categories like things like maybe tie things are in there.

So basically what the budgets are saying is, we don't know if you tie it, but that's a common thing to do.

You should be tying things. Well, actually, I don't tie it. And I see that. I'm like, what do you do not tell me to tie it? And some conscious rebellion kicks in saying, I don't know if the systems for me, or I start to push it away.

So budgets have implicit or not implicit, but suggested compliance. And then therefore I'll defy. So just be aware of that rebellion that's inside. The best system to build is a system that you create for yourself. So why don't myself?

You know, I shouldn't dress like this. I should have caused a little more complimentary and make me a little less pale. If I said to myself, I'm like, that's a good idea, because I said to myself. So build a system around your own desires and interests. So when I'm ready to money habit, I don't have any suggested accounts.

I have ways to observe your own behavior so you can create your own accounts in your own budget effectively. That makes sense. So I know one of the things that happens especially for people who are living paycheck to paycheck is this panic at the end of the month. Like you get your paycheck and it's a high. And then 10 days before the month ends, you're in a panic because you can't afford all your things.

What is happening in that payday high to panic cycle? Totally.

“This is rooted on, I think the most important principle that the entire book's based on.”

By the way, in the book, I don't talk about the behavioral principles. That's not important. I just talk about the applications. I touched on one a little bit. But this is based upon what's called optimal pharaging theory. So before humankind was the modern humankind was the Neanderthal. And we were hunters and gatherers.

Now, here's what the Neanderthals didn't do.

I wouldn't say, hey, I'm hungry. Let's go get steak. Oh, no, I'd say, we hungry. We go hunt fully mammoth and you and I are out there or, you know, we hungry. Let's go gather berries and stuff. You didn't go for a small portion just to satiate. You went for the big hunt. And the reason for the big hunt is there's a massive clock burned.

If we're out gathering and putting ourselves at risks, there could be, say, we're two tigers. When we're out there coming after us to be at the protect, gather, we're putting the rest of the community at risk. We have to come back. If we're going to have for the hunt, we're racing and chasing a big clock burned. So you go on a massive hunt. When you capture the food, say, we go for a boy mammoth and we capture this beast and kill it. Now, we're at risk because the food will perish. We have this massive beast.

But we know if we don't eat it now, it's going to rot away. So what you do is you start burying some of the food. You smoke the food. But we also know there's a very short period before it rot. So you go into a glutinous state. You start consuming an overclock intake, eat, eat, eat. Then the very last phase was now there's no food left. You start eating what's been stored.

And when that's gone, we bear going to hunt again soon or we're going to starve to death. That's called optimal farging theory. Capture and mass preserve what you can. And if you can't preserve it, consume it fast because you need those calories.

Fast forward to modern humankind. We still live by that law, exactly. Now, the massive hunt is a paycheck. The paycheck comes in once every two weeks. For somebody who will weekly, somebody will even once a month. But once every two weeks is the most frequent.

“Do you know the optimal payroll that people should receive is three times a day?”

If I paid you in the morning, again the afternoon, and one more time the evening, you actually manage your money better. But that's absurd. And no employer can afford to do that because there's costs associated with that. So you get it once every two weeks. We just capture the woolly mammoth. Our wiring is now, there's two things you can do. Preserve it. But there's not many ways to preserve it. You can put it at the bank account, but it's rotting away.

It's sitting there or consuming. And since the money is sitting there, the feeling is consume, consume, consume. This is rotting away. Some people preserve it by putting it in a 401k. When something's inaccessible, then we actually don't worry about it.

Yeah, it's preserved. Our mind is wired. Once it's smoked or buried, it's okay. But when the money is seeing the checking account, it's like, this is going to go away. I better consume it while I have it because it's gone. We prove that to be true because by a week or two, it is gone. And we prove it's rotting away.

So then we go into, oh my gosh, I don't have enough calories. I need going to hunt again and we go into this panic state toward the very end. And we go in the hunt again. So what do we do? We have to improve the preservation mechanisms. We need little 401k's. What happens when we get the hunt, the kill,

paycheck comes in. We carve it up very quickly into different accounts. Those accounts are effectively smoking or burying that woolly mammoth pieces of it. And we put into different accounts. It actually saves us and gives us comfort. We say, oh, okay, I put some money in the mortgage. The mortgage is covered off the worry about that.

And it actually takes away that stress if I need to consume it now or it's going to go away. Then you start consuming in a more optimal way because the money starts dripping to you from these different accounts. You use it more prudently and we repeat this process over and over. Yeah, that's that's really interesting.

“As you are talking, one of the things that I think about for myself as I've become more successful”

and make more money. I'm an entrepreneur. A lot of entrepreneurs are tuning in.

When I get a lot of money, the first thing I think about is I got to spend this

or else they're going to tax me on it. Totally. That's part of ourging theory. Yeah. Yeah. I'm afraid. By the way, taxes will come. We're told in our business if you spend the money on different expenses, you can reduce your taxes.

Yeah. Some of that's prud, for sure. Like, I hope your vehicle or some of your vehicles are actually going through the business to reduce your tax consequence. Some of it just can't legally be done.

And yet entrepreneurs still say if I just simply spend or find a way to spend. And it actually compromises other elements of our life. Yeah. Here's the most crazy thing. This isn't private first. We encourage people to step at tax account.

So money comes in and money goes into this tax account. And then when tax time comes, we pay from that account. What's so interesting is it reduces that sense of loss of version because the money has already been allocated to it. One of the most crazy things, Hala, is every quarter.

When I wrote first, I was expecting people to say, hey, I've more profit than ever before.

Thanks for writing this book. I actually get people writing, calling me in, sometimes showing me my office, which don't need to do that. Which people don't. It's saying, I just paid my taxes. The company paid it.

I feel so good. And like, why is this? Like, oh, because of loss of version. So that car that's in the garage. We're talking about that.

If I can't pay it, I will drop the insurance or can't afford it. I'll take a second job. When it comes to taxes, if I put taxes in a tax account and never came to my own pocket, I don't feel like it's being taken from me. A quick analogy is if I sit in here and I say, hey, Hala, this was awesome.

Here's $100. This thanks for doing this. It may feel awkward. I gave you $100. Oh, no, $100.

Thanks Mike. If I gave you $200. Thanks for this. But oh, by the way, I need a hundred back. You'd like, hold on.

Just give me a hundred and you're taking some back. Now it's super weird. Yeah. And that's what taxes feel like. I just earn money and the government takes it back from me.

But if I never give you that second hundred in the first place and just give it to the government,

it doesn't feel as painful. Yeah. And that's exactly what we did. I remember when we implemented profit first. One of the things that we changed is whenever I get my sponsorship money.

Yeah. Now it gets sent in like two buckets. One is like, my money and one is tax. And we just put it 50 and 50. And you know, if there's stuff, I don't, oh, it's just like kind of like a bonus at the end of the year.

And I suspect it reduces the pain. It does. It does. It does too. It's there though, you know, I know people that you know it's there.

But it does reduce some of the pain. And I go to some people like say their tax bills. $100,000 and they saved $110,000. There's 10,000 extra. They feel like they're getting a bonus.

Exactly. It feels like a bonus. It sounds like, it's a shell game. And logically, it's a shell game. But it's actually a behavioral management system.

“And that's what people don't understand.”

Yeah. And it prevents you from like realizing like at some point. Oh, my God. I didn't save money or I didn't put money aside or spending what you actually don't have. Because that money eventually won't be yours, right?

So you break down six accounts. In some needs, wants, dreams, fix future and emergency. Yeah. Do you want to explain each one?

It's based upon Maslow's hierarchy of needs.

“So Maslow identified that you and I have basic physiological needs to survive.”

We need to be breathing air right now, drinking water, eating food. So like if someone came running in and threw a bag of my head. This plastic starts choking me out. And I'm struggling to get out of this thing because my life's in jeopardy. And when Maslow appointed it as no matter what state we're in,

if the foundational needs aren't being met, we have to revert to it. But once they're adequately met, we move to the next level, which is safety needs shelter and so forth. And then belonging to be part of a community,

just like you have here.

And then ultimately self-esteem or self-actualization.

It should say is the highest. Well, when it comes to survivability, we need those physiological needs. We need to eat. We need food.

We need water. We need shelter. So that's what the needs account is. The income account, which is the first account, is simply the repository account.

Money flows in there. It's the pauses of your household income. If you're the sole breadwinner, it's the money you're earning. If you have collective earners, it's the collective money that's committed contributed to the household.

That's our starting pot. But historically, that's the one big pot. And we know the danger of that. That's a woolly mammoth and it's rotting away. So we need to carve it up.

The first account we carve to support our basic needs. And in my book, I'd identify based upon your income level. If you're a young but profitable person, make 100 more $1,000 a year. The percentage you put toward needs may be less than if you're making $50,000 a year.

You're making $50,000 a year. 80% of your money may be going to support your core needs to live in the United States. But if you're making $100,000 a year, maybe it's only 60% or 50%. Core needs are like groceries, shelter, rent, exactly.

Wants is I want to eat out. And some people will conflate the two. They'll say, well, I need to eat out.

So always, if you don't know which level it's in,

it's always the higher level. I know someone that has multiple homes. I say, well, I have these homes, so I have to pay the mortgage. I need a mortgage. I'm like, it's a basic level need for all humans to have three homes.

And right now, I'm like, okay, that's beyond it. We all need a home of some sort. So you have to differentiate those two. If you don't know it's with the higher level. So wants are the main luxuries.

Dreams are the bigger luxuries. So dream may be, you know, I need to eat food. I want to eat out. I would love. I dream about having a personal chef.

Like, that's kind of how you differentiate this stuff. Usually dreams are a longer term savings. Wants are usually some of you spend on a weekly or monthly basis. And needs are usually more of a daily basis. Basically.

Yeah. Fixer future is this.

Most people that start this system and most people in the United States are in debt.

So a fix account is that we're alkane money intentionally to get down. Unsecured debt. So credit cards. Anything that's not asset based. But a loan for a house, generally houses, not all.

But generally house will appreciate over time. There's value in that.

“I believe taking a mortgage or some kind of loan is appropriate for it.”

When it comes to a car, yes, most cars to appreciate. But it sustains its value over a period of time. And we do need that for transportation. I think that's appropriate. But other things like credit card loans and so forth.

They're unsecured. We need to get rid of that. It's a big burden. And there's no value. Can't say, well, you know, can I sell my credit card debt to someone else?

May look at me some money for it. No, but you can sell your car to someone else for your house. So, well, if you have credit card debt, we're going to have a fix account to pay for that. Once your unsecured debt is addressed, we're going to move to a future account. This is preserving not for retirement necessarily.

But some futures of significance. Do you have children? No, yeah, okay. So I got three kids. I remember my wife and I when they were approaching her 18th birthday saying,

"We want to take him to Disney." And we want to go large because this is the last time they're going to be home before they're out of the house. And so we started allocating money for that. That was a future saving.

So that's something big for the future event. Some people were saving for some form of retirement, which I'm not a fan necessarily of fully retiring. I don't really. Yeah, I've been talking to a lot of people that've been there.

So I'm in my 50s now, my early 50s. I've been talking to people in the 60s and 70s who've retired and anything easy necessarily. And the general feedback is perhaps slow down the pace, but if it's your passion, stick with it to the very end as I'm hearing.

The last account is emergency. The most predictable expense for everyone is an unpredictable event. I can guarantee it's going to happen. A health crisis, an accident. The boiler is going to blow in the house, which recently did our house.

And so we all need emergency account because I can guarantee something unexpected is going to happen. Yeah.

“And the emergency account is that different than the six months of savings?”

Yeah, six months of savings is for an extended period without income. An emergency is where there's a surge demand while you're still earning an income. And I just can't tell what it is. And in the book, based upon your income level, 50,000, 100,000, I have all we have to millions and earnings.

Some people are looking to secure their future more and more. Some people are saying, listen, I want to live large now because of whatever. And I am kind of living in that moment right now. I just want to kind of live big and we're doing it.

We're doing some amazing things.

“You have to identify the season you're in, match it to your income.”

And there's different percentages that I suggest. Yeah. Yeah, gang. I have become obsessed with the working genius assessment. It was created by Patrick Lensheone.

He came on my podcast about two years ago and taught me about working genius. I took the assessment then. And it was a game changer for me individually. But this year, I'm taking it to the next level. And I've basically implemented a working genius across my entire company.

This is not a personality. It has it's an actual test that helps you understand the way that you work best. There are six types of working geniuses. Everybody has two geniuses. It's a type of work that gives them energy. Two competencies.

It's a type of work that you may be good at. But over time, it actually drains.

“And then you have two working frustrations.”

It's the work you don't like to do. And it drains your energy. I uncovered that my two geniuses are invention and galvanizing. My two competencies are discernment and tenacity. And then my working frustrations are enablement and wonder.

So once I found this out, everything just clicked for me. Number one, I realized why I was budding hands with my executive team. Because wonder is the frustration for me. Whereas my business partner has wonder as a strength. I wanted to get things done, rally the group, keep things moving.

He wanted to think about the big picture. And if this was the right direction at all. And so once we figured out, these are our geniuses. We realized we can't build this company without each other and our strengths. And it helped us work better together.

And it also helped me uncover gaps within my organization. Turns out that I'm the only person who has galvanizing as a core strength.

So I'm always rallying the team.

And sometimes that can come off as pushy or aggressive. But now that my team knows that this is a gap. We need to hire people who have more of this galvanizing strength. So it really helped us align on gaps. It'll totally change the way that you do your work.

It will totally level up your teams. Happiness and productivity at work. I highly recommend that you take this assessment. And it's extremely affordable. If you're ready to stop guessing and start working on your actual genius.

Take the work in genius assessment and get 20% off with code profiting at workinggenious.com. Now, if you have a company, if you have a team, you get a report that tells you how to take advantage of your learnings and things like that. If you like what you saw and you want to implement it to your team, I highly recommend that as well.

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Again, that's workinggenious.com. Use code profiting or profiting teams to get 20% off. Young and profitors, this year, all about not missing opportunities. And for me, that starts with not missing any calls. Because a miss call is money, walkin' out the door.

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Go to Shopify.com/halla all lowercase. Again, that's Shopify.com/halla. I love this concept of the four financial seasons. So there's recover fund, activate balance. Talk to us about each one and how you can tell if you're in each bucket. Yeah, and they're rooted in behavioral psychology.

Okay. So when I was interviewing people for this, I worked with collectively either directly or through group coaching about thousand employees of different companies. And hundreds and hundreds of entrepreneurs. And I'd ask them about their situation. The majority, I would say, upwards of 70% have debt of some sort.

That's not secured debt. Like it's credit cards or whatever. Loans from family and friends.

Student loan debt is always awesome.

Yeah. That was the most common. It's maddening. And they would say, I have debt.

“There's a behavioral phenomenon that if I, you say I have something, it's a possessive state.”

It actually becomes you. So if you say I have a purple Porsche, it's your possession. It's actually part of your identity. If I say I have debt, it's part of my identity's part of my am. And when it's part of your identity, it becomes a permanence.

And that's the dangerous part. So when people say I have debt that they are also saying I'm always in debt. It's very hard to eradicate. So I said, okay, that's not a good word. We need to put the word recover.

So if I'm in a recovery state, that means an active move toward improvement. The other thing is season are not permanent. So I said, oh, recovery season is a positive temporal state. That's the time. Yeah.

So when I say, oh, you don't debt, you're going to recovery season. How long is the season going to last? It's like, oh, that's right. There's a timeframe to it. So that's why there's terms exist.

Seasons are recovery coming out debt. The next one is funding. Funding is where we're intentionally saving more than we're spending of our income to prepare for some kind of future experience. Activate is where we're spending more than we're actively earning. So we're actually downing our money savings with intentionality because perhaps we want to live larger in the moment.

And also listen, that's appropriate all stages. Or maybe you're starting a business. Yeah, that totally counts. Okay. Yeah, like that's a life dream.

I want to do this. Or I want to, I just want to take a year off. And we discover who I am or anything. So that that's a form of activation. Then the final stage is, or season is balance balance is where I'm actively trying to live in the now.

But also preparing for some future events. The interesting thing about seasons though is you can choose the season you're in and move from quickly. So in nature seasons usually have three months in the northeast of least. You know, you have winter, spring, summer fall and they go in rotation. In our business finances, they can ping pong around.

And that's like, oh, that doesn't happen in nature until I realized it did. I was just not Australia a couple weeks ago. Here, winter's kicking off. They're in the middle of summer. And with a 24 hour flight, I came back to New Jersey to temperatures in the like the low 20s.

And I'm like, oh, I just left temperatures in the mid 70s to come to the 20s. And it happened like this. Also listen, you can be home. And it's the middle of January where we hit sometimes the single digits. And it's like, it's like a 70 degree day in New Jersey.

And then it drops back down. So seasons can ping pong around very quickly even in nature. But in our personal finances, they absolutely can ping pong around. And they don't go in sequence. You can move from activate, maybe back to recovery to balance to fund and jumps around.

Yeah, that makes a lot of sense. Let's try to apply these seasons to real life. Okay, yeah. So if you get a $5,000 work bonus. Nice.

“How should somebody in each financial season treat that money?”

So if you're in recovery fund, activate balance. How does that get treated differently? Yeah, so if you're in the recovery stage and you're actually getting out dead. You could use a portion, but don't use all of it to reduce your debt in one big crunch. In the case like that, there's two kind of psychologists.

BF scanner did research around operating conditioning.

And basically said, if we get early wins in our life,

we're more likely to sustain that behavior. So if you have a small debt or two and you can wipe them out with that $5,000 portion of it, and you haven't wiped out any debt yet, it's actually smart to do that, because you'll believe you can wipe out debt faster. It's operating conditioning, but it's not logically optimal.

The optimal debt is the most expensive debt. So whatever it has the highest interest rate.

go after the high interest rate debt, because that will give you the most long-term relief. It's the smartest move. But save a portion of it. I usually suggest 10% to maybe 20% to reward yourself, because if we deprive ourselves rewards, then we become cynical of a system

and we're less likely to sustain it. So I'm saying if there's a cookie on the table and some of that can say shape this demands, you have slice that cookie, nine and a half. Slice off a small piece for you very quickly, give it to the other people. But give yourself some of that treat too.

That makes sense. Yeah, if you're in the fund season, similar method, a big chunk of it goes toward whatever future savings event is, but a little bit should go toward the now, also to have that reward. If you are in the activate season, you may choose to activate all of it. Activate is unique season and that we're intentionally downplaying our savings,

and we're going into its intentionality knowing that we don't need to save more for a period of time. So saving any of that may actually not serve you well. So if you're in the activate season, you get $5,000. This may be your moment to live large, or to extend that activate period. And use that capacity.

If you're in the balance period, someone goes toward the future. Somebody goes toward the current, and you kind of split it and split it in half. Yeah, I'd love to hear your perspective more on retirement because a lot of entrepreneurs tuning in were like responsible for our own retirement. When you work in corporate, you just have a 401k, you're going to put money in it,

and that's sort of taking care of. Yeah. And as entrepreneurs, it's really all on us.

“And some of us are making a lot of money and kind of are even me, like I think about my retirement.”

And it feels really abstract because I'm making a lot of money. And I'm like, well, I don't need to worry about that, because I'm making so much money. But I do need to worry about it. Yeah, yeah. So how do you think about it?

I'll give you some more modern teachings that people are sharing. And I'll give you a perspective that I haven't heard anyone share. Okay. But one is when you hit retirement age, your health span will perhaps be on a decline compared to where you're now.

So if you're in your 20 or 30s, you're the optimal and health. When you get to your 50s, I'm okay. What you do for exercises of things start aching and hurting. It just doesn't trust me. It's coming.

It's coming. And once you're in 60s and 70s and perhaps 80s, you may start as a decline. And you can't be as active. And it's a shame that people are saving for their 70s and 80s

to do always amazing things, but they're not physically capable.

Now listen, technology is coming about and all these things with AI and messenger research. That may change. So this is just what I see in the current state, but it may change. So actually leveraging more of that money for the now may be better. Yeah.

The second component which we already talked about is people that go into this kind of full stop generally seem to resent the fact they went to a full stop. They've lost meaning in purpose and that becomes a big emotional cost. So even if they have their health, even if they have the funds to live a new way without purpose, it becomes fleeting and it's like, is this all there is?

And that's actually anguish you're living under.

“Here's the thing, I haven't heard anyone talk about in this context.”

It was fascinating. As I was telling us, as this is one guy, he says photograph every single day of what you're doing and maybe even record a quick note about it. So 365 photographs for the entire year and he goes, what we so interesting is it's the ultimate form of memory.

When you look back at those photos, you'll remember what you did. And you'll start seeing what a rich life you lived. So if you preserve what you've done, it expands your memories. I believe, and I'm certain to feel this, at the end of life,

what's the most important is all the things remembered.

And right now when you're in your 20s and 30s, it would be a shame if you forgot all the great things you did. You know, I look back to my college days. I'm like, I remember the two epic parties that were the best parties ever. I remember a couple of friends I had that were extraordinary friends. But I remember like the day to day stuff.

But I do remember it was fun back then. I wish I preserved it. So I actively take pictures on my phone every single day now. And we'll get pictures when we wrap up here. And I'll look back and say, oh, I'm right.

It was holla. It was a fun. We're talking about her purple Porsche. We went for a ride in it. And it was like, I was a member of this.

“Yeah, I remember the things that happened.”

And it makes the current moment richer because you remember the past. Mm-hmm. And it prevents like, Reacency bias even like with friends and memories. Yeah.

Because you just really remember everything that happened all year. Hundred percent. Yes. It's not ever forgotten. Yeah.

So debt is a big problem for people. I know you give some advice in terms of how to, you know, pay down your debt. What not to do. What to do.

What's your thoughts about that? Yeah. So a common technique we talked about is based upon BF Skinner's work.

Is this concept of paying off your lowest debts first to form the normal

wiring to continue a behavior? And that's absolutely a smart idea in the beginning. So if you have a lot of debt, sort your debt out by the amount to do. And if you can wipe out some early debts, that's a beautiful thing because you'll believe,

truly, that you can wipe out debt.

And if you have very expensive debt, high interest rate debt, that can crush you.

There's another form that I've never heard anyone talk about.

It's called Consequence. Okay. I had a loan from a friend of mine for $30,000 at zero interest rate. But he was a friend of mine. So I put zero interest.

This is a very inexpensive debt. I can take my time paying this back. And he clogged up as I do. Where's the money I gave you? It had high consequence.

His name is Chris. And over time, it almost cost us our relationship. Because I wasn't paying it back. I said, oh my gosh, there's another form of interest. There's the consequence of the relationship.

And that come in the most costly loan that I wasn't paying back. And it could have burned me long term. So rate by the percentage do. But also, what's the consequence to your life? A little loss to you come about.

We lose a friend over this. So consider that. Start off with a couple early wins. But then very quickly, sort out your debt by the highest interest rate in the highest consequence. When you high consequence, high interest, tackle that.

When you've high consequence, but lower interest, that still is extremely important. And often he's disengorted. Actually do that next. And then target the rest of the stuff.

“If you have debt, should you also be saving or should you just be focusing on your debt?”

Great question. I still save. But I saved at a lower rate for sure because I'm targeting my debt. But I'm still saving because I want that behavioral mechanism in place. There was a saying from a, I think it was for me to say to you who's a very popular personal finance expert.

Great friend. And he said, I think it was him. He says the new form of discipline is automation. Automate the process. So when money comes in automatically save and you will maintain that discipline.

Also according to Parkinson's law, if you've saved before you receive the money. So like a 401k, you will adjust your lifestyle because there's a smaller closet to story stuff. You'll adjust your lifestyle to live within that container. So if you can save before you see it. And if you have an employer, you tell them, I want my paycheck in two forms.

One is to my private checking. I also have his other checking account. Can you carve out 20% of my paycheck to go there?

You will adjust off your primary that second one have hidden away.

It's your magical kind of hidden 401k without being a 401k. And I remember when I was in corporate, the system like allows you to just do that. It's really easily. Yes. And I'm a small business owner.

I got six employees at one of my businesses. We can do it. Yeah. You just got to ask. Yeah.

And also like certain bank accounts let you do it. I know relay is a bank account that lets you set up different accounts. So yeah. So relay is for business owners. So if you're an entrepreneur, use relay.

I'll give you a little plug here. Bank like mic.com. It's the bank I use for my business finances. And if you have a personal checking account, really doesn't do personal.

You can go to dream first bank. I said a link called profit first dot bank. So you can go to profit first dot bank.

“If you want to do the personal accounting.”

Amazing. Yeah.

Oh, I know that you've got a flight to count.

Yeah. So I want to be a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person. I'm going to do a person.

I'm going to do a person. If we're friends, I want you to be fully my friend and fully present. It's ironic the world wants you to be wealthy. They don't use those words. That's the takeaway I want.

The method I want you to use to start achieving financial independence is real simple. Right now, think about the thing you worry or wonder about most financially every single day.

“Do you worry if you can pay groceries, some of us do?”

Do you worry if you can pay the rent or the mortgage on your apartment? Do you wonder if you can go on a big vacation this year? I don't know what it is, but what's the one thing that you think about most? Whatever that thing is, set up one additional account at your bank, or one of the banks we suggest. But at your bank, set up one account and give it that name.

So if I worry about, if I can afford my mortgage, I'll say, I will accept an account, a new account that says mortgage.

What I'll do is every paycheck, say, comes weekly.

“I'll take $1,000 in transfer to the mortgage account to assure that my mortgage is cared for.”

Now, here's a magic of the system. You guarantee that your biggest financial worry or wonder is taking care of. It will reduce it, but the real magic is not that. It's in what's left over. You'll see, oh, I don't have as much money as I thought.

I have to adjust the rest of my lifestyle. It will force you to start taking balance and accounting for your priorities without compromising the rest of your life. That's a real simple way to get started. You don't do all six accounts, not yet. Start with one account that you worry or wonder about most.

Yeah, I'm somebody who hates finances. I'm the type of person that's like, let me just make as much money as possible.

I never have to worry about this.

But your stuff is always so easy to understand. And I always leave these conversations being like, I got to do this. Like, immediately, it's going to make me feel better. And it's not scary. Like, all your suggestions are so easy to implement.

And what you do for entrepreneurs, what you've done with profit first and what you're doing now with money. Have it for just everybody in the world. It's just awesome. I'm so excited to put this to work. That means the world to me.

And what I'm going to last thought is you said, you know, you're not really excited about numbers or the finances. Yeah, I found there's a word for it. It's called human being. You are so human. That's so normal.

I'm not into numbers. People come to me and say, oh, we're unaccounting major. No. Do you love numbers? No.

I suck at them actually.

That's why I build the system.

Something that's really simple. That works for people who care about living life. That want to maybe earn as much money as possible. But don't want to do all the management. The system manages for you.

Yeah. I can't wait to put it into practice.

“Where can everybody learn more about you and everything you do?”

Where can people grab the money? The best sight to go to is Mike motorbike.com. It's Mike. It's Mike. I'm not going to speak.

Nick named from grade school because it rhymed. Mike. Motorbike.com. And then I'm really proud of a podcast. I started to call becoming self-made.

And I'm studying the journey of these wildly successful entrepreneurs. I want to get you on the show. I love that. I met with Savannah bananas owners. I met with Don Miller.

I'm your friend of ours. Amy Porterfield. Um, 1-800-God Jung, the founder, 1-800. And I found what is their story to success. But the most interesting thing is not success porn.

Like, here's all the things they achieved. We talk about what's the struggle they still feel today that they started off with. And unbelievable how much these entrepreneurs still struggle with what we would consider the basics that they should be over. I think it's a very empowering.

What a cool concept. Yeah. It's really interesting. And people get super real.

“It's a little bit of an open moment at times.”

So that's called becoming self-made. Amazing. I'll stick all those links in the show note. Thank you. Thank you so much for your time.

It was such an awesome conversation. It's amazing. Thanks for letting me come to your studio. Of course. It was so great having Mike back on the show.

He keeps raising the bar on how we understand money. And this conversation hit especially deep because it revealed how much of our financial life comes down to behavior and not income. Mike reminded us that most people don't struggle because they're not earning enough. But because their system is working against human nature and human psychology.

And the moment that you flip the system, everything else will follow. One of the biggest takeaways is the power of separating your money into purpose-based accounts. Now with his profit for a system, you do this for your business. But now with the money habit, he's suggesting you do this for your personal life as well. And I love it.

Instead of one giant pot that fuels impulse decisions and panics, you create smaller, shot glass accounts to give you instant clarity. They turn vague intentions into visible choices and goals. And they help you stay in control without relying on your willpower. I am so inspired to go into my bank account and create little buckets for all of the

different goals that I have and all the intentions that I have with my money. Mike also showed us the importance of momentum. You don't transform your financial life through massive, rigid sacrifices. You do it through small wins that rewire your identity.

Like saving $10 a month or wiping out your smallest debt first.

That's steady, psychological lift is what makes your habits stick. And lastly, I'd love this idea of financial seasons. Recovery, fund, activate, and balance. Each season demands a different strategy. When you label your season, you finally understand which action support your goals

and which habits pull you backwards. It takes shame out of money and replaces it with intention. So if you're an activate mode, you can feel free to spend without any of that guilt. And if you're in recovery, you know that your intention is to pay down your debt. This episode is a reminder that you already have the potential to build cash confidence.

The moment you match your system to the way that your brain naturally operates, you stop surviving on payday highs and start building a life where money supports your goals instead of stealing your piece. Alright, yeah, fam. If this conversation with Mike McCallow, it sparked a new way of thinking about your money,

send it to somebody who needs this conversation. We all know at least one person who could use more clarity around their cash. And if you're feeling this live energy, show us some love, drop us a five star review

And remember, you can watch all of these in-person interviews on Spotify, video, and YouTube.

“And make sure you follow and subscribe so you stay tapped into every conversation as it happens.”

You can also find me on Instagram @yabwithhala or LinkedIn, just search Hala Taha.

And huge shout out to my amazing app team for pulling off yet another powerful live recording.

“I appreciate you guys so much shout out to Sam for con Joshua on the guest outreach team.”

And also shout out to Bryce at Record ATX for helping us with this live recording.

This is your host, Hala Taha aka the podcast princess signing off.