Those who have the ability to attract more money while economies contract benefit disproportionately from the volatility. In this episode, Ryan and Terry explore the two main ways to increase your income without having to go back to school to get more qualifications.
What you'll learn
terry: Hello, and welcome back to the passive income project. This is Terry here, and Ryan, you are back on Australian soil. Welcome home.
ryan: I am mate. And, it feels like the tan is wiping off at the moment. Unfortunately, ,
terry: it’s a, I turned up to your house last week and I was like, where’d you guys go? because you were so dark Brit was so dark.
I was like, wow.
ryan: yeah, Greek sun hits on another level. That’s for sure.
terry: Yeah. That’s super jealous. And next year, it’s my turn. I’ve gone to Bali. So get your head around it.
ryan: I got back on Thursday. I was walking through the aisles at the supermarket on Sunday afternoon. And, just doing the shop for the week.
And I did kind of look around for a moment and go this is a harsh reality check I’m back
terry: I’m back. Dammit. Well, while you’re away, mate, I, did a little bit of a short episode because we couldn’t get that last one off. So I talked a lot about mindset and the servant mentality, and I guess what we were going to talk about in this episode is skill sets.
So how do you adopt a servant mentality? What do you actually.
ryan: Yes, man. I love that last episode you did. I was in transit. So unfortunately unless I tuned in from the Singapore airport on a layover, there’s no way to join you, but mate, you never seem to amaze me how you bring together some ideas and the timeliness of this topic couldn’t be any better.
Obviously coming off the back is talking about stagflation and going right back to kind of death boost comments around, what the world might look like in the next three to six months. It’s just the best time to be thinking. It’s not always just about tightening the belt. And sometimes you need to be thinking about how do you increase your worth and how much you can earn. And so today, obviously we’re going deeper into that Aren. Okay.
terry: Just wanna clarify though, is it that I never seem to amaze you or that I never ceased to amaze you?
ryan: is that what I said? Oh shit. I actually had dry lips. It must have just been, uh, it rolled out
terry: wrong. Sorry mate. another blooper, another blooper for the list.
Not love it.
ryan: Oh shit. No, you never to amaze me. Sorry mate. It’s a horn. Anyway, what are we covering? So we’re gonna
terry: discuss the difference between earning money and making. And we talk a lot about increasing your income, but I don’t think there’s ever a good differentiation between those two things.
And I think it’s really powerful to consider because some people are really suited to earning more and other people are really good at, at making more money. And if we’re talking about boosting your income, earning capacity, knowing which path to pick. I think that’s gonna be one of the most important choices that
ryan: you can make.
Yeah. I think we’re in a lucky position where we get to tap into the experience of so many people. Like we kinda get this intimate insight into personal finance, their home life and stuff like that, but also into their careers and their businesses, which is we get to kind of. Learn so many lessons through that and kind of extract from that.
This is episode allows us to kind of think about who are the guys that we’ve learned from and who are the guys that are making a lot, who are the guys that are earning a lot, what are they doing and kind of tap into that knowledge base. So, yeah, I’m excited.
terry: It’s always really valuable to be able to learn from the bright spots who are the exemplars and what are they doing differently.
And that’s what we’re gonna do is kind of really just package that, put it into a few principles that you can follow. If you’re on either path, by the way, you don’t have to choose one or the other, you could do both, but generally you probably wanna focus on one or the other. So that’s what we’re hoping to do in this episode is say, okay, of those people that are earning a lot of money, what can we share with you about what they’re doing and how they’re doing it and of those people that are making great money, how they’re doing that as well.
The other thing I wanted to add to is that. We’ve been teasing this mystery guest coming up. And I, because we didn’t do the episode together last time we couldn’t reveal it. So we will be revealing it in this episode today. And I’m actually gonna reveal two special guests and they both marry up to the topics we’re gonna be covering.
And they’re gonna add onto this episode
ryan: as well. You did tell me the next episode, the interview did is your favorite. So.
terry: I reckon it is. Yeah. Like it was such a, we’ll talk more about it as we go, but so much practical, very, very pragmatic advice that you can use straight away if you’re on one of these paths.
ryan: So not given anything away there by the sounds, why are we exploring this topic? I
terry: think the biggest thing is that the economy’s contracting. Everybody can see it everywhere. I can hears it on the news. Everybody feels. If you could be the person that can avoid the pain that comes with having to potentially downsize, maybe you have to sell a car.
Maybe you have to sell a house, all those kind of things that happen. If you can avoid that, that is massive and earning a lot more money and being able to boost your earning power during this time, it’s a huge superpower because not only will you not have to downsize, but you can be one of those people that look like it’s almost like you land on your.
And you get to make huge gains at a time where a lot of people are selling out of assets. Maybe you can buy ’em a lot cheaper. Maybe you can build a really good foundation of wealth at this time. Huge opportunity in that sense, isn’t it?
ryan: Yes, absolutely. And that’s probably the biggest one at the moment.
There you get, you got achieve feet trying to buy more assets. The prices they’re at right now. Absolutely. All you wanna do is go, geez. I wish I had more for
terry: those things. Totally. So that’s the thing, isn’t it like, how do we take advantage of this and see it as the opportunity is we talked about having that kind of stoic mindset and changing the frame, the way you look at things, this is how we’re looking at it.
This is a huge opportunity. You just got to put yourself in the right position to be able to profit from it really.
ryan: The other thing is that it just helps you build resilience to the future storms. Cause we might be in a storm right now, but there will be more. And, it’s making sure that, I guess when the future ones roll around, you kind of see it with, eyes wide open and embrace it is the hope.
Because, yeah, the challenges comes kind of a leveling of the field a little bit, and it tends to open doors for people too. So it’s good. And right now,
terry: a lot of other people, external parties are making decisions that impact our ability to enjoy our lifestyle, right? Because if the banks keep raising their mortgage rates, cuz the federal reserve keeps raising its interest rates or the RBA keeps raising in distance rates that eats.
Our discretionary spending that’s happening. The prices of things are going up higher as well. Those are things we don’t necessarily control, but you can control your earning power can absolutely control that. So let’s shift the focus, make sure we’re not wasting any money, make sure that’s absolutely covered.
And I would say by the way, before we jump into this, that having a great cash cushion. Not having to need money right now is one of the biggest, it’s a bit of a superpower because in any deal, whether it’s with your employer, whether it’s with your customer, the person who needs the money less has the most bargaining power.
So if you’re looking for a hack, have a great big cash cushion, have a lot of money that you can pull on that you don’t need money for months and months, and months, and months. And you can take advantage of a lot more of these opportunities. So that’s a caveat that I’d add to this, even though we’re talking about focusing on.
This is all based on the fact that hopefully you’ve got your financial defense sorted on top of that, for
ryan: sure. On a side note with that is you need to define how much is enough for you to be able to be aggressive. This is something we’ve been talking about with ourselves over the last little bit. I got the sense that your risk tolerance.
Was shifting the goal post on how much of a cash reserve we need before you could be aggressive. Cause I might, be a risk taker probably than you are. Well, definitely. And it’s something where you go, just define how much do you need. And as soon as you get that, then you know that you’ve got the ability to be more aggressive in those negotiations, in those sales conversations, whatever they might be, because you know, if it doesn’t work out, you’re.
And that’s what gives you the confidence to go in and, and have what, like you said, have the upper hand in that conversation.
terry: So it’s almost like it’s not either, or it’s actually be conservative to be aggressive when you need to. All right. So let’s talk about these two paths, earning money versus making money.
How do you think about earning money?
ryan: Yeah. So I think about the contrast that you mentioned before, so earning money versus making money. The way I think about earning money is, you’re trading your time and talent for it. You’re trading over time and talent. You’re passing that to somebody else to receive income.
Whereas I think about making money as investing time and talent, it’s you putting time and talent into building something that can create value for somebody else. And so the key thing is like making money. You’re really investing in building something that can create value for other people. And it doesn’t necessarily mean that your time and talent is connected to it.
You can still earn without having to trade those for it. So it’s really kind of yeah. Where your time is focused in those two things, what it’s doing.
terry: Yeah. And I kind of look at this and I say, if it earning is trading time and talent and making is investing time and talent earning is more linear, but it’s also more certain.
So as soon as I trade my time, I get the. But when I’m talking about making money, it’s not certain that when I invest the time that I’ll get the income, actually it’s probable that you’ll invest a lot of time before you get any income, but it’s also more exponential. And so there’s like a bit of a contrast between the two, but I think we should go a bit further into maybe some pros and cons between each of these pathways, just to help sort of think through what am I better suited to.
What’s my pathway. What’s the best pathway for. So let’s talk about pros and cons when it comes to earning and making, what are the pros for you? Do you think around earning
ryan: money? I think you touched on the big one there, which is it’s consistent and linear. There’s some certainty around it, but I think also, I think if you’re in that environment, the pathway to progress is a lot clearer.
You can see, and it’s often laid out for you where it’s kind of hierarchical and you know exactly what you need to do to kind of go to that next step and climb the ladder if you like. So that’s an obvious one. The other one is banks are also a lot kinder to you. they enjoy certainty of income, cuz that means certainty of.
Mortgage repayments or debt, repayments, whatever that might be. So it’s a lot easier to use debt and kind of get things moving a lot quicker from a debt perspective, which is valuable in today’s day and age. For sure.
terry: Especially if you’re an essential worker, like if you’re a doctor, man, the banks wanna throw money at you.
You’re fine. You can get whatever you want. you’ll be good.
ryan: yeah. Yeah. Just roll across to you. What are the pros of making money?
terry: I reckon the pros of making money is. Your time is your own. We talk about time as the number one asset. The thing you can’t get back your time is your own, but I know we’re, I’m just gonna quickly jump into cons here for a second.
That’s also a, that can also be a con and I’ll explain that later as well. But the first one is you own your time. You own your time. You can do whatever you want. So for example, this morning, I’m gonna go wash my kids at swimming lessons, myself and my wife will go at the same. And we’ll watch the kids at the same time.
That’s huge for me. The other one for me is at your, like I said earlier, your income is untapped. So you don’t get certainty of when you do the work, but you also don’t have a cap on how much you can earn. Now, there are sort of situations where you’re earning money, where your income can be untapped as well.
Potentially if you get bonuses or you get commission, that sort of stuff, but there is, it’s generally like other people are determining your income levels more so than you. The other two for me, Making money, rewards, creativity, it rewards ingenuity. And so I like that. I think that’s great. It’s something that allows you to express yourself in that way, probably with less boundaries and probably the other side of it is, maybe the banks like you better if you’re earning money, but if you are making money, The tax man can often take less.
And what I mean by that is it’s easier for you to manipulate and change the way you earn income to reduce your tax liability at different times. So it’s not to say you’re always paying less tax, but there are ways for you to change the way you pay tax to make it better for you. And kind of have less of that.
If you’re more of a fixed income.
ryan: Geez, mate, we might get audited after that comment. supposed to manipulate it.
terry: Well, you can change when you’re owning how you’re owning all those kind of things. And yeah, it’s the
ryan: flexibility for sure. The flexibility and creativity, some would say.
And it’s amazing now, just talking about that, like how many of those. Pros can also be cons. like you alluded to with time being your own, just going overseas. Now, what I realize is another pro of earning money is that when you go away, you get holidays for one. When you go away, you sit it down and you can fully disconnect and stay that’s someone else’s problem.
They’ll figure it out without me with the making. It’s not that it’s actually a bad thing. It’s that you want to you want to be making money and you want to be kind of applying yourself to it. And I think that’s because of the creativity that you mentioned. And so, at times we found a little bit jarring, cuz I’m like, oh, I really wanna work on this project.
This idea that we’ve been exploring and Brit’s like, Mate. We’re gotta go look at the Pantheon for Christ’s sake. Yeah. and so yeah, it can be a jarring element to that at the same time. Of course. yeah, yeah, totally least explore the cons. And so on the earning side, I would say that the big one is for me is time is owned by others.
Yes, you get those holidays. But I know for me in the past, when I was earning money, it was jarring to be expected to be at the office at different times and be quite restricted in those ways. Have less flexibility in what that looks like, which is tightly linked with income is also determined by others.
You know, your efforts, I guess it’s not as merit based if you like in terms of income. Being rewarded by the value of the problem that you’re solving for others. There’s a disconnect between those two things. And I guess that speaks to also a third thing, which is you gotta deal with politics. Often loyalty is rewarded as opposed to the skill and the capability, the merit of the problem.
And then the final thing would be on the other side of what you said, you have less flexibility about how you pay tax. And so usually. Each week fortnight or, month. Exactly the right amount gets taken out. And it’s very hard to claim tax deductions. You’ve got less things to offset and deduct against your income.
And so yes, you pay the full certain amount
terry: it’s taken out before you even get your money. They, they take the money first. You get what’s left. There’s a lot
ryan: less flexibility, which can be a good thing, cuz otherwise it is, there is a big risk for those making money that they spend the government’s money and then get to the time where it’s asked for and then go, ah, shit.
And we see this quite a bit where accountants haven’t made it explicitly clear to them, like what, how much they need based off how much they’re earning. So that can be definitely a con on the other side for making as well. That does go two
terry: ways though, too. That one, because. I would suggest that the longer you’ve been in business, the more financially fit you will have to be.
Cuz you have to be on top of tax. You have to be managing cash flows, those kind of things. Whereas if you are earning, it’s all kind of taken care for you. And so you never really have to think about it and you don’t develop, I guess, the money muscles that you have to develop in business. And I see that as a bit of a drawback to myself because yeah, you’re sort of institutionalized in a way that’s long term
Okay. Let’s go into cons of making.
terry: Cons of making money. As I said before, it’s a pro and it’s a con your time is your own . So, as you said, you’re on holidays. You’re doing work I’m up at 10 o’clock last night doing work so it depends how good a boss you are. If you’re a good boss, it’s probably gonna be okay.
But sometimes you’re a bad boss and you make yourself do stuff that you would never do for anybody else, but you’re doing it for yourself. So it’s a pro and con in that sense, it’s all on you. And I think part of this is because that sort of instinct to wanna do more is also because you have to deal with the volatility and the uncertainty that comes with being in business, your income is not assured.
And so you resting on your laurels. It comes with probably a little bit more stress because of that. Now there’s, again, there’s two sides to this. It builds muscles. It builds a level of resilience. It builds a level of skill that you probably don’t get otherwise, but it’s just harder at times to wind down harder at times, to compartmentalize, as you kind of explained, and because you are seeing, and your feeling market changes so much more often, and it is not absolutely clear what you need to do to progress or do the next thing.
So you are always thinking, what is the next thing? What is the next thing?
ryan: An extension of that is without going too metaphysical on this, either your energy levels directly impact your income as. And not everyone is completely level in when it comes to energy levels. Like I know I come in ebbs and flows.
Yeah. Sometimes I’m high, I could run through brick walls other times. I’m like, fuck. What are we doing here? I can’t be fucked. Mm-hmm , but it’s not a consistent thing. And you build that consistency over time, but there is a pretty tight correlation between those things, especially early days with making money.
If energy’s high, it’s rewarded, if energy’s low. And so there’s susceptibility to how you are feeling and how you are kind of acting and how you’re deciding. Impacts your income quite a bit early days, for
terry: sure. You really do have to get good at managing yourself for me, if I’m not all over my calendar and I’m not making sure that a time is balanced, I will absolutely work myself into a place where I’m useless.
ryan: you’re protected from that when you are earning money is what I find to a degree, obviously at the overarching, you need to be delivering and, and doing that doing for others. But the off days and the off weeks, you kinda have that downside protected a little bit as well. Yeah. The
terry: last con I reckon with making money is that generally banks are more wary of you.
Now caveat here is that’s probably in the short term when you’re starting out, they don’t wanna bar of you. they’re like, yeah, no, you’re not getting any money, but as you go on and you’ve got cash flows. It actually can turn around and banks will be like, what do you want? What do you need? . So I would just kind of say that there’s this sort of early stage where it’s gonna be a lot harder for you to be able to get access to credit.
And we talk about how that’s a bit of a superpower as well, so that can work
ryan: against you. You know, we had a couple of exemplars in our minds members of ours that we kind of were thinking about coming into this episode. They kind of sit on both of those. Yeah. I’m both earning above. Four or $500,000 a year individually.
So both making great money. In fact, the one earning is making more than the one making that we’re the ones we’re thinking about anyway. And so sometimes it is sometimes you start to fall onto one side versus the other in terms of preferring the making side. Cause it’s easier to sell it at the same time.
You can earn more than what people are making. Obviously. The key difference between those is, and I look at those two individuals in particular is the time component. Like we’ve kind of talked about in previous episodes. I think the odds are
terry: different too, right? Maybe this could be a bias of mine, but I’d be interested to see your thoughts on this, but the odds of you out earning a business owner is very low.
You’ve got to be in the right industry at the right time and be in very short supply. Very short supply and have a rare kind of skill set. Whereas generally you don’t need to be as skilled to earn more in business. That’s my sense. Anyway, cause I look around and I see all the different types of business owners and beyond a certain point, a business owner will be able to build a level of income that surpasses the average wage owner.
The average business owner would surpass that over time. Is that fair? Do you.
ryan: Good question. I guess the certainty and probability of earning is higher on the earning side. Like we discussed on the making side. Yeah. You got the potential to earn more, but at the same time, I guess the level of failure to earn or to earn more on the making side is obviously far greater.
If you filtered out the ones that didn’t make any money, you’d definitely make that statement. That would be. And that’s, I guess, guys that have established themselves, if you’re starting from scratch and you’re coming outta uni, that’s one, one direction or the other then. Yeah, I dunno. That’s, that’s quite a hard question to answer.
Well, I think about like
terry: the highest earn that I’ve known and, and as we know through the program, but also the guys that I’ve worked in the past in sport, right. They’re generally very highly skilled in a very narrow area in very short supply. And so, in a sense, it’s harder to get there and more people want.
And there’s more work to do it. So let’s say you’re a doctor, you’re an athlete. You’re an artist, you’re a musician at the very top of the top of the top of the top of the tree. You can outearn, you can absolutely outearn, but the odds of that, the odds of you getting to that are much lower. The new building, a great business that serves a lot of people in your community.
You don’t have to be anywhere near as elite in that sense. That’s kind of my
ryan: contention. No, for sure. I think the, the pond that you’re swimming in is a critical part of that. Like you said, you either get to the top and you’re in that small group or you’re in the right pond as well. obviously technology is a good example of that.
We’ll probably touch on a little bit. So let’s dive into the earning pathway. Let’s think about what you can do. The things that we’ve observed in the, the people that we’re learning from. And also from our past experience, obviously you’re probably a lot more suited to talk to this. Obviously done a lot of consulting from top down management.
Right through organizations as well. What have you observed in doing that?
terry: Yeah, I mean, if I can link back to the episode before this one, we talked about the servant mentality. What is the servant mentality? If you are earning it is just an obsession with asking this question, how can I make the organization work better and help it sustain itself now, and later, if you are continuously going into your work environment, asking and answering that question, finding problems, coming up with solutions, that answer that.
You will inevitably be climbing the ladder. It just, it’s gonna be very hard for you not to, unless you’ve got the kind of personality that pisses everybody off, nobody wants a barbecue you will earn more with time because you are so rare. Most people go into work, they clock in and ask what they can get. If you go in and you are going into work, thinking about what you can give, you will stand out like a sore. So that for me is the mentality, but how do we apply it?
ryan: And I think this is actually almost a byproduct of the way things tend to be structured. Right? Cause you think about most earning roles that you find yourself in, and it is a role and it tends to be that it’s based off criteria or description and there’s kind of a performance review or something that’s attached to it.
And I think what it does is it makes you zoom in on just what you are. As well, rather than going quite macro and looking at where does the business fit in, in the market? How’s it serving the customer? There’s kind of this disconnect between the ultimate value creation being at the service and product that’s, being delivered to the customer versus your role.
It’s kind of a small piece in that bigger puzzle if you like. And so, yeah, I dunno. I kind of picture where. You tend to zoom in on a specific, a part of the puzzle, and it’s harder to zoom back out. That’s also what you gotta do, right? To become that servant as well, one for the organization, but also for who they’re serving and zooming out and seeing, what’s happening around it and the things that can change.
What do you do? How do you, as you said, become problem solver, treat the company’s time and money as if it were your own.
terry: Well, I think the first thing is you wanna help the company or the organization find efficiencies.
So save time and, or. And there’s two ways to do that. You’ve just got to look for sources of waste, and you’ve also got to find sources of variance. So for me, waste is time or money spent that doesn’t have to be spent. Variance is where something could be done more reliably and consistently it’s always being reinvented and people are reinventing the wheel all the time.
So the classic one for me is. Like where there’s no systems or process, and there’s very variable results and very variable inputs where you could actually just smooth all that out and create structures and systems for people to be able to follow so that it saves them the time to make that result. But also they get a more reliable result.
This is such an easy thing to do. I mean, for me, I double my income when I was 27 years old because I learnt that in my organization, there was really bad communication amongst different skill sets. So I was trying to fix athletes and trying to get ’em back on the field and trying to work with physios doctors, coaches, and nobody was speaking the same language.
And so I was like, I need to build a shared language structure that helps people understand very quickly what we’re all talking about so we can better problem solve together and collaborate. And so I built like a system for rehabilitation to get someone back onto the field, and everybody knew exactly where somebody was at and how they could contribute.
And you know, how we could decide around. That system got people word got out about this system. And people came across and saw what I was doing. And I got offered a job at an international level and basically got told you don’t have to interview we want your system. you’re the only guy that knows how to do that.
Yes. We’ve got all these PhDs with lots of qualifications and things, but nobody has solved this problem, but you have, so you can just sidestep that whole process. And I was able to double income at that age and go past all these people who were more qualified for me because I’d identified all this source of waste and variance where they didn’t need to be.
And I built a system to fix
ryan: it. Nice work mate. Love that. Yeah, thanks, man. okay. Good. Another thing I think, I guess in terms of that, what to do question is just improve the company’s offer. What is the company trying to do for its people for the customer itself? And how can you, I guess, play the role in retaining and extending those customers, keeping them on as well as finding and closing new customers.
Yeah. And we kind of think about in terms of farming and hunting farming, How can you continue to nurture those people? And oftentimes it is just through streamlining, making things easier and better for them in different ways. And then also the hunting side, which. How can you get the word out to more people about that anyway, that you can basically make what your company does more enticing to others and bring in more people that is the highest , that’s the, the first thing on the, the reward list.
terry: When I think about the exemplar here that we are kind of thinking about, and the guys that are doing this well, the handful that stand out to me, it’s not always, actually all about the customer. It can also be about employees. So you mentioned before that, If you’re earning a lot of money, you wanna be in an industry where talent’s in short supply.
And so if you are the kind of person that is making your company more attractive, because you are creating a better environment, you are able to attract better players to your team and create better products, better services as a result that can help you hunt better talent. So if you are the kind of person, that’s the reason why better talent is coming into that organization, you are starting to look very, very.
the person that we are thinking about in this sense is doing that building teams, building those environments, to make sure that the top talent wants to come here,
ryan: spot on as an extension of that. It’s being able to earn through the efforts and output of others. So not having all your income, being tied to what you are, delivering your productivity.
It’s being able to organize a dynamic of others and create the environment for others to succeed as a direct reflection of being able to do that for them and how that, what that means for the company. And so it’s starting to disconnect that you only for productivity and starting to U via others for productivity or value, if you like whatever buzz.
This is where I think the
terry: last one’s really important, right? So we talked about help the company find efficiencies, improve the company’s offer to customers and prospective employees. The last one here, I think as part of that links in right in is investing in improving your leadership skills. That’s gonna help you do improve that company’s offering that way.
And there’s three parts to leadership skills that I think are really valuable to focus on the first one’s communication. The second one’s capability, the third one is results. So if you are the kind of. That helps information flow better up to people higher than you that are making decisions and down from leaders to the people at the call face, doing the work, you are very, very valuable because if you can speak truth to power and show them what they’re not seeing.
They can make better decisions. They respect you a lot more for it. And if you can be the kind of person that helps those people on the ground, really understand why those decisions getting made and buy into them and not just comply, but commit again. You stand out so, so much. So communication’s critical.
We talk about meta skills skills. That’ll take you anywhere. That’ll make you more valuable wherever you go communication. your ability to get what’s in your head or understand what’s in somebody else’s head translate that, put it into somebody else. That’s just such a powerful skill. So it doesn’t matter what industry you’re in.
Think about that. How can you be a relay up and down to improve that fidelity of communication?
ryan: And I’d imagine that’s the first thing that breaks as well. Is that line of communication. That’s where things get a bit hairy. Yeah. Spot on. Yeah. Capability you mentioned as
terry: well. Yeah. So capability is about, can you be the kind of.
It actually improves others. So you kind of mentioned before you wanna decouple your own input from output and you wanna actually get work done through others. The way you do that is you help others build their skills and, and talents, and actually get work done through them. So if you’re the kind of person that someone can come into your team, and then in 12 months time, they’re actually three times more valuable to the organization because of the time you’ve put into them and the skills you’ve developed with them.
You start to stand out in a really important way, and this is at an individual level, but also at a team level. So can you do it in, in the micro and also in more of an aggregate, can you get the team? And maybe you’ve got a team of talented people, but are they all pulling in the same direction? Can you make that work?
And so those are two different subsets of capability. Maybe you’re great at training someone individually, but you struggle with the team side of things. How can you build that skill? How can you invest time to be able to figure that out? That’s critical because in these really highly educat. Highly sort of skilled areas.
You’ve got a lot of people that are used to being the smartest person in the room and identify a lot with their ability to solve problems that doesn’t necessarily mean they’re gonna be great team players. How do you turn talent into team that’s so, so valuable for an organization? Isn’t it? Yeah,
And I think the key thing that’s kind of standing out to me as we kind of talk through this is. You’re finding ways to multiply your efforts. Ultimately, you mentioned about the example of creating a system and a shared language that was you multiplying your efforts, right? Didn’t have to be you delivering it.
There was something was, scalable, if you like same thing through teams, through impacting others through coordinating systems, kind of multiplying your effort again. And then the last thing you mentioned, so you mentioned communication capability and results.
What do you mean when you say results?
terry: Yeah. So capabilities, obviously what people are doing, but is it marrying up, like, is the effort counting for something and are you able to keep people focused on the right things for long enough and engage for long enough? So that those results actually happen? So that’s a whole nother skill set in it.
So you can have people all together and on the same page, but if you’re going in the right direction, it doesn’t matter. So this is more about saying, okay, cool. You’ve got a great team, but are we pulling in the right direction? And are we actually achieving what we’re here to achieve? There’s a difference between being efficient and being effective, efficient is getting things done right.
And effective is doing the right things. And, that’s a whole nother thing again. So how do you make sure that people are focused on the right things? And are being efficient in working towards the right things.
ryan: All right. So what did we cover there? So earning, let me just kind of summarize what you just said.
So key thing was have a servant mentality, right? How can I make the organization work better, help it sustain itself now, and, and later be a problem solver. Really look at it as a puzzle and go, what can I do? How can this piece together a little bit better and do better? And he. Help the company find efficiencies.
I think it was the first one save time and, and money improve. The company’s offer. I mentioned, which is about farming and hunting. And then you’ve talked about investing in improving your leadership skills, communication capability results. I think off the back of that, what’s important to touch on is once you’ve done that, you need to make sure you ask for your share.
terry: Yeah. This is where most people will get it wrong. They’ll say I’m doing all those things. I’m not only gonna any more money. The reason why is because you haven’t set it up from the beginning to make sure that any value that you’ve added, you get a slice off. And so there are ways and means of doing this.
And this is where I wanna finally reveal this guest. . This is all about negotiation, right? Your ability to negotiate deals. I feel like if you are thinking about a skill, I just talked about leadership. Another one of these skills that’s going to pay off massively over the next five to 10 years is gonna be your ability to negotiate.
It’s important. Anyway. But I feel like as economies contract, your ability to negotiate gets even more valuable because you’re gonna be negotiating and renegotiating all the time. It’s such a timeless and important skill. So I managed to do was get a former FBI hostage, negotiator to come onto the show and talk about how to use. The skills of negotiation, the principles and configure those to get a pay rise. and mate, this book, I don’t know if you have you read this book, never slipped the difference.
ryan: I haven’t read his book, but I’ve seen a few of his trainings.
terry: Yeah. Yeah. So Chris Vos is the guy’s name. and Chris Voss.
Basically turned the negotiating world upside down and bucked a lot of convention and said, you guys have got it wrong. You’re treating people like they’re rational beings and they solve these problems rationally and they don’t, you need to recognize that people are really a weird irrational beings and you need to solve for that when you’re thinking about negotiating and his book’s so good.
It’s such a practical way for you to prepare for any negotiation. You and I have used the principles of this several times. Haven’t we? Yeah, yeah, yeah.
ryan: They’ve worked. There’s the tactics and there’s the things doing things to say and the kinda the skill behind it, but there’s also the frame and it’s kind of how you enter a conversation and the way you are seeing things, it has a huge influence.
That’s probably been the biggest impact that I’ve noticed from some of the things that he talks about is how you kind of see yourself in those conversations and the role that you are playing, which is huge. Yeah.
terry: Massive. And the interview, as I said, I was able to get stuff out of him. I could tell that he hadn’t.
Given before, because nobody asked him that question or that question in that way before cuz he was like, oh, I’ve never really thought about it like that, but this is what I think. So, and there’s really practical stuff in there. Like exactly what to say exactly what to say, the right question’s the right statements at the right time.
So if this is hitting the mark for you and you are thinking, all right, this is actually really relevant to me right now. Look out for that next episode, cuz it will be the next one straight after this where Chris Vos will be on and will be walking through exactly how you can negotiate a pay rise. So, if you are doing all these things, we just discussed, you need to be asking for your share and that’s how
ryan: you’ll do it.
The way I think about it is you’re harvesting your efforts. Like if you’ve done those things, what you’ve done is you’ve built up personal equity within that organization. And it’s just about harvesting the fruits of those efforts. And negotiation is the form of harvesting. It’s the tool of choice Essent.
I think it’s something, as an extra note on top of that, if you’re kind of looking at it now and going, you’re seeing that in front of you and you’re like, I’m gonna do these things, I’m gonna create more value in these ways. I think it’s also good to state your intention early and say, Hey, this is what I’m gonna do.
If I do these things, then I want this outcome. So you wanna make that as black and white as possible, and, avoid the hope and faith that can come with that, which quickly turns into passive aggress. Chris FOSS
terry: talks about exactly how to do that, to make sure that you upfront that conversation. And actually you have it on day one.
So even if it’s a new hire, you’re having that conversation on the first day.
ryan: Yeah. Yeah. You can see here that Terry’s even held this one for me. I haven’t even seen the interview in the video. you
terry: haven’t seen it now.
ryan: Yeah. Terry have mysteries our run. It’s good.
ryan: I feel like we’ve covered earning pretty well. Let’s dig into making, what have we learned from others? What have we learned from ourselves as well? Our own experiences here around making, how’s it different? Is it different? Well, it’s
terry: different. Like we said before, it’s the same mentality. It’s a servant mentality.
It’s just a slightly different focus. Right? So where before. You’re trying to serve your organization and the people within that organization that have, I guess, sway over your future. Now you’re starting to think about, well, how do I serve my customer? Cause essentially our customer is our boss. Jeff Bazos is really example, right?
And his big mental model was your customer’s the boss. And so he or she can fire you at any single point in time. And so you need to be making sure that you do what’s best for the boss. And he took it to the level that in any meeting where they were discussing strategy, It was an empty chair and the empty chair was for the customer.
And that just had everybody know that that’s the boss. And I think that was a great way to kind of keep people focused on the servant mentality and knowing who we’re here for. So for me, it’s like, how can we make our customers lives easier and help them get what they want super simple. But when it comes to business, I think it’s about being really resourceful and creative and doing more for your customers with.
That’s the challenge, isn’t it? This is the challenge. We find ourselves in all the time. How do we do more with less, more with less all the time. Because if we do more with more, we can have a great business, but we’ll make no money.
ryan: to go straight into, what to do here off the back of that. The first thing that comes to mind is to lower the cost of replication.
Obviously, firstly, you gotta figure out what problem to solve for that person. How do you provide value in all those things? but we’re kind of speaking now to what have we learned from those people. And the big thing is that they’ve found a way to lower the cost of replication. And what I mean by that is repeated tasks.
They can be systemized, any service can be packaged and productized. Any knowledge can be packaged. And so it’s looking at it and going. How can this be done better? Or how can this be done more with the lowest cost of time and effort and money? Ultimately, obviously what that does allows you to give more of it, to sell more of that and impact more people.
Importantly, have more bosses if you like. So that’s a big one. And obviously software is the unicorn there. Exemplar of this at the core, right? The whole excitement for software is. There is zero cost of replication and maybe a data cost. There’s a cost of storing data and computing power and a few things, but it’s the lowest cost of replication.
You can go from one customer to a million customers and have nothing break. That’s why software is so exciting. Yeah. That’s Facebook, Amazon, all these things. They’ve been able to use software to do that, but there’s something we can learn from that, which is if we think about our business, there’s a lot of things that we teach.
There’s a lot of principles that we share and instead of us always. Speaking it to someone, we package it and we, we share it in that way. Podcast is another example of that. And so just keep thinking, how can you lower the cost of replication so that you can impact more people? That would be my first one.
What about you?
terry: Yeah, the other one, I think it’s pretty, again, close to home for us, but essentially what we have learned from others as well is just get outside in thinking you need to think differently all the time and you are so close to the. You’re so in the weeds with it, that’s often it’s harder for you to problem solve when it’s so easy for somebody else.
That’s essentially what we are doing for other people as well. Right. And so. I think the second thing to do, if you’ve allow the cross of replication is to get outside in thinking again, so that you’re working on the right things. so Lockey who you may have heard from a little while ago is now a mentor of ours, and what’s so obvious to, to Lockey it takes us a few months to go, okay, I get it.
And it’s just how it is. It’s just humans. Right? So getting a mentor, the value of thinking differently is, is huge. Just to make sure that you are solving the
ryan: right problem. And I think I mentioned before zooming in and zooming out when you’re earning money. the same is definitely still true for making, it’s probably less about the zoom function, actually.
It’s probably more around yeah. Fixating on what you think is the right answer and not broadening the lens. Isn’t it? It’s more about breadth to the lens.
terry: Yeah. Those business owners that are killing it, that we’re working with. The big common thread is that they’ve all got different mentors. They’ve all got different coaches in different areas.
Aren’t, they’re always investing in outside in knowledge going. What’s the next thing I need to think of? How do I think about this next thing differently? So I just wanna make that point, cuz it’s you. It’s not just us. It’s essentially how it has to happen. Otherwise you’ll turn around and you’ll say I worked myself into a job and I’ve been working this job for 30 years and now I wanna sell the job to somebody else and nobody wants to
ryan: buy it.
Mm mm. Nice. A final thing I’d probably touch on here would be just finding ways to give you a customer time and money back. How can you go about, looking at that empty chair at the end of the table and how can you make their life better? How can you give them more time for the things they care about?
How can you put money back in their pocket? and often that is things that you’re doing internally, so that the co the product or whatever it might be, might be cheaper for them. If you like, or it’s helping them do better. I think we often talk about, testing, experimenting, hypothesizing, but then obviously systematically figuring out what works.
We mentioned the OOD loop, a few episodes back and explored, how you come up with that hypothesis, you kind of observe what’s going on. So you orient yourself, you decide, and then you act, and that’s a repeated cycle. it’s about gathering feedback, gathering Intel, and then giving time and money back where you can.
terry: you’re interested in that concept of the utter loop, observing, orienting, designing, and acting, we covered this in a bit more detail. In episode 35, which was in 2021. So if you wanna know a little bit more about that, definitely go back to that. I think just the way to do it, isn’t it cannot think your first idea is gonna work.
You just gotta have a lot of ideas, test them as quick as you can keep moving forward and just pay attention to what sticks basically. And descript is a tool that we use and for the production of our podcast and the media and all the stuff that we. It is a fantastic example of this, right? the first makes us
ryan: sound smart.
terry: it does. It makes us sound a lot smarter than we are. if you’re in any media production or you wanna create media, like go and check this tool out, because what it does is it turned production of media. I guess it democratized, it took it from people who are highly specialized and went through audio visual sort of training to, if you know how to edit a word document, you can now edit media.
And it’s literally as simple as that, it’s like, Transcribing video, audio, whatever it is into a written sort of word document and whatever sentences you don’t like, you just simply delete , but they keep addressing it. They keep making it even better. So now there’s a concept of studio sound, where they create an AI rendering of our voices and they model the environment that we’re in so that we can actually reduce all the outside noise.
That means we don’t have to record in studios anymore. You record it all through Europe in big open air rooms. Doesn’t really impact the sound. That’s massive for us. Massive for you as a listener. The next thing it’s done and it’s been doing this for years and years, but the last one that just came out with is this concept of storyboard, which just makes video.
Just so much more intuitive, almost like creating PowerPoint presentations. So I’m just like checking my email every day. Cuz I want this new feature. I’m like, oh I can’t wait for this to come out. Cuz it’s gonna save us so much time.
ryan: I mentioned giving your customer time and money back the time it used to take to edit a podcast versus the time it takes to edit it.
Now that is dropped by, half the time. So whoever’s editing a podcast. You get half that time back. Luckily marrow’s the man he’s also helping us sound smart. But, that’s exactly what that’s done. Right. It’s gone. How can we give people time back? How can we make things easier for them and help them do better work?
And that’s, that’s a perfect example. Yeah. And
terry: I kind of mentioned earlier that, I was gonna reveal another guest as well, so we wanted to have two guests, two good examplers for each of these sort of areas. And obviously I mentioned Chris FOSS and talking about how to negotiate higher pay. That’s gonna be the next episode.
Following that episode, I’m gonna bring a guy on called Charlie. I interviewed Charlie a little while ago and it was off the back of our business series and it kind of just, just kind of missed out, but he’s got such a great story of using business as a vehicle for wealth and building your wealth and boosting your income to the point where this guy basically, he’s got enough now that his investments.
Can actually look after his business. , it’s gone the other way. So like, if his business went to zero, his investments would pay all the overheads for his businesses and he’d still, he’d still be able to live the same lifestyle boss move. . Exactly. Yeah. So I’m really excited to share that episode. I think it’s a really good inspirational one.
I’ve learned a lot from Charlie and he’s got his own podcast too, that I wanna share with the listen.
ryan: Nice. Nice. Nice. Let me quickly summarize that. Just to kind of bring that back to the surface around the, the making money. So as you mentioned, kind of big thing there maintain the service mentality service.
It’s still the same mentality. It’s a servant mentality. It’s how can I make customers’ lives? Easier help. ’em get what they want. Yeah. But it’s then also, how can we do what the lowest cost of replication? How can you do more with less and getting outside, thinking, help people see the problem, get others to help you see the problem differently and look at it from different angles and then find ways to give your customer time and money back.
Use that experiment, OOD loop to kind of explore, throw all those ideas at the wall, see what sticks get the feedback loops. And so if I was thinking about, the big takeaways from this, right, and it kind of exist. For both earning and making the one you mentioned is a huge one, which. Have enough so that you don’t need more have that cash cushion, start investing.
I know you’ve got enough of base behind you so that you don’t need more. So that feel like you’re standing on a bit of a throne and, obviously pick your path, earn or make, or both. Definitely a combination of both works as well. But the key thing is you’re adding value if you’re earning or making, but making your customers lives better in the most efficient way.
Yeah. You’re giving them time and money back. And that probably sits at the core of, of both of those. Doesn’t it?
terry: Yeah, definitely. And one thing I just mentioned there around picking a path, earn or make, or, or both is that it is so underrated. If you’re earning money to have a side hustle, because you’ll start to learn things from business.
You’ll start to break down a lot of those ideas. I mentioned in the episode before this, that one of the reasons people don’t earn earn more is because they conflate earning with time, earning more with spending more time to. But if you have a business, what you actually start to learn is that those things don’t have to go together.
So I can tell you that in intellectually, you could say that does make sense, Terry, but the first time you make money overnight because you product device, something, you created an ebook or whatever it is, that idea will start to break down. So I feel like maybe there’s a whole episode in that, because if you’re trying to break limiting beliefs, I feel like that’s one of the most powerful ways for you to do it.
It’s not, it’s not gonna be going through some sort of psychology type course or anything like that. It’s going to be you experiencing. Different things. Or, different outcomes, your ability to earn without spending and trading time for it is gonna teach you that those two things don’t
ryan: have to go together.
Definitely. if I think about something that was quite influential to me at many people early days was, the four hour work week. The book by Tim Ferris and the reason being is because it. Directly saws and breaks the link between time and income, you trading your time for income. And so the sooner you can prove to yourself and actually see that break, the sooner you go, all right, I can multiply my income without having to do more.
Yes. Most definitely. And so many people look at this and go to earn more. I’ve gotta do more. I’ve gotta put in more hours, which is true. Cause you’ve gotta invest time into building stuff anyway, but it’s about breaking the link between that, those two. Yeah.
terry: It’s not linear. It doesn’t happen forever though.
You might do more in the beginning and you do less later, like I think about your trip to Europe, that’s a full circle moment, right? That’s you living the four hour work week? That’s you going? I, work a few hours a day, travel Europe for nine weeks. Live no differently.
ryan: So I wish it was four hours.
It was about 12 to 15 and per week. Yeah. And then a few projects got sat down for a little while and slide down a little bit. but maybe in the future, there’ll be a four hour work week
terry: over there. yeah. Not four hours, but the point being, yeah, you’re not having to show up for eight hours a day.
Yeah. To pull in the same amount of money. Yeah.
ryan: Spot on, spot on. And. What do you do with this information? There’s obviously quite a lot. We’ve learned here from others and, and even ourselves, we kind of touched on a few things there. What do you do with that information? Well,
terry: I think there’s a bit of direction here and it’s worthwhile pairing it with intention.
Give you an example of this. The start of this year, I wrote a document that was basically a vision for this year and I started it with what if statements and a bunch of these? What if statements is just like, what if this happened and what if this happened? And what if this happen? And a bunch of that stuff has already come true.
Had a couple of those things. I just kinda look back at it. We looked back at it just before this episode, I was like, damn, what damn like a lot of this has happened. So what if statements was, what if the podcast breaks through to become a regular in the top 50? And what if Ryan’s stripped to Europe is seamless and what if the business kept growing whilst he was away?
Those are three statements that I made on this document that helped me to sort of direct my efforts and. It’s good to have this direction, but you’re not gonna be able to like, okay, sit down tomorrow, solve this problem. This is going to be, it’s a way finding process. It’s a hypothesis. It’s a, did that work?
Did that not work? And so you’ve kind of got to let it go, how you’re gonna achieve it. Just know. That if you wanna achieve it, you will. And I think intention’s a big part of that. So I think if you were to think about what do I do after this? I would say, sit down, write a, what if document, what if this happened and what if this happened?
What if I was able to do this and all of those things should reflect you earning or making more money. So what if, for example, I was able to buy this house. What if I could invest another a hundred grand into shares this year? What if blah, blah, blah, blah, blah, blah, blah, whatever it needs to be for you do that, write those statements down.
And if you get it right, it should actually be you reading through it going, man, this would be awesome if this happened. I think that’s a great way to go. You want direction and intention together?
ryan: Yes. Love that your heart should be palpitating. Shouldn’t it? There’s gotta be some visceral response to it as well.
Cause we kind of talked about the episode. We did kind of mentioned the stuff we do with life by design. A lot of it is your nervous system kind of just keeps pulling you back to wanting to do it. And so that way finding it’s not always front of mind, there’s a bit of subconscious, but there’s also a bit of nervous system kind of gut decisions getting made to help you do that.
Nice. Like it. anything else you wanna touch? No,
terry: I think that’s it. If you like this episode, please share it with someone that you love. If you think that they could get benefit from it, maybe you guys have been discussing this or send us a. It’s always useful information for us, even for that person who send us a two-star review.
Cause they hated crypto. Thanks for that.
but no, to be honest, I don’t care like anything, any information we get is good. We would love to know what you’re thinking about the content. We would love to know what you want to hear more of. So send us a review, write us a post in the community. Tell us what you wanna hear more of and otherwise look out for that next episode with Chris Voss and Charlie Valla coming up
Nice. All right guys, chat to you soon.