What does it mean to pay yourself first and why is it important? It took me a while to
really understand this but then I figured it out and it changed everything --like,
financially in my business. So, that's what I'm gonna break down in this episode.
-Nate, the burning question on my mind I think on the mind of most people in America is
what does it mean to pay yourself, first? -Okay. So, I'm going to admit that he wasn't too excited
about this topic. But I'm excited to share it with you because this topic has taken on new meaning
for me. In a couple of ways. So, going back not too far, okay? There were times where I struggled
to pay my employees. I struggled to pay my staff. I would I would report to them and say, "You know
what? Paychecks are going to be delayed by about a week. I'm really sorry about that." Good news is
we had built a good relationship. And I'm talking specifically about my team in the Philippines.
And none of them ever had to leave me for that. But there were times we even had it worse. And
I said, "You know what? Paychecks are going to be delayed." And I ended up being 2 weeks late.
I think the worst it ever got was paying them 3 weeks late. And I really appreciate them. Many of
them are still working with me today and they're very patient. The problem I had back then is
I paid them first. I paid them first. And like I really struggled. Like not only was I behind with
them but guess what I was behind on my own bills. I was deep in debt. I had a big financial weight
on my shoulders and it was really stressful and that's probably what gave me my ulcer.
I really did have an ulcer. And then I learned this principle
of paying yourself first. And I decided to give it a try. It didn't make sense to me. I'm like,
"If I pay myself first, isn't that selfish?" Like, "What about my team? They're relying on me."
The moment I started paying myself first... And I'm feeling emotional because it was a...
It was a really big shift. I set aside money for myself and that took the weight off. I didn't
have to stress personally. And the miracle that happened is I never paid a team member late again.
-Wow. -I don't know how it happened. I just know that that principle really, really worked. I told
myself, "This is how much money that I need every month to be comfortable and to cover my expenses."
I paid myself that amount first and over the months and years following, I had more
and more on top of that. -So, what caused this paradigm shift? I mean, you learned this principle
somewhere along the way. But I mean it sounds like it was a pretty big leap of faith, right?
-Yeah. I think I'd heard it many times before. I don't know if it was Brooke Castillo or somebody
that I was listening to. It just really struck home with me like just having the right mindset
about money. And putting myself last was the wrong mindset to have, I guess.
-So, when I hear that question or that principle about paying yourself first, I think on a personal
level, a lot of the time that means like when you get a paycheck or something like that like to
save a little bit of that money first. Is that something that you did it was was to save money?
-Yeah. And I hadn't had any savings before. Like I mentioned, I was deep in debt.
So, I made sure the amount that I was going to pay myself would cover all my expenses,
it would include paying down my debt. And even though I still had debt, I made sure I put
money in savings every month. And what a good feeling to actually see that that savings grow
over time and my debt get paid off. And the miracle of it looking back
is just that I really think it was that mindset shift that there's urgency. And not everyone is
like me. But I know that when I have urgency, when I have pressure to perform, in some ways,
it makes me perform more but in some ways I freeze up. One way that this works for me as
a big disadvantage working under pressure is if I'm talking with a prospect. You know, somebody
that I think would be a great fit as a client. They can sense the pressure. They can sense...
Just by my body language maybe my tone of voice, maybe the words that I say. But they can sense
that I need them to buy, right? I need that. I need that money. But the whole scenario changes
when I know that I'm going to be covered. I'm going to be fine. And the way that I do sales
is is more like a diagnostic. And if they have a need, then my service can fill that need and
can be a solution. It's not like any high-pressure anything. Doing a non-pressure approach when I'm
really feeling pressure in sight doesn't match. But if I really don't have any pressure... And I'm
fine if they want to sleep on it and you know take a day to make the decision or whatnot.
All the pressure's off. It actually makes selling way more enjoyable. It makes it a lot easier.
That's probably one of the benefits that came from it. -It sounds like it's really caused a shift
from having more of a scarcity mindset to more of an abundant mindset with regards to money. Can you
speak on that for a minute about the difference between scarcity and abundance? -Yeah. That's
something that I've really studied a lot over the years because I recognized in myself like,
"Man, I've got a scarcity mindset." And so many different examples. You know, I'm really worried
about saving a dime here, saving a dollar there, getting the best deal. When what I found in doing
this... This was this was not because my mindset had changed. I hadn't gotten to this abundance
mindset at that point. But making that change and seeing the fruits of it and really seeing, "Wow,
if I take care of my needs, I'm better able to take care of the needs of others." I just think
of that airplane analogy with the oxygen mask sure. That probably fits well here.
Because as I take care of my needs, I'm better able to take care of other people's needs.
It's after that that my mindset started to shift to that abundance mindset. -So, how do you know
how much to pay yourself? -So, for me, it was just a matter of what is my need to cover my expenses,
what do I need to start paying down my debt and then what's extra on top of that that I can start
putting into savings. So, whatever that amount is, it's kind of more than the urgency. That's what I
did and that's what really worked. And I'm really glad that I did that. Because over time, I found
that as I got more and more confident in being able to pay myself first, I was able to pay
myself more. And I had accumulated quite a lot of debt. I mean, I actually don't remember the number
but I think in credit card debt and whatnot it's probably up to 30,000 at the highest point which
that that's a lousy amount of debt especially when you're just making enough to make ends meet and
you've got this heavy burden. And I'll admit, I don't remember exactly how long it took to pay off
but you know, within a year something like that, I got all the debt paid off and have money in
savings. And to look back and say, "Wow, this past year i haven't had to to pay my employees late."
It's a pretty big deal. -What do you think the biggest danger is of not paying yourself first?
-Well, I think I have eight and a half years of experience and not paying myself first. And it's
just... It's financial stress. So, it finally took me paying myself first that really caused
that big shift in my business. Topics like this, I usually don't cover too much on my channel. I'm
usually talking specifically about YouTube. So, if you want to watch another episode like this,
I made another one about how to build a 7-figure business. Go ahead and watch that one next.