Building a Thriving Financial Services Firm Through Strategic Referrals and Solid Growth Management

Tim Melanson: [00:00:00] Hello and welcome to today’s episode of the Work at Home Rockstar podcast. We’re talking to the CEO of Aurora Companies and what he does is he provides a competitive, flexible platform to help financial advisors work with their clients. So I’m super excited here to be talking with Tim Smith.

Hey Tim, you ready to rock?

Tim Smith: Yeah, ready to go.

Tim Melanson: tell me a story of success in your business that we can be inspired by.

Tim Smith: Well, I’ll tell you, I started, on my own in 1995 and a few years later. some friends of mine joined me and then. I started getting phone calls from. A major company in my industry asking if they could refer business to me. And, that’s how the whole business really got started. So the biggest success story for me is figuring out that the best way to market myself is, looking for free referrals from large institutional companies in my industry.

And that built our growth basically over time that’s the biggest success story of the whole thing.[00:01:00]

Tim Melanson: Yeah, that’s awesome. I’d say the majority of the people that have been on the podcast, they always say that the best way or the most successful that they’ve been has been through referrals. And I mean, so how do you go about doing that? Getting those referrals?

Tim Smith: Well, in my industry, so I market to financial advisors and in our industry, those financial advisors periodically, they either change companies. Or they are looking for a product or some sort of help with something out in the marketplace. So, by, making friends and connections with other people that are in that position, the people that those people go to when they need help. And letting them know who I am, what I do, what’s different about us, et cetera. you know, they’re in a position to refer people to me when the opportunity presents itself. So, it’s all just been a networking and connecting thing for 25 years. Honestly, that’s what I’ve done.

Tim Melanson: Wow. Okay. [00:02:00] So for you, it’s not necessarily, referrals from previous clients. You’re actually finding like referral partners that provide similar services. Is that what you’re doing there?

Tim Smith: Yeah, not so much similar services, but similar part, different parts of the financial services industry. So just as an example. A financial advisor wants to leave Merrill Lynch and wants to create his own company, you know, be Tim Melanson and Associates, right? but somebody in the background has to be a broker dealer, an investment advisor that keeps them in compliance and processes things and pays commissions and things like that.

So they may approach a company like Schwab or Fidelity. to do business with them and Schwab or Fidelity would refer them to me and say, hey, if you plug into this guy’s platform. Then you don’t have to start anything up other than an office. You know what I mean? that’s all you’ve got to do is outfit an office and create some marketing materials and a presence for yourself.

And then Tim’s [00:03:00] company is in the background and takes care of it all. So, you know, a company like Schwab or Fidelity, you, it actually started with what became TD Ameritrade, but that was swallowed up by Schwab recently. I’ve been through about 5 or 6 different. companies being acquired of people that are friends of mine now colleagues that refer business to us.

So, Yes, my clients, I get very few referrals from the actual financial advisors. I mean, we get some, but it’s a limited number. it’s more what you would call centers of influence people who are out in different parts of your market. They’re not competitors. They’re more. business relationships or strategic partnerships of some kind, and they are in a position to send you people when the need arises.

Okay.

Tim Melanson: So how would you like, I suppose this is very specific for you, but Is there any sort of generic ways that you can go about getting someone like that to refer business to you? Like what do you give them in return?

Tim Smith: Well, I [00:04:00] mean, we do a couple things. First of all, of course, they need something, right? They are trying to build or to further their own careers or build their own companies. And so, you know, we will do business with them when we can, when it’s warranted. we will send people to them when it’s warranted.

So, as an example, there’s a company that does marketing for financial advisors. It’s all they do social media. You know, campaigns of various types. I make them a provider on our platform. So that our financial advisors, if they’re interested in somebody to help them with their marketing, they have a place to go.

So, you have to look for creative ways. That ideally don’t cost you anything, right? Or cost very little, to make it good for both sides because it can’t be a 1 way street forever. You want to really try to help the people that are helping you, and that’s honestly so much of business is just that.

It’s really that simple.

Tim Melanson: Yeah. And in this particular scenario, you’ve [00:05:00] got sort of like a play team of people that work well to each other. And the more you build that trust and do good work for the people that you’re doing good work for, it just kind of grows, right? thank you for that referral to Tim.

He was great. Right

Tim Smith: absolutely. And these people typically stay with my company for at least 5 or 10 years. So, you know, they’ll have a relationship with whomever sent them to me. And there’s plenty of opportunity for them to say, yeah, Tim’s company is doing a great job for us. Thank you for that referral, which, of course, reinforces the story and the.

The thing, and that’s where customer service comes in and, you know, you have to do an excellent job. Obviously, you have to execute on whatever it is that you offer. but, yeah, that’s, that’s a really important aspect of it. That’s for sure.

Tim Melanson: I’m going to guess that not everything was, was great, awesome, you know, working perfectly. There was some bad notes on that path. I’m wondering, can you share with me something that, just didn’t go well and what you did to recover from that?

Tim Smith: yeah, well, I’ll give you what was the hardest thing that I’ve been [00:06:00] through. 1 thing about financial services is that there is a lot of liability. There’s a lot of litigation. There’s a lot of, you know, these financial advisors that I take on. I, the company becomes liable for anything that they do that’s bad.

Around 2012, we found out that one of our financial advisors had stolen millions of dollars from some clients. I mean, millions. And, I know today how the person did it and, you know, how he skirted the system and how he kind of tested and probed to figure out what would get caught or not caught and things like that.

But, we went through, as a result of that, years of litigation. To try to restore as much money back to the individuals who had lost money because, you know, in these situations, if they recover a quarter of the money, they’re very fortunate. I actually wrote a book about investment fraud after this whole experience.

[00:07:00] so if they get back a quarter of the money, they come after me. For three quarters of the money and, I just didn’t happen to have 10 million dollars in my bank account that day. Right? insurance comes into play and lawyers, but then there are also regulatory problems because regulators come in and they do an examination to see if they can figure out where you were weak, causing, helping to cause these things and they found weaknesses.

which is painful for me because I’m like a, you know, give the apple to the teacher kind of guy. I’m a, I’m a very rule bound person. So to, you know, to find out that we weren’t doing an excellent job was very difficult for me. and the final part of it was a reputation. you know, we lost some relationships with some of those strategic partnerships.

because until we had proven ourselves that we had fixed any issues, et cetera, they didn’t want to continue referring business to us. And in some cases, they wouldn’t even work with us any further until, you know, again, until. [00:08:00] Things had been settled, so we were 3 years in the wilderness after that. and it was a very, very, a huge financial struggle.

And I happen to have now partners in the business, and they helped put up some of the money that we needed. And, you know, I came up with creative ways to keep the cash flow going. And fortunately, we survived it and moved on and ultimately thrived again.

You know, there’s no doubt that it changes you. I am a lot more humble. Today, we had been growing about 40 percent a year before that. And, I really put the brakes on things and I’ve never tried to grow at any sort of a rate like that anymore because it just leaves too much room for potential things falling through cracks and the like.

So, yeah, that’s my biggest bad note that 1 there.

Tim Melanson: and so is that the biggest, I guess take away from that is if you grow too fast, you’re leaving too many things open. Is that like, what do you think was the biggest change in the way that you did business after that?

Tim Smith: [00:09:00] No, I think a bigger one for me in a highly regulated industry, you need to have higher quality compliance officers is what we call these folks. And, the people that I had just simply were not, talented enough to manage the organization, especially given our growth. So, I mean, it’s a combination of things.

But, the growth, the rate of growth was a part of it. not having the right people who knew how to manage their jobs along with that growth, was key to it. But I think that that is a general, you know, cautionary tale for anyone with a business that’s growing fast.

He said, Tim, find great people and let them do their jobs. don’t micromanage them, let them do what they do. and when it came to that area, while I thought I had very good people, they really were not as high level as was needed for where we were headed as a company. And so, [00:10:00] that’s the lesson I really got from it was, you need people whose talents are ahead of the job.

If you’re going to grow fast, think of it that way.

Tim Melanson: Yeah, well, and that does lead perfectly into the next topic, which is about the band, right? Because. when we’re talking to different entrepreneurs, there’s kind of like this theme that comes up. It’s either culture or talent. And, you know, some people are like, well, no, you hire people that are going to fit in.

They hire people because of their attitude. And then you can teach them what they need to know, right. Versus hiring somebody who’s got all the skills that you happen to need, but might not actually have the attitude that you’re looking for. You know, in your experience now, you need highly talented people.

So, you know, is there sort of like certain areas where you can focus more on the, like, how do you sort of hire in your company?

Tim Smith: Well, I would fall more into the culture bucket. First of all, because chemistry among the, the team is, is very, very important. I, [00:11:00] I’ve, I have tried to run a Decent sized enterprise, but still as a mom and pop cottage industry feel. I don’t know if that makes any sense to you. You know, I want, I want everybody to enjoy their day to enjoy working together to love their work to, you know, go home excited about how they spent their day.

And, you know, even some of it’s drudgery paperwork and things like that can be drudgery, but, you know, proud of what they accomplished for the day and no. Real serious problems into office and things like that, where we do have an office as opposed to my home, my home office.

But so, I think that. That’s where, when you’re looking for highly talented and experienced people. That does become a challenge because you’re not only looking for that talent and experience, you’re looking for attitude, culture. are they going to fit into this thing that we’re creating?

Will they add to it or detract from it? So that it is very challenging [00:12:00] when you need higher level people, I would say. For certain jobs, you can take somebody who has a wonderful attitude and train them, and they can be superstars, but you can’t take somebody who has no compliance experience, for example, or financial experience and turn them into a head accountant.

Tim Melanson: Well,

Tim Smith: compliances.

Tim Melanson: in my experience, anyway, the drummer, for example, has got to be amazing. You can’t hire somebody who’s just brand new

Tim Smith: Yes.

Tim Melanson: But on the other hand, I don’t necessarily think you need the number one best singer in the world in your band in order for it to be an amazing band.

Yeah, well, Bob Dylan has proved that for 50 years, Come on, I guess like it is sort of like, depending on the role in the band or in the team, some roles require a very, very high level of skill in order for this to be successful. And then [00:13:00] some roles, you have to have a really good charismatic, you know, fun or, or, you know, whatever, good cultured person, right?

You know, in order for those, you know, and then you can teach them. The parts, right? I mean, I can always improve as a singer, you know, and as we go, right? Which, which I have. however, the drummer, if you’re hiring somebody who’s just getting better as you go, I suppose it depends on where your band starts, but if you’re

Tim Smith: No, but,

Tim Melanson: on stages, right?

Tim Smith: your point, I mean, the drummer sets the rhythm, right, and keeps the rhythm. So, a drummer’s closer to a CEO in some respects, right? You know, that’s the driving force. Of the whole thing. So yeah, if the drummer doesn’t have that level of skill I love the drums, but i’d be a lousy drummer because I just wouldn’t be able to keep the rhythm Perfectly, you know that metered I don’t know.

I’m a little too adhd I think to you know, just do that exactly the same way for [00:14:00] three to four minutes so yeah, yeah, I mean you I I think it really part of management Is knowing what you need in a given position and knowing what you need comes largely by experience, you know, so, it, when you’re very young, it’s hard to even understand what culture you’re developing.

You don’t know yourself well enough, right? You know, like, when you were 20 and in a band. You know, if you look back at yourself now and go, holy, I had no idea what the hell I was doing back when I was 20, you know, we put 4 guys together on 4 different instruments and we thought we had a band. Right?

And it’s that’s 1 of the benefits of wisdom and experience and time is learning about yourself. And learning about your organization and learning about what you think you need. So that it’s not only competency, but chemistry. Right, you know, that, that the pieces fit together in terms of function, but also in terms of [00:15:00] personality.

Tim Melanson: And, you know, are we going to enjoy working together? No. Yeah. Well, that’s one thing that I think, I think from the very beginning, I always, and when I was putting together bands, always focused on the attitude of the people more than anything else. They all had to be cool, right? And, and like easy to get along with. And then, and then the other part of it though, is that, I, you know, as the band leader, I guess, I always sort of try to figure out how to get people that were better than me.

I always wanted to be the weak link of the band. if everybody else is better than me. We’re good, right?

Tim Smith: That that is a really, really important point. I mean, some people’s egos. Won’t allow them to bring on people who are better than them or more experienced or whatever. and ego is a terrible thing in business. You know, it, it can really ruin opportunity and growth and, you know, everything else. and so by letting down your ego and saying, damn, this [00:16:00] guy’s really talented.

what a valuable addition to the team that would be. even if, you know, maybe I even feel threatened by that person or, or what have you, you know, I mean, and it depends too on how dominating, domineering the person is, whether the person seems power hungry or likes to take over things, you know, you can also be a phenomenal musician, a better musician than 99.

9 percent of people, but with no interest in being the director of a bit. So, you know, maybe that’s what you’re looking for, right?

Tim Melanson: Someone who plays well with others, right? And,

Tim Smith: Yep, it’s a sandbox.

Tim Melanson: yeah, and I think that that’s kind of a similar thing in business when you’re looking for people too. it’s possible that someone in your team could end up breaking off and starting their own company, all that stuff.

And actually, maybe I’ll ask you that question. Are you ever worried about that kind of thing?

Tim Smith: rarely in my situation, I worry less about them starting a competing thing, more about them joining a competitor. starting up in financial [00:17:00] services, there are enormous barriers to it. It’s very difficult, but there is, a lack of solid management people in my industry.

the industry has shrunk somewhat as it has aged. this industry has been around since the early 19 hundreds in America. it was much bigger in the 1980s and the Wall Street craziness of Gordon Gecko kind of stuff.

Right. So that was a heyday of sorts. And the industry has changed. It has evolved. It has shrunk. In terms of the number of financial advisors and, people working in companies like mine. So the demand is greater than the supply. So I worry more about that, and that’s where, again, the enjoyment of your job every day, liking the people you work with, not working for a tyrant, right?

you know, so I’m not a tyrant with people. I probably was when I was in my [00:18:00] thirties. because I was much more hard driving than I am today. I’ve mellowed an awful lot. Like I said, I’ve been humbled, right? I’ve been chastened. but I also have learned that people, just want to enjoy their day.

So give them a job where they can enjoy the job, be fairly paid. you don’t always have to be at the top of the pay scale. But you do have to be fair and competitive with it. you know, I don’t micromanage time with people. If somebody shows up at 9. 18 for a 9 o’clock thing, I don’t get, you know, in a snit about that.

If they come in every day at 9. 18 and leave on the dot of 4. 59, eventually, yes, we’re going to have a conversation. But if it’s occasional, and, you know, we all have lives to lead. We have doctor appointments. People have children, you know, life gets in the way. So by being a forgiving boss or a boss who works with people and understands that we all have lives.

I think you can have qualitative aspects to your management, to the way that you run your company, [00:19:00] that help you compete. And help you hold on to people because what you want them to do is look at, gee, I’m thinking about going to X, Y, Z, and they’re going to pay me 5 percent more if I go over there.

But you know what? They’re a bunch of jerks and nobody speaks highly of that company. And, you know. I’m so happy here and it’s such an easier place to work and, you know, great people, et cetera. You know, that’s what you want them to say. I am often at the higher end of pay scale, but I try never to be the highest paying, you know, for a particular position or, role in the company.

Tim Melanson: So tell me a little bit more about, mentorship. do you go out and find mentors and coaches, what’s your thoughts on that?

Tim Smith: Well, first of all, we are multidimensional people and so it’s hard to find what I’ll call a mentor, a coach who can be perfect to deal with all of the parts of the person. So, you know, we are business people. We are [00:20:00] romantic and loving people. We are spiritual people. We’re physical people. We have health and, family.

And so we have all of these aspects of our lives. And I find it rare to sit with 1 person who can really give strong advice in all of those areas. So, I, I’ve sought out people. You know, based upon where I feel the need, but people who can help me with a particular area, rather than, a quote unquote life coach, who in theory would be the guru, right?

The one person. So, I have a business partner who is 20 years older than I am, and is far more successful than I am. So, that person is my business mentor. You know, when it comes to things in business, I go to that person. I don’t discuss my family with that person. That person is actually related to my wife.

So, you know, for that reason, I don’t discuss family. He’s got, you know, he’s married 2 kids, same marriage for 50 years, I just choose not to [00:21:00] go family there. So for issues of family or. mental health

Spiritual health, you know, other areas I’ve gone to other people. And have found people ultimately through friends, same thing, you know, you just talk to people, you know, and see if they. Have dealt with someone that they were happy with and. You know, I’m almost 62, so I’m in a place where I’m sort of considering.

what’s going to light me up for the next 25 years, and, I don’t see retiring. I, I, I’m just way too energetic and crazy to sit on my butt and read or something all day long. so, yeah, I, I love, I love mentoring others, but I also love finding people that can add value to my life in certain areas, when and as needed.

I’ve really been fortunate that I have found some people. who have just done tremendous things for me. and really it’s helped me just be a very content, grateful, happy person at this point in [00:22:00] my life.

Tim Melanson: Nice. Well, and what you’re saying about like finding specialists, I guess, in certain areas, I mean, that just, makes sense on both sides of the spectrum because, you know, if you as a business owner kind of narrow into something and this is your specialty. You’re just going to get better and better at it, and you will end up being, you know, the go to person for that particular area.

And if you’re trying to do all these different things at once, what are the chances that you’re going to be amazing at every single thing, and you’ve got all these plates spinning, right? so it does make sense from both sides that you would go find somebody for all these individual aspects of your life that you need help in, right?

Tim Smith: Yes. there’s a concept in marketing called narrow, but deep. rather than trying in the financial services world, for example, rather than trying to be all things to all people. My love is investing so I can draft a financial plan for people that deals with all of the areas of their life But I don’t really want to be the one that goes out [00:23:00] and tries to find the insurance And does the drafting of wills or trusts or does their tax returns

There are other people that will always be way better than I am at those things and so I have a specialty In marketing I have a specialty Most coaches, you know, whether they would admit it or not, they kind of have a specialty, like I deal with guys who run a band, you know what I mean? Or, you know, something along those lines, where they really deal with something on a very regular basis, such that they understand that better than the vast majority of other coaches would understand that, and that’s kind of what I look for.

Tim Melanson: Love it. Okay. So I’m excited to talk about this next topic, which is keeping the hat full, the cashflow. I mean, you’re probably the right person to talk to about this. so tell me, you know, as a small or a medium business owner, maybe if you’re just getting started, what would be some of the things that you would say right away that they need to [00:24:00] do to make sure that they’re making more than they’re spending?

Tim Smith: Yeah, well, first of all, most people don’t have any sort of business or financial background, right? and those things, even a base amount of those things, I took one class in management in college. And I took two classes in accounting, but I really only needed the first one. Because I know how to read a balance sheet.

I know how to read a profit and loss statement. I don’t know how to, I mean, you can make journal entries, but I have to think that through still. But reading the statements and understanding what’s happening financially, I have just enough knowledge how to do that. So I would tell anybody, get a little bit of basic business knowledge.

You know, training or understanding. And in fact, maybe this is a business for me. I don’t know. This might be my next business, but, you know, marketing, [00:25:00] accounting, you know, operations 101 for the new entrepreneur or something like that. understanding a little bit about those things is a big help.

First of all, the business aspect of it. You know, properly done the startup of a business has what’s called a business plan. Now, I didn’t have a business plan when I started my business, but what I knew was that I had a certain amount of revenue that I could count on, at least for a while, and then I could try to build on.

that when I started my company, I knew I could pay myself. So I had that advantage when I started. but you have to have One of two things. You either have to have enough money or access to money, loans, grants, etc. to survive for a period of time based upon what you expect [00:26:00] to have to spend versus what you think you might bring in in revenue and when.

You know, so it’s revenue and it’s expenses. This is relatively simple math. So having, if you’re not good at spreadsheets, get good at spreadsheets. But, take your first 12 months, put out how much in revenue you think will come and when it will start and be conservative as hell because nothing comes as fast as you expect when you start a business.

That’s just the rule 1. It’s still today. It still doesn’t come as fast as I expected. So, you know, I’m always very conservative about that. And then what are you going to have to spend and, you know, be conservative about that? Because it’s going to end up being more than you expect. and then, you know, in a spreadsheet, take the revenue line and subtract the expense line.

And at 1st, it’s going to be a negative number for a while in all likelihood. And whatever all those negatives add up to for, you know, until you reach a positive, you need at least [00:27:00] access to that much money to survive that long. In business, so that aspect of it is very simple. Math, right? This much could come in that much is going to go out and I’m either going to have a deficit, you know, a negative amount or a positive amount.

So, laying out for the 1st year, what you think you’ll bring in in revenue and when in what months, how much. And then what you’re going to have to spend and and bear in mind that in theory, you’re paying yourself. Right, because whether you pay yourself through the business or you just live off of of savings.

You’re paying yourself and you have to have that amount. So, I mean, it is easier when you start a business not to pay yourself a salary, because then you don’t have to pay all of the FICA taxes and, you know, that you save on all of that. So, if you just. Use [00:28:00] savings and don’t pay yourself an actual salary, you know, a W2 salary, you can hold on to cash longer.

ultimately, to manage cash flow, especially in the startup, you have to have an idea of what you think you’re going to bring in. What you think you’re going to spend. what the gap is going to be and how you’re going to make up for that gap to survive.

Now, it’s harder if the nature of your business is irregular revenue, So, maybe you get a sale, maybe you don’t get a sale. If you get a sale, it might be three months worth of revenue. If you don’t get a sale, you still have to spend three months worth of expenses.

If you don’t make the sale, you still have the expenses. So, that typically requires even more cash or access to cash somehow, because you have to survive in between sales, not knowing when exactly they’ll come in and everything else. So cashflow management, it’s one of the hardest things to do. And if you don’t have your handle on [00:29:00] expenses, you know, how much am I spending and on what, and by the way, keep it low.

Right, you know, you’re not supposed to have a BMW when you start up a business. Right, you know, you don’t just go out and buy yourself nice stuff. To look good, I mean, a suit or, or, you know, the right clothing for meetings, the right computer for presentations and, You know, things like that, but, you know, until you’ve made it, you, you can’t live the life of the 1 who has made it.

And when you start a business, when you’re early in business and you’re on your own in business. It is really hard to even know when it’s okay to start spending more money on yourself or, you know, to upgrade things in the company. So, but that’s, you know, that’s all a part of cash flow management. And, for me, my, my mind is very mathematical.

I think that’s why music works well for me also. And, you know, so I happen to really understand numbers. That comes to me [00:30:00] very, very easily. And so managing cash flow, at least understanding what looks like it is going to happen and what I’m going to need to be ready for from a business perspective.

You know, that aspect of it is easy. How to deal with it. You know, if I expect I’m going to have a cash flow shortfall and me, you know, oh, geez, am I going to be able to pay, payroll, You know, those are totally separate, problems, and issues. and, you know, that’s where having a partner is helpful, a money partner, or a bank credit line can be helpful at that point.

you do have to be careful to keep on going, if you keep on going back to the bank credit line, or extending the credit line, increasing the credit line, it’s very hard to know in business when you’re failing. All right. That’s a really, really hard thing. And I had an investment client once that I watched.

keep on going into more [00:31:00] and more and more debt and finally had to declare bankruptcy because he always thought the money would come. And it didn’t, avoiding debt early on is really, really an important thing beyond avoiding the expense of it. the interest expense and everything.

It can just be a very, a spiral downwards. If you start to depend on debt, you know, so government grants are far better than government loans. Right, you know, or or savings that you have in the bank. Far better than than going to a bank and asking for a loan, even if you can qualify for a loan or taking a home equity loan, for example.

So, yeah, I mean, being aware of what your options are to access capital. You know, is a critical aspect of cash flow also. but I just counsel people to be very judicious about that. You know, when, when, you know, if you have a contract where somebody is [00:32:00] supposed to pay you 10, 000 dollars in 2 months.

And you need 10, 000 dollars to survive the next 2 months. You know. Well, if you, if you use a credit line for that, it’s 1 thing. But, you know, if, if you have no visible way to sustain the company, but you need 60, 000 dollars for the next 6 months or something like that.

Tim Melanson: And like, so the kind of the way you started was talking about how it would be normal for you to see some negative numbers in the beginning. I think that’s kind of true. I mean, a lot of businesses are meant are expected to run at a deficit at first. Is that true?

Yeah.

Tim Smith: Yeah, if you’re starting from scratch. known revenue sources, you know, I didn’t start that way. I was fortunate because I already had some investment clients. I left another company and started my own company. So, I knew they were going with me and I knew what that was going to pay me.

And I knew I could survive with that and move [00:33:00] forward assuming I kept them happy. But yes, most startups without revenue are going to lose money because, it costs you money to live. While you’re starting, and you may have expenses, even expenses like Internet, computers. Printers, you know, things like that.

You have to have that in this day and age to have an at home company. Right? So, you know, you’re going to have. To live your lifestyle, even if you don’t have employees. I mean, you may have health insurance, you know, so there are expenses of survival, basic survival. even if you have otherwise a very, very low expense thing.

And you can call it running at a deficit. You can call it living off your savings. Right? you can call it numerous things, but in a very. Conceptual fashion, you’re running at a deficit. You’re losing money.

Tim Melanson: and I think probably the biggest, [00:34:00] if you’re running at a deficit, you don’t have the money. You’re more aware of it than if you are running off some savings or if you have a big old loan, like you could be going further and further into debt and not really see it because it’s not hurting it right now.

I’m wondering. I’m a numbers guy too. Spreadsheets are great. I mean, you know, I’m a numbers guy. So I understand cash flow quite well. However, speaking with, other people, it seems as though, is it true that people tend to overestimate their ability to handle cash flow? Or are there, you know, is it, you know, when you’re good at it or you, you know what I mean, what I’m saying?

Tim Smith: Well, yeah, I think there’s a natural human tendency. If you believe you’re good at something to believe that you probably will be as good at other things, you know, and so, just as an example, [00:35:00] you know, I went into, government service and I served as a councilman and mayor for seven years. And I thought, because I’m a good guy and because I’m, you know, naturally gregarious and friendly and all that kind of thing, and relatively smart, that I would do well in politics, you know, which I saw as government service.

And the bottom line is that I am not good at politics. I’m, I’m way too, direct.

I have trouble lying. you know, all, all these things that we pillory politicians for, we’re not in my skill set, you know, just the general ability that lawyers have or politicians have to give you an answer to a question that is a non answer.

I do not have that gene. Okay, so if Tim Melanson says, so Tim, why did you kill that guy? You know, my, my answer is not going to be, well, you know, in, in 1861, there was a [00:36:00] law about this. And 5 minutes later, I have not answered your question. My answer would probably be, well, he was being a jerk and I didn’t like him.

Tim Melanson: yeah,

Tim Smith: that’s my genetic makeup. So I, you know, you learn that you’re not gifted at certain things

Tim Melanson: yeah,

Tim Smith: as you go forward. this is one of the best business lessons I have learned is that we all have something that we’re uniquely gifted at, and there are everything else, somebody else is gifted at, and this is where delegation comes in, and having good people around you, or, hiring third party services comes in, you know, if you’re not good at math, get a bookkeeper.

Have them, talk to them every month. They can tell you what’s going on. They can tell you how it’s going because they’re very good at it and they know what the numbers are, or an accountant, for example. so if you’re uniquely skilled at something, you know, I mean, if you’re, if you’re a bass player, Tim, you know, to think that you could play the keyboards just as [00:37:00] well.

when you’ve put 20 years into the bass and have never touched the keyboard in your life, you know, it’s a bit of hubris to, you know, to go there until 20 years down the road after you’ve tried to play the piano for 20 years, you know? So, I, I, there, there was a coach in the financial services space who had this concept of unique genius.

And his whole thing was, I ended up working at home in part because of the way this guy coaches. it’s, you know, whatever you do really well, spend more time doing that and try to hire other people to do the stuff you don’t do as well.

Tim Melanson: yeah,

Tim Smith: You know, if you’re the rain maker, go make rain, find somebody else that can, a friend of mine yesterday, I was interviewing him for something.

he went, he had a printing company and he said, you know, when I first started, I was running the presses and I was, doing well, everything. And he said, he realized I’m a lot better off to hire somebody to run the press while I go out and get more [00:38:00] business. simple concepts. there is a tendency, I think, when we start a business to be the one armed paper hanger, the chief cook and bottle washer, out of financial necessity, maybe at first.

But ideally you can get away from that if you really want to grow. you’re going to have to focus on what you do well. And you may ultimately even need to hire a CEO to run your own damn company. if you’re gifted at something else, like being the visionary or the engineer or somebody who, is creative.

And somebody else is better at managing a business, let somebody else manage the business, but focus on what you’re really good at.

Tim Melanson: All right. So let’s move on. have your guest solo. Oh, it’s exciting. Your business.

Tim Smith: Sorry, I missed the question.

Tim Melanson: it’s time for your guest solo. So tell me

Tim Smith: Oh, Yeah. So, well, I probably, I have a lot of exciting things. So I’ll focus on two just really quickly. I still do love the investment work, even though I run a company. And I’ve started to [00:39:00] focus on, the use of some kind of wacky stuff, something called a structure note, put in a call that can give people, stock market upside without the downside.

And it’s, so for people who are conservative and don’t like watching, you know, big losses on their money periodically and things like that, the second thing I’m really enjoying is, so we created this thing called the financial dad. a son of mine, as he was graduating college, he asked me to come and give a seminar on personal finance for all of his friends, because they were all about to go out into the world of finance, perfectly ready with computer degrees, right?

That, you know, they had no, no knowledge of company benefits or investing or insurance or anything else, taxes. so I gave him a three hour seminar on personal financial topics. And my son said to me afterwards, dad, you should teach young people how to do this. You should teach entrepreneurs. You should teach, you know, cause my father was a college professor for over half a century, believe it or not.

and I think it is in the [00:40:00] genes. I just love financial concepts and explaining them and stuff. So we started this thing called the financial dad and two of my kids work with me in it on a day to day basis. And, we’ve just launched a podcast in January. where we talk with entrepreneurs about their businesses and where I give educational podcast stuff about financial topics.

I love, love, love. Explaining stuff to people, you know, especially after 40 years of doing this, I feel qualified. You know, I think I’m ready. So yeah,

Tim Melanson: do we find out more?

Tim Smith: Okay, well, so the, we are the financial dad with an underscore after it. So all one word, the financial debt underscore on YouTube and Instagram.

So you can find us there and, you know, look for my silly face and you’ll find it. and then the podcasts, they’re going to be out on the major, also under the financial debt on, on the major platforms. so you can look for those there as well.

Cool. [00:41:00] And is there any other way that people can work with you? Yeah, I mean, my main company Aurora is Aurora P W P as in Peter w. com. the financial plan dad podcast. com. They can go there and, find the financial dad stuff there. I’m also on LinkedIn just under Tim Smith. There’s a lot of Tim Smith, so you got to find the bold guy, but I’m on LinkedIn as well.

If somebody wants to connect with me or ask questions or. want some help of some kind.

Tim Melanson: love that. This has been a lot of fun.

Tim Smith: Thank you, Tim. I really appreciate it.

Tim Melanson: Great. And to the listeners, make sure you subscribe, rate, and comment. We’ll see you next time with the Work at Home Rockstar podcast.