In this insightful episode, Jeff Kikel, President of Freedom Day Wealth Management, LLC, shares how he helps founders exit their business with tremendous success.
You will discover:
– The biggest non-financial challenges for business owners in retirement
– Why traditional retirement planning is failing us
– How to decouple ownership and management in succession
Episode Transcript
Scott Ritzheimer
Hello, hello and welcome. Welcome once again to the secrets of the high demand coach podcast. And here with us today is yet another high demand coach and entrepreneur, Jeff Kikel, who worked in the corporate world in financial services for over 20 years, but 10 years ago, he decided to strike out on his own, starting not one but two businesses simultaneously, and after years of challenges and struggles, Jeff built systems that allowed him to grow and scale his companies to the point that he reached his freedom day in 2021 today, he runs three real estate three businesses, real estate, Wealth Management and publishing industries. He’s also the author of a brand new book we’re gonna get to talk about here today. Well, Jeff, welcome to the show. Excited to have you on obvious question coming out of this and is pertinent to your work, as well as what’s a Freedom Day? You said you had yours in 2021 tell us a little bit about it.
Jeff Kikel
Well, Scott, so I’ve been in the financial services industry, like you said, for 20 years. I you know, traditional retirement planner, financial planner, that whole time period helped 1000s of people retire, but I started to reach a point I’d call it like mid 2000s where I was starting to see a change in the mindset of my clients, the older, well, I’ll start with the younger one. So the newer generation, the Gen Xers, the late Gen Xers and the early Millennials just kind of had a different mindset. You know, they didn’t want that 40 year working career and, you know, saving up all this money and retiring, you know, postponing life. I always call these guys the post Four Hour Work Week, Tim Ferriss, bug the post Four Hour Work Week, generation. They just were wired differently, and they have different goals in life. And then I started seeing my my older clients looking at life, you know, after two pretty big, nasty recessions during their working career, and probably layoffs and everything else, and they were behind. So they all just kind of had this negative look at retirement when I would talk about retirement. And so I started to think about this. And I was sitting down with an older client, and we were sitting there, and he, you know, of course, the usual, I’m gonna be working the rest of my life, blah, blah, blah, blah. And you know, I started to go through the numbers, and I’m like, I can do this in my head. You’re going to be totally fine. You’re, you know, you woke up this morning and you didn’t have to go to work. You reached your Freedom Day. And soon as I said that, a big smile popped up on his face, wow. And I was like, maybe there’s something to that. And so I started using that term, starting in about 2015 with a select group of people. And it really resonated with people, because instead of retirement, which is the this time bound thing, it’s this, you know, I’m going to work until I’m 65 and you know, I’m going to postpone life. Freedom Day was, hey, as soon as you have enough money, assets, income to replace your existing job and not even replace your existing job, just make enough to where you pay all your bills. That’s your freedom day. You woke up that morning and you didn’t have to go to work. And so that’s where the concept came from. It’s the name of my company. It’s the whole concept that I talk about in the upcoming book, like we’re talking about.
Scott Ritzheimer
Yeah, so one of the the kind of undercurrents of this is this traditional approach to retirement planning. It’s just it’s not working well, whether it did before or not. This to be determined, but it’s not working now. Why is it failing us?
Jeff Kikel
Well, I think it’s always failed us, you know? I think people have learned to, they’ve learned to accept life and say, Well, you know, I saved as best as I could, so I’m gonna go into retirement. Maybe I was making a couple $100,000 a year. Well, I’m going to learn to and the industry does this. Well, you’re going to live on 85% of what you’re making. Well, if you were spending 100% now, you go into retirement and you’re going to be doing 85% or less. That doesn’t work. So the whole concept is grabbing and taking control of this and saying, You know what, I’m going to find ways to generate income. Some of it may be from traditional investing, but others, you know, it’s Hey, come up with a side hustle, come up with, you know, real estate investing, all that, but come up with sources of income that are going to replace that paycheck. And you’re going to have those going and get that done before you get to the end, right and get into retirement. I think a ton of people are realizing that now, with with the way inflation has been, you know, you’re seeing more people that are in their 70s and 80s going back to work at this point, because the plan was kind of broken. You. When you have a 9% year of inflation, and you got that year, maybe a 3% bump in your social security and your investments didn’t keep up with it, you got to come up with the money someplace. I just want people to do that sooner. And I also want people to be able to, if they hate their job, get out while you can it’s just too long of a life to spend working a job you hate.
Scott Ritzheimer
It’s it’s a really interesting challenge, especially as you zoom into a lot of folks listening to this, or business owners and entrepreneurs, and a lot of them wouldn’t necessarily resonate with, Hey, I hate working at my company, but they’re just tired. Yeah, like they’re just tired. You’ve been doing it 10, 20, 30, 40 years, sometimes. But the challenge with that is that business oftentimes represents a very, very large chunk of their assets, and it also represents a very, very large chunk, if not all, of their income. And so this whole prospect of not only am I going to not do this thing that I’ve done for 20, 30, 40 years, but it’s also tied to my entire livelihood, you know. So how do you help folks to try and wrap their mind around what things are going to look like post retirement, particularly for business owners.
Jeff Kikel
Well, and I think, you know, for a lot of business owners, and I’m even seeing in one of my businesses right now, you know, we’re in the real estate business, but we also own co working spaces, so I count that as real estate. And, you know, I mean, at some point I don’t want to be doing that. So we’re making some changes even inside our business, we’ve got a two year plan for that to say, Okay, what does life look like outside of owning a brick and mortar location? So what can we do? What things can we add into our business so that, you know, I don’t necessarily have to sell the business, but I want a business that I have complete freedom of my time, and I have complete freedom of whatever location that I’m at. So I think for a lot of business owners, and I was that guy, you know, prior to the pandemic, I had started six businesses in four years. I was working 70, 80 hour weeks every week. Thank God for COVID, because it slowed me down and it made me realize that I could be a lot more efficient with what I’m doing. Yeah, I could change up some of the red, you know, how I was getting revenue in the business. You know, before it was like, okay, it was all about people coming into the co working space. Well, they weren’t. When you have a physical location and you can’t get out, we had to change up ways that we were generating revenue, and that’s been an ongoing thing for the last three to four years. So I think those people, they don’t necessarily have to say, You know what, I’m gonna just get out of this completely. But what can you do to kind of switch up the business so that it becomes a little less active income and a lot more passive income in your business? I think that’s the biggest thing. You know, if you are, if you’re looking at it and saying, hey, I want the traditional retirement route and I just want out of this business, then you gotta get really, really serious about looking at your business today and how it runs. Because if you’re let’s say, in the the baby boom generation, or even late baby boom generation, the people who are buying your business are millennials or Gen Xers, who come from the world of I don’t want to work 90 hours a week in a business. I’m sure is heck not going to buy your business that you’re working 70 or 80 hours a weekend. So you’ve got to start looking at your business and changing it up to where it’s more efficient. Look at efficiency. Look at the ability to make yourself, what I call make yourself irrelevant to your business, so that you are not what the business is. You don’t own a job. You own a business. So that means you build systems. That means you bring in people to run that business and run those systems for you so that you can get you can, you know, kind of extract yourself out of the middle, which is hard for entrepreneurs a lot of times.
Scott Ritzheimer
Yeah, you bring me right to my next question, which is, a lot of times around an exit, there’s this ownership and management are flattened right in a lot of small businesses, entrepreneurial organizations, especially founder led, founders, the owner, founders, the senior management, right? They’re the one in the same and and so when we think about
Jeff Kikel
and the janitor and the purchasing department agent, or all that,
Scott Ritzheimer
Yeah, and so when we start to think about the. Maybe even the opportunity to own the business and not run it right, you have to start to separate what is ownership and what is management, you know, and and so how have you, either yourself or or and or your clients, started to navigate this, this distinction between owning and managing your business?
Jeff Kikel
Well, I think, you know, you’ve got to really sit down and do a serious look at your business. And I would highly this is a situation where you don’t want to try and do this on your own. You want to find somebody that helps people exit businesses. So whether they’re a business broker, and that’s a slippery slope, because a lot of them are just out to get your listing, and that’s it. But, you know, look for coaches, look for consultants that could come in and take a just, you know, a 40,000 foot look at your business. And, you know, I mean, one of the things we did, because this is what I do with clients, you know, I help clients figure this out, you know, one of the things we do is we do an Eisenhower matrix, you know. And if you don’t know what that is, it’s just basically four blocks. And it starts with, you know, the most you know, the most critical. And it’s, you know, right now has to be done. And it kind of works its way around to this doesn’t ever need to be done. And start to put some of those tasks in there. And I use an acronym. You know, when I kind of figure out how I’m going to use my time? Yeah, I use the acronym idea. So identify first. So sit down and figure out all the things that need to be done on a an annual, on a quarterly, and then get it down to monthly and to your day, look through that and say, All right, what you know, identify all of the things that you do and then categorize them into those boxes. And the D is delegate, okay, so what is important enough, but I don’t need to be doing it and be delegated to somebody. So either an employee I have here, or, you know, I’ve got employees overseas, in the Philippines and in multiple places. What can I delegate to them? Important stuff, but I don’t need to be doing it. What is an E, which is what can just be eliminated? I don’t want to assign it to anybody. It’s unimportant, and it’s not really there. And then the A is automate. So what needs to be done? And it really doesn’t, it’s not worth having a human do it, but with AI and with other things, it can be automated so that your business runs much more efficiently. So that’s kind of how I organize things, and it really should be your first step is identifying what is done. And that can be as simple as, you know, what? Just literally have all your employees, and you write down the tasks that you do over a week, and then you can figure out, all right, what, what is, why are you doing this? There’s no reason for doing that, you know, I it’s, it’s in my business, I find myself doing the same things that I railed about in corporate world. And I remember, I’ve, I had a a guy that I work with, with a large financial firm, the president of the company, one time, and, you know, he was saying, Well, why are we doing this? And I said, well, because they tell us too, who’s they? Well, it’s the innocuous day up in Boston, and he’s like, Okay, well, let’s figure out who they is, and let’s just eliminate that, because it’s stupid. You know, it’s those type of things you’ve got to be able to say, all right, why are we doing this? Right? And everybody has businesses like that. I said The Four Hour Work Week. Literally, I’ve read that every single year, twice a year for Since 2009 actually, 2006 when the book came out, and it makes me go through that same kind of exercise every year, eliminating garbage for my business.
Scott Ritzheimer
Fantastic what would you say? Shifting gears just slightly. What would you say are some of the biggest non financial challenges that business owners face in retirement. A lot of the exit discussion necessarily revolves around the transaction and what the finances are going to look like and what’s going to happen inside the business, but it can come at the cost of what’s actually next. What are some of those non financial challenges?
Jeff Kikel
Well, I think the biggest thing is, yeah, so many of us as entrepreneurs are kind of wrapped up in our business as our identity. And, you know, one of the things that I have clients do, like, even before they retire, I have them write out a bucket list. I mean, I give them, actually, a bucket list book that has them put together 100 things that they want to do before they die, and I start getting them thinking about that, because what happens is, if they don’t spend some time thinking about that, they’re going to retire, and within about a month or two, they’re going to be bored as tears, you know, because you’ll talk about, you know, what do you to do when you were. Higher Oh, well, I’m gonna sleep in. Okay, well, that’s two days. Well, I’m gonna play golf. Okay? You’re gonna be bored to tears after like, four days of doing that, or maybe once a week, you’re gonna play golf, and then you’re gonna be bored as tears. What are you gonna do after that? Well, yeah, we’ll travel. Okay. Well, are you gonna travel, you know, 360 days a year and be back home for Christmas. Well, no, I mean, we’re only going to do like one trip a year, like we always did. Okay. Well, what are we going to do to fill the time? So just keep doing that. You’ve really got to figure out what your life is going to be afterwards. And honestly, the math part is easy. The finance parts easy, it’s figuring that part out of what you’re going to do to fill your time. Is it that you might want, you know, you may want to start another business, or you may get into some different type of business, like real estate, or something along those lines. You know, I always hear, Well, I’m going to manage my portfolio. Well, I have 150 clients, and I’d manage money one day per month. So if you’re one person, you shouldn’t be spending an entire month doing that. So what are you going to do? And I think that’s the biggest thing, is having, you know, identifying what it’s going to be. Is it volunteering? Is it gonna be maybe go do some consulting work or something like that. You’ve got a lot of expertise. A lot of times, it’s staying around and helping consult with your old firm, sometimes.
Scott Ritzheimer
Yeah, I love that. So Jeff, there’s a question that I ask on my guests. I’d love to hear what you you have to say to it, what would you say is the biggest secret that you wish wasn’t a secret at all? What’s that one thing you wish everybody watching or listening today knew?
Jeff Kikel
I think the biggest secret to this all is How stinking hard this is. You know, if you’re gonna start a business and you’re gonna get to the exit, it is hard. It’s not easy. You know, it’s it’s making that transition was probably one of the most difficult things for me. When I did my first big exit from a business, it was trying to figure out what the next steps were, and fortunately, I had the income and the assets to take about a year and figure that out. And I would encourage everybody to build that in when, when you get ready to exit, whether it’s leaving a job or whether it’s, you know, leaving your business and selling your business, build in time to just think and figure out what really makes you happy, and just do what makes you happy. I eliminated probably 30 things from my life that were not making me happy anymore, and I was doing kind of out of, I don’t know if is, I don’t know if it was, you know, me saying, Oh, I have to do this because I’m in this position in the world or whatever, but I literally just eliminated them within weeks of me, you know, getting through the sale of the business, and I live a happy life. I only deal with people I want to deal with. I only do things that I want to do at this point. And I still continue to build businesses, but I build businesses that aren’t eating up my time. They’re businesses that generate revenue, and it’s passive.
Scott Ritzheimer
Fantastic. Well, tell us a little bit about your book, where we can get a copy of it and where we can find more out about you as well.
Jeff Kikel
So the book is Overcoming The Retirement Trap. It’s actually due out here in the beginning of December. It’s been a, this has been a two year journey with this book. I’ve written other books in the in the interim time. But this has really been, this is my story, really it’s, it’s all the dumb mistakes I made over a 10 year period or 12 year period of time. It’s my philosophy and my strategy on helping people exit from whatever situation they’re in, whether they like it or not, whether you like your business, and maybe you just want a different approach to it. The whole book’s about that, and it’s on Amazon, so you can get it. It’s called Overcoming The Retirement Trap.
Scott Ritzheimer
Fantastic. Fantastic. Overcoming The Retirement Trap by Jeff Kikel, k, i, k, e, l, fantastic. Fantastic book. Highly recommend it. Well, Jeff, thanks for being on the show. It was a privilege having you here today. And for those of you watching and listening, you know your time and attention mean the world to us. I hope you got as much out of this conversation as I know I did, and I cannot wait to see you next time. Take care.
Contact Jeff Kikel
Jeff Kikel worked in the corporate world in Financial Services for over 20 years. Ten years ago, he decided to strike out on his own, starting not one but two businesses simultaneously. After years of challenges and struggles, Jeff built systems that allowed him to grow and scale his companies to the point that he reached his Freedom Day in 2021. Today, he runs three Real Estate, Wealth Management, and Publishing Industries businesses.
Want to learn more about Jeff Kikel’s work at Freedom Day Wealth Management, LLC? Check out his website at https://www.freedomdaywealth.com/
Podcast Booking Status: Open
We are looking for podcast guests, and we want to share your story.
Are you a coach, consultant, or advisor for entrepreneurial organizations? If so, let’s do a great show together – and we can promote you to our audience on all our social media channels, website, and email list.