Hey friends welcome back to cubicle to CEO, the podcast where we ask successful entrepreneurs the business questions you can't google. This segment is a continuation of our q2 2023 income reports, an ongoing series advocating for financial transparency and supported by our sponsor Theory Planning Partners. Returning to the podcast for this special is the CEO of Theory, and my personal wealth manager, Kaitlyn Carlson, here to answer the existential question that plagues most entrepreneurs. How much is really enough?
In our quest to earn more, scale more, and advance our business to new financial statuses? By striving for six, multi six, seven figures and beyond? Are we really getting closer to making enough to support our dream lifestyle? Or are we blindly reaching for more because we don't understand the actual numbers required to achieve what we want? After spending years managing money for the world's richest people and entrepreneurs, Kaitlyn has a unique take on understanding when more revenue is a necessity, and when it's actually a distraction.
Hey, friends, we're gonna do a very special segment with my friend and wealth manager Kaitlyn Carlson, who many of you met in a recent episode episode 193. On the podcast, Kaitlyn was part of our retirement for entrepreneurs series. And she very bravely shared all of her own personal numbers about what her and her family are saving and investing every single year in order to retire in her early 60s with a $15 million portfolio that will allow her to passively withdraw and live on around $360,000 a year. So very inspiring. And I know a lot of you are really encouraged by that episode. So I wanted to bring Kaitlyn back as a financial expert, since we're on the topic of money, and share a little bit more about one of the biggest myths and misconceptions that I think plagues a lot of entrepreneurs, including myself, which is this idea of how much we really have to reach for how fast or how big we need to scale our companies in order to realistically create wealth that allows us to live the lifestyle we want. So Kaitlyn is going to speak to that a little bit today. Kaitlyn, can you like kind of distill more, what you see is the main challenge for entrepreneurs who think this way?
Sure. So whenever I'm presenting to a group of entrepreneurs, I always start by saying that context leads to intention. And our mission is to help our clients lead intentional lives. And so we provide that context to them by quantifying the goals that they've laid out for us. And one pattern that we notice over and over is that entrepreneurs are relieved at the end of onboarding because they realize, Oh, it doesn't take as much as I thought it did. Or oh, it's not as scary as I thought I can actually achieve this. And so typically, when I'm presenting, I always give the example of Emily.
So if Emily came to me, and she said she wants to be we often say work optional, versus like retirement, if Emily wants to be work optional at age 60, with a lifestyle of $20,000 per month, if she's coming to me at age 30, I would say to her, okay, Emily, you have to save around $5,200 a month to achieve this goal. If she comes to me at age 40. Now, she has to save around $11,000 a month to achieve this goal. If she comes at age 50, now she has to save $30,000 a month to achieve this goal. And if she comes to me at age 60, she has to come up with $8.2 million. And so I love to present this in a visual way. Because there are just so many things we can extrapolate from this mountain chart that I give.
The first is that the younger you start, the less it takes. And so that's why our mission is to get people moving on this and their 30s and 40s. Because it's going to be such a lighter lift, obviously $5,200 A month is much different than $30,000 a month. So that's the first thing that we talk about is the importance of taking action now. But sometimes I have entrepreneurs come into me with high margin businesses, and they say, Wait a second, I can actually already save 11 or $12,000 a month. And I say well, that's amazing, because that means you could be financially free in 20 years versus 30 years.
And this really illustrates the power of being an entrepreneur because for most employees, they don't really have a choice. They have to save because their income is capped with entrepreneurs. It's exponential. Now, knowing entrepreneurs, this pattern of like never enough, never enough, never enough. it over and over again leads to burnout because it's this insatiable desire for more. So at the end of onboarding, we love saying it to people You know, you really only have to save $10,000 a month. And then you can go out and play with your kids. Like that doesn't have to translate into a 5 million 7 million $20 million business, you can actually achieve that with a high six figure business. And people just, it's like the central nervous system reset, where they're like, Ah, really like, that's amazing news. And if you don't have that context, you'll be on this hamster wheel of bigger is better without ever knowing why.
I love the way you can break down such a complex topic into something so simple and easy to grasp. It's one of the favorite things I experience as one of your clients. So I hope that was really helpful for you all too. And just for some extra clarity for our listeners, when Kaitlyn says save X amount of dollars month, she doesn't mean like stored away in your piggy bank or even in a savings account at your bank. Kaitlyn, can you actually expand on when you say save? What are you referring to?
I'm so glad you brought that up, Ellen. So when I say save, I mean invest. And that's another huge misconception as people think saving means putting it in my bank account where it's not growing. If you do that, then your dollars will be losing purchasing power. So that's why it's so important to invest. And when I say invest, I mean invest in the markets. And day to day, the markets can feel volatile and abstract. But when you zoom out and look over a long period of time, the markets have a proven track record. And it looks like one side of a mountain, it's going up over a long period of time. So a lot of times people when they discover that I worked with like billionaires and multimillionaires, they always think like what set them apart. And I always say it really just came down to their habits, what they did day in and day out.
The amazing part of working with a firm like yours Theory Planning Partners, which Kaitlyn is a CEO of is that you know, as entrepreneurs, we are always like thirsty for knowledge. But it doesn't mean we have to be the expert or the doer of all things. And what I love about working with Kaitlyn is that, you know, she's able to map out for me, these are the targets, you need to hit based on your lifestyle goals based on the time that you want to become financially free. And then my only goal is to focus on the business and hit those numbers. And then I just transfer the funds over to you to manage and to invest on my behalf, which truly makes this passive like it's not one of those things where you are starting from the ground up and having to learn the process of investing and then doing all this work to you know, be on the ball with checking what's going on in the market every day or you know, when you need to take action.
Everything is managed by Kaitlyn and her team, which is a huge peace of mind for me, because there's all sorts of active investments that I love to be a part of. But it does feel really nice to have something that is a truly passive investment for me, outside of you know, like literally withdrawing the funds from my business bank account and setting it somewhere else, which obviously takes like 10 seconds. So thank you for giving me that peace of mind, Kaitlyn.
And another thought that I just had, as you were giving the scenario about Emily is and I just want to frame it this way to really help this hit home for all of our listeners. Kaitlyn gave the example of how if Emily started at 30 and wanted to be work optional by 60. Emily would only have to save around 50 or invest I should say around $5,200 a month. And so if you're thinking about your business and the the amount of profit it would need to make annually to be able to achieve that goal. That's a $62,400 pot of money you need to be able to pull out of your business a year which you guys that's I mean, you could have like a $200,000 revenue or even like $300,000 revenue business a year and be able to pay yourself a salary to cover your bills, be able to set aside the money you need for taxes, hire support, and still be able to carve out you know, potentially like Kaitlyn said 5000 or so a month to set aside to invest in Kaitlyn you even mentioned in this scenario of Emily.
That's if Emily wanted to live a lifestyle of $20,000 a month, which is not necessarily the norm in our you know, in our society. So let's extrapolate even further and say Emily doesn't need a $20,000 a month lifestyle. Maybe we have that to 10k a month that she wants to live off of in her work optional years. In that case. Would it be fair to say that if Emily started at a similar age around 30, that her monthly profit that we need to pull out and square away for investing would maybe only be like two or three grand a month?
Yeah, I mean, back of the envelope numbers. I'm glad that you pointed that out, Ellen because $20,000 a month by like normal American standards is very much an upper middle class lifestyle. So she's already looking to achieve, like above average life of life. But yes, so if we cut that in half and said, you know, there are plenty of families that can live off of $10,000 a month. And so roughly, we could cut those numbers in half. And it's also fine to start there. That's why we meet regularly, because you're gonna go through chapters of your life and feel differently, you may start off wanting a mansion on the ocean, and then end up wanting a log cabin in Vermont, or no one can talk to you. So this is likely going to change.
You know, Jake, and I just went on this trip to Montana. And when we left, we were like, "Yeah, we're gonna stay in our house for another five years". And by the time he came back, we're like, "No, we need to move this year". So yeah, change will happen. And, you know, what was that like a month ago that I laid out our plan, and now our plan is changing. And that's why I put partners in the name of Theory Planning Partners, because it's, it really is a partnership, you're going to come to the table with your responsibility and your desires. And we're going to come to the table with holding you accountable and helping you adjust in a strategic way.
That's so interesting to hear about, like how this is happening in real time in your own life and the need for that flexibility. And I'm so grateful that I mean, Kaitlyn is always so open to any new ideas or directions that I want to go in and has been such a helpful guide in so many ways outside of just like investing our funds in the stock market. So I'm so appreciative of you and everything you do for your clients, who become your friends, I mean, you really treat us like that. So very grateful for that.
I also just want to point out something I kind of had this realization when I was talking to Kaitlyn in one of our very first onboarding calls for me as a client, but I just had that takeaway come front of mine, again, as we were talking, and it's this idea that, you know, I've always kind of resisted this idea of being work optional at a more quote, unquote, normal retirement age, like around 60. And I've always been like, oh, I need to accelerate my timeline and be, you know, completely financially free by 40, or even my late 30s. And, you know, I always feel like I'm running this race against time, because I, I want to have like the majority of my life, to have the freedom to do whatever I want, and not for my decisions to be dictated essentially by my work. But one of the beautiful things I've realized in working with you, and again, in this conversation is, if we go back again, to that same example of Emily saving, let's say anywhere between three to five grand a month, depending on what kind of lifestyle she wants, at age 60 of being work optional.
One of the things I realized about us as entrepreneurs is as much as we believe that we would feel relief, if we were completely financially free by 40, and never had to do anything to work again, I think our brains would actually like deteriorate, like atrophy if we didn't find some form of purpose in the work that we do, even if it's not the work that we currently do today, or at the level that we do today, or earning what we do today, but I think it's honestly a lot more realistic to believe about myself. And I'm saying this for our listeners to who may be in the same boat as me that even if we could be financially free, or work optional, at a younger age that we probably would actually find more joy, and continuing to work until a more traditional age, let's say around 60, where we can fully like peace out. But in the meantime, if all we really need is like three to five grand extra in profit a month to be able to live that work optional life at 60 very comfortably, then you can also live life better. In the meantime, it's like you don't even have to work necessarily full time hours or, like Kaitlyn said, scale to insane heights to be able to accomplish that clear target of a couple $1,000 extra a month to invest. I don't know, I just wanted to share that in case that resonates with anyone else. Do you have anything to add there Kaitlyn?
I love that you share that. I mean, I think that you were surprised when I said my number was 60 when I said my age was 60. But probably not that surprised because I was also the same person that told you to like go for it with all your wedding stuff. And that is this is like bringing my woowoo side into everything. But like we live in a dualistic universe, like, you know, black and white and everything. And it's always gonna be about striking the balance. And if you do have that energy of like, everything and then nothing, it's actually a scarcity energy versus abundant energy. And so we really do want to encourage you can be unhealthy on the extremes, so we want to help you enjoy the middle.
That's such a beautiful message. Kaitlyn, where can our listeners connect with you and Theory Planning Partners if they're I'm curious to see if they would be a good fit to work with your team.
Yeah, thank you so much for asking. So people can go to our website, it's theoryplanning.com. And at the bottom, we have a link where you can book a call on my calendar, I'd be happy to chat. And then also, you can DM me @theoryplanningpartners on Instagram.
I love that and make sure you tell Kaitlyn, you've heard about her from Cubicle to CEO. And we'll make sure to link that below if you're interested. And Kaitlyn, thank you so much to Theory for sponsoring this episode and making this type of content where we can advocate and share financial transparency or reality a continued reality, I should say, for our listeners, I really, really appreciate everything you do.
Aw, thank you Ellen, thank you again for having me.
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