#34 Kate Toon | How to manage the money side of business (and build generational wealth)

Episode Overview

One of the biggest reasons people don’t bet on themselves and build a business is because of not knowing how to manage the finances of a business. There’s a whole new set of rules, and complexities that come with running your own shop – and it’s all on you.

Kate Toon knows this all too well. And she also knows how to overcome it. Kate is one of Australia’s most successful, well known online business owners. And in this episode she comes on the show to share her journey from scared small business operator to savvy business owner.

Key Topics
Mentioned Resources

Terry Condon: Hey it’s Terry, and welcome back to another episode of the passive income product. So in keeping with our series on business, as a vehicle for wealth in this episode, I’m really excited to share with you a conversation. I had racially with one of Australia’s most successful online entrepreneurs katetoon is an SEO and copywriting expert who helps small businesses and big brands build a more engaged audience and increase their conversions.

Kate has built a very healthy seven figure business that affords her complete control of its time and her life. And the fact that she’s the only shareholder and employee of this business makes even more. To the income she owns from a business has enabled her to fully pay off a mortgage, buy an investment property.

And now she’s also building an investment portfolio for more passive income. In this episode, Kate and I discussed the main points from block. She wrote on her website, katetoon.com, paddled my money hurdles, and here’s some of what we delved into

Why she went into business for herself while she was five months pregnant and how it all played out.

The big decisions she made in 2017 that led to a gigantic spike in income two years later, and eventually pushed her beyond the million dollar mark.

How she managed to crawl out from under a 50 K tax bill in less than 12 months.

And the simple question she used to reframe her resistance to learning about money in a business, and eventually start to actually look forward to tax return time.

So look, if you’re starting any business or you’re already in business, but struggling to make meaningful progress, you’re going to find this conversation really inspiring. So hope you enjoy this as much as I did and enough for me, let’s get into it.

Kate, welcome to the show.

Kate Toon: So excited to be here. Thanks for having me.

Terry Condon: You and I met on club. And one of the things we discussed, you talked about an idea, which was, I can finally replace my perfectly good pillows.

Kate Toon: I said, I think I’d got to the point with my finances, where I was replacing perfectly good pillows or cushions with nucleus. To me, that was like your pits at me of financial wellbeing. Like when you’re literally looking around your house, you need nothing. And you looking at that cushion and it’s fine. There’s nothing wrong with that cushion, but you buy another cushion cause you can. And I’m like, this is dumb. I need to be doing something a bit better with my money than buying.

Terry Condon: I love that market

Kate Toon: because you know, my first market was can I go to Kohl’s and not worry about having to put something back at the checkout? Cause I’ve been there, you know, the markers move as you go. And now my mark has moved again, but the cushion marker was a big one. Yeah, I think

Terry Condon: that’s great. And I think it’s not a sort of a, or a hard number or anything. It’s more like a, it’s a milestone. Let’s some evidence for you that you go, yes, I’ve arrived.

Kate Toon: We were talking about emotional intelligence before we started the show and it’s, it’s, it’s a quite emotional response, you know, like that feeling of looking at something and thinking I can afford. But am I going to buy it? Like the going from that deprivation mindset? Is that yeah. Yeah.

Terry Condon: Massive. And I think we always talk about this a lot with our members. It’s sort of saying, what would that feel like in the absence of those kinds of milestones? What you end up doing is you end up sort of gravitating towards, or just.

Kate Toon: Yes. I’m going to say a hundred percent unless you tie the money to progression, to levels, to achievements, not necessarily even things then it’s meaningless. And that’s where I was for a long time. Just aren’t make more money, hit this, figure, this figure that I’ve pulled out my bottom. And then you hit the figure and it has this. There’s no feeling of satisfaction or gratification because it didn’t mean anything in the first place really important. Yeah. It’s just nonsense. It’s just zeros on a statement and it’s also other people’s idea of what success is not your own. And that’s really important as well.

Terry Condon: Take me back though, in terms of, I talked about reading your blog posts and the journey that you’ve been on with regards to money and business. And I know you’re on a bit of more of a education journey now, again, because you’ve got to a different stage, but then let’s go right back to, I guess, where it started for you moving out and into business for yourself. Selfishly for me, I would love to know how you manage that jump, that leap of sort of going from a career and then going to building a business. How did you make.

Kate Toon: Poorly very poorly. It wasn’t plans. So I was working at an agency as a contractor and a great day rate, but I hated my job. I hated, I used to cry on the bus every day. On the way into work. My partner then had just started his own business. He was teaching French. He had one student and I desperately wanted to leave a lot of advertising. But unfortunately I tried once before I became a massive. For three months, but then realized I didn’t really like rubbing old people’s bodies. So I gave that up and it’s also really exhausting and you can’t make much money. So I went back, I’ve tried a few times to leave, but it was always that fear of loss of income. I was the primary bread owner, but I think it’s bread winner. I think that’s what you’re supposed to say. I own one the bread. So I was terrified.

So that what made me finally make the leap was I got. And I knew there would be no maternity pay. Cause I was contracting, we have no savings. We were living in a one bedroom, rented flat. As I said, my partner had. Student and I was pregnant and I knew that I had to do something. I didn’t want to have my child, no judgment on anybody else, but I didn’t want to have my child and immediately put him in childcare and then go back and work 14 hour days at an agency.

So at five months pregnant, I built a blog, a website katetoon.com. It was black with red flames up the side. And I went into business for myself at five months pregnant. And I, and I just did whatever I could do in that first year to try and make. Yeah,

Terry Condon: that’s probably pretty common too. Isn’t it? In terms of with females in business, like yeah. We’re going into having a child and I don’t want to be thinking about going back to this kind of fixed, rigid life where somebody tells me when to turn up and when I can leave.

Kate Toon: I mean, I think it’s parents in general now I know a lot of blokes who’ve made that decision when they have a kid, especially if it’s slightly older in life, you’re like they gone want to do this properly. I want to actually parent my child. So. I want to make changes to my business. So I know a lot of men who made the leap then as well. I think it’s kids change things as we know.

Terry Condon: Definitely. Yes. Yes they do. How did that work out? So, cause I know I’m just talking for myself here. Your business can be such a monster account. Like it can take over your life if you let it. So knowing that you’ve got the new little one and then sort of building this on the side, how did you manage those two things?

Kate Toon: It was just an utter scramble, to be honest. I mean, I worked in agency, so I knew a little bit about stuff. I didn’t come to this with no skills. I’d been a copywriter. I’d been a producer. I did a bit of everything. I think I’m quite a driven human. So, you know, I’d like, you need a logo. Even though I have no graphic design skills. You need a website. I’ll learn how to do that. So, you know, that first year was a lot of scrambling doing random things.

I also connected a few people. I know that sounds a bit weird and was quite savvy to take a referral fee. So I got a little bit of passive income in that first year, which made a big difference. But at that first year I probably made about 50, 60 grand. It wasn’t a lot of money. It was enough to just get us through that. It was a real stress. And there was no glamor to it. Like people like, oh, it was so much fun. My baby in one arm typing with the other. No, it was miserable. And the second year too, to be honest, it wasn’t really until year three that I began to think, oh yeah, this is a thing I could do this, you know?

Terry Condon: Yeah. Yeah. Because you were pretty skilled in terms of your copywriting and you had a lot of runs on the board. They didn’t, you know, we talk about human capital.

Kate Toon: Yeah, but worked on big brands. I worked at Ogilvy. I worked on big brands. So coming into the world of copywriting, it wasn’t like, hi, I’m a copywriter. It was like, hi, I’ve written for Microsoft and Telstra and concerts. It just had that kudos, which helped me. It was definitely a kickstart, but I had no idea about running a business accounts. Marketing. I’d been a creature in an agency being served work. I’d never had to do the effort to bring the work in. I was completely financially illiterate.

Terry Condon: Yeah. So you just talked about there two problems there, which is you knowing what was going on in your business financially, but then the winning of the business, it’s usually the winning of the business that you solve first. Isn’t it? How do I do figure that problem out? And then it creates the second?

Kate Toon: Yeah, absolutely. In the earlier there wasn’t a huge amount of money to worry about it. Wasn’t like I was thinking, oh, how should I invest this? Cause it was like, you know, the scraping together. But I think at about year four, that’s when I got to the point where I was like, Hmm, I’m never going to make much money.

If I keep on exchanging my time. For cash. How could I make money in the Warren buffet term of while I sleep? You know, I wanted that PayPal ping to be waking me up in the middle of the night. And really that was the pivotal moment that really changed everything for me. And I’ve got to the point where I was probably owning about 200 K as a copywriter, which is not. Yeah, for a copywriter working 20 hours a week. But I also knew I’d reached the ceiling. Like clients were starting to say, even big clients were starting to say, oh, that’s a bit more than I thought. And it was people like, you know, it was the Optus is, and the Telstra’s who have the money. And I was like, right. Okay. I’m probably at my limit for hourly rate. So I need to work out a different plan if I want to make more money.

Terry Condon: Yeah. And that’s when you sort of thinking, how can I decouple Tom and money and like products? Yes.

Kate Toon: Yeah.

Terry Condon: So in the blog, this is 2018, isn’t it? There’s a nice, lovely little bar chart on the, on a horizontal bar chart. And it’s sort of 20 16, 20 17. And then 2018 goes, bang

Kate Toon: 2017. The actual income went down. So I did make that compromise cause I still had clients and I was trying to build the stuff, but I couldn’t have as many clients, like I had to let go of the income. And then I think I should’ve got my figures ready to show, but I think there was something ridiculous, like a 206. Increase in revenue. I was quite open about it in the blog post and my expenses were essentially the same.

So I’ve always managed to keep my expenses very similar, even as a solopreneur to a company. And yeah, it was boom, but I didn’t feel the effects of that because I was so financially illiterate. And I didn’t really know what money was mine and I wasn’t following any kind of profit first or anything. I didn’t notice that change. It actually took a couple of years for me to realize that I’d made that money. Even that percentage. I didn’t find out that percentage until two years ago. I didn’t realize that it had been that much of a shift

Terry Condon: is 109% increase on the previous year.

Kate Toon: Yeah, 109. It’s not as good as 200, but it’s pretty good.

Terry Condon: That’s pretty good. I’m reading between the lines here, but that led to the next problem. The tax.

Kate Toon: Yeah. So because I’d made that money and wasn’t across my figures, I didn’t realize that I would have to pay so much more tax I’d gone into a different bracket and I just hadn’t saved for it. I just was like, oh look, oh, this extra money. That’s cool. I’ll spend it. So I got about 40 or 50,000. I managed to erase it from my memory,

Terry Condon: bring up some trauma for you.

Kate Toon: And that was shocking to me. And I was like, this is ridiculous. You know, I don’t want, every time I do my best to be going, where has the money gone? And that’s what it felt like. Like, I felt like I was working hard, but I couldn’t see the money. I couldn’t see the results. And so that was a real slap in the face. And that’s when I made the decision to kind of implement profit first, which was my life changing moment.

Terry Condon: Yes, it is. Isn’t it. But you did have an account.

Kate Toon: I did, but just not counting the told me things.

Terry Condon: This is what I, think’s critical though. That’s a real critical point. As we’re thinking that they’re just going to handle the whole thing and we don’t have to be mindful in any way. We say this a lot in business consultants, a lot of businesses, the same sort of situation where it’s like, oh, I don’t do any of that stuff. I’ll just do this. And actually that’s not a decision you can make if you’re going to be business owner really, is it.

Kate Toon: It’s like, if I’d asked the right questions, I would have got the answers, but I didn’t know where the questions were. Yes. I’d completely taken the route of, I’m not good at finance. I’m not good at money. I’ll leave it with my accounts and you get that bill. And I’m like, surely you knew that this was coming. There would have been warnings along the way. Could you have told me? And they were like, well, didn’t you realize? And I’m like, well, and again, At the time, but now I realize it was my job to know, and that you can never really let go of your money. And even now I’m still in my money every single day. I’m in Missouri, I’m checking things. What’s that $2 72, because I never want to get in that situation again. And it could have been.

Terry Condon: Yeah. And I can see if you go to the blog, you’ve got kind of a breakdown of your expenses and I’m like, you run a super lean shit for the size of it

Kate Toon: for a while to lean, because I was so scared of spending money that I didn’t invest in the business, especially in people, human capital. I was trying to do everything myself and really again, needed to sit down with someone. And I did sit down with my accountant. Can I afford to hire someone and she’s like, you could have four people and you’d still be fine. And I’m like, boom. And I did. And that’s made a huge difference. Not necessarily to my bottom line. Like this year. I’ll probably make the same as I made last year. This made a difference to me as a human and the things that I’m able to do in my business.

Terry Condon: Uh, lesson, we’re learning at the mind with growth and you sort of pushing towards what you want to accomplish. You actually just don’t have the bandwidth to do everything yourself, even if sometimes you can do it better, but you have to sort of give it to other people who could eventually do it better than you.

Kate Toon: And make the investment. I really did look at people and go if I hire you for three months, which is probably the time it’s going to take for you to become a really useful viable member of the team and be able to work autonomously. And I’m paying you this much and therefore, the fee is this. Would I be willing to throw that away? Yeah on the risk, did it once. And it didn’t work out. Like I did waste $5,000 on one particular person, but then other people it’s totally paid off and more so, but it is a risk. It’s a calculated risk though. Yeah.

Terry Condon: You can’t sort of achieve or get to that level of impact and influence that you want without help Kenya you just cannot.

Kate Toon: It wasn’t until about your eight or nine that I started speaking about. Yeah, because speaking events is a huge luxury a week away from your business. You know, I spoke in New York and the Netherlands, whatever. It’s a week, two weeks away from your business, the loss of time, the impact on your adrenals, your energy, the time for prayer, the presentation, and then the return on investment just isn’t. Necessarily it comes later, but it’s very ephemeral. And often there, when you’re starting out as a speaker, you are paying your own way. You’re not being paid. So I had a whole year, I spoke at 37 events in one year. And again, that was an investment because after that year, my business went up, I think about 20% and it stagnated, I needed to do something to push it up a little bit, but it was a luxury that I could afford because of the stage I was at in my business.

Terry Condon: And you got there because this 50 K tax that came to you and you decided, well, hang on, I’m going to get on top of this. And this is going to be something I want to focus on. So just talk me through that journey. Was that really hard sort of going from that stage of, I don’t know anything about money, what were your first steps? What did you do

Kate Toon: within our family? We made massive kind of budget cuts and I started to, I’d never paid myself a salary either. So that was a huge thing. So I started to really kind of. That’d be one of these stupid, I had all the money that went into one account and whatever was there was there. And so that profit first thing was hugely changed. And I got someone to come in and look at my figures and tell me the percentages. And honestly, I just did, as I was told for Goodyear, just shuffling money from our accounts scout. And I just spent no. Yeah, no personal development, no courses, no, nothing. Not even like new pads from Kiki K word of the year was like consolidate or something.

And I paid that off in a year and then I was just like, never again. Because I told myself I was financially illiterate. It’s like, if you tell yourself that, then everything becomes extremely hard. And even though my accountant would explain something to me, it would like literally my brain would shut down and I have quite complex business and I teach SEO, which is hugely technical. I just decided I couldn’t understand it. And then I just decided what if I could understand it. And then I just started to break that down. It’s been a solid. Four years. So 2018 was the real pivotal here. Then I’d probably say 2019 was the year of education. And really it wasn’t until the last few years where I’ve really understood everything. And now I’m making grown-up decisions.

Terry Condon: And you’ve been really methodical though, too. Haven’t you? Because you got the help, you made all the changes, like you said, you just listen to what they said, and then it seems like now this is what’s going to work for me because yes. You know, we talk about profit first. We use profit first in our business. Brilliant because it does put you in charge. It means that you’re not going to be outsourcing that thinking to an account. And you’re doing that every month and we use our money mapping method with a profit first to do that, to map forward for the month in, month out.

So we’re going, this is what’s there. This is how we use it. This is what’s there. This is how we use. It sounds like you’ve done the same that you’ve also worked out. Okay. So they told me to start with these percentages, but this is really what works better for me.

Kate Toon: Yeah. And obviously in 2018, I think I incorporated. So that changed things as well. It became a company rather than a sole trader. So that changed things as well. And so the figures shifted as well also because. Frugal. I always overestimated the percentages. And so every year at the end of the year, I’d have this lump of money leftover that I’d be thinking, or maybe I’m going to have to use that for my tax bill.

I’ll wait and see, and then it wouldn’t be used. And again, this is a huge mindset shift for me because I was like, well, that’s not my money. That’s the company’s money. It’s not my money. And it took a real, literally my accountant had to sit me down and go, it’s your money, your money. Like it is building up and you’re not doing anything with it. And it built up to such a mass. I was like, this is just sitting there. It’s not doing anything for anybody. I need to start doing something with this, but yeah, it’s been such a present. I’m still on it. I’m still on that journey of working it all out. But yeah.

Terry Condon: That’s super critical. I think like there’s so many talented people that are so good at what they do in this blind spot. It really does hold them back. And yes, they’re building huge revenues and they’re like, yeah, I’ll look at my revenue is gone up, but their businesses are so fragile.

Kate Toon: Yeah. I’ve got a friends in business. They’ve got all the things, all the surface level things that make them look like a business. They’ve got the office, they’ve got the team, they’ve got them shiny computers, but they are making no money at all. And if you ask them that question, they kind of shift in their seats and they don’t really want to talk about it because on the surface, the revenue is amazing, but they really haven’t done that work to look at the cost of sales and net profit and all of that. And that’s the reality of it that. People don’t want to do that because often it’s shocking. And you realize that a lot of what you’re doing in your business is just foolish and you feel like a fool and no one wants to feel like a fool.

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I love what you said earlier, too. I just want to quickly go back to you. Ask yourself the question. What if I could figure this stuff out? You have to reframe it because it’s so amazing how your brain will just shut itself down. If you talk to yourself the wrong way, it’ll just close itself off.

Kate Toon: It is a blind spot for me. I don’t know why. And therefore being gentle with myself, like I’m a huge fan of your podcast and listening to a few of your episodes, little light bulb click moments. And I rang someone up and said, I just listened to the podcast. And they said this, and they’re like, yeah, duh. And I’m like, oh, okay. Does everyone else know this? And I’m like, well, I didn’t. And it it’s life changing to. The thing that I always say, she, that you’d said that house is a liability, not an asset. And I’m like, oh my God, yes. I’m giving myself time to do this and learning slowly. And that allows me to learn because if you’re constantly negative about yourself,

Terry Condon: Yeah, the blog and the why you’ve kind of laid it out. I’m so jealous of you as a copywriter because I’m reading it going, God damn, this is good. Copy.

Kate Toon: Again. It was cathartic. I actually wanted to understand how I’d got, where I got. So often when I write blog posts, it’s actually a cathartic process of going, look what I’ve done. Look what I’ve achieved and how did I do it? Because you get so wrapped up in what you’re doing. You forget these milestones, you forget that I can barely remember the 109% the how much tax debt, because now I’m dealing with today’s. Um, and sometimes it’s good to take stock.

Terry Condon: Yeah, absolutely. And so along the way we talk about where you came from and sort of, we’ve got to now, was it kind of a, a smooth trajectory, just you going like, all right, cut. These costs, follow these things. And just things just kind of worked themselves out over the course of that year or

Kate Toon: apart from the 50 grand that there’s never been a. So there’s never been a orange. That’s lost me thousands of dollars or because I’m very iterative and I take my time and I’m patient. So when I built all my passive income products, I did it slowly. I kept my expectations low. I didn’t expect to be a six-figure launcher within the first year, two, three years to get to that point where I had launched and sell out in a day. And it’s all been done with our business plan and without real expectation, it’s kind of, I’m happy, whatever happens like I’m doing okay. And I enjoy this. Yep. And they’ll just say it for the end result, but it’s been a slow incline.

Terry Condon: You’re not saying that you kind of know everything, but you’ve got a level of control and a level of understanding over your business, your finances, what’s possible for you. The choices that you have at hand. Now we talked briefly about it before the podcast. What is it like to know now that these are all options for you? You don’t have to be dealing with what you dealt with in the past where that, I don’t know how I’m going. I hope I’m going to. It’s

Kate Toon: still terrifying because I’ve got a whole new set of problems now, like this sounds a bit wonky right now. I have a little bit of money and I’m terrified of not using that intelligently and not preparing for my future. You know, my biggest fear that drives me a lot. I’m not a particularly ambitious or driven person. I’m an anxious person. Yeah. Terrified of ending up in a flat being eaten by my own cats.

That is my biggest fear that I won’t be able to turn the gas fire on to turn it on once a week and I’ll be eating own brand baked beans. And so my problem now is like, okay, I’ve got this bit of my. How do I use that intelligent intelligently for my future? How do I invest it? And this is a whole new language, you know, ETFs, CFTs. I can never get it, right. People are saying you should buy gold. You should buy titanium. You should invest in stocks. You should invest in properties, not residential commercial. I’m like, oh my God, I just got this bit done. And now there’s a whole new set of problems, a whole new language to learn. It’s intimidating to be honest.

So I thought it would feel great. I had a year where I didn’t do anything with the money and I just sat there feeling smug and it was a brilliant, yeah. And I bought like a bike and roller skates, like, look at me, big spender, you know, someone else would go out and buy a Tesla or a BMW. I bought a bike and some roller skates, but I had this year of just feeling rich and smug and then. No, this is not the best use of this money. I need to be thinking about my future. I don’t want to be doing this forever. I’m getting old. And so now I’ve got this whole new adventure to go on, which is intimidating.

Terry Condon: Yeah. So I guess it’s just what you said before as well. What if I could figure out.

Kate Toon: I have your podcast to help

Terry Condon: you, but I find I’ve been through the same thing, right. I dunno if you’ve listened to from the start, but that is my story as well. My whole thing is if I listen to my conditioning, I’m like, you’re not a money person and like money people. To me, it just is very we’d break to people that just love numbers and spreadsheets and things like that. And it’s interesting for me. I always ask myself the question. What if I’d already learned this and I forgot. How would I approach this differently? What you all question? What if I could figure it out? And that one for me helps me a lot. What if I’d already figured it out, but I just forgot.

Kate Toon: Yeah. I love that. That’s what I do like about the podcast that you’re not putting yourself out there as some kind of financial times reading share geek, bizarrely. I actually wrote the COMSEC website. Eight years ago and managed to retain not a single morsel of information, honestly, it’s what you say. It’s in my brain because I wrote the whole website. I’d like to do that. I had to research, I had to meet with the team, talk to all these experts and then I just blanked it out. But it’s in there somewhere in my noggin. So I’m sure it will be accessible at some point.

Terry Condon: I’d love to know, like at this stage, We have a lot of listeners who are, if they’re not in business now they’re thinking about being in business. And if they’re not thinking about it, they’re sort of, they’ve been in it and they’re struggling through it and they’re kind of working it out. What advice or lessons have you learned about business? What do you think is really important to know if you’re at that?

Kate Toon: I think one thing is there is no secret. There is no methodology, and there are people who can guide you along the way. You have your membership. I have a membership that teaches digital marketing, different people are going to come in and teach you, but really it’s all about you and your adventure.

The biggest lesson for me is really patience and persistence. I know they’re not sexy words, but sticking around, keeping, trying, and being patient and having realistic expectations. Uh, for me, what’s helped me helped it all work because I’m not putting that pressure on myself to kind of be an overnight success. The people who succeed are the ones who just stick around. I mean, I really had this many people like Steve jobs and whatever who’ve said that quote, they just stick around. They keep coming back. I think it’s one in four in five businesses fail in the. Yeah. And why is that? What did they spend their money on?

What did they not do? What were they too eager over? I think a lot of it comes from being impatient and not being willing to just play the long game. I’m 12 years in, and it’s really only the last three years that I, you know, I’m not, I mean, obviously I’ve lived that whole time and had a relatively nice life, but it’s the last three years I could say I’m successful and I’m doing air fingers, fingers. Now it takes a long time. Some people, not all of us get there and image.

Terry Condon: Yeah, that’s a really good sort of point because like the way I think about businesses, it’s an infinite game. It’s not a game you play to win. It’s a game you play to play.

Kate Toon: Oh, that’s exactly it. You’ve got to enjoy the struggle, like again, and it’s also what your goals are. I enjoy my business. I want to be doing this for the next 20 years of some form or another. The end game is not building something, selling it and then doing it again. And again, I had this discussion, you know, like my business is not being built to sell. It would be hard to sell my business because I’m so in it it’s personal brand, but I’m okay with that because it’s an infinite game.

As you say, I enjoy turning up each day. If I made $40 million tomorrow and I didn’t have my business anymore, I don’t know what the hell I would do with myself. All I would do is make something again and to go start this whole process all over again. So. I don’t mind that it’s taking a while because I don’t want it to, and I’m enjoying it.

Terry Condon: Yeah. Well, that’s your most valuable asset that you’ve built your human capital in that business as an asset? That is your kind of money machine if you like.

Kate Toon: Yeah. The phrase human capital, it was new to me. And so your podcast and I love it. I love it because I think it’s such a distinction to make again, between what am I good at? I’m good at making money in my business. I’m probably not going to be. Stock investor. It’s not what I’m good at. And I could learn it. It would take me years, but why do that? When I can make money in my business and invest more passively, you know,

Terry Condon: it’s so crucial to understand that, like I know so many people that like is intellectually, when you do start to understand this myself, it’s very captain. If you kind of like thinking conceptually and abstracting that way, and you can go down some pretty hectic wormholes. And I had a friend of mine send me full sort of investment perspectives from one of these big hedge fund managers. And he had all these really well-packaged ideas. He’d sort of tied it all back to mythology and knew he was talking about what he thinks is going to come up and they’ll, but basically it’s all a big marketing package to say, like it’s super complex and it’s interesting, but you need us to do it now.

I kind of said that to him. I’m like, This is unbelievably well put together marketing package, and it’s here to make you think some people know more than I do about this, and I need them to do it. And that’s all about trying to beat the market. And we just know that if given enough length of time, nobody does.

Kate Toon: But also what you said. So this is that even though shares and things go up and down inevitably over time, they always generally go up and it’s the same, like, as I said, I teach SEO and it could, can be hugely complex, hugely complex, but most businesses don’t need to operate at that level. They just need to do the basics. And I feel that applies to humans as well. Like yeah, hedge funds, booboo, all that kind of stuff. I’m sure that’s amazing. But maybe right now I don’t need to operate at that level. And so I don’t need to be making the challenge quite as. As I think it is, you know, absolutely.

Terry Condon: Again, it’s a little bit of a grade, I guess, like more, it’s a whole more thing. Like you’re not happy enough getting the average return and the average return, if you put enough money in the market, the average return will help you. It’ll just kind of lock in different layers of lifestyle for you as you go. So as you kind of build more surplus and you just put more. You’re just locking in those layers of lifestyle from the income.

And so who cares what the market tells about whether it’s top 40? I don’t care about any of that stuff. I’m just like, okay, how do I just lock in this next layer of at least level of income and the next and the next to the next, but they’ll have to do that by using my talent and my time, the best.

Kate Toon: Yeah and I think as you get a bit older, I’m a bit more old than you. The lifestyle doesn’t need to go up a bracket, but the time needs to come back and rapidly running out of time. I’m not that old, but the choices I want to make about my time are different. Now. I don’t feel like I have infinite time anymore. So for me, the lifestyle can stay exactly where it is, but anything that frees up my time to enjoy my life is what I’m looking at. So that’s that whole passive thing we talk about. I’m excited. I mean, I’m so excited to have found your podcasts and found you because it’s like. This is the next adventure. I don’t want to make anything else in my business.

I’m not going to make another prong. I’m not going to start anything else. And I was plateau, whereas like what my business has got a bit boring now. And I actually talked to my friend, a guy called Robert garish who used to run flying solo. And he said, no, no, your next venture. It’s working out all of this. It’s it’s working out this being curious, reading the books, going down the rabbit holes. This is a whole new adventure and I’m excited about it. But as you said, it’s a process that’s taken a while to get to, because now I have a little bit of money. You need a little bit of money to make a little bit of money at the end of.

Terry Condon: Yeah and it’s interesting, cause we’re on the other side of it, we’re kind of you sort of 10 years ago on a bill to go out and getting there. So it’s interesting sort of seeing it from both sides in terms of money, what would your lessons be or your advice be for people coming into business? Like I said, at that stage, how to think about money. You talked before about how you see people building businesses or the image of a successful business. How do you overcome.

Kate Toon: Being comforted with yourself, realizing you’re enough and not worrying about other people’s opinion. I do think it’s really important to examine your kind of background with money and how you were brought up. My family was very much around not borrowing, not doing anything, not taking any risks at all, ever with anything. You have to be able to take a little bit of risk being an entrepreneur. Taking a small risk, but it doesn’t need to be dramatic, but I think examining your own money hangups, we all have them, whether we realize them or not remembering to say, not say things like, I’m not the sort of person who I said that a lot.

Like I remember when I got my kitchen done, I was like, I’m not the sort of person who has a kitchen like this. And I’m like, why the hell am I not? You know, like stupid things that we say to ourselves, which stop us. And then I think. I guess not getting over excited. I’ve a yard Kipling poem that I like to quote a lot that if poem and it’s not getting too excited by the ups and therefore not getting too excited by the dips, just trying to be on a level all the time.

I have days where in a single day, my course will sell out and I’ll make like $150,000 in eight hours. And I can’t get excited about that because that money has to pay salaries and for this and that for the next three months. So. I sit there and drink champagne. And I’m like, that’s just a normal day because there’s going to be another day where I am absolutely nothing another month, whereas bottom down. So it’s not succumbing to the roller coaster. I think that would be my biggest advice.

Terry Condon: Oh, that’s going to really come back to looking after yourself. Isn’t it being sort of on the level

Kate Toon: steady and turning up every day and doing the thing, like whether you’ve had a a hundred thousand dollars a day the day before, or you’ve lost money the day before attorney up the next day and doing it all over again, even when you sometimes don’t feel.

Terry Condon: Yeah. Yep. Absolutely. That consistent inputs, everything, isn’t it? Yeah, definitely. I can find myself at times just going like, wait, I do not want to write any social posts.

Kate Toon: Oh gosh. You’ve got to push yourself. You’ve got to push yourself, not to burn out, but you know, you do have to push yourself. And again, the people who succeed are the ones that do turn up every day. Stephen King said to his keyboard every day, whether he and writes something. And that’s why he’s Stephen King. He doesn’t go off and put the washing on, or watch Netflix. He sits at his desk and he does the time from nine to five.

Terry Condon: So what you’re saying there is really examine your relationship to money and what you think or feel about it and then just be persistent, stay in the game.

Kate Toon: Yeah, stay in the game. It’s a long game. And as I say, as we both said, enjoy the struggle. If someone said to you smart, you can do what you’re doing, but you’ll have no money from it. Would you still do it? I mean, of course we all want to make an income, but I think I would still want to do what I’m doing to some degree, even if it aren’t me, no money, or even if I’d earn all the money in the world, what would I do next?

I’d still probably want to do something like this. And that’s really important to ask yourself if you’re just in it for the glory and the money, it’s going to be hard to sustain for the long time.

Terry Condon: Yeah. And how much of that is about the agency and the control? You have a guitar because I feel there’s a lot of research out there to show that small business owners are a lot more satisfied with their lot in life than people who earn high. So for you, you were the agency copywriter or the big high time, and then you went to sort of running business fees. Um, how much is it about you just being able to control your time? That’s the thing

Kate Toon: hugely you’re captain of your own ship, whether it’s sinking or floating, you’re choosing where it’s going. You can lay anchor one day and do nothing after this. I’m going to pick my son up. We’re going to go to the beach. We’re going to have chips on the beach, even though I have loads of work to do, and I could make a thing and sell it. That’s my choice today. I love being able to call in sick to myself and equally I love being able to work when I really don’t feel like it it’s the autonomy is everything.

We shouldn’t forget that because sometimes I do forget what a joy it is to be able to decide how to run your own day. It’s such a pleasure and such a freedom that so many people don’t have. It’s such a joy.

Terry Condon: Yeah. I think it’s everything I think on the same as you. I like that. If you’ve got that, you’ve got control of your time, then you’re wealthy already. There’s nowhere to go. There’s no, to go.

Kate Toon: Yeah, this is it. And I’ve spent a lot of time feeling slightly, not guilty, but odd that I don’t have a big goal. You know, like I taught some very famous entrepreneurs and they’re like, I want to change the world. I want to do this. I’m going to do that. And I’m like, I just want to have a nice day. Is that all right? I want to walk my dog. I want to come into my office. I want to help a few people. I don’t want to work late. I just want to have a nice day. Most of my days, I’d like them to be. Yep. That’s it? I think that’s great. Yeah.

Terry Condon: You did say something else. I think it was probably in a clubhouse that I was in listening to you on. And you said I’m actually not looking to make more than I made last year.

Kate Toon: So I’ve just hit my revenue target. I hit it last month. The last year, which is the same as, so I’ve hit that. And obviously I’ve still got three months to go, so I may exceed it, but just taking that pressure off myself is amazing. So my book keeps a little running percentage to tell me how close I am to that figure. And then, you know, she’s going to do the pie chart for, I still need to get her to do the figures. She’s going to do the pie chart for me that says, you know, this is what you made, and this is what you, whatever, and we’re doing some forecasting and I’ve got a financial advisor now who’s going to match. My life until I’m a hundred. Cause my grandma lived till 96. I have to kind of think about these things.

Terry Condon: We are going to live longer, has a big sequencing risk. I think a lot of people making the assumption that they live to what their parents lived to and that’s probably not going to happen

Kate Toon: an aged care. You know, it’s a big issue that people don’t think about. They’re thinking about the bigger house, the nicer car, but I’m thinking about paying X amount a year to some aged care home. Someone will wipe my bottom when I’m 97. I don’t want to let that ruin my day to day, but I also want to be prepared for that as much as I can. I mean, you know, we could all be eaten by gorillas next week in some weird gorilla virus that we’ve not heard of yet. So I don’t want to ruin my day by kind of constantly planning for the future, but just having a good day. I’m not in scale mode anymore. My word again for this year is consolidation. I want to do less, better. I have more time to roll.

Terry Condon: Love that tools, tips, or sort of resources that you would recommend. We talked about profit first before. Yep. highly recommend that we definitely, like I said, you use it, we use it most entrepreneurs that have kind of been through that journey of going, yeah, it’s fine. I’m going to take control of it. And this is how I do it. Is there anything else that you would recommend for people in terms of sort of resources, people to check out things.

Kate Toon: Sounds basic, but I think it’s one of the first things I paid for was a really good accountancy software, full disclosure. I’m sponsored by zero at the moment.

Terry Condon: I was like, this is good for you guys.

Kate Toon: It is because the thing is, I was talking about zero positively before they were giving me money. Like, I love that process of physically reconciling my money being on top of my money. So zero has been hugely powerful for me. I think that’s a great tool with profit first. A profit first person to come into my business and do that. That was a great resource for me having a really great bookkeeper like about, I never had one until two years ago. Now you will claw her from my cold dead hands. So important for me because she’s constantly saying things like, do you realize you’ve been paying for next. Twice every month for the last two months.

And I’m like, you know, she just finds things all the time that because I’m so busy, Netflix evil, but she finds things all the time. She’s always looking for cost efficiencies. She’s coming up with smart ways of doing things that’s been powerful in terms of books. A huge reader of financial books, honestly, that makes me wanna like stick a fork in my leg. I would, and it sounds really cheesy, but I’ve really enjoyed your podcast. I’ve listened to a lot of financial podcasts, but yours is the only one that’s actually made me actually want to listen to more than one episode.

Terry Condon: Oh, thank you.

Kate Toon: I know I’m not joking and I’m not just saying next time on the podcast, you know, I’ve been like, Instagram messaging you going? Oh my God. So that’s been really useful and having a really good accountant who challenges you and asks you questions. Doesn’t wait to be asked. Who says, why are you doing that, Kate? And also somebody occasionally to just pat me on the bottom and say, that’ll do pig. That’ll do because of the money. There’s never enough. Sometimes you need someone to say you’ve done. Okay. This year. Take a break. So, and that to me is my accountant. Like I love I’ve gone from being terrified of my tax return to loving my tax return, coming back and going. I saved more than I needed. I’m such a good go. But that turnaround in. Four years, four years is massive.

Terry Condon: It’s amazing effort. Yeah. I think it’s super inspirational. That’s what I was really keen to chat to you because reading through the blog, talking to you and hearing you in, in clubhouse as well. I just think it’s very common to be in that situation where you go, oh, what the fuck moment? And that’s the best learning, isn’t it? Because it’s all theoretical up until then, but you know, when it’s not, when there’s, you know, you have to figure it out, you find that you don’t.

Kate Toon: And again, not to play myself down, which I have a tendency to be a little bit self-effacing. If someone like me, who isn’t financially illiterate can get to this place, it really does mean everybody can, if you’re gentle with yourself, if you learn like a child, if you say, what if I can or what if I knew there’s no forgotten it?

That’ll pathways to open it up. It’s all doable. It’s all achievable. And it doesn’t necessarily require you to be earning seven 50. To have financial security and success. You can add a hundred grand, you’re going on 50 grand. But as long as you know, what’s yours, you’ve got the money for the tax, man. You can pay your bills. That’s all we really want in life. Isn’t that, you know? Yeah. We can want the fancy car and the whatever, but just to generally wake up each morning and not be terrified about money, I think is a beautiful feeling. And I’m so glad to have that it’s worth so much.

Terry Condon: Nah. Amazing. Hi, thanks so much for coming on the show. It’s been also to chat to you again and, uh, and it’s funny because like I said to you before, I didn’t realize this, but I’d been listening to your podcast, but I just didn’t click. So I really appreciate it. And thanks for sharing your wisdom and your lessons with us

Kate Toon: and thank you for the podcast. It’s amazing.

Terry Condon: Thank you.

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