As a solo entrepreneur, there are major questions that keep you up at night: are there financial landmines that you’re missing, are you paying too much in taxes, are you saving enough? Will you ever be able to retire? As your own boss and sole employee, it’s easy to feel anxious and unsettled even when you’re making a profitable income, maybe your goal is to grow your business, or perhaps you just want to enjoy life more.
No matter what your priorities are for the future, you can take steps now to guarantee peace of mind and to control your happiness. In Gabe Nelson’s new book, The Solopreneur’s Money Manifesto, Gabe helps solopreneurs secure a financial plan for the future and gain freedom to build the life they’ve always wanted. He takes you through client stories and has a case study to show you the steps that others have taken to ensure their business and personal finances are on track.
From the questions you should ask yourself, to the evaluation that will help you see your unique situation clearly, this book aims to be your step-by-step guide to create the right mindset for a rewarding life.
Hey Listeners, my name is Drew Appelbaum and I’m excited to be here today with Gabe Nelson, author of The Solopreneur’s Money Manifesto: How To Master Your Finances and Create the Life You Want. Gabe, thank you for joining, welcome to The Author Hour Podcast.
Gabe Nelson: Drew, thank you. I really appreciate the chance to sit on this podcast with you and chat about my book, thank you.
Drew Appelbaum: Well Gabe, kick it off for us and will you give us a brief rundown of your professional background?
Gabe Nelson: Professional background is I started in the insurance and financial services industry right out of college, 23 years of age, moved to a town that I really didn’t know very many people other than my wife who wanted to be in Sioux Falls, South Dakota. So I moved to Sioux Falls, South Dakota with her and decided to go right into the insurance and financial services industry and thankfully, I survived a few iterations of my career that took me from being in the field.
I thought I wanted to be this great manager; I was an athlete growing up and I thought I wanted to be this manager in the suit, teaching people how to run their practices and their businesses and help them grow their businesses and their lives and I found out, I’m a terrible manager of people.
Realized that I was just much better being an advisor. Worked my way back into the advisory world after a few years of pounding my head against the wall as a manager. Then, in 2008, I decided to go start my own firm, 45 days before Layman went bankrupt and the financial crisis was upon us.
I started my practice on my own, my own what I would call my own independent advisory firm called Gabe Nelson Financial Incorporated, August 1st of ’08. 45 days later, the world fell apart, I had this fantastic business plan that was now cut in half due to the revenues of everything else that was going on. So basically, I then figured out how to run this practice, how to grow it, how to recover and get myself back to a place where I was really having fun and really making a difference in people’s lives. I mean, that’s the short scenario that I can give you.
Drew Appelbaum: Why was now the time to share these stories in the book? Was there something really inspiring out there for you? Did COVID times remind you of those early 2008 times and you just kind of wanted to put pen to paper and let people know that there is a way out or did you want to educate on a more mass platform than you have been?
Gabe Nelson: The big thing was, is about 2019, I started really looking at my practice and going, “Who do I really want to work with for the rest of my career?” By the time this podcast comes out, I will have turned 50 years of age. I’ve been in this business since I was 23 so we’re working on 27 years and I’m looking back and I’m going, “Who do I want to work with for the rest of my career? Who do I have the most fun with?” I analyzed my practice and I wrote everything down and I came away with, I love working with these small business owners but are solo business owners, who I call solopreneurs.
Drew Appelbaum: Right.
Gabe Nelson: I started putting together a whole marketing piece, I started thinking about how I was going to start to niche down. I then started thinking about, well maybe what I should do is start a podcast, started working my way down the podcast route and COVID hit.
I all of a sudden had a lot more time on my hands. I’ve got three daughters; one’s in college, one is about to graduate high school and another one is a sophomore in high school. Long story short, we are gone literally every weekend to soccer or cheer or dance or whatever was going on, we’re always gone.
COVID opened up all this time. I thought, If I’m going to write a book, now is the time to write the book. The timing was perfect with COVID. I sat back and I thought, what would I want solopreneurs to know to be able to master their finances in the simplest of terms?
Vision Is The First Part
Drew Appelbaum: You lived these lessons, right? You know the lessons from clients you’ve been working with but sometimes when authors put pen to paper, they’ll have some major breakthroughs or learnings, sometimes just by digging deeper into some of the subjects or by doing some outside research. During your writing journey, did you have any of these breakthroughs or learnings?
Gabe Nelson: I will say, the answer is yes, when it comes to a very methodical approach to going about finances and life, et cetera. I’ve always been that type of person but the best thing I would say is, it solidified what my thinking was — it’s just not exactly the turtle, slow and steady wins the race but kind of.
Just be methodical, get everything done, move step-by-step as we go through. When I looked back at the stories for my clients, I started realizing all of the — for lack of any other way to put it — all of the fun that we’ve had solving some of these complex problems and so they just kept coming up going, “Oh, I remember doing that. This is how we fixed that problem and this is how we did that.” A lot of that comes out in the book.
Drew Appelbaum: In your mind, when you started writing the book, who exactly are you writing the book for? Are these those solopreneurs that are already in business? Is this somebody who is thinking of starting their own business, somewhere in the middle?
Gabe Nelson: The book is written for someone who has already achieved a level of success in their own solopreneur business and their solo business. Somebody listening might go, “What the heck is a solopreneur?” Well, a solopreneur is a solo entrepreneur, a business owner who is running a business but has just chosen not to hire a whole bunch of employees and has chosen not to bring on a bunch of, what I would call, W2 employees.
You might be supported by a whole bunch of other team members that are independent contractors that are supporting you, and I can explain my situation, but those solopreneurs that have achieved a level of success and they’re going, “Okay, I’ve got my bases covered, now, what do I do next? I make a great living but I’m paying way too much in taxes.
Am I really on pace to achieve my goals? Am I going to be able to retire someday or do I have to keep doing this business for the rest of my life?” The book is written for someone who has already achieved a level of success that says, okay, I need someone to take me by the hand and walk me through this maze that we would call this financial planning world for someone like that.
Drew Appelbaum: Now, digging into the book itself, you break it up into three main parts. The first is, setting yourself up for success. Let’s dig into that a little bit, what are those kind of first steps you should be taking — maybe to see where you’re at and to start really evaluating and asking yourself questions about the future?
Gabe Nelson: Well, the big thing is to think about your vision and the vision of where you want your life to go because if you’ve already achieved a little bit of success and you’re starting to get things figured out, we have a tendency as entrepreneurs to start going, “Wow, I’ve already made it, what do I do now or what’s next?”
We don’t always have all of our, what I would call “poop in a group” to make sure that we’re doing things right. I would start with the vision. The vision is, what do I want my life really to look like so that I can have this business that I’ve created to support that life. So I start the book out with vision, where are you trying to go with your life, and then how do we make sure that we tailor your business and your finances and financial planning to support the life that you want to have.
Because people don’t go start these solopreneur businesses to work more. I mean, most people start them so that they can have freedom and have more time with their kids and have the opportunity to make an income that is either unlimited or a heck of a lot more than they were doing before, but they want that control and that freedom and they want to serve people the way they want.
I start with vision because the vision really is supported by the business. So you have the business help get you there and you have your financial planning help to fulfill the vision that you come up. The vision is the first part.
Drew Appelbaum: Let’s talk about the vision, is again a part of it but I think one of the major parts is just your own mindset. How important is it to just take a bit of time and just develop that right mindset, especially early on in this solopreneur process?
Gabe Nelson: It’s huge. I mean, I could say this, my wife here a few weeks years ago, told me that I should start meditating to really just help calm the mind and I can honestly say, I have meditated almost every single day for the last three years after she told me to do it. I’ve read multiple books that talk about how that mindset and then meditation could help rewire your brain. Where I’m going with this is, as solopreneurs and entrepreneurs, and frankly, everybody out there in the world, we got 800 million thoughts going through our mind every single day and they’re generally not good thoughts.
If we can start to control our mind and start to control our thoughts and start thinking of the possibilities of where we can go and where we would like to go, all of a sudden, things start to become clear and then you start to understand what those actions are that you need to take once that you’ve gotten a little bit of control over your mind. There’s a book that I read a few years ago by Jen Sincero and she has — I apologize for a little bit of the verbiage here but she basically said, your mind is your bitch, you need to control it.
Drew Appelbaum: Now, you also talk about aligning your personal and business goals. I think people have a really hard time doing that and sometimes we’ll heavily lean into the business goals and sometimes leave their personal life to the side, which is kind of sad. So can there actually be an alignment between those two?
Gabe Nelson: I am 100%, yes, you can have that alignment that’s why most solopreneurs go start their own companies. That’s why they go out on their own because they want to try to get that and what happens is we get so stinking busy that we — and we get overloaded and we don’t know what to do next to get us back into that balance.
I am a huge proponent of yes, you can actually have that and I’m a walking example of it. I make breakfast and supper every single day in my house for my family. I work most of the time out of my house. I have a little office that I meet with clients but most of my clients are all virtual now. So long story short, at 4:30, 5:00 every single day I go upstairs and I start cooking supper and that is something I truly love to do and that is balance. Being able to be at every one of my kids’ things, never missing an event is in my opinion probably the most important thing I can do as a dad is to be there.
Drew Appelbaum: Yeah, sure.
Gabe Nelson: That’s why a lot of solopreneurs go out on their own is they want that freedom and so the answer is yes, Drew, yes.
To Avoid Financial Pitfalls, Create a Plan That Fits Your Situation.
Drew Appelbaum: Now, the second part of the book is called planning with purpose, so let’s talk about planning and let’s talk about the pitfalls first. Is one of the major pitfalls just not enough planning or no planning? What do most folks usually get wrong?
Gabe Nelson: Oh boy, well —
Drew Appelbaum: It’s loaded there.
Gabe Nelson: That is a loaded question. A lot of the financial planning pitfalls that come into place is one, listening to your friends and your neighbors as to what they’re doing because the thing is just everybody’s situation is different, everybody’s financial plan is different, everybody’s life is different. So what you have to do is first of all, think about your own situation. That is one of the pitfalls.
Another one of the pitfalls is basically chasing the stock market. Now, what a lot of people think when they — yeah, I mean, what a lot of people [think] when they go to hire a financial adviser they think our job is to basically beat the S&P 500. That’s not our job. I mean, that’s nearly impossible to beat the S&P 500 all the time. There are some who do and there are some investments that do but the reality of the situation is to avoid the pitfalls by not making the big mistakes.
One, don’t listen to your friends and your neighbors as to what they’re doing. You need to think about your own situation and the other thing is don’t chase the stock market and don’t get all worked up about what’s going on in it because the investing world is a long-term game. Those are a couple of the pitfalls that we want to make sure we avoid.
Drew Appelbaum: You also list ten elements that need to be a part of everyone’s financial plan, so can you name a few of them and just let us know why they are important?
Gabe Nelson: Well, the first and most important one is called cash flow and we need to understand where our money is going. Cash flow is the most important piece for a solopreneur as well as anybody else out there in the world. We need to know how much money is coming in. We need to know how much money is going out and ideally, less goes out than comes in.
I mean that is one of the simple tenants of having a good financial plan, spend less than you make. Cash flow is the most important piece because then the cash flow supports everything else that you want to do with your business, as well as your life, and then can help to take all of those things that you’ve already talked about of what is important to you and then start to put those things into place. So that would be the first thing, it would be cash flow.
The second thing that I would say is extremely important for solopreneurs is then retirement planning.
Drew Appelbaum: Yeah.
Gabe Nelson: As a solo, you’re not sitting there working for Apple or Google or Facebook or Forbes for that matter with a 401(k) and a benefits package that’s there and so you need to do your own retirement planning and that’s the area that I just get so stick and excited about. I mean, I’ll tell people I get all lathered up and excited when we start talking about retirement planning for solopreneurs because there are so many different plans that are out there but there is multiple benefits and twists and turns that you can do to help really benefit you as the solopreneur, to help reduce your taxes.
To help save for retirement, to build up a retirement account that is so good that it doesn’t even matter if you sell your business or transition or whatever. You could just let it fall away because you’ve saved enough as time has gone on. That’s, to me, the two most important pieces. And the third I’ll throw out there would be what I would call risk management. Risk management, there’s all kinds of things in risk management but short, sweet and simple is as a solopreneur, you need to make sure that you’ve got some benefits in place to protect you.
You better have some life insurance to make sure that your family is taken care of if something happens to you and you die prematurely. You probably need to look at some type of disability income insurance. That’s debatable at times if you are able to delegate everything and then the other piece of the puzzle that you probably want to be looking at is what are you doing with your health insurance?
If you are lucky enough to have a spouse who’s got benefits then great but if you don’t, then what are the pieces that you’re putting in place to give yourself health insurance protection because health insurance, although it’s expensive, going to the doctor for major surgery is even more expensive. And then are there things that you could be doing with that like using a health savings account to help reduce your taxes and build up money for retirement down the road. I mean, those are the three most important pieces and if it’s okay with you, I’ll add one more.
Drew Appelbaum: Sure.
Gabe Nelson: It would be the idea of setting your business up properly for tax planning and liability protection and that is in my ten pieces that’s what I would call a statement business. So those are the four most important pieces, the rest we can get to as well.
Drew Appelbaum: You know, you really dive in the book. You explain retirement accounts a lot there and I wonder just as a completely random data point of all the business owners you talked to, how many of them actually have retirement on their radar especially when it’s their own business and they might be seeing it as, “Oh, well I’m saving some of my profits” but they are not doing a traditional sort of retirement plan.
Should this be on the radar more? Is this completely looked over for the most part when solopreneurs are starting out?
Gabe Nelson: Well, when solopreneurs are starting out, retirement has a tendency to get pushed aside because they are just trying to survive. I mean, the reality of the situation is, is you know, what is it? The statistics that if someone starts a business and ten years later there is only 10% of them left, something to that nature. Survival starts and then when small business owners and solopreneurs start to become more successful and start going, they start thinking, “Okay, I got to start saving for retirement and start putting money away.”
Once you make it past that survival piece, then a lot of them will start putting money into retirement but most are not putting enough in.
Drew Appelbaum: What do you suggest is being almost the right time? I know that there is no wrong time but you know, is there a percentage in your head off-hand or is there a percentage by when you’d like to retire by? Is there something out there that folks can dig into?
Gabe Nelson: Question being, how much percentage of their income should they be saving so that they could retire?
Drew Appelbaum: Yeah.
Gabe Nelson: Well, the old adage is usually been 10% and if you’re saving 10% of your income, you’re going to have yourself set up to be okay. I think it needs to be higher. I mean, with inflation, with things getting more expensive as time goes on, I think that number needs to be 15 to 20% is where that needs to be but it’s going to depend. I mean, we as a society have a tendency to spend more than we make and it makes it hard for people to save that much money and so if you can start with 10% start working your way up, that’s a good start.
Start Now In Taking The Steps to Optimize
Drew Appelbaum: Now, when do taxes really start becoming part of the plan? Is this again when you’re just thinking of retirement and down the road or is this something you should be optimizing literally every single day in your books?
Gabe Nelson: In my opinion, you should be optimizing for taxes literally every day in your books, in my opinion. I think every solopreneur, every small business owner needs to have a good CPA what I would call on retainer. You know, [who] will work some type of monthly payment fee out with a CPA so that you can make phone calls and deal with things and have them handle your payroll or have them handle your quarterly, your books and reconcile your accounts so that you as that solopreneur can focus on doing what you do best.
Because we’re really only good at a few things and the things that we’re really good at we’ve got to focus on. So I think you need to be optimizing for taxes immediately and have somebody in your corner helping you.
Drew Appelbaum: When readers finish the book, what immediate steps do you hope they will take and what sort of impact do you hope it will have on them?
Gabe Nelson: Well, I ultimately hope that they actually go to my website and buy the book but the book gives them a step-by-step guide on how to do what we’re talking about, how to master your finances and create the life that you want so what I’m hoping they do is they end the book and go, “Alright, I either got this and I now have a path to follow or I know I need somebody to help me” and either reach out to your friendly financial advisor that’s in your area or reach out to me and see if there’s a relationship that has an opportunity to be built there.
You know, find somebody to help you or use the book and follow the steps and take care of yourself.
Drew Appelbaum: Now, you do provide a lot of resources inside the book but you also have a companion website that has additional resources there as well. Can you tell readers what the name of the site is and then what do they can find there?
Gabe Nelson: Yes. The site is called solopreneurmoney.com and it’s just like it sounds, solopreneurmoney.com. That is where you’re going to have access to be able to buy the book, that’s where you’re going to see all of my social media assets. You’ll have the ability to jump right in and listen to my podcast and the podcast is called Solopreneur Money. I also have a YouTube channel called Solopreneur Money that has literally my podcast put into video format.
There are tons of resources there and then there is also a resources page, a resources section with checklists and guides, and things that you can use to determine if you’re on the right path. One of the ones that I created was a checklist to go through to determine if it makes sense to bring your spouse into your business with you or not and that was born out of me trying to get my wife to come to work with me.
Long story short, she just said, “I really don’t want to do the work that you’re doing, I want to work with you but I don’t want to do that work” and I’m like, “Okay, we’re done. I can go find somebody else now.”
Drew Appelbaum: Sure.
Gabe Nelson: Things like that, there’s checklists, the website then has, like I’ve already said, the podcast, the YouTube channel as well as the book, everything is there.
Drew Appelbaum: Well Gabe, we just really touched on the surface of the book here but I just want to say that leaving an established firm like you did and creating your own solopreneur journey is impressive in itself but writing this book where, as you say, you’re trying to help folks define their life vision and get their business on track and writing this book is no small feat. So congratulations on having it published.
Gabe Nelson: Thank you. I appreciate it. It’s been an amazing journey, I really enjoyed the process of going through, the whole process with Scribe. It’s been fantastic.
Drew Appelbaum: I do have one question left, it is the hot seat question. If readers could take away only one thing from the book, what would you want it to be?
Gabe Nelson: I would want it to be that they can actually do this themselves if they just follow the book.
Drew Appelbaum: Well Gabe, this has been a pleasure and I’m excited for people to check out the book. Everyone, the book is called, The Solopreneur’s Money Manifesto, and you could find it on Amazon. Gabe, besides checking out the book, besides checking out your website, is there anywhere else where people can connect with you?
Gabe Nelson: Yes, I am very active on LinkedIn. You just got to look me up, Gabe Nelson CFP, I think it comes up because I am a certified financial planner and you can connect with me right there and follow all the information that we have going on on LinkedIn as well.
Drew Appelbaum: Well Gabe, thank you so much for spending some time with us today, and best of luck with your new book.
Gabe Nelson: Thank you, Drew. I truly appreciate it.