The Home Service Expert Podcast - How to Achieve Financial Freedom By Becoming A More Effective Leader

Episode Date: October 2, 2020

Kelly Schols is a financial and accountability coach, speaker, and success mentor. The president of Kelly Schols Inc., he is also the author of Never By The Book and the host of the podcast of the same name. After becoming a debt-free millionaire by the age of 40, he developed a passion for teaching others his simple and straightforward message of financial freedom through countless workshops across the country. In this episode, we talked about leadership, coaching, finance, accountability...

The other mistake that I think a lot of owners make is they're afraid to let go. Number one, they don't have policies and procedures in place and operations manuals that say this is how it should be done at XYZ company. So at CPI, the company that I owned and sold out, everything was about the CPI way. And there was nobody there that was bigger than the company. I let my managers run the company. I didn't micromanage them. And a lot of that was through different things that happened in my life where I took a step back and went to work on myself because of different things that happened. And by doing that and taking a step back and working on myself, I was able to let them run the company and not micromanage them, but putting procedures in place to make sure that they knew how to run the

company. Because the thing is, as most owners, it's all sitting up here. Well, it doesn't do anybody any good when it's up here. Get it on paper and then learn to find out what's really behind their success in business. Now, your host, the home service millionaire, Tommy Mello. Welcome back to the Home Service Expert. I'm with my main man, Kelly Scholes, and he's an expert in leadership, coaching, finance, and accountability. That's a good thing to be an expert in. You're based out of Mount Vernon, Washington, and you're the president of Kelly Scholes Incorporated

and the Blue Collar Success Group Financial and Accountability Coach. You're a speaker, coach, and success mentor, author of the book Never Buy the Book, and the host of Never Buy the Book podcast. A debt-free millionaire by the age of 40 to teach others became his motivation. And since 2014, he has been teaching financial workshops across the country. He inspires audiences of thousands with his simple and straightforward message. Here's how I did it, and you can too, Kelly. It's great to have you on. Yeah, thank you for having me on. So you've done a lot. Millionaire by 40. Tell me a little bit about your journey here to what got you to become debt-free and a millionaire by 40.

Well, it was all in the home service industries. So I started in the plumbing and heating business when I was 16 years old. I was working on a dairy farm. I live in a small community, 60 miles north of Seattle, a rural farming community. I was working on a dairy farm and quite frankly, I didn't like it very much. So my girlfriend's dad owned a plumbing company and asked if I wanted to come to work for him. So at 16 years old, I said, heck yeah, and went to work for him. And at 16, I was, what you call it, cocky, arrogant kid. Thought I had it all figured out. And the first month I worked for him, I ended up wrecking a company vehicle.

Oh, no. Yeah. So I didn't make a very good impression. And he had a partner, and his partner's name was Steve Olson. And Steve didn't like me at first. Of course, you know, I'm dating the partner's daughter, and then I wreck a vehicle. So after the first month, he didn't like me very well. But he gave me a job after being there about six months.

It was probably one of the worst jobs somebody could ever have. A local hospital had a broken sewer line that had been dumping underneath it. And they asked me to go up there and spread lime. The sewer line had been broken for a year and dumping raw sewage under the hospital for a year. So I got to go up there. It was middle of August. It was probably about 105 degrees in the crawl space. I had to pull on a full hazmat suit. And I went up there and spreaded lime for a week. Needless to say, Steve came to like me and became a big mentor in my life. That's awesome. So you've learned a lot about the financials. So tell me about what's going on today. What do you do most of your time with other home service companies? Well, I do some coaching and mentoring.

I got different clients that I mentor personally. And when I'm doing it, I won't coach somebody on just business. When I coach somebody, I'm going to coach and mentor them personal and business. When I coach somebody, I'm going to coach and mentor them personal and business. Because the way I look at it is the way you do one thing is the way you do everything. And if your personal finances are in a shamble, your business finances are going to be in a shamble. Yeah, you're right about that. I know a lot of people who they spend it as quick as they get it. One of the things we've invested here is the Dave Ramsey program, but it's funny because no one's doing it. There's like five people that have actually enrolled in it and we pay for

the entire staff, 250 of us. And then obviously like Michael McKellar, it's profit first philosophy. Yep. And then I just read a book over the weekend called the compound effect by Darren Hardy. It has a lot to do with, if you want to fix something, you got to track it. You should have a little notebook. Actually, it's kind of funny because I just bought a get fit log

to check your exercises. So I'm actually a master financial coach through Dave Ramsey. Oh, I didn't realize that. Yeah. And when I first started coaching in the financial industry or in the home service industries doing financial coaching was with the company that I owned. So I ended up, over time, bought Steve out of the company, worked for him for quite a while, ended up buying him out. And then in 2014, my manager and I were looking for training to do, because we had become more of a training organization than anything. We're doing personal development, sales, customer service, everything. And we were talking about it one day and he said, hey, why don't you go look at Dave Ramsey's stuff? And at this point, I'd never known who Dave Ramsey

was. So I'm already debt freefree. I'm a multimillionaire, but I didn't know who he was. So I dug into it and I found out the principles that he teaches, Steve had actually taught me. And Steve didn't know who Dave Ramsey was either. But as I dug into it, it's like, hey, let's teach this to our employees. So we did, we did a class in 2014. It was called core financial wellness based off of Ramsey's financial peace university. So we took with 14 employees do it at the time they had $186,000 worth of debt, not including home mortgages. And in eight weeks we had that down to $140,000. Wow. Eight weeks, you said? Yeah. Oh, this is going to be good. This is something they don't teach in school,

and I don't know why. Oh, I have no idea why. I kind of got excited about it. I started talking about it in different best practice groups. I was part of Service Nation Alliance, part of the Blue Collar Success Group, and started talking about it there. And it really got a lot of traction. So then I started speaking about it all over, about what I was doing and how I was doing it. And then I became more interested. So I went back to Nashville to Ramsey's headquarter and became an actual master financial coach. And since then, I sold the business in 2018 to my partners. And since then, before COVID hit, I was traveling around the country doing financial literacy classes for not only home service industries, but I had done some for the white collar industry as well. And what I learned with

teaching the Ramsey stuff is, you know, Dave Ramsey has seven steps to financial freedom. One is $1,000 emergency fund. Two is pay off all your debt. Three is three to six months of expenses. Four is pay off your house. Five, save for college. Seven is build wealth.

And what I learned teaching it is once you get past step three, you lose a lot of people because you do step four, five, and six all in conjunction with each other, which is pay off your house, save for college, build wealth, or save for retirement, build wealth. And when you get to that point, a lot of people can't fathom that. So I broke it down even smaller. And when I go out and I work with companies and their employees, I break it down. I talk about the habits of money, the relationship of money, and the relationship between husband and spouse, how to get that $1,000 emergency fund, the difference between wants and needs, and how to budget. And if you can teach people those core principles, it can change their lives forever. Yeah. Well, it's crazy when you think about compound interest, when you start young enough. Yeah. It's just incredible of a person that starts when they're 22 compared to 40, that 18 years

of compounding. I had a Roth IRA that I put $300 a month into when I was 16. That's when I started. And now in a Roth IRA, I have 280,000 in my Roth. Well, I got a really good one for you. So I quit drinking 30 years ago. At 24 years old, I was in bad shape. So I quit drinking. Completely changed my life. But every year I have a condo with another friend in Eastern Washington on the Columbia River. And every year, eight guys go over there for a guy's weekend. When we go in, we go to the grocery store, they buy all the alcohol, and then we buy all the food. They split the alcohol seven ways. They split the food eight, right?

Yeah. So a couple of years ago, when they were splitting it up, the alcohol was like 120 bucks a person, and the food was like 30. So we get back to the condo, and they're all giving me a bad time. They're talking about how cheap I am because I don't't pay for the alcohol. Of course. I don't drink I said well, let's figure this out guys Said I quit drinking at the time. It was 26 years ago Sure When I quit drinking I was drinking eight hundred dollars a month. I was spending eight hundred dollars a month on alcohol in 1990

That's a lot of drinks. It's a lot of drinks So I said let's assume that you know, I's a lot of drinks. So I said, let's assume that I curbed it a little bit and I just spent 500. 500 a month for 26 years came to like $186,000 that I'd saved. But if you compounded it out over those 26 years at 8% interest, $2.4 million. That's incredible. And it's crazy because it's the smallest little things when you write it down in a journal. If you write it down, you realize anything you want to change, you don't need this massive change. You don't need to stop. You just need to make progress every day. And you could grow thousands of percent. You know,

Alan Rohr pretty well, right? She and Gail flew out here. This is a couple of years ago now, but they really helped me get my financial quick check. They helped me to get the reporting dialed in. So now my CFO is an amazing guy, but we've got every Friday, I know what's in the bank, how much money we owe to the debt. And see, I'm not a big fan. I'm a big fan of normal Americans living in no debt, but I'm a big fan of leverage when you're financially responsible. And I know Dave Ramsey's not, but I never really talked to Dave Ramsey ever really about credit cards.

I use credit cards all the time and I pay them off every month. And I have, I literally over the years have made over $50 million of points. I don't pay for flights. I don't pay for hotels anymore. I fly all the people in to come train. What is your philosophy? I'm just curious on that. The keyword you said was responsible.

Yep. That was the keyword because so many people aren't responsible. If you can't pay your credit card off every month, cut it up, throw it away. I agree with that. Like my, my buddy, I'll just tell you, my buddy, Chad, I was not going to put his name out there, but he doesn't carry a credit card anymore. It's crazy what happens when people have a credit card. And I love credit cards. I love, we offer financing. And I love it because people don't feel the pain when they're spending it.

So they spend a lot more money. I mean, the average ticket goes through the roof when you sell financing and there's a delayed, they don't feel the money loss because they're like, I didn't earn this money. They don't feel it the same as debit card or more is cash, actually taking cash out of your pocket and paying for it. And very few people do that anymore. I carry cash around with me all the time. I use cash a lot. I think this is a good day for me because I actually have cash in my money. You actually have cash.

Yeah. You know, a lot of stores aren't taking cash right now, which is crazy to me. Yeah. Here's the other thing, Tommy, is 76% of Americans live paycheck to paycheck. That's nuts. And that was before COVID hit. That was before the pandemic. So, you know, you write down, I did this one time.

I wrote down everything I bought. I was in a class and the teacher said listen i want you guys to take a log and it's amazing like a candy bar and chips and lunch when you go out and the dinner and it's like if you go grocery shopping and here's what's pretty cool is i'm involved in garage doors as you know yeah and amazon actually they've teamed up with chamberlain, who's Liftmaster, who's got this app on your phone, MyQ, and you could open up your garage from your phone. Well, Amazon could open up one-time use and get a one-time code to open your garage to leave

the Amazon Prime packages. Well, I'm like thinking down the road, Amazon is going to be delivering food into your garage on a regular basis. I mean, that's just where I see it going. But for me, that's pretty cool because, you know, I eat out quite a bit. I got to tell you, it's probably not as good as I should be, but I mean, here I am with pita. I mean, it's healthy stuff most of the time, but I'm just curious. What's your lowest point you've been at with financing? Obviously it was pre 40. And then how'd you bounce back? My lowest point was I was living in Southern California. So I went to work for Steve at 16. I worked for him until I graduated high school. And then at 21, I moved down to Southern California. When I moved down there, I moved down there simply to party, chase girls and sunshine.

Oh yeah. I just worked to get by. And at one point I had to borrow money from my mom to pay rent or I would have been homeless. And then when Steve got ahold of me, when I was down there and asked me to come back up and help him run a new company that he had started. And thank God he called me every month for two years to get me to come back up and help him run the company. And when he finally made me an offer to become an owner, I came back. So in January of 1990, I left Southern California. I had $300 in my pocket. I owed $500 on a 72 Chevelle and I was a full-blown alcoholic at 24 years old. So not being able to pay rent, having to borrow money from my mom, owing more money on my car than it was worth,

and a full-blown alcoholic, I would say at 24 years old, that was pretty much rock bottom. It sounds like it. It sounds like I'm really happy for you that you got out of the drinking train. I can probably lighten up myself. So what did you do? How do you bounce back from that? I mean, what are the first steps? What are the top three things you need to do? Obviously, you quit drinking, but other than that, what did you do? Well, number one was, yeah, quit drinking.

That was a personal choice of mine that i was either going to be dead or or in jail if i didn't you know i had been in two car accidents i should have been killed in a motorcycle accident i should have been killed and i'd been arrested three times all for alcohol by the time i was wow so when i hit rock bottom there not only was it rock bottom there, but it was rock bottom financial. And up until that point, even though I was struggling, I was that 76% living paycheck to paycheck. I didn't have a nickel, two nickels to rub together. I still always was pretty responsible. I'd only been late on one payment my whole life, even though I was not making money and I was living paycheck to paycheck. But when I came back to work for Steve and I sobered up, he handed me a book called The

Millionaire Next Door. Yeah. I think I have that on my shelf. Yep. So after reading that book, I adopted all those principles. And there's two types of people when it comes to money. There's people that earn more to spend more. And there's people that save more than they earn. Yep. And I became one that I saved more than I earned. I learned to live on a budget. I learned to live below my means.

And I learned the difference between wants and needs. Interesting. I like that. When I'm teaching my classes, I really talk a lot about wants and needs. You know, I got married and had two daughters. And as they were growing up, my wife and I would have dinner at the dinner table four to five nights a week and discuss life at the dinner table with our daughters. And one thing I always taught them was the difference between wants and needs. And, you know, they'd always come to me.

I want this. I want this. And I'd say, hold out your hand. And. And, you know, they'd always come to me. I want this. I want this. And I'd say, hold out your hand. And if they're watching this, they're going to squirm. And I'd say, hold out your hand. I'd say, want one and crap in the other and see which one fills up first. Yeah. I don't want to hear I want.

Do you need it or do you want it? So when I'm doing my financial classes, I talk a lot about that. And if people, you know, when they're walking into grocery stores, they're buying stuff. If they can just get that thought process of, do I want this or do I need it? You know, as I accumulate more and more things, Kelly, I don't like the filling almost.

It's like I drive a 2010 Nissan Titan. It's not nice enough that I have to worry about it. As I buy these things more and more, it's just more and more things to worry about. Once you have it, you're worried about losing it. So it's kind of comforting not going too deep in the pain on, I'd like the money to work for me. And I always have. And I've always been able to go out to eat and do things that I like. In fact, I always tell people I felt like I was successful the day I didn't have to look at the bill, which is probably not financially the best thing to give advice to do. But I'm just curious. Obviously, it sounds like it was easy for you to become a millionaire once you learn these

basic principles. It's easy, but it takes discipline. Discipline is a good word. I like accountability and I like the word discipline and I like the word consistency. Yeah, it takes that. And it's not going to happen overnight. So my wife and I, we ended up buying Steve out in 2002, built her dream home in 2003. And by 2006, we had her home paid off and we're completely debt-free. Wow. Now, how big was that business?

When I bought him out, it was about a $2 million business. It's now about a $6 million business. And it's made a lot of transformations. When I bought him out, it was 85% new construction. Now, it's 100% service and repair. Oh, wow. Cool. It's a lot of different transformations there. But after we paid off our house, had him paid off, is when I looked. And that's when we were millionaires.

And I had no idea. Because it became about the journey instead of the destination. Yeah. I'm just thinking about, there's a word it's called Parkinson's law. Are you familiar with Parkinson's law? No, I'm not. So Parkinson's law is the best way to describe it as toothpaste. When you're running out of toothpaste, you tend to roll it up and you just barely enough

that you need. And when you got a full toothpaste, you're kind of lavish with it. You'll put it all. We're kind of like when you get paid, your payday comes and you go out to eat that night. You're taking your buddies out. You're covering everybody. And then the last day before payday stuff's tight.

Yeah. Same thing happens with a building. You ran out of building. It's a huge building. You're going to use all the space. And it's basically they made a law back in a long, long time ago. They call where can I spend it? And they don't have the three months, three to six months. I mean, I bet you it's in the single digits how many companies have enough money to last three months if something. COVID didn't affect the home service as much as it affected a lot of other things like movie theaters and stuff like that. But what do you say to these entrepreneurs that are struggling to become financially free?

Look at yourself first. Get your home in order. Get your personal finances in order. Learn how to budget. Learn how to save. Learn the difference between wants and needs. I like wants versus needs. I got that written down.

How long do you usually speak when you walk into a, if you were to come into, let's say a one or just do a zoom, how long do you usually, is it like an hour of training or how long does it usually go? No, I have a, I have a two hour class I can do or a six hour workshop. Tell me about the two hour class versus the six hour workshop. I'm just curious. The six hour workshop just is a lot more interactive. I mean, I'm having people write down what their debt is. I'm having to acknowledge their debt, figure out, and then I'll work with them on how to get rid of that debt. We'll talk about wants and needs. There was a company I was working with in Atlanta, and I had a couple write down their debt, and they had $186,000 in credit card debt.

So after talking to them and talking about wants and needs and habits, they were spending over $900 a month just going out to dinner. $900 a month with $160,000 in debt, huh? Yeah. So, you know, you look at that habit, you look at the wants and needs there. Like you were saying earlier, you probably go out more than you should. I mean, people go out to lunch every day. You add that up opposed to making – I mean, I brought my lunch to work every day for 30 years. Now, were there times when I would go out to lunch? Certainly.

Sure. But I would eat my lunch the next day because I was one of those that likes leftover sandwiches. And I never wanted to waste it. But literally, I packed my lunch every day and brought it for 30 years. Think of the amount of money. Because as i'm doing the class and i'm talking to people usually it's about 15 to 20 dollars per day That somebody is spending on lunch Compared let's just say, you know, if they're spending 15 and they can make it for five. So ten dollars a day average of 20

Working days a month. that's $200 a month. I mean, cigarettes, I do the same thing with cigarettes. I mean, you could do it with a lot of things. A lot of things. I had a kid in Southern California. I was doing a class and he chewed tobacco. And when I figured out how much he was spending, he actually quit. I saw him a year later, he, and he still was not chewing. So I think the key word that you said earlier was discipline. And it's realizing first, it's admitting you've got a problem. Yep. Right. And it's money, but there's other things that stem out from the money, right?

Because you shop here, you do this, you do this. You know, I just started getting pedicures. Yeah. It's like expensive. And I'm like, I don't know, I guess I hit an age where it just makes sense to treat myself, I guess. But that's, you know, I do pretty well overall with the money I save, but what's the best way to build discipline? Do you have any tactics that really work to kind of just confront your obstacles and face them head on and stay tenacious about those? Number one, like you said, is admitting it. You know, it's just like when I quit drinking.

I mean, I admitted I had a problem and I addressed it. And the pain has to become a certain point. You know, when you're talking in recovery and alcoholics and stuff, what's your rock bottom? And it's the same thing when it comes to finances, what's your rock bottom? It has to get to a point where you just say, you know what? I'm done with this. There's got to be a better path. And then reaching out and getting help. There's a lot of coaches out there that will help people and that have been there. The thing is, is it doesn't matter whether it's alcohol recovery, drug addiction, financial issues, gambling, whatever.

99% of the people that are coaching and helping have been there. Right. And they're willing to help. It's like myself. I mean, I love helping people get out of debt. I love showing them a better path. I have another client I'm working with right now that he called me yesterday morning and I got him on a payment plan. He was over $200,000 in debt, not including his homes. And he will have everything paid off in 18 months.

But he calls me every time he pays off a credit card. And he's so excited now because I got him on a path. I got him now instead of getting excitement out of going out and spending money, he's getting excitement of paying off debt. And that was one thing that my wife and I really enjoyed building our family, building our wealth and doing everything is, like I said, we sat down at a dinner table four to five nights a week as a family and discussed life. We discussed our dreams, what we wanted to accomplish as a family for our girls, for ourselves and everything. And everything we've discussed at that dinner table, we accomplished. My girls are 23 and 25 now. They both went to private universities. They both traveled the

world. They're on their own now. They're very successful. But those are principles and those are dreams and goals that we talked about as a family. And that's one thing that happens is families get in trouble. And I've had a lot of people in my local community contact me, either a wife or a husband or something and say, hey, I'm in debt. And, you know, I got us into debt and I need to figure out how to do this. And I'd say, well, let's get your spouse on the phone and let's talk about this. And they'd say, no, it's my debt. No, it's not.

It's family debt. Doesn't matter who created it. It's not. It's family debt. It doesn't matter who created it. It's family. If you can get together and talk as couples, families open up, be honest about it, you're going to recover and move a lot faster. It's the same thing with my business. When Steve was grooming me and mentoring me, he openly shared everything. Matter of fact, he passed away. He passed away in May. And when he did, his son now is one of the owners who I actually ended up grooming and selling to. But I was talking to his son one day and he goes, yeah, mom just found out how much she was worth

and didn't realize that how much they were worth. And I said, oh, they were worth this. And he looked at me and he goes, what? I said, I told you, your dad and I shared everything. Wow. Sorry to hear that, by the way. Oh, thanks. So till the day he died, I knew as much about his finances, actually more than his wife did. It's the same thing with my partners. So I ended up selling out to Ole, which was his son. And then Brad, another gentleman that had been with me for 20 some years, they know everything about my finances. Not only personal, but business. Open, honest, and that's just the way we were. And people would say to him, why do you trust Kelly? Why do you

follow him? Why do you listen to his vision? Why do you do that? They go, you know what? We trust him with our wife and our checkbook because we're open and honest. You know, with this financial quick check I do on Fridays, I have five other people on that call that know exactly every single detail. And quite honestly, I don't have anything to hide. I would show anybody of my staff, you know, I bought a house recently and there's some issues with a lease that was previous. I won't go into it, but a lot of the employees said, a lot of the upper management said, you can't let anybody ever know it's a big house. It's a nice house. And it's a good investment. I mean, I think I've got about 400,000 in equity just off the buy.

Long story short, I said, what do you mean? I don't care if they see this. We've all worked hard and we can all share this house. We could all have fun here, but I have nothing to hide. If someone's jealous about a house I bought because I've worked hard my whole life, then they're probably not the right people. I don't know. I'm not afraid to share any of this stuff.

And it's nice to be an open book and not have a separate set of books and deposit all the cash, which a lot of people don't know. I'm not afraid to share any of this stuff. And it's nice to be an open book and not have a separate set of books and deposit all the cash, which a lot of people don't do. And it's nice to just be honest. And here's the deal. If I get audited, fine. I'm fine. You sleep at night, right? Yeah. I sleep really good at night. People go, I'm expensive. I do the job right. And I've heard some really crappy, crummy garage door companies go, how do you sleep at night with what you charge? I'm expensive. I do the job right. Yeah. And I've heard some really crappy, crummy garage door companies go, how do you sleep at night with what you charge? I said, sleep in a brand new bed. It's a great mattress, nice pillows. I sleep just fine because we charge enough to make 15 to 20%. Yeah. And all my employees can sleep well at night as well.

Oh yeah. Well, here's the deal. You could actually make money when you work for me. You could drive a new truck. You could actually get calls coming in because we pay for advertising. You actually could have nice things and give people PTO and give people health insurance. It's amazing what happens when you actually charge the right price. There's a lot of companies that aren't charging near what they should be. And most of them don't know how much they make. You know, I've tried to buy out companies left and right, and I can't even get an honest financial, like they're still working on 2019.

And I'm like, how is this possible? How do you even function? And they're like, well, I pay my wife and I'm like, fine, you know, whatever you got, those are called ad backs. We can look into that. Right. And they're like, well, no one likes to pay Uncle Sam. I'm like, fine, whatever you got, those are called ad backs. We can look into that. Right. And they're like, well, no one likes to pay Uncle Sam. I'm like, no, I understand that.

And there's tax things you can do to avoid some of the stuff. I just found out about this law that in the 70s, you're familiar with the Augusta, the masters. So in the 70s, they like to rent out their house for like 14 days for the master's program, but relatively wealthy people. And they, DC passed a new law that was blocked it and they went and they got a lot of money in wealth. So they were able to overturn the law and I could rent out my house for equivalent per

square foot of what I would do as a resort for 14 days. It's a write-out for the business and Yeah. And it's tax-free for me. Yeah. It's crazy. I mean, we did a cost segregation study on the business. I mean, look, I like to pay taxes because the bank, it's a double-edged sword. If you don't pay a lot of taxes, for the most part, it's hard to get a loan. And we got a really, really nice building. It's about a $4 million building. We bought a couple apartment complexes, small ones for the guys to stay at when they're training.

And if I had to wait to buy that with cash, I mean, I've already made lots and lots and lots and lots of money because it's gone up so much in the last couple of years. So I like leverage. And there's a good book by, it's funny, Donald Trump. He talks a lot about being able to leverage. But you're right. You got to be responsible. Well, and here's the thing.

I want to pay as much taxes as I can based on the tax laws. You mentioned Donald Trump. Well, everybody's wanted him to open up his financials. Well, the reason he doesn't is he probably pays less taxes than we do based on the tax laws that were put in place by the politicians. The more irregular income you have, the less you're going to pay in taxes. It's like Warren Buffett says, I pay less than my secretary. Yeah. I mean, as a percentage. As a percentage. But those were laws

that were put in by the politicians. They weren't put in by us. So if we just follow the law, and I sleep very well at night because I follow the law to a T when it comes to taxes and all that. And when I had the business, I never once put cash in my pocket. It always went into the business. And everything ran through. You're going to get a multiple of every dime that goes into the business if you go to sell it. So if you're planning on selling in the next three to five years, they're going to look at the last three to five years. They're going to come up with a multiple. And typically you're going to get anywhere from three to 15 times. So every dollar that goes in, if you can pull 10 out, you know, plus that money in the business could work in a lot more ways than it could work if you out there spending it. Well, and the other thing is, you

know, as you're putting it in your pocket, your employees see that. What do you think they're thinking? Well, if he can do it, why can't I do it? Yeah, you're right. That's a bad example. And that kind of segues into leadership. I wanted to talk, you've taught a lot about leadership and accountability. What are some of the characteristics that you've noticed of really bad leaders. How do you fix those? People that don't take responsibility. One of the best books I think I've ever read is called Extreme Leadership. It's by Jacko. Jacko.

Yeah, yeah, yeah. Jacko. The two Navy SEALs. Yep. Yep. And no matter what happened, it starts with us as leaders. No matter what, you can't say, well, this guy shouldn't have been driving like that. What kind of safety courses have you put into place? His whole theory of that book was I send these guys into battle. That's life and death. That's true ownership is when someone can lose their life. And the fact is, if you look at your decisions, I can't say anything. If I were to lose my business, I can't point at someone and just say, it all comes down to me.

And it all comes down to us. And I'll tell you the turning point in my life, every time I've had an issue in my life, starting with alcoholism, then I bought out Steve, then I had some union issues, and my wife passed away. Every time something happened, I turned the mirror on myself and said, what can I do to become a better person, a better husband, father, friend, boss, employer. And the more you can do that and turn it on yourself and take responsibility and take extreme ownership yourself and say, I'm going to become better, then your company will become better. Yeah. I mean, the leaders that we have here at A1, I think they accept a lot of the responsibility, but it's so easy to blame others. Yeah.

It's so easy to say you shouldn't have been, you know, I've got cameras installed in every single truck that sees the driver as well as the road. And really, it saves us a lot of money in our insurance. But it's not about trusting or not trusting the guys, but it sucks because it's got motion sensors. So every time a guy goes to smoke or grab a cell phone, we get notified. And it's just like, guys, I'm not doing this to punish you, but how does it look when you drive by somebody? And I've driven by a very, very well-known HVAC company and the guy's smoking. It was just such a turnoff. I don't know why. My mom and dad both smoke, so now they're doing the vape stuff. But ultimately, I just think it's in the... When you think about someone coming into your house, that's disgusting in my opinion.

The other mistake that I think a lot of owners make is they're afraid to let go. Number one, they don't have policies and procedures in place and operations manuals that say this is how it should be done at XYZ company. So at CPI, the company that I owned and sold out, everything was about the CPI way. And there was nobody there that was bigger than the company. I let my managers run the company. I didn't micromanage them. And a lot of that was through different things that happened in my life where I took a step back and went to work on myself because of different things that happen. And by doing that and taking a step back and working on myself, I was able to let them run the company and not micromanage them, but putting procedures in place to make sure that they knew how to run the company. Because the thing is, as most owners, it's all sitting up here. Well, it doesn't do anybody any good when it's up here. Get it on paper and then learn to manage processes instead of people. Yep. You know, that one person, I don't like to say if they get hit by a car,

I like to say if they won the lottery, they're out. People think that by hiring this magical person, you're going to find success. And the real thing is it's the magical process that happens every single time to get the expected outcome that you're looking for. And people say, man, you're so lucky to find these great people. I go, you should see the process that I use to find these people. I got over 500 applicants between Saturday and Sunday, just for technicians. Wow.

Now you don't think I can find a few awesome people out of that. Yeah. I mean, it's amazing the caliber of people that the process is dialed in. And you know, it's funny because I've got these aligned around everywhere is my, uh, your office manual. Yep.

And so we've got our service, our apprentice, our technician, our installer dispatch, our CSR. I mean, you we've got our service, our apprentice, our technician, our installer, dispatcher, CSR. I mean, you're familiar with LLEV, right? Oh yeah. Yeah. We talked about that. We, that same manual. It's pretty much probably the same, same stuff and they work and we read them all the time. And, you know, I never get sick of them and I like to change them up as, um, I tell the employees, you're part of this manual you've got give feedback if we could change the process in a way you guys are in the every day yeah you're doing this stuff so

there's no one better to tell us what can we do better yeah they're a working breathing document yeah and i mean they're changing all the time. They are. And the thing is, the more you get it out of your head and get it on paper, that's when your company is going to thrive. And that's when you're going to thrive as a leader. Yeah.

It's a lot easier to coach processes than it is people. You know, what are some systems that business leaders can set up to motivate their teams? And really, part of what I'm asking, I guess, is I find that you got to find out what employees want. What are their goals?

And you've talked about this already, but matching up their business goals to get their personal goals. Like if they want to go on a trip with their wife to Alaska for their 20th honeymoon or whatever that looks like, 20th anniversary. I find that that's a big, big deal. But what else can we do to motivate the team and employee? Well, I'll tell you, there was a book I read, and it's funny because I ran the company that way anyway. It was called The Dream Manager. Yep. So many owners and managers want to set goals for people. Well, a lot of people are

afraid of goals. They don't understand goals. They're scared of goals. So let's see what people are dreaming about. It's just like when my wife and I, like I said, we used to sit at that dinner table and we would talk about our dreams, what we wanted to accomplish as a family. And then we would break it down from there. So it's finding out what these employees want and then coaching and training. Yeah, we do a lot of role play, but how much should we be thinking about teaching them, like you said, personal finance, personal goal setting, personal. Is there a formula that you like to use to say, because I get guys that come in and talk about homeownership and about fixing your credit, right? And it's amazing what we're able

to accomplish, but I've not had a good one about just financial freedom. That's why we hired the Dave Ramsey program, but I got to tell you, they don't want it. Out of 250 people, 10 of them have logged in. Because they don't understand that it's too complicated. It's too high level for them. It's got to be broken down simpler. Again, 76% of Americans live paycheck to paycheck. Only 40% of Americans have $400 or excuse me, $1,000 or more saved for an emergency fund. So if you look at your staff and you say only four out of 10 people have $1,000 saved for an emergency fund, but yet 76% of them are living paycheck to paycheck. So how can I help them learn the basics of financial literacy?

Because like you said at the beginning, they don't teach this stuff in schools at all. Crazy. You look at everything nowadays, like you're talking about Amazon, it's going to be dropping food in your garage and you're not even going to have to do anything. Do you think people are going to be spending more money than they should? Yeah. So are people making a grocery list for stuff they need? Do they live on a budget? Are they telling their money where to go every month or is their money telling them where it's going to go every month? I like that. That's interesting. And when I used to, my wife and I, when we did a

budget, it was on a yellow legal pad. It doesn't have to be complicated. They try and make things so complicated nowadays that people get frustrated. I'd like to see a sample budget for someone like a personal one. Maybe we can attach it to this podcast, but that's pretty interesting to me. I have a basic electronic budget that I can send you that is just really simple and easy. And I use it with my clients. And it's just to show them how you can set up the budget. So you got $3,000 a month coming in and your budget's $2,500. So it leaves $500 to pay off debt. Then you can use that to pay off debt. And then I can show people how to do the snowball to be able to pay off debt, then you can use that to pay off debt. And then, you know, I can show people how to do the snowball to be able to pay off debt quick. Yeah. I'm interested in seeing how, how that works because I think a lot of people, it's just a good feeling to be debt-free. It's a good feeling to not owe a bunch of money. I mean, I could understand getting a loan on a house because you're making a lot of equity as it grows in value, right?

Well, you talked about that principle earlier. I can't remember what that principle was you talked about. Oh, the Parkinson's law. The Parkinson's law. You know, it's funny because when my wife and I were building our net worth and equity and everything. There's two types of people in a relationship when it comes to money. There's a nerd and there's a free spirit. Well, I was the nerd in the family. She was a free spirit. I would balance checkbooks every month to the penny. She'd go spend money and whatever. She wasn't frivolous, but the thing was is she didn't balance everything

every month. I did. but then I would sit down with her at the end of the month and I'd go over it and we'd discuss it. And that's the good part of having a relationship when it comes to relationship with money. And it's funny because we'd pay all the bills and we'd have say $400 left over until next pay period. Well, next pay period would roll around and get to the next pay period and she'd have $100 left. Well, then maybe the next one, she'd have $800 left over after paying the bills. Guess what? We get to the next pay period, there'd be $100 left. So it didn't matter how much she had, she would spend what was in there. So I was the one that would take every month and I'd put maybe $25 more away in savings and lower what was left for her to spend. And she never realized it because it was incrementally small, but then it added up. What's your philosophy on husband and wife? Do you believe in a joint account, separate accounts?

I see a lot of people, separate accounts as they're getting married later in life. And I like the idea of being able to go do something for somebody and then not see it on the credit card statement, like if flowers or whatever, if it pops up, but what is your philosophy on that? My philosophy is there's power in numbers. If you work together and you communicate, it doesn't mean you can't have separate accounts, but then you have individual accounts too, or individual accounts and joint accounts. And that's what we did is we had both. So we had our main house account and she had an account, I had mine. And we budgeted ourselves. Here's what we're going to get in our personal accounts each month, but everything else is going in the house account. So that's the key is the budget is okay.

You get a hundred dollars this month to spend on whatever. I'm looking forward to getting my hands on that budget. We've got a really, really, really nice budget for a one here. I mean, it's so decked out and it's huge. I mean, we live and die and breathe by this budget, but I used to think a budget would confine me, but this next year I have a plan to hit it out of the park. And I mean, I'm going to be super aggressive on growth. But the one thing I've learned to focus on more is profit. Forget the revenue. Everybody brags on revenue. They never brag about even their profit.

Why is that? No one will ever brag that I made 15, 20, 30%, whatever that might be. They brag about the revenue and they got nothing to sell. You know, their, their CPA says, Hey, you're going to owe 800,000. And they go, I don't have how. Yeah. I mean, I, my company never did more than $6 million. Never, but we never dropped below 10% net profit either. 10% of $6 million is $600,000. It's not a bad number.

Not a bad number when you consider that was after salaries. Yeah. For owners, officers, managers, everybody. Right. So you paid yourself, which is smart. Yep. And I gave myself a raise two months ago. Adam called me up and he said, Hey, he goes, you're the only person that a race since I started here. Yeah. I said, all right. What do you think? He goes, what do you think? 40, 50, 60,000. I said, half 50 sounds about right. There was, there was no rhyme or rhythm to it, but you know, talk to me a little bit about never

by the book. What, what should readers, what are readers going to get out of the book of yours? Hope and inspiration. Never by the book is, is this kind of a story of my life, what I've been through, how I got through it. People that have helped me along the way, people that guided me, different things I'd been through. So as I started speaking and talking about the financial classes and traveling around, I had people starting to say, hey, you should write a book. And I was like, yeah, sure. Well, then my wife passed away unexpectedly in 2012,

right after we got done with the union issue in the company. So 2008, when the economy crashed, my company got hit with a $544,000 pension liability notice. So that year we went from 6 million to 3 million, then got hit with a half a million dollar pension liability notice. So we came up with a plan. That's when I actually read the e-myth from Michael Gerber and really changed the company and really dove in and started working on the company instead of in the company. And we came up with a plan. We had three years to pay the union off. We ended up paying them off in two years. So I paid them off in June of 2012. And in September of that year, my wife passed away unexpectedly. So 2014, I'm traveling, you know, talking about the financial classes, but also some

friends and I decided to do a hike in the local community. And as we got ready to do it, the local hospital asked if we would use it to do a fundraiser for the local cardiac rehabilitation center. And as that started going, then the director of the hospital asked if I would name the cardiac rehabilitation center after my wife. So we committed to raise $100,000 over five years well in order to do that started going around to local service clubs and different things and telling my story of what i'd been through how i'd gotten through it to raise money for the cardiac rehabilitation center and there again everybody was asking me where's your book where's your, where's your book? Where's your book? Where's your book? So as I'm traveling around doing these things, so I, in 2014, I started thinking about it and

I actually interviewed my mom because the book starts, I wasn't supposed to be born. So I just gave away the first chapter. I wasn't supposed to be born. But then in 2018, when I sold the company and I stepped away, I was coaching a client down in San Clemente, California. And I was going down to help him with the planning and strategy meeting. And I told him I didn't want to do it on site. We're going to do it off site. So we left his place early in the morning. We started heading up Pacific Coast Highway. And then we turn and we start going up Laguna Canyon. And I got this sensation that came over me. And I was like, wow, what is going on here? And we pull into this place and we get out. I'm kind of standing there. I'm dazed. And he comes up and he goes, what's wrong?

I go, I don't know. I go, I just had this sensation come over me. I can't explain. He goes, what do you mean? I go, 29 years ago, I left this canyon. I was dead broke and a full-blown alcoholic. And I said, I'd never come back here. A week later, I started writing a book. And I had it done in a month and a half, pen to paper. Wow. I got goosebumps. That's a good time. That's a good story. So going from leaving that canyon to 29 years later, back there, coaching him on what I had learned in those 29 years. And with everybody telling me, you know, you should write the book, you should write the book, everything came full circle. And it's like, okay, it's time.

And it's my time to give back. I had a lot of people help me along the way, coach me, teach me, guide me. And it's my turn to share and give back and do the same thing. And the way I look at it is with the book, and now I'm doing the podcast as well, if I can help one person, whether it be financial, addiction, business, personal, whatever it is, if I can help one person, it's worth it. So are you able to do your workshop from Zoom now with COVID and everything? I haven't, and I've talked about doing it with my publicist.

I've talked about with some people that I've done the class for. So my brother runs a bunch of car dealers down in Florida and I went down and did a bunch for him. And we talked about it because when I do my workshop, I use my personal story. Yep. So it's, it's very personal it hits people even when i was doing it with the car dealers even though it's more white collar it still hit home with a lot of people when i do it in home service industries where you know that's where i cut my teeth yep it's pretty easy for people to relate with me sure and it's pretty interactive so i'm gonna i already got a class scheduled for november 7th i'll be going to colorado and doing one there and that's been scheduled for a while so i'm hoping now that people are starting to get over the fear-mongering

and all the hype and everything and covid starting to subside that you know, November 4th is when it's supposed to be over. Yeah. Yeah. So I'm going November 7th. Yeah. We should be good. Yeah. So you brought up some books.

I definitely think Dream Manager is an important one. A couple of questions here. First, someone wants to reach out to you. What's the best way? KellyScholes.com. KellyScholes.com. KellyScholes.com. That's K-E-L-L-Y-S-C-H-O-L-S.com. And then you've got your book, Never Buy the Book.

Never Buy the Book. That's not B-U-Y. That's B-Y. Yeah, it doesn't mean I don't want people to buy it. Never Buy the Book. Yeah. It just means I didn't do things by the book. Yep. I gotcha. And then, so I always ask, is there a few books that you'd really top of your list that you'd recommend? The E-Myth I hear a lot of there, three other books that you've said, The Millionaire Next Door. Millionaire Next Door. There's another one called The Wealthy Barber.

That's pretty good. But what is the one that you said by leadership? Extreme leadership. Extreme leadership. Yep. I'll tell you another really good one. And you know Kenny and you've had Kenny on. Kenny Chapman?

Yep. The Six Dimensions of Change. And that's more personal development. Has he got that on Audible? He just re-released The Six Dimensions of Change, version two. Okay. Even his original is an amazing book. And one thing I always ask is, basically, to close this out, you know, there's a lot of people that love the idea of hearing financial freedom, but they never take action. They never follow the steps they need to, to hit that spot

of just literally the weight that that must feel like. I'm very, very fortunate. I never got into a debt. I got into a little bit for school, but you know, my master's program, I had that paid out within a year. So I just can't imagine the wait, but I just am curious. I want you to just take us home. Whatever you want to talk about, whatever we might've not got to, I'll let you, give you at least five minutes to kind of talk about really what these listeners can do to find change in their life and hopefully make it a much brighter future? Number one, they need to realize with finance is it's a marathon. It's not a sprint. And I'm going to go back to a couple of things I talked about earlier is there's two types of people when it comes to money. There's people that save more than they earn, and there's people

that earn more to spend more. You're never going to earn enough if that's the type of person you are. And then it comes to wants and needs. If I pay attention to my needs now, I can have what I want later. And I'm to that point in my life. If I want something, I can go get it. Are you buying things that you want now more lavishly or not really? Not really. I'm not a lavish person, but if I want to go on a trip, I go on a trip. If I want to do something for my daughters, I do something for my daughters. My youngest daughter's 23 years old. She lives in Nashville. I bought a brand new house there and then turned around and sold it to her on contract. So she's buying her first house.

People will say, well, you're giving her a good deal. You're this, you're that. No, I'm not. She's paying 4.75% interest, but she was able to buy a house because I was able to do that for her. Sure. Both my girls went to private college. They traveled the world. Those were things that I was able to do for them before

they had to go out and face the real world. My ex-partner used to tell us all the time, rice and beans, boys. And if you think like that, if you think about wants and needs, eventually you can do whatever you want. But again, it takes discipline. It takes passing up that shiny object. There's a quote I like to talk about, and that's, live for today, but plan for the future. Because if you just live for today and you don't plan for the future, the future comes pretty fast. It does. And it only gets quicker. It does. It only gets quicker. And it's amazing. I actually

have a call with a gentleman tomorrow for some financial coaching that's 62 years old. I think it was Napoleon Hill. Don't quote me on that, but he said, most men die when they're 25, but they get buried when they're 80. Yeah. Because it just falls into this vicious cycle of a rhythm. Yeah. And I think the biggest thing that slows down time, I remember just the days lasting forever when I was a kid. And if you think about it, I'd wake up, my grandma would cook breakfast. I'd watch a show. I talked to my dad. We'd go work out in the basement. This is before I even walked to my buddy's house, watched him get ready, get on the bus. Then I had eight different courses or

whatever. Then the night, dinner, grandma, mom, dad, catch up, go play. You know, it's just because it was never the same. You know, you're always changing classes and quarters and everything. So I think that's my goal is to continue to change so fast and so much that I never get in a rhythm of just, cause boom, before you know it, holy crap, it's already September. Yeah. And here's the thing is enjoy the journey. So many people are striving to want this or want that, or what's the next best thing? A really good friend of mine, he's done very well for himself as well. He's a multimillionaire. He's a pharmacist, does really well, owns his own company and pretty much works when he wants now.

It's funny because when him and I talk and we talk about where we're at and stuff, it always goes back to the younger years when the kids were little and we were camping in the old beat up trailers. And we used to lawnmower race. We'd take riding lawnmowers and soup them up and race them. And it was a camping trips and that stuff. It wasn't the five-star vacations because we didn't do that stuff when we were younger. Yeah. And then we talk about, you know, what we have now. And you said it earlier, it seems like the more you accumulate, the more headaches you get. You know, now I'm on everybody's radar. It's like, I've got five lawsuits. I mean,

five lawyers. And I'm like, yeah. And then I got a set of precedents that if you come after me, I'm going to, I'm sorry, but there's, I mean, the case I'm in right now. And I'm like, you brought this on yourself. Right. Cause if you don't think I'm on like a speed dial with my lawyers. It's not fun, but you know what? I understand. You know, lawyers have this philosophy of just, you don't sue somebody that doesn't have money.

It's not even worth it. You go after insurance money if you could. There's more plaintiff's attorney in Southern California than the rest of the country combined. So it's really, I love California. It's a beautiful state. It's just really tough to do business there. I mean. Regulated like crazy.

Yeah. I think the two toughest states to do business are California and where I'm at in Washington State. Yeah. We're actually in Vancouver now, Portland area. Oh, yeah. Okay. We're looking to get up in that area, but it's tough. Chicago's, Illinois is pretty tough.

New York's pretty tough. Places I love to do business, and I'm going to go into these States here soon as Florida, Texas, the Dakotas are really good. You know, there's some really, really good States that are advantageous business owners. Real quick. Last question. What are your thoughts on unions anyway? They're a four letter word. Yeah. Now unions can be a good thing. What happened with us was in 08, when the economy crashed, they hadn't settled the contract expired in May. They hadn't settled it. So it was the 1st of August. And by then they wouldn't settle the contract. And the business administrator kept telling me, once we settle it, you have to retro pay

back to June 1st. And I just said, I can't run my business that way. So we dropped out. It was a year later is when I got the pension liability notice. That was probably the best thing that ever happened to me in business was getting that $544,000 pension liability notice because it made me sit down, look at myself as a business owner and look at the company and learn how to run a company correctly. And I did. And it's funny because up until about a year before I sold out, I always said,

I can't wait for the union to come in here and say something to me. And that day happened about six months before I sold out. The original organizer who organized us and got us into the union came in and I hadn't seen him in years. And he came in to apologize to me because they were going to start a residential program and apprentice training program for service and all that. And they never ended up doing it. The local union up here is basically pipe fitters because of the refineries. So he came in to apologize about that. And I said, well, what about the pension liability?

He's like, what do you mean? He'd never heard about it. He actually had retired and went on to do something else. And he never heard about what happened with the pension liability. And I said, well, Gary, I said, I've been waiting for somebody from the union to walk in here for the last, what, 10, 12, eight years, whatever it was. And I go, first of all, I want you to go back and I want to tell all of them, thank you for what they did. And he's like, what? And I said, first of all, I want you to go back and I want to tell all of them, thank you for what they did. And he's like, what?

And I said, yeah, you guys made me look at myself as a business owner, as a person, as a leader. And you made me learn how to run a company correctly. And I said, then you can tell them don't ever step foot in this building again. That's great. Well, Kelly, this is good stuff, man. I'll tell you what, we don't talk enough about finances. And when we do, it's usually CPAs and accounting firms coming on. It's not teaching personal finance. So I'm going to talk to Bree here in a minute and figure out what we could plan to get you out here. And I'd imagine that I've got some good buddies in a lot of different businesses here that would probably love to get them involved.

Yeah. And when I come out and do a class like that for you, if I was to come out and do it for you guys, one thing I require or I recommend is you do it after hours or on weekends. So whoever, any employee can bring their spouse. Yep. I agree with that. Okay. And then I give anybody at the class a free half an hour consultation. Oh, cool. On their personal stuff. Wow. See, I have a little over 250 employees and yeah, I think Sean at poor energy, my buddy Austin and Moxie. I mean, I could probably keep you busy, but I'll reach out and I can't tell you enough how much it means to come on. And I learned a lot. I got a lot of good notes. I really appreciate it. No, thank you for having me. I appreciate it. Yeah. So I'll be reaching out here today for you. Okay.

All right. Well, that's good. Thanks. And thanks everybody for listening. Appreciate it. Thanks everyone. Hey guys, I just wanted to thank you real quick for listening to the podcast. From the bottom of my heart, it means a lot to me.

And I hope you're getting as much as I am out of this podcast. Our goal is to enrich your lives and enrich your businesses and your internal customers, which is your staff. And if you get a chance, please, please, please subscribe. You're going to find out all the new podcasts. You're going to be able to ask me questions to ask the next guest coming on. And do me a quick favor, Leave a quick review. It really helps us out when you like the podcast and you leave a review. Make it four or five sentences. Tell us how we're doing. And I just wanted to mention real quick, we started a membership.

It's homeservicemillionaire.com forward slash club. You get a ton of inside look at what we're going to do to become a billion-dollar company. And we're telling everybody our secrets, basically. And people say, why do you give your secrets away all the time? And I'm like, you know, the hardest part about giving away my secrets is actually trying to get people to do them. So we also create a lot of accountability within this program. So check it out. It's homeservicemillionaire.com forward slash club. It's cheap. It's a monthly payment. I'm not making any money on it to be completely frank with you guys, but I think it will enrich your life season further. So thank you once again

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