August 25, 2025 • 30 mins
In this episode, Mike Michalowicz opens up about his entrepreneurial highs, devastating lows, and the creation of the Profit First system that has transformed over a million businesses worldwide. From launching his first company in 1996 and joining EO Forum — where he discovered the unmatched value of honest peer connection — to losing everything in 2008, Mike shares the raw lessons that reshaped his outlook on business and life.
Determined to end “entrepreneurial poverty,” Mike reveals how he flipped the script on traditional accounting by putting profit first instead of last, using behavioral psychology to help owners build sustainable, thriving companies. He also discusses his work on The Money Habit, his upcoming TV show The Four Minute Moneymaker, and the personal philosophies that guide him today.
This is a powerful conversation about resilience, reinvention, and the systems that can help entrepreneurs around the world achieve lasting financial health.
Please visit www.internationalfacilitatorsorganization.com to learn more about Mo Fathelbab and International Facilitators Organization (IFO), a leading provider of facilitators and related group facilitation services, providing training, certification, marketing services, education, and community for peer group facilitators at all stages of their career.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:10):
Welcome to the Heart of Business podcast sponsored by
International FacilitatorsOrganization, the marketplace
for facilitators.
I'm your host, mo Fatalbab,president and founder of
International FacilitatorsOrganization, and today our
guest is someone that I met overtwo decades ago, Mike
Michalowicz.
He's a longtime entrepreneur,member of the Entrepreneurs
(00:32):
Organization and best known forhis book Profit First and nine
other business books.
Mike, welcome to the show.
Speaker 2 (00:40):
Mo, we haven't changed at all.
We look identical to 20 yearsago.
Speaker 1 (00:44):
I think you look younger.
Thank you, sir, you're welcome.
You're welcome.
Well, great to have you with us.
So, mike, we met.
When Was it literally 20 yearsago.
Speaker 2 (00:55):
Yeah, yeah.
So you know you've worked withthousands, tens of thousands of
individuals, so for me it's avery memorable moment for you.
I'm sure it was your jobfunction effectively.
But we sat down and we werekicking off a forum and they
said we're bringing this guy, moFatlo Bob, in.
He's going to teach you how torun a forum.
(01:16):
That's effective.
And I'm like when we just talkand you came in and it was one
of the most transformativemeetings.
It went so deep, so smoothlynot quickly, not rushed, but
smoothly.
I was like, wow, and that forumI stuck with for about 10 years
before I rotated to anotherforum.
And those people are still someof my best friends in my life.
(01:38):
I just saw them a couple ofweeks ago.
Speaker 1 (01:40):
Well, that is amazing , and we're going to get back to
that, but I want to start withyou.
Speaker 2 (02:02):
Well, that is amazing and we're going to get back to
that.
But I want to start with you.
And I didn't grow up poor.
I was a very middle income, soI was expected to get one job
for my entire career, type thing.
Thing is, I couldn't get thejob.
After college I worked at acomputer store and one night
went out for a couple of drinkswith another guy who worked
there and Liquid Courage didhelp and I'm like I'm going to
(02:24):
start my own business.
So my first company was incomputer systems.
I started a business competingwith the store I was working
with and I'll tell you, don'tleave a.
Well, I did, don't leave adrunken message for the boss
saying I'm going to start my ownbusiness and kick your butt
like I did, you did that itdidn't go well, no business and
(02:47):
kick your butt like I did.
That didn't go well, no.
What happened?
Well, he sued me and the reasonhe sued me was I didn't know
you couldn't do this.
This is such ignorance.
I reached out to his customersthat I was serving and say hey,
I started my own little computerstore.
I can do your computer systems.
I didn't know that wasintellectual property theft.
So he sued me.
I went to court my second day.
There was immediate hearingfrom the judge and we settled
(03:10):
for a thousand dollars.
That's all I had.
I gave him a thousand dollarcheck and he said don't call a
single one of my customers again.
But two of them did decide tocome work with me on their own
accord and that became the startof my business.
So I do regret I didn't knowthe rules, but it did get me
started.
Speaker 1 (03:25):
Yeah, yeah.
So you started that business,and how soon thereafter did you
join YEO EO EntrepreneursOrganization.
Speaker 2 (03:34):
I joined.
So I started my first businessin 96.
I joined EO by 98, 99.
We just eked out a milliondollars in revenue.
Yeah.
Speaker 1 (03:44):
And.
Speaker 2 (03:44):
I remember, I remember like you had to qualify
for a million and the way to doit was to get your accountant
to certify this.
So I'm going to my accountantand the day we hit it was like
on December 22 or whatever, soit wasn't even year end and I'm
rushing his office.
He's like dude, I'm closingdown for the end of the you know
, the winter holidays and soforth.
I'm like Jess, you got to dothis one document.
(04:05):
He's like, wait, I'm like I gotto get this document.
He's like, okay, fine, and Iwent racing back this was still
fax time, fax that over in andhe said congratulations, you're
in.
And I joined the New Jerseychapter.
Speaker 1 (04:25):
I was, I think, the third year of the chapter in
existence is when I joinedAmazing, amazing.
Speaker 2 (04:27):
And why was it so important for you to join?
I'm sure you hear this fromeverybody.
I know you know this too.
Mo is entrepreneurship isembarrassing to say, but it is
lonely Like none of your friendswho aren't entrepreneurs get it
.
All your employees think you'rea millionaire when you're
actually spending millions ifyou got it and it's very
stressful and even your spousedoesn't really get it.
And so we joined it.
(04:48):
and because I wanted people thatgot what I got, yeah, I
remember my wife saying oh,you're joining some secret club
like some, some secret society Iheard those words right, right,
and I'm like, no, I'm justgonna go in there, but you, you
can speak from your heartbecause there's other people
that are going through the sameexperience as you.
It was powerful.
Speaker 1 (05:07):
Yeah, absolutely.
And reflecting back on it, whatwould you say was the effect of
Forum on your life?
It?
Speaker 2 (05:16):
was cathartic because I could speak about things I
wouldn't speak about otherwisejust because other people
wouldn't get it.
It was guidance.
I got direction, got direction,you know, no advice, just
experiences.
Sometimes, uh, directiveexperiences which were almost
got, you know, was almosttelling you what to do, but so
(05:39):
helpful because now I wassurrounded by eight, seven or
eight other people that had, insome cases, gone through the
exact same circumstances I was.
I was also very fortunate I wasthe youngest guy in my forum,
by five or six years.
Now this is.
I joined when I was YEO, so youhad to be 40 years or younger
and I was in my 20s and theseguys were old guys in their 30s
(06:01):
giving me direction and it waspowerful.
It was also inspirational.
Like I launched anotherbusiness out of there that
became a multimillion dollarbusiness within a year or two
because of my forum.
Um, and it's been a savior forme that there was a time when I
was like, okay, it's, this isnot going the way I planned, I
don't know the way out, and thegroup once they saved me.
(06:23):
This is not like a suicidalthing, but I was like I'm done
with entrepreneurship, I'm justdone financially, I'm over, and
my forum stepped up and said no,no, no, no, you're just getting
started.
And it became transformativefor me.
Speaker 1 (06:36):
Isn't that something?
Speaker 2 (06:37):
Yeah and listen.
The funniest thing, mo, is, thepeople in forum aren't your
friends, they're somethingbetter they're better, they're
better and I finally figured itout, at least for me.
Yeah, my friends, there's socialconsequence.
So my buddy, who I grew up with, we're in the same social
(06:57):
circle, so if I tell or revealor something like that, even
though he's my buddy, there'salso social consequence, like,
oh, maybe there's a piece ofinformation that I I shouldn't
or I should hold back because heknows the same people I know
and I can't reveal that.
But my forum they're not, wedon't.
No one knows anyone'scommunities, and so there's this
unabashed honesty and caringand there's no competition or
(07:22):
jealousy.
I mean, I'm sure it's friendlycompetition.
I, you know, I want to be thebest in my forum, inspiration,
inspiration.
But my buddies it's funny Likemy friends, I, there's a,
there's an inherent competitionbecause we grew up together.
But but these guys and gals, nocompetition like that, they're
better than friends.
It was the most ironic thing.
Speaker 1 (07:41):
It is.
It is Absolutely so back toyour business.
So you started this businessand you ran it for 18 years.
Is that right?
Speaker 2 (07:49):
No, no, my first business it was computer
networks.
I ran it for probably seven oreight years before I launched
another business, so I was whenI was.
I started when I was 26.
I sold it when I was 32, aroundthere, so it's actually only
six years.
It was a private equity deal.
There was a couple other ownersin the business by that point
(08:11):
and they wanted to take it in adirection.
I wanted to take it in adifferent direction.
So we said, you know, as bestas it apart ways.
It was very friendly, but Iwanted to move on to bigger and
better things faster.
And it worked out great.
They got the funding and Imoved on.
Speaker 1 (08:24):
Yeah, and then you pivoted.
So not a lot of entrepreneursthat I know pivot completely and
change the entire direction andgo into a completely different
business but you pivoted.
Speaker 2 (08:36):
So what was?
Speaker 1 (08:36):
the inspiration for that.
Speaker 2 (08:38):
Well, there was, yeah , so there was a bridge business
.
First I went from computernetworks to computer crime
investigation and that came outof form actually.
So I said I'm ready to move on.
And, um, I meet another forummate and we're like oh, there's
this, there's these situationsgoing down.
There's this horrible murdercase called btk which was buying
torture kill.
It was a serial killer and Isaid they caught him with a
(09:00):
floppy disk, like computerevidence is becoming relevant.
So we started this business andwithin six months Enron, the
Enron trial had broken.
And we got the phone call andthey said oh, we discovered.
You know, they found us in thephone book.
Basically, we're now workingthe Enron trial, not the
prosecution.
That's the FBI.
We're doing the defense side.
(09:21):
So Kenneth Lay, andrew Fassett,our clients, fbi, we're doing
the defense side.
So Kenneth Lay, andrew Fastow,our clients.
And we were successful.
We found what we needed to find.
They were guilty.
They were guilty, but we foundwhat we needed to find and it
puts on the map in such anotherlevel that celebrities Christie
Brinkley hires us.
Michael Jackson, he was accusedof heinous crimes and we were
(09:41):
called in to investigate that.
So we just started getting allthese opportunities coming our
way, sold that business to aFortune 500 and thought I was
God's gift to entrepreneurship.
And this becomes the greatlearning I have more money than
I'm ready to have.
I'm in my early 30s and I don't.
I think I'm a genius.
(10:03):
I think I got the Midas touch.
I actually believe that,calling myself that and I lost
it all, just blowing money.
I became an angel investor.
I didn't really know what thatmeans Blowing money and the
turning moment for me happenedjust a few years later.
It was in 2008.
I get a call from my accountant.
He's like Mike, you got todeclare bankruptcy.
(10:24):
I'm like and you know, mo, Isaw my accounts dwindling so
fast.
I understood logically I waslosing money, but emotionally I
couldn't accept it.
I'm like I'm just one bigclient away.
I was rah-rah-ing myself and Iwas.
I was not telling my familyeither.
And I get that call.
Uh, I didn't declare bankruptcy, but he said the only other
thing you can do is there's acouple of remaining assets your
(10:46):
cars.
You get rid of the house andyou can pay your tax bill, but
you're done.
And so I came home to my familyand told them we're losing
their house, we're losingeverything.
And my wife and kids wereshocked because they had no clue
it was coming.
I'm sobbing.
I'll never forget this.
My daughter.
She runs her room, she goesDaddy, daddy, I'll help us.
And she grabs her piggy bankand gives me her piggy bank.
(11:08):
She's like I'll pay our bills.
And I'm like, oh, if I thinkabout it too long, I actually
start sobbing again.
It was I'm so ashamed of you.
Know, you and I, folkslistening, we all label
ourselves as providers Likeyou're.
You're a provider for yourself,your family, your community,
our globe, and I'm like the onerule to provide I can't fulfill.
(11:32):
I'm actually doing the reverse.
I'm like a scumbag.
That that moment became theturning point and it wasn't like
.
The next morning I woke up andsaid, okay, next morning I
started drinking more than Ishould drink.
I went through a depression fora few years.
Speaker 1 (11:46):
Understandable.
Speaker 2 (11:48):
But yeah, but it became a restart and there's a
really interesting question.
There's actually two questionsthat we should ask ourselves.
I think One is we've all heardthis if you had all the money in
the world, what would you do?
And it gives you it's a greatquestion because it considers
there's no financial obligation.
But I found there's a secondquestion that's even better, and
it's the complimentary questionIf you had no money in this
(12:11):
world, what would you do?
And so the all the money in theworld means you have no
financial concern.
No money means that you have amechanism of making money, so
it's not just like the freedomto do anything.
That's wild what do you want todo?
And also generates a source ofproviding.
And so I asked myself thatquestion.
(12:31):
I said I don't have any money,I've got nothing left.
What do I want to do to createmoney?
And what do I want to do if Ihad all the money?
And both of them is in stereo Iwant to be an author, I want to
be an author, I want to be anauthor.
And I remember telling one ofmy wife, mo I'm like I want to
be an author.
I got to do this in thebusiness space.
And she goes are you effingcrazy?
Like authors don't make anymoney.
(12:52):
I'm like I have to, we will, Iwill, and that's how I started.
All right, all right, all right.
Speaker 1 (12:59):
What All right, all right.
What a great story.
Thank you for sharing that andyour openness and vulnerability.
That's just wonderful, andyou've gotten through it, which
is really what makes itwonderful.
Speaker 2 (13:15):
So let's talk about your books.
The first one was Profit First.
Well, my first yeah, I'vewritten nine Profit First was
like three or four.
The very first book I wrote wascalled the Toilet Paper
Entrepreneur.
Speaker 1 (13:23):
Yes, I remember that.
You remember that remember thatI do.
Speaker 2 (13:26):
It was this irreverent kind of spit in the
face of what I was reading,which was that was the rise of
mark zuckerberg and sergey brin,all the those people of the
dot-com era.
They were.
They were.
We had the dot-com bubble of2000,.
But by now, 2008, 2009,.
They started going again andentrepreneurs were trying to
(13:48):
emulate that.
But the entrepreneurs I knowthe EO folks and stuff weren't
like that.
It was you were in for thefight.
So the whole concept was howcan scarcity be your ally?
And that's why I wrote thatbook and back, believe it or not
, that was considered acontroversial title in 2008.
Now, it's like the subtle artof not giving an f is not.
That's not even likecontroversial um, so I it was
(14:13):
hard to get promotion, like likeradio shows and stuff wouldn't
let me on.
There was a tv show, uh, thisshow called the big idea at die
deutsch and he said I, you'recoming on the show, but you're
not mentioning the title of thebook.
Speaker 1 (14:23):
It's too edgy, wow yeah, isn't that funny, wow,
that's funny.
So then profit first comes out,yeah, and that book takes off a
big book takes off.
Speaker 2 (14:34):
Yeah, so it was funny to me, mo, it was so obvious.
So what profit?
First is the traditional month.
The traditional method togenerate profit is you have your
revenue, like you do for yourcompany.
You subtract the expenses youincur and what's left over is
profit.
Makes logical sense.
But I did this study and it'sover 80s.
About 83% to 84% of businessesare not profitable.
(14:57):
They're living.
Check by check Out of the 350million businesses globally,
almost no one's making it.
So I'm like hold on.
We all went into business to beprofitable.
That's why I did it and otherthings.
But I want financial freedom andyet no one's doing it.
What's wrong?
And I remember just beating myhead again what's wrong?
And I looked at the formula.
I said, oh my God, it's staringme right in the face.
(15:17):
Profit comes last.
We call it the bottom line, theyear end, and it's human nature
.
When something comes last, itmeans it's insignificant.
Like Mo, you would never say Ilove my family so much.
That's why I always put themlast.
Or my health.
I'm focused on my health andit's the last thing I'll ever do
.
No, I focus on my health, it'sthe first thing I'll ever do.
(15:38):
I love my family.
I put them first.
I said if I put profit first, ithas to happen.
So what I started doing is it'sthe pay yourself first
principle.
It's nothing new.
I just said I'm going to put itinto business, not just my
personal finances.
So when I have a sale, when hecomes in, I take a percentage
profit 10, 15%, wherever mybottom line to be I take it
first, hide it, and then I seewhat's left over and say now I
(16:01):
have to figure out how to makethis work to achieve that profit
.
And if I can't, that meansthere's something flawed in my
business.
I got to cut costs, increasemargins, change prices, but by
taking your profit first itreveals what you need to do
within your business to sustainthat profit.
Speaker 1 (16:16):
I think that's brilliant.
And how did that book changeyour life?
Speaker 2 (16:20):
It's sold over a million copies and it's like
thank you, man, it it's soldover a million copies.
And it's like thank you, man,it's.
It's in 30 languages, dude, Iwould.
I don't know if this is thechanging moment, but it was
funny.
I was in touring through mexico.
Uh, I started monterey, mexicocity and I moved on to the
central american countries.
I'm in, I land in monterey,mexico, and I'm waiting for a
(16:43):
chauffeur or something to pickme up and a bus drives by and
like holy crap, that's my faceon the bus and it says la
ganancia primero, the the gainsare first, or profit first.
It says it right there.
Oh, my god, what a moment whata moment what a moment that was.
It adios me, ad it, adios mio,adios mio.
(17:05):
That was the moment I was like,wow, this is something that's
now beyond me.
There was, there's these videosI'm seeing online of people
teaching profit first their ownversion of it and not
necessarily the way I would doit and maybe a little bit off
the core concept of the system,but people had embraced it.
I started seeing it in thevernacular like, oh, are you
(17:26):
taking your profit first?
Are you a profit firster?
Are you profit first driven?
Are you a profit firstorganization?
And these were terms I didn'tbring about, they just happened
and I was like, okay, this issomething beyond me now.
Speaker 1 (17:38):
I love it.
So, beyond the book itself andbeyond your work as an author
and writing many books, uh, whatother work do you do?
I'm sure there's some speakingand consulting.
Speaker 2 (17:49):
Tell us more, yeah yeah, so I I'm generally don't
do any consulting myself.
I do have.
I do a lot of speaking, publicspeaking, and I have licensees
that teach the methodologies ofprofit first, but by also also
my other books, and this is ashocker for me.
I have a television show now.
We finished recording the show.
(18:10):
It's called the Four MinuteMoneymaker.
We just finished recording itabout two months ago the first
season and broadcast thisSeptember.
Speaker 1 (18:18):
Wow, when will it?
Where will it air?
Speaker 2 (18:20):
It's on a streaming network, so it's called Watch
Free Plus, which is owned byVizio.
So if you happen to have aVizio physical television, it
will come right on yourtelevision.
You're going to see this mug.
Speaker 1 (18:32):
Lovely.
Speaker 2 (18:33):
And if you don't have Vizio, you can just use Watch
Free, the app and then, sixmonths after it's on Vizio, it
goes to all streaming channels.
So it should be on Prime andNetflix time of my life, because
the producers of the show werethe producers of Rachel Ray.
(18:55):
So just the quick backstory,because it's a fascinating
business story.
Walmart has purchased Vizio,the TV manufacturer, and what
Walmart realized?
They're competing againstAmazon.
Amazon's kicking their butt.
So Walmart says one wayAmazon's beating us is with the
Alexa devices.
They're in every room.
There's one right here it'slistening to me right now,
probably and they can controlthe interface with the customer.
(19:18):
We, walmart, don't have adevice in everyone's house.
So they bought Vizio.
They said well, vizio's in 25or 30 million homes and we're
going to update the firmware.
So what they did is if you havea Vizio TV, your firmware has
been updated, in that it nowwill broadcast and put out
content that Walmart wants.
What they realized is Netflixgets a monthly subscription, and
(19:42):
so does Amazon Prime and so doall these other channels.
But when you buy a television,you buy it once and you don't
pay ongoing for a subscriptionfor the TV.
So what they're doing isthey're like we're gonna beat
Netflix at its own game, we'regonna send out our own content,
but we're going to make it freeto the user but run ads.
It's old TV commercials.
So my 30 minute TV show has 22minutes of content, eight
(20:04):
minutes of commercials, andthat's how it's generating
income.
And and busy is not the onlyone doing this Samsung, sony,
all the TV manufacturers aredoing it.
So it was a blast doing this.
They hired the crew from RachelRay, who produces Rachel Ray,
so they were the productionhouse there and it was just a
blast.
It was hard.
We got a full season done inone week.
Speaker 1 (20:26):
A lot of recording.
Wow, wow, amazing.
Well, I can't wait to see it.
I'm sure it's going to beabsolutely fabulous.
Thanks, yeah, Thank you.
So you've written other books.
Tell us about one or two ofthem that are really meaningful
and special to you.
Speaker 2 (20:39):
Yeah, sure, sure.
So I'll give you two.
My most recent one, which is incirculation, it's called All In
, and what I do, mo, is I try tofind a singular catalyst that
fixes the core issue.
So, profit first.
Businesses start withprofitability.
What's the one catalyst?
Well, if you take your profitfirst, it forces you to
(21:00):
investigate the rest of yourbusiness, and I do this in every
one of my books.
In All In, I said why arebusinesses struggling to achieve
their vision?
How come the employees aren'tacting like owners in particular
?
And I said oh, it's because weset a corporate vision.
But a corporate vision is areflection of what I want.
I want my business to achievethis as an entrepreneur.
(21:21):
Maybe there's a leadership team, but it means something to my
ego, it means something to mywallet.
But my colleagues, why do theycare?
And I realized businesses,erroneously, are saying a
corporate vision when theyshould be setting a collective
vision.
A collective vision, acollective vision is
understanding what does everyonewant to get out of this?
It's dude, it's just like forum, like what does everyone trying
to get out of this?
And by coming together, howdoes everyone get elevated?
(21:43):
So it's a new form ofleadership thinking Um that's
the book.
Speaker 1 (21:48):
I love that by the way, that's right Right up my
alley.
Keep going, yeah, you do yeah.
Speaker 2 (21:51):
I know.
Shamefully I didn't interviewyou for that one, so I got to
interview you for the follow-up,but that's what it is.
The book I'm also proud aboutis coming out in January of 2026
.
It's called the Money Habit.
This was interesting.
I deliver profit first.
There's tons of businessesdoing it.
I'm getting great feedback.
I'm very happy and honored andflattered all at once.
(22:19):
And then I get a call from anentrepreneur.
He says uh, probably firsttransform my business, but I
have a bigger financial problemthan ever.
I'm, like you know, worrying todo what to do with all your
money.
He goes no, no, no.
He goes.
My employees, um, they strugglefinancially.
And he goes you got to realizethat if my team is struggling
independently, it's not theirproblem alone, it's mine, cause
that worry lives with them.
He goes a lot of them arecoming to me saying you got to
(22:39):
give me a raise, I can't affordto live this way.
And he says I'm paying thembetter than anyone else in our
industry and I've given themraises and they come back almost
like a week later saying it'sstill not enough.
And the realization was oh, weas individuals in our personal
finances, have the same problemas businesses that we want to
achieve financial independence,but the pathway to get there
(23:01):
isn't more money.
Businesses make more and moreand more and they still go under
.
The challenge actually isfinancial control.
We need to assert control,irrespective of how much income
is flowing into us personally orin our business, and then, once
we have control, then we candictate financial independence.
(23:21):
So the money habit uses basiccore principles, very similar to
profit, first modified orenhanced I should say for the
individual, for personalfinances, so that we can have
financial clarity brings aboutfinancial control and then
assert financial independence.
Speaker 1 (23:33):
Financial clarity brings about financial control
and then assert financialindependence.
Speaker 2 (23:40):
You know I heard an Indian guru once say you are
rich if you spend less than youmake.
That's it.
Yeah, that's the essence of it.
Yeah, that's the essence of it.
And so you know what?
It's funny, that's the essenceof the book.
But it's the how do you makethat happen?
And the reason it's called themoney habit is, I realize it is
very difficult for humans tochange habits.
So if you spend less than youmake, you will be rich.
(24:00):
That is absolutely the truth.
But do you have the disciplineto stick with it?
And the reality for most of usis we don't.
And there's a thing called theoptimized foraging theory and
other reasons why we go intoconsumption mode.
But instead of trying to changeour habits or use discipline,
we can channel existing habits.
So what we do is, I noticedmost people don't run budgets,
(24:23):
most people don't balance theirspreadsheets or checkbooks with
spreadsheets, and most peopledon't live a life of deprivation
long enough to be successful.
But what everyone does is welog into our bank account and
see how much money we have andthen decide how to spend it.
So I say, okay, if that's whatwe do, how do we keep logging
into our bank account but becomewealthy as a result, and that's
(24:46):
where I used a lot ofbehavioral principles.
But one of them is optimalforaging theory and how we
consume things can be controlledif you put things in containers
effectively.
So at the bank level, we set upcontainers accounts.
Where money comes in, we carveit up to different accounts so
we know it's intended use beforewe spend it.
(25:06):
One is for my basic needs, so wehave, I have a needs account.
One is for my wants and desires.
You know I have to go out todinner or whatever.
Maybe one's my big dream.
One is for my wants and desires, you know, to go out to dinner
or whatever.
Maybe one's my big dream.
One day I want to buy my firsthouse or maybe a second house.
You carve it up.
So what happens now is when yougo in, you have this momentary
awareness saying, oh, before Ispend, I have this much
(25:26):
available for groceries orwhatever.
We also use a dedicated debitcard, so I go grocery shopping.
I and this is true in my life Ihave a groceries card and I
never overspend because I canmax out that card.
There's other techniques,because I have a propensity to
steal from one account and say,well, maybe this one time I'll
borrow.
It's a waste to address it, butI'll share one technique right
(25:51):
now your listeners can do,irrespective of this system.
That was transformative.
Subscriptions are a techniquethat vendors use to extract the
most money from you, becauseit's the small Chinese water
torture.
It's a small drip every monththat are taken from you and in
each trip is innocuous, but inthe collective it's a watershed
and it drowns you.
So what you do is get a newcredit card, an additional one,
(26:12):
which I know already soundscrazy, but get an additional
credit card.
Then, everywhere you have asubscription, move it
exclusively to this card, so itbecomes your subscription credit
card.
I had one for my gym membership.
I have a rowing machine, I hadone on that, I have Netflix and
all these different things.
I thought I was spending acouple hundred a month.
Once I had it all on one cardand I got that statement for
$500, I almost threw up in mymouth.
(26:35):
I was like my gosh.
And what happens is claritybrings about the ability to
bring control.
I started cutting stuff andthen every month I get the
subscription card and say, wow,I'm now paying about 300 a month
.
Is this what I want to sustain?
And I am in control and canmake decisions around that.
Speaker 1 (26:51):
I love that.
That is great, thank you, thankyou for that yeah.
So, Mike, what is next for you?
You know, in terms of 10 yearsfrom now.
You've really made a bigdifference.
You've done a lot of incrediblework.
You've helped a lot of people,and just the people that have
heard what you've said in thelast five minutes are going to
(27:12):
be helped.
But you look ahead 10 years andwhat's next?
What's exciting?
You.
Speaker 2 (27:25):
This path has been so joyous, mo.
More books, maybe moretelevision.
What's interesting about TV isit's a whole different community
that consumes it.
There's people who read booksand there's people who watch TV
and there's people who do both.
But there's definitely thesedistinct groups and I really
want to eradicateentrepreneurial poverty, this
perception of success or desire,and the real struggle that no
(27:45):
one knows is going on and, likeI shared, there's 350 million
small business owners in ourglobe.
That's under $25 million in USrevenue, and I want to eradicate
that Through my work.
My best estimate is I'vetouched between one and a half
to 2 million people, which meansI haven't even got the first
drip out.
There's 350 million people, soI got to get more books out, I
(28:08):
got to get more television outor speak more or I got to do
something in a better, biggerway, but this community is where
my heart is.
I want to serve them for therest of my life.
Speaker 1 (28:19):
I love it.
I love it.
Last question, Mike.
Speaker 2 (28:27):
One person who has inspired you and how.
You know one phrase that comesto mind and it's served me so
deeply, and of course I nevermet this person it's oscar wilde
.
I mean, he goes back centuriesbut he has a phrase uh, at least
it's attributed to him thatsays be yourself.
Everyone else is already takenand I was like, oh, that's the
(28:48):
solution.
I will tell you how to at leastI believe, to be successful in
the authorship game or theentrepreneurship game or any
element of life.
Don't try to do what everyoneelse is doing and don't, surely
don't try to be better at whateveryone else is doing, just be
the best expression of yourself.
When I write my books, it isabsolutely my voice, and the
(29:09):
greatest compliment I ever gotwas I got an old college buddy
who reached out to me 30 yearsafter college I mean, this is
only a few, a few years ago andhe says I had to call you
because you wouldn't believethis.
I'm reading this book and I wasloving it and I'm like this
reminds me of that kid fromcollege, michalowicz, that
goofball, a little bit of ana-hole, and it sounds just like
(29:32):
him.
And he goes.
I wonder who wrote this?
And he goes holy cannoli andhe's like it's the same dude and
that was the greatestcompliment ever got.
Like you, me, everyonelistening in.
If we really lean into who wenaturally are, unabated,
unabashedly don't care about howother people feel about us.
It's the greatest irony andpeople feel the most about that.
(29:55):
They, the right people, engageand say, finally, someone's
stepping up in the way that Iwant to step up, they're
representing me in the way Iwant to be represented.
There you cannot be beingyourself all out, and that's
been the greatest advice andtherefore the greatest influence
in my life I think that iswonderful and poetic and
(30:17):
inspirational.
Speaker 1 (30:18):
Mike Michalowicz, thank you so much for joining us
on the show today.
Thank you to our audience and,as a reminder, podcast reviews
have a real impact on apodcast's visibility.
So if you enjoyed today'sepisode, please leave a review
to help others find the show.
Thank you all and have awonderful day.
Welcome to the Heart of Business podcast sponsored by
International FacilitatorsOrganization, the marketplace
for facilitators.
I'm your host, mo Fatalbab,president and founder of
International FacilitatorsOrganization, and today our
guest is someone that I met overtwo decades ago, Mike
Michalowicz.
He's a longtime entrepreneur,member of the Entrepreneurs
(00:32):
Organization and best known forhis book Profit First and nine
other business books.
Mike, welcome to the show.
Speaker 2 (00:40):
Mo, we haven't changed at all.
We look identical to 20 yearsago.
Speaker 1 (00:44):
I think you look younger.
Thank you, sir, you're welcome.
You're welcome.
Well, great to have you with us.
So, mike, we met.
When Was it literally 20 yearsago.
Speaker 2 (00:55):
Yeah, yeah.
So you know you've worked withthousands, tens of thousands of
individuals, so for me it's avery memorable moment for you.
I'm sure it was your jobfunction effectively.
But we sat down and we werekicking off a forum and they
said we're bringing this guy, moFatlo Bob, in.
He's going to teach you how torun a forum.
(01:16):
That's effective.
And I'm like when we just talkand you came in and it was one
of the most transformativemeetings.
It went so deep, so smoothlynot quickly, not rushed, but
smoothly.
I was like, wow, and that forumI stuck with for about 10 years
before I rotated to anotherforum.
And those people are still someof my best friends in my life.
(01:38):
I just saw them a couple ofweeks ago.
Speaker 1 (01:40):
Well, that is amazing , and we're going to get back to
that, but I want to start withyou.
Speaker 2 (02:02):
Well, that is amazing and we're going to get back to
that.
But I want to start with you.
And I didn't grow up poor.
I was a very middle income, soI was expected to get one job
for my entire career, type thing.
Thing is, I couldn't get thejob.
After college I worked at acomputer store and one night
went out for a couple of drinkswith another guy who worked
there and Liquid Courage didhelp and I'm like I'm going to
(02:24):
start my own business.
So my first company was incomputer systems.
I started a business competingwith the store I was working
with and I'll tell you, don'tleave a.
Well, I did, don't leave adrunken message for the boss
saying I'm going to start my ownbusiness and kick your butt
like I did, you did that itdidn't go well, no business and
(02:47):
kick your butt like I did.
That didn't go well, no.
What happened?
Well, he sued me and the reasonhe sued me was I didn't know
you couldn't do this.
This is such ignorance.
I reached out to his customersthat I was serving and say hey,
I started my own little computerstore.
I can do your computer systems.
I didn't know that wasintellectual property theft.
So he sued me.
I went to court my second day.
There was immediate hearingfrom the judge and we settled
(03:10):
for a thousand dollars.
That's all I had.
I gave him a thousand dollarcheck and he said don't call a
single one of my customers again.
But two of them did decide tocome work with me on their own
accord and that became the startof my business.
So I do regret I didn't knowthe rules, but it did get me
started.
Speaker 1 (03:25):
Yeah, yeah.
So you started that business,and how soon thereafter did you
join YEO EO EntrepreneursOrganization.
Speaker 2 (03:34):
I joined.
So I started my first businessin 96.
I joined EO by 98, 99.
We just eked out a milliondollars in revenue.
Yeah.
Speaker 1 (03:44):
And.
Speaker 2 (03:44):
I remember, I remember like you had to qualify
for a million and the way to doit was to get your accountant
to certify this.
So I'm going to my accountantand the day we hit it was like
on December 22 or whatever, soit wasn't even year end and I'm
rushing his office.
He's like dude, I'm closingdown for the end of the you know
, the winter holidays and soforth.
I'm like Jess, you got to dothis one document.
(04:05):
He's like, wait, I'm like I gotto get this document.
He's like, okay, fine, and Iwent racing back this was still
fax time, fax that over in andhe said congratulations, you're
in.
And I joined the New Jerseychapter.
Speaker 1 (04:25):
I was, I think, the third year of the chapter in
existence is when I joinedAmazing, amazing.
Speaker 2 (04:27):
And why was it so important for you to join?
I'm sure you hear this fromeverybody.
I know you know this too.
Mo is entrepreneurship isembarrassing to say, but it is
lonely Like none of your friendswho aren't entrepreneurs get it
.
All your employees think you'rea millionaire when you're
actually spending millions ifyou got it and it's very
stressful and even your spousedoesn't really get it.
And so we joined it.
(04:48):
and because I wanted people thatgot what I got, yeah, I
remember my wife saying oh,you're joining some secret club
like some, some secret society Iheard those words right, right,
and I'm like, no, I'm justgonna go in there, but you, you
can speak from your heartbecause there's other people
that are going through the sameexperience as you.
It was powerful.
Speaker 1 (05:07):
Yeah, absolutely.
And reflecting back on it, whatwould you say was the effect of
Forum on your life?
It?
Speaker 2 (05:16):
was cathartic because I could speak about things I
wouldn't speak about otherwisejust because other people
wouldn't get it.
It was guidance.
I got direction, got direction,you know, no advice, just
experiences.
Sometimes, uh, directiveexperiences which were almost
got, you know, was almosttelling you what to do, but so
(05:39):
helpful because now I wassurrounded by eight, seven or
eight other people that had, insome cases, gone through the
exact same circumstances I was.
I was also very fortunate I wasthe youngest guy in my forum,
by five or six years.
Now this is.
I joined when I was YEO, so youhad to be 40 years or younger
and I was in my 20s and theseguys were old guys in their 30s
(06:01):
giving me direction and it waspowerful.
It was also inspirational.
Like I launched anotherbusiness out of there that
became a multimillion dollarbusiness within a year or two
because of my forum.
Um, and it's been a savior forme that there was a time when I
was like, okay, it's, this isnot going the way I planned, I
don't know the way out, and thegroup once they saved me.
(06:23):
This is not like a suicidalthing, but I was like I'm done
with entrepreneurship, I'm justdone financially, I'm over, and
my forum stepped up and said no,no, no, no, you're just getting
started.
And it became transformativefor me.
Speaker 1 (06:36):
Isn't that something?
Speaker 2 (06:37):
Yeah and listen.
The funniest thing, mo, is, thepeople in forum aren't your
friends, they're somethingbetter they're better, they're
better and I finally figured itout, at least for me.
Yeah, my friends, there's socialconsequence.
So my buddy, who I grew up with, we're in the same social
(06:57):
circle, so if I tell or revealor something like that, even
though he's my buddy, there'salso social consequence, like,
oh, maybe there's a piece ofinformation that I I shouldn't
or I should hold back because heknows the same people I know
and I can't reveal that.
But my forum they're not, wedon't.
No one knows anyone'scommunities, and so there's this
unabashed honesty and caringand there's no competition or
(07:22):
jealousy.
I mean, I'm sure it's friendlycompetition.
I, you know, I want to be thebest in my forum, inspiration,
inspiration.
But my buddies it's funny Likemy friends, I, there's a,
there's an inherent competitionbecause we grew up together.
But but these guys and gals, nocompetition like that, they're
better than friends.
It was the most ironic thing.
Speaker 1 (07:41):
It is.
It is Absolutely so back toyour business.
So you started this businessand you ran it for 18 years.
Is that right?
Speaker 2 (07:49):
No, no, my first business it was computer
networks.
I ran it for probably seven oreight years before I launched
another business, so I was whenI was.
I started when I was 26.
I sold it when I was 32, aroundthere, so it's actually only
six years.
It was a private equity deal.
There was a couple other ownersin the business by that point
(08:11):
and they wanted to take it in adirection.
I wanted to take it in adifferent direction.
So we said, you know, as bestas it apart ways.
It was very friendly, but Iwanted to move on to bigger and
better things faster.
And it worked out great.
They got the funding and Imoved on.
Speaker 1 (08:24):
Yeah, and then you pivoted.
So not a lot of entrepreneursthat I know pivot completely and
change the entire direction andgo into a completely different
business but you pivoted.
Speaker 2 (08:36):
So what was?
Speaker 1 (08:36):
the inspiration for that.
Speaker 2 (08:38):
Well, there was, yeah , so there was a bridge business
.
First I went from computernetworks to computer crime
investigation and that came outof form actually.
So I said I'm ready to move on.
And, um, I meet another forummate and we're like oh, there's
this, there's these situationsgoing down.
There's this horrible murdercase called btk which was buying
torture kill.
It was a serial killer and Isaid they caught him with a
(09:00):
floppy disk, like computerevidence is becoming relevant.
So we started this business andwithin six months Enron, the
Enron trial had broken.
And we got the phone call andthey said oh, we discovered.
You know, they found us in thephone book.
Basically, we're now workingthe Enron trial, not the
prosecution.
That's the FBI.
We're doing the defense side.
(09:21):
So Kenneth Lay, andrew Fassett,our clients, fbi, we're doing
the defense side.
So Kenneth Lay, andrew Fastow,our clients.
And we were successful.
We found what we needed to find.
They were guilty.
They were guilty, but we foundwhat we needed to find and it
puts on the map in such anotherlevel that celebrities Christie
Brinkley hires us.
Michael Jackson, he was accusedof heinous crimes and we were
(09:41):
called in to investigate that.
So we just started getting allthese opportunities coming our
way, sold that business to aFortune 500 and thought I was
God's gift to entrepreneurship.
And this becomes the greatlearning I have more money than
I'm ready to have.
I'm in my early 30s and I don't.
I think I'm a genius.
(10:03):
I think I got the Midas touch.
I actually believe that,calling myself that and I lost
it all, just blowing money.
I became an angel investor.
I didn't really know what thatmeans Blowing money and the
turning moment for me happenedjust a few years later.
It was in 2008.
I get a call from my accountant.
He's like Mike, you got todeclare bankruptcy.
(10:24):
I'm like and you know, mo, Isaw my accounts dwindling so
fast.
I understood logically I waslosing money, but emotionally I
couldn't accept it.
I'm like I'm just one bigclient away.
I was rah-rah-ing myself and Iwas.
I was not telling my familyeither.
And I get that call.
Uh, I didn't declare bankruptcy, but he said the only other
thing you can do is there's acouple of remaining assets your
(10:46):
cars.
You get rid of the house andyou can pay your tax bill, but
you're done.
And so I came home to my familyand told them we're losing
their house, we're losingeverything.
And my wife and kids wereshocked because they had no clue
it was coming.
I'm sobbing.
I'll never forget this.
My daughter.
She runs her room, she goesDaddy, daddy, I'll help us.
And she grabs her piggy bankand gives me her piggy bank.
(11:08):
She's like I'll pay our bills.
And I'm like, oh, if I thinkabout it too long, I actually
start sobbing again.
It was I'm so ashamed of you.
Know, you and I, folkslistening, we all label
ourselves as providers Likeyou're.
You're a provider for yourself,your family, your community,
our globe, and I'm like the onerule to provide I can't fulfill.
(11:32):
I'm actually doing the reverse.
I'm like a scumbag.
That that moment became theturning point and it wasn't like
.
The next morning I woke up andsaid, okay, next morning I
started drinking more than Ishould drink.
I went through a depression fora few years.
Speaker 1 (11:46):
Understandable.
Speaker 2 (11:48):
But yeah, but it became a restart and there's a
really interesting question.
There's actually two questionsthat we should ask ourselves.
I think One is we've all heardthis if you had all the money in
the world, what would you do?
And it gives you it's a greatquestion because it considers
there's no financial obligation.
But I found there's a secondquestion that's even better, and
it's the complimentary questionIf you had no money in this
(12:11):
world, what would you do?
And so the all the money in theworld means you have no
financial concern.
No money means that you have amechanism of making money, so
it's not just like the freedomto do anything.
That's wild what do you want todo?
And also generates a source ofproviding.
And so I asked myself thatquestion.
(12:31):
I said I don't have any money,I've got nothing left.
What do I want to do to createmoney?
And what do I want to do if Ihad all the money?
And both of them is in stereo Iwant to be an author, I want to
be an author, I want to be anauthor.
And I remember telling one ofmy wife, mo I'm like I want to
be an author.
I got to do this in thebusiness space.
And she goes are you effingcrazy?
Like authors don't make anymoney.
(12:52):
I'm like I have to, we will, Iwill, and that's how I started.
All right, all right, all right.
Speaker 1 (12:59):
What All right, all right.
What a great story.
Thank you for sharing that andyour openness and vulnerability.
That's just wonderful, andyou've gotten through it, which
is really what makes itwonderful.
Speaker 2 (13:15):
So let's talk about your books.
The first one was Profit First.
Well, my first yeah, I'vewritten nine Profit First was
like three or four.
The very first book I wrote wascalled the Toilet Paper
Entrepreneur.
Speaker 1 (13:23):
Yes, I remember that.
You remember that remember thatI do.
Speaker 2 (13:26):
It was this irreverent kind of spit in the
face of what I was reading,which was that was the rise of
mark zuckerberg and sergey brin,all the those people of the
dot-com era.
They were.
They were.
We had the dot-com bubble of2000,.
But by now, 2008, 2009,.
They started going again andentrepreneurs were trying to
(13:48):
emulate that.
But the entrepreneurs I knowthe EO folks and stuff weren't
like that.
It was you were in for thefight.
So the whole concept was howcan scarcity be your ally?
And that's why I wrote thatbook and back, believe it or not
, that was considered acontroversial title in 2008.
Now, it's like the subtle artof not giving an f is not.
That's not even likecontroversial um, so I it was
(14:13):
hard to get promotion, like likeradio shows and stuff wouldn't
let me on.
There was a tv show, uh, thisshow called the big idea at die
deutsch and he said I, you'recoming on the show, but you're
not mentioning the title of thebook.
Speaker 1 (14:23):
It's too edgy, wow yeah, isn't that funny, wow,
that's funny.
So then profit first comes out,yeah, and that book takes off a
big book takes off.
Speaker 2 (14:34):
Yeah, so it was funny to me, mo, it was so obvious.
So what profit?
First is the traditional month.
The traditional method togenerate profit is you have your
revenue, like you do for yourcompany.
You subtract the expenses youincur and what's left over is
profit.
Makes logical sense.
But I did this study and it'sover 80s.
About 83% to 84% of businessesare not profitable.
(14:57):
They're living.
Check by check Out of the 350million businesses globally,
almost no one's making it.
So I'm like hold on.
We all went into business to beprofitable.
That's why I did it and otherthings.
But I want financial freedom andyet no one's doing it.
What's wrong?
And I remember just beating myhead again what's wrong?
And I looked at the formula.
I said, oh my God, it's staringme right in the face.
(15:17):
Profit comes last.
We call it the bottom line, theyear end, and it's human nature
.
When something comes last, itmeans it's insignificant.
Like Mo, you would never say Ilove my family so much.
That's why I always put themlast.
Or my health.
I'm focused on my health andit's the last thing I'll ever do
.
No, I focus on my health, it'sthe first thing I'll ever do.
(15:38):
I love my family.
I put them first.
I said if I put profit first, ithas to happen.
So what I started doing is it'sthe pay yourself first
principle.
It's nothing new.
I just said I'm going to put itinto business, not just my
personal finances.
So when I have a sale, when hecomes in, I take a percentage
profit 10, 15%, wherever mybottom line to be I take it
first, hide it, and then I seewhat's left over and say now I
(16:01):
have to figure out how to makethis work to achieve that profit
.
And if I can't, that meansthere's something flawed in my
business.
I got to cut costs, increasemargins, change prices, but by
taking your profit first itreveals what you need to do
within your business to sustainthat profit.
Speaker 1 (16:16):
I think that's brilliant.
And how did that book changeyour life?
Speaker 2 (16:20):
It's sold over a million copies and it's like
thank you, man, it it's soldover a million copies.
And it's like thank you, man,it's.
It's in 30 languages, dude, Iwould.
I don't know if this is thechanging moment, but it was
funny.
I was in touring through mexico.
Uh, I started monterey, mexicocity and I moved on to the
central american countries.
I'm in, I land in monterey,mexico, and I'm waiting for a
(16:43):
chauffeur or something to pickme up and a bus drives by and
like holy crap, that's my faceon the bus and it says la
ganancia primero, the the gainsare first, or profit first.
It says it right there.
Oh, my god, what a moment whata moment what a moment that was.
It adios me, ad it, adios mio,adios mio.
(17:05):
That was the moment I was like,wow, this is something that's
now beyond me.
There was, there's these videosI'm seeing online of people
teaching profit first their ownversion of it and not
necessarily the way I would doit and maybe a little bit off
the core concept of the system,but people had embraced it.
I started seeing it in thevernacular like, oh, are you
(17:26):
taking your profit first?
Are you a profit firster?
Are you profit first driven?
Are you a profit firstorganization?
And these were terms I didn'tbring about, they just happened
and I was like, okay, this issomething beyond me now.
Speaker 1 (17:38):
I love it.
So, beyond the book itself andbeyond your work as an author
and writing many books, uh, whatother work do you do?
I'm sure there's some speakingand consulting.
Speaker 2 (17:49):
Tell us more, yeah yeah, so I I'm generally don't
do any consulting myself.
I do have.
I do a lot of speaking, publicspeaking, and I have licensees
that teach the methodologies ofprofit first, but by also also
my other books, and this is ashocker for me.
I have a television show now.
We finished recording the show.
(18:10):
It's called the Four MinuteMoneymaker.
We just finished recording itabout two months ago the first
season and broadcast thisSeptember.
Speaker 1 (18:18):
Wow, when will it?
Where will it air?
Speaker 2 (18:20):
It's on a streaming network, so it's called Watch
Free Plus, which is owned byVizio.
So if you happen to have aVizio physical television, it
will come right on yourtelevision.
You're going to see this mug.
Speaker 1 (18:32):
Lovely.
Speaker 2 (18:33):
And if you don't have Vizio, you can just use Watch
Free, the app and then, sixmonths after it's on Vizio, it
goes to all streaming channels.
So it should be on Prime andNetflix time of my life, because
the producers of the show werethe producers of Rachel Ray.
(18:55):
So just the quick backstory,because it's a fascinating
business story.
Walmart has purchased Vizio,the TV manufacturer, and what
Walmart realized?
They're competing againstAmazon.
Amazon's kicking their butt.
So Walmart says one wayAmazon's beating us is with the
Alexa devices.
They're in every room.
There's one right here it'slistening to me right now,
probably and they can controlthe interface with the customer.
(19:18):
We, walmart, don't have adevice in everyone's house.
So they bought Vizio.
They said well, vizio's in 25or 30 million homes and we're
going to update the firmware.
So what they did is if you havea Vizio TV, your firmware has
been updated, in that it nowwill broadcast and put out
content that Walmart wants.
What they realized is Netflixgets a monthly subscription, and
(19:42):
so does Amazon Prime and so doall these other channels.
But when you buy a television,you buy it once and you don't
pay ongoing for a subscriptionfor the TV.
So what they're doing isthey're like we're gonna beat
Netflix at its own game, we'regonna send out our own content,
but we're going to make it freeto the user but run ads.
It's old TV commercials.
So my 30 minute TV show has 22minutes of content, eight
(20:04):
minutes of commercials, andthat's how it's generating
income.
And and busy is not the onlyone doing this Samsung, sony,
all the TV manufacturers aredoing it.
So it was a blast doing this.
They hired the crew from RachelRay, who produces Rachel Ray,
so they were the productionhouse there and it was just a
blast.
It was hard.
We got a full season done inone week.
Speaker 1 (20:26):
A lot of recording.
Wow, wow, amazing.
Well, I can't wait to see it.
I'm sure it's going to beabsolutely fabulous.
Thanks, yeah, Thank you.
So you've written other books.
Tell us about one or two ofthem that are really meaningful
and special to you.
Speaker 2 (20:39):
Yeah, sure, sure.
So I'll give you two.
My most recent one, which is incirculation, it's called All In
, and what I do, mo, is I try tofind a singular catalyst that
fixes the core issue.
So, profit first.
Businesses start withprofitability.
What's the one catalyst?
Well, if you take your profitfirst, it forces you to
(21:00):
investigate the rest of yourbusiness, and I do this in every
one of my books.
In All In, I said why arebusinesses struggling to achieve
their vision?
How come the employees aren'tacting like owners in particular
?
And I said oh, it's because weset a corporate vision.
But a corporate vision is areflection of what I want.
I want my business to achievethis as an entrepreneur.
(21:21):
Maybe there's a leadership team, but it means something to my
ego, it means something to mywallet.
But my colleagues, why do theycare?
And I realized businesses,erroneously, are saying a
corporate vision when theyshould be setting a collective
vision.
A collective vision, acollective vision is
understanding what does everyonewant to get out of this?
It's dude, it's just like forum, like what does everyone trying
to get out of this?
And by coming together, howdoes everyone get elevated?
(21:43):
So it's a new form ofleadership thinking Um that's
the book.
Speaker 1 (21:48):
I love that by the way, that's right Right up my
alley.
Keep going, yeah, you do yeah.
Speaker 2 (21:51):
I know.
Shamefully I didn't interviewyou for that one, so I got to
interview you for the follow-up,but that's what it is.
The book I'm also proud aboutis coming out in January of 2026
.
It's called the Money Habit.
This was interesting.
I deliver profit first.
There's tons of businessesdoing it.
I'm getting great feedback.
I'm very happy and honored andflattered all at once.
(22:19):
And then I get a call from anentrepreneur.
He says uh, probably firsttransform my business, but I
have a bigger financial problemthan ever.
I'm, like you know, worrying todo what to do with all your
money.
He goes no, no, no.
He goes.
My employees, um, they strugglefinancially.
And he goes you got to realizethat if my team is struggling
independently, it's not theirproblem alone, it's mine, cause
that worry lives with them.
He goes a lot of them arecoming to me saying you got to
(22:39):
give me a raise, I can't affordto live this way.
And he says I'm paying thembetter than anyone else in our
industry and I've given themraises and they come back almost
like a week later saying it'sstill not enough.
And the realization was oh, weas individuals in our personal
finances, have the same problemas businesses that we want to
achieve financial independence,but the pathway to get there
(23:01):
isn't more money.
Businesses make more and moreand more and they still go under
.
The challenge actually isfinancial control.
We need to assert control,irrespective of how much income
is flowing into us personally orin our business, and then, once
we have control, then we candictate financial independence.
(23:21):
So the money habit uses basiccore principles, very similar to
profit, first modified orenhanced I should say for the
individual, for personalfinances, so that we can have
financial clarity brings aboutfinancial control and then
assert financial independence.
Speaker 1 (23:33):
Financial clarity brings about financial control
and then assert financialindependence.
Speaker 2 (23:40):
You know I heard an Indian guru once say you are
rich if you spend less than youmake.
That's it.
Yeah, that's the essence of it.
Yeah, that's the essence of it.
And so you know what?
It's funny, that's the essenceof the book.
But it's the how do you makethat happen?
And the reason it's called themoney habit is, I realize it is
very difficult for humans tochange habits.
So if you spend less than youmake, you will be rich.
(24:00):
That is absolutely the truth.
But do you have the disciplineto stick with it?
And the reality for most of usis we don't.
And there's a thing called theoptimized foraging theory and
other reasons why we go intoconsumption mode.
But instead of trying to changeour habits or use discipline,
we can channel existing habits.
So what we do is, I noticedmost people don't run budgets,
(24:23):
most people don't balance theirspreadsheets or checkbooks with
spreadsheets, and most peopledon't live a life of deprivation
long enough to be successful.
But what everyone does is welog into our bank account and
see how much money we have andthen decide how to spend it.
So I say, okay, if that's whatwe do, how do we keep logging
into our bank account but becomewealthy as a result, and that's
(24:46):
where I used a lot ofbehavioral principles.
But one of them is optimalforaging theory and how we
consume things can be controlledif you put things in containers
effectively.
So at the bank level, we set upcontainers accounts.
Where money comes in, we carveit up to different accounts so
we know it's intended use beforewe spend it.
(25:06):
One is for my basic needs, so wehave, I have a needs account.
One is for my wants and desires.
You know I have to go out todinner or whatever.
Maybe one's my big dream.
One is for my wants and desires, you know, to go out to dinner
or whatever.
Maybe one's my big dream.
One day I want to buy my firsthouse or maybe a second house.
You carve it up.
So what happens now is when yougo in, you have this momentary
awareness saying, oh, before Ispend, I have this much
(25:26):
available for groceries orwhatever.
We also use a dedicated debitcard, so I go grocery shopping.
I and this is true in my life Ihave a groceries card and I
never overspend because I canmax out that card.
There's other techniques,because I have a propensity to
steal from one account and say,well, maybe this one time I'll
borrow.
It's a waste to address it, butI'll share one technique right
(25:51):
now your listeners can do,irrespective of this system.
That was transformative.
Subscriptions are a techniquethat vendors use to extract the
most money from you, becauseit's the small Chinese water
torture.
It's a small drip every monththat are taken from you and in
each trip is innocuous, but inthe collective it's a watershed
and it drowns you.
So what you do is get a newcredit card, an additional one,
(26:12):
which I know already soundscrazy, but get an additional
credit card.
Then, everywhere you have asubscription, move it
exclusively to this card, so itbecomes your subscription credit
card.
I had one for my gym membership.
I have a rowing machine, I hadone on that, I have Netflix and
all these different things.
I thought I was spending acouple hundred a month.
Once I had it all on one cardand I got that statement for
$500, I almost threw up in mymouth.
(26:35):
I was like my gosh.
And what happens is claritybrings about the ability to
bring control.
I started cutting stuff andthen every month I get the
subscription card and say, wow,I'm now paying about 300 a month
.
Is this what I want to sustain?
And I am in control and canmake decisions around that.
Speaker 1 (26:51):
I love that.
That is great, thank you, thankyou for that yeah.
So, Mike, what is next for you?
You know, in terms of 10 yearsfrom now.
You've really made a bigdifference.
You've done a lot of incrediblework.
You've helped a lot of people,and just the people that have
heard what you've said in thelast five minutes are going to
(27:12):
be helped.
But you look ahead 10 years andwhat's next?
What's exciting?
You.
Speaker 2 (27:25):
This path has been so joyous, mo.
More books, maybe moretelevision.
What's interesting about TV isit's a whole different community
that consumes it.
There's people who read booksand there's people who watch TV
and there's people who do both.
But there's definitely thesedistinct groups and I really
want to eradicateentrepreneurial poverty, this
perception of success or desire,and the real struggle that no
(27:45):
one knows is going on and, likeI shared, there's 350 million
small business owners in ourglobe.
That's under $25 million in USrevenue, and I want to eradicate
that Through my work.
My best estimate is I'vetouched between one and a half
to 2 million people, which meansI haven't even got the first
drip out.
There's 350 million people, soI got to get more books out, I
(28:08):
got to get more television outor speak more or I got to do
something in a better, biggerway, but this community is where
my heart is.
I want to serve them for therest of my life.
Speaker 1 (28:19):
I love it.
I love it.
Last question, Mike.
Speaker 2 (28:27):
One person who has inspired you and how.
You know one phrase that comesto mind and it's served me so
deeply, and of course I nevermet this person it's oscar wilde
.
I mean, he goes back centuriesbut he has a phrase uh, at least
it's attributed to him thatsays be yourself.
Everyone else is already takenand I was like, oh, that's the
(28:48):
solution.
I will tell you how to at leastI believe, to be successful in
the authorship game or theentrepreneurship game or any
element of life.
Don't try to do what everyoneelse is doing and don't, surely
don't try to be better at whateveryone else is doing, just be
the best expression of yourself.
When I write my books, it isabsolutely my voice, and the
(29:09):
greatest compliment I ever gotwas I got an old college buddy
who reached out to me 30 yearsafter college I mean, this is
only a few, a few years ago andhe says I had to call you
because you wouldn't believethis.
I'm reading this book and I wasloving it and I'm like this
reminds me of that kid fromcollege, michalowicz, that
goofball, a little bit of ana-hole, and it sounds just like
(29:32):
him.
And he goes.
I wonder who wrote this?
And he goes holy cannoli andhe's like it's the same dude and
that was the greatestcompliment ever got.
Like you, me, everyonelistening in.
If we really lean into who wenaturally are, unabated,
unabashedly don't care about howother people feel about us.
It's the greatest irony andpeople feel the most about that.
(29:55):
They, the right people, engageand say, finally, someone's
stepping up in the way that Iwant to step up, they're
representing me in the way Iwant to be represented.
There you cannot be beingyourself all out, and that's
been the greatest advice andtherefore the greatest influence
in my life I think that iswonderful and poetic and
(30:17):
inspirational.
Speaker 1 (30:18):
Mike Michalowicz, thank you so much for joining us
on the show today.
Thank you to our audience and,as a reminder, podcast reviews
have a real impact on apodcast's visibility.
So if you enjoyed today'sepisode, please leave a review
to help others find the show.
Thank you all and have awonderful day.
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