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Up Your Average is the “no nonsense” podcast made for interesting people who think differently. Learn to navigate your life with unconventional wisdom by tuning in to Keith Tyner and Doug Shrieve every week.
You gotta take a look at your money in, which is again, gonna be your wages, your business income, maybe your retirement distributions. You gotta take a look at your money out. Where is it going? Taxes, expenses, investments, gifts. And then what's left over is your net cash flow.
Doug:And how can it be used to advance the life that you're trying to live?
Caleb:Welcome to the Up Your Average podcast, where Keith and Doug give no nonsense advice to level up your life. So buckle up and listen closely to Up Your Average.
Doug:Okay. Greetings and welcome all you adventure seekers, music lovers, art enthusiasts, football fans, financiers, moms, and dads.
Doug:I'm Doug Shreve, the host of today's Up Your Average podcast. Your good friend and mine, Keith Tyner is out on assignment today. And one of Keith's greatest joys, his greatest joys are walking through life with other men and encouraging them. And so what is he up to? Well, he's up to exactly that.
Doug:And if you stay tuned in the weeks ahead, I'm sure you'll hear more. Or if you just want to give them a call and say, Hey, what are you doing? Do that, and maybe he'll send you a picture. But curious for you guys, have you been on a date lately? Have you allowed margin for time to slow down and enjoy something like a movie?
Doug:Well, week, Caroline and I decided to take her mom up on her recommendation to go see a movie. So we went to see Song Sung Blue. Say that like 10 times real fast. And while we were watching the previews, Caroline says to me, Have we ever been to a movie? And I thought, Well, yeah, we've been with the kids, but no, I don't think we've ever been to a movie, just the two of us.
Doug:And in addition to that, she goes, Have you ever taken a girl to a movie? And I said, I don't think I have. That's like one of the lowest that's a low bar, that's a low hurdle to clear for a date. Yeah, yours truly, I'd never done it. And so after twenty four years of marriage, I can now check that off my list.
Doug:I've taken a girl to a movie. And so if you like Neil Diamond, you're a shoo in just to absolutely love this movie. If you don't know much about Neil Diamond, you know he sang the song Sweet Caroline, right? And you've sang that song yourself. But if you don't know much about Meal Diamond or you just like an inspiring story, you're gonna love this movie.
Doug:So under the theme of today, we're talking about margin, specifically under cash flow. But for the two of us, to be able to take some of our time, some of our time that wasn't spent or going to be spent on anything else, and just use it to go watch a movie, it was an absolute blast. It's PG-thirteen. It's got a couple well, I just don't go see movies, okay, as you know. But it's got a couple high impact tough scenes.
Doug:And so I don't know about kids going to see this or not, your kids are probably fine, but it's a great use of two hours and thirteen minutes of your life. And if you don't like it, I'm sure Phil here at the office will give you a money back guarantee on that. Hey, and look at that, my mother-in-law is actually calling me right now as I brag about going to see this movie. How cool is that? So sorry, number one mother-in-law, I'll call you back.
Doug:So today we're going to be talking about cash flow and keeping it real. And there's a couple ways to keep it real when it comes to your money. Checking your cash flow from time to time is one of them. Updating a balance sheet, that's another one. What do you own?
Doug:What do you owe on? Those things, just taking a look at those, maybe even once a year, you will be ahead of the curve. Maybe you're really into this stuff. You're like a Dave Ramsey protege or you have Mint downloaded on your phone or there's other apps. If you're really into this stuff, maybe you're tracking it every day.
Doug:Maybe you're tracking it once a month. But I do think at least once a year, it's a good idea to go ahead and track what your cash flow looks like. And couple thoughts, cash flow is simply your paycheck. It's what your money writes you. It could be your W-two if you're working.
Doug:It could be a ten ninety nine, maybe you're a contract employee or you own your own business, or maybe you're retired and you're pulling money off retirement accounts or using your investments to live. Either way, cash flow starts with your earnings. And so if you just take a look at 2024 taxes, and you were to go and look at a W-two or look at your 1099s, it's whatever that top number is, the gross number. And so taxes are going to come out of it, expenses are going to be reduced from it, gifts are going to be made with it, and your life, your dreams, they're all funded through it. And so it's healthy to go back and say, well, what's the TA?
Doug:What's the gross? What's our gross income? Because if you're just focused on what comes into your checking account, you might be missing out on some ways to be a little more tax efficient. And so keeping it real starts with knowing how much money you're making. Simply put, if I had to simplify cash flow to its most simple form, it's basically what keeps the lights on, all right?
Doug:And so I reached out to the crew here and got some feedback yesterday. The fun part about this office we cover everything from like mid-20s to mid-60s in here, as far as our crew, the Gimbalites that work here. And then the amount, the types of people that we get to serve here just covers all ages. And keeping it real here, we had some feedback from Caleb. Caleb, the And cool thing about Caleb is he's got an accounting background, and so he speaks the language of business, he speaks the language of finance.
Doug:And this is what Caleb said, he said, I would imagine it to be most useful during times of transition or big purchase decisions. I can think back for me personally, I decided to buy a truck a couple years ago. And so before I bought the truck, I was thinking, okay, what does my cash flow look like? Can I afford this? Do I have margin to afford this?
Doug:What does my savings look like? Do I want to pay cash for it? Do I want to finance it? All these things. And then how would it impact the stuff that is really important to my family?
Doug:And would it disrupt it? What would that disruption look like? And so if you're buying a car, taking a look at your cash flow is a great idea to do it. Going from earned income to retirement income, that's a different one. You're turning off the cash flow spigot from your W-two or your earned income, and you're going to start living off of your savings or your investments.
Doug:What does that look like? And then lastly, buying a house. Have you bought a house? How many have you bought? That's one of the most stressful decisions in life, is buying a house and then coming up with, how do we do that?
Doug:And so examining your cash flow before you buy a house is a great thing to do. Call any of us, we'd be happy to talk with you. And Keith gave me some feedback too. And you know, one of Keith's themes on everything in life is think differently. And so of course he said, think differently about cash flow.
Doug:And one of the things that he said about a house is that the location and the size of your house and where you might choose to live will directly impact your net worth. Obviously, the bigger your house, the bigger your box, the greater your compounded expenses will be. You'll just have more stuff to take care of. One AC unit is an expensive endeavor, I cannot imagine two. And so just taking a look at the size of your house, the maintenance, the yard, the amount of trees.
Doug:Oh my goodness, I live on an acre and we've had some large tree expenses. Trees are not cheap to take down or to maintain. And so thinking about your surroundings, even in your yard of your house or your neighborhood expectations. So your house can definitely take some of your cash flow. And another component to this is the closer you live to a metro area, the greater the cost.
Doug:I have a really good friend who lives in Northern Indiana. And when he comes down to Carmel, he's always just like, oh my goodness, all of these lights and storefronts and just places that are trying to get my money. How do you keep money in your pocket, Doug? And so the closer you live to a big city, there's more to do. There's more variety and more places where you can spend your money.
Doug:And stuff just costs more, it's a supply and demand issue. There's just greater demand on the supplies that are available. Keith also brought up a good point that, you know, memories and expenses don't show up on a net worth statement. The the memories or the experiences might show up and they will show up on your cash flow statement because you're gonna see them you're see what's spent. And so you're gonna see if you went on a cruise or you're gonna see, you know, how much you spent on gas or how much you spent at the coffee shop or out to eat.
Doug:Those are all gonna be reflected on your cash flow statement. But when it comes to the bottom line and you think about what were the great things in life that we spent our money on, those aren't going to be read on the net worth statement. Those are going to be the stories that are passed down in pictures. As you're looking through your phone, or you're sharing memories with your wife, or your spouse, your kids or grandkids. And we have several great examples here at Gimbal of people creating wonderful memories for their families.
Doug:We have a client this year that is going to take three generations on a trip out west. And that's just going to be an awesome experience for them. And that may not be your jam, but maybe it's having everybody over for a really nice meal and going over to Kroger and doing it right, having a great meal prepared at your house. But those memories are what's really important. Keith also liked to talk about traditional expenses and how they may not make sense for your future.
Doug:Some of those traditional expenses that come to mind or came to Keith's mind are centered around education. And education is so expensive today. Amanda, Libby, and I were talking about that earlier week, and the education can come in forms of daycare, it can come in forms of high school, college tuition, it could be tutoring, but those types of expenses may not make sense for the future. And so really dialing in those and communicating them with your spouse and your loved ones to see, Hey, what are you hoping to get out of this? What do you expect?
Doug:One of our friends during COVID was attending a state school, and things were going great until COVID happened and the school shut down. And so he was brought back home, living in the house that he grew up in, And as the second semester rolled around, the university said, Okay, we're going to go all online. And so he thought, Man, what am I doing paying big prices for me not to have the traditional classroom experience. And so what he did is he enrolled in one of these online schools and then he just got busy. I think he got a four year degree in like under two years.
Doug:And he tells me today that that wasn't ideal, and he was not sure that he would even repeat it unless it was COVID. But it did allow him to accelerate life and get moving faster and get into his career a little quicker, and also develop his relationships outside of school and in his hometown. And so just thinking differently about traditional experiences and how they might not make sense for the future, how they might be different from how you experienced them or your parents experienced them, is a great license to be creative. Keith says, Give while you live. This is one of his things that he talks about constantly, is your money is eventually going to sprout wings and fly away from you.
Doug:And so why not enjoy giving money while you live? And that giving money could literally be you're giving your Silver Eagle coins to your loved ones, or it could be you are buying them a Southwest Airlines gift card to go travel somewhere. It could be you're giving them money to put down on their house, or you're giving them the car that you've been driving for seven or eight years, and then you go pick up a new one. However that looks like, Give While You Live is really great because you get to see the benefits of how your loved one or the receiver handles the gift and enjoys the gift. And so you could always leave it as an inheritance, but give while you live is a pretty cool principle.
Doug:And then the last thing that Keith highlighted, and I really like this one, He says, learn from your bad experiences. And he says, yeah. He says, only buy one timeshare ever. And so whatever the timeshare is in your life, give yourself some grace and move forward. Okay?
Doug:So if you've been on this show, you've probably heard of our friend, Mitch Anthony. Mitch Anthony is a coach to financial advisors. And Mitch Anthony, he was a pastor. And I can't remember the years that this was happening, but there was a time when interest rates were super high, farmers were leveraged, they had been buying land and tractors and equipment, and they just couldn't keep up with the leverage of the money that they had borrowed for land and equipment. And so several farmers started going bankrupt, and it was just difficult.
Doug:You'd have these farms and a family for three or four generations, and they were being repossessed. That's hard for us to imagine today because we think of farm ground, or we're tempted to think of farm ground as like the safest investment ever. Like here's what you hear, They're not making any more of it. But during this time, Mitch discovered a way to help people who were over leveraged. And so he's very passionate about looking at cash flow.
Doug:And he says, If we ignore it, it could be at our peril. But Mitch wrote an article in Financial Advisor Magazine and he called it delivering reality checks. What it was focused on was on the positive benefits of reviewing cash flow. He likened it to pretending like you're going to see the doctor. And if you're going to see the doctor, they're going to ask you about your lifestyle.
Doug:They're going to ask you about, Hey, are you exercising? How much alcohol do you drink? How many packs a day are you smoking? What's your diet look like? They're going to ask you these questions basically to discover your health habits.
Doug:And when I think of this, I think, Well, that's a pretty good idea if you were to look at your finances that way and say, What are our habits? And for those of you who are spenders, I just want to encourage you with something. I want to encourage you that your brain has some habits developed in it, from experiences that you've walked through, or genetics that have been built up or your environments. And so those habits aren't who you are, but they are how you've been living. Now the difference is, is your mind can tell your brain what to do.
Doug:And so if you're open to feedback, your mind can be influenced, informed, enlightened, and it can change. Your mind can allow you to have a conversation with your loved one without getting your feathers ruffled. And that's just such an encouraging thing to me as one who is by nature a spender. And so I was able to start looking at things differently and communicating differently once I saw the difference between my mind and my brain. That was a super, super helpful thing to me way back, I think it's around 2008.
Doug:So how do you do this? Or where do you start with evaluating your cash flow? You got to do a little data recon, a little data reconnaissance. And you got to take a look at your money in, which is again going to be your wages, your business income, maybe your retirement distributions. You gotta take a look at your money out, where is it going, taxes, expenses, investments, gifts.
Doug:And then what's left over is your net cash flow. And how can it be used to advance the life that you're trying to live? Or if there's red or minuses at the net cash flow, how can we take what we currently have and support what we truly value? And so this creates the conversation. And you can set up a cash flow statement like the one I'm showing you here.
Doug:If you're driving and can't see this, basically it's an Excel spreadsheet that just shows money in, money out, and then what's left over. So if a person was making 55,000 and their spouse was too, what might their expenses look like? Well, their total income's 110,000, but if their expenses were 78,000, and that covered everything, including their investments. And then you had 20,000 of taxes, so you had 98,000 of expenses, 110 minuteus 98 is 12. So you'd have a net cash flow, positive cash flow of $12,000 And at that point, you'd be able to talk about it.
Doug:And so doing something like this, if you want to capture all of 2025, okay, if you wanted to capture all of 2025, I guarantee you, you can do something as basic as this in less than ninety minutes. You'd pop open your credit card online and you would look at 2025 expenses. It's going to tally it up for you. It's going to tell you how much money you spend on expenses. And at this point, don't get bogged down with, Oh my goodness, you know, half of it went to coffee and the other half of it went to baseball games or whatever.
Doug:Don't get bogged down with that, just get the total number of expenses. And then after you do your credit card, that's the easiest one, after you do your credit card, switch over to your bank and look at your checking account, look at the transactions. And if if your bank has great technology, it'll just tell you how much you spent. If your bank is old school like mine, I literally had to go through each monthly statement with a calculator. And so even with that, guys, I went ahead and did all of 2025 and just timed myself less than an hour and a half.
Doug:And so I was able to say, okay, these are all our expenses for the year. Did we have any money left over? Now beyond that, if you want to get a step deeper to really get a handle on your cash flow, What I would recommend, what Keith would recommend is just get a white sheet of paper out, a plain sheet of paper, tape it to your bathroom counter. On the left side, write fixed. On the right side, write variable.
Doug:Record each day what your expenses are. So a fixed expense might be your electric bill, your mortgage, your cell phone. It might be your internet provider, and things like that. Things that don't change much from month to month, those are going to be fixed expenses. Your variable expenses, those are going to be coffee shop, Chipotle, baseball game, had to fix a car.
Doug:It's just stuff that doesn't happen on a routine basis, but just happens from time to time. And if you do that for a month, you're really going to start to feel and understand and have a good base foundation of where your money's going. And you can be honest. You can afford to say, well, you know what? I could tighten up this or that.
Doug:But that would be step two. And then step three, and and the final phase, the landing phase of this is is are you open to feedback? I will tell you this. Feedback for me for years was very difficult, and I love it now, I appreciate it. At first, I'm still a little sensitive to it, but I really do appreciate it when somebody gives me feedback.
Doug:And in relationship with cash flow, the cash flow statement is going to give you some feedback, and then you get to decide what you want to do with it. What I highly recommend is you find a time where you can sit down. If it's just you, take yourself out to breakfast. If it's you and your spouse, take your spouse out to breakfast and say, Hey, look, I did a cash flow statement, and I'm just curious, what would you say right now our money is meant to support? Right now, what is important to you for 2026, for 2027, maybe even into 2028?
Doug:What do you want our money to support? And then the reality check is, does how money is actually moving support that sentence? Are we living the way that we want to be living? And this is going to generate a conversation that will allow you guys to step back and maybe even make some changes. But my hope is that it encourages you in your conversations, in your relationships, and that you're able to, just live bigger and live more on point, live more on, on purpose in 2026.
Doug:So again, thanks for tuning in, and we'll look forward to being back at that desk behind me next week. And you guys make it a good one. Thanks.