If there’s one thing that frustrates Todd Rooker to no end, it’s that people don’t dream big enough.
Rooker, the founder and CEO of Minneapolis-based Rooker Financial Consulting, has always been driven to achieve more. From his early years growing up on a farm in Crookston and on through college, the Navy, graduate school and a career in finance, he constantly pushed himself to reach the next level. And after working in a number of roles in the industry, taking several companies public and then building, growing and selling his own financial firm for almost $20 million, he decided it was time to make a shift. Now, as a financial coach and strategist, he’s helping his clients – many of whom are business owners or aspiring entrepreneurs – gain the confidence they need to spread their wings and fly.
That said, he doesn’t mince words.
“A lot of people who are in the coaching space are ‘pseudo psychologists.’ They want to help you manage your relationships and grow emotionally and while I’m not going to demean that, it’s certainly not me,” said Rooker, who also hosts the radio show Cover Your Assets on ESPN affiliate 1500 a.m. every Saturday morning. “I’m a financial guy. I’m all about the numbers.”
The biggest challenge that Rooker faces when he meets with clients is getting them to change their mindset and to stop “speaking 401(k),” as he refers to it.
“Speaking 401(k) is not a positive thing,” he said. “It means the person’s thinking is limited by their background and their context, the people they hang around with, the people they work with, their friends and family – all of that contributes to what this big machine teaches people, and that’s to become hamsters on the wheel. They’re conditioned to go to work for someone else and be a practitioner as opposed to an entrepreneurial thinker.”
If someone isn’t thinking big enough, Rooker said, it’s often because they (a) don’t think that they could or (b) they don’t think they should.
“They don’t believe that they could because they don’t think it’s in their wheelhouse or because most of the people they know haven’t. To them, it’s just outlandish thinking and they shouldn’t waste a lot of time on it,” he said. “And they don’t believe they should because they think it makes them seem greedy. In their minds, success is a zero-sum game where if they succeed to a large degree, they’re hurting other people. It’s such nonsense, but it limits people and their thinking very dramatically.”
However, Rooker makes sure his clients understand an important point, which is that income will never be wealth. Ever.
“What that really means is that you don’t measure your success based on your income,” he said. “Income allows you to have a decent lifestyle and then you have to spend less than you earn, put it into assets and grow your net worth. Assets minus liabilities – that’s how you measure your financial success, not by the fact that you’ve got a million-dollar house or you just took a trip to Europe. That’s not wealth at all. Your assets are what will create an income you can live on regardless of the inflation rate. That’s what wealth is.”
With those key concepts in mind, here are a few of Rooker’s other observations, thoughts and suggestions on how to dream bigger:
- Building a business shouldn’t be a marathon: Rooker advises that business plans should not be written to last more than five years. “You don’t write a business plan and say, ‘well, you know what, in 30 years, I’ll be able to sell it.’ That’s flawed thinking,” he said. “Building a business should never, ever be a marathon. It should be a hard and fast sprint that consumes every ounce of blood and sweat that you have.”
- Don’t rely on other people to get you where you need to go: Most business owners aren’t financial people and they assume that if they hire a bookkeeper or a CPA, they’ll be covered. “That’s such incorrect thinking,” Rooker said. “As a result, they make many financial decisions with a herd mentality and end up making terrible choices because they’re thinking like all of their friends, and many of their friends aren’t business people.” In addition to simply expecting to earn a paycheck for the work you do, Rooker stresses the importance of building a business that has its own intrinsic, saleable value. Unfortunately, many business owners don’t look at it that way. “If you ask them what the current valuation of their business is, they’ll look at you like a deer in the headlights. They have no idea what you’re talking about,” he said. “But they should be conscious of that because the goal is to build a business to sell, not to build a business as a practice and do it for 30 years. Even if they don’t sell it, they should build it as if they were.”
- You don’t need to reinvent the wheel: If you want to build a company that’s worth, say, $10 million in the next five years, reaching out to a business broker makes a lot of sense. Assuming the broker is willing to do so, he or she can give you all the financial information about companies in your industry that have sold for your desired amount of money. “Now, you can begin the work of morphing yourself into that type of company with the notion that you’re creating a story with the end in mind,” he said. “And you’ll have a five-year plan where year one’s trajectory leads into years two, three, four and five to get you exactly where you want to go.” If you simply say “I want my business to be worth $10 million,” Rooker observed, it’s a bit like saying “I want to win the lottery.” It’s meaningless. “Show me your plan. Show me the trajectory that takes you where you want to go,” he said. “Now I believe you. Otherwise it was probably just pie in the sky.”
- Set yourself on the right path: If you do go to work for someone – especially if it’s your first immersion into a career area – make sure that person is enormously successful. That way, you’re not only getting the opportunity to learn the habits of someone who is succeeding in the space you’re interested in (and getting paid for it), but you’re also getting a glimpse of what your own future could be like. “When you go to work for someone who makes a million dollars a year, your perception of things will be completely different because you’re watching the activities that person is doing to produce that high level of income,” he said.
- Write it down and get it done: At the end of the night, before you get into bed, write down three things that are the highest priority for you to accomplish the next day. Start with tasks that almost seem ridiculous like making your bed or brushing your teeth. “The point is that you’re programming your mind so anything that you write down will get finished,” he said. “Then you start elevating the things on your list and increasing the reach and pretty soon, you’re knocking out all of your objectives. And not being able to cross off all those things and having to put one or two of them back on your list should irritate you to no end.” To people who scoff at this advice – and Rooker has encountered plenty – he has this to say: “just because concepts are simple doesn’t mean that they’re easy. They’re not,” he said. “You have to actually do them or they won’t be effective.”
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