Congratulations stupid. It costs me $2400 to make $73.12.

Hello, and welcome to today's episode.

My name is Tom Rolley of systemio.dev.

And yes, I have had a solid kick to the balls.

Last week, we spoke to our Loan Manager, her broker, and he gave me the wonderful news that I had saved $73.

12 By having my offset accounts operational.

So this came about because of some original financial advice, which was that if we set up a credit card and set up a offset account, then through the month, the offset account on the credit card would go up, and the money going in the account paid off would grow up.

And we could use this to reduce our, our mortgage.

Now, this ran into a couple of problems.

Number one, the credit card just got used way more in my family, then, than it was meant to that there was a budget of $6,000 per month.

And that budget just kind of got us about two and a half, maybe three weeks through.

So that was the last week of the month.

And it was a lot like getting paid monthly.

Not much fun.

So in the end, my wife just could not handle it.

I'm like, Hey, we're not playing by the rules, we've got to get all our expenses in early so we know how much we've got.

But that didn't happen in the end, we just canceled the credit card.

So now instead of that money growing out that $12,000 At the end of the month, instead we just kind of trickled along largely it may be a $500,000 balance.

So the entire point of the offset was lost.

Now, this LED that essentially, we by having this account, instead of maybe $10,000 saved we actually say $73.

12.

But one of the consequences of this was that the automatic syncing between the bank accounts and zero was lost.

For whatever reason with Macquarie Bank who was with us who we bank with that, once you transfer the account from a transaction account across to being an offset account, it loses the capacity to sync to zero.

So this now meant that once a month, I had to go in and download all the Quicken files and upload them to Xero.

And we have a bunch of accounts.

So this probably took 20 minutes, maybe 30 minutes, it also regularly introduced the risk of error, because there were a lot of accounts and getting them right was important, I had to check.

And so this, let's call it half an hour between the occasional error, which involved me having to go through and delete the whole account and resync everything, and actually just keeping on track.

But all are quite detailed work half an hour, once a month.

Now, this adds up to six hours a year, not much, perhaps, unless I don't consider my hourly rate.

Now let's give me a $400 an hour hourly rate.

Now yours might be higher, yours might be lower.

I actually did this exercise probably about six years ago.

And my current rate then was $330.

And that was a writer that I came up with, which was what is it worth to work an hour instead of spending with my family.

And so six years ago, it was 330 I actually feel like I'm my time is more valuable now.

So $400 an hour is reasonable.

So that six hours a year at $400 $2,400 to earn a grand total of $73.

12.

So I've essentially costed myself, Yes, I didn't have to pay myself that time, which is a trick that entrepreneurs can pull on themselves that I can pull on myself and say, well, actually, you know, I’m not going to count that time.

I just did it for the business, but I don't get paid.

So it's a true cost to zero, really, is that true? If somebody else was going to do that work, then it would cost time maybe it might cost a know 12 hours or 20 hours a week.

And if the bookkeeper costs 50 bucks, then it's still going to cost money.

Remember that I have saved a grand total of $73.

12 to payout myself 2400.

But there was even more wonderful news that our Loan Manager broker said, Hey, did you realize that interest rates have actually come down another percent points and on our mortgage, He was like your desire to stay locked into McQuarrie because of the offset accounts and save that $73 is actually costing you the capacity to go to another bank and save 1% Now that in itself was worth wait for it $12,000 12,000 So not only did I have to do the work, that would have cost 24,000 to $202,400, I also lost on out $12,000, because I'm paying too much interest.

So for $12, sorry for the, for saving $73, I introduced the risk of errors, I spent time that I could have had with my family or invest in better ways, as well as being focused on the wrong thing, which was having the offset accounts instead of focusing on Hey, are we paying the lowest rate? $14,600 minus $73.

So $14,512, something like that worse off, because I was focused on the wrong things.

So this brings up a very important lesson, am I focused on the right things? Are you focused on the right things, because in business, when you're just getting started out, or as you go along, and you start to have success, there's this thing that arises that it gets more complicated, it gets more challenging to run a business with multiple people?

And so you'll see that fires begin to arise and problems begin.

And so the temptation is to just sort out that problem.

And that is being focused on the offset accounts, which looks like it's the right thing to focus on.

Yes, that problem needs to be dealt with.

But guess what the underlying cause has not been dealt with in so next week, or in six weeks, or in three weeks, or whenever that system gets played out, again, which isn't documented.

And so you're not really sure why the problem happened in the first place, you're going to be dealing with that same fire.

That's that half hour, every month, perhaps it's three hours every month, perhaps it's two hours every week.

But your time is being consumed in this fire, rather than shifting across to look at the right problem, which is, what is the system? Or what are the processes in that system that lead to this file? And how can I fix that? Even if it takes me three hours to fix a half-hour problem that shows up once a month? From then on at? Let's see.

So what are that three hours in? So you've invested three hours, but you have saved half an hour every month.

So at six months, you are now time positive? Yes, you have to pay three hours now to sort out the system’s problem.

But this is playing out across the board in your business.

So it's not just simple systems.

It's also your complex systems.

It's how you do everything.

Because if you have not got a systems mindset, that you approach everything in your business from a systematic approach.

Now, it's not everything, but it's the vast majority, most businesses repeat systems, and then every now and then there is one problem, or there are isolated events that do need dealing with but even in that thought process of how you deal with isolated events or unusual events, that also is a way of thinking of systems methodology of thinking, we'll handle that as well.

So okay, how are we going to deal with this? How do we assess the benefits? How do we assess the risks for that one-off, but the rest of the time?

Business is repetitive.

It's the same thing over and over how you do your marketing, how you do your advertising, how you do your tracking, how you deal with your people, how you do payroll, how you do your taxes.

These are repeating things over and over and over.

And yes, you can duct tape it together and just deal with it at the beginning.

And you may well have to do that the return on investment just isn't there.

If you're not making sales, then hey, you have a sales problem.

But after a while, you're going to have a systems problem.

Because your time is getting consumed, there are too many things going on.

Your business is too reliant on you.

And you cannot exit either by becoming a director and just looking at the reports and having that business run itself without you and you take the profits or to sell it at a higher valuation so that with both of those scenarios, you are now freed up to go again as the entrepreneur that you are.

Alright, if this is a conversation that interests you, then I invite you to like or subscribe to this video podcast.

Thanks so much for tuning in.

It's been an honor having you I hope you found benefit in looking at are focused on the right things? Alright, catch you next time.

Thanks so much for tuning in.

See you tomorrow.