Hi there. My name is Kim Payne and I'm the managing director of 9Rok
Consulting. I’ve got treat for you. We're going to interview and get up close and
personal with one of the gurus of the financial services industry. He's got an
exciting story to tell. He's made an impact in the lives of so many in our industry.
And he's going to share today some of the secrets to the success that not only
he had in his life but that he helped others have in theirs.
From very humble beginnings as a little boy growing up in Bendigo and losing his
father at a very young age, he went on in 1971 and started his career with AMP.
From 1972 to 1985, he was the top performing sales agent every single year so
he kind of knows what he's doing. Then in 1984, he went into business with a guy
called Vic Ruth and together they really change the shape of the industry. And
much of what we see today is because of a lot of the hard word that they did
back then. Some of the agents that went through and did the Payne Ruth
training programs in their very first year on average increased their earnings by
more than 63%. So, he really was a trail blazer in the industry. And I'm going to
introduce him, but this is a really especial interview for me as well. Because not
only is he so successful, he's also my father. So on that note, I'd like to introduce
you to Malcolm Payne. Come on in Dad.
Malcolm
Thanks for the opportunity to give you a bit of a hand. You've sent me some info
and some questions and I've been through it all.
A lot of the stuff that I've done in the past, particularly in the training side, was
done with people that we would get together, originally for two days, lock up.
And then we do it every 3 to 6 months. And we do that for year. So, the
evolution has taken a long, long time.
Now, I'm not too sure where we're going and what we're going to get to other
than you're talking about the growth of businesses, how you get to this stage, to
the next stage and what you need to do. I'll give you my insights into that. And
I'll do my best to answer your questions. I'm getting very old. All this happened
about 700 years ago.
So, what do you want to know?
Kim
So, what I want to know is what are you secrets to your success? Why do people
say that they owe their careers and their success to you and the trainings that
you gave? What did you do to them?
Malcolm
Ah, probably go back a way bit as in your introduction. Vic and I were pretty
good salesmen. We won a lot of the awards. We were branch champions of
Victoria for a lot of years and that was all good. But we did our apprenticeship.
We went out and cold called, knocked on doors, picked up the telephone to
get an appointment. We taught ourselves a bit of a discipline that we would
take nine ‘no’s before we called it quits.
That's pretty hard in those days. But that's how it was. And basically, all you were
really doing was selling life insurance. There was no such thought in our minds
then about total planning and retirement. You were really there selling life
insurance. And that's what it was.
Anyway, after a while, we realized that there was more in this than what we
were doing and we decided to break the mould, the ‘Ming vase’ of what was
part and parcel of selling and life insurance. We decided to look at going into
the business insurance market and there were very few people who were doing
it. And I can remember some of them with great compassion and some of them
aren’t with us anymore. But, we saw that there's another community out there.
Not just the bank clerks or the people who worked in the public service or the
apprentices. There's a business community out there and we thought that we
ought to have a look at getting involved in that. And so, we did. And we
learned a lot.
I remember at one stage there Vic and I spent $1,000,000 in setting up a
computer system in a room which is twice as big as this room here. We had
people working 24 hours a day and it was scary but we wanted to know
everything that you could possibly find out about our prospects and our clients.
We wanted to know who they voted for. We wanted to know did they like
language that they didn't like you pontificating. All these things so that we could
start to mould things and you will find out a little later how that all works. And so,
then we made a huge decision, on top of that, which is how you get to the
marketplace to the business people. Who were the people who could get you
into the business people?
Well they were the accountants mainly and the lawyers and those sort of
people, bank managers, business people themselves. They were a pretty
untapped market. Busy as ‘billy O’ as you can imagine. And so, we started to
head butt a few walls and we made a lot of mistakes but things start to fall in. In
answered your question, “Why did people come to us?” Suddenly, we had the
runs on the board. I can remember if you wrote a million-dollars’ worth of whole
life back then as an agent with AMP or National Mutual or anyone, you were in
the top 2% or 3%.
And you're in the ‘million-dollar round table’ which we were in. And then you're
in ‘top of the table’ which we're in. And that's all beaut and good. Before we
went into the other side of the business, we were writing $1 million-dollar policies
on the lives of our prospects. They were whole of life policies so you’re talking
about premiums between 15 and 30 gran depending on their age.
That's all changed now, the whole of life policy has unfortunately gone and the
endowment policies are gone. It's a bit sad in my opinion but that's life. You now
get all sorts of investment funds and vehicles and superannuation and all sorts of
things, which again will talk about. But because we were doing it, a lot of
people who were good guys, good girls were saying, "What do we do to do
that?"
So, we thought about it and we said “well, if you want to know come in every
Thursday afternoon or Friday afternoon (but Fridays got the chop cause we
played golf) come in on Thursday afternoon from lunch time on, we’ll put on a
sandwich and will talk to you and tell you what we did for the last week." And for
that, they paid us 10% of their gross earn plus a bonus, which is pretty good for
us, pretty good for them.
And all the time that we're doing this, we're learning. There's a fellow for all you
folk listening to this, there's a book called 'The Time Trap' by Dr. Alec MacKenzie.
Essential reading. Critical reading. We actually, when he came to Australia,
bought him for two days to come and spend time with us. The greatest problem
that I've ever found when I spoke to agents, business people, the lot, there’s one
word that keeps coming up that is a problem. It's the word 'time.' There's never
enough time to do it. And we talked later about business planning and that,
why don't people want to do it? Because they’ve got to take timeout to do this,
which they think that time could be better spent productively and out selling
that's not how it is. It doesn't work like that. And as you know and I've seen
you've mentioned it in some of your 99 secrets in your book and all that sort of
stuff. We came up with a phraseology that the ‘money is made in the planning’.
And that is where it’s made.
Now, you get a lot of arguments about that from a lot of people but that is
where it all happens. And the most critical thing, and I thought about it on the
plane today, and where have got to try and get to in a short period of time,’
which is I said a moment ago has taken weeks and weeks and weeks and
months and with a lot of the super guys, and girls too, we had some terrific lady
business agents. It is just a long hard dedicated work process. And you just got
to be prepared to commit now. Some people don't want to commit and I
understand it. They’re making enough money doing it rather than being a
plumber or whatever they were going to be. They’re making sufficient money
with not huge overheads and they're happy with that and I commend them.
And if they're happy in doing what they're doing and they’re doing a service
albeit for that client base they’re doing a service and I think that’s terrific.
However, there's another generation of people involved in this. And they're the
people who are also trying to grow in their industries in their professions whether
they be medico’s or whether they be in the financial side with the accountants
and the lawyers and then you've got the small business, the bigger business, and
then you’ve got the big businesses where the executives are no different to you
and I. Their enemy is time. And they haven't got time to sit down and think about
their family circumstances and life after when they're going to retire. So, some of
us had to get in there and bang the drum and say, "Listen you ought to be
talking to us” and that was tough yakka." But once you've got in and you got it
started, and they saw where we're coming from and what we were trying to
achieve. They then became our source of referrals.
And then life became a lot easier. And we will talk about categorizing your
client base if you wish, which is an essential part. So, that's a bit of a preamble.
Those who are watching this today are people I assume who are in the business
that we're in. They’ve got to a certain stage. They want to grow that business to
another level and then another level. And they want to get a bit of an insight as
to how they may do it.
Well, the basic tenant in all this is to understand it is a business. Forget everything
else. We are in business. It just happens that our business isn't pluming or retail or
marketing or accountancy or building boats. We just happen to be in the
business in the financial services industry. It's a business. And every single
business, no matter what it is, and over the decades and decades and
decades that people have learnt, have got some basic principles and some
basic tenants. And they have to be the predominant thought when you are
outing together a business plan and there in hangs another story. But if they can
perceive, if you folk listening to this can see, you're in a business. If you want the
business to grow and succeed it’s got to be done as all businesses. It's not luck.
Luck is rubbish You might fluke one because you meet someone at the footy
one day then they say oh isn't that good. But it’s a design process and that's
how we’ve got to work it. So if you want to talk on those lines and touch around
the areas of, If it's a business, what's the first thing you’ve got to do, then ask me
that question, "What's the first thing you’ve got to do?"
Kim
So, Malcolm what's the first thing you've got to do? Funny, you took the words
right out of my mouth.
Malcolm
You’ve got to do a business plan.
Kim
Okay, why, nobody wants to do a business plan?
Malcolm
I know they don’t want to do a business plan.
Kim
It's really hard.
----------------------------------Malcolm
Well, I'll tell you why they don’t to do it and I know so many people who have
spoken to and lectured and spoken at seminars and things. When the bottom
line comes to what I’ve got to do to do it? Why won't they do it? And I know
people like you in the consultancy business are now friends and colleagues and
competitors of yours in consultancy business and I've worked with some and I’ve
set their boards and they bang their head against the brick wall. It's proven
pretty why they do it and I'll tell you why. It’s 2 or 3 reasons. One, you got to take
some time to do it and do it right. 13:07You can't put a little bear right on the
floor and hurdle a stick and fix it away.
The second thing you got to do, is that they know from the sort of questions that
we posts that is going to show some inadequacies.
And people don't like that.
They don't like to think that, they like to think that gee look at me I earn a couple
of hundred grand a year and I'm doing well. It isn't life good. If I want to go from
200,000 a year to turn over a million or whatever the figure is it doesn't matter.
Talking hundreds, or thousands, I'm not big note or anything. If you want to do
that then you got to take time out and accept that you've got to change. It just
will not happen easy. You got to change.
You've got to change your attitude. You've got to change your marketing.
You've got to change the type of person that you’re trying to work with you.
You’ve got to take the time to categorize your clients. Then you got to take the
time to go out and talk to your best clients.
It’s for them to tell you, what is it that your inadequacies are as they see it. Not
an easy stuff because you think they all love you. That's rubbish. They might love
you as a person, and they think you’re not a bad guy and you put on a
Christmas drink or take in the throttle or putty. Whatever, but the bottom line is
they’re paying for something.
And that's the other (14:23) color in all these. You ask them questions, and some
state in some of your little questionnaires – my thoughts on commissions, visit VPs,
visit the trials and all that.
I've been through the whole 14:38 - game but except at the end we gone into
training probably before the real push, the fees, the service but there's no doubt
in my mind that's got to be the way to go. You got to get rid of the buyers and
commissions created by buyers because one will pay a little bit more or one
might take it to Hong Kong instead of Bendigo.
If you got to be any good, and you’re really going to make it in this industry, and
if you really want the business to become the powerhouse to grow your business
and that’s a simple exercise what the powerhouse is. It’s A class referrals.
So, when we're talking about categorizing your clients and someone happens to
be A, people might think they've got 30 or 40 As. When we sort it all out, they
might have 5, if we get the criterion right.
If those people think you're that good and they're prepared to pay the freight to
get that advice and support from you albeit that might be because you've got
associates in other areas but they come in for the holistic approach and that's
all they've prepared. Then you're starting to get to a stage where the business is
starting to say, "This is what we are, who we are, what we do at the time." Now
16: 01 good filming yourself and say I carried A class client and you can picture
him or her or their business and they generate fees of I don’t know 2 or 3 grand
and suddenly you want to go and get fees of a hundred grand.
You've got a stepping stage. You've got to build to it. When you re-categorize
your client base, you should do it at a minimum, every 12 months.
Every 12 months you should sit down and say, "Okay, that was a criteria we set
for what is an A." “What's a B?” “A B has got to be someone who can be an A”.
“What's a C?” “A C is if they say bye, bye”. And a D is a done. You just don't
have them.
Guess what they do? All of us. I was guilty of it.
Guess what happens? We've become revenue chasers. Revenue chasers. I've
just made some sales but if you analyze it at the end of the week that I made 10
sales. How good is that? And I made that amount in fees and commissions. How
good is that? And then someone happens to say, "By the way, how much did
that cost us for the week?" And the cost is more to get it than what time in the
door. That's where it all goes bad. That's why when you do this business plan,
and I’ll spend a bit of time in a minute if you want.
Kim
Absolutely I want. Absolutely.
Malcolm
We ended up designing a thing called ‘The Obamps theory’ nothing to do with
IMP in that. And I’ll briefly run through it. If you get this then when you go to see
your own business clients. And again, it doesn't matter whether they're sole
proprietors whether they're a partnership. It doesn't matter whether they're big
business.
To get the business plan right, the first thing you've got to do is - what are your
objectives, short-term, medium-term and long-term? You’ve got to know that for
you, your family, and your business and yourself as a part of that. That’s the most
important part of this because you got to generate all this income.
So, to do that is an exercise in itself. When I applied my way to the marketplace
this is what I do. I wouldn't go in there with a preconceived idea. I'm not going
to sell some insurance, or some risk, or some superannuation, or some financial
plan. I wanted to know what they want and the hardest list that we all had is we
ask questions we don't listen. Half the time because we want to tell them how
good we were, the sale could have been consummated an hour ago. Well
that's a (18:44) good telling you're good. You ask the questions and then you go
and listen and sometimes you got to prompt. So to get these objectives right, it's
an exercise in its own right.
So, if I sat with you today and say, "What are your objectives for you and your
family and your grandkids, and when you have them and your business interest
and all those things?" You got to sit down and take time out and I'm going to
say, “I want to know which one you want to achieve in the next 12 months.”
Then I want to know how that's going to look in the next 3 to 5 years. I now want
to progress you down the road to the next 10 or 15 years.
What do you really want? What is it that you physically want for you and yours
and yours being family business, etc.? So you've got to write that down. You got
to document it. You'll ask about boards and consultants. This is where the acid
really comes in. This is really where the sweat runs down the back. You can't
treat this lightly. If you treat it lightly, in my case, if you're back to around well get
out of the program but I don't want you in it. Because if you're not prepared to
do this really hard yards, you're not going to get any result at the end of the day.
So, once I've got the objectives, I then got to go and this is where it all falls down
again. If you haven't kept accurate records and by the way since the day I
started right through to the use of computers now there’s all sorts of programs
now to tell you what your activity is. That's your cost to a point and it's to sales
(20:33) to expenses, etc. So, now, I've done my objectives and let's assume my
objectives for year one is I've got to earn $300,000 in the business approach just
to talk that as an example.
Now, what I've got to do is to divide what my current practice provides. Cost of
appointment, ratio, sales income. 20:39 that the best is thus 150 or thus 200.
So, suddenly I'm behind the 8 ball. So I've got to do 1 of 2 things. And oh, I got to
revisit my objectives because they're too grandiose and/or I've got to certainly
revisit my activity cause I've got to get same course but they're got to be with
people who can pay more money as simple as that. Otherwise, I now will have
to do this. Otherwise, they're not going to meet. Okay?
So, that's the first thing. So, can you now see it's starting to develop? Wow! That's
what I want. That's what I'm currently doing. If I really want that I want that 300
lodge, I've got to then make some dramatic changes to what I'm doing within a
timeframe that I've got. Okay.
So, we've gone through the objectives. Now, well the B is the activity, the
budget and activities are a mismatch. You can do budget first or activity
second. Probably, what I use in activity then is the budget as well as the activity.
I'm trying to work out what I do today and what I can have and earn. Will it
produce the objectives? And the answer is most of the time the answer is 'no'.
If it's equal well it's a beauty. Because my objectives and that's what I want that's
what my budget is. I don't have to make around with that activity because I'm
doing it. And it's probably not much need for me unless I want to say but I now
going to bring the mood and the objectives shorter. Bring it forward then I'm
going to make some changes. So, I've now done that. I've worked out that my
activities are not enough. Where do I go next? Well, I’ve got to get to see more
people but with a higher income level. That's called marketing. So, here comes
marketing. And this is a session that would take, and we could sit here for 48
hours just talking about marketing.
There are so many areas, and in your business today where you've now got
LinkedIn and Twitter and Facebook and all this other snapshot or some other
bloody thing, which I don't know about that but I know about marketing.
Marketing is a pretty simple exercise and it's very, very difficult to put in the
practice. I've got to go and find the type of people that are going to fit in to my
activity into my budget to achieve my objectives. So, I'm going back this way a
bit. You can see where it's coming from. So, I've got objectives down the
budget, check the activity which weren’t related to the budget so I've got to
change something and now I know what the change is I've got to go and put
my marketing head on and my marketing skills on and that brings me to the P.
Obamps, Prospecting. So, that's the market. I began prospecting that market.
Not with pattern chase revenue. I've got a prospect in that market. And that
finally comes down to the yes. That's selling.
Now, there's a subject that I love. The art of selling. The sales process. So, in the
space of 2 or 3 minutes we've gone through something that we'd be sitting
down taking a long, long time to do. But if you could imagine in your mind that
we now know what makes your guts churn, we know what you really want to
happen for you, your business and everything and we know what we currently
earn and we know what we did in the past to get it, this is why people don't
want to do business plans because they haven't got that data. They never did
the data.
Once upon a time to get confirmed you have to do that data or you wouldn't
get the tick. Once you've got the tick you didn't do it. So, these are the things
that we got to go back and do. And there's enormous amount of the help
available now. We didn't have it. Your business, 9rok, people like you who can sit
down and take the pain away from this and find the way around say you don't
have to make it a massive target and it's going to drive you inside. That's why as I
said, “When you get biggy you might want a board of advice.”
Well, in my day we have to have a board of advice because there were no
consultants. We were the consultants. And if we listen to ourselves we talked too
much bullshit and we wouldn't get to the middy greedy. I supposed you got to
eat that out, but bad luck that's what the facts are. So, that's the first part of the
equation. That's the Obamps Theory linked in to the style of the business plan.
You can't do it all in one hit. It's a very, very long difficult task. And of all the
great personalities and the very, very successful people that we've worked in
the past if you sat down with them now and talk to them they all say the same
thing. It was so difficult so we broke it down to smaller bits. And say, "Okay, that's
the ultimate. Let's just try and do it a little bit easier. Why not we just move from
there to there but be conscious that we now got to put in to vote these
principles and future practices that we can draw this information out of." And so,
we start to make it work and we had the big business plan. We had the mini
business plan. We had the small business plan. And that also worked in
conjunction when you went out to see your client base. And you got to the
client base and say the same thing as I'm saying to you and they're got to go
hang on a second.
So, we had to slowly, slowly chase them on just working bits and pieces. But all
the time we're going from that level, to that level, to that level, and we're going
to continue to do those steps. I can still remember writing on the whiteboard.
I’ve only used a whiteboard and now it projected.
No such thing as what do you call that stuff now you do the computer programs
and you can stand up and talk solo on the screen. You have to do it. Like you
still write on the steps of the stairs like that. And saying, "This is where we are now.
We got to get to there. Now, you want to be there or don't you? If you don't
want to be there, here’s the door, because I haven't got time for this. I'm going
to get paid by my providers if I get results from the people they want me to talk
to."
Now, I'm pretty ambitious. I pretty came for the dollar. If I got people in there
that I've going to participate or they want to be negative or that I want to do
the homework wish me (27:00) I have to go. Because you bring in the people
back to your level.
I just want people who really, really, really want to do the right thing by
themselves and their client base. And they merged together and everyone is a
winner. Logic opens the mind. Of course, I know the million-dollars’ worth of
insurance at 8% which will give me an income of 80 grand which will cover
2/3rds in the family expensive. That's logic. The emotion is turning around and
seeing the widow and the kids and that no money coming and moving out of
the house and trying to rely 27:33 they're all this and this now all this. Either you
love them or you don't. If you don’t love them and I know I’ve got a lot of close
encounters of the third kind that I want to know. And I ask them if you don't
want to do this just answer me one question. Those people you tell me, your
wife, your kids, your business partner do you love them or don't you? Well, if you
love them you show in a funny way about it. Because if you love them you've
got to protect them and look after them. If you don't, tell me now and I'll leave.
But he had. But why waste my time talking if someone is really not going to do it.
You know, we've talked about time before. You got to cut to the chase. But in
doing it, I don't know what you need. You ask questions here, we just sell the risk
product. I don't know if that person needs a risk product. I've got to find out
what they want. And their driving force might be – ‘I want to get out from work
the force when I'm 45’. Okay. Let's have a look at that.
What do you want to know? What are your prospects? Let's see if you want to
retire comfortably at 45. We've got 20 years to work on it. How much money
we've got? What do we got now? Mate, I’ve got to tell you number punch how
about 145? Or, if we want 45 this is what we got to dedicate ourselves to
percentage wise on what we earn to put away now to get towards that goal.
Suddenly, I've gone and maybe I've got to selling risks and I've got the best little
financial investment that's going help him.
Now, as you get a bit older and he starts to create some debt in the earning
capacity and we want to wipe the debt out. There's a risk problem comes in.
And suddenly there's a risk sale in. And then we bring in all the big bits. Tax
effectives and superannuation to try and get a better result and all that. See
where it comes from. It all falls into the pot. So, if I can get in my mind this is the
message I want to get across. If I can do it to better me and mine by doing
these things to understand it, how much easy when I go out and talk to you?
People said to me a long time ago, "How did you sell that million-dollar policy?" I
said, "Well, because I bought one and Vic bought one.” We bought a milliondollar whole life policy. It cost us about 26 grand or something a year. Because
we know that at least a million dollars, we could have bought (30:00) term
insurance but we bought the whole life which was able to induce a marvelous
product because you can manipulate the thing, you can borrow against it,
you've got bonuses on it and all that sort of stuff. Be there as it Mate. It was
much easy to go on to someone over there to commit to 25 or 30 grand or 20
grand a year when I go settle. That's what I do. This is the same with the business
plan.
I can remember some (30:27) folks sitting there a couple of them and I'm about
too close to the (30:30) bench but they were sitting in there. And we we're going
through all this and I said, "What you really want to earn a year?" And they said,
"We want 50 or 60 grant a year." And I said, "What? What are you doing in this
course?" "Oh, we heard that it was good.” And I said, “Nice to meet you. See
you later." You know, really, they're ambitious were good luck to them by the
way. No hassle. But their ambitious weren't synonymous in what we're trying to
achieve and that is I want to get bigger and better. I want to build my client
base. I don't want to be seeing 50 people a year. I rather see 10 and 10 people
that you look after from the cradle of the grave you do all the work and
associate with it, help them with their marketing, help them with the things that
they're doing in their business, look at the context that I had. I end up with
people wouldn't buy carpet, wouldn't buy a car, wouldn't do this things. And
then I said, "Vic do you know someone?" "Of course, we know someone." And so
it became Vic and I becomes like a family. And then we run some seminars
drinkies that we go through this computer program and we get people that will
enjoy talking with each other.
Now good putting people in there that had different likes and different wants
and requirements and had a different attitude and likes. So, we blend them.
And those people, and they talked and they sat, and it worked and it's
marvelous. I guess who was the king. We we're doing it all. So, we then go to
them and say, "Listen, you're doing so well I want a bit of help." And if you ask
generally for help, nice people will give it. "I want a bit a help. I've got to this
stage where we're providing all the stuffs to you all these benefits and
everything to you. But if I don't get more you, I won't be out continue to do it
because I'll get broke. And I don't know enough of you but you know because
people associate with people steps and stairs. And they keep go to that skill so
that's how the referral system came in and they like what we did and now
happy then cause they saw the total picture, the holistic approach to whole
this. We take them into make colleagues of ourselves. A good made of mine
probably is one of the best engineers of wheels and state planning that I know
and I introduced them to him. I get him to come and talk to these groups of
people that I had.
I get and come and talk to the fellows in their program and now the level and
now the revenue and I wasn't good at that stage at state planning but G was.
So, why pretend I'm good when he's good. So, I take them to meet him. He
wasn't going to go and channel them off to someone else. That's the risk that
people see, oh that's a bad risk. Because the moment you do that I think you
lose your own credibility. I think that's the way it goes. And if you've got the word
to it all and the right clients and the right associates and the right people that
support you it works like that.
I build up exactly same as I've been saying. I'm a mortgage broker. I'm a
general insurance underwriter. And I'm talking to them and saying, “Well, all
those clients you've got out there. But what about saying to them this is only part
of your business or part of your process what do you do about these other
things? That's not my bag. What do you do about them?” “I know some people,
I know Malcolm Payne he's quiet happy to come in and look at all these areas
that I'm not really good at but you should be good at because I want you to
understand.”
You have to look at and I can tell you now really to say everything is hunky dory
well done tick the boxes. Or you'll say there’s a couple of areas here that needs
some support. If you wish I'll put it together and then you take it to your own
people and have a look at it on one basis only. You can't take my written
process and give it to someone else. You go and find out that they're as good
as me and if they come out with something better fine. I'm not in the business of
trying to take other people's advices or way. But, I'm in the business of saying
happy to do it whilst it's an amazing thing because not a lot of people are able
to look at the holistic approach and do it properly.
And so, that's how we got. We don't have mortgage brokers in our day. But, we
have general insurance underwriters. We had the banking fraternity who were
trying to get clients in the door and the banks didn't provide the information on
those days. And we go to the banking fraternity and say, "Look, you got all these
people to come in. You lend the money. What do you do? Do you find what
they needs are? You know in all my time in this industry never ever, ever, ever
did any accountant or any lawyer that I worked with or any banker ever sit me
down and find out what it was I was trying to achieve in my life." Not one. And I
have number of accountants and number of lawyers 2 or 3 bankies. Not one of
them ever sat me down and said, "Listen, we do business with you but what are
you trying to achieve?" So what do they do now? They flank bloody insurance at
on television shows. Ring up now, and it'll cost you a dollar or 50 a day. What do
you need? I probably need two. How would a person know what they need. I'll
give you an example. Fred Nick on the television the other day rang up and
said, “Well, I want to repay my mortgage.” “Well, that's good, that's admirable,
and I think that's good.”
So, his (36:09) debt the mortgage repaid one of the family won. So, the girl on
the switch board is going to ask him. So someone in those days are gone. So you
want to ask the question to me. What would I do as an adviser, how to
overcome that? I turned around and say, "If you've got to go and see a
cardiologist because you think you got a heartburn you don't go and ask a
chemist. Go to an expert and let the expert come in and have a look. Now, if
the expert happens to be me or you or whoever it maybe they'll go and had to
look at the process and say well listen, gaps are in the plan. Here's what I
recommend but you can't do it all at once right now I reckon from what you're
telling me about what you're trying to achieve in your objectives. We all cover
this but first. Because if you turn to me and do the general insurance the life
insurance the superannuation the financial investment to that. They won't be
working for you and you might not be getting any money."
So, again, it's a process of understanding the needs and this goes back to that
objective that magic O. “I've done it. I know what I want and I know how hard it
is.” So, that's again in this process that these people are learning and growing
and I can't mention names on this but boy this one in particular if we said run
over in a corner he did everything we said and he's probably got the most
productive business turnover in financial planning in Australia and he's a
superstar and he's great. But, what he did is he committed to do it.
Now, what we did at the time there were 3 or 4 others in the country who run
great things what we did was pretty interesting, pretty new. People want to
follow it. But, if you only want the bit it’s really not much good. When I asked you
to categorize your clients to As and Bs and do it legitimately he’s typical. How
many A’s you've got? “Oh I've got about 50.” Let's have a look. Let's pull criteria.
And we did, how many you've got now? “Five.” Like I tried it in before we got in
and say, "What we're the three things that you've got out of it?" He’s on holidays.
He’s over skiing somewhere. I don't know where he is. He's over seeing someone
skiing. He must be in America or somewhere where it's cold.
And I can remember, he even said he told these and said, “We had three.”
Then he worked on it. Now, he's got an unbelievable business and unbelievable
practice. He’s into property development. He's got everything but he did it right.
It's part of my objectives. And in the end, I find reasons not to. So in the end, I've
got the diary. Vic got his diary and at 11:30 on a Friday voska (39:09) we're not
there. And suddenly people learned not to ring on a Friday afternoon cause we
weren't there. No mobile phone so they couldn't get you on the golf course.
And then the golf course stop you to use them anyway. And that's what we
wanted to do. And here's where it boils down. So, what we used to do in 5 days
we had to achieve in 4-1/2 days. That meant back to the activity. Back to the
drawing board to say, "We haven't got 5 days to achieve X. We have 4-1/2 days
to achieve X. How do we get the same result in 4-1/2 days?" So it was just at the
back of equation. Take it from there, go back, and work it out. That means I got
to turn around and see someone else, which I didn't have to. And it's just a thing.
You just going to make your class to do it and again it's not easy. But I was
working pretty hard and Vic was working pretty hard and stuffs are working
pretty hard. Well, there are other things in life I haven't worked. Sometimes on
the golf course I wish it would work because in golf course in two flesh. But that's
part in the past. I love it. And again, this comes back to the ability to do those
things, which can't do those things if you haven't gotten sit and start what you're
trying to achieve.
I'll give you a little snippet. Business Insurance. The simplest and any is afraid we
(40:39)friable. The simplest, easiest, common sense style in the world or any other
big place you can think of is the buy sell story. People who are in partnership in
business whether it'll be with family members whether it be with non-family
members whether it be as a partnership or whether it's a directorship or well it
doesn't matter what the vehicle is. It's other people that you're in business with.
Now, the P is to me. If you had your dry list and you can argue me back and
forth. If you can't control your own destiny, what's it all about? I can control my
own destiny, it’s got to rely upon me. So, one or three things can happen in my
business. And let's talk you and I the partners in the business. One or three things
can happen with one of us. One of us could die, we could become seriously
disabled, or we want to quit. Okay.
Now, let's say it's you. I'll be saying to both of sitting here okay. She's gone. I got
to work with Tim. I'm not working with Tim. I'll buy you out. Okay. How I am going
to buy you out? Well it's pretty simple, there's only four ways I can buy you out.
I can go borrow the money. So let's say the business is worth $1. Okay. I can go
and borrow a dollar. What’s that going to cost me to borrow that $1. It's going to
cost me a dollar cause we got to pay it plus, plus, pluses. It's going to cost me
the loss of opportunity on that dollar. It's going to cost me the interest on that
dollar. I don't know what the tax modifications are so it's going to cost me a
dollar plus, plus, plus. Or, I could take from cash reserves if I got them. So, what's
the dollar going to cost me? It's going to cost me the dollar plus the loss of earn
on that dollar plus the loss of opportunity on that dollar. Dollar plus, plus, plus,
plus, plus. Or, I could do a terms contract basis and say, "I'll give you 50 cents
deposit and I'll pay the balance of over X years, whatever." Well, what's that
going to cost me? It's going to cost me half the dollar because I have to turn
around and take it out of cash reserves or borrow it. So, that's a dollar plus the
interest, loss of opportunity of money and I'm going to pay you back. So, it's
coming out of income. So, it's a dollar plus, plus, plus.
Or, I can sell assets. Oh my god. I can sell assets. What happens if the market is
down? And I've got to sell property or shares or whatever when the market is
down. What a disaster that is, cause it not only cost me a dollar but it costs me
all the loses that I sustained.
Or, if the market is up, you beauty I've now turned around and stop the growth
and all those assets because I bought you out. Dollar plus, plus, plus. How about
if I leave all those intact and don't put you in that position and it's going to cost
you depending on your age and your health but it's going to cost you
somewhere between a half percent and a cent of a dollar per annum. Which
do you want?
You told me you want to control your own destiny. Okay. Well, the only way you
are going to do that is if I can make sure that I can buy you out. So, dollar plus,
plus, plus. Dollar plus, plus, plus. Dollar plus, plus, plus. Dollar plus, plus, plus. A half
to one cent per annum? I rest my case.
What I'm trying to do is to set the picture that I'm sitting down with the prospect
or client, but I'm trying to talk in terms of that insurance. Now, super. But,
superannuation is probably the most tax effective investment in the country at
the moment. It's a beauty that changed all the terminologies I used to know as
Al-Qaida pinch or something else. Now, but then they're beauties. But you
mentioned superannuation that people that throw their hands up in the air and
they got water. So, you talk about things like there is an investment at the
present time, which is underwritten by the federal government and the
opposition, underwritten, which if you put in that amount of money into that
investment they're going to charge a half the rate of tax that the tax office
charges. They got to do this and this. And this is underwritten.
It's not me. Show me, tell me about it. Well, if I do you'll probably ask why you
want to do it? What is it? I say, "It's got a funny name it starts with S and end in N.
It's got a lot of. It's called superannuation." “What? It's just turning things around.”
The other thing that we'd came up with and a bit of a baby of mine is called
‘The Meat Principle’ which I happen to work in all my life and I got so many
people in businesses that still do it.
When you look at your expense budget and then they all are stuff, tax office,
provider, consultant, to all the and there's all money that's going out. Where
were you? Anything you might get will be a percentage of leftover in the end.
And a lot of the time there's nothing leftover at the end. So, the meat principle
says, "The first person that gets paid every month is Malcolm William Payne."
Whatever the figure is, my monthly Skype and whatever that fee and I get that
paid into my bank at the start of every single month. Then the rest of them come
in and get paid. Now, some of them at the end of the month are going to get
paid. So, they become 30-day creditors to 60 days to 120 and next month I get
someone else to turn.
Now, think about it. Otherwise, who are you working for? So, that makes sure
you do not want to have creditors. You don't want to be seen like that but you
pay yourself first. And out of what you pay yourself you go and do your holidays
and your trips and your cars and everything. You do not take that out of your
business. The business is the business. And if there’s something that it pays you,
you go and do that but so many people turn around and go on holiday and the
business gets all mixed up. You can't mix it up this business. I keep on this
business, business, business. You can't play with it. It is the provider. It is the 47: 07
sacred sung issue in everything you do. So, meat principle. You should do it
yourself. That's what I want cause I've done my objectives and the budget that
says that's what I need per month and that's a monthly figure. That goes in and
that gets paid out. Now, how am I going to balance the books and it all comes
back. It all comes back to square one.
Kim
Golden.
Malcolm
Go and talk to your clients about it. They're in a different position. I saw statistics
some time ago of how many small businesses that started up and how long they
last and I went to it and go and address many, many, many god 47:46 laugh
goes quick doesn't it. Years and years ago. To a thing that was put together by
semi-government bodies for people who were starting their own business. They
want to go into business and I used to go and talk to them and ask them why
and just trying and point out the facts and it's admirable and it's terrific and it'll
hurt. But you got to ease to hurdle a little bit. But, you just got to step in stair and
step in a stair. And, I see today. Recently, I've read something about the
numbers of small businesses. Every year they collapse. What a shame. They over
extend. Why do they over extend.
They over extend because emotion and desires at driving it. The facts get in the
way of reality. They just get in the way. That's what I want to do but reality says
it's not going to work like that. You got to know where you're going. Easy? No!
Difficult? All the way. Why are some better than others? Because they fight the
hard yards. They do what is to be done. And it's not rocket science but they
don't do it. I think we were the first with an accountancy firm that really back
many decades ago really bit the bullet on business planning. And people used
to look at this excuse. What we're they talking about. Because you worked hard,
you did everything good, you run like Billy'O. At the end of the day, where is it
all? When is it gone? What happened to it? And it all got mottled up now. This is
not meant to sound do this and will happen tomorrow. But I can tell you what.
Get with the consultant and start quietly working on it and it will happen.
Nothing happens overnight. And it'll all fall into place.
Make your client base religiously. Get their A, B and Cs right. Other words, every
year reassess you’re A class, B class. And they shouldn't have Cs and Ds. They
are 49:51 penalty for failure. Every time I see a C, I'm gonna lose money. A
revenue chaser. I can only work with the Bs and As. Is that issue? Oh tart. But you
can sell in there you see. You can sell your Cs and sell your Ds. That's an
opportunity. You can stay in their and that's what will end up as a C and D
yourself.
And you'll just gotta look at the Obamps theory. You just gotta look at C and get
it's right perspective. And there's hundreds and hundreds and hundreds of books
on people who've written about businesses and business planning and then
body language and all those stuff but there's plenty of good diary out there. But,
it really is a simple exercise which has made more difficult because of lack of
knowledge but that's where you can fix all that.
It's a simple exercise. Before you do anything, find out what you really trying to
achieve. No more knowledge. And if you take that same to your client base
and your prospect base to your mortgage broker people and all that. And talk
about, I'm trying to find out what makes you go. I want to know what really. If
something happened what is that you want to be the result whether it be
retirement early whether it be look after your family, if you get knock over and
you become a vegetable? I want to know all these things. You’ve got to tell me.
Then when you've told me well sit down and say well we can’t do all at once.
Let's prioritize. Let's get one bit right first and will start progressively planning for
the next bits. But, I can only do that if I going with no preconceived ideas.
When I started out preconceived ideas, every person I saw is going to buy
10,000 A policy full stop, goodbye, sign out down to the pub. Okay. Hey, I've
done. But, I was never told any different. And so, we broke that 51:41 mold and
we went have and told ourselves to be different and then we invented a whole
our lives of things. We spent a lot of money with some of the greatest tax
planners in the country. We started the business go Fred Richard services. Fred
Richard was the absolute guru, wrote all the books on superannuation and tax
for the government. Everyone else went employed in to get the best advice to
provide to our people. But, we didn't do it that day. Or, bang the hands again.
We didn't do it that day.
And that's in nutshell about where it is. The difficulty with risk I suppose cause you
keep asking me me about risk. The risk insurance is an intangible. You're selling
an intangible. If I wanted to save you that pen, I'm not going to that wolf of Wall
Street. If I wanted to send you that pen I could say, "Have a look at this. This is a
beauty. In fact, it has all different color to it. And have a look at how easy it
flows. You can use both hands. And in the last X month, I'm going to sell it to you
for X dollars. You can look at it, analyze and think. Yeah, that's good value or
not.”
Now, I'm trying to sell you insurance. It's intangible so I got to have the ability in
the sales process to create word pictures and I've got to see you in the coffin or I
got to see you in the wheelchair. I got to see your kids standing there with
money knows and no money. I've got to see without you. Well, you can look like
that but they are the facts alive because if you don’t got it they're not going to
have it and that will be what's going to happen to them. At the same time, if
you don't build up your own retirement if you want to rely on the government
good luck to you.
At the end of the day, if you want to live comfortable you got to do it. But now
going to do it in the last five years. We've got to stop doing some things now.
And will get involve with the tax and all that." That's just another exercise. But
there again I go back, if I sit and I didn't and I learn to do it. And my greatest
problem was I was not a good listener. Pretty good with the golf but not a good
listener. And I found out when I stopped and listened pearls came out. Lots of
signs and things that you know really, really want to be out of business and this.
Well I’m just thinking a kicker. And when these pearls came out, he just gathered
them in and sort of work in where we go to next. And the greatest thing I was
able to say when I put on the presentation to him I said, "Do you remember Kim
that you said you wanted to do this, this and this? And you needed to achieve
that, that, and that. Remember you said that? Yeah, good.”
“I want you to have a look at that. Because that there guarantees that you can
do this, this and this and by the way that, that, that guarantees you that, that
and that. Now, there's a cost to it but it's all been done. I've done the work now
where do we go from here because I've got to get on with life? Do you want
me to organize some things for you or not?” I get a negative. Someone hang on
me. I spent a lot of time. You said it. So, what you said you just not believe it. Oh,
you did. Well, there it all is. That answers it all. All you got to do is come up with
the fright or done the work when they're going to be partners for life and all this
cause I’ll work with you. You're in a hole aren't you.
You said you got to back off. Well, see it really is quiet an interesting thing. I
remember or rather I read a book for that paper and some videos year ago. We
did videos and all sort of things on the art of selling. Selling is an art. Acting is an
art. Selling is an art and to get the art of selling you've got to again go into the
guts of it. Find out what it is. And when you've got what it is, you got the answer. I
can't knock you.
Oh well there's a lot of changes that have occurred since I was physically
involved in the business but they are superficial. There are different product
ranges, different tax regimes, different forms I've mentioned before in marketing,
different ways that you can get dive for an info and computers and all this stuff.
If I had to start again today, I read the first seven or eight years are wasted
chasing revenue. But, I had no one to guide me. We had no one to tell us any
different. And I'm not being disparaging to the insurance offices. In fact, I don't
think they wanted us people like us because we're doing things that they hadn't
thought about. It suddenly echo with me and I've stopped putting all these
things on blood tests and white test and longevity test to get the policy. So,
they're happy to have us out there floating a range of products. I don't think a
lot of that changed. I probably get shot down but I don't think a lot of that
changed. Flop the product and get their revenue and they’re revenue chasers.
That's what they are.
So, we saw it differently and if I started today I would go to a Malcolm Payne
Associates seminar and have to listen on what he have to say and make up my
mind whether I was that clean to do it and control my destiny as I talk about in
the buy sell story. If I was that kind to do it, I do what I was told others to do. But, I
do it with one thing probably. I would apply more discipline to what the targets
that we set cause it's very easy to step off the edge and all this are prospect
and I go and do that. It doesn't matter cause there is an extra 50 grand on this
or 20 grand. No, no, no. That doesn't wok that way. You stepped away. No
discipline.
Kim
I just want to say, "Thank you so much. That was absolutely golden." Some of
those little freebies as you call them or the golden nuggets that came out of
that. Anyone who was listening you know really take his advice because he did
it well. And probably the biggest thing for me is he practices what he preaches.
And there are many others out there that are telling everyone else to do this
and to do that but they're not doing it themselves. They're not taking their own
medicine.
So, personally, I would like to say how grateful I am and everyone else out there.
You are a remarkable man. You had remarkable success that you are the one
that has created it. You have been in control of your own destiny.
So thank you for listening. And if I'm lucky enough will get him to share a little bit
more over the coming months or years. Thank you. I love you.
Malcolm
I love you too.
[END]
<0:58:19>