MM 291 - Why Your Boss Drives a Ranger & You Don’t

Generate is supporting my vision to improve the financial receive 100,000 Kiwis by sponsoring Keep the Change. Cheers, Generate! Head to generatekeyweesaver.co.nz/change to find out more. Stay sharp like Jalette, I'm putting in that work, still never break a sweat. You talking all that talk, I ain't seen nothing yet. I'd rather take a chance, then look back and regret. Ah, yeah, I guess I'm the exception. Trying to crack it now, ain't banking on that pension. Let the music speak, don't really need attention. Damn Nico, this you, huh? That a question. Yeah, you can keep the change like Luke. Well, welcome back, you were listening to another episode of Keep the Change.co.nz/moneymail. We've got a gnarly one today, and this one is going to get a little bit confrontational, probably poke the bear a little bit, maybe trigger the odd person. But please understand that it's coming from a place of trying to educate people around the realities of the topic we're going to be discussing. Because at the moment, wherever I go on social media, I can't help but see these recurring comments from employees who are frustrated about their situation, and potentially the reward that they are getting, and a little bit of envy of other people. And I think part of it is what's happened to our purchasing power. But the other part of it I do think is a lack of education that we don't give people around running a business. And a good example, I just jumped off of YouTube, and there's somebody telling me that contractors have no employee rights, and by doing that, you're part of the problem you wanker. And obviously, you know, people have a lot of hate in their lives. And I remember, I'm pretty sure it was Big Daddy. You know, Adam Sandler is saying to the young fella, "Oh, he's saying to a do-walking past." He's like, "You're not angry at me. You're angry at your dad." And then the guy's like, "Yeah, I am angry at my dad." And sometimes when I think about these people, and they have all this venom in their comments, I think, they don't actually angry at me. They're angry at the system, the government themselves. They're not going to acknowledge that it's themselves that they're angry at. They're dad, something, you know, but they don't have their awareness to get to that stage yet. So, it's taken out on the keyboard and to anybody that's popping up and doing anything. But again, so, okay, well, right now, mate, I think we've got 470,000, maybe more soul traders in the country that are choosing to contract. Now, that's their choice to do that. So, why are you so angry? Are you telling all of them that they shouldn't be? And they should be an employee? I don't know. But people don't learn enough about what's going on, I guess, to then talk themselves off of the keyboard and get so wound up about something. Now, again, so I think that's an education piece that's missing out and going to give you a whole stack of examples. But for a lot of people, I believe that they're not actually getting a head financially at the moment because unlike yourself who may have been here for some time listening and learning, you're understanding about inflation and how you're going to have to increase your income, your household costs are going up. There's a lot of frustration, even if the economy is slightly turning and it just rates are coming down because you know, or you can feel that even if you're getting a pay rise, well, the time you pay tax on that because we didn't actually index the tax rates with inflation, this is another problem, then you're purchasing power after tax, can't buy the things that you would like it to buy. So then, you know, I'm seeing comments of what's the point of even going above and beyond or pushing hard, you don't get rewarded for merit in New Zealand, and it gets all these likes and I think, wow, okay. So there's this kind of groundswell happening of this frustration and I think that piece is purchasing power and inflation. Now, the other piece that I think weaves into it is, you know, then people go online, watch the news, see stories, you know, it might even be, they say I don't watch the news, but actually they just watch a piece of content on YouTube talking about the news, for instance, or a podcast or talking about what's happening or a politician. So they kind of are consuming the news or a narrative, and then they don't like what they see, so then they're frustrated by it. And I think this is playing out, you know, all the time, and unfortunately, if you get caught down that rabbit hole, it can be very, very tricky, and it can be very tricky to get yourself back from. Now, what I think is happening is that in New Zealand, like we don't talk about the SME world nearly enough. You know, it employs one in four people, so then you would go, probably why, because it's not big business. But unfortunately, I think the SME world gets punished by the reporting via media and general storytelling of business, being these big beasts, so if we say insurance companies, they're screwing us, you know, putting up all these excesses and putting up premium, sorry, and still making money, the banks, you know, the banks are making so much money, and then there's the, okay, people with some people learn, it's corporate greed, it's profiteering, you know, these sorts of terms, they cause inflation, it's the greedy corporates, it's greedy business owners, and you buy into whatever it is that's going to suit your defense, right? And unfortunately, then the poor old bloody SME business owners get caught in the middle a little bit, and so you can kind of see how this big, you know, divide is created or this frustration for the everyday person going, yeah, why is my life hard? What is it? And you're going to grab onto these things. Now some of them may be accurate, they may be loosely accurate, but others may not, but again, coming back to the start, I think there is a fundamental lack of education of running a business in New Zealand or the cost of doing that. Now what kind of sparked this money mail is that I keep seeing other comments like, I get paid $35 an hour, but they charge the client $150. The boss is ripping me off. And especially I did some content around doing extra work, and then, you know, you're going to pay tax for it, and is it worth it? And people saying I'm not going above and beyond anymore, and you're sort of seeing it as a bit of a thing. And again, you know, people are saying, well, why? You know, why am I going to work hard when my employer gets the new European car and I just get shafted. And this whole sort of, the next wave of it is, you know, without employees, this business is nothing. And I completely get that. You can see how that's logical to somebody, but if you step back from it a lot, yeah, but just like everything in the world, you normally need different types of people, different resources, and everything gets pulled to then move something in a direction forward. And this is frustrating for people. I think when they are emotionally brought into it, and seeing other people do well, or they're buying a narrative that, you know, I get shafted, the employee always gets shafted, but my boss is killing it, and they are making heaps of money. Now they've got a new car, and I've got a pistol pay rise, and then there's inflation, and now I can't afford the things that I can once afford or still need to afford a fuck business owners. You can very easily see how it gets to that summary. There's a lot of missing stuff in the middle of that, and I think that's what we want to touch on today, just to better educate ourselves of the realities of business. Now I'm coming at this from more of a lens of an SME, so a small business, but all businesses face similar problems, and small businesses eventually become medium and large potentially, but the real top end of town, I'm not really, that's not my experience or expertise. I don't really play in that space. So, you know, I'm not talking at a level of the real big businesses, and banks, and those nationwide, big conglomerates with bloody thousands of people, or that sort of thing. We're talking about the everyday mum and dad type business that a lot of us probably don't really understand what it is that they're going through, but then see business gets spoken about in the media, and go, "Oh, that's probably the same for a small business as well." So, in the comments, I'm seeing things like the OK, I get paid XYZ per hour, and then they charge the client five times that, like, "This is bullshit." If it wasn't for me, they wouldn't have the money, right? And then things like, "My employer just got a new flash vehicle. Lucky for some, they raised their prices. The owner must be greedy." You know, that's the profiteering and the greed and all that sort of stuff. Now, we're busy. My boss must be making the killing. Why can't they pay us more? They charge out heaps. The boss is always out of the office. Must be nice. That sort of commentary. Now, again, unfortunately, most employees never get educated on what's really going on behind the scenes, or the true cost of running a business. And to be honest, a lot of SME business owners, they don't even educate themselves on the true cost of running their business. We've got very high levels of liquidations at the moment. Now, we've done a money mail on liquidations, but liquidations come when you don't have enough margin in the good or service that you're selling. And your costs become higher and you don't make any money, and eventually you run out of cash, and when you run out of cash, you then have to borrow money or get behind on payments to people, so you go into debt, and eventually someone goes, "I don't trust that I'm going to get repaid. I think we should put a stop to this. Let's liquidate this business." And then you go down to path of liquidation. The business has to cease trading, and often the people who are old money don't get paid all of it back, and everybody that worked there potentially loses their jobs. Now, that's the cycle of business, and that's the end of the game for a business, when it's not working, that can be what you face. And we'll talk about this later on in terms of the rest that business owners take. But most people don't have an idea what it actually costs to employ someone. So when someone says, "I get paid $35 an hour, I'm getting shafted here," they aren't thinking about the other costs of that per hour unit. And then of course there is risk, which I just mentioned before. And we're going to step through some of these as an example to help you understand it a bit better. But people have no idea about the risk their employer carries, so that the employee doesn't have to. So we're going to break down some of these, but before we do, unfortunately for some, we live in a world where you get rewarded for the risk you take. And this is true no matter what you're looking at. The more risk you expose yourself to, the bigger your upside, the bigger your downside. And I think a lot of us have been brainwashed into thinking that going to school to university to then a safe job was taking a big risk. It was basically a tried and true path that looked very safe and provided security, and then we're sort of expecting large rewards. Well, what I came to learn is that you can't really expect big rewards when you're not taking risk yourself. So if you don't want to take risk in that space, you know, that's fine, but in terms of your job and your employment because you crave security in that, that's just how you're wired. You've then got to look at, "Okay, well if I want financial rewards outside of my work, where am I going to take some risks?" So it might be making sure that your kiwi saver is exactly, you know, mapped towards your risk profile and longer term. And I'll do an entire moneymail off that. But just remember that often reward comes from risk. And business owners have to take risk. And their profit or how they get paid is the reward. So an employee can't compare themselves to an employer and kind of go, "I'm just as important in this. I know this can sound harsh, but they're two very different things, very, very different." So for both to expect, you know, the employer can't accept no responsibility and no risk. But the employee, they can't expect large risk because they're not taking a large risk by being an employee there. The risk that they're taking is that they're not actually getting closer to where they would like to be, and they have a risk of opportunity cost of swapping their time and their part of their life to work there. Now only the employee can work out whether that risk is worth it or not. Now we'll come back to risk, but let's go back to the $35 an hour. The business doesn't just pay $35. So here are some of the other costs that we may skim over without the education of it. Kiwi saver. Now someone's going to instantly say, "No, wrong. My Kiwi saver comes out of my overall pay. My employer shafts me." Okay, you might want to take that up with them and see if you can negotiate that to be different. But this doesn't change the fact that I'm about to list out a whole heap of costs that a business owner still has to pay for. So don't get stuck at that one like, "No, no, no, that's not how my employer does it. Therefore all of this doesn't make sense or doesn't matter. There's four weeks of annual leave. What does the employer do when the employee isn't there doing the work? How do they keep the business going? Where does that money come from? Sick leave might be something important that needs to be done. Employees sick. There's 10 days there. What does the employer do when the staff member is sick? And again, like, this isn't anti-employment. This isn't, you know, you don't understand you're an employee. This is shish. Have I actually thought about this stuff before? What if more people understood the true cost of an employee? Would I be so angry at the world or frustrated by what I'm getting paid and not appreciating the other things that go along with it? It could be public holidays. I think there's 11 now in New Zealand. And time and a half plus a day in Lou, mostly when you work those holidays. So, you know, who's going to pay somebody else to then work on those days if you can't be there or you don't want to do it, but the organisation has to keep going? And we all work in different types of organisations, right? Whether it be an SME, whether it be a cafe, open on a weekend, whether it be a factory type set up. So, you know, some of these things I'm laying out won't really necessarily apply to you. But all of these things add on extra costs. There's ACC levies that an employer must pay. And there's training time, okay? How do I train somebody to get them to the point that I would like them to be at? That's an investment into the team. What about travel time, okay? That job is up the road. The staff member has to go there. It's two hours of travel. All right. Well, the employer is still going to expect to be paid on that travel time. Oh, I'm sure that gets billed to the client. Sometimes, what happens if the flight gets delayed? Again, it's the risk that the employer is taking. Oh, she's, flights cancelled. Hey, boss. You're going to need to put me up in a hotel. Oh, sure, okay. Is he won't close by? Then I'll see what we can get. Oh, this one's $400. And yeah, they don't need an Uber there as well. An Uber back in the morning. Yeah, oh, that's incredibly inconvenient for the employee. Let's acknowledge that. But all of a sudden, how will he be cost that we hadn't budgeted for? Mistakes and rework. Hey, boss. You know that deck we were doing? Yeah. The one you've just finished. Yeah. I kind of dropped the whole thing, a paint on the end of it. And we're going to have to take the edge of the deck off. You can tell I'm not a trader. I don't even know if this is a real example. And start again for that quarter of the year. Oh, well, I've got your schedule to be on the next job that we need to get moving because I've already paid the deposit in. Oh, sorry, boss. This is probably going to be another morning of work here. Oh. All right, all good, all good. I have to order some more materials so we can finish that. And then I have to ring the other client and say we'll be there a bit later tomorrow. Hopefully that'll go a bit because they really did want us to start it tomorrow. And I can see the weather's packing it in tomorrow afternoon. I know all good boss. I got to go anyway, mate. My, my, my boyfriend's calling. And yeah, he, he wants me to go to TwiCon. Don't tonight. So I got to go to CMA. Yeah, I'll leave that with you to sort. Sweet payroll costs. So to even pay these wages. I'm going to need a payroll service provider. They're going to charge us a fee. Now, look, you boys are going to come along at the end of the year as well. And say, oh, probably need to a set of accounts. There's some accounting costs factored in here as well. Then hey, you grab this thing pretty quickly. It's good to see where it's growing. You're doing 70 hours a week as a business owner. You're looking pretty great. You're looking pretty old. You're saying you're unhealthy. Don't have time to exercise anymore. Might be time to pay for some evidence. Support gets some time back into your day. Yeah, no, I'll do that. Do that in six months. You don't do it after your heart attack. What do you mean? You decide. Employers are going to think about that. PPE and tools. So, don't go into that job site. Don't be doing that. Hey, well, well, well, don't go in there without signing in. We better make sure the health and safety meetings been down as well. Hey, your boots are cracked at the front. That's not going to cut it. We better get you a new pair of $300 boots. Who's paying for those? Oh, excuse me, boss. I went to the physio on the weekend and yeah, I was noticing my posture is not that good. Can you please pay for me to get an ergonomic disc installed at my house? They didn't $100 thanks because you'd be way better for me. I'd be more productive too when I'm in between doing the laundry and stuff on the Fridays when I now work from home. Obviously, I'm taking the person a little bit with some of these examples. But do you get what I'm saying? There's some, a lot of costs that you can't see. Vehicles, fuel, insurance, tires, servicing. Sorry, boss. Backed into some lady. Doesn't have insurance. Not sure what the goal is, but I'll leave that one with you. You're all good to sort that. That heart attack get any closer? Uh, all good. I say, boss, I know you're on holiday, but I just had to let you know that yeah, drove the car off of the way he gave you, uh, ferry terminal. Yeah, it's in the sea. Yeah. Now, all good. You got insurance, so, eh? Sweet. What about the insurance excess? Where does that come from? Oh, yeah. I have to talk about that. Hmm. Boss, Christmas time coming up. What's it go? We go for lunch. Saw the competitors wear it on a yacht. Can we do that? Where the hell is that? The risk when cash flow slows. At least work out there. Still got to pay the team. Still got to pay the costs. Not as much work going on. The responsibility when a client doesn't pay. Now, often business owners have to pay the wages before even collecting the income. And I'll explain that in a second. The risk of fines. Hey, boss. Yeah, got this speeding fine. Oh, shit. Do we have a fines policy? Don't know. Check the internet. That we have to pay for. Okay, cool. Yeah, that internet. That's more cost for the business that we've got to pay for. To have a policy about whether the employer or the employee pays the fines. Uh, should I take it out of their pay? Oh, now I've got to think about that. How does that work? A bit of check with the payroll provider that we're paying that cost for. We can ask them how to take the fines out of the pay. Hey, boss. You don't need anything to do any business development to keep the business going? No. I've been tied up with the admin trying to figure out how we get the fines out of Barry's pay. Because, yeah, he was speeding three times in one weekend. Yeah. Uh, the risk of a personal grievance. Didn't follow the process. Shit, where's that money going to come from? Do you get the picture? There's just some fun examples that I came up with while spitballing. Again, I'm not shitting on employees. I'm just saying, this is the reality of running a business. This is the sort of stuff that people don't leave in the comments saying, you know. Oh, yes. I get paid $40 an hour. I can see I get charged out at $160. Uh, but there's all these things that I think about. No. We just go, well, revenue must be that. And I get paid that. This is bullshit. Again, I just think it's a lack of education for the individual of what the reality of running a business is in New Zealand. Because all of those costs must be covered before the boss makes a cent. And the owner pays themselves. Now, to go back to before, guess what? Well, a lot of Kiwi businesses usually pay all of this stuff that we just talked about before they pay themselves. I.e. the business does the work with the employees. They pay the wages in cash. You know, you've got to get it physically into your bank account, the associated costs. And then they send an invoice to the client and say, oh, you know, give us, we'll give you 20 days to pay. Honestly, that's how a lot of businesses in New Zealand still operate. So have you ever thought about what happens when the client doesn't pay? You've got your wages. Supply has been paid. Hopefully. You know, that debt issue where you spilled the paint on it, I know you came back and fixed it, which would have eaten into the margin of the job. But your staff member was a bit of an asshole and said this before we left. And we're not very impressed because we didn't really get what we thought we were going to get. We haven't paid the invoice. Now, we're going to dispute. We're going to settle. That's delaying cash flow. The wages are already gone, money's gone out, insurance's gone out, fuel to get to the job's gone out, paid for more materials to fix the job. That's gone out. Now we're in a fight. Well, come on, mate, you know, you need to pay, you need to honour it. No, I'm still not happy. There's a bit of paint on the ground on the grass. You've ruined our grass, actually. I reckon you can pay a landscaper to come around and sort that grass out from where you were standing on the paint to then fix the deck that you built. So until that's sorted in our grasses fix, which we spent thousands on and we really love our grass. I'm not going to pay your invoice. Again, rest of the business owner has to take on. So these are these little things that a lot of us, I think, we don't think about. And if business owners aren't communicating this stuff to employees, are partly to blame themselves. How are people going to learn this shit if no one's talking to them about it? This one podcast, like a lot of people probably, I'm not tuned out by now. They're not going to listen to this because it's too in your face. It does, it does almost sound like a beat-up of employees and I get that. But I'm trying to make it fun and comical whilst giving a number of examples because this is the reality. Now this is what SMEs and business owners are dealing with every single week. And no one's got their back or no one's talking about this. So there's no real articles about this or there's no, and an employee's not going to read them if there are. There's no news articles about this. It's always, how do we trigger the masses? Oh, let's tell them how much business owners are making. And how, oh, they've ripped these people off and this business failed. So we got that into the spectrum and then we got the, and the big ones are making heaps of money. And you can't even, you know, buy mints anymore because it's too expensive and your power's gone up. And fuck the telcos and fuck the power companies, etc. Shit, I hate all business owners. Awesome. No one in the middle is like, hey, this is kind of the reality of it. And recently a report said that one in five businesses reported a current loss in the 2023 tax year. So one in five businesses were reporting a loss. Now, I don't want to get to tax technical. But if we take that for its merit, that means that when a, a business does their tax return, they're saying that they didn't make a profit in that year. Now, some of it could be a very minor loss. I don't know. I would imagine so. And sometimes a business does carry a small loss where their expenses may be worth maybe more than their profits. And then they carry that loss into the following year and they use that to offset profits in the future. But one in five, you know, that's, that's pretty ugly. Now, whatever I think I missed this, if they don't, they must take on debt. I guess, of course, like if you enter to fund a loss, you've got to take on debt because the money's still going to come from somewhere. So, you know, then people need debt to be able to cover the costs. So even if we go back to that example of not being paid because the client is arguing about the paint that's on the grass now, well, in the meantime, like you've paid all those bills and you've got to keep the business going, you probably need access to some debt. And so then you've got to go into debt and hope, well, shit, hope I can resolve this, get that paid, back out of debt. This is why businesses use an overdraft. You know, you worry about your interest rate on your mortgage being 6%. You know, that's bullshit. You know what, overdraft interest rate is? You know what, asset finances on a vehicle? Normally double digits. Oh, just how it is. Suck it up, business owner. You want some cheap debt? Who are you kidding? Who are you kidding? So you can see why business owners end up not paying the IID or their creditors in running up debt to them. And eventually one of them liquidates them and goes, "No, not tolerating this anymore." You either got to pay up or wind your business up. And that's sort of the end of the road, as I mentioned before. Right now, secondly, let's talk about that flash new yut. And employees, you're probably going to get a bit of a laugh out of this. And employers, this may, and business owners, this may be a bit confronting for you. Because the employees see a 60K ranger, I'm talking the raw ranger here. And you think, "Oh, it must be killing it." You know, brand new ranger. Reality is, it's almost certainly on finance. The number of vehicles that are financed in this country, especially by SMEs, is unreal. Then they've got 1200 to 200 grams per month and repayments of the debt. You got maybe 200 bucks of fuel every week, 150 bucks in insurance, maybe. Tires, servicing, warrant a fitness, red shows, depreciation, eating away in the background. Now, why do business owners do this? Well, running a business is really hard. And eventually, they want some form of reward. And if they haven't thought enough about what the reward is that they want, what do you think they do? Well, we're humans. And what are humans do? We want status. So instead of having a shitty yut, boom, I can now afford the raw ranger. The raw ranger. It's an example of a made-up car, okay? That'll make me look like I'm doing bloody well. And I'm going to reward myself and I deserve it. And I need this. It's a tool for our work. And they're good bastards. Let us pay X amount per month. I can pay it off over four or five years. I'm getting me a raw ranger. Year. Or a cold in Colorado. Watch me whip. Watch me knee knee. Out of that car yard. Playing into the status piece, right? Okay. I feel good going to work today because I'm in my sick yut. A lot of these business owners, if they had to pay for the whole thing up front, they wouldn't have it. I probably wouldn't want to. Because they wouldn't want to swap the hard work which turned into the money from all the risks that they took to then have the raw ranger, or the cold in Colorado. You know, these made-up yutes that you can maybe picture. They're probably like, nah, I don't want to swap it for that. But because it's condensed down to a loan payment just like us now, personal finance is like, ah, yeah, I can afford it. They can't make the payments on these things though. Some are going to have to swallow their pride and take that range. I've mixed up my words now. I was trying not to use it. The roared danger. I don't have to take that back, aren't they? And the dealerships are probably going to have to sell it, to try and recoup whatever the remainder of that debt is. So don't be fooled when you see these fancy vehicles. Most of them are normally on tick and a business owner probably couldn't afford to buy it outright there and then. And if they were asked to or forced to, they probably have to give it back. Now, thirdly, on to risk which was sort of touched on. But this is the, I think the part that most employees never see or think about in that's risk. Now, remember that bit above about not being paid? Well, there's a real risk in New Zealand. And that, that happens every single week. Because based on zero data from 2021 and 2023, approximately 45% of invoices in New Zealand were paid late. With a significant number being overdue by more than a month. So again, you've got your wages, the employee gets their wages. Everyone gets paid, the bank direct debt, the cash, same with the talcos, etc. They're taking it out. The business owner, what do they do? I can't really afford to pay myself, so I'm going to have to go about. And I'm going to have to try and collect my cash. So in accounting terms, when you do work, and you send the invoice and you've done the work, you recognize revenue. And then you have your costs and your revenue minus your cost equals your profit. Cool, got profit on paper, but clients still owes me the money. And 45% of invoices in New Zealand are being paid late. And a significant number of them are being paid when they're overdue by a month. So again, just because the work's done and all the costs are paid for, the business owner hasn't actually seen their version of the cash to be able to pay themselves anything. A lot of business owners need to have access to debt to keep the business afloat when the unexpected happens. Like a major mistake needed to be fixed by either deck, a client not paying, staff mismanaging projects leading to a loss. How many times I've heard this? Oh, we were absolutely flying as a business, but such and such had a fair bit going on in their personal life, and kind of just mismanaged the project that they were overseeing. And yeah, we didn't get the job right, and it ended up running at a loss. And then that loss has impacted the profitability of the entire business. Oh, okay. Sweet. Probably hope that doesn't happen again, eh? So this is again the risk that a business owner has to take. What's the employee going to say? Sorry. Yeah, I misquoted it. Didn't realise, didn't think about those things. Sheesh, I thought you were your experience. We could trust you. You were all over this. Yeah, I just-- yeah, I-- yeah, I've missed this one. Won't happen again. Okay, so we just worked for however many weeks to do that project. Didn't make any money, and actually lost money on it. Now we've got to subsidise that loss from another era of the business or take on some debt to get us through to the next project to get it right. Yeah, hey, am I still good to take and you'll leave tomorrow? Yeah, yeah, I guess so. Can't really say no, because we might not follow the correct process. And then, yeah, we might end up with personal grievance or something as well. So yeah, so for a lot of small Kiwi businesses, they have their house on the line as a form of security for the money borrowed from the bank because business finance is so expensive in New Zealand. So what does a business do? Well, I've got equity in my property. If shit hits the fan, well, we'd have to get out of our house. We'd have to sell that and we'd pay the bank back with that. Oh, now how easy it is to sleep at night when that's the go? So owner often can sign a personal guarantee on debt. Have to explain to their partner, hey, we need some security against the property to get a cheaper interest rate. Subconsciously, they know, like, we've got to make this work because we're carrying some liability here and we don't want to lose the house. Now, business owner has to front any fines as well and stands between the bank and the business. They've got to take that responsibility and make it happen. Now, again, I don't want to make this sound like it's, oh, you know, employers have got it way worse. They're just two very different games. When you're an employee, the worst thing that can happen, a lot of the time is that you lose your job and then you've got to figure, okay, what am I going to do? Well, normally you're like, okay, I need to try and find another job. When you get the employer, the worst thing that can happen is you lose your house. Now, okay, same thing. If you're an employee, you lose your job. You're going to say, well, you could still lose your house because if you couldn't pay your mortgages and whatnot, we'll look at how many people have been unemployed, but actually the mortgage sales, I don't think have really kept up with that level of unemployment. So, you know, sometimes the bank have to carry some risk here as well and go, right, well, actually we've got to give people the chance to get back on top and get back on their feet because they don't really want to be selling houses from underneath people. But employment, you know, it gives us certainty. And that's probably why a lot of people choose it. And so, when we say things like, oh, you know, not everyone can be a business owner, well, you better hope that some people out there do like risk because we kind of need people to be hiring people. You know, and solving problems and doing things and adding to economic activity and innovating and helping people. Now, an employee has a very important role to play as part of the overall business. So does the employer, so does whoever is funding it, so does the customers. The beautiful thing of business, that's it all works in together. And when it starts not working, you've got to figure out, oh, how do we fix that bit? The employees don't like it here, they might leave. Without employees, we're nothing. That's what we thought about before. If the investor says, hey, I don't believe in what you're doing, we'll give the money back. Shit, where's the money going to come from? Maybe it's debt from the bank. Oh, I've got to get the ID on side because I actually haven't been able to pay my GST. Okay, I've got to negotiate that with them by some time to be able to do it. Get back and control of it. And the employer has to accept the downside of that. Things are going really well. Oh, our best employee left. Shit, new chapter open. The gap is very real. And of course it is. There are two very different things. So when I see these comments on social media, I kind of think, you know, it's uneducated to think that they are the same thing, and that the reward should be the same. Because they are two very, very different paths. And I think both, you know, can be understood. I'm sorry, misunderstood from both sides. Now typically we want security, right? And we want comfort. And we want to be doing the thing that's going to protect us. So employment is beautiful for that. Guaranteed pay, guaranteed holidays, guaranteed sick leave, zero financial risk in that business. Unless you maybe become a shareholder of it, typically no debt with employment. You know, in the employment, you'll have to take on debt in your personal life. But you're doing that based on a guaranteed income. And that's what the lender is then lending towards. So then you're hoping that the business keeps doing well. So you can keep getting your guaranteed income so you can then borrow the money. No fines if something goes wrong. It doesn't normally come out of your pocket when you make mistakes in the business. You're not normally the one apologizing or fixing the situation. Again, that's back to the employer because being an employer is built around responsibility and risk. An employee is typically built around security. And I think it's just important to acknowledge that. Now employers often get, you know, no guaranteed income. They might get delayed payment before they can actually collect the cash. Sometimes after they can get that cash and roll it into the next cycle or month of the business as well. Normally have to have risk in the form of debt. They take liability in the industry that they're in. I've got market risk turning down. I've got staff risk. I've got client risk. Clients go under, can't pay them. We did the work. Had a client, you know, a big piece of work. Probably nearly on par with the median income in New Zealand. Shit, ring me up, and client's gone under. Like, do you reckon we can claim the money from somewhere? What do you think that money's going to come from? This is the risk we take in business. So, bang, you know, they paid all the costs to do the work. Client went under, couldn't pay them, didn't pay them. Client has to carry that risk. Roodle. Turn the page, got to get up on Monday. Keep going. Still, people, everyone still speaks to be paid on Thursday. Shit, how am I going to pay you, Ron, when I was relying on them to pay me? And now they've gone out of business. If you're forced to find solutions all the time in the world of business. Sleep with nights for a lot of these people. This is why it's very important for business owners to have the right people around them to help them solve these problems. And, you know, mentorship and advisors and people who have experienced and been through problems before to help carry a little bit of the load of it because it can be a very scary place to be when problems just keep popping up. Again, I'm not saying that, you know, your problems that you're having your life as an employee aren't real or don't deserve acknowledgement or aren't any less real for you or serious for you. Again, I'm just trying to highlight that a lot of us don't actually learn a lot of the stuff about what a business owner has to deal with. And I think if they did, there might just be a bit more accepting of some of the things that people are seeing out there. And this isn't about shaming employees, it's about educating people. So, when you understand the real numbers, you stop comparing your hourly rate to the invoice at the client sees, for instance. They're not the same thing. Very different. Profit is not revving you. It's very normal on this day and age to make content showing, you know, revving you in online sales or the top line, all of this shit, which is normally the top line being sales. Then there's costs after that. Again, if you don't understand that, you're like, wow, look at all the sales that they did. They're revving you. What was the cost? What was the profit? What was the cash that went home? How much cash is in the bank account? Tell me about that. Where, nah, society's built on biggest number, revving you, revving you, revving you, revving you. So, here's the message that I want people to take away from this. Even if this one has been a little bit confronting for people. If you want the reward, the boss might get one day. You need to take on the risk the boss carries every day. And this is sort of what I think some of these people leave in these comments. I think, what do you have to go? Be the employer. If you've got an idea of the perfect culture, the perfect business, the way it's done, like go and do it. We live in an amazing country where it's, you're allowed to do it. And you can take the risk, you can have a go. You can be the employer that you want to see. Why not? You know? And eventually you've got to knock down with the comments, I'm going to go be the change. But most people don't want the risk, do they? Very scary place for a lot of people and wouldn't be able to handle the risk. I kind of think, well, if you're not willing to take the risk, you can't expect the reward. Because it seems like we're at a phase or a point where people aren't taking a lot of risk but expect reward. I don't think that's how it works, unfortunately. The very big downside to that is that people aren't getting a reward from employment. And then they are gambling with their income into one stock or one crypto or one upgrade to the home or something. And again, if they don't have education around that, potentially they're taking risks that aren't going to pay off or be that wise to be taking. And there was an article in Australia recently about millennials being increasingly frustrated by property prices increasing in Australia and their wages not matching house prices. Does that sound familiar? So then the people, the millennials taking more risk in the likes of stocks and crypto to try and keep up with it because they know that their income can't keep up with it. Now, it should sound familiar, but also it probably looks familiar. Why did everyone do in 2021 when everyone was running to open homes? Should I better go to what are they worried about? Fuck. Everyone's making money and I'm not going to why I don't want to get left behind. I need to take some risk as well. So you've got to be very careful, right? But this is behavior that I think we're going to see more of. There's more people get increasingly get frustrated by not getting the reward that they expect rightly or wrongly from the safety of a salary or guaranteed income. We've limited risk. They are then going to look for larger risks outside of it. And that could be very disastrous for some people if they don't know what they're getting themselves into. And if they get it wrong and you roll the dice, imagine the level of frustration of that person as well. You know, they're probably going to go deeper down the rabbit hole of frustration of the system, the government, the employer, big business, small business. Anyone doing well, it's going to magnify for them. Now, a quick note to finish for smaller employers as well. You are fighting a tide of misunderstanding of how much you're killing it. And that ranger you're driving around in, sorry, that roared danger, you know, you're being judged for it. Now, a concert reporting of top of town corporates with record profits may lead people to believe that your SME is the same. Corporate greed, profiteering, these fancy terms that people love to use. Maybe you've got some responsibility here too. Maybe you need to educate your staff on some of your profit and loss items to help them understand the reality of running your business. Clients said to me recently, what I often suggest to smaller businesses is ask your staff like, why are you here? What are you trying to achieve? Are there things that you can help them with? And that then opens up con lines. It's harder to do as you scale and you have more people than sometimes the goals and things can become unrealistic. And you can't solve everybody's problems, but it opens up some forms of communication. And then the employees starts to become more interested in what the employer is doing too. Easily, a lot easier when it's a smaller business, one, two staff, right? But then they said, well, then the employees started asking me questions of, you know, why aren't we doing that job? Well, there's no margin in it. We'll be losing money on it. Well, how do you mean we'll be losing money on it? I thought it was, you know, thousands of dollars that they wanted to spend. Yeah, but have a look at this. Here's the cost and then we need to travel. We need to do this. Then we need these tools. Then we need to buy these materials. It's probably not worth our time doing it. Oh, shit. I just saw a big number, $4,000 say. And think that we get paid X Y Z per hour that that's heaps of money. But again, you know, these employees aren't learning about this stuff because we're not doing enough to teach them about it. So some of you, I think, may need to, you know, go on a journey of trying to teach your team and your employees some of these things to help them understand it a bit better. Otherwise, the narrative at the top and the anti-big business, etc. I think we'll just creep down into a belief that small business is exactly the same. Now, again, I appreciate this one can probably sound like a little bit rough because it's not. It's so hard to talk about something that, you know, impacts so many people and is realistic. But isn't talked about often because I can come across as an absolute asshole. But I know that there will be a lot of small business owners listening to this just absolutely nodding their heads. I'll get messages been like, thank you, you know, for saying this. This is great. And I would know, equally, I'll get backlash from employees. It's been like, yeah, but you miss this or you don't understand this. And, you know, so this will not be fun for me to deliver this money mail I would imagine as well. But again, if you've made it this far, I honestly, I think this could be one of the last episodes that some people listen to with keep the change because I'll just go nut like it just directly conflicts that the narrative one may have in their head about their employer, their boss. And it's too confronting because so then it's just ignore it and stuff this guy. But, you know, if you're still listening at this stage, shout out to you to start with. But hopefully, you know, it's helped you be a bit further educated around this whole topic and just see things from a different angle as well. And I know, you know, how hard it can be being an employee, earning a level of income where you're thinking it just doesn't feel like it is worth the effort that I'm putting in. But the only person that is that should be the most invested in sorting that out, I think should be yourself. I think we are fooling ourselves to believe that it's going to be our employer to come and solve every problem that we have, especially if we're not communicating what those things are. So from both sides, I think we've got some work to do in the country of helping each other, you know, understand what we're truly going through when it comes to employment and equally being the employer. We'll see you next week, hopefully. I have a goal to help 100,000 Kiwi's improve their financial literacy. Generate KiwiSaver's scheme has sponsored Kit the Change to help me rich more people and make this a reality. Cheers to Generate. Hit the GenerateKiwiSaver.co.nz forward slash change to find out more.