The way online gurus talk about making money is causing a pandemic of scarcity. 

They throw big numbers out there to get people’s attention - which works! - but it ultimately creates unrealistic expectations. 

When you constantly see large numbers, your brain begins to expect large numbers. Then when you don’t see the same large numbers in your own bank account, you feel like you must be doing something wrong and the cycle loops again: you go looking for answers, tactics, and advice on how to fix your perceived lack, see more courses and programs with large number income claims, and feel worse. 

When you feel worse, you avoid your money more, and things fall apart. The money you are making never seems like enough to cover your expenses, you’re caught empty-handed when big bills come due, and your accounts are always empty when you go to transfer your owner’s comp to pay yourself for the 12-hr days you’ve been working. 

If you feel like you can’t breathe when you think about your money, feel guilty for not having it all figured out like so-and-so, or feel ashamed to talk about your money because it’s not as impressive as you’d like, keep reading.

It’s not your fault.

I’m sure you’ve seen a creator you follow sharing numbers from their recent launch. Either they keep it intentionally vague (ie “six figures”) or they share a super exact number (“$48,567.89”). Your brain has trouble contextualizing it either way, so the takeaway you end up with is “they are important because they made a lot of money” and you move on and get caught up in their emotional sales page. 

These two income claim tactics are extremely common, so let’s break them down. 

Extremely vague claims:  “six figures”

This was the first income claim pattern that everyone used in “ye olde days.” Mostly everyone did it because that’s how they were taught by their mentors. 

This tactic has two key causes: when it’s that vague, the reader can be easily misled by their own hopes and assign a greater value than the actual income, and they think they are being super safe so they don’t get in trouble with the FTC.

“Six figures” is a HUGE range! It can be anything from $100,000 to $999,999. This is the point of course. If they don’t actually say a real number, the eager hot lead will read into it what they are hoping to make and the creator will automatically go up in their estimation.

This is the "Mr Darcy" of the income world - a blank canvas onto which people project their hopes and dreams. It gains the creator a higher authority positioning than they’ve probably earned, and it causes the lead to be more easily manipulatable because they’ve switched into fantasy mode.

Also, a lot of the OG course creators got slapped by the FTC for breaking the business opportunity rule’s income claim guidelines, so they were very careful to be as far from “getting in trouble” as possible - and they taught this to their students. 

The problem is that they misunderstood the rule and thought they weren’t allowed to say a real number. Since this created the Mr Darcy phenomenon, it worked out for them and they didn’t investigate further. 

Extremely specific claims: $48,567.89

On the other end of the spectrum, we have the super precise number income claims. These are a more recent tactic - undoubtedly someone took another look at the FTC’s rule and realized that it doesn’t prohibit stating how much the creator made - the requirements center around guaranteeing how much the lead will make. [>>read the rule for yourself<<]

Unfortunately, these specific numbers are also confusing.

Our brains have trouble processing minutiae when we’re thinking big picture. If you’re looking for a course on launching courses, or copywriting, or running ads, you’re thinking about the category of your business that needs work and trying to find the best solution. You’re not in the weeds thinking about conversion rates and KPIs. 

Stating a specific number like that (even down to the decimal!) short-circuits the brain’s ability to process and creates a mental blind spot that the brain then fills in later based on context. If the rest of the sales page makes you believe that this creator is authoritative, sought-after, and effective, your brain will slap an “impressive number” sticker over that blind spot - even if the actual number is less than the average for your industry. 

Specific numbers like this also leave out the most important factor: is this GROSS REVENUE or NET PROFIT? 

I would hazard a guess that almost all of these kinds of claims are gross revenue. That is always the most impressive number at face value, and will always make them look the best when you slap the “impressive number” sticker on them. 

The truth is that they could have made $xxx in gross revenue, paid over half of that in ad spend, paid another ⅓ to subcontractors, have half the money they need for taxes, and nothing left for themselves at all, which means they actually ended up with a NEGATIVE net profit. If they were honest about that, it would be clear that they’re not someone you want to model your business after.

The problem is that your brain automatically does a mental conversion when you’re thinking about money. When someone says $xxx, your brain thinks “I’ll get $xxx to spend on myself.” You automatically convert their gross revenue to your net profit. 

Your brain will always do those automatic conversions, and it’s an incredibly useful thing. 

All we have to do is calibrate the conversion.

Most people started out as employees before they became entrepreneurs, or at least had a job at some point. Almost all of us had parents that were employees. This “employee thinking” is what creates the “I get $xxx money for myself” conversion because that’s how paychecks work. Whatever amount is on your paystub is the amount that hits your bank and is the amount you then do further conversions on - how much you need for bills, savings, spending, etc. 

We need to recalibrate the conversion to “business money thinking.” You know theoretically that you have to pay taxes and subcontractors and business bills out of what you make. But if your brain is still doing the employee conversion, your mental rule of thumb is off, which throws everything else off. 

The big secret that no accountant wants to admit: everyone manages money based on their mental rule of thumb. 

Even us spreadsheet nerds make gut decisions based on the amounts we have in our mental categories - we just track what we actually spent in a spreadsheet later ;)

Your mental rule of thumb is your rough measure. When you’re cooking and you throw in a “dash” or a “sprinkle” you are using mental rules of thumb for measuring ingredients. Your dashes and sprinkles are consistent - you just don’t know how they convert to standard measurements. Even the phrase “rule of thumb” comes from artists' technique of measuring proportions based on their own thumb. 

This “employee conversion running your business money” is why you never seem to have any money in your account when you need it, why you have to borrow from yourself (or family) or put things on credit, and why you’re scared of tax season. 

I can’t go into too much depth here, but the business money model conversion looks something like this:

We convert your existing rough measures for bills, savings, and spending from your personal money to the larger meta-categories of taxes, owner’s comp, and opex for your business. These meta-categories are based on percentages.

This allows you to run a very simple conversion any time you’re considering income. If your standard owner’s comp percentage is 50%, you can calculate that making $40K from your next launch means YOU get $20K. And vice versa: if you want $12K to go on that once-in-a-lifetime vacation, you need to make $24K.

Of course, this is the simplest version of mental rules possible.

I can help you create your own custom money rules and back-of-the-napkin financial system so you can correctly evaluate how a tactic/launch/opportunity will impact YOUR business.

As part of our monthly bookkeeping services, you get personal, 1:1 CFO coaching on how to make rules of thumb that make sense for YOUR business. Never second guess your decisions again! 

>>Click here<< for more information on our bookkeeping and accounting services. 🙂