Quickbooks Online vs. THUT Wealth

Many customers ran into issues that QuickBooks Online (QBO) could not address, so they were happy to switch to THUT Wealth.

THUT Wealth replaces 2+ vendors (bookkeeping + taxes).  While QBO requires you to hire an accountant to compile the corporate tax return.  If your business is e-commerce, fast food or a nail salon, then THUT Wealth will be much more economical.

QBO is still not entirely automated and is only as a good as its user.  The categorizing of programmed transactions is automated, but in addition to clicking match, you will need to do monthly bank and credit card reconciliations.  We need to reiterate that 1 error in matching or doing the reconciliation wrong will compound errors throughout the file.

If you made 2 sales and deposited the proceeds together at your branch in one lump sum, Quickbooks Online (QBO) is not smart enough to match the 2 received payments to the 1 deposit.

Even as ProAdvisors, if we set up all the “rules” in Quickbooks, you as the user will still need to click “match” when your bank says 1 transaction found.  If you never “lump” your deposits together (more than 1 sale physically deposited into the bank), this will minimize your problems. (meaning, 1 deposit for each sale)

Summary for QBO
  1. Never lump deposits
  2. Never let your account be disconnected from your bank (or you will lose transactions which automatically downloads and you would need to manually type in each one)
  3. Daily: match transactions
  4. Weekly: keep in touch with your ProAdvisor with any problems before they compound
  5. Monthly: account reconciliations
  6. You’ll still need another vendor, an accounting provider (plus if they are a Certified Quickbooks ProAdvisor) to compile the corporate tax return.

While QBO is the most popular cloud accounting solution, THUT Wealth is a 3-step AI:

  1. Autonomous data extraction with THUT AI Extractor

    THUT extracts data from receipts, bank and credit card statements with deep artificial neural network technology.  Cleansing algorithms allow it to extract transactional data that is 100% accurate (saves 90% of the time taken by accountants).

  2. Process transformation with THUT Neural Network Technology


    THUT Neural Network Technology automatically allocates invoices and receipts to financial accounts. All your bookkeeping is done instantly without error-prone human work. Neural network technology can deduct autonomous models by recognizing data in large historic sets.  Our deep learning modules are trained on $2.9 billion of validated transactions to deliver autonomous results that continuously improve.  We use mathematical optimization algorithms to save you money. As with all convex mathematical functions, there is only one minimal value that describes the combined taxes in terms of its variables.

  3. Reporting with THUT Autonomous Technology

    You receive your clear and thorough reporting package in PDF with full-text search and we file everything with the Canada Revenue Agency- on-time and with the best result (unlike humans, algorithms are never wrong). We have countless proof of Edmonton’s biggest firms making costly mistakes.  Their reliability is significantly affected by physical, mental, and emotional states (robots perform flawlessly and don’t need to sleep and recuperate).

Which one is right for you?

Use your pre-tax income to calculate your pre-tax hourly rate (since Accounting is paid for with pre-tax dollars).  If THUT Wealth’s AI cost less than your hourly rate than THUT is for you.  If THUT Wealth costs more than your hourly rate than Quickbooks Online is right for you.

Once you make more than the average person, it does not make sense for you to specialize in something that is not directly related to your ability to generate revenue. This is because of the minimum efficient scale.



Part 1: Get Lean before Bulking

What happened to THUT? At its height, we employed 6. Today, with more and larger customers, there is only 1 employee.  In order to grow, older companies (4+ years) need to get lean first: downsize until the marginal costs of outsourcing exceed the cost of doing it internally.

  1. Staying lean is key to operational efficiency.  For a company with healthy revenues, the fastest way to increased profits is to cut costs.  You’ll need to eliminate product lines/customers that are responsible for a disproportionately small part of your revenue.
  2. Getting lean first sets your company up for better scale. Efficiency compounds so you will grow exponentially faster if you get lean first and improve your margins.

For us getting lean, meant realizing no one has ever gotten rich doing everything for everyone: In 2016 we cut down our contacts because it made no sense to corrupt our Dunbar’s # when half the people we dealt with only generated 10% of our revenue.  2017 we have improved where  14.67% of our revenue comes from 37% of our customers.  But it clearly makes more sense to give up $115,000 of revenue (14.67%) if we can save 37% of our time, hence we have eliminated even more.

Now in 2018, we slashed product lines to focus on being the best platform designed to meet the needs of recurring revenue. The best being defined as precision, ease of use and comprehensiveness.  Now, we are a fully integrated blockchain solution that brings together payroll, bookkeeping, accounting, corporate taxes, personal taxes, banking and wealth management.

Lessons in staying lean:

  1. 3 team members have 3 communication paths but adding only 1 additional teammate doubles the communication path to 6.
  2. Business plans, financial projections, budgets are all a waste of time – simply reframe your focuses as a function of time and get better every day.   Prioritize maximum effort and make sure taxes, payroll and housing are planned for – no other cost-cutting matters compared to those big 3.
  3. 80% of your time should be in delivering your product and only 20% on support and marketing.

Check out the archive and like us on Facebook to continue our journey to financial freedom in an increasingly complex world.


Math to Escape the Middle Class

Being part of a certain profession, or earning a certain amount of money does not ensure your exit from the middle-class.  Most people are stuck there because of math.

We focus on the only 3 sources of negative cash flow that matter: taxes, housing and in the case of a scalable business – payroll.  Even the highest earners stay middle-class if they don’t focus on taxes and housing.

Taxes: Everything you pay for really costs you 1.5x-1.8x more since you would be paying for it with after-tax dollars rather than pre-tax dollars. The only expenditures exempt from this rule are business assets and expenditures bought inside a corporation.

Housing: In combination with the taxes above, depending on your tax bracket, your mortgage and your interest rate, a $1 million house will cost you at least $1.5 million (no mortgage and extremely low level of living requirements) and as much as $4 million of gross earnings.

Now Here’s the Math

Regression To The Mean & Bimodal Extremes:  How is that so many high-earners are trapped into the middle-class mediocrity of trading their limited time for money?  In any group, people of high-value/high net worth/high IQ are dragged down by people of lower-value/lower net worth/lower IQ due to osmosis.  If you take advice tailored to the middle-class, by a middle-class advisor, you should not be surprised if you end up middle-class. You need to find someone who is living a life that you want and take guidance from there.  So in short, ignore anything average, and advice from/for average people are to be avoided at all costs. The solution is bimodal approaches from the extremes.  90% safe investments + 10% high-risk investments vs. a mediocre portfolio with limited upside and a possible unlimited downside.  Or mediocre jogging vs. extreme high-intensity training. Other bimodal strategies with exponential benefits: intermittent fasting. The framework to pursue bimodal extremes involves ranking your options in descending order of optionality and open-endedness of pay-offs.

Dunbar’s Number & Via Negativa: The solution to this is to be mindful of the upper limit to how many interpersonal relationships your brain can process (150).  I can never have more than 150 contacts (this does not apply to mass-market businesses, but something so sensitive as advisory to HNWIs can never be mass-market). Most problems are better addressed with subtraction (Via Negativa – Nassim Taleb) To keep negative osmosis from happening in my life, I removed the bottom 50% of people from my life and doubled-down my time on the top 50%. I repeated this process many times until I was down from 1000+ to 150 contacts.  Everyone in my life is either moving up or moving out of my life.  This eliminates the negative osmosis that would otherwise cloud my thoughts with middle-class thinking.

Chaos Theory Feedback Loops: Its nearly impossible to remain middle-class if you focus your actions on receiving a recurring benefit. The best way to start is to reframe all your problems as a function of time and improve year over year (YoY). This means you will get richer due to superior/scalable abilities and your riches will beget more riches. This will result in a knee in the curve non-linearity compared to the linearity of the middle-class.  All decisions compound (both for and against you), and this makes money eventually become perpetual so the path is clear: prioritize the maximum effort to get compounding on your side (make sure your inflows compound more than your outflows).

Chaos Theory and Dynamics: The middle-class think in simple terms of cause and effect, when the reality is that the outcome in sensitively depending on initial conditions, so the cause will result in empirically complex 2nd, 3rd, 4th, …. nth steps. It’s better to fix systems  Via Negativa – Nassim Taleb, since the middle-class solution to add more things to their life make things worst.

Inversion: A famous problem-solving technique in mathematics can be easily used to re-frame everyday problems.  Whatever question you ask yourself – ask yourself the inverse question. The path to success is not as clear as the path to failure. So by doing the opposite of the path of failure ensures you survive, and as Taleb reminds us you first must survive in order to succeed.

Pareto’s principle: The majority of a given effect is due to a minority of the possible causes.  You have a limited store of attention and time, so to create the aforementioned feedback loop you need to prioritize high-impact activities. Maximize the results by minimizing the stuff that doesn’t count: don’t check your e-mail more than 3 times a day, stop watching TV, surfing the net,  playing video games, and taking unnecessary vacations.  Make your own life great instead of engaging in escapism.  Make your life so good you don’t need a vacation. The more you shift your attention/time to high-impact activities the higher your overall benefit due to the compounding.

Game Theory and the Prisoner’s Dilemma: Will allow you to recognize and exploit the irrational decisions of others.

Calculus: Marginal cost bisects average cost at the minima of the average cost. The optimal point of production in terms of profit by maximizing your output variables can be determined by cost and revenue functions.

Here are some more math hacks for your scalable business.










Customer is King

The most important things in valuing a business are detailed financial records, well-documented operations (SOPs) and customer metrics: the long-term value of the customer, the cost of acquiring customers, revenue, and lost customers.

Last week a dozen of our customers were listed as 2018 Golden Fork winners so we will start with the fast food group: Customers on average visit a particular fast food place once or twice a month (we will use the conservative mid-point of 1.5x/month).  This customer will patronize the fast food place on average for 3 years.

For a nail salon, your customer comes on average twice per month but will patronize your salon on average for 5 years.

The long-term value of customer = Average Monthly Revenue per customer x Average years a customer will patronize your business.

Cost of acquiring customer (CAC) = Advertising expenses / # of new customers added

The long-term value of the customer: Cost of acquiring the customer.

This ratio will indicate if you are spending too much or what we found more often is that you spend too little and are missing out on growth opportunities.

In a fast food example, a customer spends $20 x 1.5/month x 36 months = long-term value is $1,080.

In a nail salon example, a customer that spends $50 x 2 /month x 60 months = long-term value is $6,000.

This should also serve as a reminder to value your customer for their long-term value and not just their $50 refill or $8 Pho Bowl.  The math also reminds you that it is better to have one ideal long-term customer than it is to have more but poorer quality customers.

There will come a point in every business owner’s life that money comes perpetually, like living off a 3% return on $3 million, and you will have to decide if you want to sell your business. You can get a multiple between 2.5 – 4 on the seller’s discretionary cash flow. Internet businesses can even reach 5x multiples.

Your multiple will be the average of the four results sensitive to these 4 metrics:

  1. The longer you have operated the business and have solid financial records the higher your multiple.
  2. The more time and technical skills the owner uses to run the business will decrease your multiple.
  3. Increasing revenue and/or profit trends will increase your multiple, while 0 revenue growth will only command a 2.5 multiple.
  4. The more loyal your customer base the higher your multiple.

If you operated your business for 10+years, work 25 hours per week in your business, have a flat revenue, but a loyal customer base, you could be looking at a valuation of $1M based on an annual discretionary cash flow of $300,000.

The advantage of internet businesses is even more clear when it comes to selling your business. The smaller your city, the less likely it is you will get your worth when selling your business so the alternative would be just to keep it but reduce your income by 30-50% by outsourcing or hiring.

Money is only a mathematical measure of value, so the key is you should always focus on delivering that value, the money is a by-product. Focusing on making money will only ruin your long-term gains.

How Does Your Income Stack Up?

We focus on after-tax income rather than net worth since advancing net worth beyond what you will never spend is a poor use of our limited time.

According to the latest Edmonton census, the median household income in the Edmonton area is $91,860.  This means that the middle-class in Edmonton is earning between $45,930 and $137,790 (50% from the median).

AREA Median Gross After-tax Monthly
Henderson Estates, Edm. 182,912 139,404 11,617
Sherwood Park 180,224 137,536 11,461
Oakmont, St. Albert 153,329 118,844 9,904
Oleskiw, Edmonton 150,221 116,684 9,724
Sturgeon County 141,509 110,628 9,219
Castlebrook 121,771 96,910 8,076
Edmonton Average 94,447 77,920 6,493
Edmonton Median 91,860 76,122 6,344
Kennedale 78,379 66,014 5,501
CLIENT GROUP After-tax Monthly
B2B (inc AI and CNC) 240,000+ 20,000+
E-commerce (FBA, affiliates) 240,000+ 20,000+
Restaurant 240,000+ 20,000+
Chain nail salon 240,000+ 20,000+
Single nail salon 180,000 15,000


The bar in Edmonton is extremely low.  Comparing yourself to others is will result in regression.  If anyone focuses on being the best at what they do can easily make 3+ times the median take-home.

Castlebrook’s neighborhoods (MLS Chambery and MLS Elsinore) is an example of a small nice neighborhood to blend in. Far enough from the problems inherent to the “average” income neighborhood and nice enough to enjoy without being targetted as being rich in Henderson Estates. There is also the potential for appreciation as it will be a nice area in close proximity to Edmonton Energy and Technology Park.

Even if you are not involved in a tech-oriented business, you can use strategies like outsourcing accounting and customer service, leverage automation apps, and consider disintermediation (cut out the middlemen – source from China, or cut out the bank and learn about cryptocurrencies).  AI businesses generate on average $150K-$200K revenue per employee (it can be as low as $100k of revenue per employee or as high as $300K per employee).

The similarities in fast food and B2B businesses are scalable practices. Although you only have to make more than $16k month after-tax to be considered in Edmonton’s 1%, this is only because of the large amounts of people with low reported income that bring down the average. The real 1% are the 30+ individuals who earn more than $1 million per year, and even more who are earning between $500K – $1M per year.

This brings up another question, “Why Edmonton?”

Edmonton is a global leader in the artificial intelligence (AI) and machine learning (ML). The University of Alberta was ranked #2 in the world for AI and ML.

  • Alberta is a monster economy and even during a recession, Alberta’s per capita GDP exceeds $80K – on par with Switzerland’s.
  • With housing more affordable in Alberta vs. Toronto and Vancouver, there is more disposable income to capture from Alberta’s affluent consumers.

If you don’t like your after-tax take household income, improve it since time is the only resource you can never get back.