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Matt always likes to say to live like you’re poor so you maintain a hustle mentality for your business.
Seeing someone he knew blow $100,000 in a weekend didn’t sit right with him.
Celebrating is one thing, but there’s a difference between celebrating and having no respect for money. A lack of respect for money is common when you didn’t work for it.
In this episode, we talk about respect for money. We talk about the difference between wasteful partying and reasonable celebration.
We also talk about the value of your time, tax tips, living like you’re broke, investing your time, and not being loose with money.
Highlights, Takeaways, Quick Wins
- Money will magnify who you are now, so if you want to be a certain person in the future, you need to be that person now.
- Operate like you don’t have money because it will help you have a hustle mentality.
- Money is a tool—every dollar you spend that isn’t helping you make money is only going to push you back.
- Set big goals and operate on a different level.
- Invest in your future instead of wasting time.
- Your time now is worth what you will be making two to three years from now if you invest it wisely.
- Don’t feel like you deserve the money you make—nobody owes you anything.
- Don’t spend money you don’t have.
- 01:20 Matt: In the real estate game, if people are doing it right, they’re making good money. They’re doing well. Some people treat money with respect, and they keep investing it. As we say, we live like we’re poor. We’re not really poor, but we don’t spend like we’re using all of our money up. Sean and I were talking about this on the way back from Austin, but one of my friends does real estate, among other things. He was going on and on about how he had a great weekend in New York. He took a good wad of $100,000 with him, and it was gone at the end of a weekend.
- 02:08 Sean: The $100,000 was gone after a weekend?
- 02:12 Matt: After a weekend in New York. At first, I thought it was a joke.
- 02:16 Sean: I think you meant to say $1,000. Maybe $10,000.
- 02:25 Matt: It made me think. He was serious. I know how this guy is. He’s rolling in the money, and it’s different for him, because he inherited it. He’s like Trump. He got a good chunk of money, and he invested it very well. The problem with this dude is that he doesn’t respect money. He went to New York and blew $100,000. He just made that money two days before. He went, came back, and said, “I had an awesome time in New York. We missed you,” etc. That was the old Matt. I don’t do that anymore.
- 03:06 I’m very much into investing everything. I sometimes have to ask my employees for money. I was looking at this guy and thinking about what we don’t want to do in our lifetime, and then we’ll bring up some examples of what we want to do. Even though you can make $100,000, $50,000, or whatever it is you’re making, don’t think that you have that much money to spend. How much of that can you really afford to spend?
Think about the maximum investment you can make with the money you’ve earned, especially if you don’t need it.
- 03:59 A lot of people might actually need the money they make, which is perfectly fine. We’re all climbing. If you have any extra money, don’t think, “What toy am I going to get? What new iPad or phone will I get? What vacation am I going to go on?” I’m not saying that there’s anything wrong with vacations or having nice things. However, when you get to the point where you’re making extra money all the time and you start throwing that money away on things that are wants and not needs, that’s stupid. That’s being disrespectful to money. That gets me fired up. People are always complaining because they don’t have money or saying, “Look at this seanwes guy. He’s doing so well. How the heck is he making $250,000?” Come on, you’re not putting in the time or the money this guy is putting in, so you can’t be jealous of him.
- 05:01 Sean: Don’t tell them that we made half a million last year.
Have the Right Attitude Toward Money
- 05:10 Matt: People get very jealous easily when they hear about how much other people are making.
- 05:17 Sean: They get emotional about the money. To us, it’s just a tool, a number, a figure—leverage. Money is an amplifier of who you are now. You’re not going to become a different person. Money will amplify good or bad.
Money will magnify who you are now, so if you want to be a certain person in the future, you need to be that person now.
- 05:54 Matt: We’re always talking about six figure numbers, and I always seem to throw them around like they’re $10 or $20 bills. That’s because, in my business, they are. I’m not being disrespectful to that dollar amount. As you’re in the game longer and you get bigger, those numbers increase if you’re doing your job right. That doesn’t mean that I’m throwing my money away. We have rolling in the money parties.
- 06:29 Sean: That’s a joke.
- 06:30 Matt: It is and it isn’t a joke. My father-in-law restored classic cars for a living, and he makes really good money. He does cars for the owner of Target, Nascar drivers, and all of that. I’m talking about multi-million dollar cars. He has rolling in the money parties after a car has been completed, because a car takes four to five years to complete. He doesn’t call it that, and I didn’t tell him about what we do after big projects, but he said, “Hey, Matt, do you want to come join us for Fun Day?” I asked, “What is Fun Day?”
- 07:17 He said, “We’re celebrating. We just completed a car, thus making a lot of money, and we would like to share it, have some fun, and celebrate.” At first, I thought that he was being disrespectful to money because he was just throwing it away. I went with them. We all love food, so we went and tried fajitas from five different restaurants and some dessert from five other different restaurants, and then we went went to go karts, we ate, we went bowling, we ate, and then we went to go see a movie. After that, we ate again.
- 08:11 Sean: I don’t think I could do anything for seven years after that.
- 08:14 Matt: You’re hurting afterwards, but you’re happy. “Fun Day” is just a word, like we say “rolling in the money party,” to describe celebrating for putting in the time to make a large amount of money. I’m trying to show you the difference between throwing money away and spending it a little bit from what I’ve learned.
- 09:01 Sean: When is it okay to celebrate, and when are you just wasting money on partying?
- 09:08 Matt: People always say, “You work hard, you play hard.” I get that. In the beginning, I would say, “No, we can’t spend money. We’re poor.” Other people would say, “But you have plenty of money…” We do. Why do we do these rolling in the money parties? We do it because we’re telling all of the employees, who are literally helping us get to our goal, “We’re going to take a little break, pat ourselves on the back, and celebrate what we’re working towards.” We’re not anywhere near our goal.
- 09:42 Sean: You’re celebrating before you get to the goal? I don’t like it. Do you think we’re going to have a Lambo Goal party before we reach the goal? I don’t see half of a Lambo out there. I don’t see a tire of a Lambo out there.
- 10:05 Matt: It’s more of an encouragement for the employees. When you tell your employees that you’re trying to build a multi-million dollar company from nothing, they’re like, “Sure, go ahead.” When you say, “Every time we have a rolling in the money party, we’ve hit a new milestone. We just got bigger. We just got closer to our goal,” it’s encouraging to them. It doesn’t really matter to me to go eat and bowl and all this stuff.
- 10:30 Sean: I’ll take a cue from you, Matt. I’ll admit, I’m bad at celebrating. In the pre-show earlier, we talked about personalities and birthdays. I think it’s a personality thing. Matt’s the same personality type as my wife Laci—ENFJ—and she loves to have birthday months. Cory and I are both INTJs, and we prefer to literally not do anything. I know I’m bad at celebrating—I’m so future-focused because I’m all about reality aligning with my mindset. In my mind, it’s already done. I’ve already gotten there, and I’m not surprised. There’s no shock. I say, “Yep, good, we’re here. That was the plan.” I tend not to celebrate, but I understand that it’s important for other people.
- 11:35 Matt: I have some guys that say, “Why are we celebrating? This is stupid. Let’s go back to work.” I shush them. Sean and his team have a sabbatical, but my guys completely shut down the idea of a sabbatical. I told them, “I want a sabbatical,” and they said, “You can have a sabbatical, but we’re going to keep working.” These parties are fun, but they’re pretty expensive, because we’re also paying them for the whole day, just as if they worked, but we’re taking them to do these extravagant things. We usually rent cars and stuff.
- 12:15 Sean: Help me out here. How is that different from the guy dropping $100,000 in New York City?
- 12:25 Matt: We can bring this same guy up. He will take some of his employees or his friends with him and they’ll blow a much of money. When you’re just going to have fun with your friends, it’s about self-satisfaction for the person. Sometimes, I’ll do that. I’ll say, “We’re going to Florida for the weekend. You want to come? I’ll pay for everything.” That’s different. That’s for me.
Taking your team out to celebrate is an investment, to encourage their spirits.
- 13:00 Sean: To me, it depends on the numbers he’s dealing with. If he was working really hard for a bunch of years and he made millions of dollars and he said, “You know what? I deserve a trip to New York City,” I don’t have a problem with that.
- 13:13 Matt: That would be fine. The only problem is that this guy just came back from China two weeks ago, and he blew another $100,000.
- 13:23 Sean: That’s where Matt’s saying that he’s not respecting money.
- 13:30 Matt: I think it’s important, before you spend money, to think about it and ask yourself, “Is what I’m spending going to help me with my future? Is this going to help with the vision?”
Invest Your Money Where It Counts
- 13:51 Sean: How does this relate to someone who is in the grind, who is still building up their thing? Does any of this respect of money apply to them and their situation? Does it apply right now, or should they be keeping things in mind for the future?
- 14:13 Matt: Now we’ll bring it down to if you’re still doing the Overlap Technique. For you, it’s even more important to stretch that dollar. You can’t be doing rolling in the money parties, and that’s okay. That’s not a bad thing. You’re building up. I still see people doing the Overlap Technique, and they’re going and blowing money. You can spend a little bit of your money, but here’s the thing:
Money is a tool.
Every dollar you spend that isn’t helping you make money is only going to push you back.
- 15:11 There’s another guy I like to look at, and he has done something I try to follow. It’s difficult to do what he’s doing, because you have to have discipline over your mind, your wallet, your soul, and your emotion. This guy wasn’t born in America, but he came here with his family. His family had really low-paying jobs, so he did whatever he could to make money. He started working for his dad. In the meantime, they lived squished into a studio apartment with roaches all over the place. These were really humble people. They were poor.
- 16:16 But they weren’t jumping off cliffs. This guy’s discipline was incredible. He has a little shoebox that he saved money in, and it kept growing and growing. He was selling different things and making money in multiple ventures, even as a kid. As he got older and started working for his dad, he eventually took over that business and became a multi-millionnaire. In that whole process, he was very strict with his budget. He did not allow any extra money to be spent on anything that was considered a want, because that wasn’t going toward the goal, which was to get financially free and to have a better life—not only for him, but for his wife, kids, and his extended family, like his parents and their family.
- 17:37 This guy went on to start another business. He made six or seven figures, and he continues to grow and to be disciplined. Now that he is bigger, he does spend money and he does things that are a little bit more extravagant. He rarely takes time off, but he spends more now. In the beginning, he was strict. He would tell himself that he was poor, even though he wasn’t. We know this guy now as Gary Vaynerchuck. He came from nothing, and he’s on his way to becoming a billionaire. He grew with nothing, and he spent nothing.
- 18:32 Sean: It might even be to the point where, with as much traveling as he does and how valuable his time is, maybe he should get a private jet. It would be more efficient, but he still resists that. He doesn’t want all of the glamour. It’s expensive, but what’s his time worth? It’s almost to the point where he would actually save money, but he’s so resistant to all of the glamour stuff.
- 19:05 Matt: You want to pick where you want to be. That doesn’t mean that everything you make has to go in a shoebox, that you have to be a hermit sitting on a floor with an old TV. I respect if you want a smart TV. I have one, so I’m with you, and I get that.
Make sure you’re investing enough money in yourself, because if you’re not educating yourself with things that will help you improve, nothing around you will get better either.
- 19:46 Sean: Matt and I like to “stay broke.” We make ourselves broke. We may have money in the bank, in the business, and in assets, but the way we operate is to stay broke. I’m really conservative with money. It sounds like I’m being super aggressive, and I am with growing the business, but really, I’m conservative. We’re still dealing with tax stuff. A quick tip for people—this brought down our taxable amount by almost $20,000. Processing fees. If you sell things online using Stripe, Paypal, or whatever, they’ll give you a 1099K form in the United States. This is a gross total, which does not include fees. For every transaction that’s made, they’re taking processing fees off of that.
Go in and report the processing fees for your merchant accounts and deduct that from your taxable income.
- 21:06 I figured this out and I did that. Here’s the second tip that I didn’t figure out until the day before taxes. I found out that, when a transaction is refunded, that’s not reflected in the 1099K. It’s gross totals. It’s every transaction that’s happened, so it doesn’t matter if you refunded the money. We refunded $20,000 in 2015, and it’s not all people not wanting our stuff, but we have scammers. International scammers buy physical products using a stolen credit card or something, we ship them overseas where you can’t track delivery, they wait till they get them, and then they charge back. The merchant accounts, without fail, every time, will give all of them all of their money back.
- 22:05 They don’t care about the seller. They only care about the buyer, because the buyer is going to buy more stuff, and the seller doesn’t have a choice. They always favor the buyer. This person just got all of this stuff, usually hundreds of dollars worth of stuff, with international shipping, and it’s all lost money. That sucks. That’s a problem. We’re working to mitigate that now, and we’ve gotten better in 2016. A lot of times, we see things that look suspicious and we reach out. They usually don’t respond, and if they do, you can usually tell. We don’t send them our stuff, too bad. This happens a lot. They buy $200 or $300 worth of stuff and they want a refund.
- 22:56 Scammer refunds are racking up our gross total and we’re paying taxes on money we never got. I’m glad I figured that out the other day and sent that in, because it brought our taxable amount down by $20,000. That’s awesome. Also, in 2014, I did not have an LLC. It was just me. I was self-employed with six figures. The amount I owed in taxes was high five figures, so I paid the money. In 2015, we started the LLC. The way that quarterly estimated payments work is that they’re based on your previous year. All through 2015, I made quarterly estimated payments based on being self-employed in 2014. Now that we look at 2015, we made a half a million dollars, but we spent most of it.
- 24:17 We brought the amount down, because we refunded all of this. The amount of taxes we owed on that was like nothing. It was a fraction of what I paid in quarterly payments, so I have this massive refund coming my way, tens of thousands of dollars. It’s going to cover the Q1 estimated payment, Q2 estimated payment, and then some back. It’s awesome.
Live Like You’re Broke
- 24:45 I was talking to Laci, and I said, “What’s the plan for vacation like?” I’ve been busting my butt the last year. I don’t go anywhere. I suggested that we go on vacation. In August, we have a sabbatical. I want to go back to Hawaii. I say “back” because I was born there and lived there until I was six, but I haven’t been back. I would love to go back. We’re moving, I’m taking July to write the books, and we have another sabbatical in June. We talked about going to New York City or just staying at home, and we’ve been doing so many things that Laci was saying that she might just want to stay and do nothing.
- 25:40 I said, “We need a vacation!” Laci said, “Aren’t we broke?” I said, “Yes, we’re broke, but that’s because this is how we operate.” Laci said, “I saw this other account that had $2,000 in it that said ‘taxes.'” I told her not to worry about that. That’s a little thing I do to trick myself. I just leave money in accounts like you might leave money under the mattress and pretend that you don’t have it. You say, “I have a $5 bill in my pocket, so I have to go out and hustle.” That’s just how I think. Laci said, “I think there’s several thousand in an old seanwes account…” And I said, “Don’t worry about that.”
I like not thinking that I have money, because it makes me operate in a hustle mentality.
- 26:30 I explained to her that we are going to get a tax return, so she said, “Oh, so we can go on vacation!” I said, “We really can anyway.” I tell this story to explain that Matt and I do crazy things to make ourselves feel broke. We want to stay in that hungry mode. We don’t want to go on all these extravagant trips and blow our money on stuff. We’ve got a Lambo Goal, and it’s something we’ve been working toward for years. It’s way off in the distance, but it’s going to happen. You’re going to see it. It’s going to be a reality. This forces us to think bigger.
- 27:12 The whole thing that the Lambo Goal came from was that I had a big goal, and we thought, “What if we 10X that goal?” Maybe you’ve got something you’re working toward, like, “It would be great if I could live just off of money in my business accounts and quit my job.” How much money do you need? You need $4,000 a month? Your goal is to make $4,000 a month, but your goal needs to be making $40,000 a month. You’re going to operate on a different level. That’s all we’re doing.
We set big goals because it forces us to operate on a different level.
- 27:48 Matt: That’s the reason why we do this. We’re not really broke. My wife does the same thing. I say, “I’m ready to go on a cruise,” and she says, “We don’t even have money.” I say, “Technically, we don’t, but the business does.” We always have money, but we operate where we don’t have money. We are always aggressively putting money in the business. We’re always buying stuff, too, which helps. We go to extreme measures to make sure there isn’t money in the bank, because if we have more than $1,000, it’s gone. There’s the rainy day fund and the extra savings accounts and things like that.
What Is Your Time Worth?
- 28:35 Sean: What’s the moral of the story in this episode?
- 28:43 Matt: The moral of the story is: be wise about your money. Remember that it is a tool, but you have to respect this tool to get where you want to be. Like Sean said, if you’re making $4,000, you need to stop thinking that you “want to make $40,000,” and instead think, “I need to make $40,000 a month.” How do we do that? You have to respect money. You have to invest it correctly along the way.
- 29:18 Sean: What’s the biggest problem you see with people, Matt? What do they get wrong most often?
- 29:24 Matt: Two things. First off, people are too generous with their time. They’re not up until two or three in the morning doing Snapchat saying, “Hey, I’m still writing.” That’s number one. They’re hanging out with their buddies on a Friday night. You could go hang out with your buddies, but you’re trying to get something done here.
The value of your time now is worth what you will be making two to three years from now if you invest it wisely.
- 30:23 Sean: It is not worth what you make now. It is not worth the amount you make in a month divided by the number of hours in a month. That is not the value of your time. The amount you make now represents the value of your time two to three years ago, when you were investing it then. If your time is not worth what you want it to be worth, what were you doing two to three years ago? People are just goofing off! If you’re upset that you’re not making what you want to be making now, it’s because you were doing nothing two to three years ago. Start hustling now. Get the fire from the Lambo Goal podcast.
- 31:07 Start working now, and start treating your time now like it’s worth what you’ll be making in two to three years, because that’s what it’s worth. It’s only going to be worth that much if you invest it wisely right now. You need to spend it on the right things. Stop giving it away. Fast forward the timeline, the movie of your life, two to three years from now. You’ve been hustling 365, 24/7. Three years from now, where are you? What are you making?
- 31:36 How important are you? What is your time worth? That is how you need to operate today. That’s the mentality you need to have today, and you need to think of yourself as that person. Think of your time as being worth what you will make in three years, and stop giving it away to things that don’t provide you the kind of return you want to get.
- 32:07 Matt: When I say that you’re too generous with your time, I mean that you’re not putting time into something that’s going to give you a return. If you’re going to the movies, I get it. I haven’t seen Batman, and I’m trying to figure out a time to see it for a little bit of downtime. That’s downtime, but it’s after I’ve already worked. Downtime is different. Remember that. When you’re loose with your time and somebody, out of the blue, says, “Let’s go do this,” you have to cringe a little bit and say, “Should we?”
Invest Your Time
- 33:01 Sean: You’ve got to be the weird one now, and then you get to be the weird one later. Your friends aren’t going to have all the money you have later because you were the weird one back then. You were the weird one who said no when they were doing fun things. Matt, this is my life. I’m going to miss out on a dinner next week. I’ve missed out on people playing XBox. I’ve missed out on people going on trips. My friends don’t invite me as much anymore. I’m missing out, and that’s the reality. I don’t talk about it in a hypothetical sense. I really don’t get to go bowling.
- 33:44 Matt: I’m at the point now, and Sean probably is too, where people don’t even invite me. It kind of sucks, because you aren’t invited, but you know that you need to stay focused. It’s hard, don’t get me wrong.
- 33:57 Sean: It’s the same people that will want to get an invite when you’re throwing parties five years from now.
- 34:01 Matt: Or you pull up with the Lambo and you’re revving it. When I’m talking to guys and giving them advice, I’ll tell them, “If you really want to give your time away for free, if you don’t feel like your time is valuable, that’s fine.” I hear this a lot, especially in the beginning. People say, “My time isn’t really worth much. When I am working, I get paid, but when I stop working, I’m not getting paid. I can just go do whatever I want.” Hang on a second. In the last Lambo episode, we talked about giving stuff away for free, and how you can get money back from that.
- 34:50 I’m always telling my guys, “Don’t ever undercut free things. Free things and low cost things help bring in more people than your paid things. Especially with new customers, you have to prove yourself to them.” Instead of giving your day away to someone to go fishing, kayaking, drinking, or whatever, why don’t you set up something for free for a potential client?
If you want to give away your time, invest in your future instead of wasting that time.
- 35:23 I have this guy that comes to me for advice, and he wants to be a music producer. He also does video on the side to help pay for his bills. He asks, “How is it wrong for me to go play music for my friends for free? How is that me throwing my time away and not investing it?” I say, “What if, instead, you gave that time to people who were actually interested in doing music with you? Do a small track for them, do a teaser music video for them, and give it to them for free. You’re going to be giving that time away to somebody else anyway, but instead, you’re investing in them, in the customer. Along the way, you’ll learn things. It doesn’t have to be perfect because they’re not paying for it, so you can experiment with it and learn some things.”
Don’t Be Loose With Money
- 36:18 Sean: I said, “What are the biggest problems you see with people? What are they doing wrong?” Matt said two things, one being that people are giving away time and being too generous with their time. Matt, do you remember what the second thing was?
- 36:30 Matt: The second thing is pretty obvious in this episode, and that’s money. People are really loose with their money. If I remember correctly, I think our country is the most in debt out of all countries. Sean and I talked about how we operate like we’re broke. We aren’t broke, but we operate in a sense to where money is tight, so we make better decisions with our money. I see a lot of people who are so emotionally attached to their money, and they’re trying to grow it. They see Sean making $500,000 and they say, “I want to grow and be like that.”
- 37:24 They’re just buying stuff like there’s no tomorrow. We’ve talked about debt on this podcast before and how we feel about it. I’m talking about getting into debt, first of all. Number two, you might be buying things you don’t really need, like equipment and Starbucks. A lot of guys are trying to grow too quickly, and that’s part of being too loose with money. Another thing is that they start making money, and they say, “We have an extra $5,000!” Especially since that’s business money, doesn’t that belong to the business—not your personal interests? That’s how I want you to think. Just because you made $16,500 off of a client right now doesn’t mean that you have $16,500 to go on some extravagant family trip. That’s not your money.
- 38:51 The way we teach things at our businesses is that every time our employees swipe their cards, that’s less money for the business, which is less of a chance they’re going to have a job tomorrow. They want to get to the job site quickly so they have job security, and that’s how I want them to operate.
Don’t feel like you deserve the money you make—nobody owes you anything.
- 39:20 People always walk around like someone owes them something, but people don’t have to use you. You have to prove yourself. Do an excellent job. That’s what I mean with being loose with money—spending money you don’t have or making money and already spending it, even in your mind. In the middle of a job, you’re already thinking of spending it. The paperwork hasn’t even been done to wire it to your account. That’s what I’m talking about. Do not spend money you don’t have.
- 40:55 Sean: It’s not your money before you do the work. It’s not your money before the paperwork is signed. It’s not your money before the invoice is sent. It’s not your money before the check arrives in the mail. It’s not your money until it’s deposited in the bank, and even then you’re a steward of the money.
- 41:22 Matt: We are stewards of our businesses. We are just there to help the business grow. My employees and my family tell me all the time, “How is it that you don’t have money when you really do? You have the best stuff! We all borrow your stuff!” I tell them, “I have money, but I operate like I don’t because I want to feel that fire every day. I want to get up from my bed and hustle as hard as I can every day, not for the money, but to help people and improve things that will bring people value. In return, I’m going to have more zeros in my bank account. I’m going to have a more expensive Lambo.”