Jack Thursday – 3 Stages of Wealth (LA 1527)
Jack Thursday – 3 Stages of Wealth (LA 1527)
Transcript:
Steven Butala:
Steve and Jill here.
Jill DeWit:
Hi.
Steven Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill DeWit:
And I’m Jill DeWit, broadcasting from sunny Southern California.
Steven Butala:
Today Jill and I talk about, well, it’s Jack Thursday, and we talk about the three stages of wealth once again.
Jill DeWit:
And speaking of wealth, as you can see, we are I’m just saying we’re lucky enough, we’re fortunate enough to be in that point in our life that we could take a bike ride on some random weekday. So in case you can’t tell, we’re a little bit more casual than normal because we literally just got off our bikes. We had a great bite for breakfast and it was fun.
Steven Butala:
Jill, you look beautiful. Don’t worry about it.
Jill DeWit:
Thank you. Like no, no. I don’t care about that. I’m just saying we’re a little beached and red and sun and shiny and got a hat on.
Steven Butala:
It’s not going to effect the quality of content here.
Jill DeWit:
No. If anything, it clears our heads more, I think.
Steven Butala:
Yeah. That’s good.
Jill DeWit:
Especially for today.
Steven Butala:
That’s a great way to look at it.
Jill DeWit:
Thanks.
Steven Butala:
Before we get into it, let’s take a question posted by one of our members on the landinvestors.com online community. It’s free. If you’re already a Land Academy member, please join us on discard.
Jill DeWit:
I’m so tired of hearing about Discord. Just kidding.
Steven Butala:
Because it’s awesome.
Jill DeWit:
Yeah. Discord’s great and so is Clubhouse. All right. [Rio 00:01:27] wrote, “Hello, everyone. How often can I double my money by doing small deals on rural vacant land? For example, buying for 1000 or 3000 and selling for 4,000 or 8,000. I want to experience the whole transaction process by starting doing small deals first. Thanks and have a good day.” Well, you could do this very often, like a couple times a day, if you really want to.
Steven Butala:
It depends. You can definitely do this. It depends on where you are in your career. If you ask the same question to a very successful lifelong day trader, they would answer it just like Jill, multiple times a day. Could we do it multiple times a day? Sure, if that’s what we focused on. In the beginning of your career, what I would highly recommend, and we’ve talked about this on the show and we talk about it in the education, do one a month while you’ve got your W2. That’s kind of what this show is about today.
Jill DeWit:
Or one a week.
Steven Butala:
Just do one a month. Do one a month for a couple of months. Buy for 3000, sell it for six. Buy for six, sell it for 12. And now you’ve got your original investment back, and so on. And then step it up.
Jill DeWit:
Why so slow?
Steven Butala:
For the next couple of weeks-
Jill DeWit:
Why do you say one a month for real?
Steven Butala:
Because you’re going to run into all kinds of stuff and you do not want to risk running into stuff on a larger deal. You don’t want to get too-
Jill DeWit:
Oh, I read it differently. You meant buy one, sell for three, buy three, sell for eight, buy eight, sell for 16.
Steven Butala:
Or just do what you can do. Buy six $1,000 properties and sell it six times for $3,000 each. So there’s all different ways to slice this, but I wouldn’t … When I was younger, I just wanted to always bite off more than I can chew.
Jill DeWit:
That’s your concern.
Steven Butala:
And I’m older now. And I really think that two months from now, it’s going to be two months from now anyway, no matter what you do. If you’re working your W2 job two months from now, you’ll be in two months from now thinking the same thing. So why not buy a couple of pieces of property, maybe one or two, for a small amount of money, double or triple your money, put the money back into the business because you’ve got a W2 job paying your bills. This is directly the topic today. And then continue on to the point where you’re really comfortable with the process, and it’s really easy for you now to manipulate the data. There’s a lot of moving parts to this, and there’s a lot of things that it’s too easy to just say, “Hey, buy it for 1000 and sell for 3000, and then buy for three and then sell it for six.” There’s a lot of moving parts. There’s a data component. There’s Jill’s huge component of turning deals that would never happen into actual deals.
Steven Butala:
So you want to get familiar with all that stuff and give yourself the correct amount of time. This parlays right into this topic.
Jill DeWit:
I was going to add to Rio, I think how I read the question … And that was beautiful. I totally agree with everything that Steven says. I want to make sure that you know that are you going to run out of buy for one, sell for three, buy for four, sell for … Are you going to run out of those? No.
Steven Butala:
Never.
Jill DeWit:
That’s my point. I want to make sure. You’re like how often can I do that? It’s not like, oh, there’s only six in a county and if you don’t get them, you’re going to miss that boat back. Heck no. Yeah, if that’s your comfort spot, and that’s what’s so funny about some of our members, that is their comfort spot. They really like these lower numbers. They’re real used to those sellers. They’re really used to those buyers. They love writing those checks. Nothing scares them because it’s not $50,000. It’s three. Big deal. I can write that check kind of thing. You could happily do that for your whole career and be very successful. So don’t worry about that.
Steven Butala:
Exactly.
Jill DeWit:
Thanks.
Steven Butala:
Whatever you’re worried about, that’s my whole point. Maybe you’re worried about running out of property in the universe of property. Don’t worry. Or you’re worried about these types of counties not being … It’s been picked over. Whatever you’re worried about, you can overcome it. Today’s topic, it’s Jack Thursday, the three stages of wealth. This is why you’re listening.
Steven Butala:
These three stages of wealth, I personally experienced at least one time in my life. And I’ll tell ya, they’re not fun to go through. The second one is a blast for me. The third one is a blast for Jill. And here they are, I’ll just cut right to it. Number one, you make more money than you spend. So you have more money coming out than you do have coming in. And I’ll tell you, this didn’t happen to me immediately. And it is liquid painful to have your rent and what you eat cost more than what you have coming in, because then you’re just playing a shell game. So if that doesn’t motivate you to get to stage one, which is now you’ve got a few thousand dollars coming in and you’re only spending two, I don’t know what will.
Jill DeWit:
It could be for somebody taking on a second job. It could be for somebody getting a better job.
Steven Butala:
Getting a roommate.
Jill DeWit:
It could be for somebody getting a roommate, yeah. It could be cutting your expenses. I look at it this way too. It could be like, maybe I shouldn’t rent that. Maybe I shouldn’t have that car. There’s other-
Steven Butala:
Maybe I shouldn’t have that baby.
Jill DeWit:
Wait a minute. I was waiting for that.
Steven Butala:
Maybe I shouldn’t have this marriage.
Jill DeWit:
It’s little late for that, but you can easily un-lease the car, un-lease the apartment. There’s things that you can do to bring things better in line so you’re not sweating it every month.
Steven Butala:
If you’re struggling with this, there’s tons of places to go out there on the internet that’ll help you with this.
Jill DeWit:
It’s true.
Steven Butala:
A lot of them are free. In a weird way, this is kind of the company that Jill and I are launching next year called Showing Up for Life.
Jill DeWit:
This year.
Steven Butala:
This year is what I meant. Yeah.
Jill DeWit:
Like whoa.
Steven Butala:
So that’s stage one. So a great example is right when I got out of college, I took a full commission commercial real estate agent job in the worst recession that Detroit was ever experiencing on commercial real estate. It was just pure bad luck on my part, and I made zero the first year and I made like 300 grand the second year. And then I went on and moved on. So, that’s a great example of I have no money coming in. What am I going to do? You got to get real creative about where you eat and how you eat and whose couch you’re sleeping on.
Jill DeWit:
And if you eat.
Steven Butala:
Yeah, seriously. I cannot count the number of times I ran out of gas that year. And I’m not looking for sympathy at all. I’m just saying it was well worth it. And what I learned that year, probably learned more that year in the commercial real estate or in the field than I did in four years of college. So that’s stage one. So now you’ve got a job or you’ve solved it. You’re making, let’s say 3000 or $4000 a month and your expenses are two. That’s ideal. This is like a kindergarten rule I learned. Spend half and save half of what you make. I don’t think that you can go wrong that way.
Steven Butala:
Stage two is you quit your W2 job because you’ve had some side gig, let’s say buying and selling land, that allows you to support yourself and your family very consistently in a W2 type manner, except you’re signing your own paycheck because you figured something out. You figured out buying land like Rio here is figuring out that buy for one, sell it for three, and do it, like Jill says, a couple times a week, three times a month, whatever works out, and however you can get there safely. Bless you.
Jill DeWit:
Excuse me. Sorry.
Steven Butala:
Bless you, bike rider. So now that paycheck, that $2,000 that you need is your own W2 expenses and you own the company, or you own the operation or the sole proprietor or you’re partners with somebody. And you’re on your way to figuring out what you want to do for your career. So your expenses are $2,000 a month and your revenue, how much money are coming in for one month is let’s say 4,000. Next month, it’s 5,000, 6,000, 8,000. Maybe you have a tough month, it goes back down to six, back up to seven. Maybe it’s cyclical. Maybe you’re selling houses. Maybe you’re a real estate agent and that’s how you’re accomplishing this. That’s stage two of wealth. Now you have hope. This is why this is my favorite stage, because if you can make five grand or 10 grand a month, depending on how you control 100% of your time, and maybe you have a partner you can rely on socially or professionally or both, like us, then you can make $100,000. You can make a hundred grand a month if you know what you’re doing, and it’s relatively scalable.
Steven Butala:
Can you do that with a convenience store? No, there’s only so much capacity that you’re going to have with one convenience store before you have to buy another one to get it back up or to double it. Can you do it with a restaurant? Hell no. Can you do it with a manufacturing facility? Yep. Get those machines running and get some more machines in there. So you’ve got to plan for what’s scalable. That’s what scalable really means when they talk about it on Shark Tank. That just puts dollar signs into my eyes, and I love that challenge. And so that’s why that’s my favorite stage.
Steven Butala:
The final stage of wealth, and I’m oversimplifying-
Jill DeWit:
It’s great.
Steven Butala:
… is scaling it all up.
Jill DeWit:
It’s perfect. You’re explaining it perfectly.
Steven Butala:
So now you’re making 100,000, $200,000 a month, or maybe way, way more. Maybe you do it through stock options or stock, or you do it like Jeff Bezos did, where you create a company, you take it public, you retain most of the shares, and you can create some massive wealth that way. Whatever makes sense to you, it’s running through that third step, on the way up to that third step is an absolute thrill for me. Jill just wants to go straight to step three and live in step three.
Jill DeWit:
I like step two though. Step two is a challenge too. I do enjoy that. I remember, because I have fond memories of, hey, that’s all we could afford.
Steven Butala:
Me too. I loved that. It makes it meaningful.
Jill DeWit:
That was okay because we were really scaling back to use our money in other ways. So we budgeted, like entertainment during the week with little kids. I really have fond memories of Subway sandwiches and a picnic in the park.
Steven Butala:
Me too.
Jill DeWit:
And the kids thought it was the greatest thing in life.
Steven Butala:
Me too, Jill.
Jill DeWit:
That was fun. And that was step one and two that those went on. And then step three is like, oh, now we could do different things, but I still like doing those things.
Steven Butala:
So deconstructing what you want to happen in your life as early on as possible is really what I’m writing a book about, especially for young men, because I see a lot of people, and myself included, I’ll use myself as a guinea pig. We didn’t do this stuff in order, and there is an order where you can make it really easy on yourself, or there’s an order to this where you can, in some cases, make it almost impossible to do this. If have to five kids before you’re 20, it’s real tough to accomplish this.
Jill DeWit:
True. Five kids at all. That’s a lot.
Steven Butala:
Yeah. Well, five kids at all. But if you do it in order, really which is what the book that I’m … It’s called Stuff Your Fathers Never Told You. Jill will talk about her book tomorrow.
Jill DeWit:
No, all good. Bring it. We’ll do both. We’ll talk about both. I think that’s awesome. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.
Steven Butala:
Tomorrow, the episode on the Land Academy Show is called, well, it’s Jill Friday. I’m writing a book. That’s the name of the title they gave us.
Jill DeWit:
I like that.
Steven Butala:
You are not alone in your real estate ambition. Can you tease us a little?
Jill DeWit:
Tomorrow.
Steven Butala:
What’s your book about?
Jill DeWit:
Relationships.
Steven Butala:
Okay, good.
Jill DeWit:
But it’s not just boring, like oh another one. Wait for it.
Steven Butala:
Have you ever been boring?
Jill DeWit:
Well, you know what I mean.
Steven Butala:
When have you done anything boring ever?
Jill DeWit:
No, I’m going to start with, tomorrow, I’m going to lead off on the book that I’m currently reading that someone else wrote that is, oh my God, it’s making me feel really good about this. So we’ll leave it at that.
Steven Butala:
Good.
Jill DeWit:
Hey, do you need to send out a few thousand offers to property owners like us? Check out offers2owners.com. It’s offers, the number two and owners.com. No set-up fees, free mail merge, and exceptional service, plus newly added concierge data and pricing. It’s awesome. We should know, because it’s our company. Give Offers 2 Owners a call today. We are Steve and Jill.
Steven Butala:
We are Steve and Jill. Information.
Jill DeWit:
And inspiration.
Steven Butala:
To buy undervalued property.
Jill DeWit:
I feel like I’m a little hoarse. Do I sound hoarse?
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