Jack Thursday – Money Management (LA 1620)

Jack Thursday – Money Management (LA 1620)

Transcript:

Steven Jack Butala:
Steve and Jill here.

Jill DeWit:
Hello.

Steven Jack 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 the Valley of the Sun.

Steven Jack Butala:
Today is Jack Thursday. I’m going to talk about money management.

Jill DeWit:
And I’m going to take a nap.

Steven Jack Butala:
You know how I manage money? By buying land and selling it.

Jill DeWit:
You know how I manage money? By asking for your help.

Steven Jack Butala:
What?

Jill DeWit:
Just kidding. I don’t know. Not really [inaudible 00:00:26]. You’re the money. No, no, this is perfect, because look, you’re the money guy in our whole relationship, meaning our personal finances and hey, we can do this or not do this. And I don’t question you. I hope you appreciate that. I’m sure you do.

Steven Jack Butala:
I really appreciate that. I’ll lay all the stuff out in a second here and then we’ll talk about our personal situation, because it’s worked. And it wouldn’t work for everybody.

Jill DeWit:
It’s true.

Steven Jack Butala:
There’s some stuff that Jill and I do that most people that are partners like this, wouldn’t put up with. Number one, we don’t have any joint money.

Jill DeWit:
We have company money.

Steven Jack Butala:
We have companies together.

Jill DeWit:
That’s true.

Steven Jack Butala:
She and I do not share, and never have, and never will, share a personal bank account. So I don’t talk about, ever, I mean, I never have, how she spends money. It’s her money. I don’t care. And vice versa. I think, look, here’s a prelude to the whole thing and we will take a question first. The number one way to succeed at managing money is to have a plan. Otherwise, the money will manage you. And we’ve all had friends like this, friends, or maybe parents, or siblings, or cousins, or people that are just always down in the dumps about money. And it’s because they never had a plan.

Jill DeWit:
It’s true.

Steven Jack 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. And don’t forget to subscribe on the Land Academy YouTube channel and comment on the shows you like.

Jill DeWit:
[Zach 00:02:00] wrote, “Howdy, y’all. New member from Austin, Texas. My name is Zach K. I’m a seasoned entrepreneur, but totally new to land investing.” This is great! “And fairly new to real estate investing, in general.” Welcome Zach. This is cool.

Steven Jack Butala:
Fit the profile perfectly on [crosstalk 00:02:17].

Jill DeWit:
Yeah. “Having built several companies, the latest of which is a line of educational toys sold through big-box retail carrying Disney licensing, I’m experienced with building teams, setting up processes, outsourcing, et cetera, et cetera. The entire international supply chain has been wrecked these past years to say the least.”

Steven Jack Butala:
Decimated is what I call it.

Jill DeWit:
Yeah. “And I felt it’s time to a new business started in an entirely different and more stable industry.”

Steven Jack Butala:
Amen.

Jill DeWit:
Yeah. This is so cool.

Steven Jack Butala:
We are so lucky we’re in this business. We talk about it on the Thursday call all the time.

Jill DeWit:
Yep. And let’s see here. “I started land investing two months ago after hearing great things from a friend who got into the business last year. I sent out 50,000 mailers to start and closed 10 sweet deals for info lots here in Texas, purchased for 8 to $20,000 and sold between 30 and $90,000.”

Steven Jack Butala:
That’s the textbook Land Academy deal.

Jill DeWit:
Totally. “By sending 50,000 letters right out of the gate, I was able to learn a ton, fast. Some of my letters were spot on and others were atrociously mispriced.” That happens.

Steven Jack Butala:
It still happens us.

Jill DeWit:
That’s right. “Choose only the sweetest deals and let the less perfect deals slide away. Now in the process of hiring a team to scale this son of a BI. I’d love to contribute to this community as I embark on this journey. A very entertaining business, by the way. This business is endlessly entertaining as it seems, from the hate calls to the zany sellers and meet other land investors who are building at this business at scale.” I love it!

Steven Jack Butala:
This guy’s got Disney-licensed educational toys that are probably made in China and we have Christmas season coming up. And he can’t get them.

Jill DeWit:
Yeah. Cash hogs. Ugh.

Steven Jack Butala:
You know how many times Jill and I turn to each other every week and say, because something on the news or whatever, and we’re like, “God, we’re so lucky we’re in this business.” We can work from home. It’s just that one news event happens after another where we both look at each other saying, “Well, at least we don’t have that problem.” And supply chain’s one of it.

Jill DeWit:
Yeah. That’s true. You’re right. I’m not waiting for someone to deliver my paper to get a deed out. I’m okay. I mean, that’s the most thing that I would need is paper. And I can get that. That’s about it.

Steven Jack Butala:
Paper!

Jill DeWit:
I know. I don’t want to need paper.

Steven Jack Butala:
Like paper to do a deed?

Jill DeWit:
Yeah. That’s about it.

Steven Jack Butala:
Oh, my God.

Jill DeWit:
And I’m waiting for that to go away. That needs to go away, by the way.

Steven Jack Butala:
I agree.

Jill DeWit:
I was really, really gunning for, when COVID hit, I’m like, “Yes. Now we’re going to have online recording. And yes, we’re going to have online notaries.”

Steven Jack Butala:
That’s what I thought, Jill.

Jill DeWit:
I’m like, “This is going to condense it by a week, at least.” I was so excited. And Nope. It didn’t happen. I’m like, “ah!”

Steven Jack Butala:
Instead, there’s more rules.

Jill DeWit:
I know, but that’s okay.

Steven Jack Butala:
To save us from ourselves, but we’ll talk about that later. Today is Jack Thursday. It’s called money management. This is why you’re listening. If you listen to this show or anything in this business development genre of podcasts, you’re interested in money. You’re interested probably in getting out of some version of the situation that you’re in and making it better. And so that involves money management. And I think there’s a lot of people that misunderstand that money management is really what it’s all about. And if you’re lucky, you can find a partnership where there’s a bunch of talent like Jill has, with the hardcore money management and discipline it involves.

Jill DeWit:
Which you’re great at.

Steven Jack Butala:
You have to have a plan, number one. Number two, you can never, under any circumstance, live above your means.

Jill DeWit:
I was just going to write that down.

Steven Jack Butala:
You can’t. And so yesterday was about affordable housing. The very definition of that is living above your means.

Jill DeWit:
Why do people do that?

Steven Jack Butala:
I don’t know. Probably because they’re not numbers people. I see this the most with certain personality types. I come from the medical profession as an owner, as a business owner. And so there are all different types of personalities in that the business. And in that business, there are tons of people like me who are the money type people and the managers and things like that. I’ve never really met a clinician who continued to be a clinician for the rest of their lives and was also a money person. Because when you really start to apply logic, even as a surgeon, if you’re a money person, you’re looking at this every day saying, “I can make so much more money doing something else. I just have to apply these few rules.”

Steven Jack Butala:
So you’re either a money person or you’re not, or a numbers person, I should say. If you’re not, you have two choices. You have to manage your money, all right? If you’re not a numbers person, you have two choices. Learn to be one, which is tough because, in my opinion, you’re probably either set up with this by the time you’re done with grade school or you’re not. Or number two, get somebody in your life who is, which is what Jill did. Because I don’t know how not to manage money. If I go in the grocery store, all I do is look at the price for ounce of every single thing I’m buying. That’s just how I do it. I don’t think Jill does that.

Jill DeWit:
I do the big picture. No, but I know if there’s more going out than there is coming in. And you can’t have more going out than there is coming in. It always makes me think of the story of my parents. My mom would always pay the bills. So she said, “All right,” kind of like, “you pay the bills at the beginning of the month.” You have your money. You pay everything. And then you live on what’s left over, right? And as you might be doing, I did this with the kids when they were little, it might be subway sandwiches and a picnic in the park and that’s our fun for this weekend.

Steven Jack Butala:
And that’s usually the fourth week of the month or something.

Jill DeWit:
Yeah. They love it. They think it’s the greatest thing. They don’t know it’s like, “This is kind of what we could afford.” That’s fine. But my dad’s way of paying bills were, “Let’s just have some fun! Let’s go to Disneyland. And let’s buy this new stereo. Or let’s do whatever.” And then at the end of the month, try to scrape together and pay bills, which there wasn’t enough leftover. That was when we were really little. So I understand that. And then what are some quick ways to change it? You could take on more. Take on hours. Take on another part-time job. I don’t know. There’s things you can do to get yourself ahead as you’re digging out.

Steven Jack Butala:
Here’s the stages. In my opinion, there’s a few stages of money management/wealth. Number one, you need to make more than you spend, which is a lot harder. I remember this exact day I was staring at an ATM and I realized I actually make more money than I’m spending, which was not the case all through college. And it took me a couple years after college to really figure this out. And there was no podcast like this. Or if there was, I didn’t know about it. So I’m finally now making more money than I spend.

Steven Jack Butala:
Number two, the second stage of wealth for me is, I’m actually starting to save some money. Maybe I save, back then it was four or $500 a month or a thousand dollars a month, and so I can watch my savings account go up. I think this is a critical time. And you set the stage for how you’re going to live the rest of your money life. Because if you start to spend more money because you’re making more money, you’re never going to get out of that stage.

Jill DeWit:
That’s the problem right there. That’s what BASIC people do right away, like, “Great, now it can afford X!” And they keep themselves right at that same spot. [crosstalk 00:09:59]

Steven Jack Butala:
So at the end of that stage, if you’re doing it correctly and really man… It takes a lot of management and a lot of discipline. You should be saving as much as you’re spending. So if it costs you $2,500 a month to live, you should be putting $2,500 away in a bank. And so that is the tail end of that stage.

Steven Jack Butala:
Then the third stage is what I call getting ahead. Now, it’s like, “Okay, I probably live in borderline squalor with two other idiots, but now, I’m seriously saving some money.” How does that happen? You either change jobs. Having a W2 job is the very definition of a single point of failure. And so you can either change jobs and give yourself a raise that way or you can side hustle it. For example, buy and sell land. I don’t know. I don’t care if you go to a casino, but try something. I mean it. Just don’t just sit-

Jill DeWit:
I don’t know about the casino.

Steven Jack Butala:
I think that was the end of stage two, right?

Jill DeWit:
Okay.

Steven Jack Butala:
Stage three is you’re out of debt. This is huge. The vast majority of people never get to this point. But you need to have a plan, because you’re saving money now to somehow get out of debt. And you should be putting more money away to buy a house, if that’s what you want to do. Buying a house, depending on where you live in the country, gets a lot more praise than I really think it deserves. And I think that the further we get along in the cycle of America, the harder it is to just make tons and tons of money on a house, unless you live in southern California or certain places that just seem to never go down in value. So we’ve been lucky about that. So great, now you’re out of debt. I think it’s stage three.

Jill DeWit:
I think we’re on four. I think we were three. And then this is four. I don’t know. It doesn’t matter.

Steven Jack Butala:
It doesn’t matter either. The final stage is if you’re out of debt, now you start to accumulate wealth. And the sky’s the limit there. If you’ve crossed the border, crossed into you’re debt free, you have the skills or you’ve associated somebody in your life with those skills, you can get as big as you want. And Jill and I are at an age now where we talk about this a lot. It’s like, how much is enough? Do we need to keep doing this? Should we release House Academy? I’m not sure it’s worth it. I mean, yeah, we’re helping people. What are we going to do if we don’t do it? Should we release Career Path? Should we buy a mobile home park? And on, and on, and on. But if you can get to the point where you have no debt and I mean eventually no mortgage debt, where you’re all free and clear on that, you’re all set. But it all starts with that first and second step of live below your means and start saving some money, not spending more.

Jill DeWit:
That’s perfect. That’s the hardest part, I think.

Steven Jack Butala:
That was never hard for me.

Jill DeWit:
Yeah. It was hard for me.

Steven Jack Butala:
I don’t have such a high opinion on myself that I need a new car. I just never have.

Jill DeWit:
When I was like early 20s, when it was just me, on my own, I would save up some money. Spend it down. Save it up. Do something cool. Spend it down. That’s what I would do.

Steven Jack Butala:
Well, how’d you get out of that, because you’re here sitting next to me? And just don’t tell me it was me.

Jill DeWit:
Oh, gosh, no. [crosstalk 00:13:22]. No, it was not you. No, it was me saying, “This is stupid and you’re never going to get ahead.” And I had to suck it up. I had to force myself. And I had to learn to hold it back and watch it grow. It was very hard for me. Number two child is just like me. When he was a little kid, I give him 50 cents. He’s looking for a machine to put it in to get some little toy at the grocery store. Remember those little things at the grocery store and you twist it? And I’m like, “Dude-”

Steven Jack Butala:
God, number one’s the exact opposite. I bet she has more money in savings than we do.

Jill DeWit:
I bet. She’s great now about that. But at my age, the same age I was at her age, she’s so far ahead of me. That’s for sure. I did not have that self control. So it was hard. It was very hard to overcome it, but I did. You have really take a step back and think about what’s important. You have to not care what other people think, because it’s very easy to get caught up in, when I tell people I can’t go or I’m not going to go because it’s expensive, and I don’t want to spend the money, and I’m saving my money for X, that’s a hard lesson to learn.

Jill DeWit:
I remember a really good friend that would only go out with us, this is when we were in our 20s, once a week. It was a guy friend. His name was Greg. He was saving up for a car. And I thought, “What a loser.” I did. He would go out once a week with us and only spend X amount of dollars and that was it. And guess what? After two years he bought himself a brand new, it was a VW Golf or something like that, that he wanted. And I’m like, “Wow, he did it. Oh, so that’s what that looks like. And that’s all he had to do?” I’m like, “Well, all right. Where’d he learn that?” I don’t know. But I’m like, “All right, I see it.” But it’s a lot of self discipline and not listening to anybody else and doing what you know is right.

Steven Jack Butala:
I’ll leave it on this. It’s all in your head. There are people who cry poor. The people who have great jobs always cry poor.

Jill DeWit:
We don’t do that.

Steven Jack Butala:
You have complete control. I mean a W2 job.

Jill DeWit:
Oh, okay.

Steven Jack Butala:
You have complete control over this. Money doesn’t need to manage you. There’s always ways to make more money, always. It’s just all about time management and micromanaging stuff and getting yourself into the right crowd. This is my final point. My life is packed, and with Jill, too, full of people who are in a much worse situation today, people at my age, than it was, let’s say, 8 or 10 years ago. They were in sales, some kind of corporate sales or something like that. The market kind of shifted, because computers kicked in and you can buy stuff on the internet now.

Jill DeWit:
Nothing to do with COVID. Nothing to do with anything like that.

Steven Jack Butala:
[crosstalk 00:16:18] long before that. They just never recovered. They never took a computer class or never started another career or never started, let’s say, buy and selling land. So there’s a ton of ton of people that are now being controlled by factors that they have nothing to do with. Forget COVID. I’m not talking about COVID. In fact, the vast majority of people that I know, COVID has had a positive financial result in their life, not a negative one. So I’m not talking about that. I’m talking about computers passing by. When there’s a shift change in an environment, I don’t care if it’s COVID or a recession… Recessions and viruses now are here to stay. And that computer technology is a hockey sticking up, literally, exponentially. The technology and everything that we do, if you don’t embrace that, it’s going to leave you behind. You have to manage it and it all equals dollars and cents at the end.

Jill DeWit:
Mm-hmm (affirmative). Thank you. Happy you could join us today. Five days a week, you can find us right here on the Land Academy Show.

Steven Jack Butala:
Thank God tomorrow is Jill Friday.

Jill DeWit:
Thank you.

Steven Jack Butala:
And she’s going to talk about how you know you’re good at something. How do you know you’re good at something? You are not alone in your real estate ambition.

Jill DeWit:
Like reading a script.

Steven Jack Butala:
Well, yeah, like reading.

Jill DeWit:
This is our first example right now. Very good. That’s awesome. Thank you for tuning in. We hope you find our content valuable and we really do appreciate your support. If you haven’t already, don’t forget, check out our YouTube channel and please hit the subscribe button. We are Steve and Jill.

Steven Jack Butala:
Information…

Jill DeWit:
and inspiration…

Steven Jack Butala:
to buy undervalued property.

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