Jack Thursday – 5 Things I Refuse to Spend Money On (LA 1761)
Jack Thursday – 5 Things I Refuse to Spend Money On (LA 1761)
Transcript:
Steven Jack Butala:
Steve and Jill here.
Jill K DeWit:
Howdy.
Steven Jack Butala:
Welcome to the Land Academy Show, entertaining land investment talk. I’m Steven Jack Butala.
Jill K DeWit:
And I’m Jill DeWit, broadcasting from the Valley of the Sun.
Steven Jack Butala:
Today’s Jack Thursday and I’m going to talk about five things I refuse to spend money on. I should have called it, refuse to spend too much money on. Some of these are really unavoidable.
Jill K DeWit:
I got some that are just automatic, I can think of.
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. Comment on the shows you like.
Jill K DeWit:
Dave wrote, “I’ve got the VP of Business Development for a large senior living community asking me to birddog suitable land for them. Anyone ever indulge something like this by actually sending a mailer in an area with buying criteria that might be different than what you would normally do otherwise? The risk seems pretty obvious, but the upside could be pretty big. I’m thinking. What do you all think?”
Steven Jack Butala:
I started my career on this very thing, in the very early ’90s, buying and selling long-term care facilities and associated companies, and land even, to people who already own long term care companies. So I responded to this person in great length in Discord, and I said, “Yeah, I would do it. However, here’s a few things that I learned that you really need to do before you get too excited about it.”
Steven Jack Butala:
If it’s a nonprofit group, we’ve done this, Jill and I have done this for people, apartment owners, in Los Angeles with mild success. And I only say mild because mild, not extreme success, because Jill and I got really frustrated with the amount of time that. Just know that it’s a client. When you’re buying property on behalf of yourself, you can make a decision really quickly.
Jill K DeWit:
Yep.
Steven Jack Butala:
When you’re buying property on behalf of anyone else, especially if it’s an organization and there’s multiple people making a decision.
Jill K DeWit:
They’ve got to love all over it and feel it and I can’t take it.
Steven Jack Butala:
So, mild success, But if you’re really, really young and you’re super ambitious, you can get a mailer out. I’ll tell you what’s great about senior living or any specific use type property like this, maybe properties for subdivisions. These people live and die by these acquisitions so they have to make a decision. So you got that going for you. Number two, they’re very specifically zoned. So you can do a mailer, in an entire state, if you’ve got real good data, assessor data, for that specific zoning, like people who want trailer parks. That’s specifically zoned. RV parks, very specific zoning. Self storage and on and on and on. So when you find a client that’s on a real aggressive acquisition schedule, it’s not hard to put those things together.
Steven Jack Butala:
If they’re for-profit group, you need to find out who’s making the decision and you need to sign a contract that says, “You’re going to pay me 2% of whatever you buy, whatever I send you. And I’m not going to represent you in this transaction in any manner, because I’m not a licensed real estate agent.”
Steven Jack Butala:
If it’s a nonprofit group, and I did the majority of work myself long time ago for nonprofits, you really need to put a suit on and go to the next board meeting and find out, take their pulse about how thirsty they are for doing acquisitions. Because nonprofits all say they are. They want to expand and do better and spread their mission and the whole thing. But when it comes to reality, the vast majority of the time is that they just don’t have the [foreign language 00:03:26] to do what a for profit company does. Tons and tons of money to be made here. Requires a lot of patience and organization.
Jill K DeWit:
Thank you.
Steven Jack Butala:
Today’s Jack Thursday. Five things I refused to spend money on too much money on. This is why you’re listening.
Jill K DeWit:
Okay. I’m excited to hear. You said one of them might not be legal?
Steven Jack Butala:
Well, I refuse to spend money on illicit drugs and hookers.
Jill K DeWit:
Oh.
Steven Jack Butala:
But that’s not on my list.
Jill K DeWit:
Okay. Thank you.
Steven Jack Butala:
That’s lucky for all of us.
Jill K DeWit:
Thanks for that.
Steven Jack Butala:
I can’t stand spending money on rent.
Jill K DeWit:
Oh.
Steven Jack Butala:
Or a mortgage and having a mortgage. I can’t stand it.
Jill K DeWit:
I know that.
Steven Jack Butala:
It crushes my soul.
Jill K DeWit:
I know.
Steven Jack Butala:
Does it make better financial sense? Yeah. Most of the time you should not pay off your mortgage. Most of the time, in specific markets. Didn’t you say you were an accountant or something and you’re smart with money? Yeah, I just have a personal issue with having any type of debt. That’s my number one I can’t stand spending money on this. If I have like credit card debt. Just crushes my soul.
Jill K DeWit:
I know.
Steven Jack Butala:
Makes me a terrible person to be around permanently.
Jill K DeWit:
Okay. If you’re taking notes, please underline the word permanently.
Steven Jack Butala:
Hey, do you have a list?
Jill K DeWit:
Oh wait, we’re going to go through yours first and I have a few that I jotted down.
Steven Jack Butala:
I can’t stand spending money on insurance. Why? Because I don’t have a choice.
Jill K DeWit:
This is funny.
Steven Jack Butala:
The cards are stacked against me.
Jill K DeWit:
Mines are so different.
Steven Jack Butala:
I have to spend money on insurance every month.
Jill K DeWit:
That I never use.
Steven Jack Butala:
That will never get used. Why? Because if I use it, my insurance goes up.
Jill K DeWit:
Exactly.
Steven Jack Butala:
What kind of scam is that?
Jill K DeWit:
Coulda, shoulda, woulda.
Steven Jack Butala:
Same thing with bank fees, which we have enough money where we got out of that now.
Jill K DeWit:
What else?
Steven Jack Butala:
Stuff that makes me feel better and look better. Like a new shirt.
Jill K DeWit:
Gee, I wouldn’t have known that.
Steven Jack Butala:
Or a nicer pair of shoes to look nice. I can’t stand that stuff. Or, “Mr. Butala, they’re the executive suite is available at the top of the hotel for an extra $500.” Nope, nope, nope, nope. Can’t stand that stuff. That stuff that just, “Oh, I’m so rich and I feel great about myself.” Forget it. I think it makes me a terrible person.
Steven Jack Butala:
Number four, number four. Crap that depreciates like furniture. We just bought this house. It’s fairly big. And Jill and I fortunately are on the same page about this and 99% of the stuff that’s in this house is used. We’re fortunate enough to live in an area where there’s these consignment shops that have some nicer furniture that’s passes the Jill test. That’s what I call it. Everything passes mine. I would buy a golf cart and drive around in this house with no furniture.
Jill K DeWit:
Look behind me. Look behind. I’m trying to think of anything. The only I bought new is the one little table right over your head there. Everything else in the or that-
Steven Jack Butala:
The pianos used.
Jill K DeWit:
Yeah, the pianos used. The couch is used.
Steven Jack Butala:
All of it.
Jill K DeWit:
The bar is used.
Steven Jack Butala:
Trust me, it’s not cheap furniture, but it’s used, so it’s half.
Jill K DeWit:
It’s good.
Steven Jack Butala:
It’s less than half.
Jill K DeWit:
It’s lightly used, which is great. But it’s used.
Steven Jack Butala:
And my final thing that I cannot stand spending money on is freaking taxes. And that can come in the form of any type of tax, income tax. I don’t have issues too much with payroll taxes. I have no issues paying property taxes. This country was founded on property taxes. In fact, there was no such thing as income tax in this country at all before World War II, it all got started because we needed to fund a war that we didn’t start. Think about that.
Jill K DeWit:
Yeah.
Steven Jack Butala:
Now it’s completely out of control. I don’t care if you’re right or left, it’s out of control how much tax we pay.
Jill K DeWit:
I agree.
Steven Jack Butala:
And at sales tax, I think the internet takes care of that. That probably eventually will go away. But see, I have control. I have control over sales tax. I have control over property taxes. I don’t have to live in a big house that has a lot of property taxes or a state that pays crazy, requires all that. So stuff I can control, I can deal with it. That’s my list. I do have lists of stuff that I love to spend money on too.
Jill K DeWit:
I like these. This is great. You can keep going.
Steven Jack Butala:
I love spending money on education.
Jill K DeWit:
Yeah.
Steven Jack Butala:
We couldn’t afford it. Our third kid went to private school. The first two, I regret this every day that we didn’t put them through private school. We just didn’t have the means then. It’s just a different time in our life.
Jill K DeWit:
That’s true.
Steven Jack Butala:
I love spending money on and don’t care how much it costs, travel and entertainment. In accounting it’s called T&E, travel and entertainment. And Jill and I do not suffer from lack of a good time.
Jill K DeWit:
Yeah.
Steven Jack Butala:
I don’t care what the price is on that.
Jill K DeWit:
That’s true.
Steven Jack Butala:
I have no problem spending money on, this is my final one, on anything that I think’s going to reasonably appreciate. So I call them balance sheet items. Like I bought an old Corvette. I’m probably going to make 50 to $70,000 on that car and have fun with it while I own it. So I love spending money on that. I love spending money on land and reselling it. Love it. I love every phase of that.
Jill K DeWit:
That’s good.
Steven Jack Butala:
This is going to be a different list, isn’t it? For you?
Jill K DeWit:
Oh, you want to hear mine?
Steven Jack Butala:
Sure. Yeah.
Jill K DeWit:
All right. While you’re doing yours, I thought I’d jot a few down too. So some of ours are the same. So things that I refuse to spend money on is expensive furniture. I’m with you there. I can’t. I can think of one time I fell in love with one item and that was it. And then in the end it’s like, “Eh, so what. Big deal. Everything else I’m very happy.” Things that I don’t, fluff gifts. I hate fluff gifts.
Steven Jack Butala:
I have gifts on my original list.
Jill K DeWit:
I hate fluff gifts.
Steven Jack Butala:
I do too.
Jill K DeWit:
“It’s so-and-so’s birthday. I need to get them something.” Do you? Is there something really good or you just going to show up with something? Lord knows, we don’t all need more candles for starters.
Steven Jack Butala:
Yeah.
Jill K DeWit:
Or just stupid things like that.
Steven Jack Butala:
That was on my original list.
Jill K DeWit:
Fluff gifts are dumb. You talk me-
Steven Jack Butala:
I thought it was going to make me sound like a negative person, but we left it for you.
Jill K DeWit:
Anything that’s going to go in someone’s closet. You got it. It’s good. Things I refuse to spend money on. Cheap or poor quality items. We’re a little bit different there. Not necessarily the hotel room, but I learned this, you get what you spend, like what am I trying to say? You get what you pay for. In things like food, clothing, jewelry, I’m going to spend a little money on that stuff. I’m in it.
Steven Jack Butala:
I’m with you on the food.
Jill K DeWit:
Right. My number four. You’re going to love this one. Things I refuse to spend money on. Expensive wine.
Steven Jack Butala:
Yeah.
Jill K DeWit:
It is wasted on me.
Steven Jack Butala:
Yeah, me too.
Jill K DeWit:
I am not a wine drinker. I don’t care how much it costs. You put it in front of me, if I like it, I’ll keep drinking it. And don’t tell me, just don’t even tell me, because I don’t care.
Steven Jack Butala:
I think 15 to $18 for a bottle of wine is about the tip, tip, top. And I think you’re going to get everything you would get out of a $200 bottle of wine.
Jill K DeWit:
Right.
Steven Jack Butala:
I think there’s radios clicking off everywhere for this.
Jill K DeWit:
I won’t want partake in a $2,000 bottle of wine. I’d be like, “Hey, it’s wasted on me. You guys all enjoy it.”
Steven Jack Butala:
I would give it to someone else in the restaurant.
Jill K DeWit:
That’s what I’m saying.
Steven Jack Butala:
Whoever can enjoy this, please.
Jill K DeWit:
Someone else at the table can have it. I don’t care. And then my last thing is the same as you. I hate paying money on taxes. It makes me cry. But I know we have to and it’s okay.
Steven Jack Butala:
I’ll leave on this. If you own a business, a little business like these businesses we have, like buying and selling land. You have crazy amount of control over how much taxes you pay. And I don’t mean cheat. I’m not advocating that at all, I’m not even saying fib. You have a lot of control over how much property you buy, how much you don’t buy, whether or not you have a real estate designation with the IRS. All kinds of things that are ordinary and necessary expenses for you to succeed at buying and selling land. And that’s just not the case if you’re a medical doctor with a crazy paycheck, you have no choice but to pay those taxes.
Jill K DeWit:
Do your homework.
Steven Jack Butala:
We’re in a great tax position, yeah.
Jill K DeWit:
Just do your homework and do it right.
Steven Jack Butala:
Surround yourself with some good people, some local accountants that understand and have the same point of view as you do.
Jill K DeWit:
I love it. Good show. Happy you could join us today. Five days a week. You can find us here on the Land Academy Show.
Steven Jack Butala:
Tomorrow’s Jill Friday, and she’s going to talk about, well, how long do Land Academy members actually stay in the group? You are not alone in your real estate ambition. How long do they stay in there, Jill?
Jill K DeWit:
I’ll tell you tomorrow.
Steven Jack Butala:
I knew you were going to say that.
Jill K DeWit:
Yeah.
Steven Jack Butala:
I just got to poke you sometimes.
Jill K DeWit:
I know you do. Yes, you do. Thank you for tuning in. We hope you find our content valuable and we really appreciate your support. If you haven’t already, please check out our YouTube channel and hit the subscribe button. And don’t forget if you are already a Land Academy member, make sure you are connecting with us and communicating in Discord. It’s awesome. You want to find out more, send a note to support@landacademy.com.
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