Real estate has the power to change your life completely. So, today, we are talking about the mistakes you should avoid and the path you should focus on as you get your first big real estate cheques. If freedom, independence, and wealth creation are your goals, stay with us and learn how the first accomplishments tend to affect people’s lifestyles, what delaying gratification is, and how you can get rich.
What You Will Learn About Lifestyle Changes for Buy and Hold Investors | HTH025:
- How the first big cheques impact your beliefs and lifestyle
- What delaying gratification is and how it impacts wealth creation
- Matt Theriault’s story of becoming free and independent
- The reason why most people do not succeed to build wealth
- How our actions show what really matters to us
- The 2 ways to get rich
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Speaker 1: This is Theriault Media.
Don’t wait for appreciation to buy real estate, buy for cash flow and wait. In other words …
Hold that house!
Your hosts, Matt Andrews and Matt Theriault.
Matt Theriault: Hey there, flipping houses can make you rich, holding them will make you wealthy. This is the ‘Hold That House’ show. I am Matt Theriault and over there, right over there, Mr. Matt Andrews.
Matt Andrews: I’m gonna be a star!
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Matt Andrews: Don’t list to them.
Matt Theriault: Don’t listen to them.
Matt Andrews: Them is always bad to listen to.
Matt Theriault: Right.
Matt Andrews: They’re always saying their thing.
Matt Theriault: It’s the sin of omission really, right?
Matt Andrews: Yes.
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Matt Andrews: Exactly.
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Matt Andrews: Exactly.
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Matt Theriault: That was a good one.
Matt Andrews: They’re just putting out a big question mark there for you. Yep, that’s right.
Matt Theriault: They ain’t telling you about it because you wouldn’t buy it ’cause it ain’t that appealing, it’s not that sexy, but that is the key ingredient to financial independence to real estate. And you can get that for free. We know we can’t sell it to you either, so we just give it to you for free at holdthathouse.com. Holdthathouse.com. Alrighty Matt, week number five on our southern tour of beautiful hot sweaty Tampa, Florida.
Matt Andrews: It is hot and sweaty.
Matt Theriault: How did you get me to come down here?
Matt Andrews: I don’t know. I lured you down with paddle boards and surf boards and stuff.
Matt Theriault: That’s right. The margaritas are good too.
Matt Andrews: Yeah those are tasty, yes.
Matt Theriault: Cool, so today, speaking of margaritas, we’re gonna talk about lifestyle.
Matt Andrews: That’s right.
Matt Theriault: And the lifestyle changes for buy and hold investors. And at this point, my lifestyle has changed to where I can come to hang out with you for a couple of months.
Matt Andrews: Yeah man.
Matt Theriault: And, but it always wasn’t that way. Didn’t start that way.
Matt Andrews: No, that’s called freedom and yeah, you have to fight for it and grow to it.
Matt Theriault: And one of the things that when you’re getting started in real estate, the wholesaling strategy, like the quick flips or even the fix and flip strategy, and you see all the TV shows, there are good giant chunks of money to be made. And those giant chunks of money can impact your life pretty darn quickly. If it’s your first time getting a $25,000 cheque. I remember mine, that was kind of exciting.
Matt Andrews: Yeah. The shut up cheque?
Matt Theriault: Yeah.
Matt Andrews: Yeah, you tell all your friends, no it can work.
Matt Theriault: Right, exactly. As for my mum, she had to see about four of them before she believed it.
Matt Andrews: Right, right, right, the portion of cheques. Yeah.
Matt Theriault: Exactly, but, that turned into a new car, it turned into some new clothes, it turned into a couple weekends in Vegas and that impacted my life in a favorable way very, very quickly.
Matt Andrews: And how did it affect you the most probably? Belief right? Because then you realized-
Matt Theriault: Oh absolutely.
Matt Andrews: … Okay, I did this. I can do this. So it’s proving to yourself on that first cheque. I remember my first deal. You guys have heard about my first deal in one of the first podcasts we did, it was terrible. I made almost no money, but when I had that first really good deal, that first really good flip, ah man, I just knew, I can do this. I can do this over and over again. Wait, no one’s gonna stop me from doing this? That’s when you start thinking about, oh okay, what kind of lifestyle do I wanna live, right. And then you use real estate as the vehicle to get there, right?
Matt Theriault: Exactly.
Matt Andrews: So that’s it, man.
Matt Theriault: Now those giant chunks of money, they’re great, but they can be almost demonically sedusive.
Matt Andrews: Yes they can, I played that game, so I know where you’re going. Preach, go for it.
Matt Theriault: Got it, ’cause you hit that $25,000 mark and now all of a sudden, you do that three, four months in a row and that becomes your norm. And now you create a situation for yourself where you might have a lifestyle that you don’t want because now you’ve increased your ceiling for your monthly spending, and now you have to get up and go to work every single day and look for that next deal.
Matt Andrews: Got to feed the beast.
Matt Theriault: So you’re making some money, but you really have a very, just a high paying job. And most people that get into real estate, they see the freedom. They see the fruity drinks sitting on the beach underneath the palm tree, they want that lifestyle. Well, sadly, or not sadly, but I guess what’s the word … Contrate a popular belief. That doesn’t come through flipping houses. It comes through holding them.
Matt Andrews: That’s right.
Matt Theriault: So the reason that more people don’t hold more houses, I have a theory on this, because when you come up with that first deal, and you look at that property, and you’re like, “I can flip this for $25,000 dollars, or I can hold it for $250,00 a month.” Very few people can understand the value of that $250,00 a month.
Matt Andrews: Well, and that’s called delaying gratification. Most people can’t do it at all. Why do we eat bad food? Because we can’t delay gratification. Why do we make a lot of bad choices? Because we want that thing right now, and we can’t have it. Now that might preclude us having other things, so we want even more, but we can have that piece of cake right now. Now if you want a piece of cake, and you want washboard abs, one’s more important than the other. You’re gonna make that decision in a moment, and boom. If you go for that cake, it’s gonna taste really good, and you’re gonna like it, and you’re gonna wake up in the morning, and you’re gonna look at yourself in the mirror, and you’re not gonna look like you wanna look.
So it’s the same thing in real estate. Do you want that quick 25k which is nothing wrong with that? That’s good, right? I mean, that can be a great business, but how do we build wealth? We gotta delay that gratification. We gotta say, look, this is worth way more than $25,000, way more. And you and I know, just holding properties, we don’t even bet on appreciation. With that 25k, that can be trump just by appreciation alone, not even cash flow. And it can certainly be trump long term, exponentially, many times over by the cash flow. So it’s tough though.
Matt Theriault: It is.
Matt Andrews: Especially early in your real estate career. I had a hard time saying no. I like fibster fame in lifestyle apparently.
Matt Theriault: Well it gets tougher Matt because you get used to $25,000 a month, so $250,00 a month, holding a house becomes less and less sexy, less and less important.
Matt Andrews: And what does society tell us to do when we got that money? Well, we gotta have a car just like this guy, we gotta move into this neighborhood because we can. And if you’re waiting for someone to give you permission loan wise to go buy a house more than you should buy or do something stupid with your money, people will give you permission out there all day guys. They’ll give you permission to do that, but it’s your choice.
Speaker 1: We’ll be back with more right after this.
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Matt Theriault: The only way you’re ever gonna get that $25,000 a month automated, that you’re gonna get that as cash flow, as you’re gonna get that as residual income, is you have to pick up that first $250 house.
Matt Andrews: That’s right.
Matt Theriault: But if you keep putting that one off because of the $25,000 hit you’re gonna take, or that you’re gonna receive, the $25,000 profit, you’re never gonna get there and the part that gets really scary and is dangerous about that is, you’re making these large chunks of money and you feel like you’re prospering, you feel like you’re doing good for yourself, you’re enjoying life, but you are actually prolonging your journey to the financial freedom part, which is the reason that most of us got involved in the first place.
Matt Andrews: Absolutely!
Matt Theriault: So, let’s talk about lifestyle changes. In the beginning, you were talking about delayed gratification for sure. And I’ll give you my story. The book comes up frequently on our show, Rich Dad, Poor Dad. And I remember when I first read that book was in ’99, maybe 2000.
Matt Andrews: Okay.
Matt Theriault: Right when it came out. And I read the book, and it was the first time I was ever really exposed to the concept of residual income of cash flow and intellectually I can figure out what it means, but I didn’t really know how to create it. And so the more and more I got into that book, and I was married at the time and she would’ve never bought in on this because what I wanted to do was … All right so Perki Asaki, the real road to wealth is to push your expenses down and get your passive income up. And once that passive income exceeds those expenses, boom, you’re free, you’re out of the rat race, right? So, I couldn’t get the wife to ever push the expenses down.
So when eventually the music business crashed me and I was bagging groceries, and then that ultimately ended up in a divorce. I was like, “Aha! Now I’m by myself.” And now I’m not saying you have to get divorced to get out of the rat race, but this was my story and this was my lifestyle change was, I’m gonna sell everything. I’m getting rid of all debt, I’m gonna get my expenses down as low as they possibly can, and then I’m gonna start working what I know how to do and create that residual income.
Matt Andrews: That’s it.
Matt Theriault: And so, as far as my lifestyle went down, I moved into a little 600 square foot apartment. 600 square feet is very, very small by the way.
Matt Andrews: It’s tiny.
Matt Theriault: Just one room and a kitchen and a bathroom, that’s it.
Matt Andrews: It’s like a New York high rise.
Matt Theriault: Yep, and I bought an old clunker of a car. Yeah, it wasn’t a rental car, I think it was previously a rental car. And I paid cash for that. So I had zero expenses other than just normal utilities and food. And so I got my expenses down to a bare minimum, and then I started acquiring these passive income properties. And within three and a half, four years, I was out of the rat race. But I made that sacrifice for those three and a half, four years. Now I’m not saying with delay gratification, I’m not saying what Suze Orman or Dave Ramsey might tell you to delay it until you’re 62. I’m not saying delay gratification.
Matt Andrews: That’s not delaying gratification, that’s called differing your life, that’s what that is. It’s differing living.
Matt Theriault: Absolutely! So I’m saying, you work hard for three, four years and make those lifestyle changes to where you’re decreasing your expenses, focusing on increasing your passive income, you can hit a point of not just freedom, but just being totally independent. That is such a great feeling. You might not have a ton of money in the bank, but that is a much better feeling than having a ton of money in the bank, but having to go to work every single day to make sure you preserve it.
Matt Andrews: Sure, and what you just told, that personal story is a great story ’cause I heard two things there really that I wanna point out that you didn’t say but you did say.
Matt Theriault: Okay.
Matt Andrews: And I wanna make sure people are reading between the lines. You, number one, and correct me if I’m wrong. Number one, you made a decision, right? So it wasn’t just like, “Hey, I’m gonna buy the cheapest car I can and move into the smallest place I can and spend as little money as I can,” that’s a losing strategy by itself right? That’s what everybody’s trying to do. That’s what the media and government tell people to do right now. Live with less, do less, don’t vacation, live with less, these are lean times. That’s a losing proposition and that’s not what you were doing. You made a decision for starters, and then I know you and you don’t even say this, but I know you well enough to just go out and say it, then you set some goals. And set some very measurable realistic goals.
So three or four years later, you were in a different situation, not just because you moved into a small place and lived in a way that you knew you needed to, to be able to get back ahead, but you made a plan, and you put that plan into action. So I want everybody to understand that and hear that. It’s not just about, “Hey I’m going to delay some gratification,” ’cause there are some people that will just delay gratification all day long without a plan. And then it’s just like not doing anything anyway. So you made a decision and then you made a plan, and three or four years later the reason you were in a different situation. And the reason you’re out of that rat race is because you did the things that you needed to put that plan into action. So the plan was this, so the goal was this.
And then you lived in a way that was going to get you to that goal, isn’t that right?
Matt Theriault: Mm-hmm (affirmative).
Matt Andrews: And without the plan, you wouldn’t do that. It’s just a bunch of people delaying gratification for no reason.
Matt Theriault: Right.
Matt Andrews: Right? Yeah, absolutely. So that’s huge.
Matt Theriault: No one has ever cut their expenses to wealth. No one ever saves their way to do wealth.
Matt Andrews: Yeah exactly.
Matt Theriault: You know what I mean? It’s like you gotta have both parts of the equation.
Matt Andrews: Absolutely man.
Matt Theriault: For sure. So delay it just a little bit. Focus on the residual income number more than what your bank account balance is. That’s a big key, and that’s so counter-intuitive to the way that we’re raised. You were talking about something earlier, about the Truman show or something.
Matt Andrews: Oh yeah, that’s huge and I think we talked about that before and the Jim Carrey movie, the Truman show, if you guys have seen that, he was living in this fake world. It was a world that was created for him and he was the only one that didn’t know it. Everybody else was an actor in his life and there was a producer of that show that was his life. And that producer said they asked him, what if Truman just leaves? And he said he won’t ever leave. And they asked the producer, why won’t he ever leave? And in the show, and he said because people, and I wanna say this right. He goes, “People accept the world as it’s presented to them.” And I was just like, whoa!
I don’t know if that was the thrust of that movie, what was really underlying, what the message or anything, but that’s what I got out of it. People accept the world as it’s presented to them. So the way your parents lived, you kind of just by the supposition, you suppose, “I’m supposed to live this way.” Even if they said that or not. You think, “Dad did it this way, mum did it this way, I do it this way.” The media certainly gives us all kinds of messages all the time about how we’re supposed to live, what we’re supposed to have, what kind of bling we’re supposed to have in our life or lately, how we’re supposed to live with less and do less and achieve less and be less or whatever it is that this weird message that seems to be out there now from other sources and stuff.
Or, it’s the people we hang out with. And they’ve just kind of ingratiated us into a way of doing things and this is how it is, or the way their school teaches you, or university, anything. But we’re given messages of, this is how life is, right? And as entrepreneurs, as successful entrepreneurs, we’re the ones who raised our hands and said, no actually life is what we make of it, and we actually have the power in our decisions and our choices to form what we want to. So to me that’s huge and if we’re not constantly battling against the messages we are being sent like that, that draw list toward mediocrity, that draw list to the mean, or draw list to the average. If we’re not working against that all the time, then gravity will almost pull you that way. So if you’re not active and you’re just standing still, trying to maintain instead of moving forward, you automatically get pulled to that mean. Does that make sense?
Matt Theriault: Mm-hmm (affirmative) mm-hmm (affirmative).
Matt Andrews: It’s the way it works.
Matt Theriault: Yeah and I think about the whole Starbucks analogy. I mean, I drink two or three of those a day. Okay, but if I just did one a day, that’s three bucks a day, that’s a $1000,00 a year. That’s a $1000,00 a year bill that our parents did not have.
Matt Andrews: That’s right. And we need it.
Matt Theriault: Right.
Matt Andrews: We can’t live without it.
Matt Theriault: And I think about just that. I certainly don’t wanna give up coffee and I’m not going to.
Matt Andrews: I’m drinking one right now.
Matt Theriault: But, we were talking about … I think you mentioned it just earlier, about you look at the pastry or whatever, the piece of cake or something and decides whether you’re gonna have it or not and that’s very much, you just kind of look at this decision. And if you continue to take that $25,000 profit over the $250,00 a month, guess what? Freedom, this is gonna be so painful for some of you. If you keep doing that, freedom, it’s just not that important to you. Losing the weight, choosing that cupcake or whatever, and you keep choosing that cupcake ’cause it feels good at the moment, well you know what, losing weight is just not that important.
Matt Andrews: That’s right, not as important at least.
Matt Theriault: Right, and once you hit that reality of whatever there is in your life that you want, that you don’t have, if you don’t have it, it’s just not that important to you.
Matt Andrews: That’s it. And that is tough to hear sometimes.
Matt Theriault: It is.
Matt Andrews: The truth is, we actually do have what we want. And whether we wanna say that it is, or not. A lot of people say I want this, I want that, but then their actions act contradictory to that. So our actions are gonna show you what it is, is really important to you. If I say, “Hey my wife and daughter are the most important things in the world to me,” but I never spend any time with them, I can say is all I want. I can write it on Facebook every morning and say I love my wife, I love my daughter, but I never spend time with them, and I spend all my time working, or I spend all my time with my buddies or whatever else, I’m showing you my priorities.
And it’s not rocket science. It’s pretty easy to see. So we gotta be honest with ourselves there too. And be honest with the responsibility of saying, “Hey I do have what I want right now,” and sure, everybody comes from a different place, everybody has different abilities. Yeah, we’re all different, but the one thing that’s the same is that we can all create what we want in life and we all have, based on our choices. So tough love.
Matt Theriault: Absolutely!
Matt Andrews: A little tough love.
Matt Theriault: So when you look at your lifestyle, you look at the lifestyle that you want, the reason that you got into real estate, look at your actions, your daily activities and your daily choices, decisions, the words you speak, the thoughts you think that is working in contradiction to you attaining that lifestyle. There are two ways to get rich. One- do what rich people do, but I think even more importantly first you have to stop doing what poor people do.
Matt Andrews: Sure, stop thinking like poor people think.
Matt Theriault: Right, you just gotta stop doing what they do. You know what I mean? You can’t continue to do what the poor people do and do what the rich people do and expect to get where you wanna go. There’s gonna be conflicting values, conflicting actions there.
Matt Andrews: Absolutely and that’s a great point. A good friend of mine always says it this way, you know, what is your perfect day? If you had all the financial stability you needed, everything was great, your family was healthy, everything was perfect and you woke up in the morning knowing all that was said, what would you do? What would your perfect day be? Would you sit on the beach reading all day? Would you just be spending time with your family? What would you be doing with that perfect day, and then, you figure out okay, how do I make that a reality? How do I make that lifestyle true? And if you make every decision like you just said in line with what that goal is and you set that goal, then that goal is like a signpost for you. So something happens over here and you start veering off, well you look back to what the goal was.
Matt Andrews: Oh wait, that’s not gonna help me get closer to the goal. You come back over.
Matt Theriault: Correct the course.
Matt Andrews: You correct the course and then you’re going, going, going and like every good entrepreneur does, you see a shiny object over here, and you wanna chase it like you and I still have problems with doing sometimes right, ’cause opportunities come to us, or we meet different people and different opportunities, but then we look back, okay is that gonna get me closer to that goal that I’ve stayed? And then boom, you come back again. So it’s a process of course correcting, but you can’t course correct if you don’t have that signpost to look at. So if you figure out what that perfect day is, what the lifestyle is, and make every decision in line with that goal, that’s gonna keep you headed in the right direction. And then it’s all about listening to the right people, fighting the toxic messages we get, having the right mentors, getting the right education, listening to the right podcasts, listening to the right bald Matts.
Matt Theriault: Yes, there’s more than two of us out there.
Matt Andrews: There are more than two of us out there, I’m sure, yeah. But that’s it. And so just thinking about that, it’s such a simple concept and it probably seems simple to a lot of you out there but it’s harder to stay focused on it. So the key is, okay we get it. We get it Matt, we got a set goal and we can’t forget about the goals. Okay well, that’s lip service right. You’ve got to actually do it. And how do you do that? How do you discipline yourself to do that? You’re with the right people, you’re reaffirming that you’re heading in the right direction, you’re getting good counsel that keeps your course directed or course corrected I should say. And all the times it’s a lot easier to say, than to do it. Just like, “Hey I want six pack abs,” but you’re sitting there eating cake.
And now you turned it into a cupcake a few minutes ago. I was talking about a big old piece of cake, but cupcakes are good too.
Matt Theriault: That’s great, well on that note, you see that beach right out there Matt?
Matt Andrews: Yeah I do.
Matt Theriault: Let’s grab the margarita and head out there and call it a day.
Matt Andrews: Let’s make it happen man.
Matt Theriault: Fantastic. Flipping houses can make you rich. Holding them will make you wealthy. We’ll be back next week. Until then, remember, don’t wait to buy real estate. Buy real estate and wait.
Speaker 1: Hold that house!
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