Personal Finance

If You’re Denying Yourself ‘Nice Things’ in the Name of Frugality, You’re Doing It Wrong

Expertise: Mortgages & Creative Financing, Personal Development, Landlording & Rental Properties, Personal Finance, Real Estate News & Commentary, Real Estate Deal Analysis & Advice, Real Estate Investing Basics, Business Management, Commercial Real Estate
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This is the third article in a series discussing my version of luxury house hacking, which I believe is the premier opportunity for the vast majority of folks today. You can find the other two articles here and here.

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If you look, there are so many comments between the two previous editions. I guess you might say I struck a nerve. However, a few comments expressed a perspective that I ask too many questions and provide too few answers. Let me address this very briefly.

My job is not to put a fish in your mouth, Mr. Millennial. That’s your mother’s job. My job is to teach you to think! If you want answers, there are plenty of articles to choose from on BiggerPockets. If you want to believe that wholesaling is the answer to everything, there are plenty of articles to affirm your belief. If you want to believe that rentals are better than shares, there are plenty of articles on that, too.

I happen to have wholesaled. I own rentals. I do Airbnb. I own stocks. I make money online. I’ve had a real estate license. Why? Because markets work in cycles, and to make money, we fill voids. Unequivocally believing that this strategy or the other is forever the one and only answer to everything is just stupid.

Related: A Case Against Frugality: Why Pinching Pennies is NOT the Best Path to Wealth

I’ve set a very high bar for myself—I want to teach you creative thought. I want you to know who you are so as to be able to analyze all available opportunities and not take anyone’s answer for granted.

Today, I want to share with you a perspective on life that directly applies to house hacking in general—and specifically to my brand of luxury house hacking. To start, I need you to accept that everything we do in life is to facilitate some desired end. This desired end, in turn, is very much a function of your perspective on life. To understand what I preach relative to luxury house hacking, I need you to internalize where I am coming from and where I am going in my approach to life, at least to some extent. This is what determines my desired end, which, of course, tees up my methods.


Is It Wrong to Want Nice Things?

Well, it depends on who you ask. We won’t name any names, but according to some, you should just tighten your belt and shut up. I have a different perspective.

Listen, I am a 42-year-old male with a diagnosis of multiple sclerosis. I’ve experienced my arm just stop working—just like that. If my tomorrow doesn’t happen today, who the hell knows if it’ll ever happen?!

You think you’re so different? You think you have all of the answers? You think you are invincible? You think you’ve got time?

You Can Have It NOW, But…

That quintessential scene from The Christmas Story in which Ralphie walks by that storefront, sees that BB gun, and fantasizes himself in possession of it (which, by the way, is a lesson on the law of attraction in and of itself)—this scene explains a truth about the human condition. To deny it would be futile. All of us want more. You can run and try to hide behind that tightened belt, but who are you really fooling?

Related: Most Americans Overspend & Fail at Frugality… But It’s Not Why You Think

Let’s say you agree with me. You want stuff. What’s the next step?

Well, most of you will ask, “How do I pay for it?”

How Do I Pay for It?

How do you pay for it?

You can’t, can you?

Oh, well. You stop there.

It’s like that infamous story about digging for gold and stopping one foot short.

Do you know that you are only a slight shift in your thinking away from hitting the truth? Just one intellectual click.

Paradigm Shift: You Are Asking the Wrong Question

Be honest—when you think about making money, it is totally separate from the things you want to buy with that money, right? In other words, here’s the thing you want, and there’s the money that’ll pay for it. Right hand, left hand—a world apart.

But what would happen if you synergized the two? Instead of asking, how do I pay for this thing I want, ask, how can this thing that I want pay for itself? Understand, you can have anything you want as long as it makes enough money!

In other words, make the thing that you want become its own revenue stream, and then you can have it.


You Can Have Anything You Want, as Long as It Makes Money

I wanted to teach kids to play music. I built a music school so that I could afford to do it.

I wanted to talk about real estate all day. I built a website. I sell a course. Now I don’t have to feel bad spending time talking about real estate investing.

I wanted to buy a nice house. I wasn’t OK with a duplex, so I found another way. A better way. But, at the end—I am house hacking.

Each one of these line items today represents a revenue stream, but they didn’t begin that way. Each started out as something I wanted, but I didn’t feel I had a right to pursue it unless I was able to make money with it. If I were independently wealthy, I’d do these things for free because I wanted to. Such as it is, I get paid.

The Luxury House Hacking Perspective

This very nice house is in my life because it has capacity to make money, while not requiring any compromises or compression of lifestyle. The “luxury piece” is less about the technique and more about not giving up on the vision of how I want my family to live. It’s about not giving in to tradition.

Speaking of tradition, I had a college professor. He was an old Jewish man who’d survived the concentration camps. He was a composer. One of his most memorable quotes was, “Tradition is laziness.”

Don’t give up on your vision of how you want things,. Let everyone else zig—they are good at it. You’ll become good at zagging.

And now, if you can believe it, I am going to leave you hanging again—for the third time!

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Questions? Comments? Agreements? Disagreements?

Leave them below!

Ben has been investing in multifamily residential real estate for over a decade. An expert in creative financing, he has been a guest on numerous real estate-related podcasts, including the
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    Jordan Gregg Rental Property Investor from Jersey City, NJ
    Replied about 3 years ago
    This series of articles is the antithesis of the valuable content that brought me to biggerpockets. He might as well be narrating over one of those videos of a hand writing on a whiteboard trying to sell you a weight loss pill. Ben has insight and expertise, no arguments there. This is clickbait.
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 3 years ago
    More is coming, Jordan. Though, I guess you could say that in my ripe old age of 42 I’m turning a bit more toward the liberal arts side of things…:)
    Account Closed
    Replied over 2 years ago
    Clickbait is “content whose main purpose is to attract attention and encourage visitors to click on a link to a particular web page.” This is not clickbait.
    Jerry W. Investor from Thermopolis, Wyoming
    Replied about 3 years ago
    Actually, I am anxious to hear Ben explain the Tesla. Normally we hear about it pretty regularly. Ben is justifying buying a very nice house for his family and explaining how he can justify it without everyone saying he sold out on his earlier teaching. This article does not have the investing and buying cash flow 101 approach, this is more the music theory class where you don’t play the instrument every day, but hopefully it will take you to a different level. When you have been investing awhile, and you have had at least some success, you find that your mind begins to wonder if it is worth it. Your philosophy must grow to accomodate your new focus to keep you going in real estate. As Ben has been (hehe) through several different phases of investing, I can see his changing mind set and it helps me work out my reasons and motivations on pursueing real estate. Different teachers are best for you in different stages of your investing. Luxury rental hacking is not for the beginner with very few resources.
    Jordan Gregg Rental Property Investor from Jersey City, NJ
    Replied about 3 years ago
    Letting folks hang a little is one thing. Through this series, he has dangled the carrot across three posts. Substance is what brought me to biggerpockets and the reason I share it with everyone I know. I read to “learn about real estate investing without all the hype”. This feels almost entirely like an advertisement, not an educational blog post. It feels like hype.
    Replied about 3 years ago
    Hi Jordan, Perhaps he is moving forward with a new paradigm? 101 ways to make money investing in real estate is great but sometimes pushing the boundaries is necessary. You aren’t forced to read these articles, perhaps what he is doing is working? I don’t think he is setting “a hook” for anyone. He is outside the comfort zone of most investors and maybe someday we will reach that zone but for now we can accept where we are and appreciate the fact that there’s much more to learn.
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 3 years ago
    HAHAH! Jerry, the Tesla (truth be told) works mostly in combination with 6 inch stilettos. Relax – not mine! Patrisha drives Tesla much more than I, and those commission checks are no joke 🙂 What most people miss about cycles, Jerry, is that they exist! LOL We are in a servicing cycle in RE… As to Luxury House Hacking, it absolutely works for beginners, specifically because it is luxury, which means more than one thing. In fact, I’ll push the next article on that subject 🙂
    Jerry Kisasonak Residential Real Estate Agent from Mc Keesport, Pennsylvania
    Replied about 3 years ago
    Clickbait or not, I liked the post. The premise of changing “I can’t afford it” to “How can I afford it?” is solid. The former lets you off the hook (or so it seems), and the latter causes you to think creatively to make it happen.
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 3 years ago
    Jerry, my point is more than “How can I afford it?” The question is: “How can the thing afford itself?” This perspective is interesting to me as it causes me to change the face-value of what I want from a liability (even if I can afford it), to an asset (which if I buy it continues to make me money. It’s fun to look at a things this way. Thanks so much!
    Replied about 3 years ago
    Exactly…. Nicely put
    James Burow Investor from Edmonds, Washington
    Replied about 3 years ago
    The “gem” here: “In other words, make the thing that you want become its own revenue stream, and then you can have it.” No clue what “luxury house hacking” is. Did attend a bootcamp/course for flipping “luxury homes” a few years back. Same work, bigger payoffs, like apartment buildings. Thanks, Ben
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 3 years ago
    James – house hacking is essentially combination of that which is a primary residence with that which is an investment. Most people just buy a small multi and move into one of the units. In 99.9% of the cases, however, multifamily leaves to be desired, and folks doing it are making a choice to sacrifice their quality of life for the sake of making a smart financial decision. By and large this works for 20-somethings. My version is Luxury House Hacking, which takes care of the quality of life, and creates other value adds relative to the above. This is what those of us with families can do…
    Terry Pratt
    Replied about 3 years ago
    Rental property is great because your tenants effectively fund operating costs. I’ll never be able to afford to retire because I’ve spent my working years funding my employer’s retirement and my landlord’s retirement. Every income property is someone else’s outgo property. The traditional residential landlord-tenant relationship does not create wealth; it merely redistributes wealth…upward.
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 3 years ago
    To out it differently, Terry, what we do in order to afford life is we deflect expenses from ourselves onto someone else. That;s what an asset is – a system for passing expenses onto someone else. I’ve written about this a lot. And it is cynical. But, it’s true – everything I have someone else is paying for…
    Ryan Flanagan Investor from Chicago, Illinois
    Replied about 3 years ago
    This post really resonated with me. Here is a recent example from my own life. I wanted a campervan to take my family out camping (because I suck at setting up tents). I agonized over getting it because I figured it would be a money pit and would divert cash from my investing (even though it wasn’t really much money). During my research I stumbled across a website that does peer to peer RV sharing. Finding this website answered the question, “How can I get what I want to pay for itself?” I ended up buying the van. Since listing it, I’ve made back about a quarter of what I’ve paid for it in a couple of weeks. Now I have the campervan I wanted and a new revenue stream I can scale if I want.
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 3 years ago
    Exactly! Question #1: What do I want? Question #2: How do I rig it so that the thing I want pays for itself? No one feels bad about buying an asset, and in the mean time improving their quality of life. This is what you’ve done, Ryan. It’s what I do. Thanks for sharing, Ryan!
    Chamille Burch
    Replied about 3 years ago
    As a newbie on BP and just entering the education phase of my real estate investing career, I appreciate your articles. They challenge me to think about my individual goals and plans are instead of following the exact “blueprints” of others. Many articles are written in a “this is a way to the pot of gold” manner, versus encouraging newbies to think about their personal situations and customizing real estate investing strategies to meet those unique needs/desires. I think this is really important to grasp, especially in the beginning when you’re eager to get started – there a multiple paths to real estate success. I’m on pins and needles waiting to get started, but right now I’ll continue reading your articles and all the other great content on this site while solidifying my vision and desired results before jumping into something that works for others, but may not suit my lifestyle. Thanks!
    Ben Leybovich Rental Property Investor from Chandler/Lima, Arizona/OH
    Replied about 3 years ago
    Chamille, You may not know it by its’ proper name Pareto Principle, but you almost certainly have heard of the 80/20 rule. This is applicable to our lives in numerous ways, but the essence of it is that 20% of the people will necessarily produce 80% of the output… The principle is universal, and BP is simply a microcosm, with the only exception of exacerbation toward 95/5. My thoughts and my writing are not for 95% of the people here. I write for you and the other 5%. I do this because my main objective is to make a difference, and that starts in your head. Unfortunately, 95% do not want to think – they want to follow. I have no idea how to speak to them… It’s a pleasure to write for you!
    Anthony Gayden Rental Property Investor from Omaha, NE
    Replied about 3 years ago
    Ok Ben I came to the same conclusion as you with concern to house hacking a while ago. However my solution was to use rental income from other properties so I can live for free in my single family home. Of course that eats up a lot of cash flow from your rentals. The solution to that is to buy more rentals…
    Jake Moran Rental Property Investor from Falls Church, VA
    Replied about 3 years ago
    I’m glad you’re getting some sick pleasure in wasting our time with not one, not two, but three teaser articles — but I sure hope there is some actual value to be added at some point in the next 4 or 5 posts you will write. I think you think you’re helping me by teaching me how to think for myself, because I suppose you believe original ideas are the only way to make money. On the contrary, I could never have an original idea in my life, but if I can IDENTIFY good ideas and copy them, I could be very successful. Which is fortunate, because I am not a creative thinker, but I have discernment. And if you ever share your actual strategy, if there actually is one, then I will be able to judge for myself whether it would work for me or not. Thanks.
    Joshua Lindsey from Hattiesburg, Mississippi
    Replied almost 3 years ago
    I’m an 18 year old investor that works in the oil field and I really like this article because tradition is laziness. Everybody else went to college and zigged and I came out of hs making damn near 6 figures. And gonna get 2 to 3 -5 multifamilies before I’m done through my detail business and my money.
    Jerry W. Investor from Thermopolis, Wyoming
    Replied about 1 month ago
    Wow, this article is 3 years old and Ben has still not posted his answer to luxury house hacking. Ben bought an extremely nice house that had a CASA with it, or second house. Some call it a mother in law house. He can AIR BnB it or even do short term furnished renting. The extra income it makes pays a decent amount of his house payment.
    Tom Evans
    Replied 30 days ago
    Ben is the smartest guy in the world (I think). I buy $30,000 homes ( Ben refers to these as “Pigs”) in Ohio which he doesn’t recommend. I am semi-retired and my real estate has made me wealthy. I’ve read a lot of Bens articles and I know the end of this story (I won’t ruin it for you guys). I’m doggin you a little bit, but there are 100 ways to skin a cat. GO BUCKS!!!!!!!
    Lori Jordan
    Replied 15 days ago
    Good article. Never too old to learn 👍