When is it time to treat yourself? [Reinvest VS Spend profit]

15 Reply

OP

Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes

@Nathan Gesner I think that sounds very wise and well said. That's the perfect example with the truck, on how quickly a perspective can shift. My version of the new truck was about to be a new stereo lol so thanks for sharing that.

I think I'm going to make some adjustments to my plan, and I still have some time before the sale closes to work out the details, but I think my takeaway's so far are:

- Keep the profit separate and make sure it's only use is to generate more profit. I wish I could remember who said something like "Use your profit, but never spend it"

- take a shorter, and much more deliberate vacation. I think 6 weeks will be the sweet spot, that I can recover and refresh, and will also allow me to get to know my new city and make some connections

- That vacation will NOT be funded by my profits, but rather from savings already set aside for that purpose

- If I don't take an extended break, It probably wouldn't be wise to pay off my car either, and I can apply that extra 20K to my next deal and use it to generate more profit. The car will be paid off eventually by assets that generate passive income

The fatigue is already starting to be replaced with new inspiration!

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals

Originally posted by @Mike Hasson:

Hi BP Fam!

I've hit a dilemma that I'm sure many others encounter at some point in their investing careers, and figured this would be a fun topic to discuss.

So I've been working my a** of for at least 15 years as a chef, working 10+ hour days, 6-7 days per week, and EVERY weekend and holiday. Thankfully I eventually learned about wealth (Thanks, Kiyosaki) and started to set (and achieve) some bigger financial goals. So I spent the next few years learning, and reading, and improving my credit, and paying off debts, and increasing my income, and eventually, years later, I bought a house! I then spent the next two years rehabbing it, and am currently selling it for a nice profit (just accepted an offer this morning!)

I have a plan to take that profit to less expensive market (Columbus, OH) and use it as seed money to start investing/rehabbing full time. In addition, I can also use the profit to pay off all my debts and my car, and then buy a house cash (with the same plan of rehabbing it and selling for a profit). Fortunately, I have a bit of passive income already from another investment that covers my day to day expenses. Essentially at this point all my financial needs will be met and I not longer HAVE to work those 10+ hour days, nights, weekends, and holidays just to survive - so I feel tempted to take an extended vacation and just kind reflect on my accomplishments so far, take some time to enjoy life a bit, maybe find some new hobbies (which would undoubtedly cut into my profits a bit).

So here's my dilemma - and it might just be because all I know at this point is work - is that it feels kind of lazy; like I should stay on the hustle; like I still have more work to do before I can really enjoy the life I want to live. I'm still a long way off from my end game plan. I kind of feel like I should stay on the grind and not slow down, especially since I'm finally getting somewhere. But I'm also tired, and my bones hurt from exhaustion, and I don't even remember how to have fun anymore. I don't want to succumb to laziness but I also don't want to be a slave to my schedule anymore. What to do...

So have any of you had a similar struggle with feeling guilty about treating yourself? How did you navigate it? And would you have done anything differently looking back?

I just keep working but would take solid vacation every month. I started buying real estate in Columbus, Ohio in 2017 and never stopped.

Every year I could spend more and more money because of the wealth I was amassing.

I do not plan to stop until I am in mid to late 30s, so 10 more years. By then hopefully, I will be able to do whatever I want, whenever I want.

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OP

Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes

I had to read that twice lol you said a vacation every month? That sounds like a respectable goal, and from someone who's only taken one every 10 years, sounds like you're already doing whatever you want lol

I'm curious what do those vacations look like? Extended weekend? Or a full week? I have this rare opportunity to build a new schedule and I really like this idea.

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

It's a fine line....you gotta take care of yourself, but spending foolishly is easy to do! I think a good solid vacation every year, combined with long weekends and a few treats/toys here and there is very reasonable. If you can, and want to, do more, by all means go for it...life is really short....

Remington LymanBusiness Member

Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes

[email protected]614-541-8475 Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals

Originally posted by @Mike Hasson:

I had to read that twice lol you said a vacation every month? That sounds like a respectable goal, and from someone who's only taken one every 10 years, sounds like you're already doing whatever you want lol

I'm curious what do those vacations look like? Extended weekend? Or a full week? I have this rare opportunity to build a new schedule and I really like this idea.

Sometimes they are weekend trips to Cleveland/Cincinnati. Sometimes they are multiple week-long trips out of the country.

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Steve K.

Realtor · Boulder, CO · Member since 2016 · 3k+ posts · 5k+ votes

Live a little! We could all die tomorrow.

6 Reply

Zachary Beach

Specialist · Los Angeles, CA · Member since 2018 · 291 posts · 231 votes

@Mike Hasson what’s your savings rate? What’s your timeline and how bad do you want it. I think that you need rest. working more than 40-60 hours a week often isn’t advantageous over the long run. It sounds to me like you need balance and to figure out what works best for you. I don’t think spending the money will get you what you are looking for but I do think finding leisure time at the cost of working a few extra hours will. Get outside take walks or hikes play a sport go surfing or swimming. Find some hobby that isn’t expensive or that makes money that makes you want to jump out of bed in the morning.

Christopher B.

Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes

There has to be balance. Embracing delayed gratification is important and that discipline will help you achieve your bigger goals. However, you can't grind yourself to a nub either. You need to create big goals with milestones you achieve along the way. Predetermine some kind of reward/celebration for yourself when you hit these milestones. Could be a vacation. Could be a steak and lobster dinner. Whatever you want but make sure to celebrate the wins along the way or you will burn yourself out. Mentally, this will help provide motivation. Having a small taste of the fruits from your hard work and sacrifice will turn you into a success addict and accomplishing your goals will become your crack.

I did the opposite of this advice and just about burnt myself out. I was always "too busy." Gotta live along the way.

I'd check out Profit First. It is about cash mgmt for business but it also discusses the ideology and psychological importance of rewarding yourself along the way.

Also read Miracle Morning. It's about taking time for yourself first so that YOU can be the best version of yourself and how that will make you better in all aspects of your life.

3 Reply

OP

Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes

Originally posted by @Bruce Woodruff:

It's a fine line....you gotta take care of yourself, but spending foolishly is easy to do! I think a good solid vacation every year, combined with long weekends and a few treats/toys here and there is very reasonable. If you can, and want to, do more, by all means go for it...life is really short....

Excellent points balanced with moderation. Reminds me of a quote by Jim Rohn, went along the lines of:

"Nobody ever looked back on their life and said - I wish I would have spent more time at work"

I see myself falling into the trap of foolish spending, but after considering this, just like with everything else, I just need to set aside a predetermined budget for such rewards. Up until now there was just no room for anything recreational, I had to work so hard just to get back to Zero lol, but now I finally have some financial headroom, and I think that is where my struggle is coming from. But with this perspective think I can balance it without going all-or-nothing. Seems obvious now lol

I've already taken the first step in curbing the urge for useless spending by clearing out my entire Amazon wishlist. So much cool junk I really don't need, is no longer tempting me daily.

OP

Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes

Originally posted by @Christopher B.:

There has to be balance. Embracing delayed gratification is important and that discipline will help you achieve your bigger goals. However, you can't grind yourself to a nub either. You need to create big goals with milestones you achieve along the way. Predetermine some kind of reward/celebration for yourself when you hit these milestones. Could be a vacation. Could be a steak and lobster dinner. Whatever you want but make sure to celebrate the wins along the way or you will burn yourself out. Mentally, this will help provide motivation. Having a small taste of the fruits from your hard work and sacrifice will turn you into a success addict and accomplishing your goals will become your crack.

I did the opposite of this advice and just about burnt myself out. I was always "too busy." Gotta live along the way.

I'd check out Profit First. It is about cash mgmt for business but it also discusses the ideology and psychological importance of rewarding yourself along the way.

Also read Miracle Morning. It's about taking time for yourself first so that YOU can be the best version of yourself and how that will make you better in all aspects of your life.

So many great ideas here! And funny you mention The Miracle Morning, I just finished it, followed by Change Your Habits, Change your Life in an effort to redesign my life and myself - and they have me rethinking my entire habit and reward system.

Like just today after I accepted the offer on my house I went to my typical reward and chose a fancy bottle of scotch. I stood there for a while looking at it before realizing that I no longer even feel rewarded by this. I left without it, but with a question instead of "How do I congratulate myself now...?" Not that I'm avoiding alcohol for any specific reason, I just had this overwhelming feeling that not only could I find a better use of the cash, but that I'm just growing out of old habits, and now not sure what newer/better ones to replace them with.

I think Profit First will help me to find some direction with setting those milestones and rewards, thank you for the insight and suggestions!

OP

Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes

Originally posted by @Zachary Beach:

@Mike Hasson what’s your savings rate? What’s your timeline and how bad do you want it. I think that you need rest. working more than 40-60 hours a week often isn’t advantageous over the long run. It sounds to me like you need balance and to figure out what works best for you. I don’t think spending the money will get you what you are looking for but I do think finding leisure time at the cost of working a few extra hours will. Get outside take walks or hikes play a sport go surfing or swimming. Find some hobby that isn’t expensive or that makes money that makes you want to jump out of bed in the morning.

Good question - Since I have left my W-2 in anticipation of moving, and to facilitate fully immersing myself in real estate, my savings rate has essentially dropped to zero for now, so I know I need to be careful until I start generating more deals. That is a good realization to have because despite that truth, I'll be sitting on more cash than ever before, so I need to stay grounded and not think that I can do whatever I want; That day will come, but it's not today. Bummer. Lol.

I am fortunate that my needs are met already, so once income is generated, savings will essentially be 100% (while working it was about 40%). Another interesting realization I had just now, is that a 100% savings rate will cause explosive momentum!

Your question also makes it apparent that I need to be more clear about what my next goals even are. I know that someday I want a peaceful house surrounded by nature, but beyond that I'm not too sure. I found the process of rehabbing this junk house and turning it into a nice place to live, extremely rewarding, so I want rehabbing homes to be central to my plan, and building a business around that seems to pay well while providing a valuable contribution to society.

I do have a vague number of $20K/passive per month, and know about how many doors I would need to achieve that, but haven't actually worked backwards to estimate a timeline - so that will be my project for today!

Thank you for the insight and direction

Bruce WoodruffPro Member

Contractor/Investor/Consultant · San Diego / Phoenix · Member since 2021 · 12k+ posts · 15k+ votes

Originally posted by @Mike Hasson:

I've already taken the first step in curbing the urge for useless spending by clearing out my entire Amazon wishlist.

You did what? Noooooooooooo........

OP

Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes

Originally posted by @Bruce Woodruff:

You did what? Noooooooooooo........

Extreme, I know lol

OP

Specialist · Columbus, OH · Member since 2019 · 110 posts · 102 votes

Originally posted by @Steve K.:

Live a little! We could all die tomorrow.

The wisdom is in the simplicity.

Thanks for helping me realize this: I have one more month or so before I move and start my next chapter. I've been so nervous/excited about that, I nearly forgot that I still have a month left here to enjoy with family and friends before I leave.

Therefore, no need to wait until I get to Ohio, I already have everything I need for vacation (staycation?) to start today!

Wale LawalBusiness Member

Real Estate Broker · Houston | Dallas | Austin, TX · Member since 2018 · 5k+ posts · 2k+ votes

[email protected]832-776-9582 Podcast Guest on Show #469

Life is about balance. I would take a weekend vacation instead. Don’t overly spend your money. Keep your eye on the price!

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Christopher B.

Rental Property Investor · Knoxville, TN · Member since 2011 · 701 posts · 531 votes

Originally posted by @Mike Hasson:

Originally posted by @Christopher B.:

There has to be balance. Embracing delayed gratification is important and that discipline will help you achieve your bigger goals. However, you can't grind yourself to a nub either. You need to create big goals with milestones you achieve along the way. Predetermine some kind of reward/celebration for yourself when you hit these milestones. Could be a vacation. Could be a steak and lobster dinner. Whatever you want but make sure to celebrate the wins along the way or you will burn yourself out. Mentally, this will help provide motivation. Having a small taste of the fruits from your hard work and sacrifice will turn you into a success addict and accomplishing your goals will become your crack.

I did the opposite of this advice and just about burnt myself out. I was always "too busy." Gotta live along the way.

I'd check out Profit First. It is about cash mgmt for business but it also discusses the ideology and psychological importance of rewarding yourself along the way.

Also read Miracle Morning. It's about taking time for yourself first so that YOU can be the best version of yourself and how that will make you better in all aspects of your life.

So many great ideas here! And funny you mention The Miracle Morning, I just finished it, followed by Change Your Habits, Change your Life in an effort to redesign my life and myself - and they have me rethinking my entire habit and reward system.

Like just today after I accepted the offer on my house I went to my typical reward and chose a fancy bottle of scotch. I stood there for a while looking at it before realizing that I no longer even feel rewarded by this. I left without it, but with a question instead of "How do I congratulate myself now...?" Not that I'm avoiding alcohol for any specific reason, I just had this overwhelming feeling that not only could I find a better use of the cash, but that I'm just growing out of old habits, and now not sure what newer/better ones to replace them with.

I think Profit First will help me to find some direction with setting those milestones and rewards, thank you for the insight and suggestions!

That is awesome. Love the mindset, sounds like you're on a great path.

Matthew Horstmyer

Rental Property Investor · Moncks Corner, SC · Member since 2019 · 60 posts · 22 votes

@Mike Hasson

I believe all the insight you have received is very smart. However, all the information provided was best for those individuals on their journey. From the sounds of it, you need time to relax and treat yourself. Which ever direction you decide to go will be the right answer! I wish you well.

Jacob Trogan

Lender · Kansas City, MO · Member since 2016 · 142 posts · 71 votes

@Mike Hasson Focus on spending time with others this is the most rewarding, why do you have to do one or the other? Maybe the thing that will leave you the most fulfilled is working but just not at where you are currently. I would quit and take time to reflect on what you want, I wouldn’t go splurge and burn the money but get yourself in a different environment and reflect and enjoy friends/family. If you want to go back it will be easier than you think if you realize sitting around relaxing isn’t all it’s chalked up to be you can then decide to engage yourself in something else without having blown a ton of money

Jacob Trogan

Lender · Kansas City, MO · Member since 2016 · 142 posts · 71 votes

@Jacob Trogan basically I told you to do what you were already thinking, go for it seems pretty responsible to me, also read the 4 hour work week

Dan H.Pro Member

Investor · Poway, CA · Member since 2015 · 7k+ posts · 8k+ votes

You could die tomorrow or you could live many years.

When I was building wealth towards financial independence, I tried to keep both in mind. Now that I have more money than I could possibly spend, I still like to earn more. Why? Because I find the pursuit of wealth fun. I enjoy finding RE that produces outstanding return. My last property purchased was my first investment property purchase without a value add. Value adds are work, but can produce extreme return. I do not mind the work to produce outstanding return. Finding RE that produces outstanding return is like finding the gem at the swap meet, but on steroids. I enjoy finding other investments that will produce outstanding returns. I like the hunt for these investments.

However, there are a lot of other things I like to do. Next week I go to Kauai. Last month I took another vacation. In January I plan to take another vacation or 2. Next year I plan to get my pilots license. I may buy a plane if I enjoy flying enough and fly enough. I have a lot of toys, enough cars that I would need to count them to know how many. Some of the toys provide a lot of pleasure, other toys do not get used much because there are a lot of things to do in life.

My recommendation for you is to enjoy life now, but keep the future in mind. Bonus if you can enjoy improving your finances as I do. If you manage to do this, it is not work to earn money.

Good luck

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

Originally posted by @Remington Lyman:

Originally posted by @Mike Hasson:

I had to read that twice lol you said a vacation every month? That sounds like a respectable goal, and from someone who's only taken one every 10 years, sounds like you're already doing whatever you want lol

I'm curious what do those vacations look like? Extended weekend? Or a full week? I have this rare opportunity to build a new schedule and I really like this idea.

Sometimes they are weekend trips to Cleveland/Cincinnati. Sometimes they are multiple week-long trips out of the country.

I take it you don’t have a family.

Joe S.Pro Member

Investor · San Antonio · Member since 2020 · 3k+ posts · 3k+ votes

It’s definitely a fine line/tight rope. As a family man with children that still live at home I can’t just jump up and take vacations whenever I please. About four summers ago I went to four family camps/ Christian events. That was a whole lot of camps. Basically it didn’t cost that gas, motel room, and we would’ve ate no matter where we were. This was refreshing to me, but not likely to be on someone’s else’s bucket list. Since then I’ve done good to go to one camp a year. Not only that I have a family to consider and my children would did not dig it like I would. So a lot of things depends upon you making a custom plan.

William Walker

Investor · Wilmington, NC · Member since 2016 · 211 posts · 262 votes

To quote the infamous philosopher Kanye: “what you think I rap for, to push a f***** Rav4?”

it gets boring reading the posts on here where everyone boasts about how they still drive a 1996 accord but have 20 rental properties. I’m in this to get money to buy things I enjoy. When I have money - maybe I buy an investment property, maybe I go on a nice vacation. Maybe I buy the 3k traeger grill knowing it is never going to provide any return. Find a balance that makes you happy.

5 Reply

Todor Ialamov

Real Estate Agent · Burlington MA · Member since 2018 · 114 posts · 142 votes