Next Level University

#1530 - An Important Perspective Shift When It Comes To Money

• Kevin Palmieri and Alan Lazaros

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Ready to flip your financial perspective and get smart about managing your recurring expenses? Prepare to embark on a journey that challenges conventional ideas about spending and saving. In this episode, hosts Kevin Palmieri and Alan Lazaros talk about reassessing financial habits and investing time in becoming financially savvy. By understanding the importance of managing recurring expenses and planning for future uncertainties, all of us can equip ourselves with the knowledge to navigate the often complex world of finance. The goal is to transition from a short-term perspective of instant gratification to a long-term perspective of financial stability and prosperity.

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Show notes:
[2:46] Kevin's new awareness
[4:46] The parable of the coins
[7:48] Think about the recurring expenses
[11:06] Rebecca praises Alan's coaching and the effectiveness of the Peak Performance Tracker in keeping her consistent and moving toward her goals
[13:50] Be smarter with your finances
[16:43] Easier to spend the money than to earn it
[20:26] Try and figure out what's your good budget
[21:33] Outro

Send a text to Kevin and Alan!

Speaker 1:

Next level nation. Welcome back to another episode of next level university, where we help you level up your life, your love, your health and your wealth. We hope you enjoyed yesterday's episode. What if what's best for you is what's best for everyone around you to? Hopefully you had a wonderful Thanksgiving if that is what you celebrate Today. For episode number 1530 happy Friday. I hope you have leftovers an Important perspective shift when it comes to money.

Speaker 1:

So my goal in this episode is to keep it relatively simple and relatively high level, maybe just a fundamental that I've seen over the last Few years. Really, because I didn't always understand this and I am as guilty of this more so, probably than most people I Was talking to a client recently and this client makes a lot of money and he said You'd probably think to yourself how has someone who's made five, six, seven hundred thousand dollars over the last couple years few years Got to the point where they feel like they're broke? And he said my bills are seven thousand dollars a month For everything where I live, my car, and he said that's not even including a lot of my recurring Expenses. So the expenses that are monthly or whatever they're recurring, they happen, they're they're frequent, they're on schedule. Let's just say monthly, hypothetically, and when you think about it, and for me, when I in the past would think if I made $300,000 a year, there's no way I could end up broke not a chance, no way. How could you spend three hundred thousand dollars a year? My argument, or my New awareness now it's way easier to spend that money than it is to make it.

Speaker 1:

So my goal in this episode an important perspective shift when it comes to money. From what I've seen and again I don't want to blanket statement, but I would say it's probably common that many of us get in trouble, not from purchasing large things every so often there's definitely people out there that do that but it's most likely because our recurring expenses are increasing far faster than our recurring income. So let's just say this this was my analogy that I use, or example that I used when Alan and I were talking about it. One of the things that I did in the past was the second I started making more money, I would go buy something More expensive.

Speaker 1:

Now here's the thing it was never the five thousand dollars that I had to put down to buy the car, it was the four hundred twenty dollar a month car payment. That got me Because here I am thinking, while I'm making fifteen dollars an hour, so I'm making More money than I ever have, but I don't have that money. I'm just really relying on the fact that my recurring income, the money that I'm getting week to week, month to month, is Going to stay where it is, so I can actually Afford this new monthly payment. So I just wanted to have a conversation around that and I was trying to think of a good, a simple example. Alan was talking about coins in the previous episode, but it would probably do you think.

Speaker 1:

I enjoyed the coins.

Speaker 2:

Yeah, I enjoyed the coin flipping, flipping bikes to motorcycles.

Speaker 1:

You know hashtag flip life. I enjoyed that. That landed, yeah, I think so Nice. Whether you're watching or listening, you'll have a better idea than I did for me at land. That I it made sense to me. I was trying to think about this because I've been thinking of this episode for the last five days, four days because we came up with it earlier this week and I was thinking If you have let's just say you have ten coins, okay, you have ten coins I with you so far and you're making 15 coins.

Speaker 1:

So you have 10 coins in your bank account. You're making 15 coins a week, but you're spending 15 coins a week. In theory, you're gonna stay at 10 coins in your bank account. You're not gonna make any money. You're not gonna spend any money. If we add five coins to your income but we keep it the same amount, you're not spending any more. You're gonna save five coins a week. If we add five coins to how much you're spending, but we keep your income the same, you're going to lose five coins a week. So in a couple of weeks you're gonna have zero dollars because you're gonna burn through your 10.

Speaker 2:

This is my ultimate thought. And then you're gonna be in debt, so by the end of the month you actually would be 10 coins in debt, yeah, and then you're gonna be in debt, and that's not a good place to be. We've definitely been Because you had 10 coins, so you had 10 coins you were making 15 coins a week, but you're spending 20 coins a week.

Speaker 2:

Yes, okay, so you're losing five coins a week for four weeks, so by the end of the month you're actually 10 coins in debt now, and they let you go by zero.

Speaker 1:

That's what happens.

Speaker 2:

They let you fly right by zero.

Speaker 1:

They let you fly by zero, if you can really.

Speaker 2:

So you can go, you can dig a deep hole Definitely.

Speaker 1:

This was really my thought when I was that I really want to land Again. I'm not saying this from an ego place, but I think it's a really good lesson. Alan and I got a new car. I got a new car. It only cost me $5,000 down. It's not that $5,000. I mean, for a lot of people, when you go buy a car, if you're buying a new car, you're probably gonna put $5,000 down, three to $5,000, maybe more $5,000.

Speaker 2:

If you buy in cash. I have a client who just bought a. Oh no, I think she leased. Anyways, continue.

Speaker 1:

That $5,000,. You're probably gonna spend regardless. Depending on what you're buying. It's the $750 a month car payment that adds up.

Speaker 2:

And the increased insurance and the increased insurance and the increase in gas from the nicer car and the excise tax, all of it and the registration Registration.

Speaker 1:

It's more expensive to keep on the road, depending on if it's a new car.

Speaker 2:

And the Alan doesn't have a nice car tariff.

Speaker 1:

Yes, when Alan and I were deciding, on whether or not to get this new car. It wasn't a conversation of can we afford the $5,000?. It was the conversation of can we afford the $750 a month for the next three years?

Speaker 2:

It was actually deeper than that, but I'll go quick with it, but it was. Is this optimal, fair Meaning? Is this better than what we could? It's not just can we afford the $750 a month it's. Is this the best use of our capital? And that's kind of where I'll go a little bit. Is this the best use of our coins? And the answer was yes at the time, Because that was a dream of yours, definitely. You know, and at some point you gotta. If it's a dream of yours, we gotta do it. That's who we are. We're dream chasers. We gotta lead by example. If you have a dream, you work hard and you get to achieve your dreams.

Speaker 2:

That's who we are Very grateful, very privileged, I'm very grateful, but there were times prior to that where it wasn't optimal. We could have afforded it way earlier, but it wasn't the best use of our capital at the time and that's a whole nother rabbit hole that I'll go into a little bit, but I digress.

Speaker 1:

Well, that really is my thought. When you're thinking about buying something, try hard not to think about where you are today, but try hard to imagine what could change over the next few years, positive and negative. Because, yeah, in an ideal world you'd buy something and let's just say it's 200 bucks a month and you'd say, well, yeah, I'm fine, I could afford 200 bucks a month for sure, thinking to yourself that I'm gonna get a raise and things will change and I'll save money. But you also have to factor in what we call productive paranoia. Somebody calls it, it was in a book, it wasn't me. We have to factor in that.

Speaker 1:

Well, if something happens or my rent gets raised I don't know I feel like there's been a lot of layoffs lately at the type of job and the market I work in. Maybe I should, maybe I should hold off and see what the future holds. Or maybe I should try to save more money, even though I'm investing in this $200 a month car payment or whatever it may be. So I'm just trying to say think more about the recurring expenses than just what it is up front. That's my goal in this episode.

Speaker 2:

Would you say that that Okay. So in the example, when Kevin got a raise from what?

Speaker 1:

$12 to $15 an hour, Unfortunately, I believe I think it was like 11 to 13. And I thought I was. I'm off to the races.

Speaker 2:

Okay, so you got a raise. So imagine you're doing $11 an hour and then you get a raise to $13 an hour and, depending on where you are in the world, that's very little or a lot, by the way. So that's another factor of this. We won't go into that. Kevin doesn't like when I talk about the global economy.

Speaker 1:

Yeah, yeah, it doesn't land usually.

Speaker 2:

But anyway. So that's two extra dollars an hour. And then he went out and bought a brand new car. And here's the problem what if you lose?

Speaker 1:

your job Later in life as a dream chaser, I wanted to do something different and it was very it was. You don't get the stress of your future until you get to the future. When I was working that job, financially I was okay. When I wanted to quit that job and go chase my dreams, I was stressing, I was struggling. I had to go get a job in construction because I couldn't. I had no income. So it's really it seems like the best choice in the moment, but if you're factoring in what the future could hold, you might be able to make a more effective choice.

Speaker 2:

And you can very quickly trap yourselves. If you've ever heard that quote what we own ends up owning us it's because we spread ourselves too thin financially. We invest in a new car and a new home and a you know, we have student loans and whatever, and then we're trapped at a job and maybe you have a boss that you love at a job you love and then all of a sudden you get a new boss, your company gets purchased and now all of a sudden, everything's reorg and now you hate your job. Now what Before? This happened to a friend of mine. He lost his job and he was a machinist and I said and I said this to a friend of his and I said he's got to be careful. Those jobs are eventually all going.

Speaker 2:

Emilia and I have a Roomba it's a little vacuum robot and I used to work for a robotics company called iRobot. They have a government division. They have a consumer robotics division. I also worked in industrial automation and a lot of these jobs that people currently have are being automated exponentially. I mean, one of my main mentors runs a robotics company. He's the CEO of a robotics company that has pick and place robots that I can't talk about where these are going, unfortunately, but essentially big names of big companies that you know. Let's just everyone think of the biggest pizza company they can think of. Okay, those factories are all robots now and all those jobs are gone.

Speaker 2:

So the future? So let's say, you purchase a new car, you got to anticipate that you might lose your job and that's why NLU wants to help. We are trying to equip people so that you can learn how to make more money. That's why we're doing this episode right now. If you're smarter with your finances, you won't. You'll be ready for the future. I am so scared for some people. The future is not bright for some people. Kev.

Speaker 1:

I understand.

Speaker 2:

I'm really scared for some people If you're not smart with your capital, if you don't know these things, and that's what makes me so sad and I'll go quick with this. But it makes me really sad to have grown up where we weren't taught a whole lot about money.

Speaker 2:

We weren't taught about how to do our finances.

Speaker 2:

We weren't taught how to invest money. At least most of us weren't. I will say some people are, but very few. I certainly wasn't.

Speaker 2:

I didn't take my first finance course until I was during my master's in business, and that was so alarming, emily and I she said this recently, I'll go quick with this, but she said you know, it's interesting, we spend 80% of our time in three places. She said bed, because we sleep at least eight hours a night, if not more. Our offices, because we work six days a week front facing, and then we still work on Sundays, usually in the morning, but not all day. And then the gym. She's like why don't we start investing more into those three places? So we just bought this new. She's making our bed really nice. It's a what's it called? Canopy. When you canopy, yeah, yeah, yeah, and we have a new headboard. It's really nice in there. She does a great job, but it was only like 200 bucks. We're splitting it. We spend a lot of time in those three places. So make those three places nice, but we're not gonna.

Speaker 2:

I mean, I don't drive a car that much. I only drive from here to the gym. It's two minutes away, there's not really a ton of incentive to have a nicer car, but this office needs to be pristine. This camera needs to be really good. We've talked about getting me a better one because the battery keeps dying, but we just talked about getting Kevin a new laptop because if his laptop craps the bed we're in some serious trouble.

Speaker 2:

You know our business runs on computers, so you just got to really try to be am I making the most intelligent choices I possibly can with my money? And that doesn't mean you don't do recreation, that doesn't I. Or I rent movies. I always rent movies. I'm not gonna. I'm not gonna not rent a movie because it's $3.99. I don't do a lot for fun. Movies is my jam, I love movies. So just be smart.

Speaker 2:

And I've had clients and it's been fascinating for me. I've had clients that make 30 grand a month. I've had clients that make 50 grand a month. I've had I had one client that made like 400 grand in a week and a half. These people are not as wealthy as you think, because some of them go off the rails with their expenses. Not all of them, okay, but some of them go off the rails with their expenses.

Speaker 2:

And to Kevin's original point, it is so much easier to spend money than it is to earn it, and I say the word earn. Earning money with your time and effort is one of the most challenging things in the world and I think that we're taught that it's not, and I just don't agree. If you want to earn capital, it takes time, it takes effort, it takes focus, it takes skills, it takes a lot and if you don't value those coins and spend them carefully, you will always be in trouble. And Kevin and I want to see you making less of the mistakes that we made and more so. And I think that financially, I've always been fairly fairly good because I love math and I love numbers and I love finance. But I know, kev, early on for you you were really good at making money, which is fortunate, and I really do believe that I think you're great at making money. I do.

Speaker 1:

Early on. It wasn't. I'm telling you and I'll share. I got lucky, but I'll share that after you go. I wasn't. I went from. I was making 10 bucks at the gas station, 15 bucks as a personal trainer and 13 bucks as a forklift operator, 12 bucks working in a hospital. I was not making a lot of money until I got lucky, genuinely.

Speaker 2:

Okay, well, I would say that you're good at earning it.

Speaker 2:

I appreciate it. It's not like you ever went jobless. I think you're hardworking, I do. I think you're naturally good at earning it, but I think a lot of that is out of necessity because you also are really good at spending. And so very, very quick story. Kevin and I used to have separate finances before NLU combined. This is early, early, early days and I was only making, I think, three grand a month and Kevin was making like nine with his part of the business and he's like dude, I don't understand, how do you have more money than me? I said my expenses are way lower. I mean, you make nine and you know you're spending nine, eight and a half.

Speaker 1:

Yeah, you're spending nine.

Speaker 2:

I'm making three, spending two. So I'm actually in the green here. It's not what you earn, it's what you spend, and that is the most important. Fundamental principle to give you is just be more intelligent with your coins.

Speaker 1:

It's a really good way to look at it. I know it sounds overly simplistic, but yeah, what you spend is more important than what you earn, because you can influence what you spend. I would say easier and quicker and more often. How many raises are you really going to get in a year?

Speaker 2:

And the raises aren't great, I know. I know Emilia's old company. We had to go through and figure out like why, what is the? And that's actually a really good company. And the raise, even on the max, was what? Seven percent, something like that, and that's the max. So yeah, it's tough out there. Just stay humble.

Speaker 1:

We got to go in four minutes because I have a coaching call right after this. Speaking of money making money, this is what I wanted to share. Yes, I got a job where I made six figures. But if I didn't get that job, I was gonna be jeffed. I would have found a way, but I would have struggled a lot more because my bills I had a $400 a month car payment I was. I had credit cards, so in a way, I got lucky.

Speaker 1:

I didn't plan to get that job. I didn't plan to get that job and that taught me a lot about money and making more money and how fast you can spend money. So you cannot plan on luck and I did and I got lucky. I did and I'm grateful I did, but I learned a lot of lessons along the way too. That's part one and then part two, quickly is just try to figure out what a good budget for you is. Even Alan and I, we don't have a budget where we say we're only gonna spend a certain amount a month, but we intuitively, we have an agreement intuitively that well, and if Alan's ordering out three times a week?

Speaker 2:

I'm gonna order out, so just share this publicly.

Speaker 1:

I do have to go in two minutes.

Speaker 2:

I have two minutes. I know I've become CFO. I'll go real fast. I've become CFO, kevin's CSO now. So Chief Sales Officer, chief Financial Officer and I'm CEO slash CFO and I've been really impressed. You've done really good. I was talking to you about that the other night.

Speaker 1:

I've been siphoning money quietly from the business in various ways.

Speaker 2:

I appreciate it. I appreciate it. I have been pleasantly impressed.

Speaker 1:

You're very different than you used to be my, and here's the thing I promise before we go keep saying that my recurring expenses are higher than Alan's. As a human, my the car is more, so one of the things I'm trying not to do is spend more money manually when I know there's a lot of money coming out from recurring expenses. Going back to what we talked about Okay, we gotta go Tomorrow for episode number 1,531,. One question to ask yourself before you start a vulnerable conversation. We did a meetup on this recently and I figured we could probably pull some golden nuggets from the meetup to share with the whole community. So we will do that tomorrow. As always, we love you, we appreciate you, grateful for each and every one of you, and at NLU we don't have fans, we have family. We will talk to you all tomorrow.

Speaker 2:

Always be intelligent with your money. Next time on Nation.

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Alan Lazaros

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Kevin Palmieri

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