If you would have bumped into me in 2018, you would have thought I was either A.) An insanely successful young entrepreneur, or B.) A trust fund kid who blew all his money on clothes and cars.
When I started making real, paycheck equivalent money from my side hustles, I honestly didn’t know what to do with myself. I had been working extremely hard for 3 years to get my businesses off the ground, and the time had finally come to where I could reap the rewards of the seeds I had planted. To a kid that was making minimum wage just a few months prior, this was euphoria.
At the time, however, I was still just a 21 year old kid. Spoiler Alert; most guys that age aren’t the best when it comes to saving or investing their money.
Instead of investing that money back into my brands, or even into other avenues such as stocks or crypto, I cashed in my chips early. I went on a expense frenzy, buying name brands such as Supreme, Gucci, and so many more.
I bought a head-turning, but insanely impractical roadster, and then a full-sized Cadillac a year later.
I even spent over $2,000 on a party for my 21st birthday.
To anyone viewing from the outside, I was a success. But as usual, the inside tells a different story.
Sure, I was making good money for someone my age. Selling cars and having side businesses were bringing in great returns. But those returns were instantly going to cover my rapidly increasing expenses. Almost none of that money was saved, only spent.
It came to a boiling point, when I began to re-evaluate my choices and current path my life was headed down. Becoming a successful entrepreneur and business owner is my main goal in life. Had I achieved that? To a degree, yes I had accomplished that goal.
But the end goal of entrepreneurship, is freedom.
Freedom to escape the 9-5. Freedom to buy and experience whatever you want. Freedom to fly to California for breakfast, and make it to New York for an early dinner.
On my current path, Freedom was nearly impossible. A simple calculus showed the writing on the wall I faced; Your Expenses exceed Your Income. At first, I didn’t want to accept it. I had made an image for myself and set the bar high for my standard of living. How could I keep this consistent, but lower my expenses?
Short answer, I couldnt.
It was around this time, I watched an interview that changed my entire outlook on life, business, money, and everything in between:
22 Years Ago, Jeff Bezos was already a billionaire. Amazon had taken off, and he was making more money than he knew what to do with.
Yet, he drove a used Honda Accord. His desk was made out of a door and spare wood. His office was just another rental office space.
With the money he was making, he could have easily have been driving a Ferrari, working off the finest wood desk, and his office could have had an ocean view.
But Bezos saw things differently.
Around the 1:30 mark, he says it best:
“It’s a symbol of spending money on things that matter to customers, versus spending money on things that don’t.”
I was blown away by this entire interview. Because we all know what happened to Bezos between 1999 and today.
The formula for Freedom was in this interview. Stop spending money on things to impress people, or try and bring yourself joy through material measures. Instead, especially in the early years, re-invest your money. Whatever is currently making you money, put whatever you get out of it, back into it.
After gut-wrenching self reflection on my spending habits, I knew what had to be done. The goals I set for myself were not accomplishable with my current lifestyle.
So I sold it all.
I sold all my Supreme and Gucci, and bought clothes from Target. I sold both my cars, and bought a Ford Ranger for $600. I moved out of my apartment, and back home with my mom. I say this honestly to you reading this; This was the hardest thing I’ve ever had to do.
The worst part were the concerned calls and texts, asking me if “I was going broke” or “My business went under” or even “If I needed to borrow some money?”
The truth is, even though now it looks like I’m just scraping by, I’m making more money now than I ever have in my life. Last year, I almost made five times the amount in made in 2019. And this month alone, I’m set to have a record breaking month to start 2021.
But this post is not to brag, or be a self-assuring “I made it” story. This is a lesson to anyone who truly wants financial freedom and success as an entrepreneur;
Live below your means.
Yes, once you start making money from your business, you’re going to want to spend it on cool stuff. The cars, the clothes, the concerts, all of it is tempting when you have the money to spend.
But remember where Jeff Bezos was in 1999, and where he is today.
Where will you be in 20 years, based on your current path?