Managing Yourself as a Realtor or Business Owner

Welcome to Real Estate Business Builders. I'm your host, Lars Hedenborg, the founder of Real Estate B School. Bottom line, the real estate industry has failed to create a clear path to financial freedom. Traditional brokerages and coaching are designed to keep you running on the transaction treadmill with no exit strategy. While I didn't have any sales, marketing or business building experience when I got into real estate, I was willing to bet on myself and figure it out because my family was depending. Having served over 5,000 families with their real estate needs, I've made every mistake you could possibly make in this business. Through Real Estate B School, I've helped hundreds of agents and team leaders realize their goal of true time and money, freedom and living a life without regrets. If you know there's another level of growth inside of you and you want to learn how to build a highly lucrative lifestyle business, then you're in the right place. You won't find any fluff or hype here on this show. Just real world tools, systems and strategies that work. Let's grow together.

All right, what's up, Real Estate Business Builders? We have a special guest today on the podcast and I had the pleasure of meeting Matt, I guess it was in August of this year and just got to know you a little bit and then you came into our, one of our production masterminds. And I think what you've been blessed is just the willingness to share some of the pain that you've gone through so others don't have to go through it, specifically as it relates to the mistakes that you see all the time that agents make and the reason there's not financial freedom in our industry. So Matt, would you do us the honor of just a quick intro, like a minute or so and then I want you to do kind of unpack your story as we unpack these five financial mistakes that agents make and why they have no money or wealth or freedom as a result of it. So welcome to the podcast.

Yeah, thanks, Lars. Everyone, my name is Matt Plummer. I live here in Las Vegas, Nevada. And you know, for the, for the longest time my, my, my wife and I were high income earners, low net worth individuals and we were always chasing the next deal to just make it to the next month. And you know, in the five, five, six years I've been in real estate, that was no different. And you know, for our quick time that we have together, Lars, you know, it didn't take me very long to, as I was having my first conversations with real estate agents learning the business, I quickly understood and became aware that real estate agents, for the most part, are selling real estate next month to pay last year's taxes, selling real estate next month to pay this current month's obligations. And, you know, without any type of that margin created, whether it's saving, investing, buying real estate, buying into the mutual funds or stock market, just forces real estate agents to stay on that hamster wheel of just always chasing that next deal. And yeah, so I went on a journey to, to unpack some of my pain of being a half a million dollars in debt and £300 to, you know, £200 and, you know, net worth of, you know, near a million bucks.

Awesome. So before, because I kind of know the five things. So before we get to the five things, let's just talk with, talk about that journey there. The, this journey of sort of the reality of, you know, being somewhere that, that there's probably shame. There's some, you know, stuff that, that happened in your life that led you to the point where massive debt, you're not taking good care of yourself physically. So talk about that a little bit. And then how did you begin to sort of piece yourself together and heal parts of you that were broken to go on this journey of, you know, not only the financial part of it, but it's more the personal development journey, I would imagine. So let's, let's talk about that. And then I for sure want to get to mistakes and I for sure want everyone to grab your book at the end. So stick around for, for the, for the free book, but unpack the personal part of it first.

Yeah, so my entire life, man, I, I've always fought weight and I was an addict of, of a lot of things. And you know, as we, as we all make more money, we just become a bigger version of, of what we are. And I was an addict, right. I was always chasing the next thing and, you know, and that led me to, you know, I had a roller coaster life of, of. Of alcoholism and making money and gambling and smoking and all the, a lot of bad things. And that, that yo yo lifestyle, that roller coaster lifestyle turned into a yo yo lifestyle, man. I used to be able to, to lose 20 pounds and gain 30 pounds. I mean, I probably have lost, you know, 500 pounds in my life, but I've gained 600.

Right.

I mean, it was just, it always would come back and, you know, without any type of structure or freedom or any of the right habits, you're always going to fight that. And so in 2012, I was £300 alcoholic addictive sports gambler, smoking a pack of cigarettes a day, driving through the fast food, drive through every single day. And when I quickly. My wife and I had just gotten married. We've been together for a decade plus, but we finally got married. And it took me almost losing her and being on in marriage counseling to, to. To hit that very first step of any type of a transformation, which is awareness. I was sitting on a counselor's couch. She was on one end of the couch, I was on the other. I was mad at her, she was crying. And the counselor simply asked me one simple question. And he goes, can you go 90 days without a drink? And I said, you know, I probably can, but I don't think that'll change anything. And he said, well, here's the thing, dude. I've known you for 45 minutes. You've got 12 months and you're going to be dead, divorced, in jail or broke. You just gotta. I mean, that was my awareness moment, Lars. And you know, there's so much shame and blame and guilt when you're hit with that right in the gut that it quickly, if you're a person of action, gets you right into that second phase, which is decision. You got a decision to make. Like, I did not want to stop drinking. I didn't want to stop gambling. Like, I enjoyed those things. That's where my friends, that's where my social circle, I played golf. Like it all came together. But what I knew I could do and what I knew I needed to do was I needed to lose weight. That was 300 pounds. I mean, I had been 200 pounds before. I just need to get back there. So that was the decision I made of just being intentional, of what I could put into my body, right? I could get off the couch and it didn't affect my drinking or my, my gambling, right? I could walk around the block and it didn't affect those other things. So those were the things that I could do. I could affect. Hey, I could drink a meal replacement shake instead of going to Burger King. None of that affected the other stuff. And so as I kept making, as I call it, right hand turns, right? I got to the wide, I just kept making right hand turns. That led me to not drinking as much. That led me to not gambling as much. I mean, 90 days into it, man, I lost 30 pounds and I was sober and I hadn't placed a bet. And so that doing that over the course of the next 12 months brought the next thing into my eyes was like, dude, what are you doing? With this money, I mean, we'd made them over a million million dollars in. In the last decade, probably a million and a half. We didn't have any money. We got a negative net worth of 145, 000. And we quickly realized that the same habits of losing weight and becoming sober and not drinking or not gambling and not smoking were the same things that were going to help us unpack this debt. Unfortunately, you got to live on a budget. Unfortunately, you got to, you know, you got to spend less than you make.

Yeah. So, yeah, same. Same as losing weight.

Right.

Getting financially fit is not much different. So. But it's interesting that. That you chose what was going on, you know, psychologically, where you chose the. The weight you just didn't want to give up. The. The other stuff was the stuff you didn't want to give up in. And you said, well, I got to save my marriage, so let me at least go after the weight without the rationale.

Right.

Because, I mean, you know, you look at and like, how many wealthy people do you know that are £300? There's wealthy people that still drink, there's wealthy people that still gamble, but there's not many wealthy people that are £300. Yeah, right. Especially that are 60.

Yeah.

Right.

And I mean, I'm. I was 34. 33, 34 at the time. So it was the thing. And I had done it before, man, I'd lost the weight. I just didn't keep it on because I hadn't built the right habits. I didn't stack the right things around me. I wasn't involved in the right.

The.

My environment did not support my goals, whether it was my friends or my habits or my work or whatever.

Yeah.

And so. So we got on this money. We, you know, we paid attention to Dave Ramsey, which I think is a very financial Peace University was such a huge, pivotal moment in our lives because not only did it help us with our finances, and it started and it brought the conversation together. It was no longer my idea. I was not the guy person listening to the podcast and bringing my wife and. And beating her over the head with, you know, budget, budget, budget. We were doing this together. But the true thing that that financial Peace University did, Lars, was it got us into church and going through fpu. Like, giving was never part of our. Of our story or our conversations. And even when we were going through, I was like, we got $12 left to give, like, because it was at the bottom. And so going on that journey and understanding the giving aspect to money and what the Bible said about money. And then truly, you know, a year and a half later of, you know, accepting Jesus at the end of 15, as we were on this journey of sacrifice and delayed gratification and contentment. That's how we got out of debt, man. We were, we were. Total debt was $551,000. 300 grand was a mortgage. We were a quarter million bucks under the barrel of, you know, creditors across the board. And you know, we made some serious moves in 40 months and we paid off. We, we eliminated and paid off all of it in 40 months.

Man.

That's awesome. So let's get into the five mistakes that you see. So you, you've been at this, how long you've been out this aspect of helping agents?

Nearly four years, man. Nearly four years. I've been having conversations with agents around their money.

Awesome. So let's unpack the five financial mistakes that you see. I think it's super valuable to go through them in the order that you've. Being at this one thing for so long and having done the journey yourself, I think that that'll just be super valuable. And then we can give away the book and you can let know, let people know how to get in touch with you.

So yeah, for sure. I think the first thing that we need to identify is that awareness, right? The awareness phase of this transformation is that real estate agents do not have an income problem.

Right?

Majority of real estate agents have a cash flow problem. And real estate agents, and this is after thousands of interviews, real estate agents simply make less than they think. We all spend more than we care to admit, which causes us and forces us to be behind on taxes and, or retirement. And the two biggest things that stress real estate agents out the most are inconsistent income and financial disorganization. So if we can look through all of this with those, through that lens, right, and say, hey, if we can fix these two things, right, what are the mistakes that are, that happen because of inconsistent income and financial disorganization? How can we start this wealth building journey in all areas of life speaking today from a financial standpoint, right. Number one is a lack of financial plan in the future. I mean, every real estate agent starts, starts selling real estate. Hey, what's your goal for next year? Hey, are you gonna, what brokerage? You're gonna join where, what team are you going to be on? Whatever it is. And they're looking through the lens of today, not going to the end and figuring out when they're going to stop selling real estate. You Know, I think as a real estate investor, the number one of the biggest things that you're, that you do when you're reviewing deals is how are you going to get out of the deal, right? That's where the majority of the money is made. It's not through the $200 of monthly cash flow. It's like, hey, I'm going to get all this, I'm going to get the accumulation, the appreciation. Now I'm going to, how am I going to get out of the deal? So how are you going to get out of real estate? So figuring that out, go out to at least the next mountain you can see, turn around, look back, and how did you get there? So not having that clarity is going to force you to sell more real estate and keep you on the path of selling real estate forever. So that's, number one, when are you done?

Right?

Number two, living beyond your means and living in debt and using credit throughout your real estate business. You know, all of the studies show that if we use credit, credit cards as a, either a bridge or just a means without the right habits, you're going to spend 10, 20, 30% more than you would if you use cash or a debit card. All of the data is there. And if you, if you, if you want to fight me and argue me, just go to dinner with a 50 bill versus your credit card and tell me which one's bigger, right? So, so how can we live on less than we make.

Right?

It's the only way we're going to lose weight. If I spend 2000 calories and I eat 1800, I'm going to lose weight. But if I, if, if my lifestyle and my quality of life has risen to met or exceeded my level of income, like it's always going to keep us forced selling more real estate, more real estate. We're going to take the listings we don't want, we're going to work with buyers we don't want. So all of the obligations we have and are exceeding our income are always causing us and causing us to do more rather than do less, right? Which is taking away from the things we want, right? Whether it's play more golf or spend more time with our family or travel like, we got to go work, right? So how can we live on a budget? How much does your business cost? How much does your personal life cost? And two and three go together, which is, number three is don't understand the path of money. Remember, most real estate agents make less than they think, quite frankly, because they think that they get a $10,000 commission. That $10,000 is their money. Well, when we look at it through the lens of a business owner, we want to go from, you know, one side of the cash flow quadrant to the other. Like, hey, I'm a business owner. How much of that $10,000 needs to be set aside for profit? How much needs to be set aside for me, the owner that actually sold the deal as an individual agent? How much needs to go to the government, and then how much is left to run the business?

Right.

Everybody starts the backwards, right? Sales minus expenses equals profit. We were taught that that's the way every financial statement reads, forces us to stay in real estate, Right, because we pay all of the bills first. We want to pay ourselves first. Grandma told us that. But all the school teachers told us differently.

Right?

So what is that path of money? How much of the $10,000 do I actually get to bring home now? And, you know, if it takes X amount of dollars, you know, $10,000 to live well, now I gotta sell two deals at least, or three, Right? So now we can actually tie our lifestyle of what we currently do or what we want to the amount of real estate we have to go sell. Right now it comes into, you know, in your world, right? When we're talking about production and things like that, now we actually have a correlation between groceries and how much work I have to go do or vacations and how much work I need to go do.

Okay.

Number four, not having an emergency fund and sinking fund accounts.

Right.

Profit first talks about all of these bank accounts where we set up. And I'm, you know, as a Profit first consultants, you know, bank accounts are the number one thing that you can go do is just go set up a bunch of bank accounts and then go work hard to fill them up. Like, we broke this all down. Just that. Right. But then also, what are the things that are happening in the future? You know, travel is a huge thing for Melinda and I for. Especially for Melinda. And so. And I know you and your wife go on an annual vacation every year. Hey, every month we're going to set aside this amount of money so that when it comes to October and we write the check for our anniversary trips, the money's there.

Right?

How much money do we need as a Runway? Cash is oxygen for our business. Cash is oxygen for our life. How much cash do we just need sitting there so we can go operate at a maximum level? Like, too many people are just, you know, they run with their back against the wall for too long and it just gets exhausting.

Right?

I mean, it just gets exhausting not having 20, 30, 40, 50 grand sitting there just to get some margin in your life. Not to spend, not to invest, just some margin, right? So not having that margin is mistake number three. Like, you know, hey, I have this. Or mistake number four, sorry. I have margin in my business. So if I don't have a sale, I can still pay my coaching, I can still pay my admin, I can still pay my, my marketing, right. I can keep running as a business owner, I can keep paying my rent. On the personal side, if I don't have a commission come in for a month, hey, no problem. I can still pay my mortgage, I can still pay my groceries. Like, we might not be eating out four times a week, but we can still get from the first to the 30th, right? And I always recommend at least three, maybe even six months for both business and personal. And number five is waiting too long or never starting to save for retirement. You know, we stay in debt. The, the, you know, agents stay in debt too long or they just never make the decision to just get through it. Like, if you just did the work for 12, 18, 24 months, 95 of your financial challenges go away because you just, you just push through all the stuff, you push through all of the distractions. So the number one thing when people work with me is like, we just have to get through it. Because once you get through it and then you get in that rhythm of one or two or three or ten deals a month, whatever type of business you have, like, it's just so much easier to, to function at a high level operator when we're not strapped with all of these obligations.

Yeah. And I'll say, I mean, some of, some of the way you're saying this is for the individual agent, but the, there are, you know, these agents in your market, you know, that are running big teams and the, the business is not set up the way that it needs to be. They're heavy in production because they've got this big lifestyle, massive overhead with the team, and it's, and, and they're never getting ahead. There is no margin. They're, they're in debt. Nobody knows it. They think they've got everything figured out. So this is just a chronic across the board issue in our industry that nobody, nobody's talking about. Like, what does it take to actually, you know, have multiple seven figures of, of net worth, you know, at the end of selling homes? And, and agents just haven't figured it out. At all.

Well, and I think, you know, and which is, which is, you know, truly my calling, man, is there's, there are a lot of people out there online and social in the real estate community that are talking about wealth and, and building and investing. Right? And that's, that's awesome. That's the sexy dessert. But unfortunately to get there, you have to pay your price, you have to pay your dues, you have to go through and you have to eat your veggies, you have to eat lean meat and you have to go do the work. So you get to go invest like investing is a reward. And if you start building the muscles soon enough or early enough, you won't have to go sell real estate forever.

That's a really good point. I mean there are sort of quick fix programs, quote unquote out there that are going to distract an agent, you know, away from the blocking and tackling the, the, you're not going to make it in a second business if you haven't figured out how to, you know, how to figure out one business and do the activities necessary to sell 2, 3, 4. I mean you really need to be selling 3, 4 or 5 houses a month as a solo agent to be able to, to give, to live, you know, to do the vacations and then to save, you know. And most agents are not selling one home a month.

No. And, and again, this is where, you know, when I get to work, I get the honor to work with couples, right? Is the spouse that has their career and the sales partner, the sales agent that I'm working with, the real estate agent over here that has the inconsistent income, how that, that, the, you know, that just that relationship is a balancing act of, you know, how can we live on one spouse's income or how can we live on that? And part of the real estate agents income. I think too many people try to do it the opposite way because it's a bigger lifestyle. If you know, the, the, the, the, the real estate spouse says hey, we're going to go live on my income. And the other one over here is, you know, for the debt servicing or the, the investing.

Right.

Or it happens way too much in our industry is that the money doesn't even talk to each other, right? Husband doesn't talk to wife about money. Wife doesn't talk about husband about money. And next thing you know, it's just, it's that, that contention because if they don't, if the one person doesn't bring in a deal like now, there's stress at the dinner Table when there really doesn't need to be. Yeah, it's avoidable. I should say. It's avoidable. Yeah.

And it's like, you know, I don't know the psychology of it. It's probably because of the way I was raised in a bunch of chaos and. And chose a path of achievement for a lot of not great reasons. But I just wonder for folks that have ended up in a different place for whatever reason, like, what's a couple, three things that you would tell them to. Like, they're almost starting out. I watched a training this morning, a coaching program that I'm in. You know, it's the growth line. But this guy was telling his story of how like before he was 17, he was in jail twice, had to go to rehab. And so he carved out like a little, a little trough for himself. He wasn't even. He was below zero to start. You know, we want to think that we could play in the growth. Like, how can I grow and like do all these cool things? But you're in a hole. How do you lift yourself out of the hole to start?

Well, the first thing is it goes back to awareness and where that blame, shame and guilt comes in. And it's just, here's the deal, man. It's easy to fall into that blame, shame and guilt. Just know that it's. You are where you are by an accumulation of the facts. And the facts are truth, and the truth will set you free. And if you're in that valley and you're like, I just trying to get to even, right? If you go back to my story, right, we were negative $145,000 of net worth. We were a half a million dollars in debt. It took us 40 months just to get to zero. That's a three and a half years, right? So sometimes it is gonna. You do have to just keep digging and digging and digging and standing on dirt that you just moved to get to the top. However, if what most people do is they stop and then they allow, they just kind of retract back. Whereas the thing that we did, man, we just didn't stop. So I would say if you're in that valley, is find someone to lock arms with. That. That is where you are. That has been where you've been, where you currently are, and lock arms with them and don't stop until you get to the top.

Yeah, that's awesome.

I said this, I said this on social. You are most equipped to help the person that you used to be, Right? You are most equipped to Help the person you used to be. So if you're in that valley, somebody's got it worse than you, go help them. Somebody's got it worse. Somebody's been in jail four times, not two.

Right.

And so that, and then I would also, if you're married and you're, you're, you have some of that contention with your, with your partner is I would surrender. You don't know.

Right.

You're doing the best you can with what you know is just lay it all on the line, put all of the stuff on the table. A lot of, A lot of partners don't have, have credit cards that the other spouse doesn't like. Just put it all on the table and say, I cannot do this alone. I'm asking for your help. Or we need to go find help because I'm tired of living like this again. Or I can't. We can't keep doing this. It's not your fault, honey. It's not my fault. Just like, we have to find help. And that's where I was eight and a half years ago when it came to, you know, sobriety and marriage counseling is like, I don't know how to do this. I can't. Yeah. The more I try, the more I drink, the more I drink, the more I gamble. The more I gamble, the more I eat.

Yeah. So there's this, this sort of vicious cycle, and essentially you just decided to turn it into like this virtuous cycle. Like, none of the steps were easy, but you just took little steps every day and they just compound on each other.

Yeah. I mean, I was £300, Lars. The number one thing I did was I drank a meal replacement shake instead of going to McDonald's. It's the number one thing I did. I just did it for 350 days in a row, twice a day.

Right.

That led to getting off the couch. That led to good trainer. Like, all of that stuff led to it. But that's the thing I did. The number one thing that we did with our money is we looked at our bank account and we looked at our budgeting app or the piece of paper every day. And did our spending match what we said it was going to happen yesterday, two days ago, a week ago, or two weeks ago. And if it did, great. If it didn't conversation.

Awesome. What's the, what's the easiest way to. Folks, I want everyone to make sure that they get a copy of your book. What's, what's the website for the book? And if people want to get in touch with you directly.

Yeah. The book is the, the website is the number five Financial mistakes dot com. The number five financialmistakes dot com that's the ebook. And the number one way to get in touch with me is through social on, on Facebook or Instagram. Instagram is Coach Matt Plumber and Facebook is Matt Plumber.

Awesome. And it's P L U M E R awesome. All right, brother, well, keep doing what you do. I know God is looking down and just loving how you're putting yourself out there, telling your story unashamed, you know, so that others don't have to. To live in shame. So I, I love it. Let me know if there's anything I can do for you and everyone. Go to five number five five financial mistakes.com and reach out to Matt. If you're in this situation, this is what he'd do. He's called to do it. So, you know, I would just reach out if you're struggling and let down your guard, you know, there's nobody has it figured out. Just realize that, you know, that none of nobody in our industry, even if they look like they've got it figured out. I've, I've met, you know, guys doing hundreds of transactions per year and losing money. You know, I've met guys doing 5 million plus GCI losing money and they're on stages speaking to thousands of agents about how to do real estate at a high level. So our industry comes with a, a people that are maybe teaching things that aren't congruent with what they've actually figured out themselves, you know, so Matt, Matt is clearly not one of those guys. So much love, brother. Be good.

All right.

Thanks, Lars.

Thanks for listening. Would you please take a minute to share the show with other agents who may be struggling? And if you love the podcast, please leave us a five star review on Apple Podcasts or your favorite podcast platform. And make sure you visit ScaleOrDiebook.com to get a free copy of my book. It's a nuts and bolts guide to building a real estate business that gives you true time and money freedom so that you can live your life without regrets. Thanks again and see you on the next episode.