Momentum Podcast: 101

When You Become
Numb To Money

by Alex Charfen

Episode Description

I realized that the concept of becoming numb to money may seem difficult to conceive. There was a time in my life I never would have believed I could become numb to making more money. For me, like most entrepreneurs, money was the most compelling metric in my life. I did everything I could to make more, and when I made it I tried to make that money make even more for me. But I can remember the transition from being incredibly excited about money too seemingly all of a sudden becoming numb to making more. It happen much faster than I ever thought it would and did a much lower level of net worth than I ever thought possible. I had gone through the five stages of an entrepreneur's relationship with money and it just wasn't as important as it used to be. There is only one way I have found to overcome this feeling but it has worked 100% of the time.

Full Audio Transcript

Entrepreneurial Personality Type Podcast / Episode 101 / WHEN YOU BECOME NUMB TO MONEY

I'm Alex Charfen and this is the Momentum podcast made for empire builders, game changers, trailblazers, shot takers, record breakers, world makers and creators of all kinds. Those among us who can't turn it off and don't know why anyone would want to. We challenge complacency, destroy apathy and we are obsessed with creating momentum so we can roll over bureaucracy and make our greatest contribution. Sure, we pay attention to their rules, but only so that we can bend them, break them, and rewrite them around our own will. We don't accept our destiny, we define it. We don't understand defeat, because you only lose if you stop, and we don't know how. While the rest of the world strives for average and clings desperately to the status quo, we are the minority. The few who are willing to hallucinate there could be a better future, and instead of just daydreaming of what could be, we endure the vulnerability and exposure it takes to make it real. We are the evolutionary hunters, clearly the most important people in the world because entrepreneurs are the only source of consistent, positive human evolution, and we always will be.

Welcome. This is entitled When You Become Numb To Money. Now, I know for some of you, the thought of becoming numb to making more money or having more money come in sounds ridiculous. Like, there was a point in time in my career, and it's not that long ago, that I would have heard that and said, "What is he talking about? How can you be numb to money?" It's so compelling. It compels most of what I used to do. It's what we're working towards and it's what we're driving for and it's the ultimate scorecard in all of those things.

There's this bizarre point in time in an entrepreneur's life where it happens, and you know, today I'm coaching several of the fastest growing companies in the United States. I'm calculating their growth rates, I'm looking at the Inc. 500 List and I can tell you, I've got some predictions for a couple years from now. It's amazing how quickly the owners of these companies, the entrepreneurs running them are going through the stages of an entrepreneur's relationship with money. Sooner or later, every one of them gets to this place where they're numb.

Let me tell you the process you go through as an entrepreneur. The stages of our relationship with money are interesting, because you work through these on your way up to numb. First, the first stage of our relationship with money is survival. Every entrepreneur has this threshold that we're running away from or trying to survive or wanting to create foundational stability or wanting to create safety or wanting to feel okay or wanting to feel something, and that's the first thing we do as an entrepreneur with money. Most of the time, we get to that place where we feel, and it's not what we do it so much, it's a threshold we cross where we go from survival to starting to feel some stability.

Here's what's interesting: it's different for every one of us. I've met entrepreneurs that are making $200,000 or $300,000 a year and are still in survival mode. I've also met entrepreneurs that make $100,000 a year and have the habits that have put them in stability mode, where they're putting money away, where they're not struggling, they don't feel panicked. It all depends on your relationship with money. It all depends on the financial intelligence you have to understand that the faster you work through these levels, the faster you build stability, the faster you reduce pressure and noise.

The next level, you get from stability to security. That's where you're making enough money that you start to feel that safety that you always wanted. It's not that you no longer feel like you're in survival mode. It's not that you're just building stability, you actually feel safe. You feel like you have a cushion. You feel like your confidence goes up a little in the world. Man, I can tell you, I know the difference of how it feels.

In 2007 Cadey and I were running four different real estate businesses, all very large, $10 million a year plus businesses in South Florida. Or, three of them were $10 million plus, the property management company wasn't. All of them were in South Florida, and four of them were in the top six fastest depreciating zip codes in the United States. We lost like 70% of our portfolio value in nine months, which in real estate is overnight.

The real estate industry in Florida literally shut down. Everybody talks about the crisis of 2008, for us it was 2007. It was devastating. We went bankrupt. I went, and Cadey and I went from having millions of dollars to a place where ... I mean, we had equity in every property. We were conservative investors. We had 20, 30% equity in every property. We lost it all. It was millions. We went from having this massive backstop of finances to nothing overnight, and I can tell you, like, you feel the return to survival mode.

We felt the return to survival mode, like, as I share this, man, it's like I have to breathe a little bit because I remember just how exposed I felt. I remember how vulnerable we felt, how exposed we felt, how unsafe it felt, how precarious and how much I wanted to get out of that feeling. I wanted to get out of the feeling so bad. It wasn't as bad as the first time I was in survival mode, because the first time I was in survival mode, I didn't have perspective of what it felt like to get up to security. The first time I was in survival mode, I didn't have perspective about how much different life was when you earned your way and worked your way to security.

I think that and having experience is why Cadey and I, when we did go bankrupt, we were fortunate. Let's be honest, I was really fortunate that Cadey believed in me and she believed in us, because we were going bankrupt and I told her I had this idea to write an information product, something we had never done before, and sell it to real estate agents and train them how to do distress sales, which I had experience in because I was doing a ton of stuff with them in our investment companies. I was going to go lead realtors and solve the foreclosure crisis.

Really, I told her that, and she was like, "Okay, what are we going to do?" We did that, and we were liquid millionaires within 12 months of going bankrupt. Man, it was brutal. The first year, we sold 15,000 agents, and we went quickly through ... Not 15,000. The first year we sold 1,500 agents, and thankfully after going bankrupt we were quickly out of survival mode and into some sort of stability mode. I'll tell you, once you've gone bankrupt, stability doesn't feel like stability anymore. You want to get back to security, and then to step four, luxury.

If you're doing it right, you go through survival mode, you build stability, then you build the level of security. Then you go out and you start doing some luxury stuff. You know, I tell people all the time, after Cadey and I went bankrupt I was driving a 1994 Ford Ranger that had been used on a farm that I got really inexpensively. It had 144,000 miles on it, and there wasn't a good body panel on the entire thing. When we were bankrupt, we weren't going to spend money, and so I got the deal I could get.

I drove that until well after we had a liquid $1 million in the bank. Then I bought a car not for luxury, for security because Cadey went out and drove that car one day and came back and said, "Okay, you can't drive that car anymore. We have $1 million in the bank and it's dangerous." She was right, like, it used to fishtail quite a bit. It had 144,000 miles on it. The whole suspension was completely shot, but I was like, I wanted to get back to security, back to the high level. When we were there, I didn't feel it yet because again, the perspective of having lost it.

If you do things right, you go through survival, through stability to security, and then to luxury. Luxury is ... You know, here's what happens. You can go out and get what you want. You can get a really nice house. Like, Cadey and I have a really nice house. We go to other houses that are really, super nice, but like, I'm always there thinking, "I don't know if I'd trade my house for this house."

I've even been to houses that are worth two or three times as much as our house, like, I did a presentation here in Austin in a house that had a waterfall inside and a swim-through pool and all kind of other stuff. I don't know if I would have traded my house, though. We've customized it. We've made everything exactly like what we want it to be. We've got the cabinets, we've literally redone almost every room in this house around our preferences and lowering pressure and noise. That's a lot of luxury for us. My original apartment would fit in our master bedroom closet.

Once you get to that level of luxury, there's only one step left, which is excess. Some entrepreneurs go through this, but see, somewhere in between luxury and excess or after excess, you become numb. You know, when you get enough luxury, here's what happens. You realize like, "I could move, but do I really need to? I could buy a faster or newer car," but you can only do that so many times and you can only drive so many cars. At one point I had like six, and then I realized, what am I doing? I had to cut back to three.

You know, you can't really spend much more on food and you can't really spend much more on vacations, because you've got to have time that you do what you do. You get to this place where, there is no variable difference in your life with the amount of money you're making as you add really big milestones. The next milestone Cadey and I have is, when can we start flying private planes, because that's been a dream of ours for a long time. Can we get to the private plane level? In between today and the private plane level, there's not a big difference in our lifestyles.

What happens for entrepreneurs is, you become numb to money, because here's the issue. It's that, for so much of our lives it was the most important metric. I know there's people who are going to say, "Well, it wasn't my most important metric." Come on, for entrepreneurs, we all know. It's the most important metric. Even if you run a lifestyle business, and I'm not saying comparative metric with someone else, but it's the most important metric to us. Here's how I know. If you're an entrepreneur and you grow a business and you put money away and you lose it, it affects your confidence. It affects how you show up in the world. I remember it. For me, the fact that I've gone bankrupt, I think it affects a lot of the way that I think and the way that I do. I think I've learned from it, but there's still scars there.

As an entrepreneur, when you get up to this place of being numb to money, you have a decision. You can go to the next step of excess, and some entrepreneurs do that. It's, how much money can I spend and how fast a car can I buy and how big a house can I move into. You know, you can go to this place where you just have to constantly up-level everything. I can tell you, that's exhausting. I know entrepreneurs who live like that. I don't coach a lot of them. I don't do well working with them, because it is an exhausting way to live when you are constantly pushing everything in your life and trying to make it bigger and trying to chase the next brass ring, because eventually it just becomes a pain in the ass to move.

Eventually you get used to a car and you start to enjoy it, and maybe you don't need new ones over and over and over again. I have an issue. I have older cars, but I love my cars. They have been customized, they're exactly how I want them to feel. I've had them on tracks, I've had them prepped for me. I mean, there's an insane amount of customization so that it feels the way that I want it to feel because I'm sensitive and I like to feel what's going on in a car. I also like to sometimes take them out to a track and go at very high speeds. I don't know that I would trade my cars. I've gone and driven really expensive cars and I've had friends let me drive their cars, but then I get back in mine and I think, "Yeah, yeah, no, but I think this one feels better," because I had it built around me.

Cadey and I have a hard time getting to that place of excess. Some might actually look at our lifestyle today and call it excess, but I've seen some crazy excess. Just, consistent and constant pushing to get bigger. What eventually happens is, it doesn't matter how far you drive that point of excess, you still become numb to money. With each level that you get through here, there might be a lagging effect, but the pressure comes off and you start to breathe more and you start to feel better and you start to feel okay, so every dollar that comes in has a diminishing return as to what it's doing in your life. There gets to a point where, that diminishing return spikes downwards.

It's just interesting. It just happened recently for a client of mine, and it's happening for him faster than pretty much anybody I've ever worked with. His company is just exploding. Because I didn't ask permission I'm not going to share his name, but he's one of the most talented entrepreneurs I have ever met. He thinks of himself as a marketer, but he's one of the most brilliant business people I have ever run into, and it's such a privilege to be able to work with him and his wife to grow their business. I got a text message from him this morning that, "Hey, so I've become numb to money. $3 million feels like $2 million. It doesn't even really feel exciting anymore."

I left him a message and said, "Hey, that happens to all of us." Then it hit me, I remembered what you have to do when you become numb to money. I remember how you can remove that feeling a lot and get a crazy amount of momentum in the process. Here's what happens. When you hit that place of luxury and you feel like you have that luxury style, that lifestyle that you're happy with, that you feel good about and you don't need to constantly up-level everything, or even if you do, because the entrepreneurs I work with, they make enough money that eventually you can't spend it all and you have to hire people to help you manage your money. Cadey and I have an infrastructure for our money. You get to a place where you will become numb.

Here's the advice I give entrepreneurs and I almost missed this morning. I felt so good that I remembered this. When you become numb to money, the way you reconnect to its value is to start giving a consistent amount away. I'll just put a note in here, if you already tithe in any way, if you already do give away 10% to a church or you tithe to a synagogue or to a mosque, this is on top of that. Start giving a significant percentage away. Here's what will happen. It will reconnect you to the power that money has. It will reconnect you to the impact that money has, because what is it after all? It's a means of exchange. It's a way to keep score. Money is just an accounting system, but what it is, is we are exchanging contribution from one to another. When you see what that contribution makes when you start giving it away, when you start helping charities or, I mean, Cadey and I have done all kinds of stuff.

We've funded houses with Habitat for Humanity. We helped build an orphanage in Haiti. We funded Christmas for years at a local orphanage. We funded a women's shelter. You know, you start doing things like ... We funded hundreds of entrepreneurs on, which is an incredible charity site where you can go fund an entrepreneur in another country. For like a couple hundred bucks you can fund their business, and then you get reporting back as to how they're doing. It's incredible. In fact, like 95% of everything we've ever put into Kiva has been returned to us so we could loan it again. You loan it to people in microloans and then it comes back and it goes out. We've funded, I don't know how many wells with charity water.

Here's what happens. You start doing that stuff and you can't be numb to money, because I remember thinking, "Hey, if we make X number of dollars more, we can get this many more thousands of people with wells in Africa. If we do this number of dollars more, we can fund this more percentage of another house with Habitat for Humanity. If we do this much more, what else can we do to go cause a massive effect in the world?" When you become numb to money, if you start making the decision to give a significant percentage away, everything changes.

There is a reason why this is part of every major theology, why giving away something is part of every major theology. It's also just that energetic thing that it is no longer just you. I also think there's something, like, magical about this. Every time Cadey and I have consistently done this, the world has just exploded around us. I don't mean because we made it public or because we got attention for it or any of those things, because most of the time we didn't do either. Our business went crazy and the right people were attracted into our lives and it felt like we just couldn't stop the momentum.

I think when you consider why that might be is, if you're freely giving the contribution that is money out into the world, it is going to freely come back to you. There is something incredible about being able to give it away and still feel like you're in luxury mode, that shows you what you've accomplished as an entrepreneur. If you're there, if you've lost that motivation, if your business just isn't as exciting as it used to be, consider, is it because you've become numb to the single most important metric for most of us most of our lives, money? If you have, I just gave you what I consider the single biggest shortcut to overcoming that feeling and making it compelling again and getting right back into momentum when it comes to thinking about your money.

Thanks for being here with me tonight. If you're an entrepreneur who's growing a multimillion dollar business, if you're around $750,000 and you know you can get past that, if you're one of those people who's built a business where you have opportunity you know you can't take advantage of right now, then get in touch with us. We help entrepreneurs exactly like you build the infrastructure and team around them so that they can grow their business faster than they thought possible, take advantage of way more opportunities, and gain market share at a time when you should, which is today.

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