How come we are willing to spend money on other people but not on ourselves?
Why we invest in others
Last weekend, I took my cousin’s son, whom I will call Chris, shopping. He needed a suit for his first professional conference. A former Uber driver, Chris is now working as an insurance broker for North American Senior Benefits. My boyfriend is both his boss and mentor. (Thank you honey!) When I found out Chris didn’t own a suit, I offered to take him shopping. I bought him a suit, shirt, tie, and shoes. I want him to be successful: this career opportunity will change his life. He needs to fit in at the conference where he will be surrounded by many successful people.
This year, Chris will turn 30. He does not have a college education. He has had many jobs since high school from driving a truck to being an in-home healthcare assistant. He has lived in several cities including Chicago and Nashville. But he has never had a career. He has never had a mentor … until now.
I knew Chris had the potential to be a good salesman. He is naturally friendly and outgoing but he lacked the skills. My boyfriend took Chris under his wing and continues to train, guide, and mentor him. As a result, Chris has made more money in one day selling insurance than he made in one month driving for Uber. He still has his off days. He is not the perfect salesman yet. He has a long way to go before he will produce consistent commissions, but he is getting there. When we took him shopping, Chris declared his Uber days were over. He is never going to drive for a living again.
With our mission accomplished, we were ready to leave the mall. We had to walk through Belk’s to get to our car. I stopped when I saw a Kate Spade bag that I loved. The ‘Yours Truly Heart Stripe Hallie’ is a large canvas tote-style handbag. I don’t care about having a brand-name bag; I just love Kate Spade purses. However, I was not going to spend $200 on an overpriced bag even if I need a new purse (I do).* Yet only minutes before, I didn’t hesitate to spend almost $500 on Chris, which made me wonder … why don’t we invest in ourselves?
Why we don’t invest in ourselves
When I realized Chris didn’t have a suit for the national conference this week, I knew I had to buy one for him. Like a typical American, I charged it, and it was worth every penny. Not only will Chris wear the suit more than one time, but it will also give him more confidence.
Buying the suit for Chris made ask myself: Why are we willing to invest in other people’s success but not our own?
Most people I know are willing to spend money on other people, especially their children and relatives. One of the few times we invest money in ourselves is when we take out loans for our formal education. Since the cost of tuition is outrageous, I think most people consider college loans a necessary evil. We have borrow money if we want to get our bachelor’s degree.
But when it comes to hiring a coach to help us land our dream job, improve our health, repair our marriage, or teach us about business, we freak out. We are scared. Why are we willing to invest in other people to help them, but when it comes time to invest in ourselves, we don’t do it. Why is getting a college degree the only acceptable time to borrow money when some of the most successful billionaires never finished college? What is the major disconnect?
I’m not sure I know the answer except to invest in yourself is scary. Buying a suit for Chris was a no-brainer because I see his potential, his determination, and his growth. Sometimes, I think we don’t know our capabilities. Four years ago, a peer of mine said to me, “Do you have any idea how powerful you are?” Those words have stayed with me. She had met me only hours before; yet, she saw something in me that I didn’t know existed.
When you can’t see your own power, you have a hard time investing in yourself because it’s a gamble. Imagine going to Vegas. Instead of playing cards, shooting craps, or pulling slots, you run around asking the gamblers to bet on YOU. They would think you are crazy.
To invest in yourself, you must believe you will WIN. I’ve bet on myself many times. And I don’t mean the student loans I needed for my undergrad and graduate degrees. I mean finding creative ways to fund my business. If you are ready to bet on yourself, read about seven ways to find money to fund your dreams.
Seven ways to find money to fund your dreams
1. Use credit cards.
Aww … credit cards. I didn’t think twice about charging that suit for Chris. Yet, when I charge thousands of dollars for my business on my credit card, it stresses me out. And it’s not so much the dollar amount though there is a big difference between $500 for professional clothes and $2000 for Facebook ads. The real difference is betting on someone else vs. betting on myself.
Most of the potential clients who schedule discovery calls with me either have credit cards or could obtain a credit card. Typically, they have good to outstanding credit scores. But they are afraid to spend money they don’t have even when that money is going toward finding their dream job. (Often, this expense is tax-deductible!) They could easily pay back the debt on the credit card in less than a year when they land their dream job. The minimum ROI my clients get is 1000 percent. When I eliminate all other objections (e.g., my program, me as a coach), it always comes back to price.
Either they didn’t believe it would cost that much or they knew it would, but are afraid to move forward. They fear they won’t succeed even though I only extend an invitation into my program to 60 percent of people who schedule calls with me. This past Monday, I had three calls. Two women were not a good fit so I did not make them an offer. The other woman is my ideal client, and I hope she joins my program because I know I can help her. I am picky about whom I work with because I am only successful if my clients are successful.
If you do need a credit card and have decent credit, Blispay is a good option. They approve you in under five minutes, they don’t charge interest for six months, and they give you immediate cash back on all purchases over $199. #sweetdeal
Bottom line: When used wisely, credit cards can be valuable tools in funding your dreams.
2. Take out a loan.
Some people refuse to use credit cards, or in many cases, cannot get a credit card. During my divorce, I experienced this issue. Though most of my money problems were not related specifically to my marriage, my credit score was all over the place during that time in my life. I was frustrated because I could not use a credit card as a means to finance my business. When I asked other coaches how they managed the early years of their businesses, most would not tell me. Finally, one of my mentors admitted she put everything on credit cards during her start-up years.
While I was relieved I wouldn’t be the first person to go into debt for my business, I didn’t have the option of using multiple credit cards. I knew I needed more cash. Since my credit score was above 600, I borrowed money from Lending Point. In December 2016, I obtained a business loan for $8500 with a three-year repayment period. The interest rate was ridiculous, but there was no penalty for early prepayment of the loan.
Obtaining the loan and making the payments on time improved my credit score, which led the one credit card I had to offer a credit increase with a generous balance transfer deal. I transferred over half of the outstanding loan debt to my credit card, which will not charge interest for almost two years. As a result, I saved myself thousands of dollars in interest-charge fees and I ‘paid off’ my loan two years early.
When I initially borrowed the money, I had one (fairly new) credit card with a limited amount of credit. One year later, I have three times as much available credit and the option to use my credit card if necessary for emergency expenses. I still have plenty of cash leftover from the loan as well.
Bottom line: I don’t like to borrow money, but I did what I needed to do in order to increase cash flow for my business.
3. Dip into savings.
In a 2017 GOBankingRates survey of 8000 Americans, 57 percent of respondents said they have less than $1,000 in a savings account. While that fact is terrible, it means that 43 percent have more than $1000 in savings. In fact, the states with the highest percentage of residents who have $10,000 or more in savings are:
- Kansas, 38 percent
- Washington, 35 percent
- New Jersey, 34 percent
- North Dakota, 34 percent
- Kentucky, 32 percent
Millennials have the least amount of savings than either other generation, which makes sense. I didn’t have a savings account in my twenties. Between raising my younger sister Adrienne and living paycheck to paycheck, there was no money to set aside. Ever.
If you don’t have money saved, what about your retirement plan? Many people would never dream of dipping into their retirement fund (if they have one). First, you have to pay a 10-percent penalty for any early (before the age of 59 1/2) IRA withdrawals. Then, you have to pay taxes on the amount withdrawn. However, if you need the money for 60 days or less, an IRA withdrawal can act as a short-term loan. That’s right. If you pay yourself back within 60 days, you don’t have to pay the 10-percent penalty and you shouldn’t owe any taxes on the loan either.
When I hired my business coach last year, the only option I had to pay for his services was to borrow from my IRA. It wasn’t ideal by any means. I was hoping I would be able to pay back all of the funds within 60 days, but it didn’t work out that way. I paid back one-third of the total loan, so I will have to deal with the early withdrawal penalty and taxes on the remaining two-thirds. But it was worth it.
Bottom line: Whether it’s a cash/retirement account, dipping into your savings now to invest in your future can be worth it.
4. Ask for help.
Is there anyone in your life who is willing to invest in you? Many people, especially parents, are willing to help us with our formal education, but it doesn’t occur to us to ask those same people if they are willing to give/lend us the funds to hire a career coach or to start a business.
I’m working on another business right now, and I was stunned when a professional colleague wanted to become an angel investor. Though I have pitched my idea to a few people, it never occurred to me anyone would believe in me or my vision enough to help me move forward. So don’t discount the effect you have on others or how much people may be willing to help you.
For example, Chris didn’t ask for my help; I offered it. If I had not offered to help him, he would have attended his first professional conference without a suit. Yet, he never would have asked for my help. If people in your life know that you are asking for money (either as a loan or gift) to go toward something that will improve yourself, they may help you. It’s not like you are going on a shopping spree at Nordstrom’s buying clothes you don’t need. You are improving yourself.
I see the suit I bought for Chris as an investment in his future. When he saw himself all dressed up as a real business man, he seemed both uncomfortable and proud. When he tried on his new shoes, he said how wonderful they felt compared to his cheap, beat-up, falling apart, super-glued-back-together, Walmart shoes. Though I wasn’t planning on buying him shoes, he needed them. First impressions matter and I want him to make a good one. Besides, the look on his face was priceless.
Bottom line: Ask for help. The worst thing people can say is no.
5. Raise the money.
A few years ago, I helped a client raise money online. She had accepted a new position in Portland, which meant moving across the country. While she planned to fly there and ship her stuff, she knew she needed a car upon her arrival. Given her status in the community, I believed people would help her. We created a fundraising campaign on GoFundMe, a “crowdfunding platform that allows individuals to raise money for events ranging from life events such as celebrations and graduations to challenging circumstances like accidents and illnesses.”
Her goal was to raise $2500 for a used car. As I had expected, members of both her inner and outer circles contributed to her campaign. She raised $1920, which was close to 80 percent of her goal. It was enough money for her to buy a pick-up truck.
Unfortunately, a friend of hers saw her campaign and thought it would be a great way to raise money … to pay his bills. I was appalled but many people have abused the purpose of GoFundMe’s platform. Raising money for a specific life event or challenge is acceptable; begging for dollars to pay your bills is not. We have welfare for people who need it.
If you are looking for money for your business, there are other crowdfunding resources that may be better suited to your needs.
- CrowdRise (for nonprofits, companies, and events)
- Gofundme (for individuals seeking funds for a specific purpose)
- Indiegogo (for entrepreneurs seeking various types of funding)
- Kickstarter (for people seeking funding for creative projects)
- Razoo (for nonprofits seeking a donor engagement platform)
Bottom line: Creating a crowdfunding campaign takes time, effort, and energy, but the end result is often worth it.
6. Sell your stuff.
Most of us have too much stuff. Why not sell the crap you don’t need or want anymore? When I was looking for other ways to find money for my business, I thought about the valuable items I had. Then I realized: I needed to sell my past to fund my future. For example, I sold my wedding dress, which I wore two times, on the “I do now I don’t” website. (I also listed my dress on Poshmark and Craigslist.) I sold my wedding band, worth less than $400, to a local jeweler. When I saw the delight in his eyes that my white gold band with five small diamonds was exactly as I had described it over the phone, I realized I should have asked for more money. But a deal is a deal.
When I researched selling my engagement ring, I found WP Diamonds; they will buy any legitimate diamond ring. When they only offered me $800 – $1400 for my beautiful, certified, one-carat, Marquise-cut engagement ring, I refused. My ex-husband had bought the ring in the Jewelry District of Los Angeles, a great place to buy direct from the jewelers, and he paid over $4000. The ring was in perfect condition; I only wore it on special occasions. I held out and found the perfect buyer on Craigslist. We met at my jewelers to reassure him my asking price of $2500 was more than fair. (The jeweler said I should have charged $3000.) Anyway, the man bought the ring for his wife to celebrate their 21st wedding anniversary. He had withdrawn cash from his savings account. I believe buying my ring is one of the biggest cash purchases this man has ever made. As much as I loved that ring, I know it went to the right person.
After I sold my most valuable items, I looked around to see what else I could sell. I didn’t care how small/invaluable the item was; if I didn’t need/want it, I was going to sell it. I sold an iPod that I never used. I sold most of my CDs and DVDs. I sold my barely used skis, which took some creativity as skiing is not a popular sport in Alabama. Luckily, one of my best friends lives in Denver and both of our parents live in the same region of Arkansas. When we knew we would both be visiting our parents during the same Thanksgiving holiday, I brought my skis to him and he took them back to Denver. I did all of the advertising and promotion, and my friend screened potential buyers. In return, I gave him 25 percent of the selling price. He sold my skis within a month.
Here is a list of everything I have sold to date on Craigslist (unless otherwise noted):
- ABS Allen Schwartz full-length ivory wedding dress (Preowned Wedding Dresses)
- Apple iPod Shuffle 2GB Slate — 4th Generation
- Certified Marquise-Cut, 1-Carat, Diamond Engagement Ring
- Custom-built, Over-bed Medical Table
- 14K White Gold w/ Diamonds Women’s Wedding Band
- Honeywell HEPA Filter and Air Purifier (I ended up not taking this couple’s money because they needed it for their sick daughter.)
- Stetson Rolling Leather Laptop Carry-on Luggage
- Women’s Head Cool One LiteRail Skis w/ Bindings
- Over 100 CDs & DVDs (Decluttr)
Sales site resources
- Craigslist (everything)
- Ebay (everything)
- I do now I don’t (wedding stuff)
- Mercari (clothes/accessories)
- Poshmark (clothes/accessories)
- Preowned Wedding Dresses (wedding dresses)
Bottom line: Everybody has stuff they don’t need. If selling your stuff helps you fund your dream, do it!
7. Call in favors.
If you’re looking to find money to fund your dream, now is the time to ask yourself: Does anyone owe you any money? What about favors? Have you ever gone above and beyond to help your friends/family? Would they be willing to help you now? Reciprocity is a powerful tool. If you have helped someone in the past, they will feel inclined to help you now.
In the film American Hustle, Christian Bale’s character says, “Always take a favor over money.” I agree.
Bottom line: If anyone owes you money or a favor, it is time to call them.
I believe motivated people find the money. Persistence moves more mountains than talent or genius. If you have a dream, do not give up on it just because you cannot find the money. Be resourceful. Remain determined. Go the distance.
Maybe the best example of someone following his dream with tunnel-like vision and laser focus is Rudy Ruettiger. All he ever wanted to do was play football for Notre Dame, but he didn’t have good enough grades to get into the university. At 5’6 weighing 165 pounds, he lacked the physical stature and athletic ability necessary to play football for a major intercollegiate team. As the third of fourteen children, Rudy did not come from a wealthy family. College was not considered an option.
But what Rudy lacked in genius, talent and finances, he made up for with persistence. Though this clip is from the movie, Rudy’s story is true.**
Before attending Notre Dame, Rudy spent time in the Navy, worked in a power plant, and completed two years of college at Holy Cross College (to get his GPA up). When most people had already finished college, Rudy started his junior year at Notre Dame. He graduated in 1976; he was 27 years old.
Rudy wasn’t born with a silver spoon in his mouth. He came from a working class family. He struggled in school but wasn’t diagnosed with dyslexia until he attended Holy Cross. He didn’t have the body or skill to play college football. No money. No grades. No athleticism. Yet, he played football for the Fighting Irish. How? By being persistent and resourceful.
Case Study: Virginia E. Abell, LMFT
Like Rudy, Virginia is an example of someone who has moved mountains to make her dream of a successful online business come true. Here is her story.
“I own a townhome and have been living with my parents since August 2016. I rent the townhome out as a vacation rental, which covers my mortgage and gives me an extra $700 per month in profit. It’s definitely been a humbling sacrifice and I can’t wait until I can live on my own again. I also took a full-time job in September 2017. I’m lucky that it’s a really great job that I enjoy. It has helped me to build back up my savings and have the necessary money for ad spend. There is no guarantee in business and I hope that all of this sacrifice pays off in the end. No regrets, though. I’d rather try and fail than never try and always wonder what could have been.”
Virginia E. Abell, LMFT
Licensed Marriage & Family Therapist + Affair Recovery Specialist
*I couldn’t stop thinking about that $200 Kate Spade bag. So I looked it up on Ebay and found a new one listed at $135 plus free shipping. The seller and I negotiated back and forth, but he wouldn’t go any lower than $120 and I wouldn’t go any higher than $110. Upon doing a Google search, I found the bag listed at $119 on the Kate Spade website. I received an additional 15 percent off my order for being a new customer. With free shipping and sales tax, I paid $111.15 for a bag that I’m sure I will love and have for a very long time.
Sometimes, you have to treat yourself as well as you treat others.
Also published on Medium.