Trisha came to my 4-Man Intensive from the Upper Peninsula of Michigan. Long ago she rented a house for $350 per month.
In Chicago that would fetch you a tin shack under a bridge – but up there in the frozen tundra it grants you 3 bedrooms and a nice yard. Gotta love small town America!
Not fancy, but the place keeps ’em warm when it’s 40 degrees below zero. She still lives in that house now.
She explained how a few years ago she was sorely tempted to buy a fabulous home, which would cost $1200 a month. (In Northern Michigan, $1200 a month buys you a LOT of house.) She almost did but then changed her mind.
Instead, Trisha started her business, which is now a thriving mail-order clothing company.
She said if she’d bought the bigger house, she wouldn’t have been able to fund her company.
I don’t know about you, but I’d much rather own a cash-generating asset than a money-sucking liability. Homes don’t make you money while you sleep. They generate repair bills while you sleep.
Some time ago I spoke of my deteriorating 10 year old Toyota Avalon. I asked everybody what they thought I should get.
Tons of opinions. Everything from “Hey dude, drive it into the ground if it turns your crank,” to “Treat yourself to a Ferrari.”
I bought a 2nd Avalon. Premium sound system, 42,000 miles.
Nothing to brag about by any means; just a perfectly respectable, comfortable car that’ll do its job for the next 5 years. It plays nice tunes.
Compared to that, I spend extravagant sums of money on education. During the same year, I spent 50% more than the price of that car, just sharpening my mental saw.
In the Dilbert Cube I drove a 1984 Toyota Tercel station wagon that cost $1300 and had a leaky radiator. I told my boss I didn’t think you should spend more than a month’s income on a car. Meanwhile I was always buying newsletters and business books.
I have *always* done that. What I invest in education exceeds the cost of both our cars combined, at least by a factor of 2.
I STILL don’t think you should spend more than a month’s income on a car.
Age-old financial wisdom says:
-Save 10%
-Give 10%
To that, I add: Invest 10% in your own education, personal growth and development.
Most people think doing any of those things is impossible, let alone all three.
Let me remind you that millions of people go into debt to the tune of $100,000+ for a college education. Some acquire no marketable skills and spend decades paying it off.
Six months volunteering for Greenpeace? Impossible, gotta pay those student loans. Start a business and eat baloney sandwiches for 2 years? Impossible, gotta get a J-O-B and make payments.
That’s slavery.
Nothing in business is more bankable than the ability to get and keep customers. Invest in that.
There’s no liberation like knowledge, wisdom and marketable skills. The compound interest you earn over five or ten years of aggressively investing in yourself is INCALCULABLE.
“Take my instruction and not silver,
And knowledge rather than choicest gold.
For wisdom is better than jewels;
And all desirable things cannot compare with her.”
-Solomon, 1000 BC
Perry Marshall
P.S.: Join me at 4-Man Intensive like Trisha did and skyrocket your business in the next 12 months
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About the Author
Perry Marshall has launched two revolutions in sales and marketing. In Pay-Per-Click advertising, he pioneered best practices and wrote the world's best selling book on Google advertising. And he's driven the 80/20 Principle deeper than any other author, creating a new movement in business.
He is referenced across the Internet and by Harvard Business Review, The New York Times, INC and Forbes Magazine.
42 Comments on “The woman who traded a gorgeous home for an even better business”
$350 per month?? I wish!
;-)
Seriously, this is a great reminder that the best place for your money, is making an investment in yourself!
If there is anything that I have picked from this article, this is it ”I’d much rather own a cash-generating asset than a money-sucking liability.”
You know what? People don’t value education. Go to any ghetto and chances are you will find a TV in most houses and not a single book.
Yet, it is education that gives one money generating ideas. Is any wonder that 2% of the world population own own 33% of the wealth.
I love your spend-10%-of-your-income-on-education advice. Surely a cheaper deal than the price of ignorance in the long run.
One of my latest ‘life lessons’ has been the true value of things. I never did see any valid reason for diamonds to be ‘worth’ millions when they neither toil nor spin. Bling, ’nuff said. Sure, you can treat them like an investment but then you’re a serf to market volatility.
True value seems to be lie in those things that create additional value. And it seems to be as true for spiritual things like love as it does for physical things like products, services and cash. People need to be appreciated–and often pay a lot when they are; from the kinder waitress who gets bigger tips to the positive comedian on stage to the promoter who helps you in business.
I used to work for a company that taught its salespeople to ‘love’ the customer (ie, treat them with dignity and respect and meet their needs through the sales process.) When they started to leave that behind, they went under.
Through wisdom a house is built,
And by understanding it is established;
By knowledge the rooms are filled
With all precious and pleasant riches.
Solomon
The post is very inspiring… Who would have thought she could possibly have a thriving and leading business if she never started it. She made the right decision and yes it is very clear and understandable that paying for something you can’t earn from isn’t worth living; but investing to something you can earn with can always be a good choice a wise person could have. Thank you very much for sharing this post.
Perry,
I bow to your PPC skills and marketing knowledge.
I myself was extremely curious what you bought.
Cars are not simply tools to some people. So I just assume I should disregard this post as one mediocre post in a sea of awesome-ness
Also, are we to assume you make ABOUT 20K per month only? (if I use your “I told my boss I didn’t think you should spend more than a month’s income on a car”
Just guessing & from reading you over the years, I assumed you make about 100K per month MIN. If you make only 20K per month, I would be floored that the leading PPC man on earth makes only 20K. Stop the presses!!!
So why not spend a months pay Perry? or even spend 50K on a nice car and enjoy it. Especially if you make more then enough. Because to you, its no more then a tool.
I feel there is a ceiling for cars also. But it all depends absolutely on your income.
Either I am totally shocked you make so little, or you don’t practice exactly what you preach?
That question above is most important to me.
I post this with all respect. And I thank you from all of us, for the shared wisdom over the years.
S
I spent quite a bit less than a month’s income. Why not spend $100K on a car? Because it’s not an asset, it’s a liability. More thorough answer here: http://www.perrymarshall.com/18217/what-kind-of-car/#comment-43661
If you see a car as a liability. Then, to me this post is like a “no duh”.
The # 1 car among millionaires is the Toyota Camry.
Thanks for the reply. No need for another. Thanks
Steve, you raised a great question and there’s an extra angle I’d like to add.
It would be E-A-S-Y to justify buying a $100,000 car if I used it as bling. I could probably measure and prove that the car paid for itself one or several times by using it as “proof of my success” yada yada yada, you know the drill. Entire multi-billion dollar industries have been built on exactly that.
But I think it engenders irresponsible behavior in my customers and ultimately does them harm. It also attracts the wrong kind of people – ignorant starry-eyed newbies who, at some level, think they’re gonna get something for nothing. It doesn’t attract the kind of people I LIKE to work with, who are informed, level headed, competent entrepreneurs who love to throw themselves into the work of building great businesses. That’s what my Roundtable members are like and most of them buy cars and houses – and invest in businesses – much as I do. The number of people for whom a $100K car is truly an investment is vanishingly small.
I believe that everything we all do is ‘sowing and reaping.’ If I sow a $100K car I suspect a lot of people are going to reap debt and frustration, even if I personally benefit from it.
Hi Perry:
I agree with Steve about the whole making just $20,000 a month being you the biggest guy in PPC.
You are someone many of us look up to and in the world we live in the car you drive shows how successful you are.
For a marketing person I don’t think the car is a liability. I think is an asset. If I go to a customer to sell them my ppc services and start talking about I am so good and how I will generate them 1000s of dollars I should back it up with my “successful looking persona”. I don’t think a ford, toyota or any cheap brand name car will do it.
I also think that owning a car ( or something else) that is a status symbol help us “feel” successful. I think is important to spend money in ourselves. Nice house, car, beautiful stuff. Ideally paying cash or getting into very little debt. Saving and investing is good but we need to live the now too.
I like to buy art, and I feel successful when I look at my paintings and I think, wow I made it, I can afford this beautiful piece.
You can’t go wrong with investing in knowledge that makes you money down the road. At some point after following that strategy huge dividends will be able to be cashed in on whatever you like with very little effect on your finances. It may take a while, but if you can wait you won’t just look rich, you WILL be rich.
Great post! (as always)
“The Millionaire Next Door”, is a good profile on living below your means and why it makes financial sense to buy an Avalon instead of a Ferrari. Based on your financial sensibility, sounds as though you may have already read it…
Perry
Right now you are the voice of reason in my crazy everything is blowing up around me life.
My wife is not good with stress and financial pressure but really who is,so me being a constant seeker of wisdom and knowledge keep buying the books on copy writing,direct response marketing, sales, working on the skills needed to be the best in my field,marketing,writing direct response copy,
the income is not there yet, so I tend to hear in the back ground,you know the whispers,I don’t know what he’s doing but maybe he should get a job.I hope you know there are a lot smarter people than you that can’t find work?
This is the Home where I work and live,have you ever had to deal with this?
It comes from my wife who doesn’t get it and even when it is explained it still does register,she is concerned and worried,me on the other hand know things will work,just pushing for things to happen sooner than later but in the mean time we just keep buying the books and the audio even sneak in a seminar when I have something that does not require a tremendous expense.
My question to you what would you do?
find work that is copy writing direct marketing and be paid very little or continue to grind and hone my skills on my own picking up work where I can?
I have been in a constant state of forward motion I am seeing things clearer but I am not just dealing with me I also am concerned,for my spouse and her sanity. We are not missing meals or even close but a major shift in income and lifestyle, for me it’s just a different season.
Thank you for the great things you say and do..
Pete
Negativity from a spouse can be a big deal, you might considering working at an office away from home. You need to be in an environment that’s primarily positive not negative.
Getting a DM type job, or any job that moves you in the direction you want to go, is OK too.
Perry, this is an other awesome letter/ piece. Thanks.
This was a story I needed right now because I’ve decided to build my freelance writing into a business. Since cars isn’t my thing, but I do own a 1994 Mercedes. Safety and reliability were my most important reasons when I bought it. Now that it’s paid for, I drive it like I stole it and unless it comes a time it’s not repairable it’s what I’ll tootle along in for some time to come.
Great blog. Made me reflect on our two cars that are 10 years old and counting! Haven’t taken the time or energy to go get a new or used car since it is beyond my imagination to spend the amount a different car would cost. No doubt I can afford it, but…..
My cars just about date the time I started using your services and knowledge. Must admit, I’ve gotten better “milage”, MPG and traction from your sage advice than my vehicles. Looking forward to hearing more of your “words of wisdom” in the coming ten years +.
Regards,
Joe
Perry,
Your three 10% are good to follow. Right something for living without credit cards. The moment Americans learn to live without credit cards 80% of their financial problems will go away. And their majority problems re financial.
We should know millions are living nicely without credit cards in many countries.
Our two big problems are consumption and saving. We waste too much and save nothing.
Think of electricity. Average bathroom has light with four to six bulbs. Do we need that many for lighting.?
Mukesh.
Perry….
Thanks for the great post. It’s ironic that your story comes at a point of discovery that I’ve made a few years back by friend/mentor who has taught this same principle (through self education). He has transformed this idea into a video called “What The Wealthy Buy On Pay” which can be viewed by the link provided.
Although we who desire to achieve more, must sacrifice on certain comforts to obtain our goals as previous comments have been made. It must also be stated that to get to your goals there must be vehicle that can get you there. Although I’m working toward this goal myself part-time, my full-time job & the company I work for has also shown me inspiration, as the vehicle this wealthy family in this country has built just amazes me that is based on basics of human everyday needs. Again, my link can shed some light on that aspect as well.
Thank you Perry for your insight, feel free to connect for added value. I may be able to provide you means of added reach to your future subscribers.
Some think that DR is short for doctor but it actually means “Debt Regret” lol
Hi Perry:
Thanks for the interesting read. Any particular reason you did not mention by name Trisha’s business ?
All the best,
Eddie
I didn’t know if she’d want me to mention it, and needed to get the email out this am.
Your comment about cars is of particular interest to me right now. My wife wants/needs a different car. She currently drives a 1986 Honda Accord bought new, with about the same mileage as your new Avalon. But with cars some deterioration is age related, and some is mileage related. So I agree with her.
A used Avalon is something we are considering. Should the fact that you have bought another Avalon be viewed as an ringing endorsement of the Avalon? Is it prone to high cost repairs like my own elderly BMW? Or did you just find a deal you couldn’t refuse.
Avalon is inexpensive to maintain and I looked at a half dozen different models and chose to buy another one. My old one was finally starting to get expensive to maintain after 10 years so it was time to get rid of it.
Wow Perry! You sang my song today with this post. I just “jumped off a cliff” so to speak with my personal growth and development, signing up with an extremely high profile business coach in the raw food world and at one of her highest levels. I agonized and cried many tears last year when I did something very similar, but this year I agonized just a bit, prayed, and committed. Not sure where the money’s going to come from, but I know in my heart that in order to give my best to my business and to my clients, I have to be my best self. Thanks for the confirmation!
Oh, and I drive a “dog house on wheels” as it’s affectionately called by my family. Its got 205,000 miles on it and since I just bought a “new car” called personal development and education, I’ll be praying my doghouse holds together for another year while I take my business to a whole new level!
Love your blog and your authenticity!
Ginny Edwards
You are SO right! My husband and I are both self-employed, runnin’ on the ol’ gerbil wheel, and broke. We have too much overhead, and we’ve cut almost everything except utilities and mortgage. Sucky way to live. But more to the point of your article, it’s a really hard environment in which to start a business, which is what I’ve been doing for the past few months. No time, no capital.
I’ll make it happen, but it sure would go faster if I had less overhead!
I agree with you Perry, cars are a huge waste of money. It’s much better to use that money to invest in yourself. And when the dividends start rolling in, give some, save some and reinvest.
Thanks, but I wish I had gotten this advice 10 years ago.
Great article. I love the story and can really relate to it. I left the Dilbert Cube in early 2006. I ate Costco baloney sandwiches for several years and my car story is almost identical. One months income is a great rule.
I enjoyed your story because I have used the money that I would have spent on a new car, to justify, to myself, my start-up business expenses. When people ask me how much I have spent on my business, I just say it is my new car, as I drive away in my 14 year old acura.
I’ll never buy a NEW car ever again ( UNLESS I get as rich as Frank K or You Perry)!! Especially a Peugeot. It was the worst investment I ever made:
2006 Peugeot 206
Purchase price: £9,500 ( on HP – yes I know big no no )
When I added up my redemption fee plus all the maintenance it came to a whopping £18K. I could have got a second hand beamer for that!
It was great until the warranty was up – then it was like they had programed it to self destruct!
HOWEVER – one point I would like to make about investing in education INSTEAD – and this is speaking from experience – knowledge is nothing unless implemented / acted on! And once implemented they need *time* to root.
Debbie :-)
Hey Perry,
Great Wisdom!!!!
The book… “The Millionaire Next Door” sheds a lot of light on this. It really puts things in perspective, and helps you to discover your priorities.
Ron
Howdy Perry,
Well, I myself drive a current year Self. That is, I haven’t owned a car since my 10-year old Ford Escort died in mid-August 2010. Why?
Like you said, better to own a cash-generating asset than a money-sucking liability. When I need to travel somewhere or take a break from things I simply have Enterprise pick me up! LOL
I haven’t been a Dilbert Cube occupant going on to two years now, and I want it to stay that way. The lack of such a money-sucking liability leaves more laying around to continue staying free of the Dilbert Cube, which is priceless beyond compare to me; especially when you have blizzards blowing through here at 30 below the donut.
Not only that, I’m in the best shape of my life thanks to all the walking I do to go about my affairs.
Best Wishes,
Felix
Great post Perry, although its easier for me to drive a 2001 Peugeot, because I’m not that into cars. It’s safe, comfortable, looks OK and it can easily exceed the speed limit. Plus I paid for it in cash so I haven’t had any car payments for 6 years. I invest loads into business and every time I try, I’m getting closer and closer to creating the perfect cash generator for my skills and interests. That’s what the fun is about for me. Keep doing what you’re doing Perry, you’re changing lives.
So true Perry, possessions can become a form of slavery and when you are in bondage to things.
Your comment is timely as I just saw the Clinton Foundation’s ‘Decade of Difference’ video on Yahoo and I remember Jack Black singing about solving global issues through business solutions.
A thriving Internet business can be one of those solutions. Eager to hear more from you and how we can create an innovative business that does more than satisfy our own desires, but rather makes a difference.
“the borrower is slave to the lender” Proverbs 22:7
I drive a 99 Camry. I have a big enough ego wothout driving around in a “look at me” car. Also, without a car payment I have more $ to invest in planet perry.
There’s definitely nothing wrong with nice cars but it’s unbeivable to me what people spend. Most people look at the monthly payment instead of looking at the true cost.
If you can’t pay cash you can’t afford it. And by the way, it’s just a car!
Thanks Perry.
Perry,
Very, very sage advice.
Our society has been brainwashed into thinking that owning stuff is a sign of making it and that spending $200K on an education that pays you $60K is a good investment.
I avoided buying a new car like crazy until, you guessed it, I wanted to impress a girl [I thought I outgrew the need to this when I left college…sigh…].
On your topic about “education”: I recently had a conversation with my niece who graduated medical school. I shared that she better like what she’s doing b/c she will be in debt until she’s older than me now [I am 18 years her senior]. Not sure if it sank in.
I spend a HUGELY disproportionate amount of my money on travel and education. I did a “regret minimization” exercise a long time ago — I wouldn’t blink if I never owned a fancy sports car or a big house (they end up owning you anyway) but not seeing the world and meeting cool people (like you) — that would be a big regret.
Best,
– Alex –
Thanks Perry…
A couple comments –
Buy a Ferrari. I owned a Ferrari Dino 246gt for 7 years. Had more fun in my $2,000 Alfa Romeo that I owned in college because I could treat it like a car, not like my net worth. By the time I sold it, I had determined NEVER to own another until I could treat it like a car (or like Peter Sachs treats his 335S on the race track).
Save 10%, Bank 10%. Wise words. But I came up with a goal a few weeks ago to give away 50%, bank 10%, save 10% and still have a 1st class lifestyle. What a heady goal to strive for…
I always enjoy your blogs – and never let anyone talk you into NOT sharing your faith because of the possibility of offending someone!
Highest Regards
Hey Perry,
One of the things I love about you is that you are so down to earth. I’m sure you could afford a fancy car and all kinds of luxuries, but that clearly isn’t as important to you as the freedom to spend quality time with your family and with helping people gain their freedom too!
This is often so lacking in the marketing world. A lot of the other gurus are selling people on the idea that they too can have the fancy car and the million dollar mansion when really that’s not what’s going to make the biggest difference to people’s lives.
Thanks for keeping it real Perry!
Michael Arnold
London, England
Hi Perry,
Good stuff. I quit a job with a professional level salary last spring to strike out on my own (much of my motivation came from Planet Perry). I’m still in the ‘bologna sandwich’ phase of growing my businesses but we are profitable! Unfortunately the profits pretty much are all going to paying the bills for now but soon I’ll be able to afford more educational products and yours are at the top of the list.
Brilliant Perry…as usual…thanks for the heapin’ helpin’ of inspiration…