Next Level University

#1597 - 3 Places Your Money Is Going

• Kevin Palmieri and Alan Lazaros

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Have you ever found yourself teetering on the fine line between just getting by and genuinely flourishing? In this episode, Kevin Palmieri and Alan Lazaros unravel the delicate art of financial equilibrium, sharing a wealth of personal experiences and actionable insights. The topic dissects the significance of budgeting to survive, live, and thrive, ensuring you safeguard your needs, enrich your life, and secure your future.

Links mentioned:
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Next Level Monthly Meetup #26: “3 Words You Need to Remember if You Want a Next Level Relationship” on February 1st, 2024, 06:00 PM EST - https://us06web.zoom.us/meeting/register/tZUrf-6vpj0jHd3dtDOIDDagugoZEJ2Zz14I#/registration

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Show notes:
(2:35) Emilia’s Framework: Optimizing Expenses
(4:55) Three buckets of finance
(6:47) Proper allocation of your investments
(7:43) Depth of thrive to survive?
(9:10) Look at where you are spending money on
(10:56) Societal myths that equate material wealth with fulfillment
(13:01) Meet like-minded people and jumpstart your journey to achieving your dreams while optimizing your life. Join Next Level Group Coaching.
(15:50) There’s no immediate return
(17:43) Be strategic
(20:33) It’s a great place to start
(25:41) Outro

Send a text to Kevin and Alan!

Kevin:

Next level nation. Welcome back to another episode of next level university where we help you level up your life, your love, your health and your wealth. We hope you enjoyed yesterday's episode, episode number 1596 the number one thing we wish we knew about relationship sooner today. For episode number 1597 happy Tuesday. If you're listening to this, on the day it drops three places your money is is going. We, as we mentioned in a previous episode, health, wealth, life and love. Those are the pillars of next level university and I realized we don't talk about Money, wealth, making money, whatever it is, our relationship with money as often as we do other things. So Alan and I were talking and I said what do you think we can do for a valuable episode on wealth, on money? And he said actually, emilia and I were having a conversation and I think that would make a very good podcast episode. So I'm gonna kick it to Alan because this is Alan's well, alan and Emilia's framework and we'll see what comes of it also known as shmoney shmoney, shmoney shmoney.

Alan:

So this is not Alan and Emilia's framework, although I appreciate it. It is actually just Emilia's, just Emilia's. But we did use it in relationship talks, coaching. So we had two clients who are looking to buy a home and the road to their home, their dream home it has been paved, so to speak, in advance, and we've got a timeline, we've got a down payment, we got all this up, but what we needed to do first and foremost was there's there's two main ways to to Make more money. You can make more or you can save more. Essentially, we talk about the three fundamentals how do you earn more money, how do you lower your expenses or optimize your expenses, and then how do you invest the difference? So in this case, the investment they're looking to do is the home. They are already earning as much money as they can. They're picking up extra odd jobs. They're they're dogs sitting on the side, they're house sitting on the side, they're doing all kinds of cool stuff, and then they're also.

Alan:

The one we're gonna focus on in this episode today is optimizing expenses, and so Emilia had this whole spreadsheet set up for her clients. She does this with her one-on-one clients. She also does this with, obviously, relationship talks, coaching, clients, and the spreadsheet essentially just has main expenses on it and it's a blank sheet. No numbers on it yet, just columns and the. There's a.

Alan:

There's a column that has three Categories and I thought this was really really cool, so cool that I wanted to bring it to the NLU listeners. All right, so she has all the main things like rent slash, mortgage, you know, utilities, internet all the main ones and there's a column that has the three categories to survive, to live and to thrive, and I thought that that was a really, really cool way to think about it. And so everyone out there watching or listening to this, I want you thinking about your life, I want you thinking about your expenses, I want you thinking about where your money is going and I want you to put those expenses that you're thinking of in one of these three categories. Now, obviously, you're not in front of a spreadsheet right now, necessarily, but you can do this exercise in your journal at home.

Alan:

Whatever you want to do, I actually have it in my journal my dreamliner. I was doing this earlier today. So the first bucket is to survive. These are the things that you absolutely need. So food, shelter, clothing, things like that. Then the next category is to live. Now, to live would be I Don't know you could throw probably Netflix on that. You could probably throw Going out to eat on that. To live, you could probably throw maybe your car payment on that if it's a nicer car. You know you don't necessarily need a luxury car to live, but you know that that goes there.

Alan:

And then the third bucket and I think the most important bucket and the most neglected bucket is to thrive, and To thrive is an investment in the future. So to thrive, you could put an online course on there. To thrive, you could put group coaching on there. To thrive, you could put books in that. To thrive, you could put Going back to school. To thrive, you could put what's another good example of to thrive? In this case the relationship talks coaching that these two people are investing in.

Alan:

So this is what I wrote in my journal this morning it needs to be 33% in each. If you're too heavy on survive, no fulfillment or investment in the long term will happen. If you're too heavy on thrive, you're overextended and at risk. So if you're too heavy at Thrive and you're just buying a bunch of courses but you can't pay for food, you're in trouble. But if you're too heavy on just survive, you're basically only surviving and you're not building a bigger, better, brighter future.

Alan:

And so I really like the framework Emilia came up with of to survive, to live and to thrive, and when you break down your expenses and you put them in those categories, I think it can really help you figure out if you have good balance. Again, balance is probably the wrong word, but I'll call it allocation proper allocation of your investments, because someone who's only ever investing in the future at the expense of the now is overextended. Maybe they're taking too many courses, buying too many books, doing too many things at the expense of their basic needs, and if the economy were to crash or something bad were to happen, maybe they don't have enough cash on hand to survive or to live. But someone who's only ever surviving, who never, ever takes that trip or never, ever buys that course or never, ever tries that coaching, that's also not thriving, and so you can't be on.

Alan:

You know, at NLU we're very focused on drive to five. Drive to five means you have expenses in the survive bucket, you have expenses in the live bucket and you have expenses in the thrive bucket, and you're harmonizing all three and you're in proper proportion, whereas if you're at one of the extremes overly abundant or overly scarce, overly surviving or overly thriving you're probably in trouble.

Kevin:

And I guess you could probably say that it's the old sliding scale where, depending on where you are, your ability to thrive I don't want to say your ability the depths to which you're able to thrive are going to be connected to where you are in terms of surviving. I know there's times where I would buy like a $9 book or maybe a $20 book, but that was. I wasn't going to go much higher than that in terms of where I was going to try to thrive, because I was struggling financially and I was more worried about okay, these are the bills that have to get paid. With what I have left over, which back then was less than zero, there was not enough money to cover those bills. Never mind anything else, I wouldn't pour into the thrive bucket as much.

Kevin:

But as that started to pivot and there was a little bit of money left over, that's when it was okay, let's do this, let's do this, let's do this. I remember when we got the podcast studio. We had a podcast studio during COVID, but that was one of those things where that was tight for us at the time. It was like $550 a month and we said I think it'll be worth it for the future, but in the short run it's just going to cost us money, but we're at a time where I feel like we're safe enough to be able to do that and not be overly scarce.

Alan:

That was in the thrive bucket. Yeah, the thrive bucket is about the future, investing in the future. The live bucket is investing in the now and the survive bucket is basically just making sure you're staying afloat. And a good example of this would be if Kevin and I suddenly hired 10 random new people and we overextended and that was a bunch of money that we couldn't afford and we were trying to build the future on that. That would be very dangerous, because if we lost a couple of clients we might be in trouble. That kind of thing it's overly scarce. Whereas if we never invest in team and we do everything ourselves just to survive, we're never going to build the bigger, better, brighter future and NLU is not going to grow.

Alan:

And so the two ways businesses fail but also the two ways humans fail is they either grow too fast or too slow.

Alan:

You're either not investing in yourself at all no books, no courses, no coaching, no therapy, you know, and you're just surviving and not really thriving or you're overly focused on buying all that stuff and spending too much money at the expense of your own survival. And again, you know it ebbs and flows and it depends on your core values. It depends on what you what you value in terms of variety and fun, unique experiences may maybe survive. For you is a trip once a quarter, whereas for me that's not survived. Survive for me is I'm not not renting a movie, that kind of thing, and so it depends on each person. But at the end of the day, I think it's a really cool If you were to do this analysis, look at what you're spending money on and realize, holy crap, my thrive bucket is completely empty. Maybe you start small, maybe you start group coaching or get a new book or whatever it is. If you realize that your thrive bucket is really full, maybe you're overextended and maybe you're in danger if you were to lose your job or whatever.

Kevin:

I, if you showed me this framework when I was like 23 years old, I would have said my thrive bucket is full, because at the time I probably thought to thrive was to have nice things. Maybe not 23, let's say 24, 25. I thought if you said, if you said where is your thrive bucket? I would say, well, I have a nice car, have a nice apartment, I have a lot of money in the bank, like I'm great, I am thriving right now, for sure. So even that label, I think is, is super helpful. I was, I Was living and I was living pretty well, but I thought that was to thrive how would you categorize it now, because?

Alan:

I would say that's more living.

Kevin:

Yeah, I would say. Yeah, I would say living, I would say living. Most of what I was doing was really good for the present but not good for the future. It made me feel really good in the present. It made me feel really good in the present, but it did not set me up for a successful Future. So even that, even redefining what that means to you, yeah what does thrive mean to you?

Kevin:

because I think for a lot of us we think at least I'll speak for myself I'm Doing really well now. That's what I used to think of when I would think of thriving. Thriving is to succeed, quote, unquote. But to your point, if you're looking at it, at it in a vacuum, and it's right now, that doesn't necessarily mean you're gonna be thriving two, three, four, five years from today. But I again, I remember when you and I had a conversation very early on and I said I don't know, man, I don't really get it like, why should I read? This was serious conversation and maybe you've dealt with the same thing whether you're watching or listening. I just couldn't fathom how a book was gonna help. I just it didn't make. It didn't make any sense to me, I could not grasp it. So I was not really set up to have long-term thriving success back then, like I am today.

Alan:

I Remember back in college I was absolutely broke. I remember I painted up in Maine for eight dollars an hour and it was just struggle bust because I had so little money in college. I remember some of my friends from home. They had full-time jobs and they had what seemed like a lot of money. They leased cars, they had new cars, that kind of thing and I was broke.

Alan:

I drove like a I don't know $2,800 cars, something like that. And I remember I used to think back then well, my education is really expensive. Fortunately, I got scholarships and financial aid and and my mom helped a bit. But I was going into debt and I was paying a lot of money to go to WPI and but I remember thinking like one day this is all gonna pay back.

Alan:

And then some right, it's just like someone you know going to medical school, right, I mean, it's a ton of money up front, it's a ton of time and effort up front, there's very little return. But later on they end up very Successful and so thrive is a lot of times actually Deceiving. Someone who's thriving might look like they're not thriving, and and I think that that's you know. If you saw me in college junior year when I was painting houses in Maine I'm actually writing a blog about this right now and you would have said you would not have thought I was thriving. But three years after that I was making six figures and and it's a drastic increase.

Alan:

When you spend for five years in college, I stayed for my masters and You're basically just trying to survive through college and You're investing in your own education, you're investing in the degree, you're investing in your future. You're investing in your career. You're investing in your resume, you're going to career Career events and you're interviewing. I remember I interviewed so many different places and you know it's interesting because all of that is working toward thriving, not necessarily living, and I lived in college too.

Alan:

You know, I found ways to have a good time, for sure, but at the end of the day, thriving can be deceiving. So just remember that. And a Lot of people think of going to college as an investment in their future, but people don't necessarily think that way of buying a book. I I spent $59.99 this weekend on Audible because now they let you do five credits at a time. I think, yeah, five credits at a time, and I think it's more expensive. On the iPhone, I think Apple takes a cut. I'm not sure. I probably should just go to my laptop because I probably would save four bucks or whatever. But the point is is I just had this book that Emilia recommended and I'm. I just was like, okay, let's do it. I trust it. I trust that that investment in my brain is gonna pay off. But remember, the Thrive bucket sometimes takes a long time, a long time, to pay off and and there is no immediate return. If anything, it's actually an immediate hit.

Kevin:

Is the well, I guess if you think about it when you're surviving, it's an immediate hit. So it's almost the opposite. When you're trying to thrive, it it should take a while, if you think about it. If we're thinking about it on like a I'm not going to talk about the Libra Scale because I can never explain it but if you're thinking about it on a spectrum, survival is super short term, thriving is super long term, yep, and you need both.

Alan:

Yeah, kevin, I used to have a healthy discord in business about long term versus short term and which one's more important. And I would say, brother, the long term is so important, you got to think long term. You got a XYZ and he's like, yeah, but if we die on the way, he's like what? If there's holes in the ship, man, you got to plug the holes.

Kevin:

I was always like, yeah, but we're headed for the horizon. It was always my fear we might see the horizon as this ship is going down. Get a good view of it.

Alan:

The truth of the matter is Kevin was naturally inclined for survival, I was naturally inclined for thrive and we need each other to balance out. And again there's that word balance. I don't mean balance as 50-50. I mean in different chapters there's going to be a different level of like. If you don't have any money and you're bootstrapping, obviously I'm not saying to go buy a $12,000 course. I don't think that's a good idea. What I do think is a good idea is be strategic. Like if you're surviving and you're struggling paycheck to paycheck, but you can afford maybe a $20 book, start there, you know, and just make sure that you don't have any of the buckets completely empty. Because if you're only surviving and you're not living at all, you're also going to be deeply unfulfilled and that's not sustainable either. And if you're really, really, really.

Kevin:

We've talked about this before. Circumstance matters, but we can use it to a point where it holds us back and we can live behind the circumstance and it can be an excuse. But there's also the other side of that, where circumstance really does happen and sometimes you lose your job or there's a death in the family, or your car breaks down and crap hits the fan and you're in a very, very scarce place. Youtube is free. There's a lot of free things out there. If you want to thrive on a budget. There's a lot of real, I mean, there's podcasts a million podcasts now. There's more than that but a lot of these podcasts have really good information.

Kevin:

You can probably find books at used bookstores for super cheap, maybe a couple bucks. I have Tara and I went to a used bookstore. I got like five books for 15 bucks or something. But YouTube there's so much on YouTube. Alan and I were having a discussion maybe last year and I said I want to learn more about math because at the time I was doing the CFO stuff and I was taking watching courses from MIT on YouTube, totally free, and I was thinking to myself I can't believe this is free. This is wild to me. Did I have any idea what they were talking about? No, not at all, but it was cool that I had the opportunity, you started at the yeah.

Kevin:

I started at the top of the mountain. Yeah, I started at the wrong place. But my only point with that is no matter how stuck you might feel, no matter how much you're just trying to get through, there are some options out there. To Alan's point some people would say I don't care if you're broke, spend your last $12,000 on a course. No, I don't think so.

Alan:

No, I think maybe that's terrible advice. It's not good advice.

Kevin:

It's awful advice. It's the same thing. If you're down to your last $150, I would probably put it towards your bills before you do anything with us. I think we can really really help you. But you got to pay your bills. You got to pay your bills first. But on the other end of that, let's just not use it as an excuse not to try to do better. That's all. It's just that fine line, that very fine line. That would be my long overly drawn out next level nugget.

Alan:

Earlier today. Last thing I'll share I told Kev that I've been really enjoying Jim Collins books about business. How the mighty fall good to grade all these different books. And he's like, does he have any online courses? And I was like I don't know why I haven't checked. I've been on YouTube and I didn't find a lot on there. We went to his website. There's a bunch of free stuff on it.

Alan:

Yeah, so there's a bunch of free stuff for those of you who are struggling. Now. Tiny caveat I do think that, typically speaking, the free materials are not quite as good as the monetized ones, but that doesn't mean it's not a great place to start. Nlu included, right. This podcast is free and that's on purpose. That doesn't mean it's as valuable as group coaching. Group coaching is more custom. We can talk to you directly, we can get to know you directly, we can have you do homework, we can have a guidebook. It's much more interactive and it needs to be that way.

Alan:

But I started with all free content. I remember back after my car accident, 26, nine years ago, I went all in on YouTube. I mean motivational videos. I still have many of them. I did, I started there. So it's a great place to start.

Alan:

And then the more and more you grow from that content, the more and more successful you'll become, then the less and less broke you'll be and the more and more you can invest in your Thrive bucket. And so maybe you start right now with 5% in Thrive and 45% in Live and 50% in Survive and then, little by little, year by year, you can put more in Thrive, more in Thrive, more in Thrive, more in Thrive, and then start thriving, thriving, thriving, and then the percentages stay the same. Eventually it's 33, 33, 33, 33, but the numbers get much bigger. And I know I promised the last thing I say, but I always say things like this I don't know if it lands or not, but a company like Google has a department called Research and Development and they take 20% of their revenue and they reinvest it in research and development. Research and development is just essentially how do you innovate better and better products? How do you invest in the best scientists and the best data and the best tools?

Alan:

My point is if Google's gonna invest in themselves in order to grow, why are we any different? And so hopefully that lands in a new way for people. But all businesses have to reinvest in order to build a bigger, better, brighter future. I think the same is true for all human beings. You have to do that with your home. You renovate your kitchen, you renovate your bathroom, you do the downstairs, you landscape so that when you resell the house it's higher value. And the same goes for you in the economy, and it's the same concept. So hopefully you have enough self-worth to really take that 5% and put it back into your own personal development. It is a practice for sure.

Kevin:

It is a practice and it is a learning curve, especially if you're dealing with self-worth. Maybe we'll do an episode on that in the future how your self-worth is connected to your Money mindset. There's gotta be something there. Definitely you dig it. Next Salvation If you are looking for something that's free, that is valuable and a great opportunity to meet other amazing people like yourself who are into growth, into having conversations like this. Sometimes conversations around money can be uncomfortable. Even as two podcast hosts, it can be weird to talk about money at times Just because you don't know where people are and how people are gonna respond to the words you say. But we have a private Facebook group called Next Salvation and it is all about this, all about how to get to the next level, the unique level of success in your life. Link will be in the show notes, as always. We'd love to have you there.

Alan:

It has gotten better. Though Talking about money used to be more uncomfortable, I feel much more comfortable these days talking about it.

Kevin:

I feel very I put a lot of that on. Yes, we've done a lot of work. So, yes, kudos to you and I for doing a lot of work, but I feel very safe with our community. That's a big piece for me.

Alan:

Say 100% Okay. So we also, speaking of community we do monthly meetups every single month for the new listeners this is for you, for the old listeners I hope you join us. Old listeners I don't like saying that Listeners who have been with us for a long time you know about monthly meetups because we've done 26 of them. Three words you need to remember if you want a next level relationship. I did not practice these three words to the extent that I wish that I had in the past, and these three words have become the foundation of the way I handle my relationship with Emilia and they have been absolutely critical. I hope that you join us. You can keep your camera on. You can mute your mic. You can participate as little or as much as you'd like. The registration link is in the show notes. It is the Love Month. Valentine's Day is coming up and we wanna make sure you are prepared to have the best Love Month possible Tomorrow for episode number 1,598, almost there, I hit 1600 this week.

Kevin:

Two questions to ask yourself when you are down, if you noticed any lack of energy from me in this episode. I am riding the struggle bus in this very moment and that was the inspiration to do that episode tomorrow. There's a lot of stuff up in the air, so that episode will either be darker and more sad, or upbeat and happy. We don't know yet, but we'll know more, probably tomorrow. So tune in to find out. As always, we love you, we appreciate you, grateful for each and every one of you and NLU. We don't have fans, we have family. We'll talk to you all tomorrow.

Alan:

Keep dialing in your money. Next episode nation.

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Alan Lazaros

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Kevin Palmieri

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