You're about to discover how rich people respond to financial loss and how it is in direct contrast to the way poor people typically respond. Some immediately think, "Yeah, of course rich folks respond differently to financial loss than poor people; the rich have the money to pay for them!" Although that may be true, it's not always the case. Sometimes rich people suffer huge financial losses. One of the things that separates the rich from the poor is how they respond to the inevitable financial losses that occur. How do you respond? Find out if you respond like a rich person or a poor person in this video:
My Story
I purchased a property and my contractor has been in the process of renovating so that I can resell. I put the utility bill in my name at the end of October. The utility bill would not be created until December 15th and would arrive in my PO box. The water bill was $2000 for one month, $1000 for consumption, and $1000 for sewage
How did I handle this?
First I found out what the problem was:
I called my contractor to find out if there is some sort of plumbing leak but the contractor did not find one. I called my plumber and he could not find a problem either The meter was correct so the plumber told me that the utility company did not make a mistake. We could only guess that there must have been a leak that continued to drip due to me not turning off the toilet water.
Poor Person Mentality
Someone with this mentality never takes the blame! A poor person could look at this situation and blame the utilities company, or feel scammed. Possibly even demanding their money back, that something must be wrong.
Rich Person Mentality
In contract, a rich person accepts the blame, learns a lesson, and pays the bill. Rich people call financial losses lessons. The bigger the loss the bigger the lesson.
My Financial Loss Tip
Make a written list of all expensive learning lessons you have gone through. Periodically review this list. You will be less likely to run into the same problems. You can always create more money by utilizing the lessons you learn.
Have lived and owned property in multiple states (one at a time) and am now retired and ready to move hopefully for the final time. Hope to buy investment property which may be across state lines. What can you advise as far as tax reporting for multi-state rental income? Note; All properties will be within 100 miles of each other. Thanks
Ask an accountant who truly understands real estate as it pertains to taxes.
Dang…I’m half way through The Billionaire Who Wasn’t…so now I know he doesn’t keep it…no worries I kind of knew that before I started. I read Unbroken about a year ago, unbelievable story and now it’s a movie(movie doesn’t do justice to the book IMHO). BTW, I’m going to finish your videos before I seriously consider your apprenticeship…I’m loving your videos and info….spot on, you’re a natural teacher and your life experience supports/proves it!
Chuck Feeney is a remarkable human being. I recently visited the Duty Free Shop in the Honolulu airport where he got it all started. It’s unbelievable how much money that little store made.
I have to say , I would have called and asked where the large water bill evolved from, unless it is normally high in the area, as I did receive a utility bill that was high on one of my properties, no one was living in the house, and I had just purchased the property the month before. They wanted me to pay for the former owners bill that they couldn’t collect on. I explained that I had just purchased the property and hadn’t used any Utilities and had just gotten some of them turned on in the last week , it was summer time. and that there wasn’t anyone in the house, so how could the utility bill be so high. The utility company removed the billing . It wasn’t mine to have to pay. They had made a mistake. Similar things have happened to me on other houses ,, paying for someone else’s utilities because they put the wrong account number on the billing, I always check to find out if there is a mistake before I pay an exorbitant bill.
best wishes
Mark
In this case, unfortunately, it’s not a mistake.
So, any insight in how the water bill escalated to that amount ?
We have isolated the issue to either a water hose bib leaking or a toilet.
I had a similar experience on one of my property that I bought about a year ago.
There was a slight leak in an outside faucet, I noticed it and my contractor noticed it as well, it didn’t seem important at the time since the leak was just dripping slowly, until the first bill came.
I opened it looked at the total and said holy S%#@& are the workers taking showers in there or what.
I picked up the phone and calmly called the contractor and asked him to drop whatever he is doing and to replace that leaky faucet.
After looking at your video it hit me as an AH HA moment for me because I didn’t realize I was thinking like a rich person,
Thanks Phill ,,, keep those videos coming
Phil, I know you are right. In my case, right now, I let renters take advantage of me and I knew better. I kept listening to their “a couple more days” and their made-up stories of how they were going to catch up. I could have filed unlawful detainers and then I somehow kept waiting until I was stone broke. I have been handling rentals a long time and I still got myself in this position. After getting behind, I let tenants convince me of all the good they had done to the properties and to let this much go for this and that much go for that. I feel like a complete fool now about the whole situation and know that it is my fault for listening to them. I also know that I should have gotten a manager a long time ago. I tried getting a manager in the past and was not happy with how long it was taking them to get tenants into the property. Someone had suggested to keep trying to you find the right manager. I should have listened to that person. Now I am facing losing the properties and a hard lesson. You should listen to your initial gut feelings and never and I mean never let a tenant do work for you. If they get behind they will have a list a mile long to give you that they say they haven’t been compensated for and it will be your own fault because you should have kept your tenants and your employees separate. Thanks for listening and you are absolutely right!
Watch this video…watch it 10 times…What Every Landlord Should Know About Property Management
Hey, Phil!
Got the lesson down well and I already do this in my life about 50-75% of the time. I’m slowly learning to calm down. However, I would still like to know what it was that you did wrong to cause that $2K water bill. Please share this part, as well. Thanks!
Hey Phil, I’d like to say that sometimes things are just completely out of our control & really no ones fault. Sometimes you can play all your cards right & something unexpected can still happen. For instance I was just in a car accident a week ago. Clearly, totally unexpected but I know for a fact that I did everything right as a driver to protect myself & my loved ones in the vehicle. I don’t really blame anyone. The lesson that I did take away from the incident was that you can never be too sure or too confident because stuff happens. & I think that to be able to accept something like that & let go of trying to micromanage our own lives so much takes a very mature person.
Hi Phil,
I watch all of your videos, but this one is just a little off. Just because a person is poor does not mean they behave out of control. When the water bill on my own home went up I investigated first around my house and found that the water purifier had a leak. I fixed it and my water went down the next billing cycle. Our water is billed 45 days behind. I did bother to call the water company. Thank you Phil, I really enjoy your videos. Thank you for being such a teacher.
Rhonda
People who blame others for everything never get rich!!
Super valuable Lesson!
Sounds something more like no pain, no gain eh
Sonia
Hi Phil — I fully agree with you on taking responsibility, and at the same time I would make a suggestion regarding your water bill. We had a similar situation when we took over a 4-plex and the initial water bill was sky high (like yours, we also got hit not only for water usage but for the sewer treatment). We went down to the water dept. and NICELY asked if they could help us to understand what might be going on with the water usage. We had already checked the meter reading and asked tenants if they had any leaks, etc. Since we were asking for help in a reasonable tone of voice, the customer service person was really trying to be helpful. The first thing she checked was the ending meter read from the previous owner to make sure it matched up with our beginning read (they actually do occasionally make mistakes like that). When that checked out okay, and we determined that much water had really gone through the pipes, she offered to speak to her supervisor about adjusting the bill. We told her that we would really appreciate that, so off she went and when she returned she was able to reduce the charges by about 40%. Definitely pays to be reasonable, pleasant, and not trying to blame everybody else for the situation! BTW, turns out the high water usage was due to a tenant who had a substantial leak but didn’t recognize the seriousness of it because she was suffering from dementia. Shortly after that her family had to move her to a long term care facility. There was no point in blaming her — sometimes things just happen and you have to roll with the punches. Like you said, you can always make more money, so let go when you have to and try not to make yourself nuts. Thanks for the video — and Happy New Year!
I use Enote and 1note… I have your book as well. 😛
Good one Phil! I enjoy your videos!!
One of the best parts is that now you (and we) are able to share that lesson with others!
So what caused the leak? 😉
– James
Hey Phil,
I’m Far from poor and even further from rich.I totally disagree with the lesson taught.You have a $2,000 loss on water and the contractor says maybe it was this or that with no definitive answer,and the plumber says everything is ok.I think you better be prepared for another $2000 dollar bill.water meters do go bad,and I am not saying that is the case.I believe the smart rich would question that scenario a little more,but hay if you have as much money as yourself,maybe it is really no big loss.
Talk soon,
Patrick
The point of this lesson is AFTER you have done that detailed investigation, which I have done, and it has been determined that there was a leak, and the water was used, that instead of blaming the contractor, or utility company or anyone else, you take the responsibility and learn from it.
Hey Phil,
I am in total agreement with Patrick. If your Trusted Contractor says the “meter is not running…it’s not ticking really fast” and then your Christmas Eve Triple-time Trusted Plumber says “there’s no problem…there’s no leaking anywhere…” then you need to contact the Water Department and figure this out. Here’s a link to the “Typical monthly water and wastewater bills for residential customers at 7,500 gallons billable water usage for the 50 largest U.S. cities.” link: http://archive.azcentral.com/opinions/projects/new-arizona/water/ According to this website, Jacksonville Fl is the most expensive town in Florida for combined usage of water/sewer. I am assuming your problem property is in Florida, but even if it is in the MOST expensive City listed here–Atlanta Ga–it is only 194.42/month for average usage of 7500 Gallons/month. CANNOT imagine a leak where the meter is NOT “ticking along too fast” which could result in $2000 combined waste. You would have to have almost blow out conditions, based on this flow velocity chart: link: http://flexpvc.com/WaterFlowBasedOnPipeSize.shtml AVERAGE flow velocities(approximations made for sake of time) are around 840 GPH–YOU have a bill over TEN TIMES the highest Nationally? That would make about 82500 gallons of water that would have to have flowed through this “not ticking too fast” meter? That’s almost a WEEK of BLOWOUT conditions–NOT JUST A DRIP OR RUNNING TOILET –WHERE is this WATER? Based on Atlanta pricing–approximately .0259 cents per Gallon– that would be an additional 75,000+ GALLONS—seems unbelievable, especially on a property under rehab. The EPA’s website says that “10% of homes waste an average of 90 Gallons/month” that is damn sure NOT $2000! link: http://www.epa.gov/WaterSense/pubs/fixleak.html
I APPRECIATE the LESSON–yes, take responsibility–it is about HOW you look at events which transpire and anticipating these possible kinks which can separate the “poor” from the “rich.”
BUT, if this was my deal, I’s be calling the Water Department out and try and find out what the hell happened. I think you got taken by a bad meter reading or a reading from a property at which previous owners never paid the bill for about a year, and now the Municipality is trying to pass that off onto the new owner–YOU! This has happened I where I live–Portland Oregon–just in the last few months. Local TV Stations have run segments on this problem and exposed this nefarious practice,so it wouldn’t hurt to be sure…. Would love some FOLLOW-UP on this sitrep. Looking forward to an email, hopefully saying “Yep, they screwed up!” Good luck and cheers!
Correction: that should be: “Ten percent of homes have leaks that waste 90 gallons or more per DAY.” That’s only 2700 Gallons /month…sorry 😉
Water department looked into it. The bill dropped to $400. I still don’t know what truly happened. When you take responsibility though, usually you end up better than you initially expected.
Phil, thank you for your valuable tip, handling big mistakes, it very true. Also have seen all your video, they are excellent , for me it’s a ten star . Thanks again,Sam
LOL
Oh Phil
Happy to know, The buck has always stopped with me, so i think right.
Although, when i did loose a great deal of money, in 2012, i did go curl up in the fetal position, on my parents couch.
The Ah Ha moment in your video; You can re-create money.
In my head- I know this, but hearing it …….sounds good.
I listen to your videos all the time.
Always an Ah Ha moment.
I hope this note find you well. Happy holidays to your family
Michelle Greene
No shame in being brought to fetal position by financial collapses. Just so long as you let the initial shock takes its emotional course and then get back up and begin anew 🙂
Phil,
At the moment I’m planning on purchasing a home, and I also want to purchase home for investments for extra income. How can i get started without having a lot of money.
Take this course: Creative Real Estate Investing
Hi phil, You are dead right! I would absolutely agree with you! The poor need to stop their bit ching and hold a mirror to their face!
Best regards,
Rod