Episode•November 17, 2025•31 min

EP245: Lifestyle Creep: The # 1 Killer Of Contractor Success

Lifestyle creep often comes from the urge to show success through material things. Many contractors, after earning more, feel pressured to upgrade their lifestyle. This often leads to buying new trucks, bigger homes, or taking lavish trips as a way to demonstrate their financial progress. In this episode, Brad talked about: Definition of lifestyle creep and its impact on personal success for contractors Comparison of lifestyle creep to scope creep in business Psychological factors driving lifestyle increases among contractors Importance of financial discipline and delaying purchases Strategies to combat lifestyle creep. Link to Resources: Grab Brad's tell-all book: The Contractor Profit Blueprint https://thecontractorprofitblueprint.com Help us get the word out to other contractors by leaving us a review or sharing our podcast! Hosted on Acast. See acast.com/privacy for more information.

Apple Podcasts Overcast

Transcript

0:05

The reason why contractors struggle with personal success has nothing to do with the business. It actually has to do with their personal choices. It has to do with lifestyle creep. Hey, welcome back to the show. I'm your guest, Brad. We're going to be talking about some personal things. We're going to be talking about what's keeping contractors... from having personal success. So we're not really talking about business per se, we're going to be talking about personal. And the thing we're gonna be talking about today is lifestyle creep. Now, what does that mean? Now, we've all heard of scope creep. It's whenever the client, you know, says, well, I want to do this and I want to add this and can you do this? And while you're here, let's make this change and blah, blah, blah. Now you got a $30,000 project ends up being a $45,000 project. You know, sometimes at the end of the job, they're like, the customer's like, wait a minute. You told me it was 30 grand. You're like, yeah, but you added $15,000 worth of changes. Well, I didn't know it was going to be that much. The shock, right? This is exactly what happens to us personally. So let's unpack this here of how we get into the situation. And then I'm going to share with you three steps, three points, three action steps that you can take to try and mitigate this today. Okay, so how do we get here? It's very easy. Most people, you know, are not, they don't grow up in upper. middle class or rich, a lot of blue collar people grow up poor. And, you know, I don't know the psychology behind this. I have some theories. But a lot of people that become contractors grew up poor. And that's actually the reason why they went into contracting. And then the moment they have a slight bit of success, the first thing they want to do is increase their lifestyle. They want to get a newer truck. They want to get, you know, a bigger house. They want to go on vacations. Those are all lifestyle increases. Those are all creeping up the cost of that lifestyle. And, you know, it's not lost on anyone. You know, we've heard of the, you know, the Instagram gurus and the TikTok gurus and they all have. you know, Lambos and Jets and all this. And most of those guys are completely full of shit. They go rent those things. You know, they'll go stand in front of someone's house and be like, hey, I just bought this house for $5 million. And then the guy comes out like, hey, what are you doing on my front yard? Because they don't actually own the house. They're just lying to you. There's so much of that. We got to keep up with the Joneses. You know, when I was a kid, it was... You got to keep up with the Joneses, the next door neighbor. The next door neighbor buys a Corvette, so you got to buy a Corvette or you got to one up him and get a Lamborghini or whatever it is. This idea that you have to project success through material things and that constant need to try and prove your self-worth. A lot of this comes from a self-worth problem. You feel like you're not worthy. But if I get this nice truck, if I buy a new house, if I can buy a sports car, if I can do all of these expensive things, my self-worth increases and therefore everyone else will think that I'm somebody. And that's where, I mean, that's the root of it. That's where it's coming from. It's a low self-worth kind of drug, right? That's the symptom or that's the cause of it, if you will. The thing is like, it's so avoidable. It's so easily avoidable with some financial IQ by investing in yourself. Okay, I'm going to save that for a little bit later. But here's what happens. You get a new contractor. He starts a business. Three months into his business, he lands a big job. And maybe it's got some good margins. Maybe he thinks it's got good margins. But let's just say he does. situation nobody wanted to do. He said, I'll do it. I'm going to charge a bunch of money. I don't want to do it, but I'll charge a bunch of money. And he sells a job. And because of that job, he makes like 20 grand. Like in his pocket, clear, you know, free and clear, he makes 20 grand. And he's like, man, this was easy. I've only been in business three months and I already made 20 grand, you know, on one job. This is going to be so easy. I'm going to kill it. So what's he do? He instantly goes out and spends it. He goes out and increases his lifestyle. He's like, man,20 grand, I can go buy a new truck. You know, I can afford a $1,200 a month truck payment. I can go buy a $100,000 truck. I can increase my, you know, we can go buy a new house. You know, I've been living in a modular home for five years with my family. Now it's our way out of the ghetto, right, per se. Like, get out of the hood, get out of the ghetto, get out of the bad area. And I understand, like, that can definitely be something you want to do, especially if it's not safe. Like, I would want to get my family out of there, too. totally understand the reasoning and the emotional, you know, desire behind that. But if you just wait like one month or two months or three months, just delay that decision by a very short period of time, it's going to change everything for you. Because what happens is that contractor who sold that $20,000 job, he goes out and he spends you know,18,000 of it on stupid crap. He buys a jet ski or a motorcycle or whatever. He just blows it. He's got two, $3,000 left of that. Then all of a sudden, the next job he sells, he loses money on. That's never happened in construction, right? You've never lost money. The next job he sells, he loses money. He loses three, $4,000 on it. Oops. Uh-oh. Well, that's not the end of the world. Okay, we can survive that. We can overcome that. But then the phone stops ringing. The family. And friends network is dried up and you haven't done any marketing. So now you got to go out and do marketing. Well, the phone doesn't ring for a month, or at least it doesn't ring with good leads for a month. And now all of a sudden you're behind on your bills. Now all of a sudden that $1,200 a month truck payment is really hurting because you can't afford it. But if you just would have waited three months and this exact same thing happened. When you lost the $3,000 or $4,000 on the next one, you would have had $20,000 that you could have easily absorbed. And then when the phone didn't ring for another month, you still had $16,000, $17,000 left to pay your overhead for the next month or two. And then in two or three months from now, when you do sell a job and you do get back on track, you've lost nothing. You're ahead because you still have $12,000, $10,000 in the bank as a cushion. But most people go blow that instantly. Big truck, jacked up, wheels, rims, look at me now, I'm a baller. I see these guys at Home Depot and I laugh at them. If that's you listening to this, people laugh at you because they know what's happening. We know when you're a new contractor and you show up with bright, shiny things that you just screwed yourself. Now, there's always exceptions, sure. But for the most part, we know you screwed yourself. You just embedded yourself to debt, to payments, to lower cash flow. Meanwhile, the guy who's been in business for 10 years, it still drives an older truck. It's not beat up, but it's older, has zero payments. That dude's balling. He's making tons of money. You just don't see it. You can't tell because it doesn't look like he's making money. But he's smart. He reinvests the money. He doesn't spend it. He doesn't increase his lifestyle. And so he has plenty of money. He could go six months without selling a job. No big deal. He just gets a six-month fishing break. You, on the other hand, have to sell every freaking job because your lifestyle is so high, you need every penny you can get on a regular basis. And that is exactly why you're stressed out. You ever see an older gentleman who's doing some, you know, what we may say is like a low-value task? You know, maybe he's, I don't know, maybe he's washing windows. He's like 55,60-year-old washing windows. And we may think like, oh, man, I don't want to be 60 years old washing windows. What you don't know about that guy is he actually owns the business. He's got 20 employees, and the dude's a multimillionaire. But he doesn't lower himself or he doesn't put himself on a pedestal to where he can't go out and do some of those things. You see that as a failure. Society portrays that as a failure. The guy's doing what he loves. He had nothing to do that day. He thought, you know what? I fell in love with washing windows. I'm going to go back out in the field and do it. I do it once a day for every week just to keep me in touch with the guys. And that's his thing. That's what he likes doing. But you look down on him like, dude, I don't work. I don't work. I got employees. What are you doing? Meanwhile, that guy's worth 30 times more than you. You just look like you have nice things. You know, with the average, this is, I don't have the actual, the report or the test that was done, whatever you call it, the research. You know, the average income of people who buy coach purses, now coach isn't the most expensive purse, but they are expensive. They're several hundred dollars. The average income of people who buy coach purses, what do you think of this? Hundreds of thousands of dollars, millions of dollars, whatever. No, it's like $40,000. The average income. of women who buy coach purses is $40,000. It's because those people want to feel like they're making money. They want to project to everyone that they are doing well. Deep down inside, they're not. Secretly, they're not. They're portraying to everyone else that they're winning. It's a lie. It's a ruse. Most people that are like super rich, you know, that... that became self-made millionaires and billionaires, you would not know it. There's always a percentage of people that buy, you know,10,000 square foot house and have all the exotic cars. But those are the people you see on socials because that's what they want to do. They want to be in the limelight. Most millionaires and billionaires do not want to be in the limelight. You don't ever see them out. They drive like a six-year-old Camry. They dress in Levi's and a T-shirt, and they're worth like $50 billion. You'll never know that because those people want to blend in. They don't want to scream, I have lots of money, because they also know they're going to be a target. But that's not the main reason. They don't want to rub it in people's faces. They're humble. They're actually humble people. Okay? The point is that the only people who go out and buy expensive crap are people that are trying to impress other people. And most of the time, they're in debt up to their eyeballs. They're drowning. They have no money. They have a $5 million business and they're broke. Why are doctors and lawyers and people that make $200,000, $300,000, $400,000 a year, why are they broke? Because they increase their lifestyle. They make $500,000 a year and they spend $500,000 a year on their lifestyle. If they would only spend, I don't know, a moderate $200,000 a year on a lifestyle, which is a pretty good lifestyle, they would be making extra money each year and they'd be banking. But they don't. Their buddy who's a lawyer, a doctor, he buys a new boat. Well, shit, I got to get a new boat too. And this guy has an expensive membership to the golf club that's $50,000 a year. Well, I got to get that too. You're always trying to outdo everyone else. Stop that. Like stop doing that. Nobody cares. Really, nobody cares. People don't care about your success. They truly, truly don't. They may say that to you. Oh, man, you're so successful. Man, you did such a great job. People really don't care. Five seconds later, they forgot about you. They're not even thinking about you. All right. So this this idea of lifestyle creep is what puts a lot of contractors in trouble because they increase their lifestyle based on a short win route, a short win rate. Over a short period of time, you win a lot. And then over the next three months, you lose a lot, which balances it out. But you've already bought over or spent over the amount that you needed. So here's a very basic thing. And I'm doing this visually. So if you're listening, I'll explain it. I got both my hands equal. I'm holding them up and they're equal. Let's say your lifestyle currently is you make $50,000 a year. It costs you, you know, $48,000 a year to live. You're almost broke, right? And then all of a sudden through work and stuff, you make an extra $30,000 in the business. The business makes 30 grand. What you should do is not increase your lifestyle. But what happens is you increase your lifestyle by 30 grand. So even though you're making more money. you're spending the same or more money. And so you haven't actually increased your net worth or your income because your expenses went up. What you should do is stay where you're at. And then the next year or six months or whatever period of time, you make another $50,000 and another $60,000 or whatever. So now you're making like $100,000, you know, you're paying yourself $100,000 where you used to only pay yourself $40,000. You got a $60,000 net increase in your income. What you can do is increase your lifestyle by maybe $5,000 or $10,000 a year, not by 60, by 5 or 10, and keep that extra 30% or 40% or $30,000 or $40,000 as savings, as a buffer, as an investment, as your retirement. So yes, you can increase your lifestyle a little bit, but don't max it out, guys. Don't be a baller. Ballers waste dollars, okay? I don't know if that's, I just made that up. Ballers waste dollars. Most people are not ballers. Most of them, I mean, just 99% of guys out there are not ballers. They're liars. So don't be a bother and waste dollars. Okay, be smart. So let's look at a couple things you can do. This is three things that you can start doing to reverse. the impact of these bad decisions that you have.

14:43

to never do another free estimate again. So if you're ready to increase your profits, stop doing free estimates and get off the tools, then all you have to do is click a link in the show notes to learn more about the Profit Club and see how it can easily two to three times the cash in your pocket, give you a proven sales process that will convert more jobs with ease and get you off the tools once and for all. And the best part is you can do all of this without having to produce more jobs than you currently are. Click the link to learn more. Now let's get back to the show.

15:17

Number one, pay your future self first. What does that mean? Most people increase their lifestyle spending the moment they make money. Make a little bit of money, go spend it. Make a little bit of money, go spend it. Make some more money, go spend it. It's like burning a hole in their pocket, right? And that's because they have poor financial IQ, poor financial discipline. Here's what you can do. redirect the raise into assets before it ever hits the checking. So what you can do, and obviously it depends on how you pay yourself, if it's draws, if it's a salary, whatever, there's some logistics you got to figure out. But here's what you do instead. Increase automatic transfers to savings or investments by a percentage that you won't feel,5%,10%. So if you do start paying yourself more, you pay yourself, say, $20,000 more a year, $50,000 more a year. Take 10, you know,5%,10%,15% of that money before you like deposit in your account. And then automatically, if you use, you know, automatic transfers, put that into a savings account or a interest account before you get the money. So instead of paying yourself $100,000, you take $10,000 out of that and you put it into a savings, you're only paying yourself $90,000. Does that make sense? You're automatically combating against your own natural desire to increase your lifestyle by a factor of $10,000 a year. That's probably too low, but that's just an example. And you can start low. Second thing on that is create a tax overhead profit allocation account. So if you don't have one, like, you know, have an account for like savings and then transfer that money over. Treat saving like a bill. This is interesting. If you were going to put that $10,000 a year, or let's say it's $12,000 a year, you're going to put $1,000 a month. You're going to save $1,000 a month. Treat that as a bill that you get from a vendor, right? Vendor sends you a bill for $1,000. Crap, I got to pay this bill. I'm going to pay it by putting it into an investment account, right? I'm not getting into savings and personal investment advice, whether it's a high yield. you know, IRA or whatever, like you talk to people and figure that out. I'm just saying, put that money and treat it like it's a bill. Pay the bill each month like it's non-negotiable, like it's your electric bill or your cell phone bill. Hell, even if you have to create an invoice, an automatic invoice and invoice yourself, like in the email, set up a reoccurring invoice that sends you a bill for $1,000 a month. Whatever it takes, you have to combat your own emotions here. You have bad habits. You're combating bad habits. right, of spending. So what you're doing is you're building wealth quietly instead of, you know, constantly chasing the next more expensive toy. The guy who stacks cash wins, not the guy who flexes, right? Ballers spend dollars. A lot of times it's like, oh, I made an extra 30 grand this month. I'm going to put $10,000 into a savings account. And then the next month, I only made $5,000. Well, I need all that money, so I don't put anything into savings. But if you just do it as a percentage, whether it's $100,000 or $10,000, it's just a percentage of that amount, and that money goes into a savings. If you try to do it based on how much money you make, it becomes irregular, sporadic, and then you end up not doing it. Okay, so pay yourself first. Pay your future self first. Number two, I love this one. Adopt a 30-day delay on purchases. Man, I can't tell you. How many times I've wanted something so bad, a new gun, a new toy, a new technology, a new widget, whatever it is. And the second I got the money, you know, saved up, I go buy it, right? Boom, instantly buy it. And then like a week or two later, I'm kind of like, you know, this really wasn't as. much as I had hoped. It's not as exciting as I thought it would be. I just wasted $2,000, $5,500, whatever it is, on this thing that I thought I really, really wanted and turns out I really didn't need it. And I really don't even enjoy having it. If you adopt a 30-day delay on purchases, it prevents that from happening because it takes the emotion out of it. If you're still just as excited 30 days later, then it's probably something that you want or that you can have. You know, I'll tell you this, one of my goals, my lifetime goal, bucket list, whatever, and it makes no practical sense whatsoever. Like, it's really stupid. It's really a stupid thing to do. But it's on my bucket list. It's like one of my top dreams. And that is to get a helicopter pilot's license and then buy a helicopter. You know, we're talking like million dollar purchase. I don't know if I'll ever do it or not. Maybe, maybe not. But that's, it's been since I was like eight years old, I wanted to fly helicopters. It's my lifelong dream. That's just something that hasn't changed. And it probably never will change. But it's not something I'm going to go, if I won the lottery tomorrow, I'm not going to go buy a helicopter. That just wouldn't happen. But the desire would still be there. So it's something that I want. If you have the money and you want something, that's fine. You can go buy things that you want. I'm not saying that you can't buy anything nice. I'm saying that whenever you give in to this desire that you deserve it or that you need it, you'll quote, need it. Those are lies. That's your ego. That's your self-worth or, you know, low self-worth trying to butter yourself up, increase your worth. That's what that is. But if you wait 30 days, the excitement of that new thing wears off. And now it's not as a big deal anymore. It's like, eh, I don't really need that. The newness of it, the excitement of it wore off. I don't really need that. Right? So here's what you can do. Create a note on your phone called wants list. When you feel the urge to buy a new toy, add it to the list. Like you can have a wants list, another one with that. If you still want it in 30 days and it generally adds value, buy it guilt-free. That's the important thing. If you have the money and you wait 30 days and you truly want it, you can go buy it guilt-free. How many of you bought something and immediately had buyer's remorse? You're like, I don't know if I really want this. I don't know. It's kind of dumb. Why did I spend this much money? Right? That's what that's preventing. When you start making more money, you want to go spend it. If you wait 30 days, it creates a new set point. Now, there's a, again, this is scientific. Every one of us has a set point in our bank account. So let's say your set point, because you're not making much money, you live in a double wide, you're barely making ends meet. Your set point might be $2,000. Like you try to have at least $2,000 in your bank account. What happens when your set point is so low is that when you do make, say, $5,000, $6,000, $10,000, now you got $10,000 in your bank account, but your set point is $2,000, you will somehow figure out how to waste $8,000 and only $8,000 because you won't go below your set point, which is $2,000. This is a psychological... phenomenon that happens. It doesn't matter if it's $50,000, $100,000, $1 million. If your set point is $2,000, you will figure out a way over a period of time to spend all of that money. This is the exact reason why people who win the lottery are broke or more broke four years later because they've spent every penny of it. They had no financial discipline, no financial IQ. When you have a 30-day wait on purchases and you say your set point is $2,000 and you make $10,000 extra and you put that $10,000 into your bank account and now there's $12,000 in there and you wait 30 days, what happens is your brain kind of gets used to the idea of having $10,000, $12,000 in your account instead of $2,000. You're like, you know, this is actually kind of nice. I like having that extra buffer. I like having $10,000. And what you do is you subconsciously train your brain because you waited 30 days to raise your set point to $10,000. That's your new low set point. Now, all of a sudden, you don't want your bank account to go below $10,000 because you've looked at that money sitting there for 30 days and you've gotten used to it. But when you get that money and you go out and spend it immediately, you don't give a chance to increase your set point. And so it's $2,000. And then you do it again. And then you, you know, you get 30 grand in your account and you put $30,000 in your account and you let it sit there for 30 days. Now your set point increases. Now you get used to the idea of having 30,000 in your bank account or 50,000 or whatever it is. And so now you don't want to go below that. Now, when you got a hundred grand in your account and your set point is 80,000, you're like, well, I can afford, I mean, I can afford to spend 20 grand. But I have to have at least $80,000 in my account. I won't go below that number because that's my new set point. I only have 20 grand available to go spend. That's a psychological hack to increase your set point by simply waiting 30 days. It also removes the emotional impact of that item. This is why people go out and buy every iPhone that comes out when there's no new features. Oh, I got to have the new iPhone 34. It's got one more megapixel picture. It's amazing. Let me go spend $1,500 on this phone. I think I have the, I think I'm on like the Note, I have Android. I think I'm on like Note 20 or something, maybe 18. I don't know. I keep my phones for like four or five years. I keep my watches like four or five years. I don't buy the new stuff every time it comes out. So I don't care. I don't need it. Now, if there's a technology that I need for my business, I'll absolutely go spend it, right? If I need an iPad for my business, I'll go buy that immediately. But I don't need to go buy a new iPad every year. You see what I'm saying? There's a difference there. I'm not like sucked into this. I got to have new, new, new, new, new to improve and show or impress everybody. So wait 30 days and you'll see your set point go up. The last one here, number three, is upgrade your skills, not your stuff. Ooh, this one hurts. When you do get some extra money and you say, you know what? It'd be really, really nice to go buy a new Harley Davidson. You know, I'm going to go spend 15 grand on a Harley. You can afford it. Sure. No problem. But what if you spent 15 grand on a new skill, right? You got coaching or you went to a conference or you got a new certification or you went to a night school or whatever it is. Like you went and improved your knowledge. You improved your self-value, not your self-worth, your self-value. You become more valuable. You can actually charge more money. So you make a small $10,000, $15,000 investment. in yourself. And then that skill set that you learn actually allows you to go make another 10,15,20,50,000, $100,000 a year because you learn new skills. That's a pretty good investment. Like if you came to me and said, Brad, I got two choices I can make. I can take 10 grand and I can go get coaching or my family's never been on vacation before. And I can go to Disneyland, take them all to Disneyland, spend 10 grand, have an amazing experience. Which one should I do? I'd say you need a big coaching. And then the money that you, the additional money that you make from the coaching will allow you to go to Disneyland three times. I mean, think about that for a second. Now, I love experiences. My wife and I are not about having tons of material things. And I like, and by the way, I love like premium stuff. When we go do something. I want the premium every time. I like spending the money. And I don't mean like, you know, buy a new car, you know, going and buying a Ferrari. I don't talk about that. I'm saying like, if we go on a cruise, we're not buying the lowest stateroom. Like we're going to buy, you know, the medium towards the top. Like, give me the, give me the better experience. I want to pay premium. We fly, you know, give me first class if we can afford it, depending on what it is or if it makes sense. Right. Like I don't have to have first class all the time. I'm just saying I like to upgrade like premium things. If there's something I can buy for 50 bucks, but there's a better version of it for $80 and it does the exact same thing, I'll buy the $80 version just because I like the premium side of it. We like to invest in experiences like we'd rather spend a lot more money on an experience. than to buy a material thing that really loses value and doesn't provide as many memories. Now, obviously, you can buy a motorcycle and it's going to provide a lot of memories. I used to have a motorcycle, I understand. But it's not going to create value in your life initially, and it's not going to create more value. So like going on a vacation is an experience for sure, and you should have those experiences. But if you have to choose between vacation or investing in yourself, I'm going with investing in myself because it's going to create more money that's going to allow me to have more experiences. So I can have one experience and that's it. Or I can go get money, delay that experience, and then six months or a year from now, I can actually go have three of those experiences. You see what I'm saying, how that works? If you go spend your money, the second you get it, you're going to rob your future self. You're robbing your future self to enjoy today. And that's a bad, bad, bad. equation. It's a bad decision. So here's the punchline. Wealth isn't built by how much you make. Okay. It's built by how little you need to look successful. Remember the billionaire that dresses in Levi's and a t-shirt and drives a six-year-old Camry. He's not trying to look successful. He's already is successful. So what's the takeaway? Stay hungry, stay disciplined, stay dangerous. Don't get comfortable. When you go buy a bunch of nice things, you get comfortable. It actually robs you of that dangerous edge that you have. So that's how contractors can get ahead while everyone else chases shiny objects. That contractor that's got the brand new truck lifted with the wheels and all that crap on there, he's out of business in six months. He's gone. We know it. That's why we're laughing at you because you wasted money on something stupid. Guys, don't be that guy. Quit trying to compare yourself to everyone else. Create your plan and work the plan and be disciplined. All right, that's all you got to do. Create your plan. Work the plan. Be disciplined. Don't chase shiny objects. Don't try to be a baller. Ballers waste dollars. All right, that's all I got for you guys. Thanks for hanging out with me. If you have any questions, thoughts, comments, always feel free to reach out to me. You know, I ask all the time to give me feedback. I almost never get feedback. Truthfully, I almost never get feedback. I don't know if you like these episodes. I don't know if you don't like these episodes. I have one person. Reach out and say, you know, you've lost your way and I'm not, you know, I really don't listen to you anymore. I'm like, okay, I understand. Thanks for the feedback. But that's, that's about it. One person. So give me feedback. If you want to hear different things, if you want me to pivot and bring on different guests, if you want me to, you know, shorten the podcast or make it longer or do different things, you can give me that feedback. I promise I won't bite. I welcome the feedback. All right. So always feel free to reach out to me. If you want to see something different on the show, but either way, I appreciate you hanging out with me. Uh, you know where to find me on the socials, just search for the hammer grind podcast or go to the show notes. And remember guys up next time. Profit is not a dirty word.

EP245: Lifestyle Creep: The # 1 Killer Of Contractor Success

0:00

Related Episodes

EP273: Cash Flow Mastery | How Contractors Ensure Financial Stability

Jun 1, 202654 min

Cash FlowBank AccountsCustomer Deposits

EP177: Understanding and Preventing Scope Creep in Contracting

Jul 29, 202444 min

Scope CreepChange OrdersEstimating