Make, Multiply, and Manage Money – Steven Pesavento

November 30


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Too often we look at money from a framework of lack. You have to work hard for it and when you want something it feels like you cannot afford it.

In this episode, Stephen is going to take you through the 3Ms of money, Make, Multiply and Manage. As you grow to understand what you can achieve in each of these areas, you will gain the knowledge that the sense of lack can become one of abundance with some effort, persistence and investment in yourself. 

Key Takeaways

  1. When the core of your income is tied to a fixed salary or an hourly rate, then you’re working for money. That means the money is not working for you.
  2. When you understand how money moves, and how it’s created, then you understand where there is the most value and you’re able to solve a problem.
  3. One of the biggest mistakes in multiplying your money is focusing all your effort and energy on doing so but with a very small pot of money.
  4. If everything you’re focused on is managing money and you don’t know how to multiply it or you don’t know how to make it, then you’re working with a very limited viewpoint and very limited tools.

Resources Mentioned

Interested in connecting with other like-minded individuals? Then join our VonFinch Private Capital Network.  Learn more at

Make, Multiply, and Manage Money – Steven Pesavento Transcription:

Steven Pesavento 00:05
This is the Investor Mindset podcast and I'm Steven Pesavento. For as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better, and how we can do better. And each episode, we explore lessons on motivation and mindset for the most successful real estate investors and entrepreneurs in the nation.

Steven Pesavento 00:28
Money is the fuel that drives success, happiness and fulfillment in the world. But oftentimes, people have some really negative beliefs about money. I don't know if you're like me, but when I was growing up, I was taught, money doesn't grow on trees, you have to work hard for money, don't ask for it, we can't afford it. You can't afford it, I can't afford it. That's too expensive, really beliefs that ended up limiting us in in believing that money isn't in abundance, that there isn't trillions of dollars flowing through the economy every single day, and somehow, that we're stuck with these limits. So how do we break that we break that by changing the way that we think about money, we change the beliefs that we have about money, and we start understanding the three M's of money, how we make money, how we multiply money, and how we manage money.

Steven Pesavento 01:22
So let's start out by talking about how do you make money, one of the beliefs that many people have, you might be one of them. I know growing up, I was absolutely one of these people, I think of this as the middle class mindset about money. And what this mindset is, is I work for money. I work for money. So when you work for money, you're working for an hourly rate, or you're working for a salary, now maybe have a bonus, maybe you have some success based compensation that's tied to that. But the core of your income, when it's tied to a fixed salary or an hourly rate, then you're working for money. That means the money is not working for you. And it also means that you are essentially focused first on reducing your risk in exchange for somebody to greatly reduce the potential income that you can make. Now many people think and you might be one of them, you might be thinking to yourself, that well, that might work for a business owner that might work for somebody who's running their own business, they can go think about not working for a salary. And this is absolutely true business owners. Oftentimes, they're making their money based on a set of results that happen within the business. They're making their money based on the success that the business has, how much income is actually generated by the business. But salespeople are in that same exact boat. This is why many salespeople they work for a base, but they also work for a commission, which means oftentimes that salespeople have an unlimited upside. So what you want to do in order to focus on making money, and being able to master this expertise of being able to make money is you want to move yourself from working for money to being paid based on success being paid based on an aligned interest with your client. Now, as an employee, you can do this too, as an employee, someone who's not ready to set out on their own, someone who is really risk averse, somebody has a personality profile that's going to match more alongside working within an organization, you can do this as well. Now, it might be hard to do with your current boss or employer. But if you've already added a ton of value, then and you can bring confidence to this conversation, you can shift that as well. And so the way that you do that is you would go to this employer, and you'd say, Mr. Mrs. Employer, Mr. Mrs. Business Owner, I love this role, I'd love to work in this role. You've gotten through the interview process, they've made the offer, and they say to you, hey, the salary is $100,000, and we'll pay you 10% bonus. So you're gonna make 110,000 If you succeed at the top level, and now what you do is you say, Hey, Mr. Mrs. Business Owner, I would love to learn more about your business and understand how this works, understand where money is made, and how I can actually add as much value as I possibly can. Because when you're focused on creating value, first, you're going to end up making much more money in the long run, then I would say, I'd like to give up most of my salary, maybe I'd like to give up 100% of it. And I want to work based purely on success, or I want to get paid a much lower salary, and I want to have the opportunity to participate in that upside. And what you do is you align your interests, what are the actions that you're going to take or the outcomes you're going to create in the business that will result in some type of great windfall for the business that's going to end up leading to really, really great things happening. And what you're doing is it's a risk reversal. You're going to that owner and you're saying I would like To get paid less now, and I'd like to deliver massive amounts of value. Many people who know they can find other people, we're going to work for money, they're gonna say no, but you're not focused on those people, you're focused on finding the people who are interested in a risk reversal. And you want to create alignment. So you want to set a very clear set of deliverables a very clear, clear set of outcomes. And then you want to participate in those outcomes. The simplest version is matching that of what a salesperson does, when they sell, they get a commission. So Operation based roles, this can be tougher, but it is possible when you have a really well oiled set of KPIs and measurables. And you can end up actually measuring what's that deliverable. Now, it's much easier to be a business owner and to be in control of that or to do joint ventures or to engage in relationships from an agency perspective where you're going, and you're making these kinds of offers. But the first most important thing about making money is we no longer work for it, we instead put all of our effort energy into value based compensation, we get paid based on the value we create, you'll notice in the VonFinch model of investment, when we're investing Yes, we get paid some fees for buying and operating, which really just covers some of the basic overhead often doesn't cover all of it. However, we typically get paid a percentage of profit over and above a certain return profile. So you can model this same type of behavior yourself in your business, or within your career. So we want to change the way that we're getting paid. That's the first piece about making money. And we want to learn about the different ways that money is made within businesses. So no matter what your role is, you want to understand how does the business make money? What is the product or service? Who is the audience? Who is the primary ideal client? How do we reach them through marketing and sales? How do we fulfill to them? And how do we create the margin? What is that margin, all of this stuff is not going to be transparently available if you're following this employee value process that I'm talking about. But most of the time, if you're a business owner, this is actually exactly what you're doing. You're going to a client, you're saying, Hey, I'm going to build you this $10,000 website, but I know that that $10,000 website is going to make you $100,000. So I'm willing to not do it for an hourly rate, but I'm willing to do it based on a project rate. So that's number one. Number two with how to make money is the education piece that I was just alluding to, you want to learn about marketing, you want to learn about sales, you want to understand how to communicate, no matter what role you're in, you're always have a sales component, because you're selling ideas, to your bosses, you're selling ideas to clients, you're selling ideas to your network, you're selling ideas all the time. And so when you can understand and really educate yourself on how a business works, and how it makes money, and learn each of those individual pieces, you may not be an expert in all, you're obviously going to have your area where you are the best at that thing. But by understanding how all these pieces together, you're going to understand how money is made. We'll dive into more on this in future videos here so that you can understand more on what it means and how do we actually go about making money. There's a ton of strategies. And it's exciting because that means there's essentially unlimited opportunities for you to make money.

Steven Pesavento 08:32
The second most important thing that you want to understand is how do you multiply money. The reason why you want to understand how to multiply money is because once you've made money, you want to then put your money back to work. So in this example, where you are a business owner, you're essentially making money off of it, having your clients pay you for the services that you're delivering, based on value based pricing, you're aligning your interest, you're reinvesting that money back into the business, and your which is allowing you to then create a return that is going to allow you to continue to grow. So you make $1 You invest $1, and you make $2 back, or you make $3 back or you make $10 back, the bigger the margin. The bigger the multiplier, the bigger the multiplier, the faster that you grow. Now, when you're making significant money in your business, and you're looking to diversify, that's when you start looking at investments. It's great to focus all of your effort and energy in one direction growing your business or growing your income stream. If you're a professional like doctors, lawyers, consultants, etc. You focus on making money and then you continue to do your expertise, but you learn some of the core habits, beliefs and actions that ended up leading to multiplying money. One of those would be to invest into commercial real estate. One of those would be to invest in oil and gas. One of those would be to invest in businesses. What we're going to do is, you're going to want to look at what is something that I'm excited about that I can really grasp and understand, and how can I then invest, take the money that I've earned, making money. And the most simple example is going in buying a rental property, taking your $25,000 down getting a $75,000 mortgage and owning $100,000 piece of property, we're able to multiply that money because when we buy it, right, that leverage allows us to essentially 3x the return that we'd be creating, because it's much cheaper to get debt often than it is to get equity. And, again, we're looking to multiply your money, obviously, you're listening to the investor mindset show our business is multiplying money for investors. So we often will take a million dollars or $10 million, for example, and go buy a $30 million property, and then we'll improve it will raise the rents because we understand how to make money, we're then doing that within this business context, but we're using our money and other people's money in order to multiply it and grow it. So we're taking that $1 and returning in two, or taking that $1 and returning in three, or taking that $1 and creating a dividend that continues to pay us off. And then we're able to pull all of our money out and still be able to create that dividend. So understanding how to first make money and then second, multiply money in that order. Most important thing, a lot of people they get excited about investing, they think I want to learn how to multiply money, but they don't have any money. This is a huge mistake. So many people are in a 40 or 50 or $100,000, a year tax bracket. But they're focusing all their effort and energy on how do they multiply money, but they're trying to multiply a very small pot of money. It's a huge mistake. If instead, you go back to the basics, you learn about how to make money, you learn where money comes from, how it flows, who has it, how do they go about creating it, how businesses work, doesn't mean you need to be a business owner to do this. But it does mean you have to understand how the money moves. Because when you understand how money moves, and how it's created, then you understand where's there's the most value and you're able to solve a problem. And when you're aligned with the upside of solving that problem, you create even more money, right?

Steven Pesavento 12:24
So we make money, then we multiply money. And finally, we need to understand how to manage money. The rich, their biggest focus, the ultra wealthy, their biggest focus is focused on managing money. Once you have hundreds of 1000s or millions of dollars, or hundreds of millions of dollars or billions of dollars. Your focus then is on how do you manage money? How do you reduce risk? How do you go about reducing your expenses or saving money in a more effective way? Each of these do play in with one another. But the reason we're focused on managing money last is because a lot of people start out listening to a Dave Ramsey or Suze Orman. And they're really focused on hey, how do I manage the money I'm making, and they're not thinking about making more money. Most people's biggest mistake is they're not making enough money. And that is really disheartening to a lot of folks, it's probably disheartening to you I know is disheartening to me when I first heard that, fortunately, I had a mentor, much like what I'm sharing with you, that was able to quickly shift that understanding, no need to feel bad about where you're at, it's important to understand where you're at today. But if you're making 50,000 or $100,000 a year and everything you're focused on is managing money, you don't know how to multiply it, you don't know how to make it, then you're working with a very limited viewpoint and very limited tools. When you're looking working with limited tools, you really are working from a place of lack, you're you are not working from a place of abundance. And rather we want you to be in a place of abundance. I would much rather have you be in a situation where you're making tons of money, but you're poorly managing it because we can add on a set of management skills easily to that to allow you to keep more of what you make every single month. I would rather have you making money and knowing how to multiply it. But making poor decisions from an expense standpoint or from other money management standpoints that end up having you lose money. Because again, managing money is one of the simplest things. It takes discipline and it takes learning a key set of strategies. Most of the time that includes understanding what are you spending money on? Why is that important to you and really managing money and spending money with purpose. A lot of people are going to tell you not to go out and get that Starbucks or not to go out to that restaurant or not to drive that car. I'm not going to tell you that. I do believe that you need to live within your means. And a part of being able to understand how to multiply money is understanding how you can save money and put it into a wealth account, a savings account that will be invested, and then making those investments that will multiply it or saving money so that you can then put that into marketing or expansion or growth personally or professionally in your business that will allow you to learn a new set of skills or bring on a set of experts who will allow you to grow above and beyond. First, we need to make money. Second, we need to multiply money. And third, we need to understand how to manage money. Let me know in the comments down below. What is your biggest challenge between these three, I would love to see conversation about that if you're listening on podcast, hit me in the DMS at Steven.pesavento on Instagram or on LinkedIn at the same. Thanks so much for listening. If you're interested in learning more about money and how you can get your money working for you, then I encourage you to hit that subscribe button, share this with a friend and start learning together. Thanks so much we'll see on the next episode.

Steven Pesavento 16:13
Today's episode is sponsored by VonFinch capital. If you're interested in investing alongside me in the same type of real estate opportunities that I personally invest in, then head over to VonFinch capital and join their private investor network. You can do so at Join me on that next deal. I look forward to seeing you on the inside. You're listening to the investor mindset podcast. If you like what you heard, make sure to rate review, subscribe and share with a friend. Head over to the to join the insider club where we share tools and strategies from the top investors and entrepreneurs and how to take it to the next level.



3Ms of Money, Active Investing, Investing, Investing Mindset, Mindset, Money Management, Money Mindset, Passive Investing, Real Estate, Real Estate Investing, Sense of Lack

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