64: Borrowing Money to Build Your Business

You’re listening to the Mastering Money in Midlife podcast with Debbie Sassen, Episode 64.

Welcome to Mastering Money in Midlife, a podcast for midlife women in business to overcome financial anxiety and make more money without burning out or sacrificing their families. Join Certified Life and Money Coach Debbie Sassen, as she shares practical business strategies and mindset shifts that help you dissolve the money blocks that keep you stuck in a cycle of underearning and undersaving, sabotage the growth of your business, and prevent you from building the wealth that you desire.

Hello, my friends, and welcome back to the podcast. I missed you. I know if you have been listening to my podcast every single week, you probably didn’t miss me because I show up in your RSS feeds weekly. Or, you get my emails, and I let you know that my podcast has dropped, and you can click on a little link in my emails, and you go straight to my podcast.

But in case you don’t know, I was actually out of town for just over two weeks. My husband and I went to a family wedding in New York. And then we went to Puerto Rico, where we spent two glorious weeks, 12 days actually, on holiday. I love the beach; I grew up in Los Angeles. I love the sun. I love the sand. I love the ocean and the salt. My husband’s from London. He doesn’t like the sand and the salt and all that too much, but he humored me. And I was in seventh heaven, and so was he.

We did adventure activities. We spent like five hours one day doing zip lines. They have the longest zip line in all of the Americas, in Puerto Rico. It’s, I don’t remember exactly; I feel a little bit embarrassed about that. But I think it’s like two and a half minutes. I forget exactly how long the entire zip line is. But you go at 90 kilometers an hour ziplining over the mountains and over rivers. And it’s absolutely gorgeous.

There are a couple of zip lines where you lay down, and for the rest of them, you’re sitting with your harness on with the zipline holding you at the top. And it is just exhilarating ziplining at tremendous speeds and seeing this gorgeous country underneath you.

We did a boat tour on a lagoon at night, and we watched the sunset. And then, there are these little things in the water that light up. It’s called a bioluminescent bay, and we did that one night. We went into the rainforest, where I actually slipped and fell in the mud. It rains every day in the rainforest. Our guide said, “Embrace the mud,” and I did that literally.

But there are also natural water slides, so I went sliding down the slide, and I got all washed off. And we jumped off a rock 20 feet high into the water. We’re adventure people. We had an amazing time. And so, I’m a little happy and a little sad to come back to work. I would just love to spend more time on the beach and in the sun and in the sand.

But my lovely family also needs their mom and their dad back. And my people, you, you need me to come here and record podcasts for you and help you to embrace money, not mud, but money, and build your business. So today, we’re going to talk about borrowing money to build your business.

If you’ve been with me, the entire month of January, I was going to talk about how to be more productive, so that you can meet your goals in 2023. But just after we arrived back in the country, somebody on LinkedIn tagged me, I would not have found this post otherwise. And if you’re interested, just send me an email, and I will give you the link to this specific post. But there was a conversation about debt, good debt, bad debt, neutral debt.

I have very strong opinions about debt, that there is no such thing as bad debt. So, I charged in there, which I guess I sometimes do because I have strong opinions, and I shared my opinion about debt. And so, while I am in the vibe and in the vortex talking about debt, I thought that I would share with you my opinions also, and why I believe that all debt is neutral; it is not good, and it is not bad. Debt is just a tool. And it is actually a beautiful tool that you can use to build your business.

Let me start by giving you a little bit of background. First of all, I am not a person who has ever had a large amount of debt. In fact, other than a mortgage on our house, we have paid back the mortgage on our house. I’ve never been in debt. I have never had credit card debt. It just wasn’t a thing that accompanied me in my life.

There are a couple of episodes on my podcast, where I interviewed people who were in debt, and we talked about the importance of unshaming debt. Again, because debt is neutral. It’s not good, and it’s not bad. But there is such a mindset, I would even say it’s brainwashing, that there is such a thing as bad debt.

But debt is really no different from a hammer. You use a hammer to bang in a nail. Sometimes you use that end where it’s split to pull nails out. Debt is no different from a washing machine. A washing machine is a tool. You use the washing machine to wash your clothes.

There is a function to debt. When you borrow money, it enables you to do things today that you might have to wait for if you are going to accumulate money. Or, you might miss an opportunity if you don’t have the money today. And people have this idea, “Well, if I want to go to college, it’s okay to take out a student loan, and then I’m going to pay it back later.”

Or, God forbid, you should have a medical expense, or your child should have a medical expense. And then, of course, we’re going to borrow money if we don’t have it saved up; it’s not in the bank. Of course, we wouldn’t compromise our health or medical procedures in order to have something taken care of. So, we’ll put it on a credit card, we’ll take a loan out from the bank.

But business? No, we can’t possibly take out money, borrowing money, for your business. That is potentially bad debt. So again, I didn’t grow up with debt. I’m not the kind of person who has large expenses. My parents didn’t give me a credit card that I could use with a sort of blank slate without any limits when I was in college.

My dad gave me a credit card for use in emergencies only. I worked in the computer lab when I was in college. Those were the days when people didn’t have laptops like college students do today; we actually had to go to a computer lab. It was open all night long. I did the graveyard shift because I got paid time and a half. And it was great. I loved it.

I could just sit there and do my homework, either in my computer programming courses or other courses, because it was not a very well-used computer lab during the graveyard shift, from like 11 at night until six or seven in the morning. I thought it was fabulous. I’m a night owl anyway. And I just got paid time and a half to sit in the computer room and help people, and maybe change the paper in the printer every now and again.

So that’s me, not a person who has ever been a big spender or gotten into debt. In fact, on our trip to Puerto Rico, our air flights were the most expensive part of our trip. We flew first class, which was an investment in my health, my mental health, and my sleep. I am just not 18 or even 38 anymore. And being able to have a live flatbed makes me a much happier person and makes me a much more pleasant person to be with.

And so, our trip for the two of us for two weeks, which cost over $10,000, the air flights were the biggest part of it. We stayed in a hotel. It had a kitchenette in it. We keep kosher, and there are no kosher restaurants in Puerto Rico. So, we ate a lot of tuna fish and eggs and very simple foods. There is a place where you can have takeaway, and twice we ordered takeaway.

But other than that, we just rented a car. We stayed in a place that had a kitchen because that’s what we needed. So, it wasn’t a fancy hotel. We don’t go to casinos. We did actually buy a bottle of Bacardi rum because Bacardi is made in Puerto Rico. And we thought this is what you’re supposed to do in Puerto Rico. Let’s try it out. Neither one of us enjoyed it very much. So, we managed to get through about a quarter or a third of the bottle of Bacardi. But hey, we’re low maintenance; we’re cheap dates.

Anyway, that’s me. That’s who I am. We love earning money and having family adventures and taking care of our kids with our money. And when we have expenses for holidays, it’s really an investment in an experience and an investment in the relationship. All right, so let’s get back to debt.

When I was working on Wall Street, and this was back in the 1980s, I worked in what they called the Fixed Income department. Fixed Income is another name for borrowing money or debt. I helped companies, multinational companies, governments, and government agencies borrow money. Which they would invest in their business, in their business operations, for long-term growth.

Let’s take, for example, a company; let’s keep it simple, let’s call it Coca-Cola. If Coca-Cola wants to build a new bottling factory somewhere in the world, they can either wait until they accumulate a lot of money, so that they can buy a piece of land or rent a piece of land, build the factory, hire the employees, put in all of the equipment that they need in order to bottle the Coca-Cola, and then, they will be able to start to produce Coca-Cola.

Or, they can borrow money and invest it now in the factory and in their bottling plant. They can get to work now producing Coca-Cola and selling it on the open market in that new area, where they want to sell their Coca-Cola and other carbonated beverages that they sell.

When you borrow money today, to invest in your business today, you save yourself time. And here’s the thing, time is a nonrenewable resource; you can always make more money, but you can never buy yourself more time. If you let five years go by in your business, accumulating cash to make an investment, you have lost five years of business growth.

So, it makes tremendous sense for you to borrow money in order to save time and grow and scale your business more quickly. We’re going to talk about interest rates and when it makes sense or does not make sense. But most of the time, you buy yourself time, growth, and scalability much more quickly when you decide to borrow money, invest in your business, and start growing.

And that is what I did when I was on Wall Street. I saw, over and over and over again, how companies would borrow and invest, borrow and invest, borrow and invest. And they kept growing and growing and growing for the long term. That is how all big businesses grow.

And when you think about startups in the high-tech world, they’re always going out, and they’re looking for seed money, venture capital. They’re looking for money to invest in their business today so that they can grow and scale very, very quickly.

People who are running big businesses never look at debt as a bad thing. They look at it as a tool that’s going to get them where they want to get faster. The problem with debt is not the debt itself. The problem is how many people, in their personal life, think about borrowing money.

And what they often do is they’re spending more than they’re earning because they have an impulse to spend. So, rather than waiting until they have money in their savings account that they’re going to use to buy, whether it is furniture for their house, a car, or a new computer, they’re spending from an emotional place, from a need. And they’re overspending on things that are going to lose value over time, rather than thinking about what they really need and what they are desiring.

Is it coming from a place of growth and investment, and scale? Scaling their business, for example? Or is it coming from a place of neediness and impatience and unhappiness with who they are, where they’re at, and what they’re feeling about themselves? And then, it becomes an overspending problem.

It’s not a problem with the debt itself. And overspending is no different from over drinking, over eating, over surfing the internet. There are all sorts of “over” things that we do in order to not feel negative emotions. That is not a problem with the debt itself, it’s a problem with regulating our emotions, and processing negative feelings. And that’s not something that we’re going to discuss on the podcast today. But again, debt is not good or bad; debt is only neutral.

Debt is a tool that you use in your business today. You borrow money today, and you’re going to have a future stream of cash flows that are going to go in and flow out of your business as you pay back the bank where you borrowed the money from. Or, maybe borrow it from a friend. Maybe you borrow it from your pension account. Maybe you borrow it from a family member, like your mom or your dad or your grandparents.

But if you’re thinking about using this tool called debt, called borrowing money for your business, it is because you want to speed up the growth of your business. You want to collapse time so that you can create results more quickly.

I want you to compare, in your mind, the way you could borrow money to invest today, in a website, in a coach, in a mentor. When you can borrow money, in order to get yourself some mentorship, invest in a mentor, to improve your skills more quickly, you can get to where you want to go in your business more quickly.

If you are bootstrapping your business, let’s say you’re gonna go out, you’re gonna make a sale, you’re gonna go through these consult calls, and you’re gonna get a no, and a no, and a no. By the way, which we all get, we all get tons of nos in the business.

But if you can work with a mentor, who’s going to help you really analyze and evaluate all of your sales conversations. And show you those fine nuances of where the conversation is going sideways, and how you can tweak and improve your conversation to get you to where you want to go faster, which is to help more clients more quickly.

When you bootstrap it, it could be that you’re going to get like 1,000 nos, where somebody who is working with a mentor, who can point out the fine nuances, will help them to just get 100 nos before they get the first yes, on their sales calls. Nos are never a problem. I just want to repeat that if anybody’s thinking that getting nos on a sales call is a problem, it never is; we always get lots and lots of nos in the beginning, until we refine our sales skills.

And if you can refine your sales skills more quickly, that’s fabulous. Because you’re going to collapse time, and you’re going to create more sales, serve more people, get your name out there, get people working with you, because they’re happy, and you get referrals.

And all of that is going to happen much more quickly because you decided to borrow money and invest it in yourself and invest it in your business. So, the alternative is to bootstrap it, where you’re going to work really hard to get your first clients, and then you’re going to hold on to that money.

And then you’re going to work really hard. And you’re gonna get another client, and then you’re going to hold on to some more money. And they’re gonna work really hard, and you’re gonna get a little bit of money; you’re gonna hold on to it.

It’s just going to take, whether it’s a year or two years, or three years or four years in order to get yourself to a nice pot of money, that you can invest in skills, and mentorships, and websites and all the things. Or, you can borrow money, and you can start creating results today much more quickly.

So, borrowing money is a way to collapse time and speed up your results. It actually does fit very nicely into our theme for January, which is how to reach your goals in 2023. And so, investing in mentorship, investing in skills, investing in training, through borrowing money and building your business, is a great way for you to reach your goals in 2023. Investments via borrowing money are great ways to build your business.

Now you can borrow too late, meaning you’re going to bootstrap it for a while, and then you’re borrowing, as it were, too late in your business, like you could wait those five years. You can also borrow too little money. You might think, “Okay, I’m just going to borrow $1,000. I’m just going to borrow $2,000. I’m just going to invest in this little program.”

I know so many people that invest in online courses, and I don’t want to dismiss online courses. I have online courses; I have sold them. Some people have actually gone through all of the modules, and they have gotten a tremendous amount of value out of the online course. I have a course called Investing Made Simple that hundreds of people have been through, and it’s a very valuable course. I don’t really market it anymore. If it’s something you’re interested in, it’s a $297 course.

But I also know that so many online courses are bought because people only want to invest a little bit of money in their business. And they never complete all of the modules. Or, they watch the modules and don’t do the work. And they also never get the results that they want in their business.

So, they’re willing to invest $1,000 in an online course, but they don’t take action. They don’t follow through. And then, they’re going to take another $1,000 and invest in another course. And then, after three months pass, they’re going to take another $1,000 and invest in another course.

It’s going to be this process of investing a little bit, over and over and over again, and never really getting the results that they want. And it’s such a shame because so much time has elapsed, and then they’re feeling frustrated, they’re feeling annoyed, they’re feeling impatient. “Why am I not getting the results that I want?”

Here’s what I want to offer you, if you would borrow money to invest in high-level mentorship, that is when you’re going to be able to create more results more quickly.

So, borrowing too late and borrowing too little, are both problems that you might encounter, when you are investing in your business. Nobody just dreamed up the idea of how to run a business and went out there and did it. Every single one of us who has created a successful business has invested in mentorship.

It was when I started investing big money in the big leagues, $25,000 every six months with my coach, that I started creating multiple six figures in my business. Now again, thankfully, I never had to borrow that money. But I have to tell you, the first time I put $25,000 on a credit card, I actually had to split it between two credit cards, and I felt a lot of discomfort in my body. It felt very, very uncomfortable.

So, I can’t talk about the debt, but I did put it on a credit card. I did have to call my banker and move some money around, increase my credit limits and tell them, at the bank, that I was going to be running through these two charges $12,000 on one card, and $13,000 on the other card.

And all of a sudden, it propelled me, in my head, into a different league in my business. I became the person who could invest $25,000 in myself and in my business. And what I want to offer you is that when you borrow big money for your business, and big is relative, you have to look at your business and think about what it means to you to invest big. For you, that could be $5,000. It could be $10,000, or it could be $50,000. The numbers are just numbers; they are all neutral, just like debt is neutral.

But you become a different person when you can invest in yourself at that level. And then, when people come to you, and they are having money objections on their sales calls with you, you will feel differently in your body. All of a sudden, you won’t have any resistance to their objections. You won’t be thinking, “Oh yeah, maybe it is difficult for them to pay that much money. Maybe it is true that they can’t afford it.”

And not being able to afford something is really someone saying, “Well, I don’t really value this. It’s not really what I want right now.” Because if they really wanted it, just like a medical expense, if there was a medical expense in their family, they would figure it out. When they really want to invest in a big way in their business, collapse time and get more results faster, they will be able to figure it out.

And when you have done that for yourself, over and over and over again, you will become a different person as a business owner. I know it’s scary in the beginning to borrow money and invest big in your business. As you do it, and as you commit to figuring out how to pay it back, you become a different person, a different business owner. And you realize that borrowing money to build your business is really the way it is done.

Everybody starts their business with zero, we start a business with $0, and we have to figure it out. Now, as a coach, we might think, “Okay, I can go to coach certification. I can get some skills. I can hang up my virtual shingle out there. Show up on some Zoom calls and make some money.”

And really, it is a little bit like that. But when you pay for mentorship, because growing a business is a different skill set from being a coach. And so, when you actually decide to invest in a different kind of mentorship, not the mentorship to give you the coach skills you need. Or, if you’re running a different kind of business, whatever skills you need to be in that kind of business. Right?

But when you decide to invest in yourself and figure out how to build your business, you become a business owner. And it’s just a different persona that you have. It’s a different skill set that you need as a business owner; is how to run a business. And that’s very different from doing the thing that you do so very, very well.

So, that is what I wanted to offer you today, that there is no such thing as good debt or bad debt. Debt is just a tool. You’re going to borrow money today; you’re going to pay it back in the future. I sometimes say, “Borrowing debt is borrowing money from your future self.” And in six months from now, a year from now, two years from now, and five years from now, you’re going to be paying back money from your future self. Your future self will be paying back the debt. Right?

And as a business owner, whether you are building a bottling factory for Coca-Cola, or whether you are Amazon… How did Jeff Bezos build Amazon? He had to figure out how to get delivery trucks, which we all know and love from Amazon Prime, that deliver things in two days. Or, now that I’m in Israel, I can order things from the United States, and they send them on airplanes.

And then, they drop it off at my house, with the post office or UPS or whatever it is. There’s a lot of infrastructure in brick-and-mortar businesses. And those of us who have online businesses, also get to borrow money and invest it in our business to grow. Because we just have a virtual business that has a little bit less cost than a brick-and-mortar business, but it’s still a business. It still needs investment, and borrowing money is the fastest way to get you where you want to go.

And when you collapse time, you get back something that is so, so precious. Because of those years that you’re losing on bootstrapping it and doing it yourself, you will never be able to recoup those years of your life. So, if you have any questions about borrowing money, and why it is the best thing to do for your business and your business growth, feel free to send me an email.

I love helping business owners change the way they think about debt. They always look at debt as a neutral tool that they can use for their own growth and their own happiness and satisfaction, showing up and serving their people in the world like they love to do.

All right, my friends. Thank you very much for tuning in to this podcast. If you stay with me till next week, I’m going to share with you how to be more productive in 2023 and meet all of your goals.

And the last thing that I want to share with you is my Money Healing Circle. Where we are going to spend seven weeks together, looking only at your money mindset, dropping into our nervous system, uncovering where all the blocks are to asking for more money, looking at your family of origin story around money, setting big income goals, and figuring out what’s in the way.

We’re going to be doing that together in a small group setting and really healing our relationship with money from the inside out. We start February 9. It is a $2,000 investment in your business. It is a $2,000 investment in the way you think about money and the way you feel about money in your body. You’re going to be able to take that investment with you for the duration of your business. It is an investment that is going to keep on giving.

If you would like more information about the Money Healing Circle, please reach out to me. Debbie@debbiesassen.com We start Thursday, February 9, and it is going to continue for seven consecutive weeks.

All right, my friends. Thank you for tuning into the podcast. I look forward to seeing you next week. Bye-bye for now.

Thanks for listening to Mastering Money in Midlife. If you want more information on Debbie Sassen or the resources from the podcast, visit MasteringMoneyInMidlife.com.