This is the affluent entrepreneur show for entrepreneurs that want to operate at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth so you can have a richer, more fulfilling lifestyle. In this show, you'll learn how business and money intersect so you can scale your business, scale your money and scale your life while creating a
deeper impact and living with complete freedom. Because that's what it really means to be an affluent entrepreneur. There's probably anyone, very few people, that if you walked up to them and said, do you want to be rich? Do you want to be able to be financially free? That's going to turn around and say, no, I'm good, I don't want it. And here's the thing. I actually believe that financial freedom is a birthright. We just need to understand
how to go claim it. It's the very reason I wrote my best selling book, building your money machine. This one, if you haven't got it, you got to get it hit the USA Today, debuted on the USA Today bestseller list. You can grab [email protected] and everything. But here's the thing, is that it is our birthright, I believe, and it is our imperative to live a life that is rich. Now, when I say rich, that isn't me. That doesn't mean it's jewels, bangles, cars, luxury, all that
stuff. I mean rich in the sense of experiences. Are you living your life fully? Are you able to live a life of choice? Are you able to live a life that you get to live instead of have to live? Are you being able to choose each day or are the demands of the day choosing for you? This is the thing that I want for you, is that when I talk about living a rich life, yeah, the money matters because it allows me the opportunity of choice. It allows
me the opportunity of options. It's the privilege of being able to do some of the things that I happen to be able to do. I do want a big bank account, but not at the cost or at the sacrifice of your well being, your real life and all those things. But here's the thing that I do know. There's a lot of people that will speak to it and say, I want money. I want wealth. I want rich richness in my life. But they're not willing to do what it takes to make
it happen. As much as you want to look at it, wealth, wealth creation is, is more about your behaviors, your choices and your decisions than it ever is about money. If you're not, if you don't believe that, let's look at some studies. 10,000 millionaires were studied. 79% were first generation. In other words, they created it during their lifetime. Eight out of ten, they didn't inherit it. It wasn't gifted, it wasn't one. They created it. Eight
out of ten. That's good odds, y'all. Good odds. And so now you look at that a little further, and 31, 32% of them did not make much more than $100,000 a year. So it wasn't because they made a ton of money. They sold a company for hundreds of millions of dollars. It's because they did the right thing with the money. They had to build the wealth. They needed to live a rich life, a life that had choice, a life that had options, a life that they got to live instead of had to
live. See, it is something that is a skill set that is learnable if you're willing to learn it. And I think there are seven things that can stand in your way to do this, and I want to break those right now so we can look at what, what we really need to do. Because wealth, truly, richness is truly more than money, but it is a series of learned strategies and behaviors that will get you there. Sometimes we don't want, we're unwilling to learn, we're unwilling to change, we're unwilling
to put the right things in place. So let's just talk about this first. And the very first thing that I think gets in the way is we have the wrong priorities. And what I mean by this is this, is that we tend to come into a place where we say, let me make some money and let me spend the money to live my life, and then I'll see what's left and I'll invest what's left.
This is what I call the wealth priority pathway in the book. And the problem is this, is that, that if you do, and this is what most people do, the problem is this here, the investing is literally the scraps. Your financial future is being built on scraps when you do that. We don't want to do that. We don't want to do that. Here's what the wealthy do. The wealthy flip this. They realize that they got to make money. They make investing the
priority, and then they spend. Now, you might say, well, if I did that, Mel, ha ha, I wouldn't be able to pay my bills. I get it. You may not have been able to pay your bills. The difference is this, then you go back to the income and you figure out how we can get a bigger shovel to get both of them. So you're living in an and world and not an Orworld. But the priorities first would be investing first. And the tendency is that we put our spending, our lifestyle, our current lifestyle first,
to the point that we will actually finance it. We'll put it on credit cards, we'll put it on payment plans, we'll put it on on buy now, pay later. If we have to do that for consumables and lifestyle, that's telling me that you cannot afford it, and you're forsaking your
financial future to make that happen. The other priority that I think we get wrong, or we can get wrong, is we get so caught up in what it looks like from the outside that we will do things to look good to the outside world instead of doing the things that matter. I think you ought to be looking at how do we become a quiet millionaire? I don't need to parade it. I don't need to drive a fancy, expensive car that's going to depreciate over time, that I have to finance over 70
months because I can't afford it. I don't need to finance all those things. Now I get it. There's a tremendous amount of pressure. TikTok, social media, Instagram, the media, the marketing messages, all the stuff, comparison and them putting their facades of their perfect lives in front of us, and we're going, oh, my gosh, this is where I should be. There's a guy by the name of Patrick bed David. He said, growing up, and we grew up in the same neighborhood, in the same
community. He said, growing up, I would see a kid, and we're close to the same age. I think he's a little younger than me. He said, I would see a kid that got a new bicycle, and that was my comparison set. The new bike, that's the standard. But today, in today's world, the comparison set for people is Kardashians new jet or Taylor Swift's Ira tour. That becomes normalized, y'all. What we really need to do is define our life. What is our journey? What do we want?
Make that the priority. Not worry about what the exterior looks like, the external looks like. Because here's the thing. I'd rather you be wealthy than look wealthy and have the peace of mind that you're living fine versus the stress of financing a lifestyle so you look good to the outside world of a bunch of people that you don't know and don't are probably never going to know that really don't matter. All right, so now I think I killed that one. All right?
But number one is the wrong priorities. Number two is a tough one belief that you can so many people that sit back and say, you know, I didn't come from money, therefore, I can't have money. I'm from the wrong side of the tracks. I didn't go in Ivy League school. I didn't get a big education. I didn't get any education. Okay? I don't think it matters, but that belief certainly does. I didn't come from money. My dad came here at 17 years old with nothing to go to school.
He got a degree. He got an engineering degree. He became an aerospace engineer, defense contractor. For a defense contractor, he made a decent salary. He had a pension. But we didn't live lavishly. We didn't take crazy vacations. We always bought used cars. We lived in the same house. One house they bought in 1958. We never moved. We never upgraded. We never did any of that. I'm a son of an immigrant that didn't have a bunch of stuff handed to me or him or our family. We had love,
we had good work ethic, and we built it. And so there is an element here of allowing our circumstances, our age, our stage, our circumstances, to start to navigate our beliefs and what we think we can achieve. I will tell you right now, if you asked me a decade, a decade and a half ago, would I be where I am today, financially or living the way I am? I'm not sure I would have said yes. In fact, I could almost assuredly say, I don't know that I would have said yes. I had
a desire. I'm not sure I had the map to make it happen, but I had to take one step at a time. And as I did that, the micro successes started to build the belief. And now I could keep that. Now I was able to move the goalposts a little bit, move the vision, to expand the vision. But this is a big one. And the tendency, especially when it comes to money, is to. Is to allow the stories in our head to navigate what we do, you know, whether it's fear, shame, guilt,
all of it. And the problem with money is that most of us are not educated, even those that are educated. I got educated as an accountant, y'all. The accounting degree did nothing for me about wealth, did nothing for me about money management. To be able to be wealthy, to live a rich life, it didn't teach me that. It taught me how to. How to use a timesheet and get paid for my hours and
commoditize my value. It certainly did that. And so we observe, we, most of our financial lessons, money lessons, are caught, not taught. We observe what someone's doing, and we give it an interpretation. Without a narrative, no one explains it to us. So explain. We explain it to ourselves. And so we create a story around what we observed, give it meaning that sets an identity. This is called the money story dynamic in my book, building your money machine. And
that creates an identity with sets, our behaviors. And those behaviors will set a money set point. In other words, the stories in our head set a governor on how far we can go if we're not able to break through those. And that's what sets our belief system in play. So this is one of the things that we really need to do some work on to move through it, because if we don't believe we can, we won't. All right, number three. Number three, I kind of talked about this already. Is the focus on
looking rich. Okay. The focus on looking rich instead of being rich, you can dress yourself up any way you want. Here's the challenge. You know the reality. You know the reality of it. If you're financing it, if you're stressed under debt and it just looks good from the outside, it's not real, and that is going to impact us. So what ends up happening is when. When we are trying to look rich, we make decisions to create a facade, to make a painting, paint a picture for people that,
to the outside, looks great. I know a lot of people that are actually very, very wealthy, but they live bankrupt lives in the sense that they're so far in debt and they aren't enjoying the journey. They have no richness in life. They're not enjoying the experiences. It's not the way to live. I don't care how big the bank account is. That's why I say our focus is on the
richness in life and not the wealth in the bank account. Yeah, we want the wealth in the bank account, but not by forsaking the wealth in the bank account, is to allow us to have the richness in life, the choice, and the things like that. So focusing on looking rich to impress people that you don't even know is a mistake, because it's easy to create a facade of what looks like a rich life on a payment plan until the payments come due. All right, so that's number three. Number
four. The other thing that holds people back is wanting quick results. Wealth creation wealth building is a journey. It takes time. Okay? Time is your friend. Get in the game. Stay in the game. Stay in the game long. There's something in the book that I talk about called the wealth creation curve. And the wealth creation curve is. Is kind of the way we, we build wealth. Wealth is not linear like this. A lot of people think. Think that way. They think it's linear, but
it really isn't. Wealth does this, and there's this little segment right here that, that is at the very beginning of your wealth journey that you, you sitting here. I call it the flat line, because you're putting money in, you're investing, you're listening to people like me, and then when you get, you get going, you put in years and years and you're going, man, I've only gained, like $67. This is stupid. It's not getting me anywhere. And you give
up because you don't know what's around the corner. What's around the corner is this right here. And what's around the corner is what I call the acceleration zone. This is the tipping point. And now the subtitle of my book, the subtitle of my book is how to get your money to work harder for you than you did for it, okay? That's what's happening here. This is where your
money is working harder for you than you did for it. But we don't get there if we don't have the patience, if we don't have that long term view, because we want quick results. Quick results, we're swinging for the fences, which means that we take more chances of losing money than making money. Okay? So it's important for us to look at it through the eyes of a long term
view. I want to run through some numbers for you. Now, these numbers were done by some dear friends of mine at the money guy show, Brian Preston and Bo Hansen. But they demonstrate some really important things to consider. Okay. And the first is this, is that, let's say that your target is a million dollars and you're going to put $10,000 away per year at 8% to get to your first hundred thousand dollars. That's the hardest. It's going to take you 7.6 years. So at
7.6 years, you'll have $100,000. If you did 10,000, you're at 8%. Okay? It's going to take you 20.6 years to get to $500,000. So now you're halfway to your million, but it's taken you. It's literally taking you 20 years, 21 years, almost 20.6 years. But you still have another half to go. A half a million to go. But see, now you've crossed the tipping point. Now you're in the acceleration zone. Watch what happens to get to that million
dollars up here. The time it takes from here to here is a sum total of seven and a half years, y'all. It takes you less time to make a half million dollars here than it may took to take up make 100,000. This is the power of it. But we have to get in the game and we cannot look at quick results. We have to look at it over the long term. Get in the game, get on the field, stay in the game, stay long term. There's
so many different ways I can carve this up. So you can see that if you look at the S and P 500 over a 20 year period, any rolling 20 year period, the lowest you're going to you return was 4%, except for 120 year period. At 90% of the time, over a 20 year period, you were at 8% or above. 59% of the time you were over a 20 year period, you were at 10% or above. We got to play the long game.
We got to play the long game. Quick results will get us in trouble. It's how I got in the Ponzi scheme and how I lost my rear end. One third of everything I own. Me and two friends, we lost over four and a half million dollars because we looking for the quick win. All right, all right. Number five, not owning your value. This is a big one. Like it or not, we are in a value exchange economy. You get paid for the value you
provide, the solutions you create. And in order to one, in order to get paid for that, you need to be skilled up at a level that you can provide a bunch of value, a whole lot of value. The solutions that you come with need to solve complex problems. The bigger the problems are that you solve, the more you can get paid. That's a big
shovel that'll help you out. But the problem that I see with most people is we got raised in an environment of punching a time clock or a timesheet or what's my hourly rate? That's putting you into a math equation of commodity. And we never own our value, even when we negotiate our salaries. Do you own the value you bring to the table? Do you, with conviction, own it and say, this is what I bring to the table. This is the value of my solution. This is the value
of my work, not what you think it is. But look at the solution. If I bring in a solution, like, I get called in to cases where I'm working against the taxing authorities, against the IR's, in valuations, and I can save them a million dollars in taxes, $100,000 price tag for that is very small. If I look at my hourly rates, my God, I'll get paid a fraction of it. But you should be paid for the solutions you have. But you have to own, own
it with conviction, and most people don't. So you own your value, and you take responsibility for increasing your value, skilling up and developing and elevating that value. Okay, number six is the wrong use of
debt. Oof. This one's a big one. This one's a big one. Because what ends up happening is that we are in an environment where it's so easy to buy things on payment plans, whether it's swiping a credit card, tapping a phone, or buy now, pay later, what they're doing with that is that they're allowing us to live beyond our means by putting things on a payment plan, on an installment plan that comes home to roost in a big way, because sooner or later, the math
does not work out if you're not careful. So there are two kinds of debt. I don't believe that all debt's the devil, okay? But I do believe that all debt has two personality traits. All debt. The first personality trait is that all debt costs. It's called interest. You're going to pay more when you do it. Even when they say 0% y'all, they're not giving you a free lunch, they're getting it somewhere. Okay, so all debt costs. The second personality trait is all
debt stresses. It stresses your finances, and it stresses your psyche. So we know that going in now, there's productive debt and there's destructive debt. The stuff I'm talking about is destructive debt. Destructive debt is the debt that you're using to finance lifestyle. It's momentary pleasures. It's financing lifestyle. It's luxuries, it's long term financing on cars, it's big screen tvs, luxury vacations. Things that you cannot pay cash for but are consumables. Lifestyle stuff should
be avoided at all costs. The wrong use of debt will bury you and will stand in your way of being rich. Okay, that leads me to the number seven, the last and final, and I think the most important, the most important investment that you can ever make is you. And doing it in a way that makes sense in order for you to truly develop, to truly skill up, to truly get paid, to live a fully rich, embraced life, you need to invest in yourself. You need to invest in yourself first.
Whether that is personal development, whether that's introspection, whether it's coaches and mentors, whether it's further education, whether it's understanding money and wealth, whether it's training programs, courses, mentorship conferences, be willing to invest in yourself, because the more you grow, the more the world around you will grow, the more your ability to build wealth will
grow, the more you grow. Because if we don't develop the skills to steward and to build the wealth, we'll never get there. Listen, I have a, I have a video that talks about the first hundred thousand. Your first hundred thousand dollars of wealth is the hardest threshold to get over. Why? Because up until that time, you had no wealth. You had no
net worth. And up until that time, one of the reasons you didn't is you had no skills, you didn't have an understanding, you didn't have knowledge, you didn't have the habits, you didn't have the behaviors, you didn't have any of that. And during that first hundred thousand, the reason it's the hardest is because you have to learn all of
that. You have to figure out the skills, you have to understand investing, you have to understand behaviors, you have to understand money, you have to understand all of those things. And it's during that growth that once you skill up that you get to accelerate beyond that point, beyond the tipping point, beyond the flat line to make it happen. So one of the things to really dial in is investing in yourself. First, start with my
book, building your money machine. It'll help you skill up. It'll give you the knowledge. It gives you the resources, because you get a bunch of resources with it through a QR code here to help you put it in place. Invest in yourself first and make sure that you dial it in. If you truly want to be rich, if you're truly obsessed with living a rich life, don't let these seven things that I just walked you through get in the way, all right?
Because financial freedom is your birthright. Let's just go out and claim it, all right? I hope you found this a value. I hope that this helps you on the journey to financial freedom, because I want to see you soar, all right? I want to celebrate you on that path, all right, until I get a chance to see you in another episode, the affluent entrepreneur show, or on the road or when I'm out there, speaking as I've always said, always, always strive to live a
life that I lose you. Thank you for listening to the affluent entrepreneur show. With me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to melabraham.com group, and I'll see you there.