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 absolute entrepreneur.
All right, this one's gonna be a fun one, just because we're gonna do some math, we're gonna do some things, because so often people will say, wait, I don't have a lot of money left over at the end of the month or at the end of the week or at the end of the day. And so I don't think it makes sense for me to start investing until I do. Here's the
challenge, okay? Your wealth creation is going to be driven much more by your behaviors, your habits, your choices, and your decisions than it is ever going to be done by money. Now, money. Look, money matters, but your behaviors matter more. Here's why I can say this. There was a study of 10,000 millionaires. 79% of them, eight out of ten, were first generation. Eight out of ten, meaning that they actually created it in their lifetime. It wasn't inherited, it wasn't gifted,
it wasn't won in the lottery or anything. They created it, y'all. Eight out of ten, that's pretty good odds for you. Now, you just need to understand the prescription and the recipe to make it happen. That's what this channel is about. And if you haven't subscribed to this channel, speaking of this channel, I want you to subscribe to this channel so you can get all of the goodness, all of the training, all of the perspective that's going to light
the path to financial freedom for you the right way. All right. All right. Let's get back to it. So here's the thing. If we just understood the behaviors, now, going back to that study, if 79% of them were millionaires, here's the other data point that I think just blows you away. 31% of them never made much more than $100,000 annually during their career. So they weren't making boatloads of money, but they still became millionaires. So it wasn't about the money they made. It
was about what they did with it. And so it's about the habits. It's about the behaviors. It's about the choices. It's about the decisions. And this episode is going to show you how to make those decisions, even in small increments, okay? Because what we're looking for is $510 a day. $10 a day, okay? Where you might look at your day and say, where am I spending five or $10? Now, this is not about the latte
and all of that stuff. There are plenty of places that we are spending money in subscriptions and other things that we may not be getting the benefit of or we may not be enjoying the value of. And if we just took that and moved it from the expense column to the investment column, things change. Now, here's the other nice thing is, in today's world, we can do what's called fractional investing. Back in the day, if you were going to buy a share of stock and the stock cost $100, you had to have
$100 to buy it. But now you could take $10 and buy one 10th of that share. So you can buy fractional shares now, which makes it easier for you to invest. So many of the brokerage houses allow fractional investing, which gives you the possibility of doing this. And I'm going to give you a different way to do it, where you're not just buying into one company, you're buying into many. So the key is this. All we're trying to do, and all I'm trying to do is get you in the
game of wealth creation. Because here's what I know. You will never win the wealth creation game if you're not on the field playing the game. You can't do it from the sidelines, and you cannot do it from the stands. All right? If you're sitting on those in the stands as a spectator watching other people create their wealth, until you decide that you have enough income to start getting in
the game, it's not going to do you any good. Because what you're doing is you're wasting your most valuable asset when it comes to wealth creation, your time. Okay? And then if you sit back and say, I don't want to deal with risk, so you say, I'm going to get in the game. So you're no longer in the stands. You're going to be on the sidelines. But I'm going to put it in a cd. I'm going to put it in a savings account because I want to be safe, y'all safe. I get
it. Okay? But you put it, you cannot save yourself to wealth. You have to invest yourself to wealth. Okay? Here's the thing. If you invest $5,000 a year, $5,000 a year at 8%, and you do it from age 25 to 65. By the time you're age 65, that $5,000, okay, is going to be $1.5 million, okay. You invested a total of $200,000. That's $5,000 a year over 40 years. So you got $1.5 million. Here's the challenge.
That's if you invested in, say, an S and p 500 index fund with the average returns of 8%, okay, if you put it in a savings account, if you put it in a savings account, same amount of money, same decision process. I'm going to get in the game, but I'm going to get in the game without risk. And now instead of 8%, you get 2%. By the time you get to retirement age, instead of having $1.5 million, you will have $314,000. That's it. You cannot save your way to wealth. You have
to invest. We have to get in the game and do this. And so this is why I wanted to do this exercise of what would happen if I did $10 a day, okay. About $300 a month. What does that do? Okay. It's actually not $300 a month because I'm going to only do it for five days. So it's about 4000, 4200 a year because I'm only looking at the days that I can invest, okay? And we're only investing five days a week. Okay? So I'm giving you some days off to make that happen.
But let's just assume that you're going to do $4,200 a year, okay, on the investing days, we're going to do something very specific with it. So I'm looking backwards five years. And I said, had I done this for five years, $10 a day, $10 a day over five years, here's what we would have done, okay? $10 a day over five years on only the investing days, you're going to put away around $12,590. It's about $4,200 a year. Okay? That's what we're, that's the, that's the
exercise we're doing. And I said, and I went back and I did something called back testing. They said, let's go and let's buy an investment every day at that $10. And the two investments that I wanted to compare is something called Voo and VTI. Okay? Now let me be really clear here. I am not recommending these investments. I'm just doing it as an example. And what I'm choosing right now are two index funds, ETF index funds. That one, Voo. Voo is, is the s and p 500. Okay?
So you're getting 500 of the biggest companies. I want a diversified portfolio to do that. So I'm buying, I'm putting one, one amount in, but I'm getting access to a bunch of companies. VTI is total stock market. Okay? And this is about 3000 companies. Okay. So those are the two investments that we're going to compare. And I'm going to assume that we invest the $10 each day at the adjusted closing price. And so I went back and I did the calculations and did that for
every day that the market was open. That's why we don't have, we're not doing $300 a month every day because we don't do it on Saturday, Sundays and holidays and everything. So we're doing about $4,000 a year in total. If I did that going back five years to mid July when I am recording this. Okay, the Voo, let's look at what happened. What would happen with Voo? Okay, Voo, we invested, we invested 12,000. $12,590 over five years at this day, I would have had $19,090.
Now you might look at it and go, okay, that's, that's nice. Okay. But what has happened, if you look at this, is, I've actually got between this and this almost, well, $6,500 that I made in five years. In five years. This is a 51.6% return over the five years. If I look at it over the five each year, it's an average return of 10.3%. 10.3%. That's not bad. That's not bad. Imagine this. Now look at VTI. Okay. And this is why I'm telling you we stay simple. It's, and we still get
results. $10 a day, 1205. $590.05 years. Okay. As of mid July, you would have a little bit less. $18,555. Okay. Okay. The return on that is 47.4%. Okay. Average 9.5%. It's over five years. Watch this. And this is why I'm telling you to get in the game so quickly. I don't care your age, stage or circumstance. Let's find $510 a day and let's get a 10% return. Let's get a 9% return. It's not the dollars that are important, it's the percentage return that's
important. Because when we increase the dollars, then the dollars will go up because we're getting the percentage return. Why is this important? Let's take this and let's extend this out because this is where the power is in this whole thing. Okay. What if you did this for 20 years? Okay. What if I took this out for 20 years? Okay. Now in 20 years, I'm going to have $277,000 total and 69.7% of it was growth. Meaning that I only put about $100,000 away. What if I went 25
years? Just five years more 25 years. Watch what happens. $490,000. $490,000.78.6% is not your money. It's the growth of the money. Think about that. Every dollar you put in, almost $0.80 comes back to you over 25 years. It's really powerful. This is the power of getting in the game. This is why we have to be on the field playing. Let's give it another five years. Let's see what happens in 30 years. This will blow you away. 30 years. You're going to end up with a total of $847,000.
Okay. Almost 850,085.1% of it is from growth. The point being is that if you turn around and start with just a little bit and get yourself on the field and stay in the game playing it long term, you'll win the game. The challenge is we're delaying it because we don't, we're not fully prepared. We're not sure what to do. We don't have enough money to really make a difference. So I'm not going to do it with
$10 a day. No, $10 a day will make a difference. You tell me in 30 years, if you had 850,000 more dollars, wouldn't it make a difference in your life? We got to get you in the game. Now. I haven't complicated it. I'm just telling, I'm saying, let's say I invest just in one thing. Voo or VTI? Vo or VTI? I'm either diversified over 500 companies in the S and P. S and p 500 or I'm diversified in
3000 companies in the total stock market index. And we hit those returns over the long term at $10 a day over 30 years, $850,000 richer. Okay. It's not. It truly is not the amount you're putting away that matters. It's the fact that you put your foot on that field and you're starting to play the game. Because I promise you, the $10 a day will not stay $10 a day. Because as you start to see growth. As you start to get, get into the game, it will become contagious for you and you will
put more more into it. All of a sudden, it becomes $15 a day and it becomes $20 a day. And before you know it, you'll have millions. But you can't get to millions. You start with a few dollars to begin. All right. I hope that this maybe shined a light on what can happen if you simply get in the game, no matter the amount. And if this was $5 a day, cut these numbers in half. That's okay. Okay. It's dollar 20 a day, double them. But point being is that just
get in the game. Don't get so concerned about, well, it's not that much money now, but it is a lot of money later, but it won't be if you're still in the stands or on the sidelines. All right, let's get you in the game. Let's give you the pathway. Let's give you the recipe. If you have not got my book, the recipe is in the book. I break it all down for you here, building your money machine. Grab the book. Also, if you want more guidance, make sure that you're subscribing to this
channel because I'm putting out all the content. I'm not selling you insurance. I'm not selling you investments. I'm not a broker. I'm not here trying to build a book of business. I'm trying to sell you on one thing and that one thing, your dreams, your path to financial freedom to give you the unbiased view and the perspective of a road traveled by me. All right. I hope that this helps. I hope that you found this a wake up call. So you get in the game right now with
just $10 a day. All right. Until I get the chance to see you in another episode on the road as I'm speaking, all right. Or answer some of your questions. Always, always strive for life. That I do. See you in the next episode. Thank you for listening to the
affluent entrepreneurship with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneurship, our Facebook group now by going to melabraham.com group, and I'll see you there.