All right, this one's going to be a hot one because I'm talking about things that maybe some people don't want to talk about. The fact is that the middle class. If they stay with their thoughts and their actions and the things that they. Do, they're never going to become rich. But it doesn't have to be that way. And listen, here's the deal. I'm a son of an immigrant. My dad came here at 17 years old with nothing. He came here and went to school. I didn't come for money. I didn't have a silver
spoon. I came from an engineer and a homemaker, and I went to school. I did some things. I did enough things right to be successful. I did enough things wrong to be educational. I made a whole boatload of mistakes. I've lost money left and right, but I've actually been able to grow from it and go from it. And I want you to. So, and I say this not. Not for any other reason other than. To say, I don't care what your. Age or stage of life is. I don't care what the side
of the tracks that you think you were born on. I don't care what your upbringing is. What I care about is that we. Find a solid place as you are today. Whatever happened in the past is the past. And let's figure out how we can change the trajectory for the future. How do we shift that financial future for you? And there's some things that I noticed as the decades have gone by of. Me working with people like you to. Build wealth, to build financial
freedom, to build a business, to build a life. In a different way that maybe hadn't come about. There were some things you weren't talking about. There were some things you weren't doing. There were some things that that can happen. But here's the deal. It's not your fault. It's not your fault. I'm going to walk through twelve things. That I think that until we get. These straight, no matter what our age. Or stage are, we're not going to find the path to wealth
or richness or financial freedom. Or if we do, it's going to be a rough go to get there. So let's jump in. I'm going to jump to the iPad and we'll write these things down. Here's the first one. And this is the thing that I grew up with and many of us grew up with. Number one is not talking about it. Okay. We are in a situation where what happens is that we're not talking about money. We're told, how many of you actually were raised in a home
where they. Said, well, talking about money is impolite. I remember, I remember. I remember we called him an uncle. He wasn't an uncle, but he was driving this nice, nice sports car. I had no idea what it was. It was an Aston Martin in hindsight, but he had this phone in it way before phones were vogue. I mean, it was this big phone, and you had to dial a central station, and they would connect the call and all that stuff. And I remember looking at him and. Saying,
how much do you make? My mom almost spit her food out. She was like, do not ask that. Are you kidding me? That is so impolite. And maybe it is asking what someone. Makes, but talking about money isn't impolite. It's actually a necessity. Here's the deal. A recent study showed that 72%. 72% of people are stressed about money. 22% say that it's extreme stress. So if we're having stress around money, but we're not talking about it, how do we relieve the
stress? How do we learn things? See, the problem is that most of our money lessons are caught, not taught. We don't go through formal education. They don't talk about it in school. They demonize it in the media and social media. They glamorize it sometimes in social media and make it seem like, oh, get rich quick. But they're not having real talk around real money and around real life. That's part of what.
What the work is that I'm doing. The show, my. My new book, building your money machine, is all about, is to open up the conversation. Because here's what I know. Until we start to have a conversation. Around money, like, really around money, what is it? Why does it matter? Does it. Is it the thing that's going to give you happiness? Short answer, no, but is it the. Thing that's going to give you drive? Is it the thing that's going to give you meaning? All those questions, and
then how does it work? How do you get money? How do you keep money? What does it mean to build wealth? This is, number one, is that if we're not talking about it, we need to talk about it. In order to talk about it, it leads to number two, is we've got. To ask ourselves, what environment are we in? Who are we hanging around with to make that happen? Because if we're living in an environment, if we're surrounding ourselves in an environment where most of the people are spenders, they're
in debt. And they're having conversations about how terrible it is, how rough it is, and how they can never get ahead. It's not going to elevate you past that. And so what we need to think about is what pools are we swimming in? What environments are we in? Are they nurturing? Are they growing? Are they challenging? Are they creating uncertainty, fear, angst, lack?
And I'm not saying to eliminate those out of your life, just to be aware of it so you can turn around and say, I want to go somewhere else. I'm going to add to my environments, because sometimes you can't get rid of, you know, family members and that kind of thing. But, but are we having conversations about spending money or are we having conversations around building wealth and having a meaning and, and generosity and making a difference? They're
different. And they're going to spur a different. Element of thinking, which is going to drive a different behavior, which is going to drive a different money result. So that's number two. Number three is they're playing the payment game. So what happens is this, is that we start to buy things or we start to make spending decisions based on the monthly payment. And marketers know this, especially car dealers. They know this. And if they can get
you to commit to a payment, they can manipulate the numbers. So you actually overextend yourself and you dont realize its little pieces of time. Its that whole analogy of if you put a frog in cold water and start to boil it, it doesnt realize that its getting boiled until its too late. I know its a horrible analogy, but its the truth. And so what ends up happening is. When we play the payment game, oh, its only $100 a month. If you do only $100 a
month 1012 times, all of a sudden you're. At $1,200 a month. The challenge with the payment game is. What it does is it removes the. Friction from the buying decision, which makes it easier for you to buy. That's why a car dealer, a car salesperson, when you come on the lot, one of the first questions they ask. You is, what kind of payment are you looking for? Because if they know the payment, they can, they can change the numbers. Now,
I negotiate a whole lot differently. And when they turn around and do that, I remember the last time I negotiated, I said, I'm probably going to pay for cash. But the bottom line is we're not talking about payments here. And until I decide that I want a car, you and I aren't going to have a conversation. So can I have some time to go look. Now, I walked off lots because some. Of these salespeople that are, they're, they're. Like parasites and they won't leave you alone.
Well, I, as a customer, ask them to give me space and time. And if they're not gonna give me space and time, that means they don't respect me. If they don't respect me, they don't. Get my money, means I walk out. Even if they had the car. So, so. But the bottom line is that when you start to look at payment games, buy now, pay later, or zero down financing or just credit card financing, layaways, all those things are taking
and kicking the can down the road. But sooner or later, that math equation is going to come home to roost. It has to work out. Math is going to work out. So playing the payment game is something. That the wealthy or those that are. Moving towards wealth know that they shouldn't be playing, because inevitably there's a cost to it. Even when they say it's 0%, nothing is for free. Zero, 0%, okay? It's not for free. Somehow they embedded some compensation in there for them to actually
finance the purchase. So you need to be, be aware of it. So we're not going to play the payment game. We're going to pay for things. We're going to buy things and do things to the extent of cash. Now, some big purchases like a car, we just got to do it right. We have some rules around buying cars. How do you buy cars or a house? Same thing. We have some rules around buying a house so you don't overextend yourself to a point where you can't do it. So. But by and large, we want
to. Buy things in cash as best we can. Especially consumables. Especially consumables. The stuff that is lifestyle, luxury items. If we're financing our clothing, if we're financing our vacations, if we're financing our. Daily living, then what we're doing is. We'Re robbing from our future to live a life today that we can't afford. Okay? So we need to be, we need to be smart about it from that perspective. Number four is we have no liquidity. What is liquidity? Cash, okay? It's cash.
It's how much cash do you have on hand? And the reason isn't to have cash because people have said all cash is trash. You don't want cash because you're not. You're going to lose money on inflation. And they're right. However, it is important for us to have liquidity. So we have peace of mind, okay? When there's an emergency, if there's an emergency, and there will be. That's just
the, that's the way life is. Life will happen. And at some point you have an unplanned expense, you have an unplanned health ailment, you have an unplanned, you know, work interruption. You get, you know, laid off or something. And if we don't have liquidity to carry ourselves during that time, we end. Up having to go into debt, which means that instead of building the mountain we're trying to build, we're digging a. Hole to get out of. We don't want to do that. So we want to have
liquidity for a few reasons. One, peace of mind. Two, so we can take care of any emergencies. Three, so we can sustain ourselves during any kind of prolonged downturn, or health challenge, or relationship challenge, or work challenge in that way. And then the other reason we want it is because there may be opportunities to buy. And if we have liquidity and cash to buy, we can negotiate much, much better. I did that with a house. I
did that with my car. I do it a lot with that. So we want the liquidity to put us in a power position to make that happen. And so over time, we want you to do that. I want you to use the wealth priority ladder, which is in the book, and I explain it in detail in the book and in my trainings, so you understand what to do to make that happen. Number five. Number five is, is being house rich, okay? Cash poor. And what I mean by this is. That putting too much into a
house. Now, I just had a conversation with. Someone that said, I don't think that. I'm ever going to be able to own a house. And I asked the question, is there. A reason you want to own a house? Well, it's the american dream. Well, I asked the question, is the american dream your dream? I never thought about that. I just thought I was supposed to own a house. Oh, no, no, no. I don't care what the american dream is. I want to know what your dream is. There's no necessity that says
you have to buy a house. There's no necessity that says you have to own a house. Is it a good investment? Well, from a pure investment standpoint, no, because it costs you money. It's not truly investment. It's a place to live. You're paying a mortgage, there's cost to upkeep it. Okay. Does it go up in value long term? Typically, real estate does. Is it a good investment? Only when you're ready to sell it. There are other investments that are more liquid and more appropriate. And
the challenge is, if we overextend. Ourselves with our housing, okay, if we. Overextend ourselves with our housing, we have no cash to live. We have no cash for anything else. We have no cash for liquidity, we have no cash to get out of debt, and we are just barely making ends meet. So we have to be really smart about it. I look at your housing costs. Total housing costs need to be less than 30% of your income. Less than 30% of your income. If it's beyond 30%, you're starting to
tiptoe towards. Towards being overextended. House rich, cash poor. Okay. Leads me to number six. And number six is separating effort and earnings. This is the whole premise of my book. Building your money machine is for you. To understand how to separate your ability. To earn from the efforts to earn it. The challenge right now is that most of us, in order to earn money, we have to go to a job. We have to go to the business. We have to run on the treadmill, and
we got to run on the treadmill. And the fact is, and I came out of that space, I'm an accountant. We sold hours. So unless I was churning the hours, I wasn't making money. Unless I was on that treadmill, I wasn't making money. And if I wanted to make more. Money, I had to run faster, longer. Harder on the treadmill, y'all. Sooner or later, something breaks down, something burns out. We can't go. We hit a ceiling, we hit a cap. And so what we need to look at is how do I separate
my. Efforts to earn the money from the earnings itself, hence the money machine. Okay, yes, I earn money by doing. Things, my efforts, but I also create things, assets. I buy things, assets that generate income without my efforts. The book I spent a lot of. Time creating, but it's going to be. Selling for the next decade or more, making money, okay? Changing lives, helping you, like, the path to financial freedom, to give you the tools, the tactics, the
strategies, it's going to be a game changing book. So it's going to be there for a while. But I did the effort once, and now it goes on, okay? Investments, real estate, rental properties, you know, there's cash flow. It takes a lot less effort once you're in it and it's working. Other investments, portfolio investments like stocks and bonds and index funds and ETF's, all of those things are going to give you income
without as much effort. And the more that we can reduce. The effort to earn, the more we have time to live our lives the way we want to. So those that are wealthy, those that are rich start to understand, and they know that at some point, they have to look at how do I separate my efforts to earn money with the actual earnings itself. And the way to do it is to build a money machine. The number seven. Number seven is about leverage, but not
leverage in the way you think. I'm not talking about debt leverage, but it goes back to separating effort and earnings, too. But leveraging assets to create earnings without. Your effort, but also leveraging. Team. See, anything that gives us time back is going to is leverage. Anything that gives us effort back is leverage. So I want to look for ways that I can generate my income with less effort or less time. And so I am talking about leveraging
assets, team, and time. Okay? And when we do that, we get it back to do it for, use it for other reasons. Which leads me to number eight, and. That is. Knowing your value. This is a big one. It's a big one of not knowing your value. And if we truly want to start to leverage things, first things first. Value yourself. Value yourself. Okay. We tend to not ask for our value. And the value isn't in our hours. The value is in the solutions that we create
or that we provide. The tendency is to do a math equation to say, well, I work 40. Hours, and there's my hourly rate, but. In that 40 hours, what's the solution you provide that can create value in the hands of the folks that you're working with? This piece, number eight, is about you owning your value. To look at yourself and say, I. Actually am valuable, and I'm valuable to. This extent, and I'm not going to reduce my value, and I'm going to own it with conviction. Okay? Number
nine. This one. People wish it would go away, but. It won't go away. Taxes. There's two systems, okay? There's two systems of tax systems. One, and it's not a tax system for the rich and a tax system for the poor or the middle class. That. That's not true. We all have the same tax system. We all have this access to the same tax system. But when I say two tax systems, it's the tax systems for those that. Are employees and
those that are business owners. Because an employee pays for all their expenses after they pay their taxes, so. They get their paycheck, and after they. Take that, get their paycheck from their paycheck they get, let's say they get gross pay of $2,000, but the net check they get is like $1,500. So there's a $500 difference. Where did that go? To pay taxes. So right out of their paycheck, they pay taxes first. They have $1500 net
to spend, to. Pay for their mortgage, to pay for their car payment, to pay for expenses. And to pay for all those things. But a business owner, they make the money, they pay their business expenses and. They pay tax on the net. So they actually have the opportunity to pay for things before tax. So for instance, if they use the car, the vehicle for business use, instead of paying it after the taxes, they can pay a portion of it from the business, get a tax deduction for it and reduce their
taxes. Understanding the two tax systems, those for investors and business owners and those for employees and using it effectively is really important to move you towards the richer side of things. Number ten, and most of you probably heard this, is multiple streams of income. Multiple streams of income. And here's the thing here, and I do think that we want this, but we want multiple levels of income to the level of effort
to generate the income. And the less we are dependent on a single strand of income, the less risk we are to losing our wealth, losing our way and losing our income. Now here's a caveat here. You need to start with one stream of income. You need to get that running fast and furious. You need to get it rolling really well before you start to try and develop another one. The tendency might be to try and try and create three or four streams
of income at the same time. And none of them will work because you're not focused enough to give it the attention that's necessary. So get one income spinning. Well, that's like you're spinning plates. Get it spinning. Well, first, before you go spin another one. Okay. But over time, I want to make. Sure that you have multiple streams of income. All right, last two. Number eleven is not tracking your numbers. Okay, not tracking your numbers. Now, one of the numbers I want. You to track
is your net worth. But here's the thing, I get it. Some people say I'm afraid to look at what it looks like. I don't want to know what it. Looks like, and you know, I get it. But until you're willing to look it in the eyes, look it in the face, until you're willing to get real with your current reality, we can't move you from there. Not about judgment, not about blame. I don't care how bad the decisions you think you made in the past. They'Re
in the past. We're going to make new ones. I'm going to equip you, I'm going to empower you, I'm going to educate you, I'm going to support you, I'm. Going to guide you, you're going to. Make new decisions, you're going to end up with new results. Now, I'm not saying that it's easy. Depending on where you're at, but it will be simple. And we do that. Right. So tracking our numbers so we know where we at, where we're at. Tracking
our numbers so we know where we're going. Tracking our net worth is a huge thing that most wealthy people are doing on a regular basis. And the last one is this. Number twelve is making investing a priority. And here's what I mean by this. Making investing a priority is that if you don't, if you don't do this, here's what most people do, okay? Most people are making money spending money. On their lifestyle and on living. And then they look at what's left and they take what's
left and they invest that. They create their financial future on whatever's the leftovers. The problem is that investing isn't a priority in that equation. And what you're really doing is creating a future on the scraps. And there may be some months where you have a lot left over and there may be other months where you have no leftover. And so it's hit and miss. And you wonder why you can't get ahead. Well, because it's not a priority to get you ahead. And
in order to do this, what we need to do is flip it. We make money, we invest first, we. Allocate that, that 20%, 25% towards our future. And if you can't get to 2020, 5%, start where you can. Maybe it's 5%, we increase it to six, to seven, but the target is 20% to 25%. But more importantly is that you're creating the habit that it is the priority. And you sit back and say, I'm. Going to invest first, and then I'm. Going to spend
the rest on my current lifestyle. And you might look at me and say, mel, if I did that, I couldn't pay my bills. Well, now we have the real question. Now we have to look at not only what your bills are, but now let's examine the income that you're bringing in. How can I increase my value and increase the flow of income so I have enough to support my investing as a priority and my lifestyle, but we. Dont forsake our financial future for a. Present that
I cant afford. All right? So I hope that this makes sense. These are the twelve things that, when I look at it, when ive worked. Over the decades with folks that are. Moving from wherever they are, middle class, even below middle class, and moving into the rich realm or the wealth realm or the financially free realm, these are the twelve things.
Okay? They're talking about money. They change their environment and they make sure they surround themselves with people that are going to challenge them, grow them and help them. They're not paying the payment game. They're building liquidity so they have safety and opportunity. They're not worried about being house rich and cash poor. They find a way over time to. Make sure that they separate their effort from their earnings. They leverage assets, time and team. They own their own value.
They understand how to use the tax system to their advantage. They develop over time, multiple income streams. They're tracking their numbers and they make investing a priority. I hope that you use this as. A checklist and you start to look at things and say, how can I make each of these happen? Because when you do now, all of. A sudden you move from wherever you're. At, whatever the age or stage you're. At, towards the path to financial
freedom. And the richness you deserve. And know that I'm with you every step of the way. I truly believe that financial freedom is your birthright. We just have to go claim it. All right. I hope you found this of value. If you have any questions or anything or comments, do me a favor and let me know. Let me know. Reach out to me. Post it below.
Let's have the conversation. Let's start the money talk here. Let me help light the path to financial freedom for you until I get a chance to see you in another episode or on the road as I. Speak, or maybe on one of my lives. Always strive to live a life that outlives you. Here's.