I'm Politely Begging You To Get Good with Money

0:00I am politely begging you to get good with money because here's a number that I think should stop you cold waiting just 10 years, which doesn't seem like a lot to start investing can cost you hundreds of thousands of dollars and more. Even if you do everything else right, well, in this episode, I'm going to show you exactly why time matters more than your effort and how well the wealth creation curve actually works. What do you need to do right now to put yourself on the right side of that curve without overwhelm without guesswork? This is building your money machine where we help you master your money, eliminate financial stress and live a life by choice because earning more doesn't make you free a money machine does. And I'm your host Mel Abraham and after 30 plus years as a CPA and entrepreneur and a money mentor, I've seen the math play out in real lives, including my own after starting from negative net worth and building it and then losing some of it and having to rebuild a big chunk of it, I've done it all. Now I want to make sure that you don't make the same mistakes and that you get control

1:04of your money and you get good with it now starting today. So let's dive in. Yes, I'm begging you to get good with money, not because I want you obsessed with money, not because I want you chasing some think Instagram version of rich. But because if you don't get good with money, money will quietly control more of your life than you realize. See, by the end of this episode, I think you'll understand why this is so important and getting good with money is no longer optional. It's a requirement. And when you start to understand exactly what to do first, second and third, your money stops stressing you out and it starts supporting the life you want. So let's jump in, okay? Because if your money feels heavy, then this is the game I want you to play because I want to start here. You didn't click on this video or this episode because everything's perfect financially.

2:06You clicked because money feels heavy or maybe you feel behind or maybe you feel tense or maybe you're doing okay, but it still feels fragile. And here's the thing. You're not imagining it, nearly 40% of Americans say they can't cover a $400 emergency without borrowing or selling something. That's not motivation. That is a fragility problem, okay? Money stress is the most socially accepted anxiety disorder on the planet and let's face it. It isn't everyone's lives. We don't talk about it. We just live with it and we assume that that's the way it should be. And money stress doesn't stay just in your bank account. It leaks into your sleep, into your relationships, into your confidence. So if this feels personal, good, okay? This means that we're talking about the right thing, all right? So we need to think about this and say, well, why is money so important?

3:10What do you actually want? And it's not more stuff. Let's be honest. You don't want a yacht. You don't even want to be rich. You want breathing room. You want stability. You want options. You want peace, okay? You want money to stop being the villain in every decision. Here's the metaphor I always use. Money should be like oxygen. You don't think about it when it's there and there's enough. But when it isn't, when you feel like you're getting choked, nothing else is working. It's when it's an absolute necessity and it becomes painfully so, okay? That's why getting good with money really means it's not about the excess. It's about the enough with margin, okay? And when we don't, there are quiet consequences of not doing it right. And I have seen it live out in friends' lives, clients' lives, family's lives, I've seen

4:15it. Because when money is unmanaged, life manages it for you. That's when you start to stay in jobs longer than you should. Or you say yes when you want to say no. Or you delay dreams because now's not the right time, okay? Bad money habits, they don't blow up your life. They slowly shrink it, okay? And the scariest part is it starts to feel normal. See, we don't really understand the cost of waiting, the cost of delay, the cost of doing things because we've never talked about it. We've never had the conversations about it. But if we start to understand this concept that I've taught for many, many years now and wrote about it in my book of the wealth creation curve, you start to see what happens with real numbers. I want to make this undeniably clear because this is where people lie to themselves, including

5:16myself, okay? I'm not exempt from this, okay? They say I'll start later or they'll say when things calm down or when I make more, I've heard that one a hundred times, a thousand times, it's always, when I make more, I'll start investing. So let's put numbers to later. Imagine two different people, okay? You got Bobby, person, person A and saving $5,000 a year. Starts at age 25, earns a reasonable rate of a turn of 8%, okay? And does this until age 65, so effectively 40 years, okay? No genius, no lucky breaks, no hustle, you know, none of that. Just by age 65, doing $5,000 a year, over 40 years at 8%, Bobby will end up with 1.3, around 1.3 million dollars.

6:18Now let's look at person B, okay? Angela. Angela saves the same $5,000 a year, earns the same 8% that Bobby did. Because everything exactly the same, makes the exact same decisions, but waits until age 35, just 10 years. So they, Angela does it for 30 years instead of 40 years. That's it. By age 65, Angela has a total of around $566,000. That is $750,000 less than Bobby, but that's it for a second, okay? Because Bobby contributed $5,000 over 40 years, $200,000 total. Angela contribute $5,000 over 30 years, $150,000 total.

7:22The total difference between the investment is only $50,000. But the outcome is a $700,000 difference. See that money didn't come from working harder. It came from time showing up. This is the wealth creation curve, okay? See early on, it feels pointless. At the bottom section of the, the wealth creation, I call it the wealth flat line. You're putting money in, you're putting money in, you're saving, you're investing in, and nothing exciting is happening. You're looking at it and going, this doesn't make sense. I've only made $67. That's the flat part of the curve. And you know what? Every single person has to do that. Every single person has to go through the flat line. The question is how fast you can get through it. This is where it challenges your discipline because it's where people will say, this is so working. I don't feel rich. What's the point, okay? So what do they do?

8:22They quit. But then quietly the curve starts to bend and it hits what I call the acceleration zone. But if you quit and you start over, you actually go right back to the beginning. You have to start through the flat line again. That's why we have to get in the game and don't get out of the game. I don't care how much you put in. I care that you're on the field playing the game. See when you start to move through that flat line and you get to the acceleration zone, the money starts earning more than what you put in. Growth accelerates, momentum takes over. And then there's this steep side of the curve, the exponential side of the curve that most people don't even see because they don't have the patience and the discipline and everything to stay in the game. Most people don't fail at money. They leave the curve right before it starts working for them. See waiting doesn't just delay wealth. It eliminates time on the steep side of the curve where we want to be.

9:25The time in which your money is multiplying, that's the thing that we need to be on. But we need to get in the game to make it happen. Well creation is not a spectator sport. It's not something you do from the stands or the sidelines. You have to be on the field playing it. And this is why it's so important for people to just get in the game. I don't care that you're only getting in the game at $5 or $10 or $100 a week. I don't care. I care that you're playing because what you're doing is developing the skills, the mindset, the muscles and the habits and behaviors that wealthy people have to get good with money. And that is a key. Now one of the things that also helps is you knowing where you're going with your money. What is that number that's going to give you the freedom? What's that number that you have to cross to get to a life of choice? It's something that I call the freedom number. Okay. Now here's the thing.

10:25A lot of people don't know what that number is. But I have a tool for you that I'm going to give you for free. It's called the freedom number calculator. You'll go in, you'll put some information in. It'll give you a ballpark idea of what you need to create. The money machine you need to create to have freedom, to have choice in your life. So you can, we'll hook it up down here, but you can grab it by going to MelAbraham.com forward slash number to get access to it. Like I said, it's totally free. Okay. Now, let's talk about a little deeper of why waiting is even more dangerous now than it's ever been. And that's something that I've talked about on stages and on some of my other videos. And that is the idea of a K-shape economy. Right now we are sitting in a K-shape economy. We have two directions we're going. You have those people on the upper arm of the K, those, those are the ones that own assets. They have systems. They understand how to use leverage properly.

11:27They are building something to allow their money to work harder for them than they did for it. Okay. Then you have those people that are on the lower arm of the K, they're waiting for stability. They're waiting for things to change. They're relying on their hard work, their effort and the income alone to make happen. Now that is, it's not bad in and of itself, but the idea of a K-shape economy is the fact that the divide between the upper arm and the lower arm is, is getting bigger and bigger at an accelerating pace. And at some point, it, it gets you to a point of no return. That gap widen so big that getting from the bottom arm to the upper arm becomes harder and harder if not impossible. And this isn't about fear. This is about the reality of things. That's the other reason that I need you to get in the game. I need you to get on the field. I need you to start using the principles that we talk about to start getting, getting it in play.

12:27I don't care that maybe in a year's time, you're going to sit back a while. I'm not rich yet. Well, it's not going to happen that fast. It didn't for me. It wasn't for the clients, but you want sustainable, lasting wealth. Build the habits, build the muscle, build the literacy to make happen. See, you will build structure in that process and those with structure will pull ahead. Those without it will fall behind quietly and consistently. Do nothing used to mean standing still. Now it means sliding backwards, okay? And so we need to think about this through a different lens. And you might sit back and say, man, why do you care about this so deeply? Well, I do. Let me tell you why. My dad came here to this country at 17 years old with nothing. We didn't come from money. We came from grit. We came from a dream. We came from a vision. We came from from my dad saying I wanted a better way. I wanted a better education.

13:28I wanted to raise a family and do that. And my dad came here and went to school. I started my adult life in a negative network. Why? Because I had student loans. I had all that stuff. And like I said, my dad and company became an aerospace engineer. We had a good life, but it wasn't a luxurious life. We lived in the same home all our life. We drove used cars. We didn't live a lavish lifestyle. So I didn't have a head start. I didn't get in inheritance. I built wealth the hard way. I learned the hard way. The lessons I talk about aren't from some theory or some book. They're from a life lived, okay? And when I built the wealth the first time, I ended up losing one third of it in a Ponzi scheme, okay? That moment, I mean, between me and two friends, we lost over four and a half million dollars. And that moment taught me something important. Hope is not a strategy. Systems are, I need to look back and say,

14:29what systems allowed me to get into Ponzi scheme? What systems allowed me to build the wealth before the Ponzi scheme? And what systems would allow me to rebuild? I didn't rebuild faster, although I did. I rebuilt smarter. And so when I tell you this, I mean it. Where you are today is not where you're destined to end up. And what we need to do is give you the habits, the systems and the elements to make it happen. And there are things that are holding us back. And it's not intelligence, it's not laziness, it's emotion, money feels scary, so we avoid it. We've never talked about it, it feels complicated, okay? Avoidance feels like protection until it becomes a prison. So you don't need more motivation. You need a clear sequence. I wanna give that to you right now. What do you need to do first, second and third? Here's the path, okay? Step one, get clear.

15:31Know where your money goes. Know what your life costs, no judgment, just truth. That means that I want you to track your spending for 90 days, how much you're spending, how much you're spending it on, what the emotion is when you do the spending. Not for judgment, but for awareness. The more aware we are, the better off we'll be. And I want you to categorize it between needs, wants and noise, needs, wants and noise. The needs are your survival. They're the food that you need, they're your healthcare, they're your clothing, your shelter and your transportation, that's it. The wants are all the other stuff. And I'm not saying not to have the wants just to be conscious of it. The other thing that you can do to accelerate this getting clear is look backwards six months. Get all your bank statements, get all your credit card statements

16:31and go through and do the exercise going backwards six months. Now all of a sudden you'll have clarity of where your money's going, which is the awareness that we need. And at some point you'll look at and say, I don't get any value out of this, why am I doing it? And so now you'll start to cut things out and that gives you the margin that you need to use to start building your wealth. Step two, build safety. The wealth priority ladder I talk about in my book Building Your Money Machine is use the process that I have my clients, my students and what I've done with my family to build wealth in a sustainable way. And the first stages of the wealth priority ladder is to build an unshakable foundation. Safety first. So you have that foundation for growth. So this is the time for you to start to look at, do I have emergency reserves? The two things that you do here is liquidity and debt management. So do I have emergency reserves?

17:32Can I sustain myself as something happens? An emergency fund in a high yield savings account, three to six months, that's what people say, okay? That works, that's cute. I want you in a piece of mind fund nine to 18 months. Now you won't get there overnight. Let's get you to three months to start. Put it aside, get it in a high yield savings account and get that liquidity under your belt. So you have the oxygen and if something happens you're not going into debt, you're not selling things, okay? Because you need stability before strategy to make that happen. And then at the same time, I want you to look at all the debt you have. And if you have destructive debt, if you have consumer debt, if you have high interest debt, I need you on a debt payment plan. Let's get this debt put to bed as quickly as possible. And you do that by using an avalanche method or a snowball method and talk about it in detail in my book. And there's a lot of information I've done other episodes on that specifically.

18:35But get on a debt payment plan. If you have a debt payment plan in place and you've got that liquidity in place, you've done step two and you're ready to move from there. Step three then is to start building a machine. See, once we have that unshakable foundation, now is time to save and invest. And this is the key to your wealth. The amount you invest, the percentage, the savings investing rate, the percentage of your income you put away is the biggest indicator of your ability to build wealth. Now, we recommend 20 to 25% of your income going into investing and savings. This is the time and the space where you have the ability to separate your earnings from the efforts to earn it. And when you do, that's when you get a life of choice. Because you're not in prison to that earnings treadmill where you have to go to work to each day. I'm blessed that I can get up every morning and have a choice. That everything that I do from a work standpoint

19:37and everything is by choice, not because of demands of the bills or the day, okay? And I want that for you. But here's how you need to do it. I want you to automate it. So you don't have to think about it. You don't have to pull the levers. You don't have to turn the dials. But automate your investing. And there's a hierarchy, and I talk about it in the book, of which accounts you go to first. You know, can you qualify for a Roth, Roth account, Roth IRA, than other iris or 401Ks and employer matches? There is a specific optimization strategy that we talk about. I'm not going into depth here. I just need you to get the concept of place and make the choice that you're going to automatically save, automatically invest to make it happen. That way you can let time and not stress do the heavy lifting. That's the first choice. Then we can worry about where you put it and how you invest it. Step four, stay on the curve. Remember, if you get off that wealth creation curve, you go back to the starting line. You have to start all over again in the flat line.

20:39Consistency will beat intensity every time. Progress beats perfection. That's why I don't care if you start with $5. Just need you moving. I just need you in motion. Time beats timing. Get in the game. All right. See, I'm not begging you because I doubt you. I'm begging you because I've seen what waiting costs. Your future doesn't need perfection. It just needs structure. Where you are today isn't a verdict. It's just the starting line. But every year you wait, the climb gets steeper. So start now, not perfectly, just intentionally. Get good with money. So your future doesn't have to recover from your past. That's the game I want you to play. And I'm here for you. This channel's here for you. The show is here for you. My work is here for you to help you on that journey. Because I promise you, if you commit to getting on the field

21:41and getting good with money, your future life will be vastly different than you can imagine. It is, the math will always math out. I hope that this helps. I hope this is slight to a little bit of an inspirational fire under you, a little different of an episode. But I think this is an important thing to think about and understand. Because it matters to me. That's my mission. And so I am politely begging you to get good with money starting today. And I hope that this moved you a little bit forward. I'd love to hear it from you. I'd love to hear your comments or your thoughts or even your questions. I love having conversations with you. And to keep you in motion towards your financial dreams. And until I get a chance to see you on another episode or as I'm on the road speaking, as I always say, always, always strive to live a life that I always do. I'll see you in the next one. Thank you for listening to The Affluent Entrepreneurship. With me, your host, Mel Averham.

22:43If you want to achieve financial liberation to create an absolute life stuff, join me in the Affluent Entrepreneur Facebook group now by going to melawram.com for a slash group. And I'll see you there. And that's it for this episode of Building Your Money Machine, where we help you learn how to master your money, eliminate financial stress, and live a life choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you'd do me a favor, go to Apple Podcasts or wherever you're listening to this podcast, and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information, and this message out to people, because I truly believe that financial freedom is your birthright. And I want to help each and every one of you plan it. Thanks so much.