Building Financial Freedom and Affluence with Mel Abraham

You're listening to the PT Profit podcast, episode number 54. Today I'm sitting down with Mel Abraham and we're discussing everything on building financial freedom and affluence. Are you ready? Stay tuned. Hi, I'm Beverly Simpson, former fitness manager turned online personal training business owner. And this podcast is where smart fitness professionals, including trainers and clinicians, discover how to increase client performance in movement, package and position their products and services and get out of their own way so that they can increase their revenue to live a life that they love without sleazy sales. Welcome to the PT Profit Podcast. What's up coach? Welcome to another episode of the PT Profit Podcast. I'm your host, Beverly Simpson and I'm going to keep our chit chat today nice and short because I have a very, very special guest who is literally going to blow your mind. Literally. I could have just hit record and said, can you just talk? Don't worry about me. You just go for as long as you want and I could have talked to him forever. Honestly, it is truly a pleasure and a privilege to have Mel Abraham on the show today. I had the pleasure of listening to him speak multiple times, seeing him coach. He is an incredible person, which you're going to about to discover from the inside side out. Truly, he is an inspiration to me and to many and he's personally helped me thinking through my own frameworks inside of both my fitness and my marketing business. So Mel Abraham is a CPA by education and an entrepreneur by exhilaration. He's the author of the number one bestseller the Entrepreneur Solution, the Modern Millionaire's Path to More Profit, Fans and Freedom. He's the founder of the Thoughtpreneur Academy and Business Breakthrough Academy where he helps entrepreneurs bring their businesses to the world and build the lifestyle that they want. After finding a cancerous tumor in his bladder larger than a baseball in June 2019, which he does, share his story inside of this episode. He successfully conquered it within 18 months, which led him to openly teach the Affluence blueprint. Because his cancer journey spotlighted the immediate, immediate and urgent need for entrepreneurs to find financial liberation and peace of mind. It is the very process and system he used to build his business and more importantly, his wealth through business. That allowed him to completely shut things down to focus on what's important and most entrepreneurs are building a financial house of cards and don't even realize it and traditional financial advice will no longer work for you. He's a committed advocate for the entrepreneurial way and provides real education to real entrepreneurs for creating a real life. He's built, bought and sold numerous multimillion dollar businesses for himself as well as his client. He's a globally recognized thought leader, business advisor, CPA and financial expert, sharing stages with a long list of Fortune 500 as well as beacons in the business and personal development industry from Arianna Huffington, Shailene Johnson, Brendan Bouchard, and Tony Robbins. Mel is a certified Public accountant with over three decades of experience as a financial expert. He is a regularly sought after consultant and valuation engagements around the world such as family limited partnerships, co tenant, interested valuations, operating businesses as well as various entities. These projects have rang from small family owned businesses to large $1.7 billion companies. When he's not speaking, training, mentoring, or just being a little nunny, you can find him working out or training in the martial arts. If not, he'll be creating experiences and memories with his beautiful wife Stephanie by traveling to exotic places or hanging out on the beach where they live. Mel is one of the kindest leaders that I know and a true inspiration to me. Are you ready to change your life? Let's roll that interview. What's up Mel? Thanks so much for joining me on the show today. How are you?

Oh my gosh, Beverly, I'm doing awesome. So, so grateful to be here and.

To be part of this, really, honestly, like I said earlier in the earlier in this show, having you here has been is such a pleasure and a privilege because if you guys get a chance to see Mel speak, it will change your life. Literally 15 minutes will change your life. So hopefully you guys are just as excited as I am to dive in. So without further ado, Mel, can you share with us a little bit about who you are, who you serve and how you got there?

Oh my gosh. So I had an unconventional journey, but I am a CPA by education, so primarily I focus with business owners and folks like that, helping them build their businesses. But I started out in the traditional role but decided that there was no way that I wanted to continue to do that. It just was something that I was unhappy with. It didn't give me joy, it didn't bring me joy. And so I left and I went on my own. Actually I went to Japan for a little while and then I went on my own, which is a whole nother story, but I went on my own. And what I found was what was really important to me was helping people take their entrepreneurial dreams and get them out of the corner again. Take them out of the darkness, shake them out and bring them to life. Because I truly believe that the entrepreneurial journey is the vehicle that we can use to find not what I call financial freedom, but financial liberation and affluence. And it is about really, how do I live a richer life, how do I have a deeper impact, how do I create complete freedom them? And that's kind of the journey I've been on. It certainly wasn't a linear journey. I've lost more money than some people will make in a lifetime. I have remade it. I have built, bought and sold businesses. I've had detours, left turns all around, and it's in the dust and the mire and the potholes. I stepped in that A lot of the lessons have come about and it's really my focus today is working with entrepreneurs and to help them become what I call an affluent entrepreneur, to help them understand the money side of business. How do you create something that gives you the freedom and doesn't shackle you to a business? And you say, wait a second, I thought this was going to be me and I had control and now all of a sudden it controls me.

That's so important. And I'd love for you to talk a little bit more about what it means to be an affluent entrepreneur and how do you know when you get there? And the reason why I'm saying that is because so many people that I work with, we are used to that dollar for hour. We are used to grinding in the gym, we are used to serving those physical therapist sessions and, and bound by what insurances will let us do and let us not do. And so I feel like so many people in this audience feel like that whole concept and idea of what it means to be an affluent entrepreneur is so far without. Within reach.

Yes. Oh my gosh. So, and I know that you're tied, you have some, some limitations with respect to, you know, insurance and all that stuff. But the first thing to realize is that, is that the, the timesheet, if you will, was created in 1919 and it should have been burned at the stake in 1920. It's the worst business model you could ever create. Swapping hours for dollars is horrible because you commoditize the value that you bring to the industry. I came out of that. That's what accountants do. They take their timesheet, attorneys, accountants, and all that stuff, and they're ticking the time and they're selling time. The problem is, is that when you do that with a customer, when you do that with a client, they see the time. They don't See the value. They need to see the value. I'll give you a for instance. I happen to be backstage, and I was announcing from backstage, and I was going to go on stage, and for some. And I was hopping up and down, and all of a sudden I fe something. Someone took a baseball bat to my calf. I end up on the ground. Now, in the spirit of the show, must go on. I'm laying on the ground doing the announcing until I could get this next speaker on stage. He gets on stage, and then someone says, what happened? And I said, I don't know. I thought someone kicked me. I turned around and no one was there. But point being is that someone else that was backstage, the husband of another speaker, looked at me, says, you know, my physical therapist is in the audience. Would you like to talk with him? Because they took me to an emergency beforehand. Before that, they. They took me to emergency. They put a brace on me. They said, you popped your calf. You might have torn your. Your Achilles and this and that. So here I am back, back there, going on crutches. And so this physical therapist, Frank, comes over and looks at me, says, first things first. He said, you're losing the bracelet, because from what I can evaluate, this is not a tear. He says, you are losing the brace because of the fact that not what it does to the leg, but what it does to the mind. He said, when you take that brace off after six weeks, after eight weeks, we are going to have to work on the mind to allow you to use the leg again when you can use the leg now. So let me give you some exercises. And literally within 24 hours, I was back on my feet doing the things that I was doing. Now, look, could have charged me for a physical therapy session and would have charged me this 100 bucks or 150 bucks. But you know what the value was to me to be back on my feet at a live event was huge. And too often we forget about that. And so I think the first thing is to start having conversations around the value and the transformation and the difference you make in people's lives, and not just their lives, but the parade of lives that come beyond. I just found out recently, my wife and I just found out recently. We're going to be grandparents for the first time. So I'm going to be granddad. I am not old enough to be a granddad. At least I don't think so. But I do know that I'm not mature enough to be a granddad. So here's the thing that I realized Is this. Is that was sitting there talking with my wife. And I said, you realize now that we have at least 80 more years of Abrahams that we need to think about taking care of. Because when you understand how to build affluence, when you understand how to build a business, when you are creating legacy in the moment, you don't create it for yourself. You create it for the generations beyond. And we just added a generation. So I looked at it and I said, when you talk about affluent entrepreneur, there's three critical outcomes for an affluent entrepreneur. The first is that they live a richer lifestyle. And this is based on all the work that I've done. They live a richer lifestyle. In other words, they're not keeping tabs on their wealth in the sense of. Wealth is a statistic. It is the number of commas in a bank account. And yet what they're truly looking at is the richness they have in their life. And that's feelings, that's experiences, that is the richness they bring to themselves and those around them. And so they're living a richer lifestyle. From an experience standpoint, that doesn't mean lavishly, you know, private jets and all of that stuff. That means what is rich for you? It could be a yacht in Monaco, it could be a tent in Montana. It doesn't matter. But what is rich for you? Forget the social media. Forget what you see on the media. Look at what your neighbor's driving. Ask yourself the question, what's rich for you? What's rich for your wife, your husband, your significant other, the people around you? And live that life. Live that life. And so that's the first thing. The second thing that I think an affluent entrepreneur has is what I call deeper impact. And deeper impact is that, look, you're working with someone one on one, you're having an impact on them. That's clear. That's easy. That's. That's fundamental. However, there's also other impacts. There's the impact that you have on the people next to you, the people you love, the people that are standing by your side. But more than that, the bigger impact is who you become in the process. And then the affluent entrepreneurs, I think they realize that there's multiple levels of impact, and they look at who they become, who they are, they look at who they affect to the right and left, the people that they love, and they look at how they can have an impact in the community and society, and they have a deeper impact. It's not about what you leave behind. That's a legacy it's what you create in the moment that's the legacy. And then the last piece is that they have complete freedom. And I look at freedom and they look at freedom pretty much the same way in the sense that too often we think freedom is a financial number and that's independence, but it's not freedom. Because there's plenty of people that I've got colleagues that I know that are worth 200, $300 million. I got one that I'm thinking of now that has five airplanes. Lord knows why you can only fly one at a time. And yet he's miserable. He's horrible. He's miserable. He's not fun to be around. His health sucks, his relationship sucks, his attitude sucks. Yeah, from the outside he looks great. He's got private planes and he's got all these other things, houses and cars, and it looks like he's got a great life. But you know what? He's living in a prison cell. Now, his might be a well decorated prison cell, but it is still a prison cell nonetheless. And so freedom, freedom is complete freedom. Yes, financial freedom, the ability to do the things that you want to do and not necessarily be concerned about how I'm going to pay the next bill. 78% of people are living check to check these days, and that's a travesty, and we need that. But the other freedom that we need to think about is the freedom of time, the ability to decide what you'll do, when you're going to do it and how you're going to do it. To just sit back and say, I bought back my time. The reason I want to make money, the reason I want wealth in everyone's life is not because of the wealth, but because it allows you to buy back your time and it allows you to buy options. It allows you to have choices in life. And then the third freedom is, is the freedom of mind, peace of mind to know that things are taken care of. In 2019, I was diagnosed with cancer and I lived a healthy life. I was working out, I was eating healthy other than a sweet tooth, I was eating healthy and I thought that I was doing well. I didn't smoke, I didn't drink and all that. And next thing you know, they find a 5 centimeter tumor in my bladder. And once I got out of the depths of despair and the darkness that comes with the realization that I had cancer, which I never thought I would have because I had none of the risk factors, because I wasn't a drinker, I wasn't a Smoker. I wasn't around chemicals. I didn't have any of that. No one in my family has ever had cancer. So this came out of left field. Out of left field for me. And what it did is it made me realize the importance of making sure that you're set up properly financially. Because I knew in that moment that once I got off my knees, once I got up and I said I needed to move forward, that I would move forward and say I needed to now have the opportunity to say, I'm not going to be as active in my businesses. I'm not going to be as active in some of these things because I need to be proactive and active in my healing, in my. My ability to get through this. And so I needed to pull myself away. And when you think about hearing those three words, you have cancer, which most people, God forbid you ever hear it, it's not about the cancer that matters. It's about, is your life set up when life decides to take a left turn? What I realized is that I needed to deal with the cancer emotionally. I needed to deal it energetically. I need to deal with spiritually. I need to deal with it physiologically, but I didn't have to deal with it financially. And that took a tremendous amount of burden off of my shoulders, my family's shoulders. I had the choice of doctors. I was able to do the things, but it was because of the work that I did 30 years before and 20 years before and 10 years before. And it's the choices that I made financially. And I didn't realize the importance of those things. I did, but I took them for granted until that hit. Until that hit. And I had the luxury and the blessing to be able to pull back. And then I think about it and I go, well, the cancer was just a dress rehearsal for the pandemic. Because it's easy for someone to say, well, I won't get cancer. But I said, you know, we all got the pandemic. We all had to deal with the economic blackout. So the real question, again is, is not, are you running your business? Are you running your life? And God forbid you get cancer, it's actually, are you running your business, running your life in a way that when it takes a left turn, you are prepared to handle it. That is the key. Now, I guess we will close the loop on this. Just so you know. 18 months of three surgeries, four tumors taken out, 28 treatments, and as of November, they declared me completely free of cancer. They had not seen anyone fight it the way I fought it. And it was a 7 1/2 centimeter tumor when they went in, not 5. But I feel great. And I'm. We are now we're no longer on defense. We are on offense, and we're going to make sure that we keep this little bad boy away. He can go find another home.

So, great. I'm so, I'm really so happy to hear that. And I remember when you shared that story with us at BBD last summer, and there were two things that you said that I thought were really important and compelling. And it'll bring us to my next question, which, as you said, and I think it's a quote from Buddha, you know, we think we have time. We always think that, you know, you know, it's not going to happen to us. Or I just need to get to that 10k. Or I just need to get to 15. I just need to start saving a little and then I'll handle it. And that comes from this assumption of believing that tomorrow's coming. But the truth is that no time is promised to us ever.

No.

So I think, you know, and I know as someone who used to operate from that space of, I just need to get to this and then I'll take care of it. You know, that was one of the things that had that big. One of the biggest impacts that I learned from you is recognizing and, you know, really getting tapped into. Hey, we need to be prepared now. So what would you say to someone who was maybe in us, my old state, that state of I just, you know, when you've got 78% of Americans living paycheck to paycheck, what are some of the first things that we can do to start preparing ourselves?

I think the first thing, and this is. This can be tough for some. It's a little tough love for some people. But I think the first thing we actually do is we have to examine our life. We literally have to look at it and say, why am I living paycheck to paycheck? Because we think it's an income problem. And often it's not an income problem. It's an expense problem. It's a. Put it bluntly, it's an ego problem. It's a status problem. It's something that we're trying to put on a show because we're worried about what people will think. We want them to think something about us. You know what? I just want them to think, I'm a good person. I don't care about the car. I drive now. I drive a nice car, but I don't care. And if what they're doing is loving me or following me, because, oh, my gosh, I got a Lambo, which I don't. But, you know, I got a Lamborghini, or I have a private jet, or I have any of those things, they're following me for the wrong reasons because those are not meaningful. So I think the first thing is to examine our life and. And examine it in this way. I want you to take 12 months, at least, of your credit card statements, 12 months of your bank statements, and I want you to spread them out on the table. You might want a little wine with this. I don't know. But. Because here's what I'm going to ask you to do. I'm going to ask you. I'm going to ask you. I'm telling a bunch of fitness professors to start drinking, because here's what I want you to do. I want you to start to look at all the statements, and I want you to have two color pens. I want you to have a red pen, and I want you to have a green pen. And I want you to mark all the things on those statements that are absolute needs in green. Those that are wants in red. Okay? Now let's be clear. What is a need? A need is something that keeps the roof over your head, keeps you fed, keeps you clothed, keeps you protected, and keeps you safe. So as much as you might think so, Netflix is not a need. The mani pedi isn't a need. The technology around me isn't a need unless it's necessary to generate income. And then look at the wants, because on the want side of the equation is the place that we might be able to find where you're leaking cash and you're leaking wealth. Now, I am not one. And anyone that looks at the way I live my life, you know that I am not one that's living off of ramen and Mac and cheese and doing those things. I live good. I live well. But I do it with three characteristics in mind. I live fully aware, fully conscious, and extremely intentional with every financial choice I make. So when we decide that we're going to do something or we make it with intentional choice, what do I mean by that? Here's why this is important. Let's do some math. Because I'm a math. I'm an accountant, so I got to do a little bit of math, but I'll do the math for you so you don't have to freak out that, oh, my gosh, I got to get A calculator out. So let's just do some math. Let's assume for a moment that all I did was find $200. $200 in expenses that you don't need. It's a subscription service. It could be cable. It could be some other things that you don't need because you're not using them. And we take that $200 and we save that money and we put it into a. Into a high yield cash account. And over time, we actually invest it. If I invest that $200 a month, $50 a week at 8%, in 30 years, you have over $300,000. Okay, $200. $300,000. Take it to $500. That's going to put you at 7,800 thousand. I don't know the math on it. 7, $800,000. 15, $1,800 will put you at over $2 million. Point being is that we get so caught up in thinking that I gotta hit the ball out of the park. I. And thousands and thousands of dollars. No, you're too focused on the making. Now. Making is important. We'll talk about that. The question isn't what you're making. The question really is what you're doing with what you make. See, entrepreneurs, they come into the game and they say, I'm going to generate income. There's two sides of the affluent entrepreneur journey. There's two primary sides. There's a third side, too, but there's two sides. There's the income generation piece, and most of them get it good. Okay. But then there's the wealth creation piece. Most of them miss the boat on that because they're so focused on making the money that they're not focused on keeping the money. Here's the interesting thing. The mindset and the skill set to make the money is not the same as the mindset and skill set to keep the money. So that's. So that's what I would do first is examine it, see if I'm leaking cash somewhere else. Then second, I would look at scaling income. So are there things that I can incrementally do? For instance, can I create a product, a program or something that doesn't take my time, so I'm no longer swapping hours for dollars that I can sell on an ongoing basis. And like we just. You did the numbers. Let's say I created something that I'm going to sell for 100 bucks. If I sell two of those and that money goes into an investment account, two pro products at 100 bucks. A month gives you 300,000. So we don't need to do a lot. If you want to see what happens, there's a book by Chris Hogan called Everyday Millionaires. Now he's not talking about now 80, 88%. I remember the stat off the top of my head. 88% of millionaires do not inherit their wealth. They're first generation millionaires. In other words, they created it. The interesting thing is that many of them are not what you would think. They're not the dot com, they're not the Internet millionaires. They're not these stories that you hear where they make it overnight. First, it's never made overnight because if it's made overnight, it's usually lost overnight too because we're not in the right comfort zone. But what you'll find, what you'll find is that it's just the everyday person that does the right thing with the dollars they have over time, that gives them that over time. It's when you sit back and say I want to do this in five years, I want to do this in two years. Where you take risks, you put blinders on and you make mistakes. I've done it. I've done. I lost one third of my net worth because I made some bad decisions and ended up in a Ponzi scheme. Well into the seven figures. Well into the seven figures.

Oh my gosh, this is just so mind blowing. Okay, so you said three things that I, you know, that I. Three things I want to talk about. Number one is that the, the language of wealth and the skill set of wealth is different than generating income. I definitely want to go there because I know that you're the person to go to when it comes to learning that language. So we'll definitely go there. But something else that you said to speaking of gener generating income is there is this idea and I'm curious to know your thoughts, your perspective on this. When you know, how do you discern taking calculated risks? Because one of the things that you said was that you're going to make a conscious financial decision. So how are you both discerning with how you're going to use your money? And also abundant.

Yeah. So for me I actually look at risks now. And the way you'll look at risks actually will change as life changes for you. Okay, I, as we sit here today, I'm 59, will be the 16th of September. My wife says I act 12 still, which is totally fine. So my day's not complete unless she rolls her eyes at me. At least Once. But the reality is that, that someone like my son, okay, my son is 30 years old now, he's got a wife, 27 year olds, and they're young, they have the capacity to take more risks than I do. Because now when I say capacity, they have the Runway. They have the time to correct their mistakes than I do. Because if I look at it this year, I turned 60 and I'm not the type that's going to retire. But let's say that I wanted to traditionally retire in five years at 65. I don't want to take risks with what I am doing to the point that it puts in jeopardy what I have done and what I've created. Whereas if I know that I've got 20 years to retirement, 10 years to retirement, it's a little different game. So I look at the. So your risk tolerance, as they call it, and the way you evaluate risk may shift depending on your life situation. Whether you have kids, whether you have grandkids, whether you're, you know, higher in age, lower in age, whether you're single. All that goes into play. However, that being the case, in general, when I look at an opportunity or the risk of an opportunity, the question I do what I call worst case planning. So I ask myself, what's the worst that can happen and what's the cost and the consequence that worst case planning? You know, people have asked me recently, oh my gosh, are you in cryptocurrency? I mean, if you just put it all in cryptocurrency, you'd be a kabillionaire. And I go, yeah, but think about the risk you took on. Are you prepared for that? And it sounds great in hindsight to say it hit 40,000, right? But, you know, the next day it dropped by 4,000. Now if you got in at 3,000 and now you're at 40,000, who cares? And that's fine. My point is that there's different investments or different possibilities that carry different risks. And you need to look at that. I'm a conservative investor. I'm one that says, let's slow and steady, let's stay on it. I will allocate a piece of my portfolio, a piece of my life to more speculative things. But it's a thin, narrow slice. So. But more specifically to, let's say, a business opportunity that comes in, the thing that I would look at is say, all right, what's the possible return? What's the possible revenue that I'm going to generate from this? What's the cost of generating that? Revenue. So what's the profit? Too many people get caught up in the top line, say, I can make. I can make a million dollars doing that. But. But if in the process it's going to cost you 800,000, I'm going to look at the 200,000 versus the million. So I want to understand that. Then I want to ask myself, what's the probability that I can make that? What's the probability of success here? And then there's another question that most entrepreneurs failed at. There's this concept that I talk about that I say, most entrepreneurs, especially when they get in this game, they have what I call sandbox syndrome. Sandbox syndrome is that kid, and maybe you all had it where you had that kid and you're playing in the sandbox. And there's this one kid, the kind of bully kind of kid that goes and collects all the toys in the corner of the sandbox. Doesn't matter that he or she doesn't want to play with them. Just going to collect the toys because he wants the toys in the corner, and you're stuck not playing with toys. Well, entrepreneurs do the same thing. They collect opportunities. An opportunity comes their way and say, oh, this is a great opportunity. I'm going to take it. And they do that, opportunity after opportunity. And what they find is that they've dissipated their resources in a way that they can't dedicate any time enough to an opportunity to make it make sense. The question. And I sit on a board, a board of directors of one of the companies I sit on. This company was founded in the 1880s. And we had this conversation because we had a business development team that was going out and spending millions of dollars traveling looking at all these opportunities. And I asked them, I said, which ones are in our core genius? Which ones have the highest profitability and which ones have the highest probability of success? Those are the diamonds. Those are the ones that we need to go after. So I would ask you, when someone comes to me, so I've got this opportunity, a client that I'm mentoring, I said, the first thing I ask them typically said, is it in alignment with your vision and your values, the position and where you're going, and if it isn't, I think you take it off the table unless it's such a great opportunity that you're willing to change directions? Okay. Then we look at the profitability, the probability of success, and one last piece, and that is lifestyle. You mention it, we have a specified amount of time here. So the question is, in every business Equation. Every opportunity, every business equation is this little variable that no one talks about and it is lifestyle. In order to take advantage of this opportunity, what impact is it going to have on your lifestyle? I'm literally right now getting ready to launch my own video show, my own podcast, all around money and business and that type of thing. But I won't launch it until I have the back end built. So all I'm doing is recording, delivering, creating, serving and creating relationships. That's it. And after that it goes to post production and I never see it again until it's published. And until I have that in place, the lifestyle cost to me is too great and I won't do it even though there's people hungry for it right now. No, my primary focus is create, making sure that my lifestyle is at a level that doesn't put me in stress, doesn't put me in jeopardy, it doesn't put my health in jeopardy or my relationships in jeopardy. So I need to be dogmatic about that.

So important, and I'm curious for you, for your own perspective, you know, how do you determine the profitability or not profitability, the probability of success? Because I feel like so many entrepreneurs, you know, for me, from what I've noticed, the difference between the six figure earners and the seven figure earners are the seven figure earners believe they can do it and the six figure earners just have to get through that feeling of I'm an imposter, essentially. So how do you define or know whether or not something is going to probably succeed or not?

So this goes back to that whole worst case plan. So now I, I guess this is a curse and a benefit. I came from the accounting world and I believe that my tendency, my tendency is not necessarily to be pessimistic, but to be curiously critical. So I'm always looking for what's wrong, which, you know, works well in relationships and all kinds of things. But, and, but I'm always, you know, when someone comes to me, I start going, what about this? What about that? What about this? And it's not to stop it, it's to consider it. And so as long as I, so the first thing I do is I'll start listing out and say, what could go wrong? Worst case, planning, what could go wrong? I'm going to do, we're going to do work on the house and they got to do scaffolding to do some of the work. Immediately my mind goes scaffolding, danger, drop, danger, fall, danger, all kinds of things. Oh, what could go wrong? How Do I mitigate that risk? How do I reduce that risk? Insurance. Let's make sure that we have insurance. Okay. And we make sure that they're careful about. Now, that's what I've been paid to do for a lot of my clients, is find opportunities and then also mitigate risk. So the way a lot of people will say that entrepreneurs are risk takers, they're not. They're actually risk mitigators. They look at the opportunity to say, hmm, there is a possibility here, but what are the risks? And they list them out and they say, how can I solve that risk? How can I reduce that risk? How can I bring that down? And when I can reduce the risks that far enough, then I look at. I say, let's give this one a shot. Because I've identified all. It's no longer betting on black and letting them spin the roulette wheel. We have actually stacked the odds in our favor as we move forward. So good.

So true. And so true. And I love that I work like that, too. I need to work through worst case scenario. Worst case scenario, what's going to happen? Right. And something too, you brought up earlier and brings it back to it is, you know, death is our greatest teacher. Right? Yeah, it just.

It is.

So no one's on their deathbed saying, man, wish I worked harder, and none of that stuff. Right. And so I.

It all.

It all comes back to like, this is my worst case scenario. I could die tomorrow. And then what?

Yeah.

Is it really that bad? Right. So I. I think that's really powerful insight. So I also want to go back to something that you said, and I want to hit on this because I think it's important, and I think most entrepreneurs miss this, is that you were talking about investing and you were talking small numbers. I think people have this idea, and what I mean by small is, you know, finding an extra $200, $300 to start investing. People have this idea. I know that I did that. Oh, I need to, you know, invest thousands of dollars in order. In order to make it worth it. But it's not true.

No, it's not true. It's absolutely not true. Now, do investments go linearly up? No. There's a lot of volatility. Why do people lose money in the stock market? They lose money primarily because, one, they don't have a plan. Two, they don't have a strategy, three, they don't have an understanding. Okay. But more importantly, four is they make decisions emotionally. They make decisions emotionally. So what. What you're watching in the stock market, in the short term, gyrations, I don't know where it's at today. But, but you know, if, if it goes up 400 points and it goes down 400 points, it's, it's literally, that's up 70 points. But what it really is is a demonstration of the levels of fear and greed in the short term. Because what happens, there's this emotional cycle of investing that goes on. And so what tendency is, is that, oh my gosh, markets go, think about what happened in March. We lost 30% in 30 days. Okay? Unprecedented. In that moment, there was a lot of people that said, I'm out, I'm out, I'm out, I can't take the pain, I'm scared to death and I'm out. So they made an emotional decision without understanding it. Because let's face it, what happened in March, what happened in March was we had a health problem. We still do that turned into an economic problem because of the uncertainty around the health problem. And that economic problem is an economic problem wrapped around the health issue. But the fact of the matter is that fundamentally, did these companies lose 30% of their value? In other words, are they earning 30% or more, less than they were before? Looking at it now, some companies certainly got, got hammered, some companies got hurt, some companies did great. But what we're not doing is doing the logical look at this and say, wait a second, let me slow down and let me make a decision. When you make emotional financial decision, when your emotions go up, when financial decisions, your financial intellect goes down. And so what happens is that we need to think about and realize that if I start to get into investments, it's not a straight line up, but I am looking and playing the game for the long term. That means that over the next 10 years, over the next 8, 15, 20, 25 years, the market will have the tendency to go up. It has repeatedly. If you look at the charts going back to the, the 1920s, it has now. Did we have flat spots? Yes. Did we have downturns? Certainly. But if we didn't let those. Because here's the challenge, those that got out in March, they locked in their losses, their account, their 401k, all that stuff, locked in their losses. Now if they didn't get out, they're back at where they were and well above that because it recovered. They. The scary part is when you're approaching retirement, if these people that were staring, sitting there in March going, wait, I'm supposed to retire this year, that's scary. And I get it, okay? But if the people that got out were people that still had 10 years to go before they needed the money, what are we doing? Why are we running in panic for the hills? Because the same people that run in panic for the hills are the ones that. Wait, wait, wait, wait, wait. Oh, it's going up, it's going up, it's going. Wow, it's been going alright, I'm in. And they stay in too long, they get in too late. And what they do, when you invest with emotions, you get out too soon and you get in too late because you're driven by fear and greed. So what we really need to do is one, have a strategy and a plan in place for what it is you're trying to accomplish. Now, everyone that I work with, we first start off with an affluence visioning process to sit back and say, what is the lifestyle you're trying to create? Lifestyle drives everything. What's the price tag on that lifestyle? And then let's create a financial machine to fund that price tag. And then we have a plan, we have a strategy and we go and execute on the plan. And what a plan and strategy does for you is it starts to allow you to strip away the emotions of making the choices that you're going to make. Now it also helps to have people around you, mentors, advisors and those types of folks. When you do find yourself emotional and trying to get on the ledge to sit back and go, hey, talk me off the ledge. You don't think that in March when it started to tank, I didn't just sit back, I got on, I have my wealth strategist and said, Mitch, let's chat, let's talk through this, let's make sure the plan is working, the strategy is working. What have we done to mitigate this? If this continues or it stays. And so we have a logical conversation, we strip away the emotions and we can make an informed decision and that's it. I mean, allocating your income, a portion of it, to investing on a regular basis, consistent discipline, investing over time. One, two. Make it automatic. So my dear friend David Bock talks about this, but make it automatic. So if you find $200, $500 in your expense or you're going to do these sales, then what I want you to do is have it automatically taken out of your account. It's not in the operating account, it's not in the checking account, it's not, it's automatically moved. So out of sight, out of mind. And we take the Friction out of your investing by making sure it's automatic and now you never even notice it's gone. Now if you're working in a job and you're getting a W2 and that type of thing, here's what I would tell you to do. Let's say you get a 3% raise. You take one to one and a half percent of that raise and you make it automatically get transferred into an investment account. You still got a one to one and a half percent raise. Okay? The rest is going into your future fund. You're not going to notice it at all, but you will notice it in 10 or 15 or 20 years. Where you go, where'd all that money come from?

Now I've heard you speak about, you know, your business and your, your financial system also being an investment. So do you live by the same principles when you're reinvesting, investing back in your finance, your business?

Yeah, actually. Your business is actually your most powerful wealth building tool. The challenge is it's also your single point of greatest failure, especially in the kind of businesses we're talking about here. If you can't do your business because we're in lockdown, or if you can't do your business because you have an issue. I've got a dear friend that I went to college with who's a chiropractor. You know, after decades of doing that, it's taken a toll on his joints. He can't see the number of patients that he once saw. So we need to understand that the business is your greatest wealth building tool. The problem is if I take everything from the business, reinvest it back into the business, then I'm creating a possible point of failure that could be catastrophic if we're not careful. So what I tell people to do is that the business becomes a funding mechanism for other. So when we talk about generating income and wealth creation, what we're trying to do is take that income and convert it to assets that will generate other income without your active involvement. Now, some people will try to call this passive income. I don't believe in the concept of passive income because the tendency is to think that if it's passive, then I don't need to be involved with it. Here's the deal. When you forget about your wealth and you forget about your income because you think it's passive, it will forget about you. So we look at it and I look at it as leveraged income. In other words, I'm leveraging my time. So when you're doing your one on One work. It's a one to one relationship. An hour of work gets you paid a certain amount. But there's ways to leverage it where I don't have to put an hour in to get an hour's value back. I don't have to like, I get paid on things that, you know, residuals my book, okay, I get paid every time that sells. But I did it once and I do that. My investments, I can get paid on that. So, so what we need to do in your business is one, operate it as profitably and efficiently as possible. In other words, do the wants and needs analysis in your business too. Take that money and I would allocate a percentage to go outside your business into a future fund, an investment fund. Now in business, what I would tell you to do is if, at minimum, I would tell you to do a 401k, you can put away 50, 60 thousand dollars, depending on age, in a 401k each year and either take it as a tax deduction or you do a 401k Roth and don't take it as tax deduction. But I want you to max out. I'd like to see, I tell people 15 to 25% automatically going into investments for the future. 15 to 25%. The older you are, the closer you are to 25 or more. Because what we're trying to do is fully fund your retirement, your future, your options. And the way we fully fund it is not in the traditional way. This is why I say traditional financial advice doesn't work for entrepreneurs. We don't fund it in the traditional way that we're taught. See, back in the day in the industrial age, we had something called pensions. Most companies don't have pensions these days. And a pension was a promise of a lifetime income. And in the 70s, 80s, they came up with the 401k type of setup. So they said we're not going to do the pension. In other words, we're not going to promise you income for life. We're going to promise you an asset pool and you can live off that. And it's up to you to figure out how much you're going to have in there. So we'll match and we'll put a percentage in if you participate. And so what ends up happening is that you end up getting this money at the end of the day, but it doesn't promise you a lifetime of your income. It promises you an income based on what's in there. So if you didn't put enough in there, then you don't have enough to retire, you don't have enough to live, you don't have enough. And then we have this idea of, of reducing our lifestyle. 48%. I think the statistic that was a Transamerica retirement study, 48% of the people believe that they're going to have to reduce their lifestyle in retirement years, which is crazy. You worked all your life. Why should I be reducing it? I should be increasing it, I should be enjoying it. And so I would take a percentage and move it outside the business to make sure that we've got that piece of it covered. Now also, if we have debt and that type of thing, I want you out of debt over time.

Time, right. And you suggest doing this, it doesn't matter whether you are on day 100, day one day, you know, year 100, whatever, you need to start right now at the beginning.

So yes. And the reason I don't care how much now, maybe you can't get 15% because you're just starting out, but here's why you're investing habits are a muscle. And when we get used to using that muscle, then it becomes easier to use that muscle. I remember I flew into Montana to speak at a big conference and they sent the car service for me and this young kid who was the driver of the car just graduating college and he says to me, well sir, what, you know, what would you Recommend For a 25 year old like me just getting started about retirement. I said, well, the first thing is to not call it retirement. He says, why not call it retirement? I said, because when we call it retirement, it's easy to put off. It's easy to say, well that's going to come down the road. And I said, when we look at the math behind the numbers, you're best served to start early because then time does all the heavy lifting for you. So what we need to do is realize that it's not about retirement. It is about that other freedom, peace of mind and that I want to build for the peace of mind knowing that I have the option to work, work or not. And so I'm not searching for a retirement age or retirement plan. I'm searching for peace of mind. So good.

Now I definitely want to be mindful of your time. So last question.

Yeah. Is my God, where did time go?

No, I honestly could talk to you for 1200 years. So I am, I want to go back to an important point that you talked about learning the language of wealth and knowing that that is a different skill acquisition than generating revenue. So how does one start with learning the language of wealth?

So a couple things. One is to realize that when we're trying to generate income, a lot of times entrepreneurs, they go at it and they're willing to take risks. So your mindset is opportunities, risks and execution. When you're building wealth though, you're trying to mitigate risks. So your mindset is risk reduction, preservation and accumulation and multiplication. They can coexist, but you need to understand that you don't bring that same tool set, the same skillset, the same mindset that you were using. In one to the other. You've got to put on a different hat. So the way to do it is frankly is education and mentorship, honestly is that one is. Well, there's something before that, let me touch on that. One is to make sure that you will not invest in anything that you do not understand. Okay? That means you're going to need to take the time to learn. Now I'm not expecting you to be some finance major or some financial planner or some financial guru. I am expecting you to check pulse on the patient too often. Here's what I see. I've got a CPA for that. I've got an advisor for that. So I just, I hand it to them and they take care of it. I don't know. Remember I said when you forget about your income or your wealth, it will forget about you. Here's the deal. There is no financial advisor, there is no cpa, there is no attorney that is going to be in love and as passionate about your future and your legacy than you. And so your advisors. And I, you know, I feel I'm in a really interesting position because I got no investments to sell. I'm not an advisor in that capacity. When I'm with one on one mentoring and stuff, then I have a different relationship. But right now I'm speaking as a financial educator with some experience and that type of thing. So it gives me the benefit of being able to be unbiased and say things that might piss off some people in the financial industry. And I don't care because I'm here to make sure that your future is taken care of. And the financial services industry, in my estimation, they make a living by making sure that we think it's complex. And because it's complex, we need to lean on them and rely on them and keep paying them to do that. That. Now I pay my financial advisors and I'm fine with it, but I am not in a co dependent relationship with them. Here's the deal. The commitment you need to make to yourself, first and foremost, is that you will step up on the helm of your ship, your financial ship. You will take a hold of that wheel and you will be the captain and your advisors, your CPAs, your attorneys, your financial planners. They will be your first mates, they will be your navigators, they'll be to your right and left, and it will help you, you navigate this space. But they will not take the wheel from you, ever. All decisions are made by you. All decisions need to be understood by you. That means it's their job to educate you. It's their job to make sure that you understand it. But it's their job to make sure that you can make an informed decision. And when you make those informed decisions, you become in control, one that starts to strip away the emotions of making the decisions, because logically you've thought it through. But if you think that you're going to build wealth without being involved in it, if you do, it's coincidental. And if you do, coincidentally, it's probably not sustainable. And so the point would be that you need to be involved in it. And I get it. There's probably a whole lot of people out there that are creators and they say, I don't like numbers. Well, your financial liberation is on the other side of that math equation. It's simple math. I don't expect you to get into the complexities. That's your advisor's role, to simplify it enough so you can understand it and make the right decision. Now, not all advisors are created equal. So one of the things you need to understand is that I was having a conversation yesterday with someone who said, yeah, these people are telling me to do this and that. And I said, what's their bias? How are they getting paid? Because if they have a bias, then we need to know about it and know in construct, in context. That's what it is. So I think that we need to look at that. But really, to get yourself in a place where you can build wealth while generating income, I think is realizing that, yes, your core business, your core business is the business you're in. Whether it's selling widgets, whether it's doing coaching, whether it's doing therapy, whether it's doing training, that's your core business. But if you're in business, part of your business is the money side of business. And we don't. We can delegate the work, the detailed work to some people, but we do not relegate it and then walk away, which is what most people do. I Have a controller, I have a bookkeeper, I have an accountant. They do take care of that. And that's when you get in trouble. So my suggestion is this, is that you surround yourself with the right people, the right mentors, the right coaches, the right advisors. They understand their position and their role in the whole thing. When I got diagnosed with cancer, there was a time in my life where I fought competitively, martial arts. And anyone that trains fighters, you all know that you've got your strength trainers, you got your foot trainer, you got your foot speed, your hand speed, you've got your stretching and all that stuff. And I said, well, I'm getting back in the ring and this time it's for my life, so I'm going to do it just the way I did before. And I said, let me get the doctors together. So I got my. And I used every doctor that you could possibly imagine. I picked the best doctors I could find, from the surgeons to the. To the holistic oncologist, acupuncture and meditation and qigong. And I did everything and I sat them down. I said, here's the deal. I'm gonna get in the ring, I'm gonna fight, and I'm gonna beat this thing. I said, you can't fight this fight for me, but what you can do is tell me what to do and train me to what to do. So I am the strongest I could possibly be for this fight. To win this fight, when I get in the ring, that's your responsibility. And if you're prepared to take that on, then come on the team. And that's the way I think you need to look at your financial advisors. That's where I think you need to look at your attorneys, financial advisors, your CPAs. And if they're not prepared to be part of a team knowing that, that you are the one doing the battle, you are the one doing the fight, you are the one that's building the wealth, the legacy for the movements and the missions and the people that are in your life, then they shouldn't be on the team. That's the way I would look at it.

Oh, my gosh, that is so powerful. And what an amazing way to end the episode. So for those of you who want to learn more about Mel, what he teaches and all your courses and like, where. Where's the best place I can send them?

So My website is melabraham.com. i have a Instagram. You can reach me at melabraham9. I'm on LinkedIn and I have a private Facebook page. I mean, a Facebook page. Melh Abraham I also have a private called the Affluent Entrepreneur Group on Facebook. So any of those things I'd love to hear from folks. I'd love to, you know, if there's questions, if there's things. Because I'm going to be doing, like I said, I'm going to start pushing some things out, content out. I'll be answering questions and doing that live on the show and that type of thing.

So I can't wait. That's going to be amazing. And we're going to link all of those places up in the show notes. So thank you so much, Mel. This was so helpful and eye opening and I know that it's going to impact a lot of people. So I'm so grateful. Thank you.

Ah, thanks for having me. This was, this was a joy.

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