016 Answering Your Money Questions

Hey there, real quick, before we jump into the episode, listen, if your earnings treadmill hasn't set you free yet, running faster won't either. Listen, hustle without principles just going to burn you out. So here's what I want for you. I want you to join me for my money machine experience live. It is three free trainings. Deep dive into how to escape the treadmill and build a money machine that actually works for you. All right, grab your spot here by going to moneymachinelive.com and I'll see you in the free training. Hey, there. Welcome to this episode of the affluent entrepreneur show. And in this episode, we're gonna do something different. We're gonna answer your questions. Remember, this show is about you. It's about your money. It's about your wealth. It's about your life. It's about how do we scale your money, scale your business, and scale your life in the way that you envision to be that affluent entrepreneur, to be that person that lives the life that you envisioned. And so in this episode, we're gonna talk things. I'm gonna answer questions that have come in from you. We're gonna talk about things like, should I refinance my house? How do I get ready to buy a house? Is this the right time to buy a house? What about if I came into a little bit of money? What do I do with that? Couple of other questions are coming in. So here's the deal. Stay tuned. We'll be right back with the show.

This is the absolute entrepreneur show for entrepreneurs that want to operate as at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth so you can have a richer, more fulfilling lifestyle. In this show, you'll learn how business and money intersect so you can scale your business, scale your money, and scale your life while creating a deeper impact and living with complete freedom, because that's what it really means to be an athlete. Entrepreneur.

All right, let's do this thing. Let's do this thing. Welcome to this episode of the affluent entrepreneur show. And this one is one of the Q and A episodes. I'm taking questions from you to help you with your money, with your wealth, with your business, with your life. So these are some questions that have come in. If you've got questions for me, if you've got questions about money, business, wealth, any of these types of things, I want you to send them to me. I want you to DM them to me. Put them in the comments. Let me know, reach out to me. We'll bring them on the show. I answer them live. I might even be bringing you on the show and we'll do some live coaching with you. So do me a favor, make sure that you send me your questions. The other thing to do is this, is that if you haven't done so already, don't make me come after you. But if you haven't done so already, do me a favor and smack that subscribe button and subscribe to the show. Make sure that you're getting notified of every episode that comes out. And also leave me a review. Here's why. Because you know that I am obsessed and my mission is to help people find financial independence. Financial independence is a birthright in my mind. It is one of the core drivers of everything I do. But most people don't know how to claim it. So I want to give them the gift. I want to give them the path. I want to give you the opportunity to claim your financial independence by understanding the key principles, not get rich quicks, tactics and all of those kinds of things, but the real principles that have withstood the test of time that actually work. And so this is why I need you to leave some reviews, download, subscribe, pass it on. Because what it does is it allows itunes to put it in front of more people, YouTube to put it in front of more people so we can get this message out and we can get the tools, the tactics and the strategies in the hands of people to take control of their financial destiny. Again, because it is in our hands. So with that, let's jump to some questions. These are questions that have come in either through my Facebook group, at the Affluent Entrepreneur Facebook group, on my Instagram DMs, or just in conversations or comments. Just they come in from all different places. Send me your questions. And that's where they came in. The first question is coming in from Sally in Raleigh, North Carolina. I'm going to be in Raleigh, North Carolina in October. I'm doing a keynote there. I'm it's going to be fun. We're going to be talking money. We're going to talk about what are the key elements that entrepreneurs today need to do to build their wealth. So here's the question from Sally and Sally says, I'm thinking of buying a home and trying to understand what is the best way to save for the home. This is a great question. And this could be a home. It could be a car. It could be any major purchase. And one of the Things to think about is that in many cases I want people to try and use what I call sinking fund savings. If I know that I have a major purchase. If, if you know and I don't know, I don't know the answer to this. Sally, if you want to buy a home this year, next year, five years from now, 10 years from now, it just depends on where you are. But the idea behind a sinking fund savings is to know that if the purchase is five years from now, that I'm going to be allocating a portion of my cash flow and, and my portion of my cash flow is going to go into a savings account specific for that purpose. In other words, it's earmarked for that purpose. We don't use it for vacations, we don't use it for expenses, we don't use it for any of those types of things. It is specific for that purpose. And we'll talk specifically about the house in a second. But I think it's important for us to understand this if we're looking to make a major purchase. One of the things that we need to talk about, I'm going to do another episode on this called my framework called the Wealth Priority Ladder. It's what do you do with your cash? How do you allocate it first, what do you put it up against first and then next to build wealth? And it's called the Wealth Priority Ladder. And when I do that episode, we'll make sure that you. That's the other reason you need to subscribe. It'll be coming up and I'll walk you through all the steps of the ladder. But one of the things to do is this. Before I start thinking about making a major purchase, one of the things that I need to do is to look at what my existing financial structures. In other words, do I have a peace of mind fund? And for entrepreneurs in the Wealth Priority Ladder, what I do with a lot of my clients is in the affluence blueprint. What we do is we try to build out nine to 18 months worth of cash in the bank account in a high yield savings account. To give you the latitude, the peace of mind, should anything happen for whatever reason, you're taken care of. If you don't have that peace of mind and fun in place, at least we'll start out in increments. I want you at six months, then I want you at nine months, then I want you at 12 months. But if you at least don't have six months in place, I wouldn't be making Any major purchases right away, I would build to that six months first. I'd put all the cash towards that six months. Then we can start sinking fund for the down payment of the house. Now let's talk about the house because that's an important thing. A house purchase is a long term decision. So one of the things to do, and I know that this is the American dream and I've owned my share of houses, I still own house homes and all that stuff. But what I don't want you to do is just because society says this is the American dream, that you want to go out there and buy a house when maybe, maybe it's not the right time, maybe, maybe it's not the right circumstances. Because a house buying decision isn't a decision that you get into and then you get out of in short order. It's something that is long term. So in other words, do you intend to be in this area for five years, seven years or more? If we don't intend to be in this area for five to seven years or more, then maybe it's not the thing we want to do is to buy a house. And I'm not here to talk you into buying a house or out of buying a house, Sally. I'm just here to have you start thinking about these things. Now you might turn around and do something like I've done. I bought my homes and when I moved on from that home, we converted it to a rental property. So we bought in areas that we could turn it into long term rentals or short term rentals and that type of thing. So you just need to think about it from a long term perspective. Now what we want to do, and this is your first home and it doesn't in your question, I don't know if it's your first home. Typically I want 20 to 25% down, which in today's market can be hard depending on where you're at. If you're in, in California, where I'm at, it's expensive. You're in Raleigh, North Carolina, it's not as expensive. Okay, but 20 to 25% down. Now I'm going to give you an escape clause here, all right? If this happens to be your first home purchase, your first home purchase, not a second home, not another home, not a rental property, not a vacation home, not just your first home. The first time you ever buy a home. To get you in the game, I allow my, my clients to be, when we talk about it in the affluence blueprint and when we Work with them is to go in at 15% down. I don't want you to go lower than that because then there's a lot of debt and a lot of debt means a lot of stress, a lot of payment and a lot of strain. So typically I want 20 to 25% down. But if it's your very first home, we'll, we'll ratchet it down to 15% to give you some breathing room to get you into the home if it makes sense. So, but it's a long term decision to make that happen. Now the other thing that I'd love to do before you start buying a home, so you're putting money into a sinking fund, you're saving your, let's call it 15 to 25%. The other thing that I want you to do here is this. I want you to go check your credit report. Go to freecreditreport.com we'll link that up in the show notes freecreditreport.com you get a chance to take your credit report at least once a year for free. Okay. Once you check your credit scores, I want you to check your credit, I want you to see what is on that credit report. Are there things that are in error there? Are there comments or accounts on there that you don't recognize? Start getting it cleaned up. Get it cleaned up now. Know that credit reporting bureaus are not going to take things off of there just because you made a mistake. If you made a mistake and you, you missed a payment, it's late, they're not going to say, oh, it's okay, Sally, we'll take that off of there. They're going to leave it on there until it falls off on its natural occurrence. But if they made a mistake, it's not an account of yours, or, or this never happened. You provide the documentation, then they'll clean it up. So I want you to get really clear on what your credit report says so you can clean it up if you need to clean it up at all. But get your credit report and take a look at it now. Your credit score is going to impact the kind of loan you can get. The rates are down right now as we're, we're shooting this, as we're recording this. I anticipate that over time they'll start to go up because the, in fact, the feds have talked about it. But the fact of the matter is that rates are down. The rates you get will be dependent upon your, the level of loans. So the more down you put, the lower loan to value it is the lower the rate is that you might get. Now the other side of that is the better your credit score, the better the rate is. If you're a, you're an excellent credit score in the seven hundreds and eight hundreds, mid seven hundreds to eight hundreds, you're going to get the best rate possible. Okay? So you have the ability to do that. But the first things first. One, let's make sure that you don't have a lot of consumer debt. Two, let's make sure that this is the right decision for your circumstances right now in a long term view. Three, then what I want you to do is, is look at your credit report and make sure that it's clear, clean, and if anything has to be corrected, you start to do that. Four, I want to make sure that you have a minimum of six, preferably nine to 18 months of a peace of mind fund in a high yield cash account. And now we put a plan in place to create a sinking fund to make that happen. Now one more thing that I want to be really clear about. You say, I'm thinking of buying a home and trying to understand what's the best way to save for them. That's great. Let's just talk about, and this is specific to what's going on now because the real estate market is just going freaking bonkers right now. It's just going crazy. And people are buying homes sight unseen. People are buying homes without inspections. People are buying homes and, and flipping them because it's ratcheting up so fast. I've, I've heard markets that have increased 10, 12% in a year, which is unheard of, unprecedented. Now it's also unsustainable. But here's the risk. For most people, buying a home is the home is an emotional purchase. And I totally get it. It's an emotional purchase. You want the home, you fall in love with the home, you fall in love with the location. Look, the realtors are freaking great at doing this. They, they cook their, the chocolate chip cookies so it smells great and they have you visualize what it looks like and it just looks wonderful. And they get you hooked in emotionally into that home. Now this is where the risk is. What I don't, I want you. And this goes for any negotiation you're doing. Anytime that I get involved with assisting or consulting on a negotiation, which I do a lot of, One of the first things we do is before we ever start the negotiation, I want to know what your drop dead point is. What where that line is that you're not going to cross. I want you to look at your numbers. I want you to know what you can afford, and I want you to to look at what you believe you can afford. And I want you to cut it by 20%. Cut it by 20%. Don't go to your lender and ask them what you qualify. They'll tell you what you qualify for, but they're going to qualify you right on the edges of your affordability. I don't want you on the edges of your affordability. Because what happens is that you get into negotiation, all of a sudden the house goes into a bidding and you now get in the heat of the moment and you bid and bid and bid, and all of a sudden you pay more for the house than you actually wanted to pay. And the only way to avoid that is, is before going into the deal, before even looking at the house, before looking at any houses, what you want to do is know, this is the line that I will not cross. I don't care if it is the Taj Mahal and it is an amazing buy, I will not cross that line. Because the only thing that's going to cross that line for you is the emotions. And when we chase deals on an emotional basis, we start to make bad deals for ourselves. People think that real estate's the place to make money. It is. But where you make money in real estate is on the buy side, not the sales side. See, too often we think, well, I can sell it for more, I'd rather you buy it, right? And so one of the things to do, especially in a fast moving, fast appreciating market, is not to chase the deal. Know the deal that you're willing to go into, know what their line is and don't cross it. And your realtor will have to help you with that in the negotiation of that, in making that happen. But when you start to get caught up emotionally and start to, let's say, compromise where you have set, this is where you get in the danger zone. Now this happens, doesn't matter whether it's homes. In fact, in the affluence blueprint, we talk about this very thing in stock investing. And when you're investing in general, when your emotions get involved in your financial decisions, your intellect goes down. Okay? So what we need to do is strip all the emotions out of our financial decision making. Make it based on principles, make it based on rules, make it based on logic. And it either pencils out or it doesn't pencil out. And if it doesn't pencil out, you walk away from the deal. All right. So Sally, good luck with this. Congratulations. This is your first home. Way to go. And if as you're going down this path to saving for a home and getting ready for that, if you've got more questions, shoot them my way. We'll guide you through the process. We'll help you along the way. Let's make sure that you make the right decision the right way for the right reasons. All right, so that's Sally, Raleigh, North Carolina. And let's go to the next question, which is actually very similar. And this is Rick from San Francisco, California. And he asked the question, is now a good time to refinance my house? Now, I happen to know Rick and I asked him, he's only been in the house for less than two years. So here's the thing. I might have a different answer if you were in the house for longer. But because of the fact that he has not been in his house for a long time, he's not going to necessarily restart the loan. Because if you got a 30 year loan and he's into it for a year or two years, another 30 year loan, it's only a two year deal. But let's just talk about how I look at this. A lot of times we'll say, should I refinance? Just because interest rates have dropped, Just because interest rates have dropped doesn't mean that you automatically go and refinance because it still may not be a good deal. What we need to look at is what's the cost of the new loan? Because it's not free. In most cases, 90% of the cases it's not free. So we need to look at what's the cost of the new loan and can I recover that cost of the new loan in 24 months or less, in two years or less. In other words, let's look at some numbers. If I look at some numbers and I say there's a $400,000 loan, let's call it, and these are hypothetical, but let's just play the numbers game for you. A $400,000 loan at the original loan is 400,000 at 3.6%, 400,000 at 3.6%. The payment on that loan is going to be about just over $1,800 a month. Okay, so you're in a home, you got a $400,000 loan at 3.6% and you're paying $1,800 a month today. You could refinance that $400,000 and take the interest rate from 3.6% to 2.75%. 2.75% brings the payment down from $1,800 to $1,600. You save $200 a month. Okay? Now the cost to get in this loan is $3,500. So now I look at this and I say $3,500 divided by the $200, okay, $200 over 20, my 24 month limit, two year limit, $200 a month in savings because my payment goes from 1,800 to 1,600. $200 a month over 24 months is $4,800. So as long as the costs are less than $4,800, I would consider refinancing the loan. So in this case it was $3,500. We would recover the loan in effectively 18 months. The cost of the loans in 18 months. Now, we gotta assume a couple things. One, you're staying in the property if you intend to stay in the property for two years, and that's. It doesn't make sense. But you're going to stay in the property long term. So you recover the costs and you get the benefit of the lower payment. Okay, but I look at this from a two year window. If I cannot recover the cost of the refinance from the savings that I'm going to get in a two year period, then I typically won't do it. All right, so hopefully that helps, Rick. But I'm going to give you something else. I want you to think about this for a moment. You have an opportunity right now, everyone has an opportunity right now to look at the loan costs and a refinance. We're at the lowest level for since I can remember of interest rates and to lock in an interest rate at a lower level. So what would happen, what would happen if instead of refinancing the $400,000 for 30 years again, in other words, I'm going back into a 30 year loan? You went into a 20 year loan, in other words, you cut off 10 years off the loan. 10 years off the loan. Here's what happens. Let's just play the game, okay? Your original payment was $1,800. Your new payment on a 20 year loan is going to be about 2,000, $2,100. Okay, $2,100, which means that it's actually going to cost you more to get into this new loan. But you're paying less interest, less of an interest rate and you cut 10 years off the loan. Why would you do that? Watch this Your original loan, if you went For 30 years, for 30 years, you would pay $188,000 in interest over the life of loan. But if we go to 20 years, we cut the interest down to somewhere around 100, just, just shy of 120,000. In other words, we save more than $60,000 in interest by making sure that we shorten the period of the loan. In fact, I refinanced our house here. It's the only debt we have. We don't have a lot of debt on it, but I refinanced it here and literally we didn't change the payment at all. The payment stayed the same, we dropped the interest rate and I cut eight years off the loan. It's going to save me hundreds of thousands of dollars in interest. Hundreds of thousands of dollars of interest. So hopefully that helps. Yes. Refinancing maybe, depending on the difference in the rate. Basically use the 24 month rule to see if it makes sense. Either that the savings you're going to get is going to more than pay for the cost of the loan in 24 months or less, that you're going to be in the house for long term to get the benefit of it and then also consider the possibility of going to a shorter term loan. Now, if you are in a loan that say you've been paying on it for 15 years and now you're going to refinance it, now I have a rule here. If you're in a loan, you got a 30 year loan and you got it 15 years ago, that means there's only 15 years left on the loan. You don't go into a 15 year loan, I mean a 30 year loan, because what you're doing now is extending the time to pay another 15 years. And I don't ever want that to happen. So if you are, you've got 15 years left on the loan, then all you're going to do is refinance it into a 15 year loan. In other words, maximum you're going to go is 15 years because I don't want to extend that loan anymore longer. So I know that that may throw a kink in the works for some people that have been in their loan for a long time. But it's the right way to do it. Otherwise what ends up happening is that you're paying on the same house for 45, 50 years because you refinance it for another 30 years. Okay? So that's the way I would handle it. I hope that helps Rick, and let me know how it goes. If I can do anything for you, same thing that I said in the last question. Check your credit, make sure it's clear, make sure it's clean and everything as you go through this process. All right, let's look at the next question. Next question comes in from Colorado, Denver. Jack from Colorado. This is a great question. He's asking the question, I want to contribute to retirement, but I'm trying to understand which is better, a Roth IRA or a regular ira. Now, I'm going to talk about this in the construct of an IRA, it could be a 401. You may be working for a company. So let's just talk about the difference between Roth and regular, okay? When you typically go and contribute to a regular IRA account or a regular 401k account, it's deducted off your income. You get a tax deduction for the contribution. And because you get a tax deduction for the contribution, you pay less taxes today.

By doing that. So people will use it as a tax savings strategy. Now, here's the challenge. Here's the problem with that, is that when you take the money out when you retire after age 59 and a half and everything, you start drawing the money out, everything that comes out is now taxable at whatever the tax rate is at that moment in time. And we can't predict what the tax rates are. They're going to be all over the place depending on who, what the administration is and what's going on at the time. So a regular IRA or regular 401k takes it off your income. So you don't pay tax on it now, you pay tax on it later. Okay? The Roth version of it, the Roth version of it does not give. You take it off your income today. In other words, you pay tax on it today, you put it into the account, it grows into retirement, all of the gains, all of the growth and everything into retirement. When you take it out, when you retire, it's completely tax free. I love the Roth for a lot of people, because when you draw it out, it's tax free. Here's the thing. Think about this. A million dollars in a Roth IRA and a million dollars in a regular IRA are not the same. See, because the people that have the Roth ira, they can take that million dollars out at retirement with no tax, no penalty, no nothing. But the people that have the million dollars in a regular ira, when they take that out, they have to pay tax on the million. So they're going to end up with something like 700,000 or 650,000, depending on what the tax rates are. So they're not the same. We just need to understand that. Now, which one should you go into? It depends on what you anticipate your income and your tax is going to be. Now, we're not going to be able to predict what the tax rates are, because who knows? It just depends on who's in office and what they're putting in. And we're just along for the ride. Okay. I think that we are sitting in a place where the taxes are lower than they've been and they're probably going to go up. And so a lot of people today are putting things into a Roth so they can let it grow tax free and draw it out tax free. And so it just depends on where you are on your income, where you think your tax rates are going to be. Are you in a high income tax bracket right now? Are you in a lower income tax bracket right now? That will depend on that. Now, the other side of this is this a Roth. Depending on your income, you may not actually qualify for a Roth. In other words, what ends up happening is that they actually limit you to getting into a Roth. If you make currently. Currently, if you make more than $140,000 as a single individual, you can't use a Roth, so you don't get that benefit. If you're married, filing joint, it's $208,000, I believe so. So if you're on a high income, you may not qualify for a Roth. And so just understand that you may not even have the option depending on what your income is. So my feeling is, first I try to max out and fund my Roth as much as I can, and then I'll go into my regular retirement accounts and that type of thing. Now, if you're working for a company and you're in a 401k with them, you can actually see most 401 plans have a Roth option. So you can ask them if there's a Roth option. You can max out the Roth option at the company to make that happen. So I hope that helps. Jack, the good part of this is that you're getting in the game. You get in the game. The idea, remember, the most people don't have money issues, they have behavior issues. The fact of the matter is, I don't care if you're putting $1,000, $500, $10,000 away. Well, you can only put 6,000 into an IRA unless you're over 55. So the point is that you're starting to create the financial habits of the wealthy, in other words, putting money away and putting money to work for you, so it works harder for you than you ever did for it. And so the key is this. And this goes to all of you that might be sitting back, going, well, one day. One day I'm gonna start doing my retirement. I'm going to start doing some savings. I'm going to start doing some investing. Listen, that day is today. I don't care if it's $10. The idea behind putting $10 away every week, every pay period, every month and increasing it is, one, you're never going to miss it. Two, it's creating the muscle and the habits to do that on a regular basis. Because then all of a sudden, when $10 doesn't mean that much, you go $20, and then you go to 40, and then you go to 80, and then you go to 160, and all of a sudden you're at $200 a month. Remember, $200 a month over 30 years is over $300,000. The key is the consistency and the habits that you create, not the amount that you put in. I want you in the game, and I want you in the game today and stay in the game. All right. Hopefully that makes sense to you. All right, Keep crushing it, Jack, and let me know I can help. I got one more question for this session. This is a great question, and I think a lot of people may or may not have this happen, but this is Ellen from Los Angeles, and she asked the question. She said, I just inherited over $200,000. How should we invest it? Okay, now, I don't have enough information to give that to you, and I'm certainly not able to give you investment advice here on the show. But let's just talk about the concept here. First off, when you come into a windfall, let's just talk about this. We've all heard the statistics that the people that have won the lottery, they win the lottery, and within a couple of years, they're completely broke again. And why is that? Well, here's why it is. I believe that we have a financial comfort zone. I've talked about it in. In some of my episodes. I've got another episode that's coming that's coming out or it's out already, called the Money Identity Cascade. So there's some things that happen, but we have this financial comfort zone, this money comfort zone. And what ends up happening is that as we learn more, as we grow more, as we do more with our money, as you're listening and going through some of the stuff that I'm doing on the show and reading some of the things that I'm writing and you know, you're part of affluence blueprint or whatever it is. What we're doing is we're pushing up against the wall of your financial comfort zone. And as we push up against the wall of your financial comfort zone, we stretch the wall, we move the wall, we move it slowly. As we slowly move it, you get used to it. You grow with it in a way that the wall never breaks down, but it just gets bigger and larger and encompasses it. Here's what happens with the people with lottery winnings or come into money pretty quickly is that they haven't pushed up against their financial comfort zone. And now this large sum of money comes in and it obliterates the comfort zone. It completely destroys the wall. That's like going into the gym. Okay, you haven't been in the gym, you've never worked out before. And you get in the gym and you get on the bench press and you put, you've got an Olympic bar and that Olympic bar is 45 pounds. And you put two 45 pound plates on each side, that's 90 on each side, that's 180 plus a 45 pound bar, that's 225 pounds. And you said you think that you're going to bench press that because you saw the last guy do that. Okay, what do you think's going to happen other than probably ending up in the hospital because you just destroyed your chest and your arms because you dropped the weight on you. It's not going to end well. But it's the same thing with your financial comfort zone. When all of a sudden you come into a lot of money and you're not used to it and you haven't trained yourself, you haven't skilled up to it. What happens is you blow through that wall and you're not prepared for it. And that's why people that win the lottery, that haven't got themselves to a point to handle that kind of cash flow, end up back where they started. And I don't want that to happen to you. So here's what I tell everyone that comes into a sum of money. Now you've come into this because of an inheritance and because of that there's emotions involved. This is a tough thing. There's, believe it or not, when you inherit money, when someone dies, some people feel guilty, some people feel obligated, there's this attachment because it was from Someone else that just passed away. And you've got the emotions of death and the morning of the death and all that stuff. And there's a lot of emotions involved with that money that are beyond just the money emotions. Okay, so what I do in this case is that the first thing I tell everyone to do is that I want you to park the money. I want you to go get a high yield cash account, and I want you to just put the money in there. I want it to sit.

For six months.

Six months. Because what I want to do is I want to allow the emotions to dissipate. I don't want you to spend it. I don't want you to sit back and go, I'm gonna go get. I'm gonna go get. We're gonna go on vacation. We're gonna do. On this lavish, lavish vacation. We're gonna. Gonna buy a car. We're gonna go do this. I don't want you to do anything. At the beginning, I had a dear, dear friend, had this exact same thing happen years and years ago. He inherited. He inherited homes, two homes, rental properties and cash and everything. And he. He bought expensive watches, expensive cars. He blew through all. He lost the homes and everything. It was sad to watch because with what he got, he could have set himself up for life. Now you've got a couple hundred thousand dollars. You might look at it. Well, it's only a couple hundred thousand. Let's play a game here. There's a thing called the rule of 72s, okay? If we get this thing invested properly for the right reasons, let's say it's invested at 7% in 10 years, that 200 becomes 400 in another 10 years. So in 20 years, that 400 becomes 800. You're getting close to a million bucks in 20 years. We need to do this right, but we can't make emotional decisions with it. So what I want you to do first is let's place it in a high yield cash account to earn a little bit on it. Don't touch it, don't spend it, don't use it. Now, in the meantime, in that timeframe, while you're waiting on it, what I want you to do is I want you to look at your financial situation. I want you to look at, do you have consumer debt that needs to get paid off? What is your income, your ability to earn income to get that paid off? Do you have a home? Do you have a plan on where you want to go, what you want this money to turn into, and what your lifestyle Looks like it's called. We call this the Affluence Vision in the Affluence Blueprint. So what I want you to spend the six months doing is one, learning about yourself, learning about what you want, understanding what your current reality is, understanding what maybe skills, mentorship, and other things you need to have in place to help you with it. And then we can step into it and say, all right, let's talk about where we want to invest this. How do we want to invest it? We'll probably drip it into an index fund, depending on your age and all that stuff. Or an etf. We can do that. But I don't want to do anything with it until you get a clear vision and a clear plan in place to operate from. Because too often we start when we get large sums of money. We make emotional decisions because we think that it's going to stick around and it doesn't stick around. So that's my thinking on it. I hope that helps. I know that you wanted specific investments, one I cannot give in specific investment advice on this show. However, what I want you to do is step back first. Then we can get you the right advisors, we can get you the right people in place and do that. So one more word of caution and this is going to sound awful, but I think it's important. When you come into money, all of a sudden, you come into some newfound friends, and I want you to be very cautious. Things may sound too good to be true. They may have all kinds of ideas of what to do with the money. And I'm going to tell you, ignore them, push them away. Be very cautious. I want you to follow the bias. I want you to follow what's in it for them. I want you to follow that. And don't fall prey to. To what can happen when you come into money. And other people say, oh, they got some money. I got an idea. Maybe they can invest in my business. Maybe they can do this for me and that type of thing. And you know what? Those people that are in your life that truly care about you, that are truly there for the right reasons, they're not asking you for your money. So I know that may sound harsh, but it's real. I've watched families torn apart. I've watched people's lives torn apart because money got involved. And so I'm being upfront. You know me, this show is going to be real. It's going to be direct. Sometimes it's not going to feel good, but that's just what you're going to get from me because that's how we keep you alive. That's how we keep you surviving. That's how we keep your money stuff alive and make sure that you don't make decisions. Look, I got caught in a pond. This game wiped out one third of everything I own because I let emotions get away from me. I forgot my rules. I let them go. I kicked them aside. I don't want that happening to you. And I'm saying you, Ellen, not just you. I want to. I'm talking about all of my audience, all of m fluent entrepreneur community. So I hope that helps. I hope this helps. Here's the thing. I'm going to keep answering these questions. Ellen, stay in touch with me. Let me know how I can support you as you move through this. But the first things first, put it in a high yield cash account and let's let the emotions dissipate and let's put a plan in place. Okay? All right. I hope that helps. And do me a favor, do me a favor. If you've got questions, send them my way. Let me bring them in on an episode. Let's get them answered, let's help you out, let's keep you moving forward and let's keep you rocking and rolling in the process. And if you haven't done so already, hit the subscribe, leave a review, send me a screenshot, tag me into, into it if you've left me a review. Because here's what I'm doing. I'm choosing the reviews, you know, a couple times a month and those reviews that I read on the air, you're going to get a one on one laser coaching session with me. All right? So let's make that happen. Let's keep it rocking and rolling. And remember this, I want you to always to live a life that outlives you. And I'll see you in the next episode. Cheers. Bye. Thank you for listening to the affluent entrepreneurs entrepreneurship with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the affluent entrepreneur Facebook group now by going to melabraham.com group and I'll see you there.

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 of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, 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 claim it. Thanks so much.