028 10 Money Lessons for Parents

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. Oh, this one's good. This one's good. Because you know what? This is the episode about the lessons and the steps that I gave my son as a brand new dad. You know, as many of you know that August 2nd of 2021, I became a first time granddad of a beautiful granddaughter, Emily Ray. Emily Ray Abraham was born. And so someone asked me the question because she's an expectant mother and expecting a child and she says, what would you tell a brand new parent about finances and taking care of their children and all of that? Well, that's what this episode's about. And it hits home for me because I'm a brand new granddad and my son is a brand new dad. His wife is a brand new mom to my little beautiful princess granddaughter, Emily. And so whether you're a brand new parent to be parent or or a grandparent, this episode, it's going to rock your world. And you know what? I'm going to talk about the Emily factor in this case. See you in the episode. Cheers.

This is the Affluent Entrepreneur show for entrepreneurs that want to operate at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth so 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 affluent entrepreneur.

Hey there. If you're here, I already know that you're one of the people that really want to get this money thing situated. You want to understand what it is to try and change your financial destiny and build financial independence in your life. You want to be an affluent entrepreneur. I get it. So here's the deal. I want to go deeper with some of my, my audience and my community and and spend a little more time with you. So I have a free three part live training event that I am doing starting October 20th. I want you to mark that on the calendar. October 28th. We're going to do three, three different sessions, about 90 minutes each. We're gonna go through a number of different things. Cause I'm gonna set you on a different trajectory financially, wealth wise, business wise and life wise. And so to save your spot or to be on the VIP list to make sure you're there, go to affluencelive.com affluencelive.com and make sure you grab the spot. We're gonna have limited spots, but I wanna help you. The first session really gonna focus on this idea of what is the affluence journey? What, what does it take? What are the four stages of the affluence journey and what are the barriers, the things that are getting in the way of building the wealth at the level that we want to have the freedom that we want so we can break those barriers down. In the second session we're going to talk about the core affluent entrepreneur principles and drivers that drive wealth and start to give you the breakdown of the pillars, the three pillars that all affluent entrepreneurs need to have in place to, to make it happen. And then we're going to bring it home in our third session. In the third session I'm going to talk about the nine accelerators to being an affluent entrepreneur to live a richer lifestyle, to have a deeper impact and to have complete freedom. So October 28th is the date. Go to affluencelive.com grab your spot, set yourself up on the VIP list. I'll see you there. Let's change your financial destiny together.

Hey there. Welcome to this episode of the Affluent Entrepreneur show. This one, this one's going to be a different one. Well, I keep saying that it's going to be a cool one. Many of you know if you've been following me for any length of time, many of you know that I am a first time new granddad as of August 2nd this year. And so I happen to be at a mastermind recently and a soon to be mom asked me what advice would you give your son who's a brand new dad and me being a soon to be mom, would you give them as far as advice from a financial standpoint? So that's what I want to talk about in this episode. We're going to talk about the 10 lessons that I would give to new parents. And it could be new parents they may have had a child already, but you might be a new parent with a new child coming on board. And I think that this is something we ought to think about is some of the lessons are financial lessons. Some of them may not be, but they're 10 lessons that I think are extremely important. And at the very end, I'm going to walk you through some numbers. And I call this the Emily Factor. And so here's the thing. My little granddaughter, beautiful Emily Ray, she's now got a framework or a process that named after. Because I can do that. But let's just talk about it, because here's what I want to do is I want to make sure that from a financial standpoint, we are raising empowered little ones to be able to do the things that they want to do, to have the things they. They desire to have to make the difference in the world that they want to make, to be able to live a richer lifestyle, not a wealthy lifestyle in the sense of money is the only object. Okay. Because it isn't about the money. And we'll talk from further about some of the things that I did with Jeremy as he was growing up. And I'll bring Jeremy on the show. We're going to have some conversations around that because there's some things that I specifically did with Jeremy to start to train him and get him to understand and have conversations around money. I think that we need to do that. But let's just talk about the couple things that I think we need to consider as parents and even as grandparents as we move forward, because I think that this is where we can make a difference in today's world, you've got 78% of people living check to check. And it doesn't have to be that way. You've got people that are living in debt, they're buried in debt. And it doesn't have to be that way. But we're not having conversations around money at all. And if we do have them, it's too late, you know, so it's late in the game. So we haven't been able to avoid the things that we could have avoided. So if you're a parent, if you know someone who's going to be a parent, if you're going to be a grandparent or you ever want to be a parent, this show is important. But there's also some things that I think you're going to come out of this show understanding that may relate to you and your financial position, your financial future, the things that maybe you can do and how we can play this game. All right, so these are the things that I think matter. I look at the things that I'm doing financially, building wealth, building what I call a money machine. One of the things that we do in affluent blueprint is to help people understand that if you're an entrepreneur, and we primarily focus on entrepreneurs and helping them go from treadmill entrepreneur to affluent entrepreneur to understand what it takes to make that happen. Because too often entrepreneurs come to, they come to this world, come to their business with the expectation that they're going to actually become free, that they're going to get freedom because of being in business. And what they find is that they're on a treadmill and in fact they have less freedom and in fact they're running faster and faster. And the only way to be more productive, to have more, build more, scale more, is to go faster, harder, longer. Well, that leads to breakdown and that leads to burnout and that leads to stress, which affects relationships or affects families, it affects marriages, it affects everything in a ripple effect down. And so what we want to do is help people understand that businesses create cash flow. They don't create freedom. And it's that cash flow. When you use that cash flow effectively, using a proven process to build a money machine, it's the money machine that gives you freedom. And what if, what if we started to have these conversations with our kids at a younger age? Imagine how much further ahead that they would be if you took some of the principles that I've taught on the show and my programs and put them in the hands of youth, what would happen? And think about this. Jeremy and Cammie, he's 31, she's 28. They just had their first grandchildren and working off of these principles at 31 and 28, they have three homes and a multi million dollar net worth. Now, I don't say that for any other reason, but for you to understand that it's possible no matter where you are in your age or stage of life. But we got to get in the game. We got to use principles at work which are prescriptive behaviors that make a difference over time and, and we gotta stay in the game. So why I look at this is that with little Emily Ray, this beautiful little princess that came into our lives just a little while ago, August 2nd, it's a perfect opportunity for us to have this conversation and say, what should a new dad, what should a new mom do? So let's talk about it, let's walk through some of the lessons and for those of you that are watching on the video. I'm going to jump to my iPad. We're going to walk through some of these lessons, and I'm going to walk through something that I call the Emily Factor. But if you're listening, not to worry. We will make sure that all the graphics are available to you in the Show Notes. So make sure you go to the Show Notes page to do that. And if you know of anyone that is expecting a child, just had a child, you know, doesn't matter age, get them this episode. Let's get it in their hands. Let's give them the gift of understanding how they can set their children up in a proper way so they become independent. And not only that, when we do this right, your kids ain't coming home to you to say, hey, I need to move back in with your mom and dad. Let's make them independent, productive young men and women. All right, you game? All right, so let's just jump to the iPad and let's just talk about some of the lessons that I think come about. One of the things that we need to do. So the first thing that. And this is, this is our little Emily Rae and my son and Cammie and my beautiful bride in the background. So the first thing that they need to do when you have a child, believe it or not, seems mundane, but is to get a Social Security number, apply for a Social Security number. A lot of times they do this, help you do this at the hospital when the baby's born. But if not, you want to apply. Here's the reason for that, is because it's tagged to getting certain tax benefits, dependency claims, child tax credit, which we're going to talk about in one of these things. So one of the first things to do when the baby's born right away is to try and get the Social Security number in place because it sets some things up for what you're going to do later with them and helps you out versus having to chase it down later on. So step number one is to get their Social Security number. Step number two, and this is important one, is to commit to the most important investment you could ever make in your child or grandchild's life. Okay? The most important investment that you could ever make is you. It isn't the money. It isn't the toys, it's you. It's the time committing to making sure that you structure your life to take care of this little angel, to be in that little angel's life so you can influence them. You can allow them to see your values. You can be A role model to them. This is huge. This is huge. And I get it that we have to work, and I get it that in some cases we have to put a child in daycare and that type of thing. But I'm going to invite you to look at it and say, how can I make sure that I'm intentional with every hour that I spend with my child or my grandchild? See, I made that mistake early on. And I saw Jeremy somewhat withdrawn. He was going to daycare.

But at one point, I walked into this daycare facility and it was so loud in the afternoon, I was getting ready to leave town. And it was so loud in the afternoon, I looked. He was trying to do some homework and everything. And I said, man, is it always this way? He says, most of the time. See, I usually pick him up later, but I was going to say goodbye. So I saw it in the middle of the chaos, if you will. And I said, and if you need help with the homework, are they available? He says, sometimes. And it hit me. I said, man, this is not good. Now, it could have been the daycare facility and everything, but nonetheless, I looked at him, I said, I'm taking this trip. I'm back in two days and you'll never come back here again. And that's what I did from that point forward, I put an office in the home. I started working from home. Anytime I left, he was with family. He wasn't with a daycare facility where it was chaos around him. Now, I get it. I'm not saying, for those of you that can't do it, I get it. But when you're intentional with your time with your child, it's the greatest investment you could ever make. The returns on it, although may not be economic, they're emotionally exponentially, emotionally just fulfilling and full of richness. And so I think this is one of the things that we need to realize going in, is that the greatest investment that we can make for our children, in our children, is ourselves. Okay, that leads me to number three. Number three is remember that it's their dreams, not yours. And this is, gosh, I saw this so many times with the kids at the karate school and all that. A martial arts studio for over 11 years. And so I saw parents, I saw kids, I saw kids coming in. But it's our job as parents, as grandparents, to support their dreams. We had our chance. Now, this may sound horrible and tough to swallow, but if we screwed up our chance at our dreams, and I don't think we ever screwed up, I don't think it's ever too late to go after our dreams. It doesn't matter whether you're 20, 30, 40, 50, 60, 70. Go after your dreams. I'm starting new things, and I just turned 60. But the key here is this, is that this isn't about you making sure or trying to live your dreams through their life. You don't get a second bite at the apple because you didn't live your dreams your way. You don't get a chance to turn around and do that. So support their dreams. I remember Jeremy was having problems with. Well, he wasn't really. He was getting a B in algebra. And I had a tutor come in, and the tutor does this interview with me, and he does this interview with Jeremy, and he asks Jeremy, you know, he says, you're getting a B and you still want to get tutor. He says, I want to get an A. He says, what do you want to do? And at that time, Jeremy wanted to go to film school. He wanted to go to University of Southern California, wanted to go to film school. And the tutor, after Jeremy tells him that, says, looks at me and says, what do you think of that, dad? And I looked at him, I go, well, it's his dream. And all I can do is support the dream. Give him the avenues, give him the possibility, give him the opportunity to make that happen. As long as it's moral, as long as it's legal, as long as it's ethical, as long as it's not hurting anyone. Just because I wouldn't have chose that dream is not my place to squash the dream. So I know some of this may be parenting advice, but the question was, what would I tell Jeremy as a brand new dad? And these are the things that not only would I tell them, I've told them. That leads me to number four. Number four. Lesson number four is this. Assets, not skill sets. This one's crazy. And this is what started Jeremy down the path of having conversations around money and some of the things that we're doing. So I had a family come to me years ago, and the two boys, mom had just passed away. The two boys came to me, and they were worth $5 million. Not bad. I mean, they were worth $5 million. And they said, we got to figure out what we're doing with this $5 million. We don't know. We screwed it up. And in having a conversation with them, I found out that their dad passed away five years earlier. Okay, so they just lost their mom. Five years earlier, they lost their dad. But when their dad passed away five years earlier. They weren't worth $5 million. They were worth $175 million. I'm going, wait a second. You were worth 175 million? You're coming to me today, five years later, at 5 million. What happened? And Jeremy asked me the question because he heard my conversation. He says, how does that happen, dad? And I said, here's the problem. We spend a lot of time trying to achieve. Trying to accomplish time to acquire, trying to accumulate. Then we spend a lot of time figuring out, how do we transfer it? How do we make a difference to it, how do we get it to our heirs, our significant others, our children, our grandchildren, how do we transfer it? And we're worried about transferring assets instead of skill sets. And in this case, what happened was dad did a phenomenal job of building wealth. He did a phenomenal job of protecting it. He did a phenomenal job of transferring it. So he transferred the assets well, but he didn't spend the time to transfer the skill sets. See, it's more important for us with our children to give them the skill sets versus the assets. And, you know, Jeremy and I have had conversations. This is what put Jeremy on the trajectory that he was on. At 11 years old, this happened. So this was 20 years ago that this happened at 11 years old. I put him on a commission, and we started having conversations around money. We started doing things where he understood what to do, how to do it. Because the idea was, let's develop the skill sets.

And in time, he can develop his own assets. And. Yeah, will things transfer to him? Sure. But he doesn't need me, and he's not dependent on it. And he's been now empowered. And that's the thing that I think we need to think about. So when it comes to parenting, the question we gotta ask ourselves is, what skill sets, financially especially, do we want to transfer? And like I said, I'll do more episodes on how do we do that? How do we develop that in the children? And what can we do with our children and everything, but what skill sets are we going to transfer? And focus less on the assets. You can accumulate the assets. I have this, and there's an interview that we did, and it's a great interview. It's coming up with a dear friend of mine, Allison J. Prince. And she said it was funny. She said her children came up to her one time and said, so we're millionaires. And she looked at them and said, oh, no, no, no, you're not millionaires. You guys are as Poor as hell. But your dad and I, we're millionaires. We're going to have to teach you how to become millionaires on your own. And they empowered them. By the time they were in high school, they were making six figures and giving back and generosity and contribution. You're going to want to listen to this episode. It is epic. It's coming up, so watch for it. But my point is that how we teach our kids, how we talk to our kids and do this is important. So we don't go from 175 to 5. Think about this. $170 million was lost. $170 million at 5% would turn into $700,000. Over $700,000 or so a month without touching it. A lot of bad decisions were made to lose a lot of money with those kids. I wish I got them five years earlier, but they're doing well. We moved the 5 million and we kept on growing from there. All right, but point being, Point being is that, is that it is more important for us to focus on transferring the skill sets before we start transferring the assets. And that leads me to number five. Number five. Now we'll start to look at some more tactical things is I want you to start to rethink what we call in the affluence blueprint in the wealth priority ladder. We call it a peace of mind fund. Some people will call it an emergency fund. But think about this. This fund, this amount that's sitting in a high yield cash account is there to take care of things when things don't go right. When things are unplanned. You know that over 60% cannot sustain themselves if they've had a unexpected expense of $600 or more. That's crazy. The reason we put a peace of mind fund in place, an emergency fund in place, is so we don't have those hiccups. So we don't have those things that cause us to go into debt, cause us to be stressed, cause us to. That's why I call it a peace of mind fund. Well, if the peace of mind fund is based on the expenses that you have on a monthly basis.

Guess what? Being a new parent, your expenses just went up. So I think we need to relook at your emergency fund, your peace of mind fund, and say, what's in there? What's it going to take? Do I need to make an adjustment to it for purposes of taking care of this new baby? This new child, whether it's medical expenses, supplies, clothing. I mean, they go through clothing like Crazy diapers, whatever it is, daycare and childcare, all those things that you didn't have before need to be put into the equation to make sure, do we have the ability to move through, to traverse, if you will, an emergency or something that, that comes up with that. So that's step number five that I would think about. And then I would go to step number six. Now step number six, this is, I would think about life insurance if you don't have life insurance. And let's, let's play this out for a moment. And I'm not, listen, the insurance industry doesn't need me selling anything and I don't sell insurance. But when we talk about life insurance, we're talking about how do we replace your income if God forbid something happened to you, to your spouse, because now you've got a family and the family needs to be taken care of. And God forbid something happens to you or one of you or the income earning spouse, God forbid something happens to you, how are they going to survive if they've got a mortgage, if they've got rent, if they've got medical expense, how they're going to survive? So one of the rules of thumb that you can use is to get insurance that pays out about 10 times your annual salary, your annual wage. Now let's be clear what I'm talking about here. I want you to hear me on this. I am talking about just insurance, term insurance, insurance, buying insurance. There is no investment product in it. There is no whole life. There's not universal, there's none of that stuff. They're not wrapping it up, dressing it up and saying it's an investment, you can borrow money and all that stuff that most of the time, most of the time they're robbing you blind. It's inappropriate, it shouldn't be used. And I know that if there's an insurance agent out there that's, that's listening, I'm going to get the hate mail. But what I want you to do is buy regular term cheap insurance for the death benefit to replace your income and that's it. We'll deal with investments and all of that stuff at another date and another time to make that happen. But I want to make sure that you have some life insurance in place to make that happen. Which then leads me to number seven. Number seven is another insurance. And I actually think that this insurance is, is even more important and that is disability insurance. So let me tell you something that happened with me. I've had what we call long term disability, salary, continuation Disability insurance for decades. And back in 1996-97, I had herniated three discs in my back, couldn't walk, I couldn't stand up straight. I was at the martial arts studio throwing some kids around and I had not warmed up. I just had showed up and they wanted to spar. And so I jumped on the mat and there it was. And I herniated three distal back. I let it go so badly that I had tingling in my toes and pain and I couldn't stand up. And the orthopedic surgeons wanted to do surgery. And I said, and when I understood what the surgery was, I said, we're not doing surgery. We're going to repair this without surgery. And we went at it with acupuncture and therapy and a whole lot of things. But bottom line is I was unable to really work for almost eight months. Well, when you are the primary breadwinner and when your income is tied to your services, when your income is tied to you showing up, when your income is tied to the time that you dedicate to it and you can't dedicate that time, how are you going to make a living? How are you going to pay the bills? So I used my long term disability policy in that case, and now I negotiated with them because they would pay me out on a monthly basis if I wanted it. And in my case at that time, it was about a $10,000 a month policy they were paying out. But I said to them, look, the doctors say it's going to be at eight months minimum to get me back on my feet. I don't want to do this paperwork every single month. I don't want to go through this every single month. Can we negotiate a lump sum of a lump sum settlement to work through this? And so we negotiated well into the six figures, a lump sum settlement. They wrote me a big check, I put in the bank account, it paid all my bills and I could focus on my healing. The likelihood of someone getting disabled is far greater than the likelihood of someone dying, especially at a younger age. And as a new parent, like, I look at my son and I see some of the crazy stuff he does and ultimate Frisbee and all these kinds of things. And, and he's a young guy and said he needs disability insurance, his wife needs disability insurance to protect their income streams, to protect their ability to pay the bills. So I would look at disability insurance. That would be step number seven. Step number eight, college funding. Maybe. Maybe. Why do I say maybe? Here's why I say maybe. I want you to focus on you first. If you have your retirement plan in place and you're funding it regularly and money's going into it and you know that it's building and you have a lifestyle financial plan in place like we talk about in the affluence blueprint and, and all of that, where we teach them exactly how to do that, then great, we can start thinking about, we can start thinking about funding college for our child or grandchild. But I wouldn't do that if we don't have the other stuff in place. In fact, I would follow the wealth priority ladder that we use in the affluence blueprint and follow that course. But here's why this is important. We know retirement is going to come home to roost at some point in time. It means that somehow, some way, you're going to have to take care of yourself until your last days. We don't know whether college is going to happen for our child or grandchildren. They may choose to go to college or not choose to go to college. So if we put money into a 529 plan, it can only be used for education. Otherwise you get hit with penalties and those kinds of things. So they're good to have. But we want to make sure that the retirement and your financial future is secure first before we do any of that. So I want to make sure that you're set up and you have a plan and a path and it's automated and you're doing the things that we want you to do to make that happen before we start thinking about, oh, funding the college for a child that we don't know if they're going to college. And here's the other side of it. As the child starts to get closer to college. And if we teach them some of the financial principles that I talk about and they understand that they may not need your funding. There's other ways to get college paid for. And I'm not talking about student loans. I'm not a lover of student loans. I will tell my clients I'm willing for you to get a student loan maxed out. No more than the first year salary for the profession you're going to be in when leaving college. But I don't want you choking in debt. I've seen people come out of with debts and $300,000 in student loans. You're behind the eight ball. You can't get ahead of that. That's horrible. And worse yet is that you go into debt, you go in $100,000 of student loan debt to get an art degree, that maybe you're going to get paid $25,000 a year as a salary when you get out. Getting that loan paid off is a problem. So I don't. I'm not a believer in student loans. And we've got a student loan problem in this country not because of the borrowers, it's because of the, the lenders. It's because they're not educating, because they're not having the conversations with these young kids coming out. Don't get me on my soapbox. But the bottom line is this, in this step, in this step, I want you to look at college funding only if you have your financial plan in place and that you're funding it to get yourself fully there. So that's step eight, step nine. And then we're gonna get. I've got a couple more here. Step nine, you need to update your will and your trust. Now, first things first, if you don't have a will and trust, we need to get one in place. Now, it depends on your state. Each state's gonna be different. But you need something that tells the world. Here's the problem is people say, I don't want to spend the money or I'm just gonna get it online. Or you can do that. But if you're not educated in some of these things, you may be making financial decisions and let's just say life decisions on behalf of the beneficiaries, on behalf of the people that survive you, that you may not understand the repercussions of. So I want you to be intentional with it. When I first put my trust in place, we did things like if Jeremy, you know, God forbid, had any kind of addictions and how the money and how things would happen if I was gone to take care of the addiction versus just giving him money outright. Things like at this point, and these are hard conversations because, look, you're talking about end of life planning. You're talking about some really difficult conversations. I get it. But if you don't have the conversations now, what happens if, God forbid, something happens is it's left for the state law and the courts to decide and Lord knows, do you want to trust your children's future, your family's future to a bunch of courts to make the right decision and think that they're making a decision that is what you wanted? I'd have the hard conversations because you need to have conversations around things like, what are you going to do with the money? Where does it go? How do they get it? How does it come out? What do you do about guardianship with a child? Who's going to raise a child if, God forbid, both parents are gone? How's the child going to be raised? How can you instill your values into the child through the trust and through the will? I was having a conversation, working with a dear, dear friend of mine and reviewing his stuff because he, he had a new baby about a year and a half ago, and, and he says, I want to make sure that he's taken care of. And I said, you want to make sure your values are, are transferred in that the actions that are being taken support the value system that you're. You're creating in the home. So it's time to start looking at updating your will and trust to make sure that the people you care about are taken care of. And I get it. It may not be fun. It may be painful and frustrating to have some of these conversations that you just don't want to have. But I'd rather you have it now when things are open and things are healthy, than have it when you're distressed and trying to figure things out because things are going awry. Okay, so that's number nine. And then number 10. Number 10. And then we'll get to the Emily factor is make sure that you're taking advantage of the child tax credit. This is important. It's a lot of money. Child tax credit, for the most part, is $2,000 per qualifying child. This is another reason to make sure that you get that Social Security number so you can get that $2,000 child credit. If you owe less taxes than the $2,000, guess what? They'll refund the credit to you. You'll actually get a check from the government up to $1,400 per qualifying job. So it's a lot of money. So you want to make sure that you're properly asking for the child tax credit, your cpa, your tax preparer, as soon as they know that you have had a child, they should know that this applies. Why is this important? Well, one, it's. First, it's a lot of money. Two, if you consider this child tax credit and try to use it for what I call the Emily Factor, you're going to see how you can set your child or your grandchild up easily. So let's talk about the Emily Factor. All right. What is the Emily Factor? Well, it's nicknamed after my beautiful granddaughter, Emily. And here's the thing, people ask, what are you going to do for her? And what are you going to do for her. What are you going to do? What should I do? So I want to make some assumptions, and I'm going to show you how we can set them up. But I want to be really clear on this. We don't do what I'm going to ask you to do here without putting a process in place to educate them to transfer the skill sets in the process. All right, so let me repeat that. We don't do what I'm going to ask you to do here unless you have a process and you're working through transferring the skill sets to your child or your grandchild. So they know how to handle it. So they know how to build it. So they don't take 175 million and make it 5 million, but they take 100 and they make it a million. That's the overarching context of all of this. Otherwise, because I truly don't believe in just handing money to kids if they have not proven themselves worthy of it, if they have not proven themselves mature enough to handle the tool. Remember, money is agnostic. It is a tool. It is a tool. It's a hammer. And a hammer can be used to destroy as much as it can be used to build. But if we don't teach them how to use the hammer, in all likelihood they're going to start destroying things before they start building things. We don't ever want to do that. I don't ever want to do that. So that's why it's important to focus on skill sets versus assets first. So overarching. Everything we're going to do now is that we are transferring the skill sets. All right, so what is the Emily factor? So let's just make some assumptions. Here's what I'm going to plan to do with Emily. And these aren't the numbers, but I want you to under. I change the numbers because I think it makes it workable. And when you think about the $2,000 child tax credit, which is money coming back to you, you're going to see that this child tax credit can actually fund the Emily factor. Okay? So let's assume that at birth, I decide to gift $500. Now, when I say gift, I put it into a high yield cash account or I put it into an account. Okay. Aside for her. Okay. Not I don't give it to her. I just put in an account. And I'm going to take that and put that aside on day one of life. Okay. Then I'm going to take $25 a week, $100 a month and put it into that investment account for 20 years. So I'm gonna literally fund $500 and then $25 a week. Now people go $25 a week. It's not a lot, it's not 25 bucks a week. If you don't worry about the weekends, it's less than $5 a day. I'm just gonna put it in the account and I'm gonna invest it into a broad based ETF or index fund. In other words, a broad full stock market type of fund. I'm not going to tell you which fund to go into. That's a separate ball game. We, we walk through the evaluation criteria and the affluence blueprint. But, but I think that if you look at the average returns of ETFs or the stock market, broad based stock market, it's 8%, 8 to 10%. So I'm going to put it in a broad based index fund. It's long term money, I don't care about the short term fluctuations. And build it from there. Then from there, like I said, the average return is 8%. Then from there I'm going to do that like I said, till age 20. And after age 20, I do nothing more, Nothing more. So I'm literally going to fund $100 a month for the first 20 years of say, Emily's life. And what does that do now in that process? Now she's too young to learn, but starting 10, 11, we start having conversations and teaching about money and investing and we teach about generosity and giving and donations and values and all those things that come into play. We transfer a set of values and we transfer a set of skills to the, the children over time and watch what happens. So I want you to watch what happens. And then for those of you that are listening, these are the graphics you're going to, you want to download so you can see exactly what's happening. Or if you're watching the video, you're going to see this. The bottom line is this, after age 20, at age 20, here's what's going to happen. In that account at 8%, there's going to be $61,365 in that account. But I only put in 24,500. Remember, I was only putting in $100 a month plus the 500 I started with. So $61,000 is in that account. 60% of the money in that account was from growth. It wasn't from me, it wasn't from you. Now this is why it's so important to teach them skills, because now they can take the money out. They can do what they want with it. At that point, they can pay for college and everything. But my desire, my. My. My conversations and the training and the. And the skill set is to get them to say, ch. Just leave it. Leave it alone. Don't touch it. Because now if they leave it for another decade. So now they're. They finished school, they paid for school a different way, and now they're age 30. At age 30, we've put no more money in, not another dime. That same $60,000 just keeps accumulating and building based on compounding at the 8%, because that's the average rate. Some years we'll get 10 or 11 or 12%. Some years we'll get 3 or 4%, but call it average 8%. At age 30, that $60,000 goes to $136,136,000. Now, 82% of the account value is from growth, not from you. Remember, you still have only put in 24,500. You get 122% increase every single decade. Okay? Every single decade. Now, if we get them to hold it till they're age 40, that 136,000 now turns into 302,000. So our $24,000 we put in there for our child or our grandchild has now turned into $300,000 by the time they're age 40. Think about how that shifts their lives. Think about that, how that gives them peace of mind. And if in the process, we gave them the skills to operate, the skills to do it and everything, and it completely transforms. But watch this. This is where it even gets even more magical. Now, if we give it one more decade, one more decade, we go from age 40 to age 50. Don't touch it. Guess where it ends up. Another 122%. Up $670,000. Almost three quarters of a million dollars from your $25 a week. Now, if they're really aggressive and they're going to sit back and say, oh, I love the way this is going, and. And they want to do nothing more than wait till age 60, they still have the same 24,000 we put in there. But instead of it being $670,000, guess what? We are full $1,489,000, $1.5 million based on putting away $25 a week, a coffee and a croissant a day. That's it. You want to change your children's lives. You want to give them the financial Flexibility, the financial independence. Then let's focus on giving them the skill sets, let's focus on giving them knowledge. And then let's give them the gift of turning a hundred dollars into a million dollars. You have the opportunity now, and this is such a wonderful time to sit back and say, how do I want to do this with my children? I mean, this is an amazing, amazing time. Now I get it. Some of you may say, well, I got a kid who's five years old, that's fine. You see the ramping up of how things go. Start wherever you're at. It doesn't take a lot. 25 bucks a week over time makes a huge difference. But only if we teach them the skills on the journey. Okay, that's the Emily factor. So whatever the numbers are that we're doing, that's what we're doing. I'm putting a lump sum in for her, for her birth. And then every month, automatic transfer. One of the principles, one of the accelerators, the affluence blueprint, is to make it automated automatic transfer. So every month that money's going into that account, it's getting invested and reinvested and it's growing. And before you know it, it's going to be hundreds of thousands of dollars and approaching seven figures for little Emily because we did little things up front. I hope that this helps and for those of you, that this may hit home because you either are a new parent or you're going to be a new parent. Then let me know if you've got questions. To me, parenthood is one of the greatest gifts of life. To be able to raise a child, to be able to be given, it's a great responsibility. But being Jeremy's father was a huge gift to me. I became a better man. I learned how to love better. I made a whole lot of mistakes. And I'm sure when we get him on the show, he'll be more than happy to tell you. So I'm sure I wasn't that easy to live with. I was a single full time dad. I was screwing it up left and right, but I did my best. I think we did okay and he's doing well. And you know, I, for those of you that are parents, it's the greatest job in the world. It takes the greatest skill in the world. It can be the hardest job in the world, but it can be the most satisfying also. So I appreciate you all being here. I hope that this helps you in your journey into parenthood, into childhood, whether you're a grandparent or a parent and helping you make that happen. So, and I look forward to I'm going to have a few kids coming on the show. We're going to have some conversations with them. We'll dial again. For those that are parents or dealing with this, do me a favor, if you've got questions, shoot them my way. That's how this show came about. Someone asked and let's get them answered. Let's get them answered so you can change your financial trajectory and your financial destiny. Remember, I believe that financial independence is a birthright. We just got to understand how to claim it. One of the ways to claim it is, remember, is that I have a money plan workshop. If you go to themoneyplanworkshop.com it's a free, free seven day crash course in getting your money stuff straight. So if you're trying to figure all this stuff out, just jump in the course, it's free. Go through it, learn some deeper principles, get some executable things to get done and make that happen. All right? And I look forward to seeing you in another upcoming episode, talking with you on the road, answering your questions either in the Facebook group or in the DMs or on lives, just let me know. But in the meantime, remember always, always to live a life that outlives you. Cheers. See you in the next episode. Bye. Thank you for listening to the Affluent Entrepreneur show 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 Podcast 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 your birthright and I want to help each and every one of you claim it. Thanks so much.