086 Social Media is Destroying Your Financial Future

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. There is an insidious parasite that is eating up your wealth and your path to financial freedom. It's called social media. All right, in this video and in this episode of the Affluent Entrepreneurship, we're going to talk about social media, what it's doing to your wealth, how to avoid it, what to do differently. I look forward to seeing you in the show.

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 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 absolute entrepreneur.

Oh, man. Social media, we are all on it all day long. We are tied to it. It's incredible. But here's the deal. It is affecting us financially. It is impacting us psychologically, socially. I get it. I use it all the time. I use it for business. I'm on social media, Instagram, Pinterest, Facebook, I mean, LinkedIn, you name it, I'm there. And some things we're going to talk about, I've been victim of, all right, Knowingly. It's crazy. Listen, there's a recent study by allianz and showed 80, 88% of people are comparing themselves to what they see on social media. 88% are looking at social media to decide what their self worth is, what they should do next, what makes sense. 57%. In the same study, 57% of people said they purchased something.

Because of what they saw on social media, that they weren't going to purchase it. They never intended to, they weren't looking for it. And here they go. They bought it because they saw it on social media. And here's the deal. As much and as little money you have, the Fact is, is that your habits, your buying decisions, what you do with your money is a direct driver of your financial freedom, your financial independence, your wealth and all that. And so if we're allowing these outside forces to manipulate, to encourage, to convince us to do things that we, we wouldn't otherwise do, it'll destroy our financial future. So we need to be careful, we need to be intentional with what we do. I mean, let's face it, how many times. And this happens to me and I can point at stuff that I have where I'm going through Instagram and I'm looking at the phone and all of a sudden this ad pops up and I go, that's cool. And I swipe and I buy it. Now it doesn't sound like a lot, but here's what's happening is we're getting programmed into buying things. And so there's this full out social selling assault, if you will. And I'm not against it, I just want us to be conscious about it and what it's doing. So I'm going to talk about the social media spin, the social media spending spin and why this is important, what it's doing and the things that they do that are even more insidious than it once was. Advertising's advertising. Advertising is selling. It's been around for decades. It's been around for centuries. They used to post, you know, sales bills and stuff on polls and stuff. Now they don't have to, they just do it digitally. And so let's just look at some of the stuff in, in, in here when we do this. And that is this, the first thing is this. Some of these recent studies are showing that, that our screen time, our screen time in social media, we spend over 153 minutes a day, 153 minutes a day on social media. Think about this for a moment.

That's almost three hours out of the day. Okay, that's, you know, out of 24 hours, if I'm sleeping, eight. That brings me down to, what is that? 16 hours. And so 20% of those hours are on social media. What is that doing to us as a humanity? What does that mean? Now here's the other side of that. Because you take those 153 plus minutes a day on social media and what are the social media platforms doing? And this is where we need to be careful, is they are now watching what you do and they're digitally stalking us with advertising. It's, it's algorithm type of advertising. They aren't concerned that you're spending Money on what you want. What they're concerned about is just that you're spending money.

So they will. If you look at something, I fully listen, I fully believe that my wife will do some shopping on my computer. So when I go on my computer, those ads are coming up in front of me saying, hey, your wife looked at this. You might want to buy this. I mean, this is what they do. They understand your search behaviors, they understand your viewing behaviors, they understand all of that. And it goes into an algorithm. And they then put ads in front of you and that they believe you'll click on. Here's the most important part. Like I said, they don't care that you're spending money on what you want or need. That's not their objective. Their objective is to get you to spend, period. And when you spend, period. There's one other aspect of it, and they don't know this and nor do they care. And that is they don't care if you can afford it. So you put stuff on credit cards. You. You buy things that maybe you weren't looking for, you didn't need, and it just looks cool. And you buy it and you say, let's put it on a credit card. And you do that a couple times a week, it starts to add up, okay? And there's this whole aspect that came out in 1913 that still exists today in a different form, and that is this. This other. Other part of this called the Keeping up with the Joneses. Now the Keeping up with the Joneses, it's interesting. This was strip that was. Was created in 1913. It was around from 1913 to 1940. It was about this family called the McGinnis family that was socially climbing, okay? And they were trying to climb the ladder of social economic demographics so they would look cool and look good, and they're trying to keep up with their neighbors. Now their neighbors names were the Joneses. Now, you never saw the Joneses, but. But that's this. This family out there called the Joneses. And they were trying to keep it. So they're making buying decisions. That's where the saying keeping up with the Joneses came into play. And so what they were doing is struggling to try and keep up with the Joneses. If the Joneses bought something, they had to buy something. There was this commissary about this. And so that was back in 1913.

And that phenomena still exists today. The difference is that it's all done on social media. It leads to something that I call peer pressure. Fomo.

Okay? People are on social media, parading their car, they're parading their travels, they're parading their clothing, they're parading their lifestyle. Now, whether that lifestyle is real or it's on debt or it's a whole different game, okay? We don't know the underpinnings of it. They're just putting it up there. They could be dressing, they could be renting the Lambo. But what's happening is we get this FOMO or this peer pressure, just like keeping up the Joneses, and we tend to buy more. 57% of the people will buy something that they didn't need or they weren't looking for because of what they saw on social media. That's this fomo. It's real. It's real fear of missing out. Now the thing where I think it gets really insidious and why I say it's an insidious parasite, is that these last few really start to affect us and infect us over the long term. And that is this, is that too often we use what we see on social media as a metric for net worth. Okay. A self worth metric. And it's not, it's not, you know, you know, we're measuring our likes, we're measuring our contacts, we're measuring the comments, we're looking at all that stuff. And sometimes it's just not healthy. Let's not even talk about the trolls. But we're using, hey, they have all this and they're traveling this way and I can't travel this way. I'm not worthy. That's a problem. Okay? And that leads to all kinds of other problems. But then we go to what we recently saw back in January a year ago is this whole idea of meme investing. So think about this.

This happened with the, the Reddit string, you may have heard about it, with the whole GameStop issue. So GameStop is a, is a video game retailer, a walk in bricks and mortar store with video games that you put into a, into a computer or into a gaming console. And it wasn't doing well. It wasn't doing well. And the stock was at $4 a share. Okay. And because of social media and the conversations on social media, bunch of people started buying it and it became a meme. They drove. Because if the increase in purchasing of stock is going up at a heavy rate, you'll see a price increase in the stock. Well, this price increase went to $400. It's an interesting story. If you really want to get into it. There's a lot of things going on under it, underneath it. But I just want you to understand the dynamics and the impact of what social media can do. So they drove this GameStop price up to 400 bucks. The fact of the matter is, is this company worth $400 a share? No, it's not. It needs to change its business model. It doesn't have the profitability. It doesn't have the user base. They need to change things in order to do that. Now it has gone up 400 bucks, and there was people that bought it $400.

And it's dropped to below $100 again. So we get caught up in what we see on social media and we presume it's real, or we get caught up in the hype or we get caught up in the em. Up. Caught up in. In the momentum and the trip and. And the trend and. And. Oh, my God. I don't want to miss this out. Someone I heard just made a million dollars on GameStop. I better get in. And you get in late.

Meme investing's a mistake. It's a horrible, horrible strategy. I'm sorry. Okay. And so social media lends itself to that because we never have to look at the qualifications of where this stuff is coming from.

We need to critically think through it. Okay, Number seven on this is this, is that it perpetuates this idea of easy money. There's so many people out there that I see that are on TikTok and they're on Instagram and they're on Facebook and they're promoting how you can make easy money. And I can. You know, you can make a killing in real estate. No money down. All these. All these get rich quick schemes. And they are schemes. Okay, Is it possible that they made some money? Maybe. But here's what I'd invite you to do, is that if you're looking to make a buck quick, it's a mistake. Listen, it's what got me caught in the Ponzi scheme. I am no different than you. I am susceptible to the same emotionals, emotional swings. I am susceptible to the same psychological impact. And I got caught up in what seemed to be, oh, my God, I'm gonna make 21% every eight weeks. Okay, that sounds great, because in my mind, I started doing the math, but in my heart, I knew something didn't sound right, but I pushed it down.

And in the end, I lost one third of everything I own, well, into the seven figures. Me and two buddies, we lost over four and a half million dollars because the easy money came to me. And I go, oh, this is good. Oh, this is going to be good. My life's going to change. It changed not the way I wanted it to. All right, so you got to be careful about the easy money beliefs in there. And then, and then this, this last one, and then I'm going to give you some things to make sure to keep you safe. Okay? And that is, this is that we're in a noisy environment. And what I mean by noisy environment is that people are using influencers to promote stuff and realize that influencers that are getting paid follow the bias, follow the money line. If they're saying this is a great product or a great thing, are they getting paid to say it?

Are they a customer that actually used it? Are they someone that actually did it?

Realize that you've got these influencers that are being paid to make posts and do these things. I'm not saying not to buy anything. I'm not saying not to listen. I'm saying to think it through and not just blindly follow. I've. Look, I'm no different than you. I've done it myself. I've bought things that I didn't need. I bought things that I didn't use. I bought things that were junk. I did it too. I'm no different. So let's talk about the solution. What is the solution going forward? Well, there's a couple things that I think that we, we need to do. The first always, always is to understand your why. Understand your why before the how. Too often we're trying to figure out how we're going to make money. First off, why do you want to make money? Why do you want the wealth? How much wealth do you want? In affluence Blueprint, we spend a lot of time defining what the affluence vision is. What's the destination and why do we want to have that destination? Why do we want to go there? Why is that so important? Because it's the why that's going to drive us through the tough times. What got me out of the Ponzi scheme, what got me through to rebuild lost over 7 figures, but rebuilt it and built it 3x to where I was. So if I had lost a million dollars, but it was over a million dollars, I built it to 3 million 3 exit in 18 months was my why. And my why was my son. My son. I needed him to see me in adversity coming back.

Okay, what's your why? So we need to know why then. The second thing is to understand and follow the bias. Okay, ask the question what's in it for them? The person that's promoting it, the person that's saying this is a good deal. The person that's saying that even on the tv, these people that are these actors that are talking about reverse mortgages and all this stuff, they're getting paid what's in it for them.

So I'm not saying not to do it. I'm saying to do your own independent investigation, okay? Because it's only then that we can make some better choices and better decisions that are fully informed. Okay? That then leads me to number three on this. And number three is.

What you see isn't what you get. And here's what I mean is that too often in social media.

What they present to us is this dressed up view of their life. It's not real. In many cases, I know for a fact that there's so many people that present a face that they're worth millions and they're not.

They have all these followers. They're doing it and they can't even sell a T shirt.

So don't on the surface look at it and say, hey, what I see is what. It's not what you get. It's not the reality. Okay, Number four, and this is important, I had to figure this out. Know your demons and know your stories. We all have money stories in our head. Money's dirty. Wealth is for the greedy. I make bad investment decisions. I'm horrible with money. These are demons and stories that until we exercise those from our system, until we understand and move those out of our system. And I've got an episode that deals with money stories and expanding your money money mind. We'll hook them up in the show notes that allow you to do that. You can then think.

Clear and not be impacted by these stories of what transpired in the past. These stories of what you observed with your parents, these stories of what mistakes that you made. I mean, if I allowed this story to perpetuate after the Ponzi scheme, we wouldn't be having this conversation. I wouldn't be financially where I'm at. I had to deal with the demons. We all have to deal with the demons. Okay, then from here, get an unbiased advisor. Now that could be a financial professional. It could be someone like me. I don't have any investments to sell you. I'm not here to sell you an investment. I'm here to sell you on a financial future because I truly believe financial independence is a birthright. And you have that right. Let's go out and claim it. And so get an unbiased advisor that you can go to, that you can ask questions of. And if you don't have one, use the show. Send me questions, send me your comments. Let me try to help you out. Okay? Then work from there. Okay? Get someone in your corner that isn't driven by commissions, that isn't driven by sales, that isn't driven by any, but driven by your best interest.

Your future, your children's future, your grandchildren's future. Okay? Then from there, make sure that you have a cash resource plan. I'm going to do a whole episode on a cash resource plan. In other words, I want you to have a plan in place for your money that's going to move you from where you are to where you need to be to give you the money machine that you need to have the financial freedom and independence you deserve. But we have a plan in place because then the plan dictates what we do. We don't just flippantly move, because at that point, with the plan in place, we go to number seven. You can be disciplined and say it's not part of the plan. And if it's not part of the plan, it's. It doesn't get done unless we're willing to change the plan.

Now, this is the last piece to try and keep you safe. This one might. Might rub y' all the wrong way, but it's something I think y' all should do, and that is this. Remove your credit cards from the apps, get it out of Amazon, get it out of your, you know, so you can't just hit one key and buy something. You got to get up, you got to go get the credit card, you got to put all the numbers in. I want to make it as challenging for you to make a purchasing decision as possible. I want as much friction in that purchasing decision as possible so you get a chance to think about it. Now, unless you're like me, I memorize my credit card numbers. So it doesn't. Doesn't work well with me because I can just put the numbers in. But fact of the matter is, I want you to remove those credit cards out of those systems. First off, it keeps you safe from cyber hacking. Second, you'll see that your spending will go down.

Third, you'll find that you make better financial choices because you'll separate the emotion from the logic and make a more logical decision once the emotion dissipated. Okay, so social media can be.

Great fun. Social media can be great for business, but social media can be an insidious parasite if we don't understand how they're using the algorithms, how they're using the ads to stalk us, how they can use psychology to get to us and the things that might be happening to us. So I don't mean to demonize the whole thing. I just mean for us to wake up, to be aware and to understand how that can be the parasite to our wealth and to our financial freedom in the future. So I hope that you found this useful and helpful. And if you've got questions, if things come up, do me a favor, send me a DM and people are commenting on my YouTube videos, all that stuff, do it. Let's keep this going. Let's keep you on this journey. Now, got a couple of episodes I'm going to send you to because I think that they will help you on this road to financial freedom. And the first is episode 19. I'll mark that up here. It's about creating your money machine. What does it take to create your money machine? I want you to go watch that episode and then episode 24. This is what to do with your cash. So as money's coming in the door, where do you allocate it first? Where does it go first? What do you do? Does it go into a 401k? Does it go into an emergency fund? What do you do with it first and what do you do with it next? So check out episode 19 and episode 24. We'll make sure that it's hooked up up here and keep you moving forward. I hope that you found this of value. I can't wait to see you, talk to you, chat with you, meet you, and see you soar. And until we get a chance to see each other in another episode or talk on the road, always, always strive to live a life that outlives you. Cheers.

Foreign.

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.

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