099 The Keys to Living a Rich & Wealthy Life With Chris Harder

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 Entrepreneurial Show. This one is a special one. As you can see, I'm not in my office. I'm actually in Portugal with my beautiful bride, Stephanie, and with our family. We're taking a little bit of time here. But I wanted to take this moment because I had a special, special conversation with a dear friend and a special dude, Chris Harder. Some of you may know him. He. He used to run the podcast called for the Love of Money, but it is the Chris Harder show now. Him and Lori Harder are inspiring young entrepreneurs worldwide in areas of entrepreneurship, life and money. And we have this conversation about our journeys, which somewhat parallel each other about how to build wealth, how to create a life that is meaningful, how to not allow the chase and the chase for money interfere with the living of life and to do it in a way that brings richness to your life. So I hope you enjoy this episode. Let me know in the DMs, let me know in the comments. Let me know if you have some questions. And I look forward to seeing 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 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.

Mel, my friend, how you doing, man?

Man, it's so good to be here and see you, Chris. Thanks for having me, man. I'm doing well. Doing well.

We're doing something kind of special today. You're kind of having me, too. So we're just going to have a great conversation about life and the importance of building wealth, but not forsaking life while you're building wealth and how those two things come together because I watch my audience struggle and I know you watch your audience struggle with something that both you and I used to struggle with. And that is which is more important, grinding away and building wealth so that you have the financial security or actually spending some of it and living life while you're alive and while you're healthy and while you're capable. And boy, both you and I have had some moments in life that have really helped us to reconcile those two things and that's kind of what I hope to do for everyone listening today.

Yeah, I mean, I think life has a way of just opening our eyes sometimes. Sometimes it's a subtle message, other times it's a not so subtle message. I mean it's a two by four on the forehead that gets our attention to start looking at things and saying, am I doing the right things for the right reasons at the right time?

Yeah, you had one of those two by fours that had, you've had two of them. I want to start by talking about the first one you had because it's such an endearing story. I know you've told on here before, but, and I'm sure your audience has heard it a hundred times, but this is one of those stories you can't hear enough. Would you mind sharing that first two by four to the head?

Yeah. So I was, this is, we're going back a way. This was back in the, in the mid-90s. I, it was the same year that I became a single full time dad of my five and a half year old son who's now 32. But what happened is my partners pushed me out of my business, out of my partnership, said they don't want to be partners with me anymore. I had no clients, I got no client backlog. Now I'm a CPA by education.

And I had no cash flow, but I just bought a house. So I was 300,000 in debt. And I had this gift of being a dad, of being a father. And I sat back and I said, what do I do? What do I do? How do I take care of my son and this gift while living my dream of being an entrepreneur and impacting lives and doing what I wanted to do. So I did what most entrepreneurs do. I got on the treadmill, I started to run and I started to run hard and long and fast and I was traveling, I was speaking, I was doing the things that I thought I needed to build my business. And, and lo and behold, I'm getting clients and I'm Getting cash flow. And I'm looking at this and saying, this is going to work. And, you know, I thought I was doing it all right. And then one day, Jeremy, at 6 years old, comes running, and he says, daddy, Daddy, Daddy, I drew a picture of you at school today. And so he was so excited that I just, you know, I knelt down, I grabbed this picture from him. I look at it, and it's there. Here I am in blue felt tip pen. But I'm standing in front of two computer screens with a phone in each ear and the one on the desk ringing. And it was in that moment that I realized that I was totally screwing it up. I mean, and it would have been easy for me to look at it and say, hey, kid, I need to do this. We need the prophets, because it's the prophets that allow us to do the things that we want to do and have the roof of our heads and have the fun. But he didn't see us having fun. He didn't see any of that. He saw me just working. And it was a realization that he. If I was going to feed this gift, I was going to take care of this gift. He didn't need the prophets. He needed my presence.

And I. I don't mean to interrupt you. I literally had one of those moments this morning. You know, I'm at my lake house right now, which is a manifestation. Being able to be up here and hang out here for the summer, buying this place is manifestation of what you and I preach and talk about now, right? Put yourself in position to actually live life. But even this morning, just to show people that we never fully fall out of these traps, I'm lucky enough that my mom has a lake house 2,000ft down the shore. And most mornings I go and I drop our dog Bananas, which you and I both have awesome sheepadoodles now, but I go and I drop Bananas off at Mom's house because he loves playing in her yard over there with. With her golden doodle. And most mornings I'm not in a rush, and most mornings I'm present. But this morning, I was in a rush. I had all sorts of things going on, had to get my workout in a deadline, and I was really short with my mom. No, not rude, not disrespectful, but really short with her. And when I left and pulled away on my way to the gym, by the way, it's not like it was some 911 emergency. I really resented the fact that I was short with her. And right away, and this is Where I think people end up right away. I was able to catch it and not, you know, be present of the fact that. Wait a minute, you were just short with her. You can't act this way towards people you care about. What if that was your last interaction? And so these moments in life that are, some are big wake up calls like you had when your son drew the picture of you. And some are little mini ones that remind you, like the one I had this morning. But we got to pay attention to these events in our life that make us realize that we're putting our calendars above moments and people we care about.

Yeah. You know, and I think it's easy to deflect it or disregard it as, as, ah, I've got more time or, or it's not that big of a deal. And I know that there's been times probably even, you know, if we talked to Stephanie and my wife and you know, that I've probably. She didn't feel that I was completely present and. But you're right. What happens if it is the last interaction? What happens if it's, you know, how do we make that moment meaningful? One of the things I've always said, I remember when I met Stephanie, I used to talk about legacy all the time. And she thought she came from Philly. So she thought that my definition of legacy was, was the rocky statue on some steps somewhere. But you know, I looked at, I said no, legacy isn't. The problem with legacy a lot of times is that we believe that it's something we leave behind when we leave this earthly place. And I look at it differently. I believe that legacy is something we create in the moment we interact with someone because that interaction has the ability to change someone's life. Whether it's a smile, whether it's a handshake, whether it's, it's just a wink. And so legacy to me is moments good. Yeah. But if we looked at our life that way and we realized that the importance of that moment, how would we approach, approach it differently?

Yeah. It's funny when you just redefine legacy and that legacy is really built by lots of small interactions that have legs. I think we forget that. I think we're working on what's our big legacy, what will people remember us for. And all along people are remembering you, whether you were pleasant or not, whether you were polite or not, whether you gave them advice or not, whether you helped them or not, whether you cared about them in a moment they needed to be cared about or not. Those are the Moments that have legs that build the legacy, not. What's the one big thing you left behind?

Yeah, little things. Little things. Stephanie and I are in Portugal right now. We took a cooking class today, and we made pastries, these customary pastries for Portugal nadas. And we had extras. We brought them back to the hotel staff that have been taking care of us this whole time. Just a little thing.

And they're so appreciative. But it's a little thing. We didn't have to do it. And it wasn't for any recognition. It was just, hey, they've been good to us. Let's be good to them.

So describe the picture one more time. So I want to make sure people heard this. Now I want to take this up a very important direction.

The picture was in Bluefelt to pen. It was a stick figure of me standing up in front of two computer screens with a phone on each ear and another phone on the desk that was ringing.

Man, I understand the visual and visceral wake up call that that was. And I know that changed the trajectory of your life at that point, but to fast forward that story, you had a second two by four to the head that has really confirmed the mission that you're on of teaching entrepreneurs not just how to make seeds, but how to plant them and turn them into the crops.

Yeah. So with that, with that picture that Jeremy drew, I decided to look at business differently. I said, I have to learn how to do business differently, and I also had to learn to do money differently. Because if money and freedom were tied to the efforts in my business, then I would always be imprisoned by the business. So if money and freedom were always tied to the efforts in my business, then I would always be imprisoned by the business.

I bet four out of five people, if not more, that just heard that threw their hands in the air, said, amen, and also said, shit, that's me right now.

Well, here's the good news. You can fix it. The first part is that awareness, that realization, and say, okay, how do I do this differently? So what it allowed me to do is kind of say, how do I reinvent it? And I did that. Now we fast forward. Jeremy was five and a half, six years old at the time. And then in 2019, life is going great. Jeremy's older. I'm doing well. I've been running my businesses. I'm traveling around the world, speaking, launches, all kinds of things going on. I mean, I literally had just stepped off of a. A G5 coming back from masterminding in Puerto Rico. If you've never done it, you all need to fly in a G5 at least once and hope someone else pays for it.

So two statements are very true, by the way. Everyone is flying G5. It's private jet, by the way. For those of you that aren't quite sure what it is yet, it's an incredible private jet, and you always want to hope someone else is paying for it.

Yeah, exactly like mine. So what ended up happening, though, but two weeks, literally two weeks now, I'm a healthy dude. I work out, I eat pretty much healthy. I don't smoke, I don't drink a ton, you know, that kind of thing. And I heard three words that I never thought I'd hear, and that is, you have cancer. We found a 5 centimeter tumor in. In your bladder, which turned out to be seven and a half centimeters. So my whole life got completely turned upside down in a moment, in. In an instant. And I wasn't. Not that anyone's a candidate for it. I didn't have the risk factors for it. So it was something that I had to. I struggled with because, like I said, I didn't smoke, I didn't drink. No one in my family ever had cancer. But they looked at me and said, it's in an odd place. It's a large tumor, and we're gonna have to go in and take it out. And it's on top of the prostate. We might have to take out the prostate. We can't see the ureter on the right side, so we might have to put a tube and a bag in. And if it's bad, you're going to lose your bladder. I mean, everything got turned upside down.

And so there's two things, I think, that came out of it. And the first thing to understand is this is I started to spiral into darkness. I think I reached out to you at one point, too. And everything and resentment and blame and trying to look in my past and say, I. What did I do to deserve this? What did I do? Where did this come from? And that was a dark place for me to look. And I don't know, some of the people listening or watching maybe thinking the same thing about their current life, their current life circumstances. But the thing that pulled me out is they said, well, what happens if the cancer, the why around the cancer.

Isn'T behind me? In other words, I stop looking to blame something or find something that caused it, but it's in front of me. What if the why behind the cancer is the motivation to do something different? The Inspiration. It changed everything for me.

I apologize. But, man, I want to hope. I hope people grab these things. I know sometimes they listen passively when they're driving in their car, that kind of thing. People need to understand the power of this. One easy question. And they can insert anything, right. Instead of cancer, it might be divorce or bankruptcy or, you know, insert tragedy here. Say this again. This is amazing.

So what if the why that we're looking for is in front of us and not behind us? Which gives me the ability to say, how do I take control and make the cancer something positive, something valuable, something that's actually good for others, good for me, even though it's tragic. It's something that we had to fight. And it's a continuous battle because of the kind of cancer I had, that we need to stay vigilant and diligent on it. But here's the thing, when we go back to the first lesson with the drawing that Jeremy did is once I got past the whole why, I realized I needed to fight the cancer. I needed to fight it physically. I needed to fight it medically. I had to fight it psychologically, energetically. And I had a great team of doctors, but more importantly, great team of people that loved me in. In the process. My wife and my son and all of them. But the one thing that I didn't have to fight it was financially.

Oh, most people, when these things pop up, when life happens, they already are fighting their financial situation. Now they have a war on two fronts.

I don't know how you would do it.

And that's why you're on the mission that you're on today.

It is, absolutely. Because I. I look at this. This process and say, you know, because like you said earlier, it's not about the cancer. It's about life. Life is going to happen. And it's about controlling the controllables, but preparing for those uncontrollables that we can't control. We're in it now. You know, just because they want to talk about a recession doesn't mean that it needs to be your recession.

Yep.

And so we can choose to participate in their zeitgeist, or we can choose to create our own. We can choose to be what I call a thermometer or a thermostat.

Mel, I want to ask you real quick. How would you define your mission after these two events in life? Yeah.

So my mission, I. So here's the core belief to everything I do. I believe that everyone's birthright is to be financially free. And I truly believe that. I believe it's possible, I believe it's probable. The problem is, is I don't believe that one. We don't teach it, we don't talk about it and we don't allow people to understand what it takes to claim it. We think it's complicated, but it's not, you know, that there's some simple concepts, some simple principles that are necessary and if you do them in a disciplined way over a period of time, you're good. Look at my son, 32 years old, his wife's 30. They've got their first child, we've got a, they've got their second child. I'm going to be grand granddaddy for a second, go around and they are, they own multiple homes and they have a multimillion dollar net worth and they're here. The reason we're in Portugal is because they took a month off and said we're going to Portugal and they've been here for a month living in Portugal and. And so we're crashing their party for a week or eight days and doing this. But they're experiencing life and they're sharing the experiences together with their brand new daughter and everything and just experiencing cultures and that. See, I think the other side of this is, this, is that we talk a lot about wealth, but I think that wealth is a statistic and what we really are really reaching for is the richness in life, which is the experience and how we feel life each and every day. And watching them or watching your children or watching yourself in a relationship, like I watch you and Lori and you all experience life, you live it fully and there's a feeling there and we've spent time together and I think that's whether it's a tent in Montana or a yacht in Monaco. That's where the richness comes from. That's where the feeling comes from.

It's all of the above. By the way, I explained to someone the other day, I need range in my life to be happy. So I need a rural lake experience as much as I need to be in the south of France and everything in between. I need range to live a rich life.

Life.

A rich life doesn't mean nice things around you 24 7.

Nope.

It means something different for everybody. I asked you what your mission is since you had these events and you, you put it very eloquently. I would say my mission ever since my father passed away has really been to help people live an extraordinary life in all ways. And I watch people sacrifice, you know, it's like they're pulling these levers, right? And I'm watching them pull the work lever, but then they push the, the life lever the, the opposite direction or they pull the life lever and they, they push the work lever the opposite direction. And it's this, this all or nothing on one of the two fronts. And I'll tell you when, when my dad died two years ago, just over two years ago now. And for everyone listening, you have to, to understand it was so unexpected. He was 72, as healthy as they came, had as much purpose as they came. Even though he's retired. He was president and chairman of the board of the Wisconsin Maritime Museum. And he loved it more than anything else. He was building this big, ended up being a $10 million tower for the museum. Like this man was the epitome of how you should do life. Woke up happy every day. Got his workouts in. Well, honestly, Mel, he's what you are. Only he was older. Right. You know, I always tell you I'm, I'm inspired and shocked every time you remind me of your age because you're so fit and full of life and vibrant and all this. You're. How old are you right now?

I'll be 61 on Friday.

61 year old running around in a 39 year old's body with a 17 year old's attitude. And it's fantastic.

Sometimes a little younger than that, according to my wife.

And so when, when I got the news that dad died two years ago, it was in Covid, it was not from COVID but it was during COVID when everything was locked down. I don't know if you remember, they, they had almost no flights. They had canceled 90 some percent of flights for a long time there. And I was in California and had to get home to Wisconsin with mom, with my wife. Lori and my brother and his girlfriend are two great big dogs. And because Lori and I had gone bankrupt from making bad decisions and we, we never filed bankruptcy, I just use as a generic term because we had to start over financially from making bad decisions all the way back in 2008, 2009, when that recession hit, that forever changed my view of money and my financial habits to put us in a good position going forward from that moment. So that when my things like my father passing away, I was able to quickly charter a jet, be on that plane in two hours when there were no other options, pay 20 grand for a one way flight, get the dogs on, get the family on and be home with mom in a matter of Finding out five hours later and those types of things are priceless. To not care at all, that all of a sudden you got to pay for a $20,000 flight. And that's not even the most important part of. Of that wake up call. When dad passed, the most important part by far that has put me on this mission to help people live an extraordinary life in all ways is dad was full of life. And when he passed away, it was a horrible reminder that we all think we have a lot longer than we might have, right? We all think we have a lot longer than we might have. And when I got onto that flight, it was so busy for the couple hours of, you know, quickly grabbing some things to pack, getting the flight coordinated, the whole nine yards, that I didn't get to really let it sink in that dad had died unexpectedly. So when I finally sat on that in that. That seat and the jet was taking off, that was the first moment that I had space in front of me to realize and let it sink in. Holy. Dad died. I can't believe this. And the very first thoughts I remember having, Mel. And this is the important part, the very first thoughts I remember having is, thank God I don't have any shoulda, coulda, wouldas in terms of spending more time with him or making more memories with him or. Or putting things off or not saying things I should have said. Because ever since Laurie and I had to start over financially, it was probably 11 years prior to dad passing away. Ever since that happened, we had been on a mission putting not just our finances first, but life first. You know, we would fly mom and dad out and. And they would spend.

Five months every single winter out in Santa Monica by us, not with us, but by us. And we made memories that wouldn't be made if we couldn't afford to do that at the same time.

Every bike ride, I was able to say yes to every lunch, I was able to say yes to every dinner, I said yes to every family short little trip that we did spur the moment. All the things that most people say I'm too busy for or I can't afford right now or I have to work, all of those things that were seemingly insignificant, they suddenly had the greatest value of anything I ever had in my life. And a big part of that value was my morning process was significantly easier. Not to say I wasn't crushed, but it was significantly easier because I wasn't faced with an entire list of I should have done this or I could have done this or I should have said this or I could have spent more time. And that was the greatest gift I had ever given myself. And that gift took a long time to develop, obviously. And that's why I'm on the same mission as you. And that's why we're doing this episode right now. Today is. Damn it. There's two things you got to get really good at. Number one, making money. That's very important. You understand how to make money and make a lot of it. And number two, taking care of it and making that money and taking care of that money in a way that you're not trading time for what could be life experiences, without a doubt.

And if someone just watched.

Your social channels, Lori's social channels, your brother social channels for a little bit, they would see that you're a living example of good values, caring, generosity, belief in the greater good, possibility, and all of those things that I think come with that, making the moment a precious thing. I think that's why we can connect. And we connected a while back is because of that. And I said, you're living a true, true example of exactly what you talk about, and you're an example of it. And you see the family. I see, like I just watched. We just looked at the images of the birthday for your mom.

And those things are precious. Precious, you know, especially for your mom.

Yeah.

You know, and, you know, and it's a gift that sometimes we take for granted. We FaceTime. My mom, who's 87 years old yesterday, she doesn't know how to FaceTime. All we saw was her forehead, okay? But the fact that we connected with her from Portugal, it just. It means the world. And so this is why I think it goes back to that whole thing of. Of how we living our life. What are the legacies we're doing in the moment, and the money. As much as we might, some people would like to demonize it. The generosity not just of dollars, but the generosity of your time is possible because you learned how to make money, you learned how to multiply the money, you learned how to keep the money, and you learned how to do good with the money.

You just stated that absolutely perfectly. Let's teach those things. Everyone listening right now, because I want them to have these. Whatever their version of our lives are, right? So it's a little bit different for everybody. Whatever their version of their dream life is, I want them to have that. So, Mel, let's kind of deconstruct this for them. Starting with, how can people earn more money without burning themselves out and sacrificing life Experiences and creating memories.

Yeah, I think the first thing, especially in today's world.

The barriers to entry are far, far lower than they've ever been. And so whether you have a knowledge and experience, a skill set, a strength.

That you can market, and you don't need a lot of money to do it, it's time to get it out there. Because there's a couple reasons I think, for this, is that, first things first, I think we spend some time evaluating ourselves. What are our talents? What are our skills? What are our strengths? When we understand those skills, strengths and talents, we can then look at them through an, an optic or a set of goggles that says, what problems do those talents, skills, and, and, and strengths fix? And then you sit back and, and say, okay, here's a list of problems that I can fix.

And I get it. We can get all kinds of imposter syndrome. Who am I to fix it and this and that. But you know what? All you got to do is fix one and it'll. It'll be enough fuel for you to go to the next one.

Understand what you're saying is they can monetize any skill set they have. Any problem for other people, they can monetize that and be in control of that income source themselves.

There is someone that I know that is making.

Millions of dollars teaching ladies how to do. I don't know if it's crochet or needlepoint or it's. It's with the little, like the, the sharp little rods and yarn. So you may think it's silly, but there's someone out there that, that helps. So if you look at it and say, I got skills, there's problems that those skills solve. Now we simply have to look for the people that have those problems and go serve.

Mel. Let me take that lady's example who's making millions of dollars teaching needle point or crochet or whatever the heck that's called. I love your description. The pointy little sticks with the, with the yarn. That's exactly how I would describe it because I knew what you're talking about. And now because I want people to understand how she's making millions. Is she kicking out 10 million sweaters a day? Probably not. Is she teaching other people how to do it through tiny courses? Ebooks. Tell us, how is she actually turning that into millions of dollars?

She is teaching people how to do it through many courses and ebooks. So I guess there's different types of knots and different types of patterns. And so she's literally teaching them in These little micro lessons. And so someone wants to learn how to do a pair of socks or a hat or a sweater, they can buy the lesson and they learn. They get to create the sweater for their baby, their grandchild or something like that. And she gets paid. And it's leverageable, it's scalable. And it's not her constantly having to put stuff out because they're courses.

They're little mini courses and ebooks. What do you think she sells them for, on average?

I think on average, they're probably between 47 and 127 bucks.

How incredible. I love that. So it's affordable for anyone that wants to learn it. Her reach is limitless. She's making a ton of money doing, teaching something that she loves to do that most people. So I love your example right here, Mel. Most people would look at what she does, knitting, yarning, crochet, whatever the heck you call it. And they say, well, it has. That has no real monetary value, and she's cranking out seven figures. This is such a great example. Do you have any more examples of someone who's just literally monetizing themselves through something that people would be shocked at?

Yeah, I think so. But I think here's the other motor, even more powerful thing with that example. The margins in her business are huge because the overhead is small. And why that's important is if I have a business that on average can generate 50% to 80% margins like she does, my acceleration to wealth and freedom is so much faster because I'm not living off of 10% margins, I'm living off of 50% margins. And if I understand the money principles behind it, some of the things that you teach and I teach, then getting yourself to financial freedom is far faster than it's ever been than trying to. I'm going to open up a pizza shop, which I'm not taking anything away.

I love.

I love a good piece of pie. But it's a different business model that allows you to get additional cash flow at a different level. Level.

All right. I want to make sure I'm always linear, so I always sum things up for people. I hope the first lesson that they've taken away is, number one, you can monetize anything you're good at, no matter how obscure you might think it is. And you have to be cognizant of two things. One, you have to build it in a way that it'll be passive income, right? Selling courses, just reaching numbers of people out there, not trading your time for money. And number two.

You Gosh, I just forgot what my number two was.

That's margins.

Oh, margins. Yes.

Thank you.

Margins. Got to choose the things that are high margin. Otherwise you're just going to grind too hard for too little profitability.

Yeah, here's, here's why this is important when you do this right. And this is what came out of the lesson with Jeremy and then what allowed me to navigate financially, the cancer without stripping our lifestyle, without changing our lifestyle, without selling stuff or reducing lifestyle. And that is, this.

Is that when you have leveraged income, passive income in this way, you're creating a money machine. You're creating something that's generating income without your effort. And then with that, building something out that allows you to produce income like an atm. That's what allowed me to survive. Us to survive financially. The cancer to. We weren't draining savings. In fact, whether we have an emergency fund or not, we weren't, we weren't stripping it down. We just turned on a different machine. And that was the assets that we acquired because of the business that we created that was high margin business. Just like this gal with the needle pointer, the crocheting that allowed us to sit back and say, well, we need money, flip the switch, allow it to pay us without draining it, without selling it. We weren't selling stuff. I wasn't selling my wife's shoes. If I sold my wife's shoes, it would have been a fate worse than the cancer. So it's just not something that we have to do. But the problem is society tells us save and spend versus how about using this passive income to build a machine that will recreate income on an ongoing basis without eroding the machine. We're taught, we're taught to do that. We're taught to erode the machine. We're taught to save, put it in a retirement account and then spend and pray that our life doesn't outlast our money. It's an industrial age concept that worked because we had pension plans back then. We don't have them today. And what we need to do is create our own money machine. And that's the gift of a high margin business built off of what you know.

I want to talk about this concept because this is where, you know, you just said we've been taught to save, then spend and it's wrong. We should be taught to save quickly, invest and then spend the crop that is born of those seeds that we invested. And this is where I always like to introduce this example of your earned income. That's not what you should be spending. Those are the seeds. That's what you should be investing. Spend as little of that as possible on your day to day life. Then you earn the right down the road, the more earned income you can earn, that's the more seeds that you can plant. The more seeds you can plant, then the more passive income, AKA the crop. Right? Seeds turning into the crop. The more passive income you will start generating off of those investments. Give me example of your a couple of your favorite passive income investments.

I do a lot in the stock market. Okay. I do real. So the three most passive income. You know what I call leveraged income. I don't use passive all the time because I don't want people to think that it's a set it and forget it. Because your relationship with money is that it's a relationship. And as we know if we get passive about a relationship, it dies. But point being is that there's three levels above your business income that you need to think about asset based in asset based income sources. That is rental real estate, that is equipment, things that are hard assets. I can rent, okay, so I have some rental real estate. I don't do a lot of rental real estate as people would think because I don't want to get the call at 11 o' clock at night and say hey, toilet's clogged.

I'm with you on this by the way, Mel. It's a absolute great legit way to build wealth, but it is not for me.

Yeah. And I think that when we choose our path to wealth, part of that choice is the lifestyle we want to live. So above that is what we call residual income. This is like my book getting paid every time it sells. It could be considered your courses every time it sells. White labeling your technology, white labeling some of your stuff and getting paid your downlines. If you're in a network marketing type of environment, that's creating residual income. In other words, you put the effort in upfront and now you get paid residuals on an ongoing basis. So that's the step above.

People don't realize how many great funds there are that you can invest in. For example, this past year I invested in a large tranche of ATMs that pay me thousands of dollars every single month. And at the same time I got to write off my entire investment into those ATMs that year using you know, one year accelerated depreciation. So it, it pays me income for seven years and I got a massive write off that year. That's a great example of leveraged income. You know, taking the seeds, planting them so they can turn into the crop that's going to pay you on a regular basis.

Absolutely. And then, then the, the one at, at the top is portfolio income. This is what most people think about in, in investing. It could be stocks, it could be bonds, ETFs, index funds, annuities, those kinds of things. They're paper assets. And so my primary focus is at the real estate level. I'm investing in syndications.

Real estate investment trusts and things that I'm hands off. I'm not getting the calls. So I still have exposure trustees, I still have the exposure to real estate because I think that it's a good ballast. I have some residual income from my books and some of the things that I do there. And then I have a portfolio of investments in index funds, annuities and, and other things that will pay dividends or grow or things like that that created in a sense between all three of those. All three of those. That's what creates the atm. And here's the, here's the goal. The goal is to be able to generate enough income from those three categories to, to replace at least 80% to more than 100% of your current income streams. Because then you have freedom, you have independence.

Yeah, I've got a great rule of thumb that I'll share with the audience when it comes to this. Number one, you must have multiple income streams right now. You must.

It's no longer a luxury.

You no longer get to choose if you want to. It's a must, or you're not going to survive. Number two, one of those income streams must be leveraged, to use your term, or passive to use mine, where they're going to continue to pay you for a significant amount of time even when you are not working, when you are not doing something. Number three, at least one of those income sources must be fully within your control. So aside from this passive one, or sometimes it is the passive one, it must be fully. You're not relying on someone else's distribution. You're not relying on someone else's formulation of, you know, shakes or vitamins. You're not relying on somebody else doing something correctly. It is fully in your control from start to finish so that you can know, you can always crank up that lever. You can always crank up that, you know, income producing machine if you have to. Those are my rules of thumb for, for right now. And it all sums up, it gets summed up by this. You should build your lifestyle using that methodology. You should build your lifestyle so if any one of those income sources went away tomorrow or today, I don't care if it's your biggest one, you should build your lifestyle. If any one of your income sources went away today, you would not have to change your lifestyle tomorrow. And that's what everyone needs to be building towards.

I couldn't agree with you more. I mean, this is the frustration. So many people were in pain during the pandemic, during and are feeling threatened right now. And, and primarily is because they. We are taught to have that all in on one, one income stream. But if it gets shut off, health legislation, econ, economics, whatever it is, desire to just not be in it anymore, we're in trouble. We're in trouble. And so that's the thing I love. I agree. Multiple income streams is a necessity today.

Okay, so we've talked about, you know, how you need to earn your income while you're not sacrificing life. We've talked about turning seeds into crops through different leveraged income and leveraged investment opportunities. What's next? Set it and forget it. I know you said you're not a fan of that. What should people do next?

So here's the thing. I think that we take an active role in our wealth creation. So the first, the, you know, one of the things to think about, especially in, in the current times that we're in with increasing interest rates, is beware of variable interest rate or destructive debt. There is a difference. I know some people say get out of debt. Get out of debt. I don't buy into that completely. I think that when you have debt that is helping you produce cash flow or increase your net worth, that is productive debt. When you're using debt to finance your current lifestyle. In other words, we are robbing our future so we can impress someone. Today, you know, I had a. I go and get my haircut, which doesn't take long these days, from a kid who's like 23 years old. And he tells me about this. His buddy says, my buddy just bought a $5,000 watch. And you like watches? I love watches too. I go, really? I said, does he make a lot of money? And he says, no, he's 23 years old. And I said, okay. I said, why would he do that? And he said, well, because his friends thought it was cool. I said, is, is it okay if I do math for you? And he said, sure. I said, well, look, if you invest a dollar in your 20s, in your early 20s, it will turn into somewhere between 75 and $90 by the time you retire. I said, so if he invested the 5,000 into something of an investment instead of the watch, he would end up with about $400,000 down the line. So he just. In my mind, and it's up to you to do it. It's just that you do it consciously and with intent. Because, look, we don't live. We're not on beans and rice and Mac and cheese unless it's got truffle oil and that kind of thing.

But we're intentional with what we do. And so if he was intentionally understood it, and this is what we're not teaching people, that the $5,000 decision was really a $400,000 decision down the road, then maybe we would make different financial decisions. And I think that with that in mind, the next step is to sit back and set and make investing a priority. That means that we put it ahead of financing a lifestyle.

Amen. Amen. Now you have created a course. Not a course, but you've created a free training to help people do that. Because listening to this 45 minute episode, if anything, there might be equal parts inspired and equal parts lost if we're being honest, because we just gave them a whole lot of do this, don't do that, do this, don't do that. Tell me about the free training you have coming up.

So I have a free training that's, that, that's coming up. It's called the Affluent Entrepreneur Experience. We're going to do it live. And it's, it's really me going into a deep dive in three separate trainings where we start to talk about this whole pathway to financial freedom as an entrepreneur especially, what do we need to do with our business to scale our income? What do we need to do with the income to scale our wealth? And how do we make sure that that wealth is feeding the lifestyle that we want to create? And a lot of this was born out of my financial journey. Look, I have not just like you, you went through it in 2008 and 2005, I got, I got found myself in a Ponzi scheme that wiped out one third of everything I owned. Well into the seven figures. Between me and two buddies, we lost four and a half million dollars and we had to rebuild.

So most of everything, even though I'm a cpa, most of everything that I teach is really from my journey. The mistakes. I mean, I've been, I think this goes for you, you and Lori too. We have been fortunate enough to do enough things right to be successful, and the audience has been fortunate enough that we've done enough things wrong to be educational.

Yeah, isn't that, that's the sweet spot. I freaking love that's. I've never heard someone phrase it that way. That's really good.

You know, and so it's not theoretical. I don't have investments to sell. I'm not here to try and sell insurance to anyone. The only thing I want, because I still think that so many people struggle with the concept of, oh, I could never be financially free. And I said BS to that. And I don't care what age or stage you're in. I don't care if you're, you're 25, 35 or 65. It is the time. Today is the day for you to go claim that financial freedom path and to do it in a way where you're going to get unbiased, direct conversations around what works and what doesn't work. And that's really what this training is about, for us to work through it. They get a workbook and we work them through the workbook with some specific frameworks, some specific principles and rules, wealth creation. It's less about the money, it's more about the behaviors. And if we can give you the behaviors based on road tested principles and you do them on a regular, consistent basis, you'll do just fine.

They get a workbook and everything. It's all totally free, right?

All totally free.

I love it. So they can go to melabraham.com forward/chris to get it for free if you guys want for free. If you don't want to pay for this, go to melabraham.com forward/chris Again, that's how you get it for free. Melabraham.com forward/chris the affluent entrepreneur experience, workbook, perfect education, the whole nine yards. Mel, I can't thank you enough for coming on, sharing your stories. You always inspire me. That's why you're one of my dear friends. But you know, being willing to inspire everybody else and just engage in this back and forth with me about one, you can have a dream life and two, it doesn't have to be as complicated if you're just willing to follow a set of tracks that someone gives you.

Absolutely, man. And thank you for having me on and I look forward to actually letting my audience also listen to this conversation. I think there's just so much goodness in what you do and how you show up and the example that you and Lori set and being on this journey together is incredible.

Yeah, well, thanks for being on. It's my pleasure. We got to do this again together.

Absolutely.

Thanks, buddy.

See you, man.

Thank you for listening to the affluent entrepreneurship with me, your host, Martin 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 is your birthright, and I want to help each and every one of you claim it. Thanks so much.