10 Signs Someone is Secretly Wealthy

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. Most people think being rich means fancy cars and designer brands and a house so big that you need a map to find the kitchen. At least Instagram tells you that. But here's the truth. The majority of people who look rich, especially on Instagram, they're drowning in debt. Meanwhile, the truly wealthy, they're living in modest homes, driving reliable cars and quietly stacking assets while everyone else, they're chasing the logos. So, no, wealth isn't built by what you show off. It's actually built by what you say no to. And in this episode, I'm going to give you the nine things that the truly wealthy people do not waste their money on so you can stop fueling someone else's bank account and start building your own. This is building your money machine, where we help you master your money, eliminate financial stress so you can live a life of choice. Because earning more doesn't make you free, but a money machine does. And that freedom, it doesn't start with your next raise. It doesn't start with your next client or your next paycheck. It starts the moment you get your money to work harder for you than you did for it. And I'm your host, Mel Abraham. And with 30 plus years as a CPA, as an advisor, I've had a chance to see those that did it right and did it wrong. And in this episode, I'm going to break it down for you. Let's do this.

All right. So you want to be wealthy. That's why you're here. You want to master the money. I get it. Here's the deal. A lot of times it's like, what do I need to do? What do I need to do? Where do I put my money? Where do I put my money? But the reality is that we also have to talk about the other side, what not to do with your money. And what I've seen over the decades that I've worked with truly wealthy people and even on my journey, that there are a number of things that are in common that wealthy people will never waste their money on. And I'm going to break it down here, and the first one is this literally is that cheap stuff actually costs more. Here's, here's what I mean. A wealthy person is willing to invest in quality because they know it's going to last longer. A lot of times we think that that three dollar phone case that we just bought that cracks faster than your willpower at a buffet, that's not saving money. It's literally renting regret because what you're doing is you're buying something that doesn't last and it ends up costing more because you have to replace it more frequently. And so what wealthy people will do is they will look for quality. Now that doesn't mean that it's a license to overspend. But they don't nickel and dime themselves with disposable junk. They'll spend upfront for quality because they know that in the long run it actually saves the money. Okay? And Americans especially, we waste thousands every year rebuying things that should have lasted when we bought it the first time. And so here's the move here. Look at what you're buying. I get I'm the first person that's going to run to a good deal. But you balance the good deal between that and the good quality because sometimes buying cheap becomes much more expensive because you're buying twice. Okay? Number two, they don't have home. Ego spending, as I call it. House poor, money machine rich. That's what they want, okay? They're not, not, not that they live in, in dilapidated houses. We live in a really nice house. But we also realize that the house is not an investment. It's a lifestyle choice. It is a lifestyle asset. It's a place that we live, okay? And it takes, it costs us money every month in mortgage and insurance and utilities and upkeep. We're right by, we're right on the beach. So the salt water eats things up. That's the reality of it, is that we understand that. And we went in eyes wide open. There's this idea of the American dream. Buy a house and it's going to be your pathway to being rich. And that's truly not the case. And I've got other episodes that I specifically deal with that. But you start to understand that it's not about overspending on a home. And when you end up with a oversized home, you end up with oversized expenses and you have to furnish it. You gotta have the decor, upgrades you have to end up in a situation where the house becomes handcuffs because just trying to upkeep it becomes a problem. I had a client and a dear friend who bought a house. It was a beautiful house, and it wasn't the house that was the problem, but it came with acreages of land and the amount of utilities and the amount of water necessary to keep it. It was right on, on a lake. And everything was, was outrageous. He ended up having to get rid of it. Cause he said it's costing us more on the upkeep than it is on the house payment. And wealthy people understand that and they buy. Now, I also know wealthy people that have multiple homes. And at one point I had, we had three homes and we've brought it down to just one because that's where we're at, you know, and so I understand that and I don't waste money and, and wealthy people don't waste money trying to prove to their neighbors or peers that, look at all the homes I have and, and everything. The home serves a purpose and is a place to live. It may be a nice place to live, but they do it within their means and they follow the, the home buying rules that we talk about. Literally, we don't want anyone to spend more than 25 to 30% maximum on total home costs. Total home costs, meaning not just the mortgage, not just the real estate taxes, but insurance, maintenance, utilities, all of it. We want to make sure that that happens. So that's, that's number two. Number three is they don't waste money on status signals, okay? They're about the quiet wealth instead of loud debt. You know, they're not the person that's flexing in Gucci on Instagram. They realize that they live the way they want to live. Like I said, I look for a deal. I love looking nice, but I'm not going to be wearing $5,000 suits. I don't wear suits anymore anyways. But the reality is that that kind of spending is fleeting and it becomes addictive because of the dopamine hit. Because you're always comparing and you're always trying to buy the next thing. The next thing, the next thing. Okay, the data actually shows it that 61% of people earning $250,000 or more don't even own luxury cars. And here's the kicker. The typical Rolex owner, their net worth is under a million dollars. And to me, look, if you are a watch fanatic, great. But the fact of the matter is, is that if you're just buying it to show it off. It doesn't make sense. The people that are truly living in quiet confidence, they don't need validation from some logo. And wealthy people don't buy things to prove things. They buy things that align with their values and what they want. And other people are going to do what they're going to do. I don't care what my neighbors have. I got a neighbor up the street, I've seen in his, in his driveway in front of his house, literally two Aston Martins, a Porsche and a G wagon. I mean, that's like a million dollars worth of cars. Now, I know nothing about him. I don't know what he does. I don't know how much money he makes. I don't, I don't know any of it. But I know one thing. He can only drive one car at a time, okay? So I just want you to start to think about how that plays out in your life, okay? And, and what those costs could be, because that's, that's the money that you can use to build the financial machine, the money machine, to give you the freedom. It's why I created something called the Lifestyle Cost Calculator, which is totally free, where you can start to put your numbers in. It'll give you the real cost of your dream life so you can stop spending on the things that look good and start funding what really matters. If you want to grab it, we'll hook it up in the, in the show notes below and in the description below. And I may mention it again later, but it's a game changer because now you know where you're going. All right? And it's totally free. That leads me to number four, which is the luxury transport traps. There it's. Whether it's wheels, wings or, or boats, they start to become chains and everything. We need to be mindful of it. It's like there are people that I know that pamper their SUVs, their luxury SUVs, more than they, they pamper their, their marriages, which is sad, but you look at how much they put into it. The leather seats, the monthly payments, the sky high insurance, and, and they're putting more towards their car than they are towards their retirement. And that is something that's going to come home to roost, you know, and it could be a car, could be a boat. You know, they say that the two best times in a, in a boat owner's life is the day they bought it and the day they sell. Sold it. Now, at one point, I actually looked at buying a boat because I was scuba diving and all that stuff, but I looked at the slip fees and the care and all that. I said, forget it, you know, it doesn't matter, okay? And then there's others that will buy a plane. Now if you're a pilot and all that stuff, I get it. And I can hear people now saying, but Mel, it's a tax deduction. Okay, it might be a tax deduction, but you still have to pay for it. You're still net cash out even if you got a tax deduction for it. And when you talk about vehicles, especially a lot of these, they lose their value, 20, 30% of their value in the first year. That's like lighting a pile of cash on fire. So wealthy people know that transportation, just like a home, is not an identity, it's a utility, it's a lifestyle asset. Now you're your car should get you to freedom, not keep you from it. Which means that you don't overspend on a car. I literally was listening to something where someone was making $100,000 a year and their car payment was $1,000 a month. It's ludicrous. It's crazy, because that's just the car payment, then the insurance on it and everything else. Okay? And that thousand dollars was on a seven year loan. It's crazy. All right, all right. I get hyped up on this. The number five. They don't spend money on what I call false hope purchases, okay, that they're not buying lottery tickets where they think, oh, I'm gonna hit it out of the park. They're gonna turn around and put money into higher probability kinds of things. Now, a $10 lottery ticket isn't gonna necessarily break the bank, but it is the behaviors and the habits that might, because you start saying $10 here, $10 there. But to try and hit the mega millions, instead of doing the things that are proven that have high probability of success, think about this. The stock market goes up 8 out of 10 years. 8 out of 10 years.

So why not take a bet that 80% of the time it's going to go up versus something where it's 1 in 302 million that you might make a million dollars on that lottery ticket. Why not put it in something that you know over time will give you the returns? And so when you look at it that way, you know, these false hope kinds of things, gambling, and I gotta watch it because my sister plays world class poker and everything, but at the same time, I don't make false hope purchases. And most of Them don't. They will earn the money. They will put it into systems and wealth building systems that are going to create wealth for them in a high probability kind of thing. So they aren't counting scratch offs. They're going to turn around and put the money to work for them in a money machine. Right. Leads me to number six, they avoid penalties, financial penalties. In other words, they have the pulse on the fees. So like for instance, I all my banking, none of it is in big banks. I'm not with Chase B of A or any of the big banks because of the fee structure. They get extremely wealthy doing what they do and they don't need to. And if I'm going to going to give them my money, that's how they're getting wealthy. Because they're putting my money out and making money on the money that I give them. I literally give them the inventory. You give them the inventory to go make money on the backs of your dollars, but they want to charge you a fee. I don't want to do it. Okay. And then tap on that late fees and other fees. So what I want to do is avoid those things at all costs. And the wealthy will typically, typically do everything they can to capture the discounts and make sure they avoid fees. Overdraft fees, monthly fees, banking fees. Americans have paid over $12 billion a year in overdraft fees. 1212 billion with a B. That's not a mistake. That's actually their business model. Okay. And wealthy people just don't neglect that. And it is in effect a tax on your funds, your money. So the way to do this is to automate your bill pays and some of the things to make sure that bills get paid on time. You don't pay additional fees and they get avoided. Make sure that you have the liquidity in the account so you didn't get overdraft fees. Make sure you have that kind of protection place, automate it, monitor it. So you stop donating to the banks through late fees and other fees because the wealthy don't pay them, they collect them. Number seven, impulse spending or what I call subscription creep. It's the leaky bucket. Okay? The leaky bucket is going to sink most money machines and it's the little stuff that, that you put on on, you know, reef automatic refill. You ever walked into Target for just toothpaste and left with a whole bunch of candles to light like Yankee Stadium? Yeah, see, I see you. All right, because we did it. We did it once, only once. Because my wife loves candles and they were on sale. So when. So we go, well, we're saving money. But then I looked at it. What are we doing? Okay, yet if you look at the data, average Americans will spend as much as $450 a month on impulse buys. $450 a month, that's $5,000 a year. Do you know $5,000 a year over 40 years, put in an account at 8% is going to be more than a million and a half dollars impulse spending. Then you add in the subscriptions that you forgot that you signed up for. You're leaking cash faster than a broken faucet. So the wealthy people will plug the leaks. They're gonna look at things, they're gonna work from, from shopping list. When we go shopping, we have a list and, and we know that. And we're gonna run things in a way where everything's deliberate and intentional and we're not just hitting the buy now button. And I've told people to use the 72 hour rule. If it's something that wasn't in the plan, wasn't on the list, isn't something you need, but you want it. Do me a favor, put it in the cart, leave it there for 72 hours, and then if you want it after 72 hours, go ahead and, and, and buy it then. But allow the emotions to dissipate so you don't overspend. Okay. Leads me to number eight. And number eight is it's ownership burdens. There's no other way to put it, but I've seen people literally buy vacation homes that they use three weeks out of the year, but it's theirs. They pay for over 52 weeks, but they use it for three weeks. That's not wealth. That's a shackle. You know, that's changed with a view. Okay? Wealthy people value flexibility and they don't fixate on ownership. Okay? They're not in a situation where they are worried about renting. At times. When my wife and I go on vacation, we would love to have a place in Italy, but then we look at it and we go, because we love Italy, and we'll go for weeks at a time, but how many weeks are we going to spend there? If we spend two weeks there, three weeks there, even a month there, but then we got to pay for it for 12 months, and I get it. Oh, well, you can rent it, right? That brings a little more complexity into your financial game, which is fine when you have the critical mass into your portfolio. But when you're first starting out and building wealth, this is not the thing you want to do. You do not want complexity coming in. You want to keep it simple. You streamlined and doing the right things. And the wealthy in this situation, a lot of times they go, well, it's cheaper for us to rent something really nice for the time being that we want. It could be a castle. I don't care. But renting it makes sense because then you're only paying for it for the time that you use it. Okay? And you can ask yourself before you buy something, if you're thinking about it, do I own this or will it own me? There was a time, like I said, we had two homes down here at the beach, but we were. We were paying mortgages. We weren't. Clearly, we were not using both homes. Okay? We didn't need it. Freedom is worth more than a deed with your name on it. And it leads me to the final one, and that is consumption without roi. Affording something isn't the same as, is it worth it. Okay?

Getting a new phone every year just because it's new. Getting a new car every three years just because it's new. I used to turn my cars every two years, every two years. Now I keep my cars for seven, eight years. I get a nice car, but I keep it. Which goes back to one of the first. First things that we do is I buy quality. Okay? But if you're constantly buying new things, oh, the new. The newest golf clubs. The newest golf club every season. See, none of that really changes your life, but it does change your bank account. And wealthy people don't ask the question, can I afford this? Because many of them can't. They ask the question, does this buy me more freedom? And if it doesn't, a lot of times they just let it go. Does it bring me more joy other than the moment that I did to purchase it? And if it doesn't, there's no return on time, income, or joy. It's clutter. It's not compounding your life. Affording something doesn't mean it's worth it. Okay, so here's the thing.

Truly wealthy people, they don't waste money because they know that their wealth isn't about spending less. It's about spending with direction and intent. Every dollar has a job. Either it's building your money machine or it's fueling someone else's. So here's the challenge for you. Stop pouring gas on fires that don't warm you. Start fueling your machine that buys you freedom. Ask yourself, is this something that's going to move me closer to my freedom, closer to that dream, closer to the life that we want. And if you truly want to know exactly what your dream life costs, download that lifestyle cost calculator. Just go to melabraham.com lifestyle. It's free. Put your numbers in, project it out. It'll tell you what it's going to cost you to have that life that you want. Then you know the game you're playing and how to get there. Because remember, as I said earlier, earning more doesn't make you free. A money machine does. So let's build yours. All right, I hope you found this valuable. I hope that you look at this and go, all right, Mel's not telling you not to buy stuff, telling you to do it intentionally. I'm telling you to do it with. With, with purpose. I'm telling you to make sure that you put your financial future, your financial freedom and the quality of your life before the quality of your purchases. All right? All right. I hope that this. This helps. I hope that this is valuable. I'd love to hear from you. Let me know your thoughts, Let me know your comments. Okay? And I can't wait to see you on your road, on your path to financial freedom. And until I do, as I always say, always, always strive to live a life that I let you.

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 youg Money Machine, where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple Podcasts, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom show your birthright, and I want to help each and every one of you claim it. Thanks so much.