12 Things I Don't Waste Money On (As a 64 Yr Old Millionaire)

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. You ever notice how we buy things that feel like happiness in the moment, and then six months later, it's just clutter, it's debt, it's actually regret. You know, here's the thing. Most people think that cutting out that coffee is the secret to wealth. No, it isn't. Coffee isn't killing your freedom. The real killers are the so called joy purchases. The ones that are marketed as peace or progress or status. They're the ones that actually are robbing you of your long term freedom. Now, you'll hear that I'm not here to tell you not to buy something. I just want you to be smart, conscious and aware of it. Because this is the building your money machine show 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. The money machine does. And that freedom doesn't start with the next raise, the next client, the next paycheck. It starts the moment we get the money to work harder for you than you did for it. All right, I'm your host, Mel Abraham. And as a CPA entrepreneur and someone that has mentored many on their road to financial freedom and has walked it himself, I have seen it over and over again, and I've done it myself. I made my share of dumb joy purchases along the way just to have regret. So. So in this episode, I'm gonna break down 12 of the biggest traps that can be costing you your freedom, your future, and give you frustration instead. All right, if you're ready, let's jump in. Let's go do this.

Many people that I've talked to, we've had this conversation around financial freedom, financial literacy, and getting them on the path to financial freedom. And a lot of them say, oh, you're gonna cut out all my fun? You're going to tell me to stop? No coffees, no Netflix, no vacations, and basically you want me to live like a monk until maybe one day I might be Able to afford that bingo night in Boca, you know? No, that's hogwash. I mean, it really is. See, because here's what I know. Freedom and living a rich life isn't about deprivation. It doesn't come from deprivation. What it is about, though, is dodging the illusions. The money traps and the things that flow, feel like joy, but actually steal your wealth, your peace, and your future if we're not careful about it. And depending on where you are in your financial journey, these traps that come into your life, and they do regularly, they are the things that you need to fix to get you on the right trajectory towards your financial freedom path. Now, one of the things that I got for you, that is a tool that will help you understand, where am I on this financial freedom journey? If you don't know is I have a Financial Freedom Zone quiz that you can take. It's totally free. Takes about, I don't know, 70, 90 seconds, depending. Answer a handful of questions, gives you a report of where you are, which zone you're in, what's the next steps, what to focus in on. We'll hook up for you here, or you can go to your financial freedomquiz.com to grab hold of it. All right, let's look at the 12 joy killers that keeps smart people broke and how to stop them. Number one, lifestyle inflation masquerading as progress. Here's the thing. You get a raise and you think, finally, I can breathe. And so what do you do? You go out, you upgrade your car, you upgrade your house, you maybe even upgrade your wine budget. Now, trust me, most of the stuff I've, I've done, I upgraded my car and I regretted it, okay? I didn't need to upgrade the car. But it feels like progress. But what we're really doing is speeding up the treadmill, okay? Because as your income rises, if your expenses rise along with it, then your savings, investing stays flat. You're not moving ahead, you're not building a money machine. Literally, both things go up and you're in the same place and you're wondering, I got so much more cash coming in, but it seems like it's going out the door. Why can't I get ahead? I'm still living. Check to check. The Fed in, in a recent study, found that 60% of households. 60% of households increase their spending almost dollar for dollar when their income rises. Translation, the raise went straight to Starbucks and the mortgage company. We need to be careful about that. Now, here's the deal. What do you do instead? Because I truly believe that you should be celebrating your successes. But the thing that I would look at is that when something like this happens, we don't scale our lifestyle at the same rate. We do it as a prorated rate. Here's what I mean by this. It's the 50, 50 raise rule that I use. That half of the money of the raise or the additional income that you have is going to go towards building the money machine, investing, savings, debt, payoff. The other half upgrade your lifestyle guilt free. Okay? But don't flippantly do it know before going in what your celebration is going to be. So, so you're sitting back and you've already pre planned the reward that you're going to get when the raise comes in. So it's already done and you know what you're going to do with the money when it comes in and the rest is going to, is going to go towards your future. Okay? Because the other the otherwise congratulations, you just bought yourself a shinier hamster wheel. And that's not what we want to do. Okay, that leads me to number two. Number two is the subscription lifestyle. And this is, gosh, this has increased tremendously in recent years. Subscriptions feel small, they feel harmless. $9.99 here, 1499 there, and companies know you'll forget about them. That's the entire business model. Okay? An average household spends $273 a month on subscriptions over $3,200 a year. Most people though, they underestimate that number by two to three times. They don't realize it. Okay, look, even me, I went and did my own subscription audit and I found that I was spending $475 a month on random software and must have apps that I wasn't even using. Okay? That's $5,700 a year. If I took that $5,700 a year and invested it 8% over 10 years, that's going to grow to about $87,000. That is almost 100,000. Okay? That's a Tesla or a heck of a lot of tacos. But it isn't going towards subscriptions that I'm not using. But what happens is they, they just the little slices in little amounts and we don't realize it. Okay, here's the action step for this one. Do a subscription audit every single quarter like I did, okay? Keep the ones you love and that you're using the actual ones you're using. Kill the rest, put them on hold. Redirect the cash towards your financial future, towards building your money. Machine. Because the reality is Netflix isn't going to pay for your retirement unless you're starring in a show or you're investing in the company. So it's exactly why I look at things, say you need to know where you are on this journey in building your money machine. And so we can be deliberate with each and every dollar going out to make sure that it's giving us the joy today, but also building our future for tomorrow. All right, number three, and that is banking on points, perks, or cash back. Okay, here's the thing. We convince ourselves that chasing rewards is free money. But here's the deal. If you're carrying a balance on one of those points cards, those points are the most expensive peanuts in the airline industry, okay? The fact is, is this. The average credit card rate and APR right now is. Is 21.6%. The average rewards are 1 to 2%. That's like paying a hundred dollars for the privilege of picking up two. Okay? It makes no sense. Now, truth be told, full transparency. Do I have points cards? Yes, I do pay the balances off every single month. I do not carry balances. But also, the other thing that we. We're not. We don't really think about is that every points cards, almost every single points card has an annual fee to it. So you got to factor that in also. So if, if I have the APR and I'm carrying a balance, I'm paying interest on it, I'm going to pay an annual fee on it. That could be anywhere from $60 to $600 or. Or more just to get points, then does it really make sense? If that's the case and you're carrying a balance, forget the points, pay it in full every month, or get yourself on a debt payment plan and make sure that you get debt free, because then the perks are gravy and they're not eating your meal for you. Because if I'm carrying balances and in order to get the points, they're eating the meal for you. Okay? And if you're bragging about the free flight while you're drowning in debt, then frankly, you don't need the platinum card you need. You need an invention is what you need. All right, that leads me to number four, investment purchases that really aren't investments. This is something that I know it's hard for people at times, and including myself, we love to slap the word investment on luxuries just to make us feel better. That $3,000 mattress. Now, mind you, I'm not one that will tell I just want you to be conscious and aware because. Because sometimes it makes sense for the lifestyle, the quality of life. A great mattress, I'm one for it. But $3,000 mattress, don't justify by saying it's a health investment. Okay, the $25,000 kitchen remodel. First off, most kitchens are going to cost you more than that. And you say, well, it's an equity play, and I'll get it back when you sell it. Reality is, you won't. Okay, the $700 blender. Yes, I got one. All right. I got the $900 coffee maker, too. Longevity tool. Okay, let's be real. That's not investing. It's just decorating. And in the case of the mattress, it's napping. So I want you to be honest about it. I'm okay with doing it. Don't try to disguise it, because the kitchen remodel. Here's. Here's the facts. A kitchen remodel ROI is about 52% of the. Of the cost. The bathroom model is 57%. So think about this. You spend $30,000 on the kitchen or on the bathroom, and you might get $15,000 back down the road if the buyer likes the backsplash. And if they don't, it's just a cost. So be real with yourself. It's not about. It's not about not doing it. It's about don't put labels on it to try and make it feel better. So what's your action? Call things what they are. Mattress equals comfort. That's it. Remodel equals lifestyle. And make a conscious decision. Do it responsibly, and do it that way. Investments, if it's a true investment, they create income, they appreciate in value. They create your money machine that will allow you to. To allow it to. To pay for your lifestyle. Lu. Create joy. And I'm not saying not to have it. We have plenty of it. And both are fine. Just don't confuse them, okay? Because if your investment requires grout, upholstery, a warranty card, it's probably not an investment. Number five, chasing stock tips and fads. Oh, don't get me going. You know, you're wired for excitement, adrenaline, that dopamine hit that whole thing. So when Reddit, TikTok, or Uncle Gary promises the next best bet, big thing. It feels like a shortcut to wealth. I get it. But that's gambling in a suit. Okay? You know, 80 to 95% of day traders lose money. Retail investors typically underperform the market by at least 4 to 5%, studies have shown annually. Here's the thing, True wealth is boring. It's not an adrenaline rush. If you're getting an adrenaline rush from your investing, you're in the wrong stuff or you're doing it the wrong way. Anchor your money. The action here is to anchor your money in boring, proven wealth builders over the long term index funds, ETFs compounded. If you need excitement, you got to use your Vegas money, your vacay money, not your food on the table money. If you want excitement, go ride a roller coaster. Don't do it with your money. Don't do it with investments. Don't build and follow the wealth priority ladder. Follow the process that we put out there so you can build long term sustainable wealth with a higher probability of success. You build that unshakable foundation and you build growth from there. And you take a piece of it. I do trading. Some of it goes to the moon, some of it doesn't. But it's not with my long term money. It is not with my future. It is with a slice that, gosh, if it went to zero, I would be moody. I would eat some bad food for a weekend. I would be upset. But it wouldn't destroy us. Do the same. All right, that leads me to number six, buying motivation instead of building habits. Here's what I mean by this. People think buying a $997 course or a $2,000 desk is the same as building discipline. It feels like progress. I get it. But really, you just bought some fantasy of a future you. And I'm okay with it if you actually use it. People ask me, well, you know, is this an expense or an investment? Well, that depends on you. 80% of online courses are never finished. Most productivity apps are abandoned after 30 days.

What will change your wealth, what will change your money are the habits. I'm guilty of this, just as anyone else. I bought a course for $15,000 one time. It was back when things were shrink wrapped, CDs and books and all that stuff. I never even took the shrink wrap off. That's not the course's fault, that's my fault. Was that an investment? Could have been if I used it, but in my case, it was a waste of money. Okay, build your habits, your wealth creation habits first. Okay? And then upgrade them. That's your action. Step here is to look at and say, okay, if I'm going to invest in something, the way that that investment gives me an ROI is I have to do something differently. That means that it takes discipline you don't buy a treadmill until you've actually walked around the block. Prove that you can do it, and then upgrade. And the reality is, dang it, discipline is actually free. The merchandise you're buying around the discipline is optional.

So when you're going to buy something, look at it and say, how does this accelerate my path to wealth or move me closer to my destination?

And what's the ROI look like before you ever buy it? Or just don't. Okay, number seven, status symbols that don't create joy. Luxury cars, $10,000 watches. The heavy metal card that makes you feel the clunk when you drop it on the counter. Okay, yeah, it'll impress some strangers for 10 seconds, but you're going to pay for it for 10 years. See, luxury cars, they. They literally can cost you four to $10,000 or more annually just in insurance and maintenance. That's a vacation every year. Now, don't get me wrong, if you're into cars, and I, I have some friends that are really into cars, and that's where they get their joy, great. But they're doing it consciously, intentionally, and they know it. And they're not doing it in a way that it's robbing their future. They're building their future. They have it embedded in their plan. But if we're doing it for image, if we're doing it for status, if we're doing it for recognition, that's a bad way to go. Because what will happen is that you'll get stuck in a car that depreciates like crazy, and then you can't afford it or you don't want it anymore, and then getting out becomes a problem. I'd rather take the vacation every year and spend the time with my wife making memories and living that. That richness into life. So action step here. If you want it, totally fine. But buy it for you. Not the barista who doesn't care, not the neighbor who's not going to be there buy it for you. Make sure that you're making the decision for you because we're designing your life, okay? Because flexing for strangers is the most expensive applause you'll ever buy. There's no reason for it. Just live true to your life and let them do their thing. Okay, number eight, stress spending posed as self care. Okay, we can rationalize things like impulsive spending as self care, the $300 brunches, the retail therapy, the spa splurges, all the stuff that can happen. But if you're more stressed when the bill comes, that's probably not care, that's sabotage. So here's the thing. I'm all into self care. I have massages, I take care of myself, I'm at the gym. And so if you're truly doing it again, are you doing it for you and are you doing it smart so you're not overly stressed. If you're going into debt just to carry these things and you can't pay it off at the end of the month and everything, you're sabotaging your future. And ultimately what's happening is that the very thing you say you're doing it for self care to feel better becomes this momentary pleasure that causes long term stress that is sabotage for your financial future. Okay? So your action step here is to redefine self care. Rest, nature, people you love. If you want the massage, amazing plan for it, budget it in, put it in there, then enjoy it completely guilt free, okay? Otherwise you just bought survival literally in a spa robe. Do it right. All right? Number nine, fitness shortcuts that don't last. All right? I have been working out since high school, which is a lot of years at my age, okay? And I still get to work out literally four to six times a week depending on my travel schedule. But you know, let's face it, we want shortcuts and I do this. We buy the machines, we buy the gadgets, we buy the powders, we buy that. But here's the thing, we can buy that stuff and if it's sitting around and we don't use it, just like wealth, if we don't do something different, we won't get anything from it. Fitness is the same way. We can't watch fitness, we have to do fitness. So if you're going to truly buy fitness, then do the fitness. Don't buy the machine and let it sit there. Don't buy the powders and not use it. Don't buy the gadget and not do it. We don't want to buy intention because that is going to end up as clothes hanger or furniture. 80% of home fitness equipment are unused after a year. That's what the data shows. So here's the thing. If you truly want fitness, remember, prove the habit first. So start with a free habit. Do some walking. I do four and a half miles with my dogs every single morning. Okay? Do some body weight work, do some sleeping, get some recovery. Make sure that you build the habits. And now you say, okay, I'm going to elevate those habits. And now I'm going to go and bring Something else in. Because here's the thing, you don't need to spend $2,000 on a Peloton that becomes a coat rack. Just buy a $10 hook or coat rack or a $2 hook from Home Depot and now you got your coat rack and you got a couple grand to hold you back. But now's the thing is, is that you gotta look at it and say, huh, fitness shortcuts typically don't last, like fad diets. So maybe I just need to do the discipline work and I promise you this total. Another aside, the same discipline it takes to take care of your health is the same discipline that's going to serve you in taking care of your wealth. That leads me to number 10, paying for complexity instead of clarity. Okay? The financial industry, they love complexity, fancy annuities and layered insurance premium strategies. And it all sounds brilliant, but you don't understand it. And it's usually expensive and not effective. Here's the thing, a lot of times that there's these newfangled strategies and everything and what it are, they're just disguised complexity that brings the wool over our eyes. The number one rule in the money machine blueprint and what we do is to say if you do not understand it, you do not invest in. You only invest in things you understand. That's it. Period, End of story. And it has to be simple because that's all it needs to be. Doesn't matter whether you're building. It's six figures, five figures, eight figures, multiple eight figures. Simplicity will win the day every single time. Think about this. A 1% advisor fee over 30 years can eat 25 to 30% of your wealth. It's not advice. That's a ghost business partner skimming off your future. Now I have advisors, they earn their keep because they're not just doing the investing, they're doing a bunch of other things to do that. But the real key, especially in this realm is making sure that what is being put in front of you is simple. It is low cost, it is transparent and that you know how they are getting paid. And if there is a bias there because they're getting a commission, they're getting a fee or something that is just, that is not disclosed or it is kind of covered up. Run, run. Okay? Because that's the, that's what the financial advisory industry or services industry has done in the past. Not all of them are that way. But beware of that because some of them are just disguised salespeople, right? Number 11, DIY, that costs you more. This Month. Look out. We all think that we're YouTube pros. The fact of the matter is that I got to go fix something. What do we do? We YouTube it. Until you realize that the. Fix the sink, the water dripping through the ceiling, and all that stuff that you thought was going to save you $200 to just cost you $3,000. Because now instead of just a leak, you have a water feature that has gotten out of hand. I've been there, all right? I know where my limits are now. I don't. I do not do DIY when I don't think that I can do DIY. I don't go to YouTube and look at. I go too many steps. I'm going to hire someone. Here's the thing. Your action here is to ask, is this my genius zone, or am I just being cheap? Reality is, wealth isn't about doing everything yourself. It's about knowing what not to do. It's about knowing and saying, nope, this is not in my wheelhouse. I'm not doing it. Like, if it's got anything to do with electricity or plumbing, I'm out. I'm out. And if it has anything to do decorating, toss it to the wife, because she is amazing at it. All right? Because here, the reality is that unless your name is Chip Gaines, step away from the plumbing. That's what I learned. Right? Leads me to number 12. This is the final one. Spending for the future you. That never arrives. Okay. We love buying for the future us. The wardrobes for lives we don't live. The gear for the hobbies we never start, but the present us. We're on the couch with popcorn and Netflix. If we say, I'm going to go, I'm going to buy the expensive mountain bike because I'm going to bike every day. But you're not biking. That's a problem. Or you sit back and say, I'm going to buy these custom suits because I want to be out there, you know, cultivating relationships and doing the things. But you're not going out there to cultivate the relationships. Buying the gear for hobbies. My wife and I just started pickleball. Look out, look out, world. Buying the gear and the clothes and the shoes and all that stuff, but we're doing it. So we need to be smart about buying stuff for future us that we're not living into right now. So I think that your action here is to buy for the life you live today and prepare for the life that you want tomorrow. That means that buying for the life you live Today and investing for the life you want tomorrow. Don't clutter your present with a bunch of fantasies, a bunch of bills, a bunch of credit card statements for the things that might happen in the past. Let's look at what you're doing today and ask yourself, what's the next step? What's the next thing that will elevate this? Enjoy and progress, but not so far out that it doesn't make sense. Okay? And beware of things that go in and out, like wardrobe. The future. You may have a great wardrobe, but if you buy it for the future you today, and when you get to that future you, the trends have gone. Guess what? There's no value in it. All right, so Those are the 12 things I think that I don't waste my money on. I'm going to avoid that as as much as possible. Many of them is because I didn't. I made the mistake early on, and I finally learned what really matters. See, because financial freedom, it isn't about deprivation, but it's about dodging those illusions that drain your money and your joy in the long run. Every dollar you save here doesn't shrink your life. It actually multiplies it. And here's the key. You are taking the dollars that you save and you're putting it towards that future life. And that's where the multiplication comes in. You get a chance to build it in a way that builds the life that you envision rather than being washed down. This current of spending on stuff that actually maybe only matter for the moments and not for the long term. All right? And if you're trying to figure out the next steps on where you are right now on this journey, what to do on the financial freedom journey, Go take the Financial Freedom Zone quiz. Okay? It's straightforward. It takes like literally 70, 90 seconds to do. It'll give you a report. It's free. And you'll know your zone. You'll know your next steps. You'll know the situation. Go to your financial freedomquiz.com and take it. Let me know what you think. Okay, so stop buying illusions. Start buying your freedom. Because earning more doesn't make you free. Building your money machine does. All right, I hope that this helps. I hope you found this valuable. And I can't wait to hear which one of these 12 you're going to take out of your of your life or how many of them are in your life that you got to get a hold of. All right, I'd love to hear from you. Let me know. Comment. And while you're here, make sure you subscribe and let me know what you're thinking. I can't wait to see in the next one and on your road and path. Thank you for listening to the Affluent Entrepreneurship with me, your host, Mel Abraham. If you want to achieve financial liberation to create an affluent lifestyle, join me in the Affluent Entrepreneur Program Facebook group now by going to melabraham.com group and I'll see you there.

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