60, Wealthy And Fulfilled: Wisdom I Wish I Knew In My 30s And 40s

If you're in your 30s or 40s right now, chances are you're making the same money mistakes I was making at your age. And nobody's going to warn you because people giving you advice haven't lived far enough down the road to see where those mistakes lead. I have though. I'm over 60 now, and I've spent 3 decades as a CPA inside the finances of some of the wealthiest families in the country. And along the way, I even lost 1/3 of everything I owned into a Ponzi scheme, built it back, beat cancer twice. So today I'm giving you the 8 lessons I wish somebody handed me 25 years ago, including the one that cost me the 7 figures and the one I trade every single dollar I have to have learned sooner. Stay with me to the end because the last 2 lessons are the ones that change everything. This is Building Your Money Machine, where we help you master your money, eliminate financial stress, live a life of choice. And I'm your host. Mel Abraham. Let's do this. 8 lessons and every one of them left a scar. Let's start with the year that my whole life blew up. Lesson number 1, the fuel truck isn't the engine. Here's the thing. At 35 years old, my life blew up in a single stretch. I was in the middle of a custody battle for my son. My partners had pushed me out of my own firm. And Jeremy, 5 and a half years old at that time, came to live with me. And I became a full-time single dad. You know, no firm, a boy looking up at me who needed more than a provider. He needed a father who was present. And up to that point, I'd been playing the money game completely wrong. See, I was an accountant. I billed by the hour. So when life got chaotic, my brilliant financial strategy was to just work more hours. That's like trying to get out of a hole by digging faster. The hole doesn't care about your work ethic. Every dollar I made was chained to a timesheet. And if I stopped, the money stopped. And now I had a little boy who needed my time more than my income. So at 35, I got deliberate. I opened a defined benefit plan. I opened a 401 plan at my company. I maxed the thing out every single year from that point forward. That was the year I understood something most business owners never figure out. My business was only ever the funder of my wealth, and yet I had spent Years treating it like wealth itself. See, your income, your practice, your company, your job, they're just a fuel truck. They're not the engine. The engine is the money invested working without you, whether you show up or not. That's the key. And I realized that I had to figure a way to separate my efforts from my earnings. Otherwise, I would be imprisoned to the earnings, imprisoned to the earnings treadmill, as I call it. See, most people in their 30s, in their 40s, pour everything back into earnings. Earning more, and earning more just gives them a bigger fuel truck with no engine to put it in. So I started investing deliberately. That's what I want you to do. That's the first step, is to realize that your job, your career, your profession, your, your business, it's not the wealth, it's the funder of the wealth. But then I made the next mistake on the list, because knowing you should invest and knowing how to invest 2 very different animals. So lesson number 2, burn the ugly quilt. Oh, at one point I literally had over 30 different accounts and investments, more than that in those 30 accounts. Today I have 9 and my wealth grows faster now than it ever did back then. Here's how I ended up with the over 30 accounts. I wasn't chasing that complexity. I was chasing the next big deal. The next best deal, the next best way to build wealth. And every time a unique opportunity walked into my advisor's office, it landed in front of me. This one's a great one. This one's a new one. Let's try that one. And that's what I was doing. And I said yes so many times that I ended up with a portfolio that looked like a quilt sewn by a committee or a 4-year-old, an ugly quilt. Nothing matched. Nothing was rowing in the same direction and nobody could tell me what it was all for. Specifically, see, some of those investments had a ton of fees. Some of them had no market to sell into. Some, when they stopped performing, I was stuck holding them. And my advisor collected his commissions, collected their fees on every single one of them. And that conflict of interest was never fully disclosed to me, or I didn't understand it. The numbers guy, the CPA. And when we finally simplified We got down to 9 accounts and a handful of investments in each. That's it. Now, every single dollar has a job. Some of it is for cash flow. Some of it is for protection. Some of it is for growth. And I can log in and see exactly what everything is doing in about 2 minutes. That's the game. And the returns since we simplified, depending on the account, they've averaged anywhere between 9% and 25% since inception. Wow. See, complexity makes your advisor rich. Simplicity makes you rich. And if you can't explain what an investment is or what it is on a napkin or in one sentence, then it just doesn't belong in your life. Simple accounts, every dollar with a job, but a job that's pointed at what target? That's where the number comes in. We need that, the job of every dollar to point at the target of your life, what you want, what you're trying to create. But sometimes we don't even know what that number is. So let me help you with that too before we get to the next mistake, if you will. If you don't know how much is actually enough for you, I want you to go figure out your freedom number, at least the ballpark, the benchmark. And I've got a free tool for you called the Freedom Number Calculator, and we'll hook it up here for you. Go to melabraham.com/number and you'll be able to grab it, do some calculations, at least get an idea of what the horizon, the trajectory looks like. All right. Lesson number 3, the chocolate problem. This is, this is a big one because I hear this all the time. Somebody probably told you in your 20s or 30s to follow your passion and the money will follow you. Well, let me tell you why that's hogwash. I was going to use a different term, but it's not true. See, I have a passion for chocolate. I love chocolate. And if I follow that passion, the only things it's going to give me are diabetes and a bigger waistline. That's it. See, that's the whole return on investment when you get that. A bigger number on a scale, don't want that. See, the mistake is passion alone never made anyone wealthy, but passion married to value creation, that's a marriage made in heaven. The question was never, what do I love? The question was, what do I love that solves a meaningful problem in someone else's life? Build the skills, solve the real problems, create value people will pay for, then wrap your passion around that. And now you got something. See, energy that doesn't burn out attached to income that doesn't dry up. That's the beautiful thing. See, and I've watched people chase pure passion into broke, and I've watched people grind it out with pure value with no passion into burnout. The wealthy, the fulfilled ones that I've been around for 30+ years, they figured out the intersection. The passion's the fuel, the value's the vehicle. You need both or you're going nowhere. See, and speaking of advice, when we start to think this through, it sounds noble and steers you wrong. There's a whole movement built on one of these half-truths that I wanna break down because that's lesson 4. And that lesson is retire to what? Retire to what? Here's the thing. The FIRE movement, Financial Independence, Retire Early, tells you to put away 70% of your income. And I get it. Live on rice and beans, as they say, and retire at age 35. And I get the appeal. But retire at 35? To what? See, people are living to 95 right now and beyond. That's 60 more years. 60 more years. Do you really have enough to carry you that far? And more importantly, what are you gonna do with the 6 decades of nothing? See, if you can't find joy in the journey, you'll never find it in the destination. Starving your life today to escape work tomorrow just trains you into scarcity, and scarcity doesn't magically turn into peace the day you quit. This is the thing that people don't understand is that I wanna stop working, I wanna stop working. That's not the goal. The goal was never to stop working. The goal is to never work because you have to. That's a life of choice. And that can be available at almost any age. That's the thing that I think we need to think about, that lesson. When you start to understand that and start asking yourself the question, I'm not retiring to a number, I'm retiring to a new season, a new purpose, a new direction. I'm retiring to something, not from something. Now, building all of this assumes that nothing ever Goes wrong. And let me tell you about the day that 7 figures of my net worth wiped out, wiped out. You know, that's the thing. So you build the value, you build the machine, but let me tell you what happens when somebody tries to take the machine from you, because that's the thing that happens, especially if your machine gets big and people know about it. You might end up with a target on your back. So lesson number 5. They took the money, not the machine. See, between me and 2 friends, we got into an investment in the early 2000s. By 2005, we had lost between the 3 of us over $4.5 million. It turned out to be a Ponzi scheme. My share was well into the 7 figures. It was over 1/3 of everything I owned. My net worth gone in a minute, in a moment. See, money I had earned the hard way, hour by hour, year by year, and a guy with a good story and a fake statement that made it disappear. In a moment. Now, I want you to sit in that for a moment with me because I know some of you have your own version of this, the loss, the shame, the voice at 2:00 AM saying, how did this numbers guy fall for this? Yeah, the CPA got taken. The irony wasn't lost on me. My friends have never let it be lost on me either. Here's what I had to decide in that moment. Was this loss an instance Or was it my new trajectory? Because those are 2 very different things. And in the end, it took me about 18 months to not only recover everything that I lost, but to triple it. And it didn't come from some hero trade or some lucky bounce in the market. It came from falling back on the things that built the wealth in the first place. The skill sets that nobody could steal, the business, the income streams I knew how to create. In the brand new set of investing rules designed so nothing like that could ever touch me, my family, or the people I worked with ever again. See, you're going to make bad decisions in your life. I get it. We all will. You're going to lose money. You might even lose some friends, maybe a job. Those are instances. They don't get to define you. They don't get to set your trajectory unless you hand them the pen. See, the thief that took my money, the parasite as I call him, he couldn't take my machine builder. Your skills, your values, your system, your people— nobody can take those. So protect them like they're the actual wealth, because they truly are. And notice something here: the recovery came from rules, not willpower. When emotions go up, financial intellect goes down. And the new rules did for me what my emotions Never could. So I rebuilt the money. But right around then, 30 years of sitting inside wealthy families started teaching me the question that matters more than how much. Lesson 6, nobody admires the brush. Here's what I mean. After 3 decades of working with high net worth families, I stopped asking, how much do they have? I started asking, what is their money actually buying them? Because I sat across the table from people with enormous wealth. I mean, enormous wealth and no peace, no margin in their calendar, no close relationships, no confidence to spend a dime of it, no purpose once the work ended. Health was quietly falling apart underneath the portfolio. They accumulated everything and they thought this is what they wanted, but they never designed a life that they wanted to live. I knew their balance sheets cold. The balance sheets were beautiful, but their lives were not. That's when I crystallized this in my own mind. Money, it's just a paintbrush that you use to paint the masterpiece called your life. And nobody stands in a museum admiring the brush that painted the artwork. The real scorecard was never net worth. The real scorecard is whether your wealth is creating the life that you said you wanted in the first place. The peace, the margin, the relationships, the purpose. See, if your number keeps going up and your life doesn't, you're not building a rich life. You're just keeping score in a game that nobody wins. And nobody taught me that lesson harder than someone in my own family. See, this next one's a tough one to tell. Lesson 7, the bill money can't pay. See, here's the thing. I had a relative, not a close one, But close enough that I watched his whole story play out over the decades. He had his own business. He was building it the way we're told to. He traveled constantly, always on a plane, always at the next meeting, always out of town. A wife and 2 kids at home. And you've asked him why. He had the answer we've all used. I'm doing it for the family. But the reality is this, he didn't have a family. He left them behind a long time ago. He didn't just start noticing it. It happened. The marriage ended in divorce. The kids grew up and grew distant, and eventually they were estranged completely. And as he got older, he was diagnosed with Alzheimer's and he died alone. He had his money. He didn't have his life. See, I think about him when I hear somebody justify the missed dinners, the missed recitals, in this decade with, I'm doing this to pay the bills. And I understand the bills. I've stared at plenty of them. But hear me on this. The most important bill you will ever pay is the one to the people you love. And that bill doesn't accept money. It only accepts time and presence. And you need to be there for that. It compounds like any other debt. And if you let it go unpaid long enough, no fortune on earth can settle it. He would have traded every dollar at the end for one phone call that never came. Don't build his life, build yours. Which brings me to the final lesson, the one it took me 2 hospital rooms to teach me. Lesson 8, the line in the sand. See, here's the thing. In my 30s and 40s, I thought I had all the time in the world. Then cancer showed up twice, and I learned there's a line in the sand that every one of us crosses one day. We don't get to pick where it's drawn. We usually don't even get to see it coming. But here's what I want you to know about the moments when mortality was staring at me. Money never crossed my mind, not once. Not the accounts, not the portfolio, none of it. What crossed my mind were the memories. Did I do okay with what I had? Did I make a difference? Did I give enough to people that I loved? Are there regrets? And on the other side of that, one question. What am I going to do with the slices of the life that I have left? Because now I know that they're finite. Now I know that there's a line in the sand. It was easy to push it off until mortality smacked me in the forehead. It was given to me. It was demonstrated to me vividly. And that's when I understood that the true currency of wealth isn't money, but time. Your ability to control it, to choose what you do with it, to choose who you spend it with and how it feels while you're spending it. That's where richness lives in lives. See, money's only job is to buy that currency back for you. And sometimes I imagine what it would have been like to have almost 2 more decades of appreciating moments of my life before cancer ever forced me to. How much richer would have those years been? See, you may be watching this in your 30s or your 40s. You're holding out of those decades in your hands right now. That's powerful. That's meaningful. I can't hand you my 30 years back. Nobody gets those. But I can tell you what's waiting on the other side of doing this the right way, because I watch it at my own dinner table. My son Jeremy, the 5-and-a-half-year-old boy from the start of the episode, is 35 now. He and his wife have 2 kids. They just got back from a month in Italy with those kids. A month. Not because they're rich beyond imagination, but because they started building the machine early enough that life gets to come first. That's what this was all for. Not the accounts, not the returns. Mornings in Italy with your kids. No timesheet anywhere in sight. Whether you're 35 or 55, the machine doesn't care when you start. It only cares that you start. Every lesson I gave you today cost me something. The years now for the price of just hitting play. Because earning more doesn't make you free. The money machine does. I hope that this hits. I hope that you start to put things in position. I hope you start to realize what really matters in life and why we're trying to build the wealth in the first place. It isn't for the bank account. It is for the life account. And it's a life account you get to decide, that you get to define in your way, in your time. Not by something your peers think, your parents think, your degree thinks, social media, the media expectations, but you. I hope this hits home. And if this one hit, do me a favor. Make sure you're subscribed. Give it a thumbs up. Share it with one person who actually needs to hear this before they lose a decade and learn the hard way that that decade was important and that it mattered. I hope to get a chance to see you on your journey to your rich life. Thank you, Mel. All right. If you have comments or if you have questions or anything, ping me, DM me, leave them here. I love having conversations with y'all. All right. Till I get a chance to see you in the next one or on your path to your financial freedom, always, always strive to live a life that outlives you. See you in the next one. Cheers for now.