7 Things I Wish I Knew Before I Retired

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. I've been financially free for years, but when I retired, meaning I fired my boss named obligation, I still ran smack into challenges that I didn't see coming. And after 30 plus years as a financial expert and an entrepreneur, as a mentor, you know, I can tell you going from building wealth to living off it is a bigger psychological shift than most people think. And in this episode, you're going to learn the seven things I wish I knew before I made the shift. So you can step into your freedom without anxiety, without drift, or wait, am I allowed to spend this kind of panic? Okay, we're talking about the mental switch from accumulation to decumulation and why active income is literally like oxygen. And how to design your post work life with purpose instead of letting it just happen, happen. Okay, this is building your money machine where we teach you how to master your money, eliminate financial stress so you can live a life of choice. Because earning more doesn't make you free. A money machine does though. And that freedom doesn't start with your next raise or your next paycheck. It starts the moment your money is working harder than you do. Think of it as your financial education with a side of sarcasm and a whole lot of heart. And I'm your host, Mel Abraham. So let's dive in and make sure that your journey to retirement and your retirement feels like freedom and not financial identity crisis.

Most people think retirement means golf carts, early bird specials, and slowly turning into your parents. Okay, yeah, hard pass for me. So for me, retirement wasn't about that. It wasn't about quitting. It was about switching. It was about switching from I have to to I choose to now. That's a big difference. So that's where I start to look at it and say, retirement isn't an age. It doesn't. It's not something we wait for. It's something we're journeying towards. And at any point in time, we can decide, we can choose, we can transition to that life of choice and that's why we're building it. It's not some number like Social Security at 67, oh, now I'm retired. No, it's something other than that. But here's the thing that people don't warn you about is that during the time that you're trying to build wealth, you're in what's called the accumulation phase. This is where you're building the money machine. You're creating assets, you're investing, you're accumulating. That's why the accumulation phase is called that. You're stacking wealth like you're playing financial Tetris. And that is our wealth building phase. And during that phase, there's different characteristics. We're spending a lot of time saving, managing, investing and putting money away. But then there's this moment where when you are in that accumulation phase and you get to a place where you want to shift your world from a have to do a choose to, I get to kind of thing, you move into what's called the decumulation phase, the living off of what you built, the living off of the money machine. And that stuff, I gotta tell you, it will mess with your head if you're not ready, okay? Because you think about it, you've been indoctrinated for 20, 30, 40, 50 years of accumulate, accumulate, build, build, build, build, build. And now you're told go ahead and use it and you can't figure out how. And so going through, and I'm be honest with you, this is, this has been a challeng me personally, I'm 63, going to be 64, effectively.

Retired for a decade, you know, and trying, but I'm still actively working because I'm working by choice. But at some point I'm going to turn the machine on and I have to transition and I have to shift my thinking to working off of that. And the idea of that plays games with your mind. All right, now before we get into this, I think that this, there's something for you to be aware of is do you even know what your lifestyle will cost you? Because a lot of people don't even know what their target number, what that number is. And so one of the things I want to give you right up front here is access to something called the lifestyle cost calculator. It's totally free. You can go to melabraham.com lifestyle you'll put all your numbers in. When you think you'll are going to make that shift, it'll tell you what you need to have accumulated or what it's going to take to do that. And so go ahead and grab that tool as. As you get done with this and see where you're at. All right, let's jump in. Because the first thing I think to understand is that retirement doesn't start when you quit working, okay? It's not this moment in time where you, you were and now you are. Okay, you weren't, and now you are. Whatever it is. I thought it was a date on a calendar. It isn't. It's a state of readiness. Your retirement begins the day your money machine covers your lifestyle without lifting the finger. Okay? The day I got my money machine built in a way that I knew it would cover at least 80% is what I tell people of my lifestyle costs. I had choice in my life. It's not the day HR hands you your final paycheck and he says, here's a cake, a retirement cake and your gold watch. See, this is why I think it's important for us to build the money machine before you need it. Because what that means is that you get your choice before you need it. You get the freedom that will come along with that instead of panic, okay? Retirement isn't a date. It's the day your money is working harder for you than you did, okay? And whether HR is going to throw you a party to transition you out or not, you don't have to wait for that. That's the first thing. The second thing is accumulation versus decumulation is a whole new game, okay? Accumulation. Every dollar is a soldier that is sent out to recruit more soldiers or an employee sent out to recoup more important employees. But at some point, when you move to that decumulation phase, you're living off of the. The. The employees that you've already. You've already got. And so here's the kicker. In accumulation, spending feels like a betrayal. In decumulation, spending is the point. But we don't get that because we still feel it's a bet, okay? So if we don't prepare for that shift, you're either going to blow through your savings with this freedom fever or you're going to hoard it like it's doomsday and you're going to forget to live. And that's not where we're trying to get to. What we're trying to build is something that's meaningful. And I think that I talk about the fact that I believe that we have a broken retirement system, and it was broken when we went away from pensions. Now, I totally understand why companies did away with pensions, but back in the day, you would have a pension plan where you would work. And your loyalty for a company that you worked for pretty much most of your life was paid back with what they called a pension, lifetime income. So you work all your days at the company, and when you decide to retire that date, the time that you'd retire, they give you a pension. They pay you for life. My dad had a pension plan. Now what happened is lifestyles and things got more expensive, people were living longer and pensions got more expensive. And at some point companies decided, hey, we're going to do away with these because we can't afford the fact that now instead of living to 50, 60, you're living to 80, 90, 100 years old and paying that lifetime of income, we can't sustain it. So what did they do instead of. That's when they gave us the IRAs. That's when they gave us the 401ks. That's when they gave us SAP IRAs and things like that. What they did is they actually took the responsibility for creating a pension and dumped it in your lap and said, it's your job, we'll supplement it with employer matches and things like that. But if not, if you don't put money away, you got nothing. At the end of the day, we're not guaranteeing you income. Your job is gonna require you to be the one that builds your own pension. That's where the money machine comes in. And so that broken retirement is what started to shift some things and get people in this situation where I gotta build it on my own. And when you build it on your own, now you have to manage it now, you have to understand it now, you know, I have to have to know how to use it. And the challenge is that if we're not careful, we didn't build enough to give us the lifestyle we want. And the way that, the other way that the retirement system is broken is if you look at the traditional retirement, what they do is they say, let's take 70% of your salary. If we can replace 70% of your salary, you're good, okay? But what I don't want people to do is to reduce their lifestyle. If you've worked 40, 50, 60 years before you make this shift, the last thing I want you to do is say, hey, guess what? That was a good run. But you got to reduce your lifestyle by 30% or 40%. No, no, no. I want you to create something that allows you to live your lifestyle at where it's at or above, or at least what you envisioned at a minimum. But the challenges that if we aren't careful, we are. And we don't have the right dynamic plan, we don't know whether we've built enough of a machine to get us there. And so what do we do? We hoard it and we forget to live and we don't enjoy those years. Okay? Accumulation is about building the army of employees. The accumulation is living off their victories and in retirement. Spending isn't cheating, it's the point. Okay, that leads me to point number three. And is this active incomes like oxygen. I thought that once my assets could cover my life, I'd never want to work again. Yeah, that lasted for five minutes. Okay? Active income gives you confidence and optionality. Active income is actually the thing that gives me a lot of joy. Not the point of working, but the work that I'm doing. I get to be out there speaking, I get to be out there serving. I get to be out there. And I'm using the word get to because that's what it feels like. I don't have to. And that's the difference. It keeps my mind sharp, it keeps me in the game, it keeps me connected with people, it gives me a purpose beyond the earnings because the earnings isn't the sole motivation. Okay? And so what happens is, is that when you start to earn by choice, it completely trumps, okay, earning by necessity. Okay? Active income.

When it's done by choice is the oxygen during those years. And so even if you're shifting into this retirement, ask yourself, what are you going to do? What are the things that you'll do that give you joy, that give you purpose, that give you meaning, that. And that leads me to point number four. Your calendar becomes a mirror. When you lose the boss, when you lose the built in schedule, you're not intentional with your days. If you're not careful, your days will reflect whatever you drift into. And there's a whole lot of drift because there's a whole lot of distractions. And the drift isn't just unemployment. It's not better. It's looking at things from a different angle, different elements. So this is why what I want people to look at is as you're designing your life, one of the reasons we start out any kind of work with our clients with a life vision is to get really clear on what their life of meaning looks like. We call it the, the money machine vision process. And what we want them to do is to have that purpose. And the only shift that they make is the way that life is being funded because one was being funded by the earnings, the other will be funded by the money machine. But the joy, the purpose is built and implicit in there. We don't turn around and make a shift to retirement and then decide, oh, now I got to figure out a new purpose. We're doing it along the way. We're doing it along the way. So now I block my time with purpose. My workouts, my writing, my own personal development, my meetings, my visioning, my future self, the times with my wife, with the grandchildren, with dogs. All of it is calendared, okay? And not formally where I have it on a thing, but I know I have a pattern. I have a process. And I know that I'm giving to myself. I'm giving to the things that matter. I'm giving to the people that I care about. It starts to build something. Freedom without structure is just drift with and being lost at sea, okay? So it's not just about freedom. It's freedom with structure and purpose. Okay? Number five, health is actually the real portfolio. Listen, y', all.

Let me be real. When you hit 40 or 45, all of a sudden you get the real definition of what gravity is, okay? Because things start moving, things start changing, all right? And the fact of the matter is, you can have the best killer financial plan, but if your body is falling apart, your freedom shrinks fast. Not because you can't pay for it, because you can't do it, okay? The two danger zones I see is the 40s, like I said, the decline starts. And if you ignore it, if you stop the moving, you stop. Stop working through it. Then. Then it's. It's a challenge. It's gonna. It's gonna rapidly decline. Think about it. You know, if you've gone to a high school reunion and you see people and you see some different people that are in there, okay? And the second danger zone is your early 60s. This is when it starts to accelerate if you're not careful. Look, I'm gonna be 60, 64, and I can feel it in my joints. But I work out every day, five, six days a week. I'm walking four and a half, five miles a day. I get 10 to 18,000 steps in a day. I know that I want. And the motivation, okay, I want to look good, but the fact is, I want to keep. I want the vibrancy in my life to be able to keep up with my granddaughters who are 4 and 2, to be able to share life with people like you, with my wife, the people I love. Okay? And knowing that the age is just a number and I'm hyper proactive on my health, so I'm very much. I monitor everything. My blood pressure, all that to get blood work done. I'm proactive about it. I kind of joke around with my wife because we've been married almost 14 years. But I tell her, I said, you haven't served enough time to get out of jail yet. You're stuck with me. All right? So I want to be as healthy, as vibrant as I possibly can. And if we're not careful, this is the thing that crashes and not the portfolio, okay? Your health portfolio compounds faster than your financial one, okay? And if you can't enjoy the freedom, then it's not worth the fortune. This is the bottom line. All right? Now number six, okay? Your money relationship changes overnight. And this is an odd one. But, but it's true in the sense of, think about it, in the accumulation phase, you're asking yourself, how do I grow my net worth? How do I, how do I build my wealth? How do I have more, create more, how do I do it faster? Okay? And, and you, then you start to shift that, that question from those questions to how do I make my net worth grow my life? So now you look at it and say, how do I allow the money machine to grow my life? How do I allow my money machine to fund my life? It's a very different question than how do I build it? How do I accumulate it? Okay? Now the, this all comes down to a plan. Because without a plan, you don't know. One of the first things that we want people to do is to understand what that life is, to put a price tag on that life so they know what their target is, what their number is, what they need to create their financial freedom, how big of a machine they need to do. Because I don't want them running a 10 mile race, constantly accumulating, accumulating when a 5 mile race would have done okay for them. And at the same time, I don't want them to stop at 5 miles if they need to run 10 miles. So we need to know that target, that date, so we can build a plan to get there. The plan isn't to have a plan. The value of having a plan, a financial plan. And everyone should have a financial plan, no matter age, stage, circumstance. You need a plan. And we do this with our money machine master plans, whether our clients, to build it all out. And the purpose of the plan isn't for the plan. The purpose for the plan Is it shows you the path. All right? Now, if you don't have a plan and you want to get started with it, one of the easiest ways is to just grab my lifestyle cost calculator. It's free, okay? It's a lifesaver. It's like Google Maps for your retirement spending. And you'll punch in your lifestyle. It'll show you kind of what the road ahead is. I'll put the link below. You can grab it@melabraham.com lifestyle and start at least getting an idea until you get a dynamic plan built for you, okay? Because retirement is where your money stops being the goal and starts being the tool. And without a spending plan, without a plan, freedom turns into financial guesswork. And we just don't want that. All right? Number seven, Legacy is built in the moments, not the monument. Okay? I used to think that legacy was what you left behind. Now I realize facing your mortality, you start to look at life differently. Facing being a single full time dad of a five and a half year old, my son Jeremy, when he came to live with me, starts to shift your perspective, starts to get your priorities in place. Yes, you have to put food on the table. Yes, you have to make money. But the reality is, our greatest currency, in our most finite currency is time, is our moments. The true richness in life is our ability to have agency over time, choice in the moments. And the true legacy in life is how we spend those moments. See, it's not about accumulating stuff and leaving material goods behind and saying, that's my legacy, because that's stuff.

What the true legacy is is about how you live while you're here. It's how you're spending those moments, who you're spending them with. It's not big things. It's actually little things. It's the I'm proud of you that you say to your child. It's the you look really nice today that you say to your significant other. It's the simple, hello, how's your day going? That you say to a cashier.

Those things can literally shift someone's life in that moment. And that gives that moment the reverence it deserves by making that moment matter. And when you stack those moments, that's the true currency. That's the true legacy. Because you didn't leave behind stuff you left in them, meaning you left in them a feeling, okay, retirement is the perfect time for you to sit back and say, how do I create even more impact, even more family memories, more generosity, more giving, more mentoring at the Top rung of the wealth priority ladder is the affluence level. And that affluence level is about generosity. It's about impact. It's about giving. Now, generosity and giving and impact should be throughout all the levels. But this is the time that you have the greatest ability to do it, so you give back. To my mentoring, a lot of the things that I do, why I have this channel, why I do the content and my live shows all for free, is my ability to give back. It's my ability to try to be generous, to try to mentor and all that, because I know I can't work with everyone. Okay? Your real legacy is going to be written in the moments, not in the marble, okay? Legacy isn't a will. It's the way you live while you're still here. And your retirement can leave a mark long before you leave this planet. And I think when we look at it in that way, you'll look at it a whole differently. Okay, here's the deal.

The truth bomb is this. Retirement isn't the end of work. It's the end of working because you have to. And that's the way I want you to look at it. So if you want to get there faster, then what I need you to do is focus on building your money machine. If you're not sure how to do that, grab my book. Building your money machine. Okay? Practice living on asset income before you need to. So as you're building it and you're thinking about, hey, I want to slow down my active work or my work that I'm having to do, then start to play around with getting the income from the machine and what that feels like and what it's going to be like and can you do it? In other words, you do a dry run, a rehearsal of your retirement, of that shift, okay? Number three is to design your post work life with the same precision you built your career, okay? In other words, be deliberate, be intentional about what you want your life to look like today, tomorrow, and in the future. Design it and make it. So make the decisions that align with those values with the path that you want to make, okay? Because the goal isn't to stop working. The goal is to choose. That's what we're in for. Okay? And this was the thing that was difficult for me. But once I started to understand that I choose every single day and I get this feeling that washes over me a blessing to be able to stand up each day and go, I'm making a choice today and everything I get to do today is because I get to do it, because I have to do it. And that's a joy that I want all of you to have. Okay? I hope this helps. I hope you start to look at it and you may sit back and say, well, I'm not anywhere close to retirement, but I hope you got the spirit of this to understand that this isn't something you wait until you're into those years. This is something you build on your path to those years. All right, I hope you found it valuable. If anything hits you, do me a favor, let me know. I'd love to hear from you. I love having conversations with y'. All. So post a comment, leave me a dm, let me know if you haven't subscribed to the channel. Make sure you subscribe. And remember, I've got that lifestyle calculator that you can grab for free to start getting yourself dialed in. And I've got the link below for you to get that. All right. I look forward to seeing you on your path to financial freedom or on the road as I'm speaking. And if I happen to be out there, come up to me, say hello. And until I do, as I always say, always, always strive to live a life that outlives you. I'll see you on the next one. Cheers.

Thank you for listening to the Affluent Entrepreneurship with me, your host, Mike 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.