7 Things You're Obsessing Over That Are Making You Poorer

Here's something most people never figure out. You can be paying close attention to your money and still be making it worse. Not because you're careless, not because you don't care, not because you're irresponsible, but because the things you're watching aren't the things that actually move the needle. And nobody tells you this. They just keep selling you more of the things to obsess over. Now, I've spent 30+ years as a CPA sitting across from people, high earners to low earners, to people beginning, who were doing all the right things. On the wrong scoreboard. And today I'm going to show you exactly where that focus needs to shift. So in this episode, I'm covering 7 things. 4 to stop obsessing over, 3 to start. Stick around because number 4 has a story behind it that I think is going to stop you cold. This is Building Your Money Machine, where we help you master your money, eliminate financial stress, so you can live a life of choice. And I'm your host, Mel Abraham. Hello, hello. So let's dive in. All right, you clicked on this video because something about the title maybe hit you. So let's get into it. 7 things that if you're obsessing over them can actually hold you back, can actually keep you broke. And by the end of this, you're gonna feel a whole lot lighter. So let's start with number 1. Number 1 is the small stuff trap. And I want this to sit with you for a second because You're not financially irresponsible. You're paying attention. You care about your money. And that's actually the part of the problem is that because you are caring about your money, but sometimes we care about the wrong things. It's just as expensive as not caring at all when you're caring about the wrong things. You know, people who have cut their morning lattes, they clip the coupons. My dad used to clip coupons and they still can't seem to figure out why they're just not getting ahead. See, most people I've worked with over 30+ years, they're hardworking, they're well-meaning, they're financially exhausted though because they're watching all the little things and watching the wrong scoreboard. Let me do a little math for you because I think this is important. We've heard this statement, the Latte Factor, and I think it's taken outta context, but if you cut your lattes out, then you're on your road to riches. I just don't think so. And that's not the way the author meant it because the author's a dear friend of mine. But let's just do the math. A $5 latte every single day at 365 days a year is $1,825. Okay? Now that is not a small sum. However, that's not where our obsession and our focus should be. Let's look at the other side of the ledger. The average car payment is, is between $700 and $800 a month for a long time. Let's say that you got a car payment of $800. And you financed it over 7 years, which is ridiculous, but you did it anyways. That's $67,200 before interest. You're not going broke on the lattes. You're going broke on the big decisions you made while you were feeling virtuous about the small ones. So I'm not saying to go drink bad coffee. I am saying the latte isn't your problem and the car payment might be. The big things might be. Now, at the same time, I don't want you to hear me saying, "Oh, the small expenses don't matter." They do. They add up. But what I've seen over 30+ years sitting across the table from people and talking about their finances is that the big leaks aren't in your grocery budget. They're in your other big ticket decisions. Yeah. That many times are driven by one thing, wanting to look like you're winning. Now, I'm not saying that that's what you're doing, but, but keeping up with the Joneses is just not worth it. 'Cause the Joneses are broke. I know it because I've seen their balance sheet. So stop obsessing over the small stuff while the big stuff is bleeding you out. That's number one. Now, number two is one that I've seen constantly and it's costing people years and I tried it and realized I can't win at it. And number 2 is beating the market versus my savings rate. This sounds exciting, but mathematically it doesn't hold up. Stock picking, market timing, obsession with, hey, I gotta beat the market. And I get it. You know, market went up 10%, you went up 18%. It's bragging rights. It's fun. It feels like you're doing something. It feels like you're in control, but that's also how you might end up having to explain to your spouse why you put $10,000 into a cryptocurrency that sounded trustworthy on Reddit, but ended up at zero. Here's what the boring math actually tells us. See, in the early years of building your wealth, there's this period I call the wealth flatline, usually 5 to 7 years in. And, and during that stretch, your contributions, how much you put in that those are going to make the biggest contribution to your growth. And you're looking at it, and this is what ends up happening with most people is they look at it and they go, "I'm putting money in and put money in, but it's not growing." So, you don't think it's going to work. And here's the challenge, the wealth flatline, no matter age, stage, or circumstance, everyone must go through it. And you cannot short circuit that stage. You cannot hack it. It has to be lived. And the person who's obsessing over stock picks is trying to skip a chapter that can't be skipped. Now there are a few levers that actually move the needle during this stage. And it's not picking stocks. It's not market timing. Number one is what people will say is their income. Yes, your income matters, but it's actually not the most important. So one of the things you can do at this stage is making sure that you're doing everything you can to increase your value in the marketplace to get paid as much as possible to build your income. Number 2, and this is the most important, is your saving and investing rate. How much of your income are you putting away to put to work for you? Okay? Because that is more important than the income. There are people that have lower income, but they're putting high percentages away and they end up building wealth faster than those with more income. So pushing your income up and pushing your savings rate up is huge. And the third thing, which is maybe counterintuitive, is time. Time. Because here's the thing. Most people will come to me, they'll say, "Hey, Mel, is it a good time to invest in the market?" And my answer to them is a question. Are you investing now? No. Did you invest yesterday? No. Then now's a good time. Bottom line is this. Now is always the answer. How you invest is a different question. But now is all the ans— always the answer because you cannot win the wealth game sitting on the sidelines. It's not a spectator sport. So you gotta be on the field playing the game. That's the thing that we need to do. So your income, your saving or investing rate, and time. Those are the 3 that will actually beat timing the market and stock picking. All right. Number 3, and this one makes people the most frustrated, and that is someone else's retirement number. So I wanna ask you something, this is huge. Where did your retirement number come from? Maybe you don't even have one, but if you do have one, where did it come from? Did you figure it out based on your life, your lifestyle, your debt situation, your income, your expenses, your vision of what the next chapter looks like? Or did you hear someone on YouTube say you need $2 million, $4 million, and now that number lives rent-free in your head? Or an advisor might have told you that. See, if you didn't hit that number, you know, you and someone else gave it to you, you feel behind, you feel like you're failing. You might as well move in with the kids in the garage. So, the question really is— Yeah. What's the number 4? See, here's the framework that I've used for clients and myself for years. I don't work from the income out. I work from the life in. Ask yourself the question, what does the life that I want actually look like? Define it visually, vividly, and specifically. Now, You may not be able to know all the details, but you'll know the details based on where you are today. And I'm not talking about the life gurus that say you should— what you want and the big planes and automobiles and all this stuff. Not the life that your neighbor wants, not the life that your parents want, your siblings want, but the life that you want. Where are you? What are you doing? Who are you with? What does Tuesday morning feel like? Get specific, get vivid, because that life has a price tag. And once you know what that price tag is, that becomes the size of the number, the machine that you need to build. That is your freedom number. It's not some universal floor that someone picked from a dataset. It costs a specific amount for the life that you're actually designing. Yeah. And that amount will change, but at least you can get a trajectory on it. So your number depends on your situation, on your debt level, on your location, on your lifestyle, whether you plan to keep doing some kind of part-time work that you love. It depends on what brings you joy, on where this thing goes, who you're with, because the sharing of life is what really matters most to people, not— Money. The sharing of a bank account. Chasing someone else's number without knowing your own life is like building a house without a blueprint. You might end up with something, but you just have no idea if it's what you wanted. All right. And to help you with this, one of the things that I have is I have a Freedom Number Calculator. It'll give you a ballpark number, really easy. Put some numbers in, get a number, play around with it. It'll give you an idea of the trajectory you're going towards. So, go to melabraham.com/number, plug it in, get an idea of where you're going, and keep going. All right. So, chasing a number that someone else invented doesn't work. Find yours. That's number 3. Number 4. Oh, this one has a real story attached to it. Income instead of net worth. Obsessing over income instead of net worth. Income is a performance. Net worth is a reality. And most high earners are obsessing over performance while the reality is quietly telling them a different story. This is where the Joneses come back in, because part of why people watch income so closely is because income is the number that you can brag about. If income is the Bentley in the driveway, income is the house in the right zip code. And net worth though is the number that tells you the truth. Yeah. That truth that doesn't always look great at dinner parties. See, it's important. Years ago, I was doing business management for a client in the entertainment industry. He was making a lot of money, real money, and he was spending it the same way. The Bentley in the driveway, the beautiful home, the lavish lifestyle for his whole family. By every outward measure, this man was winning. Yeah. But then when we sat down, I asked him a simple question. What happens when the income stops? And I watched the, the color leave his face because he had never actually looked at that number, the net worth number. What is actually here number. See, everything he had, the house, the car, the lifestyle, it was all dependent on one thing. Him continuing to work. His name, his ability to keep showing up to generate it. He was on a treadmill. And that treadmill was going faster and faster every single year. And then he got cancer and the income stopped. Not because he chose to get off, but because he couldn't stay on anymore. And there was nothing underneath him. He left his family with nowhere close to what they needed because the income had been lying to him all of those years. Oh. All of those years. Now, I'm not telling you that story to scare you. I'm telling you that story because I've sat across too many people who were earning great money and still completely exposed. High income is just a shinier leash. And if you, if your money stops when you do, you're not free, you're rented. See, net worth, and especially investible net worth, is the score that matters. Net worth is what tells you whether you actually are building something or just funding a lifestyle. We got to watch the right target, watch the right number. Income is performance. Net worth is reality, especially investing, investable net worth. That's number 4. Number 5 is the one I had a personal confession about though. Ah, this one. Ah, the perfect time to start. Let me ask you something. How long have you been waiting for the right conditions to start investing, to start putting real money away, to start building the machine? Because here's what I've learned. The perfect time is a myth, and waiting for it is one of the most expensive things you can do. This is the thing. In my 20s, I literally cashed out my 401(k). 401(k). I went to live and train in the martial arts in Japan for a while. I wanted to experience something, and I needed the money to do it. So, I quit my job. I cashed it out, I paid the tax, I paid the penalties, and I left. You know, was it worth that and that experience? I'm going to tell you absolutely it was. But was it worth it financially? Ah, dang it, probably not. And that was probably a different way I could have done it. Okay. And before you ask, I know I'm the CPA, I should have known better. And I did know better. I just didn't do better. Welcome to being a human being. Here's the thing though. The lesson isn't start early. That's the lesson everyone tells you, and it makes everyone who's 45 feel like it's already over. But the real lesson is this. It's not the amount you put away that matters. It's the consistency with which you put it away. The time you give it to do the work. The person who starts imperfectly at 40, and stays consistently, consistently beats the person who had a perfect plan at 30 and kept waiting to put more in before they started. See, delaying doesn't make sense. Starting imperfectly today is better than starting perfectly someday. Someday is not on the calendar. And I know some of you might be sitting there thinking, well, it's too late because of my age stage, because the market has run away because of whatever. I've made those mistakes myself. Maybe you're sitting back and saying, I'm too far behind. I've heard this from people in their 40s, their 50s, their 60s. And every single time my answer is the same. And even if I told you it was too late, what would you do? Quit? Stop trying? Give up on the life you want? Man, I hope not. No. So start, start now. Start with what you have. Start imperfectly because the clock you're, you're waiting to stop is the same clock that's running against you. All right, start now. Start imperfect. Start anyways. That's 5. Number 6 is the one I think is costing people years and they don't even realize it. Obsessing about the plan instead of the execution. I want to introduce you to someone, and you might know them. You might even be them. They have a financial plan. Actually, they have 3 financial plans, all of them color-coded, beautiful spreadsheets. One of them has tabs. All of them. I mean, it's amazing, like a work of art. There's just one problem. Nothing's moved. It's just a plan on a paper, on a spreadsheet. And here's what I've observed over 30-plus years. Planning feels like action. It looks like action. It has, like I said, the timelines, the spreadsheets, it's got the research, the strategy, the intention, all of it. But as long as you're still planning, you're never having to face the result. The plan is safe. The execution's where you find out if it works. And that, that's terrifying for some people. So people plan and they plan again and then they plan and the plan doesn't produce results. So they don't say anything and they don't execute. They just say, I need a better plan. So they go build another one and that loop continues. See, the purpose of the plan is to give you the path to execute, not a reason to stay in the planning stage forever. A good enough plan executed consistently beats a perfect plan that never gets touched. Every single time. If you find yourself on your second, third, fourth, Plan and nothing has changed. It's not a planning problem. It's an execution problem. And execution problems require a different solution than more planning. Put down the spreadsheet, make the first move. One step forward is worth more than 1,000 steps mapped out on paper. All right. That's the game. Execute the plan you have. Let it give you more information so you can make a better plan, but you have to be in motion. To make that happen. That's 6. Number 7 is where everything we've talked about comes together. Obsessing over the destination instead of the journey. Here's one that I really want you to think about carefully because this is where I see most heartbreaking versions of success. People who hit the number, who crossed the finish line, who did everything right by the spreadsheet, and felt nothing when they got there. Or worse, they delayed everything until they arrived. Every joy, every experience, every moment of actually living. The beans and rice today so maybe, maybe you can enjoy it someday. See, here's what nobody tells you about that strategy. You get really good at beans and rice and then someday comes and you don't know how to do anything else. And if you don't develop the capacity for joy on the journey, on the path, you won't suddenly find it at the destination. You don't flip a switch at retirement and it becomes someone who knows how to enjoy life. You become that person now along the way, or you don't become it at all. Here's what Stephanie and I did and what I encourage everyone I work with to do. See, we got clear on what actually brings us joy. Not the social media hits, not any of that. It is not what someone else wants. It's what we want, what brings us joy. And us, it really is travel, time together, reconnecting, getting away from the noise. So we block it a year in advance, multiple times. And it doesn't have to be extravagant, but we plan it and we fund it. Yeah. It's no longer an afterthought. It's a line item because it matters to us. Your joy points are yours. Nobody else's. Nobody else gets to define them. What's universal though is this, you should be living in alignment with what matters to you right now. Not just when you hit some number. See, a lot of people, they reach this financial freedom and they realize they— Yeah. Only know how to accumulate. They never learned how to actually use what they built. Accumulation is one thing. Decumulation is a totally different set of skills. And if you spent 30 or 40 years obsessing over the destination, you'll arrive and have no idea how to be there. So, don't defer the joy. Define it. Fund it. Live parts of it now, not at the expense of building the machine, but as part of building it, because the whole point of the machine to fund the life. And if you're not living the life while you're building the machine, what exactly are you building it for? I didn't make this episode to shame you for how you've been thinking about money. I made it because I've seen what happens when smart people, hardworking people spend years obsessing over the wrong things. And I've also seen what happens when they shift their focus to the right ones. And I was one of them. See, the obsession doesn't go away. It just gets redirected towards your savings rate, towards your real number, towards your net worth, towards starting now instead of waiting for the perfect time, towards execution instead of more planning, and most importantly, towards a life that you actually are designing with joy built in from the beginning, not deferred until someday. Here's the thing, because earning more isn't gonna ever make you free. A money machine does, but a money machine has to be built around the life that you actually love. That's the whole game. That's the whole game. That's what I want for you. All right, 7 things that if you're obsessing over them might keep you from where you want to be. Now you know. Now, you know what to do. That's the whole game. If this hit for you, do me a favor, share it with someone that needs to hear it. And if you haven't done so already, subscribe, give me a thumbs up, and send me a comment, send me a DM. Let me know. Let's have a conversation. All right? Because this is the reason I do this stuff. I truly believe that financial freedom is a birthright. We got to go out and claim it. And if I can help you on that journey, if I can light the path on that journey, then I welcome the opportunity. All right, y'all, till I get a chance to see you on the road or out there as I'm speaking, then— or on your path to financial freedom, always, always strive to live a life that outlives you. I'll see you in the next one. Cheers for now. Cheers.