9 Subtle Signs You’re Building REAL Wealth

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 that wealth looks like a mansion, a lambo, or sipping $18 cocktails on a rooftop. I mean, you've seen the Instagram feeds. I'm sure it's all highlight reels and credit card debt dressed up as success. But here's the shocker. 74% of Americans are stressed out about money. That's not wealth, okay? That's chaos with a fresh coat of paint. I mean, that's the reality. And the craziest part is this. Real wealth doesn't look like that at all. It's subtle. It's. It's boring. And it's built on habits that don't impress your neighbors but will set you completely free. Okay? I know this because I've been teaching money for. For over three decades. And as a cpa, as an entrepreneur, as a money mentor, I've worked with people who went broke chasing shiny, shiny objects, shiny everything, and the others who quietly built millions while living in a house you drive past without even noticing. And in this episode, I'm going to break it all down for you. I'm going to talk about the nine subtle signs that you are actually building wealth. 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. And that freedom doesn't start with the next pay raise, the next client, or the next paycheck. It starts the moment we get your money to start working harder for you than you did for it. All right? If you're ready to start to understand what really matters, how to do it, then jump in with me. Let's do this.

All right? Most people think that high income equals freedom. Okay? The truth is. The truth is, it's just a shinier leash. And I've said that before. But if your money stops when you do, you're not free. You're rented. And while 74% of Americans say that they're stressed about money. The wealthy are out there sleeping like babies and sipping coffee, okay? Without calculating the overdraft fees and all the other stuff. And there are subtle signs that you can see are in your life to determine are you truly building wealth? Are you on the path to become that, that millionaire or wealthy at all? Or is it fake? Is it Instagram, Flex, that kind of thing? I'm going to break down the nine subtle signs here. And the first one is this. The truly wealthy, they focus on lifestyle. Now I want you to reframe these and think about it from you. Are you focusing on lifestyle and not just a bank account? Here's what I mean by this, is that they're not spending for a current lifestyle. They're looking at what their life is that they want to down the road. They have a vision. Every time we work with our clients or our students, one of the first things we do with them is to define the vision they have for their life. So the lifestyle, the life that they want drives the decisions they make with their money to build the money machine to fund it. Okay? See, the mirage in our life is chase the big number, the 2 million, the 5 million, the 10 million. Pick your poison. It doesn't matter. But that's just a number. The question is, how much do you need? How big of a machine do you need to create to give you the lifestyle you truly want? Okay? And so the machine is saying, design the lifestyle you want. Build the system to fund it. Okay? And if your life costs $6,000 a month, that's $72,000 a year. That's the target, not some random millionaire badge that you're looking for. And, and so if you're looking at it and saying, I know exactly what my life is that I want, then you're on track. Okay? It's one of the subtle signs. But if you don't, then it's time to do that. See, Pew research said only 54%, 54% of Americans feel like they're knowledgeable about their finances. Translation, most people are chasing numbers. They have no clue at what their life life costs or what those numbers will actually buy. They're just chasing a number. And retirement isn't a number. It's a choice. And the wealthy make the choice early. Okay, here's the thing. When you look at it through those eyes, now you know what your destination is. Now you know what the target is. I don't care how far away from it you are, we'll get there. But the problem is, is that most of us don't even know what our finish line is.

And so until we do, we're running a race with no end. Okay? Now, if you don't know what that is and you want to start to calculate what that is, I actually have something called the lifestyle cost Calculator. It's totally free. You can grab it@gomelabraham.com lifestyle. You can put all your information in when you're going to retire, all that stuff. It'll tell you what your life will cost down then down the road, whether it's five years, 10 years, 20 years, you know, taking inflation, all that stuff. So if you really want to know that, grab that and start doing the calculations. But allow your lifestyle to inform your money decisions and not the other way around. Okay, sign number two. You take imperfect action, but calculate it. Okay. Perfection's a mirage. It's a fallacy. Waiting for the perfect time to invest, waiting for the perfect time to do something is never going to come. It's like waiting until you know that everything that is in place before you ever have kids. Spoiler. If any of you have had kids, you'll never be ready. I mean, it's just the case. And here's the math. $1,000 invested today at 7% doubles in 10 years. Wait 10 years, you'll need $2,000 just to make up for it, just to get to the same place. Waiting costs you more the mistakes. And so what happens is that the wealthy are willing to take calculated action, which means also calculated risks, to know that they are in motion and making progress. Now, are they going to make all the right decisions? No, but they're going to be in motion. I've not made all the right decisions. They're going to be in motion towards that goal, towards the vision for their life. So if you're one that is willing and is already taking imperfect but calculated action, well, that's a sign that you're building real wealth. Because if I waited to figure everything out, I'd still be behind my CPA desk. Color coding spreadsheets and pretending Excel shortcuts were my superpower. But momentum beats perfection. And every time. Every time. Okay, sign number three. You invest in knowledge. See, you understand. You know, this is a sign if. If you are investing in knowledge, you're here, you're having conversations, you're listening. You're investing in your knowledge. Now, some of this is free. Some of it you might be buying. Whether it's buying my book or courses or. Or other. Folks, when you invest in knowledge, the Knowledge compounds just like money. Okay? The financial literacy index says that Americans average 48% correct on a basic financial literacy quiz. 48%. That's less than half. Oh, my gosh. Okay. And so that's not a grade. That's a cry for help. And so what I would invite you to do is, if you truly want to be on that path to financial freedom, is to stay curious. Because wealthy people stay curious. They learn the tax buckets, they learn financial literacy, they learn the asset allocation, they learn about compounding. They learn about ETFs and exercise and real estate. They become knowledgeable. Do they become these gurus? No, but they have enough understanding that they can control it, that they are in the driver's seat. Okay? I think about it like my client Jack, he learned how to negotiate his comp after building his plan. He. He went in and said, here's what I'm trying to accomplish. Here's how I'm trying to accomplish. And he went in and negotiated, got an extra $20,000 a year. And that money machine now prints every single month. That's ROI on financial fluency. And so sign number three is that you are focused on investing in your own knowledge. Okay? Sign number four, you think in decades, not days. See, the wealthy know that the market goes up 8 out of 10 years. They think in long term view, they realize that when the market drops a thousand points in a day, they're not freaking out and running for the hills. Now, mind you, I used to do that, all right? I was this emotional wreck like an adolescent when I was investing, because I'd watch the market each day and I'd freak out until I figured it out, until I understood it, until I got the fluency in it. Market dips, headlines scream, Twitter loses its mind. And wealthy people, they barely blink. They barely blink. They just stay there because they know that they're playing a decades game. And in fact, some of them are playing a generational game, not a day's game. Okay? We're not trading. We're investing. Run the math. $200 a month at 7%. After 20 years, you've got $90,000. But keep it going for 40 years, it's 270,000. The heavy lifting happens later in time. Warren Buffett has made 90% of his wealth after 60. That's decades of compounding. When you talk about about the wealth creation curve, and I talk about it in my book, the beginning of your wealth journey, you're in what I call the wealth flatline. It feels like you're Making zero, zero progress. But what you're doing is you're compressing the spring of compounding, and you hit a tipping point where all of a sudden your money starts to make money on itself at a rapid, ever increasing rapid rate. That's the acceleration zone. That's when your money is working harder for you than you did for it. But the only way we get there is getting in the game and staying in the game and thinking long term. Because we know down the, down the road. So instead of panicking about next week's market drop, you're playing checkers. You're in the game, playing the game as we keep going. Okay? And you're just gonna keep doing it because you're looking at it in decades. Sign number five, you've built an emergency fund, emergency moat around you. Okay, you want sexy? Forget Tesla now, mind you, that's coming from a Tesla driver. But sexy to me is an emergency fund. It's a peace of mind fund. It's knowing that you have the ability to sustain yourself if things go against you or something happen, happens. Whether it's health, whether it's work, whether it's relationship. Doesn't matter. Okay, Vanguard says 37%. 37% of Americans can't cover a $400 surprise expense. Banker says that Bankrate.com says 24% have no savings. The St. Louis Fed, they say that nearly half don't even have three months set aside. Okay? That's one flat tire of away from a financial disaster. Okay, I get it. People say, well, cash is trash, putting money away. To have liquidity is to sustain you and protect your wealth as you go down the road. Now that means, look, an emergency fund, three to six months. Three to six months in a high yield savings account, that's going to keep you going. Now, I like to go to a peace of mind fund. Now, peace of mind fund is extended. Instead of three to six months, we look at nine to 18 months, depending on age, stage, or circumstances. So if your life costs. If your life costs $3,000 a month, it's $9,000. You need to have that account for three months. $18,000 if you want six months. But in my world, if I'm doing the peace of mind, I'm telling them nine to 18 months, that's going further. That's what allows you to not worry about the pebbles and even protect yourself from the bricks if life throws them at you. Okay? The wealthy don't just build portfolios. They build moats around what they've built. And so they are able to sustain themselves if a storm hits or when a storm hits. Okay, so if you're one that has the liquidity and has built that emergency mode around you, it's a sign that you are. You're building real wealth. Okay, that leads me to number six. You track your net worth, not just your income. See, a lot of people are focused on their income, their income, their income. But high income is just broken. A nicer suit, nicer outfit. The Fed has said that the median U.S. household net worth is $192,000. That's not the flex. That's a scorecard. The median is $192,000. Here's the interesting thing. A doctor makes $300,000, but owes $400,000 in student loan debt. That's, that's not good. And if they got $400,000 in student loan debt, even though they have the income, in all likelihood they have a negative net worth. You can have a teacher that makes $70,000, and they're completely debt free and they have $500,000 invested. That's a net worth of a half million dollars. See, income is the noise. Net worth is the signal. The wealthy know the difference, and they're tracking that investable net worth. And the easiest way to start tracking it is, is to get clarity on what your life costs. So if you're not tracking it, let's sit down and let's break it down. What do you own? What do you owe? I get it. Some of it might be painful. When I first did it, it was painful. Mine was negative. But if we don't know, then we're not in the game. Okay, and so, so you want to start to get in game. But if you're already tracking your net worth, and we do this, I do this every single, every single year. A detailed network statement. But I look at it on a quarterly basis, too. If you're already tracking your net worth, that's another sign that you're building real wealth. It leads me to sign number seven. Lifestyle creep hasn't caught you. Lifestyle creep. Man, it is sneaky. You get that raise, and suddenly Starbucks feels cheaper, the car looks shinier, and the clothes look nicer. And now you're broke at a higher level. See, I had two co workers that got $10,000 raises. One buys a new car. The payment is 500amonth down the drain. The other invests the 500amonth. Twenty years later, at 7%, the person that put the money and invested that raise, they got 260,000 quarter million dollars extra. Same raise, different future by doing it. Look, I'll admit I'm not perfect. And I've blown bonuses on speakers taller than me. And that didn't compound. I was turning my cars every two years, okay? And that was what I was doing to look good. So here's what I'm going to invite you to do. Let's say you do get that raise. Let's say that you do that. Take a sliver of it to increase your lifestyle. Take a sliver it for enjoyment and celebration, but take the majority of it and put it towards your future, okay? Because lifestyle creep is real. And all of a sudden you can't figure out why your monthly expenses are are so high. And it's because they you got comfortable and you slowly just let it creep up and your investing didn't creep up with it. Get your investing creep up faster than your lifestyle sign number eight. You actually are looking at your taxes instead of being blind and say, I have a CPA that does that. See, taxes, they're a silent wealth killer. You ignore them at your own peril. You ignore them and you're trying to build a machine. You're building a machine with a hole in the bucket when your taxes could cost you 30 cents on every dollar or more. Like in my state, if you have high income, it's costing you 50 cents on the dollar. It's very, very different. And if you know that someone is taking and draining your income at 30, 30% or 50%, it's really hard to build wealth to do that. And so it's important as you start to get critical mass to understand the taxes that impacts you, not to become some tax expert. But think about it this way. Two retirees, they each have a million dollars. One ignores taxes and pulls it from their traditional ira, meaning that they put money in, got a tax deduction, and now they pull money out, they have to pay tax on it. And let's say that they're at a low rate of 20%. Okay? They pull the million dollars out 20%, 200,000, poof, gone. The other understands the idea of Roth conversions and Roth IRA accounts. And so they understand the difference and they put it in the Roth instead. And now all of a sudden they end up in a situation where they pull the million out and 100% of the million dollars is theirs. They don't pay any tax on it. Okay, here's the thing. When you're building wealth, you've got a couple of buckets to consider tax deferred, which is your traditional 401k and your traditional IRA, those will have tax impact. When you take the money out down the road tax free, which is your Roth IRA or your Roth 401, that will not get you a deduction today. So you'll pay taxes today, but.

You'Ll get it all 100% tax free down the road than taxable. That's your normal brokerage account, okay? Your normal brokerage account. You want a mix of these buckets so you can navigate the tax journey as you start to build wealth. Okay? And this really comes down to having the right plan in place, the right strategy and the right process in place to be in. But the bottom line is this. Sign number eight is you pay attention to taxes. If you're paying attention to taxes and trying to minimize them and maximize and optimize your, your wealth in the process, you just, you're, you're on the road to building real wealth. And that leads me to sign number nine. You find generosity in the journey. See, wealthy people know that the point isn't just to stack, it's to share. It's to share. The University of Michigan found that highly generous people are 46% more satisfied with their finances versus 29% for the low generosity folks, okay? Life satisfaction matters. Life satisfaction matters. And I think that we make the money not because we want the money. We make the money because we want a certain life. We make the money because we want to have a certain impact. Generosity also isn't just from the money. It's from your time, it's from your relationships, it's from your wisdom. See, because I always say that legacy isn't what you leave. Legacy is how you live. And the wealthy, they don't wait until the end to be generous. They bake it into the journey because it brings generosity and joy at the same time. I remember when I had the martial arts studio. I had a martial arts studio for 11 years. And we would do gift baskets for people that fell on hard times to give them meals and things like that. And the kids would, would do them, not me. The kids would do it. And we would go deliver them with toys for their kids and all that stuff anonymously. I mean, in other words, it wasn't from the school. But they had a chance to see the joy on people's faces, to see the gratitude on people's faces. And all of a sudden the experiencing of that generosity was mind boggling for the kids. And it was such a great experience for them. They loved doing it. Now here's, here's the ultimate flex of Are you building real wealth? You sleep well at night? It really is. Ramsey Solutions says 74% of Americans stress about money. Wealthy people, they're not up at 2am wondering how to pay their bills. Their machine is humming whether or not they work tomorrow or not. See, freedom isn't a yacht. It's truly peace of mind. That's why I say in the Money machine blueprint, the three critical outcomes is lasting wealth, enduring freedom, and living legacy. Okay, so here's the truth. Wealth isn't loud. It's subtle. It's boring. It's calculated. It's patient. It's generous. And these are nine subtle signs that if you see the more of these you see in your life, the closer you are to that journey towards building real wealth. And hey, if you've only got two, there's seven more that we can get in there. All right? Use this as your checklist. Use this as your pathway to start bringing these into your life. Because these are signs. And if you saw yourself in there, congratulations, you're building real wealth. And if you didn't, you know exactly what to focus on. All right? And if you want help to try and figure this out, you can grab my lifestyle cost calculator. To kind of figure out what your your lifestyle costs. Go to melabraham.com lifestyle to grab it. It's totally free. Because real wealth isn't about random numbers. It's about funding the life that you actually want. Okay? Earning more isn't going to make you free, but that money machine you build will. All right. I hope that you found this valuable. I hope that this is meaningful. If you have any questions or anything comes up, do me a favor. I'd love to hear from you. I love having conversations with you. All right. Till I get a chance to see you in the next one or on your road and path to financial freedom. As I always say, always, always strive to live a life that outlives you. See you.

Thank you for listening to the affluent entrepreneur 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 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.