How to Build Your Financial Freedom Engine (Step-by-Step)

If you're tired of chasing the next raise or running on earn the earnings treadmill. This video is for you. And it's a special one, because this is a live session that I did, a live keynote that I did for a group of entrepreneurs that spent over $10,000 to be in that room. And I'm going to walk you through exactly how to build what I call your financial freedom engine so your money can work harder for you than you do. And then you finally get peace of mind, your time, and the choice you deserve. Your financial freedom engine, it isn't just about dollars and decimals. It's about aligning your habits and your vision and your money into a machine that lets you live a life that outlives you. This is building your money machine, 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. A money machine does. And that freedom, it doesn't start with your next raise. It starts the moment your money works harder for you than you did for it. Think of this as a bit of financial education with a side of sarcasm and a whole lot of heart. And I'm your host, Mel Abraham. And check this one out, because it's special, it's different, and I think it's going to make a huge difference. Let's do this. How y' all doing? Yeah, amazing. Two days. Can we talk money? Yeah. All right, here's the deal. I remember starting to talk about money, and I really thought, because I'm an accountant, cpa, I was just going to do the math behind the money columns, rows. It adds up, it multiplies. We're going to create wealth. And I quickly found out money isn't about the math. It's about the emotion. Because when it comes down to it, I know a lot of people say money's a tool. I actually don't think it's a tool. I actually think the money that we're trying to create is the paintbrush that we use to paint the masterpiece called our life. Yeah. So here's the deal. Why I say that is because if we're just chasing a number, which I was early on, all I want, I was doing the math, just the number, the number, the number, the number. And so I was just doing the math, thinking that I was going to make it. And once I had the number. How many of you hit a financial goal? How many of you hit a financial goal? Hands up. High, high, high. Cool. And how many of you keep those hands up? How Many of you, after hitting the financial goal, had a feeling of, huh, Is that it? Yeah. See those hands? See, the reason for it is because we're looking at the number. We're going to talk about a couple of different things. And I think when we talk about wealth, wellness and financial wellness, that I want to make sure that you're doing some of them. You might have heard before. But the question is, are you doing them? Are they common practice in your life? But I don't ever want you to separate that from life. I don't want you getting to a place. There's so many people that I've worked with, families and things that Brendan said they have a ton of money and from the outside they look wonderful, but they live bankrupt lives. So there's two levels here, the functional level of the math behind the money, but then there's the life level of the life behind the money. Viktor Frankl said this. He says there are plenty of people that have the means to live, but there are a lot fewer people that have the living on meaning. And so when we talk about some of these things, I, I would love for you to attach it to what matters to you. Who's the person you're fighting for? Who's the person that matters? What's the cause that matters? What's the, the mission that matters? Because that is why we do this. It isn't to collect trophies, it isn't to collect stuff. And when we think about money, how many think money is somewhat complicated? Anyone? No? I love it. All right, cool. All right. All right. How many of you got my book? Yeah. All right, hands up. How many of you left a review? Oh, I'm hunting you down. All right. The whole purpose of the book and the whole purpose of everything I do is to simplify the whole journey of finance. I thought it was hard. I thought it was complicated. I'm a cpa, y'. All. There's just a handful of things you gotta do. And I promise you the math will math out and you'll end up where you want to be. So let's walk through this because here's the thing that I remember growing up as a child because I was trying to figure out, figure this out. I lived in a ranch style house. My brother, I have an identical twin brother. There's two of us. Our wives think that we share the brain. It's just a matter of who uses it at that time. So we had a ranch style house, two bathrooms, side by side down a hallway, and one of the bathrooms had this Frosted glass on it. And at night, the moon would shine through that frosted glass, and it would light something up on the floor. And I'm at one end in the bedroom, and my brother's at the other end in the bedroom because they figured out quickly that we couldn't be in the same bedroom together as twins. But what we would see is this light on the floor. And we thought it was a ghost. And so what we would do at night, it didn't happen during the day, but at night, the ghost would come out. And so if I had to go to go see my brother down the hall, you know, and I wanted to go, I gotta pass the ghost. So I literally like Olympic level sprinting because I didn't want the coast to catch me. And I run. And when Jeff wanted to come and see me, he did the same thing. And all of a sudden, my dad, he's going, what are you guys doing? And we're going, dad, the ghost. The ghost. The ghost is going to get us. And he says, what ghost? In the bathroom. There's a ghost. Do you see him? He's in the bathroom. He's looking at us. And he walks in the bathroom, and he flips the light on, and the ghost is gone. And I go, oh, how many of us do that with our money? How many of us do that because we've been told that it's hard to make money. It's. You know, it's. Your future depends on it. I've got bills to pay. I've got all these things. How many of you do that? Well, the idea here is. Yeah, I see the hands up. The idea here is to flip the light on because it's not a ghost. And so let's walk through a couple things. The first point that I. I want to kind of hit on is this. Does this make sense? Are you. Are you ready for this? All right. This is something you've heard before. Okay. This is something you've heard before. Live below your means. Live below your means. Here's the deal. When it comes to building wealth or financial security, there's two parts to the equation. Cash in, cash out. That's. Doesn't get any more complicated than that. But the challenge is most of us aren't thinking in those terms. And when it comes to building wealth, what does live below your means means? It means, what are your priorities? Because I can tell what your priorities are by how you spend your money. You can tell me all day long. No, I wanna be financially free. Really? You did 12 doordashes in three days. We're guilty. We do doordash a lot. But that demonstrates what your priorities are. Do you know that the reality is that your wealth, your financial freedom, your financial life is driven much more 80% by your behaviors, habits, and decisions than it is your money? 10,000 millionaires were studied. 10,000 millionaires were studied. 80% of them were first generation millionaires. First generation. That means they made it. During their lifetime, 30% of them never made more than $100,000. So they didn't sell a dot com business. They didn't sell. They didn't have bitcoin. They didn't do any of that. They just worked well. So the difference isn't the money. The difference is what they did with it. It's the behaviors, the choices. The. Here's the thing, y'. All, no matter what your financial situation is, you don't have money issues. You don't have money problems. You have money symptoms. They're symptoms of your choices and decisions from the past. And so here's the beautiful thing. As much as that seems like confronting now, it allows you to sit back and say, all I have to do is change my behaviors. We're good. So the first thing here with this point is to realize that you have a choice. And that choice is to live like a statistic. Out in the world, 66% of people are living paycheck to paycheck. Did you know that 40% of those people make more than a hundred thousand dollars a year? And they're still living paycheck to paycheck. Now I get it. I'm not. I'm not blind to the fact that cost of living has gone up, But I'm also not blind to the fact that we have choice in our life and that we have the ability to build value and we have the ability to solve bigger problems. And we have the ability to show up differently and to make different choices at the value that we put out in the world so we can get paid more. Because remember, cash in, cash out is what we're dealing with. And so when you look at that and you look at that statistic, there was another statistic in the same study. Market watch did it and said that 48% of people said that they felt broke. The problem is that they don't realize that it's a behavior. They're looking at the money. The money doesn't matter. Let's look at your behaviors. Think about what Anthony talked about. Think about what Trina and Kim talked about, what Brendan talked about. In the fitness space. Did you know that everything they told you in the fitness space about habits, decisions and accountability, it's the same thing in the money. Same exact thing. If you can do it with your weight, you can do it with your bank account. Yeah. Can I get it? That's the money. Hell, yeah. So that's the thing that we gotta start looking at. So the first thing is this. I want you to take the time to examine, am I living below my means now? It doesn't mean that I have cash left at the end of the day, at the end of the week, or the end of the month. What it means is that are you spending money on the things that bring you joy and that are meaningful to you? And is there something left over? Is there margin in your life to create something beyond that? Because the choices you make today is about your future. How many of you have kids in here? All right, so we have a lot of people have children here. Here's the other reason to do it. Your children are watching. Many of you know my story. I was a single full time dad raising my son Jeremy. He was watching. And there were so many times in my life that I wanted to curl up in pain, especially when I lost the money in the Ponzi scheme. Especially when I did that. And someone said to me, said, he's watching you and he's gonna take a lesson away from this of how to deal with adversity. If you curl up in the corner, which you can do in difficulty, what do you teach him? But if you beat it, why you teach him? And so we got up and we went after it and we rebuilt it. So those of you that have children, here's how I want you to think about your money. It has nothing to do with you. We think about weeks, we think about months, we think about years. I want you to start thinking in generations. Think in generations. Imagine what you would do if you started to say, how do I make this move through generations? Not that we're going to ever give the kids money. I got a chapter on the book that says skill sets before assets. They have to earn the right to get it. But what that means is that we have to give them the values to make it happen. All right, so that's the first thing is to start examining what, where your money is going. Do I have margin at the end of the day, at the end of the week, at the end of the month? And then we'll talk about the second piece. What are you doing with that margin? So the second element Is your saving and investing rate. I want you to check your saving investment rate. I have something called the wealth priority ladder. And in there I say, I want you to put 20 to 25% away of your income away. 20 to 25% of your income away. Now, if you're older, it might be more than 25%. If you're younger, it might be less. My son started. I started him at 10 years old. I gave him four buckets. I said, you're going to get paid for my business. You're going to do some things for me. You have four places to put it. One is going to be for savings, the second is going to be for giving. The third is going to be for investing, and the fourth is going to be for living. And I didn't want the buckets necessarily for the buckets. I needed the buckets for the conversations that I needed to have with him, the values I needed to distill. See, the savings was about frugalness, and we can get those lessons ourselves. The giving is about generosity that we're not in this life just for us. The investing is about a future, the magic of that, and building something meaningful. And the living is about priorities. Okay, so your savings rate is the percent of your income that you're putting away. And I say, like I said, I want 20 to 25% to be put away. If you don't, if you're not doing that and you can't, you haven't got there and you're not putting away. A lot of people say, I don't know what to invest in. I said, are you putting any money away? Are you saving anything? They said, no. I said, well, then you don't have anything to invest. Why do you even worry about the investments? And if it's habits and behaviors, here's what I need you all to do. I said, 20 to 25%. How many of you sat there said, there's no way in hell I can do that. Hands up. Yeah, yeah. All right. That's okay. Start with $5. Start with $5. Because what we're doing is developing a habit and behavior. We're not worried about developing the bank account. That'll come later. But if I get you in the habit of doing this, if I get you in the behavior doing it, and it becomes second nature. The five turns into ten turns into 100, turns into a thousand turns into ten thousand. Jeremy started early. He's 35. His wife's 32. They've got two little princess granddaughter. My. My granddaughters they don't have granddaughters. I have granddaughters. And they have four homes and a multi million dollar net worth right now. Yeah. Why? Because they created the habits. Because they're doing it step by step, just like when they were talking about the. The fitness. So what we need to do is I want you to take as much as you can and push to as much as you can, 20 to 25%. If you're not doing it, check yourself. This is the wellness check into a high yield savings account. You'll only get maybe four, four and a half percent on it. That's fine. I'm more worried about the muscle. How many of you after this are going to go to the gym? There better be more hands than that, huh? All right, go to the gym. Okay. Well, I know Anthony kind of just dits the gym. I mean, you go. I ain't going to the gym if they're washing off that way. But you know, the first time you go into the gym, you're not going to use the big weights, you're going to use the small weights. Same thing with money. So it's number two is we have to push our savings and investing rate as much as high as possible. That is going to be the determiner of your wealth more so than your income. It will drive your wealth more than anything else. So when you get back, I want you to start to look at it and say, how much of a percentage am I putting away in my 401k in my other accounts? And start pushing it at 20, 25%. How many of you commit to do that? I promise you in 12 months, I promise you in 12 months, life will be different. Life will be different. It did that. All right, Number three, the key metric I want you to track is something that we call net worth. This is assets minus liabilities. This is your score on your journey to wealth. It's called net worth because this. I wrote a book called building your money machine. This is your money machine. Assets are the things you own. But here's the assets I want you to track. The only assets. Well, I want you to track all the assets, but the assets I want you to track, really, for building a money machine, which is going to give you the financial freedom that you deserve, are the ones that will generate cash flow or build your wealth so you can live off it in the future. That means it takes the residents out of it. It's called investable net worth. All right, I'm getting a little technical, but I think it's really important. I want you to have a machine that generates the cash that allows you to live the life by choice. By choice. I want you to get up every morning. I get up every morning, put my feet on the floor, and just, first thing, make sure that I'm still above ground at my age. But I look at it and I go. I put my feet on the floor and I get a chance to make a choice today, to be here, to do the things I get to do. And I want you to have that beautiful choice. Not at the waning years now. And the way you do that is you track this metric. The way you do that is to sit back and say, this is going to grow with time. I want you to track it every single month. Where did it go? Did it go up? Did it go down? That means your investment accounts, your cash accounts, your 401k, your retirement accounts, all of it. Then the liabilities, that's what you owe. Loans, credit cards, student loans, all that stuff. You subtract it out, that's what's net, that's what's left over. It's as if, if I took everything I owned and sold it, paid off everything that I owed, I ended up with this dollar amount I can use to live on. That's what we're trying to get to. Because when we build that machine big enough, you're completely free. Here's the definition. I know that from my perspective is this, is that I need to find a path to separate my earnings from the efforts to earn it. Yeah. Because if I don't separate myself from the efforts to earn it, then I am on the earnings treadmill. I am imprisoned by it. If I. If you have to keep running to make money, if you have to keep running to pay bills, that's not freedom. And I know, I know folks that are making in the millions, but they got to keep running partly because of their lifestyle and their expenses, but they haven't built a machine outside of them. They haven't given themselves the choice to step off the treadmill and say, I'll let the machine run. See, when I got diagnosed with cancer a couple years in 2019, we had the machine and I had the blessing. And it was a blessing and the privilege to be able to say, shut everything down. Let the machine pay. Pick your doctors, fight the devil, fight the demon and beat it. And be 100% focused on it. That's the beauty of it. So the purpose of building this net worth is to give you the ability to separate your earnings from your efforts to earn it. Doesn't mean you stop earning. I still go out and learn. I'm still making money. I'm still doing the things and the machines in the background doing its thing. But every day, I got a choice. I was telling Brendan recently, I was speaking at another conference, and I sit in the back of most of the conferences, and I participate. And they were doing a visioning exercise, and I. For. For the first time, I was having a hard time doing the visioning exercise. And I realized everyone's there saying, I want the boat and I want the yacht, and I want the. The big. The plane, and I want the big house. And I said, I don't want that because I'm actually blessed that I'm living my vision. Like I called my wife, I said, we're living our vision, and I just realized that we're living it. And so now all of a sudden, my vision and my vision board was about meaning, was about moments, was about memories, was about serving, what was about generosity. It's a different vision board. Does it make sense? Yeah. How many want that? Yeah. Hell, yeah. So that's how I look at it. Now, I have one other thing that I think is this, to me, is one of the most important things. How many are in relationships? If your partner's here and your hand's not up, you're gonna have a long ride home. Hey, y'. All, I just want to let you know that my book, Building youg Money Machine, is out, and it debuted at number four and number 24 on the USA Today bestseller list. Number four in business, number 24 of all books, all titles, all genres. It was big time. So if you have not got your copy of Building youg Money Machine, then the first question is, why not? The second question is, when? And the third thing is, go to your moneymachinebook.com, grab your copy, then give me the information from your. Your book, so I can make sure that I give you some special gifts, bonuses, and wealth resources to accelerate your path to financial freedom. Let's get to the. Oh, they're writing. There you go. So here's the thing. Brendan mentioned this. I heard this statistic. I don't know how true it is, but they said the second leading cause of divorce behind adultery is financial. That's crazy. Money's not meant to divide. Money is meant to coalesce, to create, to come together, to paint that. That masterpiece called and here's the reality. Why is that happening? Because we don't know how to bring them in. If you are in a committed relationship and I know that one of you might be the lead in the finances, but you are not roommates. You are teammates. Yeah. That means that you gotta have conversations. One of the first things I'll tell couples is that, go have a conversation. Like I told my brother that. And like. And he's a cpa. He knows his stuff. And he goes, and he's been married like, 35 years. He goes, you. You. You want me to go talk to Laura? Yeah. Have the conversation about your life. What is it? Here's the mistake that most, most couples make is that they talk about the tactics. They talk about the math. Like, we started the math. Doesn't matter. So you're not building math with your partner. You're building life with your partner. Everything starts with a vision for your life. Everything. It's the very reason that the first part of the book is all about the vision about the life. And when you have a conversation with your partner about the life vision, what you want to create. My wife and I, we've got two beautiful little doggies, not little, £80 each. They still think they're lap dogs. I've been kicked out of the bed. Don't get me going on it. So here's what they. We do. We get a chance to go for a walk every day with the dogs together and have a conversation. I know Brendan and niece, they go for walks to have that conversation about life. What you want, what matters to you, how you want to do it, how you want to live it. And when we have the conversation around money that starts. Starts with life, then it informs the roles that we want to have, our responsibilities, who's doing what to create the life. And she. My wife's doing some amazing stuff that's helping create the life. I'm doing the other stuff to create the life. But we are talking and walking the path together. I have a client that after telling her to go home and have a conversation with her husband, she had a conversation with two very successful folks. She sent me a text and she says, oh, my gosh. She goes, we realized after having that conversation that we were cheering each other on from the sidelines. We've decided to get on the field together and play the game together. This has changed our life. And by the way, after 20 years, we just booked a second honeymoon. Money is meant to bring you together, to live a life together, to create memories, to create a that. It's not meant to be something a bank account. It's not meant to be something wielded as power or anything like that. Especially in the relationship. So it has to start with one thing, and that one thing is transparency. Transparency. Come clean. I grew up in a house for Mom. She had some of her own credit cards dad didn't know about. But us kids, we knew what she was buying. It was pre Amazon. Okay, that's not transparency, frankly, up front, it's financial infidelity. It really is. But when you have transparency about what you want in life, what's going on in your life, how it is now, all of a sudden, other things open up in your life. What else can you do when you're together as a team? Transparency is sexy. It is. And so the thing. When it comes to you in a partnership, the first thing is this. I want you to have regular, they call it. Everyone says it. They say, have money dates, but no one says, well, what do you do with a money date? Here's how you do it. The first things first. Get on the same page. The same page. Not the same line, not the same word of the page. As long as you're on the same page. But make sure you're on the same page for the vision for your life. What do you guys want first? That's it. Start there. What do each of you. Then you can start asking yourself, what do each of you bring to the table to help this become a reality? It is never. A money date, is never meant to criticize, argue, or discuss anything like that. Like, if you are going there and you go, honey, you spent way too much at the salon today. How do you think that's gonna go? You're not so good. That's not a conversation you want to have. But that's how most people are. They go, let's go to our budget. You know, the only thing that makes it fun is they're drinking wine while they're doing it. But that's not gonna help them get to where they want. And now money is division in there, and that's what we gotta stop. So as a couple, how many of you. How many of your spouses are here? Are you here as couples? I love it. All right. Will you commit? Yeah. Will you commit? Will you commit to having that conversation sometime in the next seven days about your life, about your love, about your future? Can they do that? And those of you that partners aren't here. All right. How many of you will commit in the next seven days to have that conversation? Because more than any money tactic, more than anything in the world, when you have a meaningful relationship with your partner, looking at a life that you want to build together. It is vastly richer than any wealth in a bank account. How many people commit to that? Hell, yeah. So here's the thing I want you to realize. I wanted to give you just a couple of tips, a couple of things that are. That are fundamental. They're fundamental to a financial journey of abundance, of freedom, of one that will get you to a point where you can step off the earnings treadmill and make and live a life of choice. Because our job here isn't to own stuff. Our job here is, is to create the memories, the moments, the impact. And the money is a tool. It's a paintbrush to bring it to life. And each and every single one of you, you have been put here with a gift. You've been put here with a gift to take to the world and to nurture. You've been put here to do the things that you're meant to do. And the only one that gets robbed if you choose not to do it, to not do the discipline, to go through it, the only one that gets robbed is the rest of us. Because the gift isn't yours to take. Your gift is yours to give. That's why it's a gift. And so here's my ask of you as I close out, is that you take the time to look at the gifts that you have, to appreciate the things that are in your life today, to get a vision for the things you want in your life tomorrow, to create that path, to be willing to commit the discipline, the habits, the behaviors, to walk that path, to know that you have your ultra members here, that you're not alone on that path, to become accountable, to do the things that matter. Because here's what I know. If you just take one step at a time, one moment at a time, you stack them each and every day. Over time, you end up getting the life that you envisioned. You end up living the purpose you were intended, and you end up living a life that outlives you. That's a good life. Thank you and God bless. Thank you for listening to the affluent entrepreneur show 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. 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.