How to Have Better Finances Than 95% of People (in 3 Months)

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 are working harder than ever and they're still falling behind financially. You know, I've seen it over and over again in my 30 plus years as a CPA, an entrepreneur, a mentor, and a coach. And I can tell you this. If you're stressed about money, it's not because you're dumb or lazy. It's because nobody ever gave you the playbook. Now, in our time together, I'm going to show you exactly how to build a foundation of. Of wealth. And for wealth that most people will never have, you won't need to cut out the lattes or move into some shoebox apartment. Okay? But we're going to break it down step by step so you know the moves to make over the next 12 weeks so you can be further ahead financially than 95% of the people. Okay? This is building your money machine, where we help you master your money, eliminate financial stress so you can live a life of choice. Okay? Because earning more, it doesn't make you free. But a money machine, that does. And that freedom, it doesn't start with the next raise, the next paycheck, the next client. It starts the moment you get your money to start working harder for you than you did for it. And I'm your host, mel Abraham. With 30 plus years as an entrepreneur, as an advisor, as a coach, and someone who's walked this journey himself. All right, let's get into it. Let's step off that treadmill, and let's start building your freedom. Let's do this.

What if I told you in just three months, 13 weeks, 90 days, you could have better finances than 95% of the people out there. See, before you roll your eyes. No, no, no. You don't need a six figure salary. You don't need to cut out the lattes. Like I said, we need a process. So I'm going to break it down for you, week by week. What I want you to do to start to build it, you will build money momentum. If you stay with me and do this process over the next 12 weeks. Things will shift, things will change for you. Trust me. All right, we're going to break this down. I'm going to do it in a couple of phases. Phase one is about getting clarity and control. That's the first four weeks, weeks one through four. Week one is about writing your money story. See, week one isn't about spreadsheets. It's about stories. It's about your money story. Here's the challenge. We all grew up learning money stories. I believe that our money lessons, they're caught, not taught. See, because they didn't teach us money in school, most of our families didn't have money conversations at the dinner table. Lord knows we didn't do it. It was impolite to talk about money, but we heard things like, money doesn't grow on trees. We can't afford that. Okay, what do you think I'm made of? Money? All those things. But those little lines, they don't just disappear. They percolate in our mind and they sneak into our adult life like little pop ups on a sketchy website. And here's what happens. We give them a meaning, we take them on, and we give them an interpretation. And so you got to look at it and say, some of my beliefs around money, if I have a belief around money that I can't afford things. Scarcity. Money doesn't grow on trees. Scarcity, okay, what do you think I'm made of? Money? That it's selfish or. I think money is just for that wealth is just for the greedy. Or building wealth means someone else has to lose so you can win. But you want to build wealth. How is that going to serve you having those beliefs? Because those stories become beliefs, those beliefs become identity. Identity defines the behaviors. And the fact of the matter is that your wealth is driven by 80% by behaviors versus money. So the thing that you need to look through is to start filtering out what your earliest memories of money are. And what I want you to do is there may be a moment, like in my book, I talk about the moment I saw my dad cry. And I was five and a half or so years old. It's the first time I really saw my dad cry. But it was all about money. But more importantly, it was about having a conversation with my mom saying, we can't afford to do that right now. And his tears were tears of disappointment, of saying, I'm trying so hard to give you the people I love so much, and I feel like I'm failing And me as a five and a half year old with no context, with no understanding, with no explanation, took it on to mean that, oh, if you don't make a lot of money, you're going to disappoint the people you love. Now see, here's the thing. That was just my interpretation. That wasn't really what happened. And too often it's these interpretations of the stories that drive us. And I got driven to start making money, making money, making money as much as I could till one day my son and I was a single full time dad, raising my son from five and a half years old, six years old. He comes running and says, daddy, Daddy, I drew a picture of you at school today. And so I kneel down to look at this picture and there I am.

Blue felt, tip, pen, stick figure. It's not us playing ball, it's not us having fun. We're not at Disneyland, we're not even smiling. He's not even in the picture. I'm standing in front of two computer screens with a phone in each ear and another one on the desk screen. See the hands of a five and a half, six year old. I got a mirror into my soul. But more importantly, the message, the interpretation of, oh, seeing my dad cry and saying, hmm, if you don't make enough money, you'll disappoint the ones you love. Here I was decades later making good money and disappointing the one I love. So it wasn't the making of the money that caused it. And my point is that if we don't rewrite your money stories, they will keep running your life, they will run your financial existence. They will set your money set point. So here's the thing that I need you to do in this week, in that first week, that first session, I want you to spend the time writing down all the money beliefs, the money stories. One, what it was. Two, see if you can connect it to something that happened. An observation. It was your parents, it was social media, it was media, it was a movie. Where did it come from? Then ask yourself, what part of it are facts and what part of it is your interpretation? What part is facts versus interpretation? Because the facts are the facts. The interpretation is all the meaning. The interpretation was me saying, gosh, if I don't make enough money, I disappoint the people I love. The facts were mom and dad were having an argument and a discussion about money and buying something that they couldn't afford. That's the facts. My interpretation is what drove me. And then once you know the facts and the interpretation or the meaning you gave it, look for the better, more positive interpretation. What can I make this mean? Okay, that's all I want you to do in the first step, the first week. Because until we tear down the walls of the stories, we can't tear down the walls of the beliefs and reshape your identity. Yes, money's a mental game. It's also a money game, but it's also a behavior game. All right, that leads me to week number two. Week number two. Now that you've looked at your story, we're gonna get a little practical. We need to map your cash flow in week number two. And so most people know their paycheck, they just don't know their path. I know I get paid, you know, on this day every month or this day every couple weeks, unless you're in your own business. And here is how it looks for an average American. $6,000 comes in $4,500 straight into lifestyle, $900 into debt, and then $600 trickles into your future. Okay? There's no system, there's no process. And that's a problem. See, your future's on a starvation diet. We can't work from there. And so we have to ask ourselves how we're fueling things to go deeper on this. One of the things you can do is in chapter 12 of my book, building your money machine, I talk about the wealth priority ladder, but it tells you exactly how to allocate your money. But the first thing that we need to do here is know where your money's going. So this is a time for you to start to map out where your money is going before it comes in. This means that you're going to journal and track. Just like if you're on a diet and you're tracking your eating, you're going to track your spending. Not to stop it, necessarily, you may, but to become aware and to kind of understand. And now you get a chance to look at what's going towards the necessity, the needs, your survival, what's going towards your wants, your desires, what's going towards your future. How much debt do I have? So what I want you to do here in this week is I want you to just track your spending all week. What it is, what it's for, how much, and what the emotions or feelings are in the spending. Because we might find emotional triggers that we can use to break the spending patterns. And if you're seeing that we're just living check to check, because 60% of people are, then we need to get serious. And we got to get. We got to get clear on where we might be able to find it. Because the bottom line is, if we're truly going to find the path to financial freedom, It's a simple equation, okay? Simple equation. Money in, money out, and the difference between the two, we take that difference and use it to build the future. If the difference between the two isn't enough to build the future you want, we have to fix the money here and the money out. It's. It's that. It doesn't get any simpler than that. Now, that doesn't mean the fixing is easy, but it is simple. We do know what to do. It just means that it might be difficult because of your situation, age, stage, or circumstance, but that doesn't mean that it's impossible. So in this week, this is a time for you to start to get critical and look at where your money's going. Leads me to week number three. Before we start building wealth in week number three, we need to make sure that we have an unshakable foundation. Unshakable foundation. The first thing that we do to build that unshakable foundation is do something that I call the comfort fund. This is the bottom rung of the wealth priority ladder. This is not your emergency fund. It's not your peace of mind fund. This is a comfort fund. This is just to get you over a hump if, God forbid, something happened. Okay? So I want. This is a time to get fifteen hundred dollars or one month's expenses into a high yield savings account, whichever is larger. This is to allow you to navigate if you need to pay and all of a sudden pay a deductible for a health or a car accident or something, or you have a transmission go out or something. Okay, I know transmissions will cost more than $1,500, but this is a place I want you to start because you. It isn't about the, the big emergencies. This is literally about not steering into the ditch, okay? And this is the very beginning of it. So if Your expenses are $3,000, we need $3,000 in the comfort fund to start. It's. It's not $1,000 like other cookie cutter advice if, because here's the thing. If one car repair can destroy you financially or put you into debt on a 27% credit card, that's a problem. And I'm trying to avoid that. And this is a place where what you can do in this week is you can look around your home. Like if I went into my tech Cabinet. There's plenty of cameras and gear in there that I am not using and I could go and put them on Facebook Marketplace and bring money in because this is a one time situation. I want to get the comfort fund in place and keep it in place. So if there are things that you can do, taking on an additional job, taking on a side gig, taking on an additional project, or selling things that you're not using to bring that one time dollars in, put in a high yield savings account. That's the game we want to play. We just want to come from fun and place. That's week number three. Week number four. It's time to redirect the cash flow. Okay, we talked about stories, we talked about knowing where our money's going. We talked about putting a comfort fund in. Now we're in week number four. This is time to plug the leaks. Where's the money going? That's not giving us value. That means cancel unused subscriptions. Call your cable company and start renegotiating. They go to the retention department saying I think I'm going to go to another company and see what they do. Every dollar you free up isn't just saved. It's redirected towards your financial freedom. Have the conversations with your, with your credit card companies to try to reduce the interest rates. Okay? Because here's what's going to happen. If you have $10,000 on a credit card at 22% paying minimum payments, 27 years, $12,000 in interest. This is a time to start really getting discipline direct and start cutting it down. Okay? Some of this may be hard, tough love and hard because it's the first time that you're doing it. But once you get out of it, especially if you're not getting benefit of it. I just put one of my gym, I've got a couple of gym memberships, I just put one on hold. Not because I couldn't afford it, it's only 40 bucks a month. But I put it on freeze because I'm not using it. Why should I just let it leak no matter how much net worth or wealth I have. So put it on freeze. I mean it's only $500 a year, but that releases $40 more a month to do something else with that is actually more meaningful. Build wealth, do other things. Okay, so this is the time to find the leaks, plug the leaks. Things that aren't that you're not using. We stop or freeze things that we are using. Maybe we go and renegotiate, we look for the leaks that we can plug, okay. That starts to get you into a place where you need to look at your debt. And, you know, do I have to get out of debt? And if you have consumables, lifestyle or credit card balances, we have to get you out of debt. And that means that during this week, I want you to get yourself on a debt payment plan so you're not carrying balances for 27 years. How do you do that? I have a debt breakthrough calculator will help you do that. Go to melabraham.com nodebt it's totally free. You'll put all your debt into this Excel, okay? And the payments and the interest and all of that. And then you'll decide whether you're using an avalanche method or a, you know, snowball method to pay it down. It'll tell you exactly what to pay, where, when, and you just get on that debt payment plan. Get you get it paid down. Once we start to get control of the debt, we have the comfort fund in place. We're going to. We're now plugging the leaks. Now all of a sudden, we've got clarity and control. Now we can start to move into phase two. Phase two is five to eight weeks. Is weeks, five to eight. And it is about momentum, okay? It's about momentum. So week five, this is where we start to define your freedom vision, your big purchases, the things about it. This, we were looking myopically down into the details in the first four weeks. Now I want you to zoom out. I want you to look at your freedom vision. It isn't just numbers. It's your life. It's getting clarity on the life you want. And if you're in a committed relationship, want to be in a committed relationship, you're in an intimate relationship. Do this with your partner. You're creating a life together. Do you guys want to travel? Do you want time with family? Do you want to start a business? Do you have a cause you want to get behind? Get really clear on the domains of your life. Not just the financial, but career, professional, relationship, family, spiritual health, all of it. Get clear on it. Then we apply the numbers to it. Because here's the thing, if we don't do that, we're just saving and investing with no rhyme or reason. We don't ever know whether we've ever arrived. So the reason we define this is because the money is simply the paintbrush to paint the masterpiece called your life. So we need to know, and you're the painter.

So we need to know the painting we're going to make. So we figure out the paintbrushes we need to paint that masterpiece because you can account for all of that. We can see where you are, we see where you want to go. We know the gap now. We can build it in, okay? This is about building a vision and a plan. And if you're. When you look at this, all of a sudden you start to see things like, my housing's eaten 35% of my income. Well, that's going to stress you out. Doesn't matter how cheap the coffee is, okay? So we need to look at where this money is going, what our life is that we want, and what it's going to cost to make it happen. Okay? It may include a home, it may not include a home. It may include vacations or specific travel. It may not. It's personal. That's why personal finance is personal. But often we don't take the time to define it. Well, in week five, it's time to define it. Week six, now that you look at it, we go, we plug the leaks. We've got some things going. How do we accelerate it? How do we get momentum? Well, now it's time to boost the income. Boost the income. Now, that can be done a couple of ways. One is we can work harder, work longer, work more. We can take on side gigs. We can do other projects. That's one way. But there's another way that I think we don't tend to think about, and that is by creating more value. See, you can't shrink your way to wealth. You have to grow your way to wealth. And the way I look at it is creating more value. Become invaluable to your employer. And that might mean skilling up. That might be gaining certain experience. Experience certain certifications, okay? Become invaluable to your clients, indispensable to your community, your market. Because we live in a value exchange economy, we need to look at it through the eyes of value. What value do you provide? The fact that you worked five, 10 years for a company doesn't entitle you to raise. I hate to tell you. I mean, that might be tough love, but it's the truth. What entitles you to getting paid more, getting compensated more, is that you bring more value to the table. And so what we need to look at is to be intentional with our value growth. How can I become more valid? How can I solve bigger problems? How can I solve more complex problems? And that might mean that you got to take courses. You might need to learn some new skills. You might need to get a coach, a mentor. You might need to go to your boss if you're in a job and say, I want to develop and grow better so I can become more valuable. What's a good path for me? And do that. I remember Jack, one of my clients.

He used his money machine plan, literally to negotiate a whole new comp package. He didn't beg. He knew what his plan was to achieve the financial freedom he wants at retirement, and he showed it to his boss. But he made a business case, a value case to his boss about how, how this could work, to make this his plan work, while at the same time making the company's plan work and him becoming more valuable. And you know what? His boss bought into it, says, let's go do this. Let's make it happen. That's not just a raise. That's a money printing press disguised as a paycheck. That's the game we're playing, okay? So find a way in week six to increase your value. Okay? Week seven. This is what I call the four bucket system. Now that money's coming in, where do you put it? Now there are. You can take the one of the 47 budgeting apps and everything, but I'm going to give you just four buckets right now, okay? And that is this. The first bucket is savings. And this is actually something that I did with my son at 10 years old, okay? And it still works, no matter age or stage. At the very beginning, I want a bucket for savings. I want a bucket for investing. I want a bucket for giving, and I want a bucket for living. And living split between needs and wants. Now here's why we have these different buckets. The savings is about frugality and safety. The investing is about your future. The giving is about your generosity. And the living is about. Is about your priorities. And you can do these in separate accounts. You can do them in the same account. You can do them in sub accounts, however you want to do it. But the point is that I want money going in. Now, the savings bucket should be where you have your comfort fund, ultimately your peace of mind fund, your emergency peace of mind fund, which is really 9 to 18 months of cash in the savings bucket, the investing bucket, as I wrote in my book, I want 20 to 25% of your income going towards investing. Now I get it. You may not be able to do this right now. Start with 1%. Start with wherever you can. 1%, 2%, 5%. And slowly increase it every quarter, every month if you can. The goal is 20 to 25%. We can't. But we're not waiting until we can do 20. 25%. We start where we're at, start where we're at. And we want to invest. Okay, the giving, this is on you. But I think that generosity is a part of wealth and it's part of living a rich life. And so give of your. If you can't give of your money, give of your time. Find a space and a place to do it, but put it away. And even if you're not sure where to give right away, just allocate it side you'll find a cause down the road. And then living, living. I want you to split it between needs and wants. Now if you looked at your spending in the prior weeks, you'll have a better feel for that. But needs are your survival. They're the food, they're your health, they're your clothes. There's your transportation and they're your shelter. Wants are everything else. Okay, there are some things here I want to keep the living expenses probably below 50%. Okay. As best we can. Because we're putting money towards savings, we're putting money towards investing. But these are the four buckets. And look at it from that perspective. Just because you can get complex with the planning and we do some very sophisticated planning with in our money machine master plans and with our clients and when we teach them in the money machine blueprint what to do. But at the very fundamental are you allocating money towards saving, investing, giving and living? And if not, that's what we need to do. All right, leads me to week number eight. Talked about debt. And this is another place where I say if we haven't got on the debt bandwagon, let's get on it now. This is the debt breakthrough calculator. Debt isn't just math. It is a weight, an albatross around your neck. And we break through by getting it yourself on a debt payment plan. The easiest way is to grab my debt breakthrough calculator. It's totally free. You'll get a short training with it. It's an Excel template. Go to melabrahm.com no debt. Pick your lane. You're either gonna use Snowball Quick wins or you can use Avalanche Lowest interest. Both work. The breakthrough is choosing and sticking with it. Get yourself on a debt payment plan in this week and stick to it. And while you're doing that, this is a time, if you haven't done so already, to try and renegotiate the interest rates, the APRs on those credit cards, you may have to escalate, say, let me talk to someone else, let me talk to someone else. But if I can drop those interest rates by 2, 3, 5%, it's going to make a difference as you're putting money away. Okay, that leads us to week nine and phase three. That's grow and protect. Okay, in week nine, you open your money machine accounts. Now we start building your money machine. This is where you start to look at things and say, am I putting money away in my IRAs, a brokerage account, my 401k? Which account do you go into? I want you to follow the wealth priority ladder in chapter 12 of my book. But at the very least, if you work for someone that is matching your, they have a 401k and they match your contributions. Get the free money. Get the free money. And this will be part of the investing bucket, in the four bucket strategy. Okay? But get the free money first. Start building the money machine. We have to put money into the game, into these accounts invested in low cost ETFs and index funds to get it to work for us. If we're not putting the money to work, we're never building the money machine. That's the whole purpose. Okay, so this is where we start to get the accounts open, getting things working. Then week 10 is your first investment step. You got the accounts open, now let's make an investment. Start with a broad based Low Cost ETF Index Fund, an S&P 500 fund, a total stock market fund. Don't get complicated, don't get crazy. Get it? Maybe a target date index fund that you can do. So One of those three to start, start small. If it's 100 bucks a month, great. If it's 50 bucks a month, fine. If it's a thousand, wonderful. But I just want to get you out of the stands, off the sidelines and in the game. And week 10, we do it. Week 10 is when you start to say, I'm going to put this to work for me and know that it's long term. It's 10, 20, 30 years down the road. You're going to allow it to grow and you're going to set this up on automatic. You're going to turn around and say, I'm not just making this one investment. In week 10, you're setting up an automatic plan to continually make this investment. Every paycheck, every week, every month, whatever it is that is automatic to build. Because $100 a month is over $150,000 in 40 years, $500 a month, 750,000. A thousand a month will be over a million and a half. It builds. That's the game we're playing. That leads me to week 11. This is about guardrails. Now we're building some, now we have to protect it. This is where I want you to start to look at things and say, do I have things in place? Do I have the right insurance? Do I have the right limits on my car insurance? Do I have the right disability insurance, life insurance? Do not get whole life insurance, especially during this time if you need life insurance. Life insurance is only meant to.

Replace the income that comes from your work should you be gone and the people that depend on that income. Now that doesn't mean that if you have a stay at home spouse that there's no income, therefore not insured. Because that stay at home spouse is what allows you to go to work and make the money. Which means that if, God forbid, the stay at home spouse isn't there, what happens? Just get term policies. They're very cost effective. It's simply to protect the income streams or your ability to generate income. Don't get into these convoluted whole life index, universal life and investments in there. Don't do any of that. Simple, simple, simple. Okay. Insurance is one. Make sure you have the right health insurance in place because that will destroy people. The most bankruptcies are from medical debt. Here's one that a lot of people don't. They think about, but they don't do anything about. Fraud protection. I want you to go to all of your, the three credit reporting bureaus, Experian, TransUnion and Equifax. Okay, I want you to freeze your credit. Before you do that, I want you to run your credit report and make sure everything is correct on it. If something's incorrect, then make sure that you get it corrected and then freeze the credit. Now that means that you won't be able to apply for new credit unless you unfreeze it and someone else can't. So you're protecting your credit, your credit by doing that. And it's easy. You go to the websites and you say, I wanna freeze the credit. And if you need to unfreeze it for any reason because you wanna increase a limit or anything, you just go in and say, I want a thought for a week or two weeks and that's it. But you protect and you get that in place. Also, I have specific fraud protection and identity theft insurance. It costs a couple hundred bucks a year. Get it in place and then this is the time that if you have not done it and you have a family or anything like that, you need to get your estate basics in place. Do you have a will? Do you have a trust? Get it dialed in, all right? And if you have other possible liabilities, you know, you have a rental property or something like this, look for umbrella insurance. This is the kind of thing that we need to have in place. All right? And then the final week, week 12, I want you to review. I want you to reset. This is what you've done. And in 90 days, you rewrote your money story. You built a comfort fund. You're redirecting your cash, you're boosting your income. You've bucketed your money, you started investing, and you've put guard guardrails in place. Now's the time to review. Now's the time to reset, and now's the time to repeat. Do this sprint four times a year, and in 12 months, your finances will be completely unrecognizable. That's the game. All right? In 12 weeks, you've done more than most people will do in a lifetime if you do this. I know that some of it might be tough, some might be harder because it's new, but I get it. You're not alone. I'm with you on this ride, okay? Because remember, money isn't the goal. Money is the paintbrush. It's the tool. It's the paintbrush for your life that you want to create. All right? So don't just watch this video. Don't just listen to this episode. Go there, do the numbers, do the work. If you need to get out of debt, get my. My debt breakthrough calculator that we talked about, and stay with me on this journey. The process works. You just have to work the process. The math will always math out. And I've got tools, I have strategies, and I have resources for you to make it easier and more. Most importantly, I have support for you. I'm here for you to answer your questions, to support you on this journey. So you don't have to do it isolated or siloed, and you don't have to get sold into a bunch of crazy stuff because it should be simple. And it is. And it is possible, and it is. It doesn't mean that it isn't, that it's easy. It may be difficult, but we'll get you there. All right, let me know what you think. Let me know how you're going over the. Over these 12 steps. We'll get it all dialed in and if you have questions or comments, post them, let me know. All right, and then someone else that could use these 12 Share this out with them. And if you haven't done so already, subscribe below. All right, stay with me on this journey. Let's make this happen. Because you know what? Financial freedom is your birthright. Let's go claim it together. All right, till I get a chance to see you in the next episode of the next show on your path to financial freedom. Or maybe when I'm out there speaking, as I always say, always, always strive to live a life that.

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 youg 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 your birthright, and I want to help each and every one of you claim it. Thanks so much.