If You Thought You’d Be Rich By Now, But Aren’t. Watch This…

You're in your 40s. You make good money. You've been saving, doing the responsible things. And every so often, there's a thought you never say out loud, and that is this: I thought I'd be richer by now. If that hit a nerve, don't click away, because that feeling might be pointing you to the completely wrong problem. The usual fix is like, save more, hustle harder, cut the little luxuries, even the lattes. And it misses what's really going on. And you might not be behind at all. You might just be standing on what I call the wealth The flatline, the stretch where you do all the work and you see almost none of the payoff right before the whole thing takes off. 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, and I've seen this play out over and over again over 30 years. And this time I'm going to give you the path so you understand it and you have it working for you. Let's do this. So let's talk about why you might feel like you should be a whole lot further ahead than you are. And I get it, 'cause I felt the same way. And, but why feeling that, as real as it is, might be lying to you. The picture almost all of us carry in our heads without deciding to looks like this. You put in effort, you work, you start to get a little money and you start to build a little wealth. And then you put in a little more effort and you get a little more wealth. And all of a sudden you start to see this line and you think that this line is this Straight line that goes from the bottom left to the top right. This straight diagonal climb up and to the right. Steady, fair, predictable. That's the line you expected, and it's totally wrong. See, that's not the way wealth is actually created. See, wealth— the line that wealth actually follows is flat for a really long time. It's flat. It's a frustrating stretch. You are putting money in, you are putting effort in, you are doing the things, and then all of a sudden you look at And you're not making a lot of progress, but then there's a bend and then it climbs like it's trying to leave the chart. Now you ask yourself, why the gap between these 2? Here's why. Because your effort doesn't compound, but your money does. See, early on, almost every single dollar that you make in progress is coming from you, your sweat, your income, your discipline, your efforts, and the work that you do. See, your money hasn't grown up yet and it can't pull its own weight because there isn't enough of it yet to pull anything, quite frankly. That long shallow part, this long part has a name. This is, the whole thing's called the wealth creation curve in my book. But this part, the flat part is called the wealth flatline. And I call it the wealth flatline for 2 reasons, because this is where people will flatline their growth and their wealth building because they lose patience, they lose discipline, and they say, I'm not getting anywhere. And they stay Step off the line. I did, I did, I did, and moved to Japan. Okay? And you gotta understand how this plays on. But before we go one moment further, I think the reframe that I wanna hand you is this: the flatline is where the acceleration gets built quietly, long before the scoreboard ever shows you a single sign of it. See, you're not stuck. You're actually compressing and loading a spring. The catch is this, that a loaded spring and a broken machine look identical from where you're standing. Same flat number, same quiet account. One of them's about to launch and take off, and one never will. And the only way to tell them apart is to understand which part of the curve that you're actually on. So which one are you sitting on? Now I want you to hold that question for a moment because I'm about to answer it. With math. Here's the thing that I think we need to start to look at. The reason that the flatline is so brutal and has nothing to do with the math is it has to do with how it shows up in your life. The flatline doesn't visit you in some quiet, cheap, spacious season when you've got margin and that you have time to be patient. When you're sitting in that flatline where you're really doing all of the heavy lifting, it shows up in the dead, in the middle, Of the most expensive, most demanding, most uncertain years you will ever live. This is where you start to look at your career, your kids, your mortgage, your childcare, your college. You have aging parents. You're building that career and, and building the wealth at the same time. It's difficult. You're buying a house, the first house, or you're outgrowing the first house and you're looking for the second house. You're trying to raise the kids and oh my gosh, and you're paying for childcare that costs like a second mortgage. And now you're starting to think about, well, wait a second, I gotta deal with college for the kids. And do I put money away? And how do I put money away for me and the college kids? And well, one second. Now you've got aging parents, and now you're looking at the parents who are sitting back saying, oh, we need some help. And how do I help my kids, myself, and my parents? Your income's climbing. Sure it is. But so is everything else, and everything is reaching into your pockets. It's like trying to fill a bathtub while your kids just keep pulling the plug. And one of them just handed the plug to the orthodontist, and that bill's a big one. So you make real progress, objective progress, but it doesn't feel like progress at all. You didn't do anything wrong. You're not behind. It's just the math of the season where every dollar you earn already has 4 other dollars worth of jobs waiting for it. It's what I call the messy middle. And underneath all of it, there's running this commentary in your head. And for some reason, it sounds like this: I'm doing everything I'm supposed to do, so why isn't it working? And for others, it's quieter and maybe even meaner. Maybe I really thought I'd be further along by now. Or for a lot of you, it's late at night, 2 AM, you're waking up and, and it's the one nobody admits out loud. You're sitting back and say, maybe I'm just not Good with money. Now put a whole single name on all of this, and it's discouragement. That's the gap between how hard you're working, how little the scoreboard is willing to reward you for it. And discouragement is the most expensive emotion in all of personal finance, because what it tempts you to do next is this, is that this is where it turns into dangerous— discouragement never tells you To quit, that'd be too obvious. You'd see it coming. Instead, it just whispers something that sounds a lot like ambition. It says, maybe you need the next hot thing. Maybe real estate's the real answer. Maybe you should take a bigger swing. Maybe this slow and steady stuff is for suckers and you should just go enjoy your money now and live for today. You only live once. Why you got it. Every one of those whispers is a way to jump off the curve, to jump off the flatline before you get to the, to the bend, to the acceleration zone at the exact moment that it's about to spring. That right there is the villain of this whole episode. Not the market, not the returns, not your salary. It's the discouragement that shows up in the messy middle and tries to literally talk you out of the plan right before the plan was finally going to work. So is your flatline a loaded spring or a broken machine? There's exactly one way to know that for sure, and we got to run the numbers. So let's run them, and I'll show you kind of the precise moment I think that this flips and why it feels so slow. All right, so here's the thing. I'm going to give you an illustration. Let me put a number on this slog, if you will, so you can see instead of Just feeling it and know that it's the math and it's not you. So it's a simple example. You invest $10,000 a year, you earn a hypothetical 8%. Now you can get an 8% long-term rate in an S&P 500. You start with nothing. Year 5, you've personally put in $50,000 of your own hard-earned money. And the account is worth about $59,000. So 5 years, 50 grand of your own sweat, 9 grand of growth from the work that it did to show for it. That's the moment that most people look at the statement and go, see, this doesn't work. What's Mel talking about? He's an idiot. All right. And I get it. I lived it, which I'll tell you about in a second. But here's the deal. Watch what that same boring, unglamorous machine does if you Just leave it alone. You keep going, you get to year 10. Now it's worth about $145,000. Year 20, $457,000. Year 30, you've contributed $300,000 total, $300,000 of your own effort and money in there, and the account is worth $1.13 million. See, which means that More than 70% of that ending number is money you never earned. You never worked for it, never sweated over it. Your money actually worked for it. It made it while you were sleeping, while you were at your kids' games, while you did absolutely nothing. That is the acceleration zone. That's where the bend comes in. Now, where does this thing stop needing you so badly? Let me give you an exact dollar figure because it might be the most important number in this whole episode. At around $125,000 at 8%, it earns you about $10,000 a year. Look at that. So $10,000 a year, that's an entire annual contribution matched by the money that just sits there being money for you. That's the first year your money pulls in a full shift right alongside you. So here's what I mean. If you are contributing $10,000 $10,000 a year, and now your money is earning $10,000 a year. You have doubled it. You're doing part of it, it's doing an equal part, and it only tilts up from there. And you get to $250,000, now your money is putting $20,000 away while you're putting in $10,000. It now out-earns you 2 to 1. And at $500,000, now you're at $40,000 a year at 8%. At $1 million, you're at $80,000 in a single year. You're still just putting in $10,000. So you go from doing all the lifting, all the heavy work, all the splitting and working, to having this work for you, to standing back and watching your money do most of the work. That handoff, that handoff from your earnings machine to your money machine is the entire game. And I know the flip is real because I lived on both ends of it. All right, here's the thing. Back in 1996, I was a brand new single dad in the sense that, you know, my son came to live with me at 5 and a half years old. So here I was, a single dad rebuilding after a bitter custody battle. And I literally blew my whole life apart scraping money into an account and whenever I could and finding a spare dollar here and there because I had no business. I was just starting. My partners had pushed me out. 5 years in, I had barely had $35,000 saved, but it was still $35,000. I had something. And I remember staring at the number thinking, man, I am about to turn 40 and this is just going to be a slog forever. I thought I was in this grind forever, but I stayed in the seat. I stayed in the seat because I was driven by how do I take care of my son? How do I do the right thing to To be good to them. And most of us have to look at what is the why behind the building of the wealth. It's not the number, it's the life that the number gets us that matters. And that's somewhere north of $200,000. That account threw off about $16,000 in a single year, $1,000 a month doing nothing. That was the moment it stopped being a theory for me. I felt it in my chest. Oh, this is real. This works, but it took a while to get there. Now, I get it. Some people are sitting back going, get where? And what do I need to do? So real quick, while we are here and we're talking about this, if this landed for you, I wanna make sure that I've got you on this because this is the first part of the story and there's so much more to go. So if you haven't hit subscribe yet, do me a favor. Why not first? And second, subscribe and stay on this journey with me because I got a lot more coming your way. All right. And while you're at it, might as well share this with a person that also needs to hear this. All right, let's get back to it. So here's the next thing is that I want to pull this in and give you some additional things that come into play here, because the emotion that comes out of this is important because the flatline lies to you twice. And the internet is literally happy to help. The first lie is that everybody your age is crushing it except you. So, you're in the flatline, you're struggling, you're putting the effort in, you don't feel like you're getting ahead. And the internet's also telling you, you know what, everyone else further ahead of you. And so now, it starts to feel even more real. So, what's actually happening? And I wanna be really clear here, and this is a survey that was done on consumer finances by the Federal Reserve. The median net worth for households between ages 35 to 44 is about $136,000. For 45 to 54, it's about $247,000. Okay, this is important because that's the median, meaning the middle. Half of everybody is above it, half of them are below it. So If you're 47 with $300,000 to your name, feeling like you're a failure, hear this. You're not behind the pack. You're ahead of the typical household for your age. The reason you feel behind is you've been comparing yourself to the average, and the average is a handful of ultra-wealthy people dragging the number into the stratosphere. You've basically been measuring your life against Jeff Bezos. And a rounding error. So comparison quietly kind of rewrote your definition of, of normal, and it rewrote it in the wrong way. So I'd be doing you no favors in doing this if I stopped and, and said, hey, here's the comforting part. I think that it's important for you to track these numbers. It's important for you to know these numbers. It's also important for you to, to know what these numbers mean and realize that comparing yourself to someone else doesn't necessarily mean anything. I want you to compare yourself to the journey that you want to create. But here's the other honest kick in the pants, because even those people that say, well, I'm way ahead of the game because my number's bigger than that— what they don't tell you when you dig underneath some of these numbers that the Fed's own data shows is a big chunk of the net worth number that they're showing for most households is the house they live in. The Fed's own data says the typical family holds roughly 2/3 of their net worth In the primary residence. Now, that's why I say that there's a difference between net worth and investable net worth. I want you to build investable net worth. Investable net worth is the thing that will generate cash flow and support your lifestyle down the road. I'm not saying your house isn't an asset. I'm just saying that it's a use asset. It's a lifestyle asset. And a house is a wonderful thing, but it doesn't pay you. It doesn't cover a bill. It doesn't put food on the table. It doesn't send you a check every month. You can't eat the drywall. I guess you could. It probably doesn't taste good. The equity in the home you live in can look exactly like wealth while producing precisely zero freedom, and freedom's the objective. That's the difference between a machine and a mirage. And that's why I don't want you comparing numbers the way most of us do that get you to start feel behind. A number that impresses your brother-in-law is not the same as a number that sets you free. So how do you tell if you're on track apart from are you kidding yourself? And I think Fidelity has some benchmarks that are a decent gut check. Their retirement guidelines kind of say this: you want to have in investable assets 1 times your salary saved by age 30, 3 times by age 40, 4 times by age 45, 6 times by age 50, and 10 times by age 67. And notice something here? 1, 3, 6, 10. Those jumps aren't even. They accelerate. Even the official guideposts assume that there's a, a curve, not a straight line, which means that if you're in your 40s and not where you kind of thought you would be, you're not out of the game. You're standing right where the acceleration is supposed to start. So how do you get off the flatline? Well, I think there's 3 levers that I want to give you because that's how you get off of it faster. 3 levers, not 12. And lever 1 is this: know your actual number. The fastest way to kill that 2:00 AM dread is to replace it with the math. Right now, your sense of, of whether you're behind is just a feeling, and feelings are a terrible accountant. So make the math work instead. What do you have? What are you putting in? What return are you assuming? How much will you actually need? How much time do you have? Answer those 5 questions and all of a sudden the fog turns into a target, a trajectory that you can aim at. And your feelings can't tell you whether you're behind or not. Only the numbers can. And now the other thing that happens is that you're going towards your number, your trajectory, not someone else's, not some data set, not someone that has expectations for you. And 9 times out of 10, when somebody finally runs the real numbers— and I've seen it— they're nowhere near as far off as the dread had them believing. All right, lever 2: increase what goes into your machine and time the amount going in smart. The single biggest lever you control on the flatline is how much fuel you feed it. And there's a smarter way to do this than just save more, save more, save more. Bump the savings rate. Capture the raises instead of spending them. Don't let your lifestyle inflate every single time your income goes up or you'll run in place for decades. But this is the move I really want to give you because it's the one that saved me when my income was all over the map. Back then, I was, I was making money in lumps. By projects, cuz I would get a project here and a project there. And so I didn't have an even salary and I would land a big project that might pay me $50,000 and then I might not have a project for a month and then I might land a $70,000 project or a $10,000 project. So it was this constant up and down, up and down. And that's the game that I was playing. So if I'd waited around to save a little every month, like the books tell you, I'd have saved basically Nothing. So I did the opposite. Every single time a big check came in, say it was $50,000, a windfall of some sort, I'd take a small slice to celebrate because there gotta be joy on, on the process. Maybe it's $1,000 off that $50,000 that I'd go and celebrate because you gotta, you gotta feel the win or you won't keep going. Then I set aside what I needed to cover for taxes. Then I set aside what I needed to cover for the runway until I landed another project, another revenue generator. And then everything left, maybe it's $30,000 or something, in one shot went straight into investments. One move, jumping it in and putting it in. I call this leapfrog funding because it let me jump the portfolio forward months, sometimes years in a single afternoon. So if your income is lumpy, stop waiting for it to get smooth. Leapfrog it. That's the game I want you to play. Maximize your contributions as early as possible whenever you can. Lever 3, give it time and stop reaching for the shortcut. This is the lever that, that does most of the work while asking the least of you, because it's mostly about what you don't do. Compounding doesn't need you to be brilliant. It just needs you to be present and patient and to quit getting in the way. Every time you jump out because you maybe you got scared or someone told you, you jump back in because you got greedy. That you raid the account because of something, chase the shiny thing, you reset the curve, you go back to zero, and you gotta go through that flatline again. And I'm not preaching this at you from some mountaintop. I did it deep in my own flatline. Discouraged and impatient, I went hunting for a shortcut. I cut corners on a couple investments. I didn't understand the investments, but they were supposed to make me a lot of money. Quickly. And I got burned for it. I got burned for it. And I watched people do a version of this constantly. You know, I'll change the details, but once I knew a guy who spent 11 years building a solid, boring, do-it-right portfolio. 11 years. And in year 11, a rough market hit and some louder guy at a conference convinced him he'd been doing it all wrong the whole time. So what did he do? He bailed out. He moved it all to cash, and then he went chasing something shinier. And by the time he crawled back, he hadn't just missed the recovery, he kneecapped the exact bend we've talked about. He did all 11 years of hard work and he just quit right before the reward showed up. Don't be the person who does the hard part and then skips the payoff. All right, so let me bring this all way back around to the thought that you had at the very start. The one you don't say out loud. I thought I'd be richer by now. Maybe you did think that. Maybe you're 43 or 48 or 52. The number isn't what the younger version of you pictured it would be. I want you to hear this part clearly though, because it's the whole point. Wealth building has one genuine cruel feature. The hardest, longest, most thankless part of it happens when you have the least Evidence that it's working. You do the savings, you make the sacrifices, you feed the machine straight through the messiest, most expensive years of your entire life. And for a long, long time, it looks like almost nothing until it doesn't. See, most people quit judging the process right before the process was about to reward them. They do the whole flatline. They just don't stay for the bend. So don't ask yourself whether you should have been richer by now. That question does nothing but beat you up over the curve nobody ever taught you how to read. Ask a better one instead. Is what I'm doing right now going to let my money eventually do more work for me than I do? Because the day that becomes true is the day everything changes. That's the day you stop being rented to your own life and start actually living it by choice. So you protect that bend. You guard from the discouragement, from the shortcuts, from the version of you that wants to quit In year 5, because that acceleration you can't see yet is already being built right now underneath the flatline that you're actually standing on. Because earning more doesn't make you free, the money machine does. And when you compress that spring and stay patient and stay diligent on that flatline, when it releases, all bets are off. Now all of a sudden you've got an accelerating machine that gives you the peace and the freedom that you deserve. All right, I hope that this hits. If this shifted the way you see your own number even a little bit, do me a favor, subscribe so you don't miss what's coming. And at the same time, pass it on to someone else who needs to stay in the seat and be part of this. All right, until I get a chance to see you on another one or on your path to your financial freedom, as I always say, always, always strive to live a life that outlives you. See you in the next one. Cheers for now.