If You're 40+ and Saved Nothing For Retirement, watch this...

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. What would you do if you woke up one day and realized you had no savings for retirement, but the clock was ticking? Listen, if you're in your 40s or even in your 50s, and feeling the weight of not being financially prepared, this episode's gonna be for you. Listen, I know how overwhelming it can feel to think that maybe you have just fallen behind. But here's the good news. It's not too late. You can still turn things around. And so in this episode, I'm going to share with you the specific steps that you can take to start building your retirement, no matter where you are and where you're starting from. So whether it's creating that safety net that you need to paying off debt or finally making the money work for you through smart investments, I've got you covered.

If you're in your 40s, looking at your savings account and realizing, oh, my God, I've got nothing saved for retirement, listen, I know that that feeling can be overwhelming. I've had conversations with people in my life, clients that. That I've dealt with, that have gotten to that point where. Where they start thinking that, hey, I'm in my 40s, and is it too late? And here's the thing. You still have options. It's not too late. And. But here's the thing that we need to understand. Over 40% of Americans between the ages of 40 and 49, they say they have less than $10,000 saved for retirement. That is a travesty.

We didn't fix it. But here's the good news. Starting now, even 40 or 50, you actually can live a financially secure future. You have the ability to. To make it happen. I'm gonna walk you through some of the steps that you need to take on right now to start to put this together and to write the ship. The bottom line is this, is that there is a process. In fact, I detail a framework for building wealth in my book, building your money machine and walk through something called the wealth priority. Ladder in chapter 12 that literally tells you what to do with every single dollar. But in the meantime, I want to make sure that you're covered here. I want to go high level. What are the things to do if you're sitting back saying, I'm 40, 40 plus years old and I haven't saved anything for retirement? Because here's what we know. If you're at 40, you still got at least 25 years to go. 25 years to 65 if you're at 40. If you're at 45, you got 20 years. I mean, you may have even longer. And so why this is important is because when you start to look at the power of compounding, the things go. Even just saving $500 a month at an average S&P 500 rate, 8% over 25 years, it's going to grow to half a million dollars. Okay? Now the power of getting in the game even now is huge because if you saved it for 25 years, it's a half a million. If you waited another decade and you saved only for 15 years, it's only 150,000. I mean, it's 150,000, which is more than you would have had if you didn't do anything. But the earlier you start, the bigger the results are. It's just the way the math works out. And what's more important, it's not the volume of dollars, but the consistency of the small actions that you do to build the things that you do. So I want to walk you through, give you some steps that I think you need to take some really key action items to take to put you on the path to financial security, no matter age, stage and everything that you got going. Now, step one, and I'm going to jump to the iPad here, but step one is that you need to face the numbers. Because until you're willing to actually look at your numbers, we can't solve the problem because we have no idea what the problem is. So we can't solve it until we fully understand. And the way we fully understand it is you face the financial reality that, that you have. I know. Let me be. This is, this is my, my dad, my granddad's side of me coming out for a moment. This isn't about you facing it and getting yourself upset. This isn't about you.

Beating yourself up and bullying yourself because you should have, could have, would have, and, and all the things that you wish you did when you were 20, 30, when you were just even a year ago. That's not what this is about. This is about creating a level of clarity and a level of awareness that you finally have control. And so we can't stick our head in the sand. We can't pretend it's not existing. We can't blame ourselves for what we did or didn't do in the past. But we need to get real and face the numbers now. So what does that look like? What are the action steps that I think you need to take here? The first is this. I want you to physically get a pad of paper out or get a spreadsheet or something, or get an app. But I want you to write down your income and your expenses and your debt. Okay? In other words, let's figure out what's coming in, whether it's from a job, whether it's from a business, whether it's from a side gig, whether it's from rents, whether it's from investments. Figure out all the money coming in so you know what the inflows are and then detail out what's going out. That means getting a hold of your bank statements. That means getting a hold of your credit card statements. That means looking at it from a critical view, to sit there and list it out. Not to judge it, not to say, oh, I shouldn't be spending that. There may be a reason to say that, but not at this stage. All I want to do is capture it because. Because usually you haven't looked at it that closely. And so I want you to list out your income, I want you to list out your expenses, and then I want you to list out your debts. How much do you owe, who do you owe it to, what's the interest rate, what's the monthly payment? Okay, so how much do you owe, who do you owe it to, what's the interest rate, and what's the monthly payment? Okay, you want to list those out, we'll want you on a debt paydown plan. We'll talk about that in a moment. And I'll give you a link to something that makes it easy for you, a free resource that we have. So. So first things first, let's get clear on the inflows, the outflows, what you have and where it goes. That's it. Then I want you to start to look at and say, where can I find a. A minimum of 10% to 20% of your income at the beginning to move towards savings and investing? Okay, listen, when you're younger, you might have the luxury of saying 10% in my book, building your money machine, we actually in the wealth priority ladder we recommend 20 to 25%. If you have no savings at this stage, I got to get you in the game, so I'm not going to push you to 20, 25% yet. I want you to exercise the investing and savings muscle. So I want you in the game. Get in the game at 10%. Get in the game at 20%. Get in the game at 15%. Get in the game at 5%. Get in the game is the key. Once we get you in the game of savings and investing, we are going to want to push that up closer to 20%, closer to 25% to catch up for the things that you're doing. But if you're not putting anything away, 20 and 25%, is it going to do you any good either because you're putting 0% away? Hopefully that makes sense. So without the clarity of where your money's coming in, where it's going, and the way you're spending, we don't have the, the access or the ability to make this decision to put money away. So now's the time to, to really look at it. And one of the ways to do that, and this is another action item, after you've written down these income and expenses, to look at the expenses and say, what are the things that I'm not using, not needing, and I don't, and, and I don't have to spend, Cut those out and move that towards investing in savings. Then look at your income and say, how can I increase my income? Is it a side gig? Is it additional hours? Is it additional work, additional projects? Can I take my skills and monetize those kinds of things to elevate the income to take on that 10, 20%. So step one, step one is get clear. Okay? Face the numbers. Okay. Step two in this process is to start to build a safety net, y'. All. At this stage, you're gonna need to have what people will call an emergency fund. I call it a peace of mind fund. At the very beginning, at the bottom rung of the wealth party ladder, we talk about getting a comfort fund in place. Something that is this little dose of oxygen if you need it if something goes wrong. They say 40% of people can't afford an unplanned expense of $400. That's, that's crazy. So we don't want you going into debt, but that means that we have to have money put aside as a safety net because life is unpredictable. And without a financial safety net, in an emergency is going to put you into debt or into a bad situation. And so I want to avoid that. The way we do that is you start out with fifteen hundred dollars or one month's expenses, get it into a high yield savings account. That is your action item. Okay? Fifteen hundred dollars or one month's expenses in a high yield savings account. Now how do you get fifteen hundred dollars? You, you have, you've got to be resourceful. I mean, if there's stuff in your home that you're not using, I got a ton of technology, cameras and, and, and teleprompters and things like that that I don't use because I don't use a teleprompter, that kind of thing, that if I needed money, I could sell it and bring in some cash, put it in the high yield savings get. Are there things around that you can get rid of that, that will get you over that hump? Now this is not your emergency fund. This is not your, your peace of mind fund. Your peace of mind fund emergency fund is greater than since 9 to 18 months. But I just want this safety net if something unplanned comes in. So look at selling unused items, cutting unnecessary expenses, picking up a side project and overtime, something like that, that can quickly get this in place. So you have the peace of mind that you're not going into debt if something happens. Because without a safety net, an unexpected expense can completely topple your financial future. And being at 40 in the 40s, you know you're not at retirement age, but you can see the light at the end of the retirement tunnel. So we got to look at it from, from that perspective. That leads me to step number three, okay? And step number three is debt elimination. We in our world, in our society, we have normalized the existence and the carrying of debt, okay? It's a mistake, it's a problem. We shouldn't do it. Now I don't believe that all debt is a devil, okay? But I do believe that all debt has two personality traits. The first personality trait is that all debt costs. It costs in the form of interest, okay? And right now, if you're putting things on credit cards with higher interest rates, it's 20, 22, 28, 29%. When you're having to pay 29% to these credit card companies, there is no way that you can build wealth, is destroying your wealth. So high interest debt is going to completely obliterate your ability to build wealth, especially in these decades. So where your cash is so important, and so it's important for us to get you out of debt. Now, there is a Second personality trait. All debt stresses, meaning that it stresses you financially, but it stresses you psychologically too. It weighs on you. Now there is destructive debt and there's productive debt. Productive debt is the debt you use to build cash flow and build wealth. That could be a mortgage on a rental property. It could be putting Facebook ads or ad spend on a credit card temporarily that you spend a dollar, but you get $2 back in the form of sales. So you're making, making cash flow on is not that's productive debt. Destructive debt is the stuff you, you put on credit cards for consumables and lifestyle. It is the big screen TVs, it's the luxury vacations you can't afford to.

Things that are creating this lavish lifestyle or a lifestyle doesn't need to be lavish, but it is beyond your means. And the only way you can make it make sense is to put it on payment plan. But a payment plan is really just kicking the can down the road which is going to come home to roost. And when interest rates are high, it's hard to get out from under it. So I need you at this stage to really get hyper focused on debt elimination. And you have two ways to get out of debt. It's the avalanche method or the snowball method. If you want to know how to do that, here's what I want you to do. I want you to go to melabraham.com nodebt I have a short training there and a spreadsheet that you can download, an Excel template that you can download. Put your stuff in and you can test and see which one. The debt avalanche method focuses on paying off the highest interest rate debt first. It's the most economical way to do it. The debt snowball method focuses on paying the smallest balance first. It's the most psychologically pleasing method because you're going to get the win sooner. Okay? But the key here is this. Choose one, set it up and stay on it. Make it automatic and stay consistent. Get yourself out of debt. Follow the process so you don't have a ton of debt going into your retirement years. Okay? If we don't get on a debt payment plan and we aren't getting rid of the debt, it's going to burden you and your cash flow in the time where maybe you're not going to be making as much income when you retire. And we don't want to do that. So think about it from that perspective and make it, and make it work from there. Okay, let me throw some numbers at it because I just to make it real, let's say that you're paying off a $10,000 credit card debt and it's at 18%. Okay, 18%, which is low right now. $10,000. At 18% is $1800 a year. If I take $1800 a year over a 20 year time frame and invested 8%, that's almost $90,000.

So by getting that credit card paid down and taking the payment I was putting against it just for interest and investing it, I, I get myself almost 100 grand. That's the power of doing this. Okay, that leads me to step number four. And step number four is, is to start investing, y'. All. You can't win the wealth creation game on the sidelines or in the stands. You have to be on the field playing. Now, it has been shown that.

Wealth creation is less about the money and more about the behaviors. And what I want to do is give you the behaviors, the, the, the habits so you can make the right decisions on an ongoing basis. This is why I tell people that even if all you have is $5 a week to invest, to save, to put away, I want you to do it because it's exercising a muscle, it's creating a behavior that $5 will turn into 10, will turn in 20, turn into 100, and then a thousand, then 10,000. But if I don't start with something, I never start. And I get it, I hear it all the time when I make more money, then I'll do it. I promise you. 30 plus years as an advisor, 30 plus years as a money mentor. When people say that they never do it because they didn't develop the habits early on. And so what I want to make sure you're doing is a couple things. I'm going to give you some action steps here. Okay? The first is this. If you are an employee of a company that matches and has a 401k, I need you to start contributing to, to get the match. It's free money. If they're going to give you 100% for the first 3% that you put in, you take 3% of your salary, you put it into the 401k account and they match it, you got 100 return immediately. You have to start doing that. Otherwise you're one not developing the habit. But more importantly, you're leaving free money on the table. So I want you to look for the free money. I want you to look for, for the ability to make sure that if there are matches or things like that that are available, you got to take it, you got to take it. The second thing I want you to look at, and I just had this conversation this morning with someone is if you are eligible to create and contribute to a Roth IRA, then I want you to contribute to a Roth IRA because that money will grow 100% tax free for the rest of your life. Okay? So you don't get a tax deduction for it now, but you can take it out.

Later on with no taxes, which is very different than a 401k or a regular IRA. It is a hugely valuable account if you're eligible. The reason that, that it's limited is because it's so hugely valuable, they limit it based on your income and they limit how much you can put into it. So those are the first two action steps. Now there's something here I want you to understand.

It's not just about taking the money and putting in an account. Because here's what happens. You create a 401k or you create a Roth IRA, or you create an Iraq. That is an account at something like Fidelity, Schwab or Vanguard and you put the money in. That money has to be invested. It's typically not invested right away. You have to make two decisions. If, if I were to, to draw this out for you. You know, this is the account and it could be an IRA, it could be a Roth IRA, it could be a 401K. Okay? So you, you put money into the account. So now there's dollars here in that account. That means it's in the account, but that means that it's sitting there as cash. This is step number one. You actually have to do step number two to make sure that it's working for you. Okay? And step number two is you need to tell the account where to invest it. Okay? And so where do I want you to invest it? I want you to invest it in a broad market index or a low cost etf. I don't want you paying a ton of fees. I want to make it easy. I want to make it without friction. And I want diversification and low risk. So you can get into an S&P 500 fund. You can get in a total stock market fund. Very low cost, very easy to get into. So that's one, one place you, you can do it. I'll just put this here so you can go into an ETF index fund. Okay? And then I'm going to tell you another way to do this, which is, which is easy. The other way to do it is, is to look at a target date fund. This is like an etf, it's an index fund, but instead of trying to figure out which one to go into, you just figure out the date. The reason it's called target date is you target the date. You need the money. So if you're 30 years from retirement, then you might put a 2055 fund. And you go in and you say, I need a fund that is that, that matures at 2055. What that means is that they will pick the right funds to be aggressive early because that's what you want, conservative later, and they rebalance it for you. It makes it easy for you. So all you're doing is you're putting money in, choosing the date, get it invested, let it run. Now, this is a very simple way to do it. And as you grow and as you get critical mass, you'll be more sophisticated. But right now, I just need you in the game. I want to make it easy. And the majority of my Investing is in ETFs and index funds. It's not complex investment strategies. It is simple investment strategies that allow you to look at it. So the first place I would look is ETFs, index funds and, or target date funds. Now, one of the easier ways to do this might be if you are with a brokerage house that has robo advisors. You literally can go through and answer their series of questions. And when you answer their series of questions, they will automatically determine the mix or the proper mix of funds for you to consider to make the investment. So it is not hands off, but is as close to hands off as possible because they're doing a lot of the heavy lifting for you. Something that used to not be available, but it's available now, so why not use it? There isn't the excuse of I don't know how to do it. We put the money in and then we choose the funds we want to get into. If you don't want to choose the funds, you can do a target date fund or use a robo advisor to determine the set of funds you get into. But the point is, is that I need you in the game. Once you're in the game and you're moving, then we can manipulate it and change it as we as we see fit. Okay? If we don't get you in the game, the consequences are you're going to be looking at 50 and 60. And you go, I still have nothing for retirement. Well, I don't want that for you. You. All right, Remember, by putting in there regular contributions to the retirement account, brokerage Account or investing account, investing them regularly, even at 8%. Okay. It's going to grow to hundreds of thousands of dollars, to even millions of dollars. Okay? So it's not about how much you put away, it's the fact that you're doing it. All right, that leads me to step number five. Step number five is I want you to supercharge your income. What do I mean by this? Okay, listen, the bigger the shovel of income that you have, the easier it'll be to catch up or to build wealth. So I want you to start to look at ways that you can increase your income. Now, that could be as simple as making sure that you get a raise, negotiating for a raise, looking for higher paying job opportunities. But I want to be really clear here. Even if you worked for a company for 20 years, the 20 years themselves do not entitle you to a raise. And I know that might be hard to accept, but we live in a value exchange economy. The way you justify a raise, the way you justify getting paid more, the way you justify all of that is to make sure that you're providing more value. And what you want to look at is say, what's the value you're creating for the company? What's the value you're creating for your customer? What's the value that you bring to the table? And make sure that you're getting paid for that value. Sometimes you're not. And it's legit to ask for it. Sometimes you are. And then the question is, how can I increase my value? Can I get additional skills? Can I get additional knowledge? Can I help with an additional project? So now you increase the value and get. And paying you more makes it easier to do that. So when you go to negotiate the raise or anything like that, the negotiation positioning should be from a point of value and not entitlement. Hopefully that makes sense. The second thing to consider with supercharging your income is is there a side hustle? Can you freelance? Can you consult? Can you do things that are maybe one degree off of what you do, but it's right in your wheelhouse from expertise standpoint. Maybe you're a teacher and you can do side tutoring. Okay. Those kinds of things that maybe you do. Like there's a site out there. These are. It's a site for wedding photographers. Most of the time wedding photographers are shooting pictures on a weekend. Well, they got five other days a week to shoot pictures, but there's not weddings. So they put themselves out as freelance photographers in other environments to do travel photography and things like that, or portrait photography. And so what they're doing is taking their skill set but using it just off in, in, in a different direction. So, so this is the thing that we do because when we read, when we supercharge our income, we now have additional income to use to one, aggressively repay debt to get ourselves out of debt and, or get ourselves into the investing game to get us to that 20 or 25%. Because if we don't do that and we just stay where we're at, we've stagnated our income, but we've also stagnated our asset growth, our, our building of the money machine and our ability to have that financial freedom we deserve. Okay then, number six. Okay, number six is. I know you're not going to like this, but it's something I got to put out there. Adjust your lifestyle. Here's the thing. There may be some deferred gratification here. There may be some things where you say, I got to sacrifice some luxuries today so I can have financial freedom later. Maybe there's some things that you're doing that are costing you a lot. Little action items or steps you can take. Here is to look at your home. It's one of your biggest expenses in your life. Where are you living? Can we downsize it? Can we be in a lower cost area? Can we be in a lower cost unit? Can we be in a lower cost home? I'm not saying to do it, but I'm saying it is an opportunity to look at if we need to do that. I'd rather you focus on getting a bigger shovel like we talked about in the last step and getting things dialed in versus shrinking down. Because I truly don't believe that you can cut your way to wealth. You have to grow your way to wealth. And your path to wealth, if it is done through deprivation, isn't going to be enjoyable and it's not going to be sustainable. So I don't, I don't want to use that as the vehicle all the time. Sometimes we have to make some hard choices depending on our situation. And those hard choices may be temporary or short term. For the long term, good. So you want to look at downsizing, possibly. The other thing you might look at is are there discretionary spending like eating out or luxury subscriptions or things like that that I just don't need, that I can shrink down. Okay. And in doing that, then there's some other things that you might look at, for instance, delaying retirement, for instance, and say, I'm just going to work a little longer, maybe delaying Social Security to age 70 instead of thinking of taking it at 62, 63, 65, 67. Because every year that you delay it, your level of benefits go up. Okay? But if we don't make any adjustments to our current state of affairs, then it's never going to change and we're going to find ourselves again with, with nothing in retirement. And retirement is coming. Okay, that leads me to this other and last piece for you to think about, and that is this, okay? In our 40s, this is the time that you really need to start building a plan, a detailed financial plan, okay? You still have plenty of time ahead of you to.

Adjust for the plan, to tweak some things, to make some changes, to grow. But if you don't have a plan, then we don't necessarily know.

What changes to make that will have the greatest effect. And so building wealth isn't about perfection. It's about persistence, and it's the small, consistent actions that will lead to the big results over time. And so when you sit back and create a, when I, when I sit with a client and we do a, a money machine master plan, which is our big plan, where we literally schedule out and plan out everything from what they have, what they owe, what their income, their expenses, we build out their financial plan to retirement and, and will it last till age 90, age 95, we figure out the probabilities, we run a thousand different scenari scenarios. If the market crashes, if they retire early, all these scenarios to look at the probability of success. The whole purpose is to give them a recipe to operate from and a security to say that we've tested it and then we test it on a regular basis. Because when you do that, the plan will inform the actions you need to take to make the plan a reality. Otherwise, what you're doing is say, well, I'll put some money into retirement, I'm going to cut this and I'm going to spend that. But you don't know if that's moving the needle towards retirement, towards the money you need to have the life you want. And the only way to do that is to set a plan in place again. It could be, it could be a very rudimentary one. It could be on a pad and paper of what does it take. It could be on a spreadsheet, it could be in a budget, it could be in an app, it could be with, with us. It could be with a money machine master plan. It could be any of that. The point is, is that if you have a vision for your life, you need to have a plan. Make it happen. Because. Because then with the plan, we can take the steps to make the vision and the plan the reality instead of just a dream. Okay, look, I get it. You may be in your 40s, but it is not too late. And by taking small, consistent steps today, you can build a financial future that you deserve. If you want a detailed framework of how I prioritize things and the actions you need to take with each dollar, grab my book. I break it down step by step on building the vision, building the plan, and, and the steps in the wealth priority ladder. So go ahead and do that. But in the meantime, here's what I want you to do. I just want you to start. I want you to start by starting to save your first thousand dollars by putting yourself on a debt payment plan, by opening a retirement account. Because every action you take today is going to compound to a better future tomorrow. But if we don't take the action today, we have no future tomorrow. So that's, that's what I got for you. I hope that this helps. I hope that you, you start to see that Even if you're 40 and have nothing saved, it ain't too late. You got the capacity and the capability to do it. We're just going to make some decisions. We got to make some choices. We have to commit to it. We got to do it consistently over time. But you don't have to do it alone. I'm here with you. That's why I have the show. If you are not subscribed to the show, make sure that you subscribe. And in fact, don't do it alone. Share this with a friend. Let them go on this journey with you because you want them to be financially free too. I'm here to guide you along the process. I am on a crusade to help a million families find the path to financial freedom. And I want one of those, frankly, to be you. I think that financial freedom is your birthright. We just got to go claim.

Is simple. I didn't say it's easy. But just because it's difficult doesn't make it impossible. I'll hear. I'm here with you every step of the way. I'll give you the principles, I'll give you the processes, I'll give you the steps, and I'll give you the unbiased thoughts of how to make it happen and how to do it in a sustainable way. All right, this is, that's it for me on this one. I hope that you found it of value. If you have questions, you have comments, let me know. And I hope to see you on the road to your financial freedom. And until I do, always, always strive to live a life. See you in the next one. 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 is your birthright and I want to help each and every one of you claim it. Thanks so much.