Investing Advice People Don't Want You To Hear

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 is the best financial advice that you can have? Maybe, just maybe you don't want to hear. Well, that's what we're going to do in this episode of the Affluent Entrepreneur show. I'm going to break it down for you. I'm going to give you real world advice from the real road traveled so we can get real results in your bank account and in your life. All right, Enjoy the episode.

All right, what is the next magic bullet? What is the exciting financial move that is going to drive you to the moon, that's going to take your financial foundation to a whole new level? Here's the deal. I've asked, I've been asked this all the time about what's the best practical advice that I need to know to make a difference in my finances and in my wealth, to create wealth. Here's what you might not want to hear. It's not the fast, sexy stuff, but it's the sustainable stuff that actually builds wealth that I think really matters. And there's some things that I want you to start to look at. And I'm going to walk you through a couple things in this video that'll make a difference. And if you listen and you take it as a checklist, you're going to see that your financial destiny, your financial future will change forever. Here's, here's the thing that I know if you're trying to build wealth and it is an adrenaline rush, you are doing the wrong thing here. Your wealth building journey shouldn't be an adrenaline rush. It shouldn't be feeling like you're on a roller coaster, a topsy turvy or anything like that. It should be this, this slow, slow growth. Now that doesn't mean that you can't get there fast. That doesn't mean that you don't make moves. That doesn't mean any of that. It just means that we do sustainable, specific things that have been proven time tested over time, no matter whether the economy's booming or the economy's breaking or anything else that's going on. And when we apply those principles, we can transcend all of the economic data, we can transcend all of the stuff that's going on around us, and we can build wealth in that process. Listen, I've been going to be 63 this year. I've seen a few things. I've been through a few recessions. I've been through a few downturns. I've been through a few breaks in the market. I've been through interest rate hikes and inflation. I've been through all of it. These are the things that matter. And when you do the things that matter, no matter what is going on around you, you're destined to win. All right, so here's the thing. Let's just talk about wealth in general. Wealth creation in general. Here's what we know. The fact is, is that wealth creation is less about the money. It's less about your income, and it's much more about your behaviors, your habits, your choices, your discipline. Okay, this is why I say this. There's a study out there that shows that 79%. 79%. 8 out of 10 millionaires are first generation. First generation. That means that they didn't win it. They didn't. They didn't get it gifted to them. They didn't inherit it. They created it. 8 out of 10. That's good data for your side. Now, here's the other thing that's really cool of that eight out of ten, over 30%, over one third of them never made.

More than six figures, a hundred thousand dollars during their career each year. What does that mean? So the millionaires that were made weren't these Internet millionaires. They weren't the ones that sold their company for hundreds of millions of dollars. They did it steadily over time on a. On a salary that really wasn't. Wasn't huge. That. That should excite you, because what that means is that you don't need to hit it out of the park every time. We just got to do the right things. But if it's not the income that makes a difference, then what is it? The behaviors, it's the choices, the decisions, it's the habits that you have in your life. Because when it comes down to creating wealth, look, it's not that complicated. As much as people will think that it's complicated. There's just a couple things. Make more money, get a bigger shovel. Okay, I want to increase my income. We'll do another video on what are the ways that you can get paid more for the things you do. So you have a bigger shovel of income to move yourself towards financial freedom. Because if we have a bigger shovel of income, it doesn't solve the problem, but it certainly helps it. And why do I say it doesn't solve the problem? Because we can look at a lot of people that make a lot of money. Take Mike Tyson for instance. But they end up broke. You can look at Nicholas Cage, Burt Reynolds, God, there's so many that we can name off that, you know, that ended up building a ton of income but going broke. So it's not the income that matters, it's how we use the income to build what I call a money machine, to build the wealth so the income makes more income for you. So that's what happened with these folks that were making $100,000 or so a year. They just deliberately, intentionally use the income properly to create millions in their life. So instead of sitting back and saying, I got the only way to solve this is more income. Maybe, maybe not, then we ought to look at and say, yes, I want more income, but I need the right behaviors, the right decisions, the right choices to make sure that I use the income in a way that starts to build wealth. Because if we don't do that, the income isn't really going to matter. Okay, so make more money. The formula for wealth is make more money, spend less money, invest as much as possible. That's it. It's a three step formula. Make more money, spend less, and invest as much as possible and then stay the course. All right, hopefully that makes sense to you. All right, so here's the thing.

When I first started my financial journey, I got into some really esoteric kinds of investments. It was, it was kind of, they were fun, they were sexy, they were, they were challenging. They were, there were all of those things. Then this leads me to the very first rule and one of the very first pieces of advice I can give you. And that is this. Never, ever, ever invest in something you don't understand. Keep it simple. Listen, I couldn't follow some of these investments back when, back in the day. But I didn't have the rules that I have today. So I found these esoteric investments. I thought they were really cool, they had some nuances to it and they told me that they to go through the roof. And, and I believed it and I got invested in it. Some of them did, some of them didn't. All right, but the, the, the difference is that if someone said, hey, explain that investment to me, I couldn't do it back then. I could now. And so the very first thing is to make sure that you are not investing in something you don't understand. If you choose to sit back and say, I want to invest in real estate, we can talk about that. But the question is, do you understand real estate, truly understand real estate? Is it a flip? Is it short term rentals? Is it long term rentals? Is it commercial property? Is it multifamily housing? Do you understand it? Do you understand the market around it? Do you understand the sector, the community, all of that stuff? If not, you have no business investing. What you have business do is investing in your knowledge, growth first. So you understand it and then you can make an informed decision. It doesn't mean all your decisions are going to be right. Mine clearly are not.

But they're informed. So I want you to understand it. If you want the stock market, you're going to learn about the stock market. Doesn't mean you become an expert, but you have an understanding. I was having a conversation with someone recently and here's the difference. Too often we are sitting in the passenger seat and allowing other people to drive our investment bus. I don't want you, I want you to move from the passenger seat to the driver's seat. The people that are on your bus are going to be the advisors, the people that are promoting the investments. But you will make the decision. The only way you can make the decision is that you understand what you're investing in. So first things first, you don't invest in something that you don't understand. Second, you want to make sure that what you're investing in has a long term record. Okay, let me say that again. A long term record. Too often, especially now, we, we are investing in memes, trends, fads. We Hear it on TikTok. Lord knows, don't get your advice from TikTok. Okay? Or at least look at where the person has got their advice from and how well they're doing. And is it the reality or is it a facade? That's an aside. But the bottom line is this, is that it is important to look at it and say, has this done well during good times, during bad times, has this done well for a long term? Because now you have some proof. Now history isn't an indication and a guarantee of future, but it certainly might give you an idea of what could happen if you know what happens with an investment during rising interest rates, if you know what happens with an investment because of recessions, because it's been through it before. Or a market downturn. It gives you an idea to be able to predict. So I want to invest in something. I understand. I want to invest in something that has a long term record. And then number three is really to understand this. Small things matter, but big things matter more. I get it. My dear friend coined the whole thing of the latte factor. And I know that he gets. David Bach has put this out there and he gets. He gets kind of ridiculed about the latte factor. The reason I'm not wealthy is because I drink a coffee. That's not the point of what he was making. The point of what he was making is being deliberate and intentional with how you use your money. And that little things can make a difference, but big things can make a bigger difference. Your choice of a car, for instance. A depreciating asset. I watch someone on on TikTok telling people that they were better off buying a $200,000 car than a 25,000 dol. Thousand dollars car and that it was a wealth transfer, y'. All. It is a wealth transfer to the dealership. What kind of crazy advice is that? You are buying a depreciating asset. Big buying decisions will have a material impact on your wealth creation. So what we need to do do is be careful about the big stuff. Doesn't mean you don't do it. You do it fully informed, fully intentional, with the understanding of it. So things like car housing, student loans. Oh, don't get me started on student loans. I get it. We. We want to get a college education, but you say I can't afford the education, so I'm going to go get a student loan. A student loan. Your tuition for education is no different than any other investment. There must be an ROI on it. If I am going to get an education that is going to get me a salary of $200,000 a year. It's different than if I'm going to get an education that's going to get me a salary of $25,000 a year. If I go spend $150,000 in student loans to get a $25,000 salary. That's pure silliness. It's ludicrous.

If I'm spending $150,000 to get a $200,000 salary, maybe I can make the case for it. I prefer you don't do it that way. There's a lot of ways to pay for stuff. But understand that these big things can actually bury your financial future if we're not careful because they stick with us for a Long time housing decisions, car decisions. I was looking at something the other day, watching people financing cars for six and seven years.

Yet they only keep the car for two or three. Which means that when they get out from under the car, they are completely upside down. And what do they do? They're in a negative. So in other words, the car is worth less than what they owe. When they get out of the car, they either have to pay the difference or what do they do? They roll it into the next car. That means that they're buried deeper in a hole on a depreciating asset. It's a mistake. Now I get it, you want to drive a nice car, but what's the real reason for the car? A safe mode of transportation from A to B. Now I drive a nice car, pay for it cash. Okay, so you want to, if you really want to do that, figure out a way so you don't bury yourself in a depreciating asset and do it from that perspective. Credit card balances. These are some of the big things that will, will harm you. Carrying a credit card balance, especially in today's times where the interest rates are 24 to 28 or 30%, you can't get ahead of that. Even with high yield cash gaps at 5%, you can't get ahead of that. The market grows at 8, 9, 10, even 15%. But you're paying 25%, you can't get ahead of that. So you need to look at the big things that you're making, the big decisions you're making in, in your life, around the money and what the long term impact. Okay, so that's the next, next piece. Remember, this is advice that people don't want to hear, but they're going to make it. It's going to make a difference in your, in your life, in your financial journey and your financial destiny. This next one is this. Stop the comparison game. I get it. It's easy to grab that phone and get on Instagram and go, look at that. I think I need to buy me one of them. That's how I got a 900 coffee maker in there. But the challenge is comparison does a couple of things. One, it doesn't allow you to be content with where you're at, nor to appreciate what you have. And when you're not content or appreciating what you, where you're at or what you have, what do you do? You go buy more because you think it's going to satisfy you, because you think it's going to make a difference. But it doesn't. So what do you think? Oh, I just need more, and you can't get enough of a fix. Comparison, they say, is the thief of joy. Here's what I think we ought to be doing is forgetting what everyone else is doing around us and stay in our lane. To be really clear, one of the things that I do with, with our clients at the very beginning is let's talk about your life. What do you want your life to look like? What does that look like? Where. Where do you want to be? Do you want to be in a tent in Montana? Do you want to be in a yacht in Monaco? Do you want to be somewhere in between? It doesn't matter what the answer is. What matters is the answer is your answer. And now you sit back and say, is my buying decision? Is my investing decision? Are my money decisions moving me closer to the vision for my life? Not the vision you see on social media or the media or the advertisers or what your neighbor's doing, but your life. So we stop comparison, and we stop buying based on comparison. We start buying based on a vision for our life that's meaningful, that's impactful, that that is something that really matters to us. I want you to start pushing yourself to putting 20 to 25% of your income away. Now you sit back and go, oh, I can barely pay my bills. I get it. But remember, decisions, habits, behaviors will drive your wealth. I want you to build, make a decision, build a habit, have some behaviors that start to push you to 20 to 25% of, of your income going to wealth creation. Now you can. You may not be able to do it right away, so you do it in, in 1% steps, 1% steps. So you get a raise or you get. Or you start putting money away, and maybe you start at 5% the next quarter, the next six months, you'll move it up at 1%. So you go to 6%, then 7% and slow. Slowly, you are building up to the point where you're putting 20 to 25% away each and every day. Okay, you just keep doing will. It will help. But the bottom line is that you, the sooner you get yourself to that 20, 25%, the sooner you will build the money, money machine and the financial wealth. You need to be completely financial free. Here's why this is important. I hope that this starts to drive home some of the advice that maybe you didn't want to hear, but it will. I promise you, if you take this on and put it into your life, it will make a difference in your financial future, your financial destiny. It will change the generations. You will become a financial inflection point for your family. Because the idea here is this. It's not about building a bank. It's really about living a rich life and stripping away the stress that comes from money that most people, most people are experiencing around money. I want to eliminate the stress, and we can. When you do the right things, when you build the right behaviors, you have the right habits, you make the right decisions and choices in your life. So keep it simple, keep it consistent, win the long term game and not worry about the short term game. In other words, you're going to do the things that matter in the long term. And in the short term, you might say, I'm not going to do that because it affects me getting to the long term game or my long term vision. All right, so build your machine, keep it simple, keep it consistent, get on the field, stay in the game long term, do this, you'll thank me. But more importantly, your financial future will thank you for doing it. All right, I hope that this helps. I can't wait to see another video, another episode, or on the road. And until then, always, always strive, live a life that outlives you.

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.

And that's it for this episode of Building your money machine where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful to you, here's what I'd love for you to do. If you do me a favor, go to Apple, Apple Podcast, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people. Because I truly believe that financial freedom is your birthright and I want to help each and every one of you claim it. Thanks so much.