Most People Aren’t As Rich As You Think

You can look rich or you can live rich. In 30 years as a CPA, I have met almost nobody who figured out how to do both at the same time. See, the ones who look rich are usually paying for it every single month. The ones who actually live rich though are the ones that nobody ever notices. That gap has nothing to do with how much you earn. 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. By the end of this, you'll know exactly which mistakes are quietly costing you a life and what those mistakes are really costing you. And the 4 questions I hand my own clients that build one rich life for real, starting with your very next paycheck. Let's do this. Let's get right into it because by the end of this, you're never going to look at someone else's driveway the same way again. So the first thing is this, there's a visibility problem. Something I think about. I had a couple ones. Beautiful home on the bluff overlooking the beaches of California. Bentley in the driveway, a Corvette right next to it, a Mercedes for his wife. They were in the entertainment industry. Big names, big rooms, big energy. The kind of world where the car you drive actually can say more about you than anything you say in it. You know, appearance wasn't simply a luxury for them. It was practically a line item. And when people around you expect a certain look to even get into the next deal, the pressure to keep performing never really turns off. And when they walked into my office the first time, I remember thinking, oh, I better bring my A-game. I was a numbers guy who became a business manager because I was good with a spreadsheet, not because I was used to sitting across from famous people. So I sat there trying to look Um, doing the math on a legal pad, one of those yellow pads, while quietly noticing his watch cost me more than my car. Then we got into the numbers, the actual numbers. And I remember running them, literally running them twice because I kept expecting to find a cushion somewhere and it just wasn't there. The house was worth close to $4 million at the time, and we're talking decades ago, and there were 3 loans on it. Not one mortgage, 3 separate loans stacked on top of each other. Because what I found out was every time the lifestyle needed more oxygen, they went back to the well one more time. Each loan was just covering last year's version of life, and that's it. Now, the income side of it, that was real. It just never stood a chance against what was going out the door. I've got a name for that now after 30 years of watching it happen. Check to check, just with more zeros on it. Here's what nobody tells you about wealth. The only thing you could ever actually see is what someone spent. The car tells you they had enough to finance a car. The house tells you they qualified for a mortgage, but neither one tells you what's sitting underneath it. And most of the time, there's a lot less underneath it than the driveway wants you to believe. See, I run what I call a financial X-ray on people now. It's out of habit. I want to know what's under the hood. Forget what I can see because that doesn't matter. What's the debt behind it? What's really invested? What's the stress? What's the life behind it? What's happening? What happens the month the income stops? I run that X-ray on the most impressive looking lives and the picture changes fast. See, real wealth doesn't have a logo, and a paid-off account has never once bought anyone a bigger front door. This is exactly why I built this whole show around the idea that earning more doesn't mean a thing until you know where it's actually going. Next time you, you catch yourself sizing up someone else's life, you know, compared to your own— and we live in a comparison society, whether it's social media, whether it's media, whether it's our Friends next door. I want you to ask what's underneath it before you ask what it looks like. Compare the couple on the bluff to a client that I worked with for years, okay? Because here's the thing. They had a beautiful house on the bluff overlooking the beaches. But this client, they had the same house for almost 30 years. They had a nice car, nothing anyone slows down to look twice at, but it was a nice car. They took 1 to 2 trips a year. They planned well in advance. And because of that, they fully enjoyed it. He paid for both his kids to finish college and grad school without blinking. And if you met him at a barbecue, you'd never once guess that he had anything. He doesn't bring money up. And if you ask him directly, he still undersells it. He retired before he turned 40. He's sitting on about $3 million. He's taken zero income since he retired. I mean, no paycheck at least, no salary, nothing but his own portfolio covering his entire life. And today, literally more than a decade later, he's sitting north of $8.5 million. His Tuesday looks nothing like the one you'd expect from a man with that kind of balance sheet. No alarm tied to a commute, just coffee, maybe a call with one of his kids, a walk, whatever the day happens to call for. Funded entirely by decisions he made years and decades ago. He's never once had to revisit under pressure those decisions. Nobody driving past his house has ever once thought, man, there goes a rich guy. But nobody else has looked at it and said, hey, he has a— doesn't have a house on a bluff. That's the crazy thing. See, you cannot see true richness. You cannot see it. All we see is consumption. And those are 2 completely different things wearing the exact same outfit. So that's the illusion. Looking rich and being rich can be complete opposites. So let's talk about what it costs to keep up that appearance, because the math on this one is going to bother you. It might even blow your mind. So if you want to know what your own lifestyle costs are, which I think we all need to know, and a lot of people don't know it, they don't want to look at it. I created something called Lifestyle Cost Calculator. It's totally free. The link's below and we'll make sure that we have it available for you. It's melabraham.com/lifestyle. But let's go to this next piece. And this next piece is that there are 2 price tags on this. Let's look at a real example. No fictional couple with a mansion, just the simple math that you can check yourself with a calculator app. So say this, you're spending an extra $1,000 a month To look the part, a nicer car payment maybe than you need, eating out a little more than you planned, or wardrobe that is a little more flashy than it should be. The subscriptions, the little upgrades that, that never once feel like a big decision, but when you add them up, it adds up to $1,000. Now, if all we did was take that same $1,000 a month and reroute it towards your financial future, Instead, instead, at a hypothetical, call it 8% return, in 20 years, that becomes close to $590,000. Read that number again. It's almost $600,000 built from money you'd never even miss on a monthly statement. See, nobody sits down and writes one big check and deals with it. That's the whole trick. The kitchen gets split into 18 easy payments. The car turns into $800 a month for 4 years or 7 years the way they're doing it now. And by the time it's paid off, you hand back the keys and own exactly nothing. But they made their pound of flesh in the process. It's small enough every month to, to never feel like it's a real decision, but it's big enough over 20 years to be the only decision that actually matters. And look, I'm not telling you to eat rice and beans and, and all that stuff and stare at a wall for 2 decades. That's not life either. But I'm telling you that every single thing you buy to Looks successful has 2 price tags stapled to it. There's the number on the receipt, and then there's the number that that same money could have become if you just left it alone to grow. So there's 2 numbers. Your brain rewards what you can see today though. The car is in the driveway and it registers instantly as you drive it and you get in, you have that new car smell. And I'm not saying not to get new cars. I have a nice car. But I've done it differently. But the number quietly compounds in an account somewhere where you don't see it on a regular basis. You can't experience it. You can't smell the smell of fresh leather or fresh interior. It doesn't register at all for years, which is exactly why this works on smart people every single day. Now, if you stack a few categories together where you start looking at the nicer car, The slightly bigger house payment. Hmm, let's upgrade the vacations. It's not hard to get to a point where it's $2,000 a month without anyone in the family feeling reckless about it. However, when we look at the opportunity cost, the other cost, and we reroute that instead to the same 8%, you know, in 20 years turns into just under $1.2 million at that point, built from money that never felt like it was a sacrifice to spend. And this is the thing that I think stings if you're already in your 40s. Take that same $1,000 a month and reroute it starting at 30 instead of 40 at the same 8%, and you're not looking at $590,000 anymore. You're looking at $1.5 million. One extra decade of building instead of performing is worth 2.5 times as much. Every dollar you spend to look rich has 2 price tags. That's the thing. What it costs you today and what it costs your future. The store never hands you the second receipt, not at checkout. That's just what happens when you compare your real bank statement to someone else's highlight reel. And none of that is a flaw in you. It just isn't. So we've seen the illusion. We've seen what it can cost. Now watch what happens when that gap Runs for years instead of months. Because this is where it stops being about money and starts being about your options. It's something that I call the performance tax. The mortgage didn't care that you'd just been diagnosed. When this client on the bluff got diagnosed with cancer, the mortgage didn't care. The 3 mortgages didn't care. Because there's a part of that story that I hadn't got to yet. He got sick in his mid-50s. Cancer. And every payment kept arriving right on schedule, the way payments do, completely indifferent to what was happening inside the house. See, the bank doesn't sound a— send a card. It doesn't ask how you're holding up. It just keeps showing up every month like a subscription nobody remembers signing up for, except this one had a house attached to it. Now, he, he had life insurance, But only $250,000, and that's it. And honestly, I had to twist his arm to even get that much. He didn't want to spend the money on something that he hoped he'd never need. And I get it. But that conversation is never an easy one. Insurance, it's about the only financial product you buy when you actively hope you're wasting your money on it. Because every year you don't use it is a year you live through. But $250,000 against a $4 million home with 3 loans on it. 2 more cars and a lifestyle that needed the income to keep flowing every single month to just survive. You already know how the math ends before I even finish this, don't you? See, when he passed away, his wife and his kids were left holding a driveway full of impressive things and a stack of bills those things could no longer pay for. Looking rich, it buys obligations, not options. This doesn't only show up When someone dies. It shows up every single day to people who are very much alive. And I've sat across from them. I've sat across from people running their entire departments. People everyone else in the building respects, watching them come apart over a payment they can't get out from under. Think about what that looks like on an ordinary Tuesday or Monday morning. The alarm goes off. There's a mortgage payment due in 9 days bigger than What a lot of people take home in a month. There's a car lease renewal sitting unopened on the counter. There's a tuition bill for the school in the good district because good districts carry their own kind of tax. And it's a tax that no one ever talks about and it never makes it into a brochure. None of that cares how the person next to you is sleeping or whether last month's diagnosis has even sunk in yet. The bigger mortgage requires bigger paychecks just to keep showing up. The car payment requires the bonus. The lifestyle requires the job to keep going. And even the job that's slowly wearing someone down to nothing because the lifestyle can't survive without it. That's not weakness. It's just what happens when the mortgage gets a vote and grief doesn't get one. It's also a peace of mind cost, not just a financial one. So you don't sleep well at 3:00 AM when your calm depends on next month's paycheck landing exactly on time, every time, forever. That stress, that emotional load that comes from the financial pressure to try and look rich is one of the biggest mistakes, 'cause more income never bought that family freedom. They had more income, but it financed a bigger obligation. What a payment requires from you over the next 5 years actually matters more than what you can technically afford this month. That's the part that nobody photographs. The lifestyle that, that's supposed to say you've made it can quietly turn into the one thing you can no longer walk away from. I think about that family on the bluff more than almost any other one I worked with. Not because they did anything unusual, but because they did exactly what a lot of people are doing right now, just with bigger cars, bigger homes, and better cars, I guess. But that's the cost when the appearance runs the show instead of you. So let's talk about the actual alternative, and it's got nothing to do with deprivation. Now, I love Dave Ramsey, genuinely respect the man. He's helped millions of people stop bleeding money, and I'm not here to take that away from him. But I have a problem with his beans and rice. If you're buried in a hole, sure, you do what you have to to climb out. I get that completely. But if the entire plan is deprivation, no spending, no debt, no, no, no, no, no, on repeat for years at a time, you're training a behavior. And wealth creation is a behavior. And the behavior you're training in that situation is scarcity, not wealth creation. You can't eat beans and rice for 5 straight years and expect to suddenly build something, suddenly develop a taste for building something else. People climb out of the hole with that method, and I get it, and that's the most important thing. But then they have no idea what to do with the money once they have some, because no one ever taught them. And no one ever taught their muscles and built their muscles for having it. The only muscle they have was for not spending it. The habit that builds real wealth isn't cutting everything off. It's directing everything on purpose with intention, every dollar assigned to a job before it ever hits the account. And that's a completely different skill than restriction. And it's the one that nobody teaches you in a program built entirely around what to stop doing. Here's the alternative I use with my clients, and it has nothing to do with restriction. 4 questions. What do you value? What's the actual vision for your life and why does that matter to you? Who do you want to live that life with? And does this decision move you closer to that vision or further away. See, values aren't a poster on a wall. They're the stuff that you'd protect even if nobody was watching. Vision without a why behind it is just a wishlist with better lighting, and that's it. And who you want to live this life with matters more than almost anything else on that list. Because plenty of people build an impressive life next to the wrong people or Completely alone. My life is richer because of my wife. My life is richer because my son and my daughter-in-law and my grandkids. My life is richer because of the people that I get to share life with and, and serve with and do the things with and experience life with. And that last question replaces, can I afford it, as the filter for every dollar you spend. Say you're staring down at a bigger house, one that stretches the budget without stretching your actual life. Run it through the filter. Does the extra square footage move you closer to the vision, or is it just square footage that happens to impress the neighbors? Once you ask it out loud, you already know the answer. Or take the moment at the dealership when a sales guy's pointing at the upgraded trim and where you pause long enough to ask whether the upgrade moves you closer to the vision or just closer to a bigger payment. See, that pause, the habit of pausing before you agree to anything, Is worth more than any budgeting app you'll ever download. The same filter works on bigger decisions too. So you can look at it, the job with the better title and the worse hours, or the worse commute, or the one that you already have with your evening still intact. Run it through the vision filter, not the title. And the answer isn't the same for everyone though. And that's exactly the point. The filter is yours and just yours, not a template borrowed from someone else. It's not mine. It's not someone else's, it's yours. Systems will outlast the willpower every single time. Have a system, ask the questions. And this filter is a system. These questions are a system, not a willpower contest you're gonna— destined to lose because willpower starts to run out. And there is no 3-in-the-morning moment with this version of a plan. There's no lying awake running numbers in your head because the mortgage doesn't care how you're feeling. It's just a quiet, unremarkable confidence that whatever happens, you already decided what matters on purpose years before you needed the answer. Run that filter for 1 year and you'll make a few different choices, I promise you. Run it for 20 and you're not the same person with the same balance sheet as everyone who never asked the question at all. Let's go back to my client, the one who retired before 40. Same house for 30 years, an ordinary car, a couple trips a year, every dollar of his kids' education paid in full without a second thought. He wasn't depriving himself of a single thing, at least not the things that mattered. He was running every decision through some version of that exact filter, whether he ever called it that or not. That's the real difference between the bluff and the boring house that's now worth $8.5 million. One version of rich needs an audience. The other one doesn't need anybody to notice at all. And this connects to something I talk about all the time, and that's something that I call an affluent life, the affluent life paradigm. An affluent life has 4 parts to it, and only one has something to do with money. And when people hear me talk about affluence, they think I'm talking about opulence, and it's completely different than that because an affluent life is first a meaningful life. Meaning that it brings you joy from the inside. It warms your soul. It excites your heart. The second is that it's an impactful life, meaning that we affect people that we are interacting with, that we matter. The third, and this is the only thing that has anything to do with money, it's a fruitful life, which gives you the choice in life, the options. And the fourth, I think this is really important, it's a peaceful life. Peaceful life. See, richness is measured in what money can't buy, not in what's parked in the driveway. So here's where that leaves us, and it's simpler than you think. I still think about that family on the bluff, not the cars, not the house, none of it. I think about a wife and 2 kids sitting across from me trying to understand how someone with that much stuff could leave them with so little to live on. And I think about my client in the ordinary car, in the same house for 30 years, who nobody on the street has ever once called rich. Sitting on more money than most people will see in their lifetimes, doing exactly what he wants every single day and every single day he has left. Most people aren't as rich as you think, and the ones who actually are usually don't look it at all. If you spent years quietly comparing your life to someone else's driveway and keep coming up short, you've been grading yourself on the wrong scale the whole time. That scale was never about who has the newer car. It was about who built something that doesn't collapse the day life gets hard. So the next time somebody pulls up next to you in something that maybe costs more than your house, don't do the math on what they have. You don't know what they have. Nobody ever does. Do the math on what you're building instead, quietly, invisibly, on your own timeline, running through your own filter. That's the version of rich that's still standing when everything else gets tested. Not the version with the better parking spot. The version still standing when the paycheck doesn't show up or the market drops or life throws one curveball nobody plans for. I hope this hits. I hope you get a chance to, to look at this and start to review some of your choices and realize that richness isn't what's seen from the outside, but what is felt on the inside. Wealth is just a statistic in the bank account. All right, let's live the rich life and make sure that it's defined by you, intentionally by you, each and every day. All right, if this hit in the way I think it will, do me a favor, hit subscribe. If you haven't subscribed, I'd love to have you subscribe to the channel and drop me a thumbs up or a comment. Let's have a conversation. Let's, let's make sure that you're not alone on this journey. And if you have questions, ping me, DM me, comment. Let's have the conversation. All right, listen, until I get a chance to see you on your next journey or on your path to financial freedom, as I always say, always, always strive to live a life that outlives you. All right, see you in the next one. Cheers for now.