My Biggest Problem With The "Middle Class"

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. Are you really middle class or have you just been told you belong there? What if that mindset is the very thing that's holding you back from the financial freedom you deserve and that you want? So if you're someone that wants more out of life than just scraping by, living check to check, playing it safe, well, this episode's for you. Cause today I'm going to dig deep. I'm going to tackle this hidden problem that I think exists with the middle class label and why thinking of yourself as middle class may be the very thing that's stopping you from reaching the true wealth, the true richness, and the true freedom you deserve.

Oh, middle class. We hear it all the time. Are you middle class, upper class, lower class? All these categorizations. Here's the thing. I'm going to talk about middle class in this episode, but labels in general don't do us any favors. Labels in general give us an excuse, I think, and let us off the hook of doing better. Okay? The biggest problem that I see with middle class isn't the income. It's the mindset. It's. It's what it allows us to do. Many people that are thinking that maybe they're middle class, they say, well, gosh, then I only have a certain level I can get to because I'm middle class. But what if it's the actual label itself that was put upon us or that we've taken upon ourselves? That is the very thing that holds us back. Because this video, this training, this episode is all about addressing the limits that this thinking imposes on us in terms of what financial category we should be in. And I am a firm believer that it's not real, that no matter where we start, we have the ability to go well beyond it. I'm going to give you some examples in this episode around that. And so I think that we don't do ourselves any favors when we take on those identities, those titles, those labels, or we allow ourselves to be categorized like that. And so this is where I, I want us to have this conversation because it then, it releases us to do some more specific things that drive wealth. Here's the thing. When I first got into working and coaching and mentoring people around their money, around their wealth, I literally thought, because I was a cpa, I literally thought that I would sit down with people and I would show them the math of wealth building. I would give them the columns, the rows, the spreadsheets, the stuff like that. And I really quickly found out that all the great spreadsheets, all the great mathematics, all the great.

Stuff that is technical, didn't mean anything if I didn't deal with the things that were in their heart, in their soul, in their mind, including my own. Okay? Because when we give ourselves labels, they sometimes can become self fulfilling prophecies. When we start to say I'm not good with money, when we start to say that I'll never reach those levels because I was born here or I started here, we create these self imposed limitations. Now I'm not saying that it's easy, okay? I'm a son from a, of, of a an immigrant who came here at 17 years old. He came here with nothing.

Just to get an education and to build a career. He became a, an aerospace engineer. You know, so it wasn't like we had a ton of money, but he did. All right, okay. But point being is that he came from nothing with nothing to build something for our family. And my dad did, and my mom did, and, and I think that we live in a time where that's still possible. And so the difference is that when we give ourselves a label like middle class, there's some expectations around it, like having a steady income or maybe just home ownership and a retirement plan. Enough to get by and that enough to get by mentality is what limits us. But we'll wealth building it requires more of a mindset that is more growth, abundance, freedom, not just stability, okay? It's why when I talk about the journey to financial freedom, we go through multiple gateways. We go through the stability gateway, then the security gateway, then the independence gateway, and then the freedom gateway. We go through all those gateways because as we enter those gateways, we develop more and more skills. We have a more and more expanded mindset in doing that, and we have examples all around us. For instance, if you just look at Howard Schultz, who is the former CEO of Starbucks, he literally came from a working class background, he was in a housing project and he redefined his path just by seeing opportunities that were beyond the environment he was in. Okay, so he came from a housing project, saw something bigger for himself, and went after it. His net worth today is arguably somewhere around 4 billion or more. Okay, but he didn't start there. It wasn't given to him. Okay, so here's the thing. When you look at this idea of middle class mindset, and I call it the myth of the middle class mindset, I think it's many middle class people prioritize financial safety and security and choose low risk investments and focus on saving and comfort rather than building wealth. And if you look at the statistics, okay, studies show that 70% of middle class Americans primarily use savings accounts. Well, you cannot save your way to wealth. I did a calculation once where, where if you were putting $5,000 away.

A year for 40 years, okay, $5,000 away for 40 years. One person puts it away $200,000. 5,000 over 40 years, puts it away in an S&P 500, getting 8 to 10% a year. At the end of the 40 years, they'll have a sum total of a million and a half dollars. The other person, that's mostly savings, puts it away in a 2% savings account, okay, and does that for 40 years, the same $200,000, but one ends up with a million and a half, the other, the saver, ends up with 300,000. And so when we look at it and say part of that middle class mentality is savings, which is really important, but there is a, a point in which we need to go from savings to investing. We end up in a situation where we cannot save ourselves to, to wealth. And so when the statistics are showing that 70% of the middle class are using savings accounts more so than investing, there's an issue there. Now, part of that's mindset, but the other part of it is education and literacy, I can't speak about it enough. The idea that we don't educate our youth, we don't educate ourselves, it's not something we talk about. But part of the reason that savings accounts are used is because they don't know any better. It's not, it's not your fault, it's not their fault, it's, it's not answer. But the fact that we don't talk about it, we don't teach about it, it's why I have the channel, it's why I wrote the book. It's why I do. What I do in this season of service of my life is that if we just have a savings mentality, it often leads to missed opportunities, to create wealth, to build wealth, to go beyond stability and have growth. Because the reality is that savings alone actually gives you less stability than you would think because it doesn't usually even keep up with inflation. So this is one of the things that happens with a middle class mindset, which is why I wanted to have this conversation and do that and to challenge the belief that comfort is enough. Comfort isn't what we're going for, okay? I want you to replace it with growth. Not that you don't have contentment and you're constantly trying to grow, but you're trying to be better each day, you're trying to be better each moment, and you're trying to shift towards learning and growing and growing personally, but also as well, leads me to the next one. And that is this. Financial freedom is achievable for everyone.

To me, financial freedom is not a luxury. It's a birthright. It is not a luxury just for the wealthy. It is a birthright for everyone. It is possible for those that are willing to take the time to understand the fundamental principles of wealth creation. And they are simple, simple principles. Now do not confuse when I say it's simple with the fact that it's easy. I didn't say it's easy, I said it's simple. There are some very fundamental concepts, and I talk about in my book building your money machine, that you, if you follow them, when you follow them, and you follow the frameworks and the processes on a consistent basis, you will achieve wealth, you will achieve the richness you want. That doesn't mean it's easy because based on your age, stage or circumstances, you may be starting negative. I started negative. I was at a negative net worth. I had debt. I don't know where you're starting, but just because it's difficult doesn't make it impossible. It just makes it difficult. Follow the processes, okay? Because financial freedom is your birthright. And I want you to go after it and I want to be there to support you in, in that, in that journey. You think about people like, it's cliche in a sense, but you look at someone like, like Oprah, who was born into poverty and she built her wealth by starting to understand, you know, opportunities and applying financial and personal growth principles and eventually becoming a multi billionaire, if you will. And when you look at the statistics, there was a study of 10,000 millionaires. 10,000 millionaires. 80% of them were first generation. That means that 8 out of 10 created it in their lifetime. It wasn't gifted. It Wasn't inherited, it wasn't one. It was created. If 8 out of 10 created it, then that's a good odds for y'. All. Okay? Here's the other statistic. In that study, 30% of them never made much more than $100,000 a year. Okay? So it wasn't that they made a ton of money that allowed them to be one of those first generation millionaires. It was what they did with it. They followed principles, they followed the process. So the key here is this, is to focus on small, steady habits, behaviors that create wealth over time, saving and investing consistent percentages of income. We talk about it in the book with the wealth priority ladder to consistently trying to up level your knowledge around financial literacy. Even if it's 15 minutes a day to listen or watch a show like mine, to read a portion of a book, to educate yourself, okay? That's all aimed at growth rather than just comfort. So it'll transform your future in, in the long term. The compound effect of stacking those little habits over time will be astronomical over decades. Okay? So breaking out of this middle class mindset really is a shift in behavior and perspective more than anything else is to sit back and say, no matter where I'm at, no matter where I started, no matter what I have, whatever I don't have, I can take small steps in education, in learning, in growth. I can take small steps in savings investing and wealth building. Even if it's putting $5 away, you're exercising the muscle that 5 will turn to 10, the 10 will turn into 20, rather than seeing money as merely the vehicle to pay bills. And I get it. If you're living check to check, that's all it is. You're just trying to survive. I get it, okay? And there are things that we can do to try and escalate your income to bring in additional income to get you out of that, that rat race, if you will. But start viewing each dollar that's saved or invested as a step towards freedom rather than just a means to pay bills. So every month I want you to start to save. Even ultimately, I want you to put 20 to 25% of your income away to build wealth and to automate the process. Now I get it. At the very beginning, you may not be able to do that. Well, maybe it's 2% to start, and every quarter, every six months, you kick it up from 2% to 3%, then maybe 4%, then 5%. But start somewhere. Start with something, okay? And really just start to build it over time. I was Just speaking at an event. And someone came up to me, a gal who came up to me and said, you had a conversation with us three years ago. She goes, I am floored at how much money we have put away for ourselves and our kids just in the couple of years, because you had a single conversation that told us specifically what to do. And we just followed it without trying to judge it, without trying to question it. But we follow the process and it works. And I mean, to me that warms my heart because I'm seeing a family here in front of me that is going to have choices in life and financial freedom and security and lack of stress. And that's why I do what I do. And so I think that it's important for us to look at it from those eyes and, and redefine what safe means. You know, safety isn't about avoiding risk and everything, but about having choice in life and making sure that you have options and should things steer wrong, should you fall on hard times.

There is the idea of this like a, a 30 year old investing $500 a month in a diversified portfolio of 8% literally could have almost 3/4 of a million dollars at retirement. It's, Is it risky? No, not really. I mean, there's always risk in investments, but the market goes up 8 out of 10 years. When we look at things long term, we then look at it and say, Now I have $750,000 in retirement, I get to redefine the word safe and safety. Okay? And as you build that investment, as you build that, you start to look at it very, very differently. So the, the last little pieces of this, I think that are hugely important in navigating past this middle class mindset limitation is the, is investing in financial literacy skill building. When I have interviewed millionaires and billionaires, one of the things that they always did.

Almost every single one of them, they invested in their own learning and self improvement. They realized that.

The skills that they had aren't the skills they need to get them to where they want to go. Even Warren Buffett himself, he attributes a lot of his success to reading and learning about finance daily. This is arguably one of the best investors of our time. Yet when he was young.

Not coming from wealth, he spent the time reading, learning, understanding Daily, just trying to grow a little bit. And when you make that commitment to yourself to boost your financial literacy every day by just little increments.

It makes a huge difference. It makes a huge difference. So dedicate 15 minutes, 30 minutes.

Two hours, you know, a week, I mean so if you did two hours a week, what is that? That's like, that's like 15 minutes a day. Okay, 20 minutes a day to reading about finance, investing and personal growth books like the Intelligent Investor with Benjamin Graham. My book, building your money machine can give you some skills, some frameworks, some processes to get you in that space. Okay? And then the last thing is this. I want you to prioritize growth over comfort, okay? Instead of saying, I just want to be comfortable, I want you to say, I want to be comfortable, but I want the discomfort of growth. In other words, when you go to the gym to grow the muscle, to build the muscle, there's discomfort in lifting the weights, there's soreness after lifting the weights. That's the kind of discomfort I want, is in your financial growth. I want you to prioritize financial growth and personal growth versus over comfort, set some goals in place for your financial future and then strive to make that happen. Increasing your savings by maybe 10% every year, starting in the game and pushing yourself to make a little more, give a little more, do a little more, learn a little more. That's what's going to make a difference. Because this is the, the way to move yourself from a middle class mindset to a growth mindset. I'm not even going to say upper class to a growth mindset because when you move from a middle class mindset, then you open up the possibilities and the opportunities. And then I think the thing that can help you in this journey is, is to make sure that you surround yourself and network with people that are willing to challenge you to grow, that actually see you beyond the middle class, that are mentors and a community of like minded people that value growth, that can kind of kick you in the behind when you need it, lift you up when you need it, encourage you when you need it. And there's plenty of folks out there and networks out there that will allow you to be part of that journey and support you on it. Because whatever you're feeling, the angst, the stress, the, the nervousness, the, the lack of belief, you're not alone.

I've been there. I still will cycle back depending on where I'm at and what I'm doing. So you're not alone. Let's get with people that are on the same journey so we're all swimming the same direction so we can support each other on that journey. One of the places you can do that is to follow the show to. If you have not subscribed to the show, do me a favor. Subscribe to the show. Stay on the journey with me, okay? Stay in the conversation, stay in the community and do that. Build the habits that will eliminate a middle class mindset and give you a growth mindset that allows you to get the wealth that you deserve, the richness in you lot, in your life that was meant for you, and so you can live a life by choice. That's what I want for you. Okay? Middle class, whatever the category is, I'm more worried about the mindset than the category because it's the mindset that holds us back, not the category. So let's build off that mindset. Let's break that mold. Let's break that mindset. I'm here with you every step of the way to help you out. No matter whether you're a. A single mom, a single dad. Like I was a married couple, a young couple, an older couple. Doesn't matter of fact, circumstances, age, stage, I'm here to support you on this journey, to move you to a place where you belong, okay? And that is the vision for your life. A life of choice built by your own hands, by your own design, by your own vision. All right? I hope that this helps. I hope that you got something out of it. I'd love to hear from you and see what your thoughts are from this and. And also maybe meet you on the road to your financial freedom. All right. Until I get a chance to talk to you in another episode or on the road to your financial freedom, as I always say, always strive to live a life without losing. See 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, 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.