Psychology of People Who Save But Never Spend

I spent years building a machine that was supposed to give me freedom, and then I got to a place where I could actually use it, and I froze. Not because I was broke, not because the numbers weren't there, but because after decades of being told to save, save, save, I didn't know how to stop. See, if you've built real wealth or you're building real wealth, you still feel guilty. You still feel anxious or just plain wrong every time you think about spending it. And that is not a character flaw. That's a psychological trap, and it's one of the financial industries have built for you and then forgot to tell you about. This is Building Your Money Machine, where we help you master your money, eliminate financial stress so you can live a life of choice. Because earning more doesn't make you free, a money machine does. And I'm your host, Mel Abraham, and after 30+ years as a CPA, an entrepreneur, a money mentor, someone who's walked This path to financial freedom from nothing to something, broke it, rebuilt it. I've learned what real wealth is. It's not about bigger numbers. It's about bigger and better choices. And today I'm going to show you the psychology behind why smart, disciplined people hoard instead of live. Why the conventional model makes it worse and what the real solution is. So let's do this. We're going to dig into the psychological trap that catches even the most disciplined wealth builders. Why the system most people were handed actually makes it worse. And the model that actually solves it for your finances, for your life. So let's do this. Let's just talk about the trap that nobody warns you about. And I'm going to start with this because it's going to sound a little bit uncomfortable, but the habits that build wealth can become the very same habits that imprison you. And I mean that literally. The exact behaviors, the mindset, the identity that got you the financial success, those are the same things that can quietly turn into a psychological prison, a trap that keeps you from living the life that you built all this for. Here's what the research tells us. The psychologist Daniel Kahneman and, and Tversky, two of the most important behavioral economists who ever lived, discovered something that should change the way you understand your financial behavior. They found that losses feel roughly twice as painful as gains feel good. 2 to 1. Now, and I can attest to this when I've lost money, because it's basically saying losing $100 hurts about twice as much as gaining $100 feels good. Now, think about what that means for someone who's spent 20, 30, 40 years watching their account balance go up. Watching it go down, even intentionally, feels like a threat. See, your brain doesn't distinguish between I'm strategically spending from my wealth and I'm losing. It fires the same alarm. And when that alarm goes off, the instinct is always the same. Protect, preserve, don't touch it. And it gets deeper than that. See, the research out there— there was a research out of the University of Michigan that found that career and financial identity becomes so deeply embedded into who we are that changing them triggers the same neural patterns as grief. Crazy. But think about what that means for a lifelong saver. They spent 30 or 40 years with this core identity. I am disciplined. I am a builder. I listen to Mel Abraham and this is what I do. I am the person who puts money away while everyone else spends, spends, spends. That's the identity that doesn't just flip off like a light switch when you happen to hit your number because you are the saver. You are the builder. You are the investor. It's not what you do, but it is who you are. And this is where it gets a little ironic. I've done this to you basically, not intentionally, but through everything I teach, the Wealth Priority Ladder, put 20 to 25% away, keep building, stay disciplined, don't touch it. These are the right habits. They're great habits and you need them. But nobody, including me until now, teaches you the second set of skills that need, that, that you need to develop alongside them. The skill of actually using what you've built. This is the thing. The result is, and I've seen it up close, that you're not enjoying life, that you're not living fully. I have a colleague, brilliant, driven, substantially wealthy. I mean, like close to half a billion dollars of wealth, 5 airplanes. Lord knows why. You can only fly one at a time. But here's the thing. When I look at his life, What I see is someone who's spectacularly wealthy and profoundly miserable. His health is suffering, his relationships are suffering, and the only moments that seem to bring him genuine joy is when he's on the hunt, when he's in a conquest, when he's going after something, building the next thing, acquiring the next acquisition. The accumulation became the drug. The building became the identity, the entire identity. And when I ask myself honestly, is this person living a rich life? The answer is no. He's living a wealthy life, but those are not the same thing. See, now here's something that I think makes us feel less like one person's story and more like a widespread crisis when we start to understand this. There was another study out of the Center of Retirement Research in Boston College that said they found that half of all retirees are reluctant to spend or draw down their savings even after decades of building what they could and building so they actually could spend. And then there was another study that Mel Abraham said 46% of American retirees say spending creates anxiety and that it's taken an emotional toll on their lives. That's nearly half. See, these people who did everything right, saved diligently, invested consistently, built real wealth, and they can't bring themselves to touch it, to enjoy it. That is not a math problem. That is not a strategy problem. That is a psychology problem, and it is everywhere. So that's the trap. The habits that built your wealth can work against you actually living it. But here's the real question: what is that costing you? Because it goes a lot deeper than just a number in an account that you never use. And that's where we're going to go next. And then we're going to break it down for you. There's this concept that I've talked about repeatedly. And that is the difference between the wealthy life and the rich life. And I wanna make this distinction really, really clear because I think it's one of the most important things that I've ever said, or even more importantly, that I ever realized in my journey. A wealthy life and a rich life are not the same thing. And you can have one without the other. And, and for a lot of high achievers, that's exactly what happens. See, a wealthy life to me, is a statistic in a bank account. It's the account balance, it's the net worth, it's the assets, it's the machine humming along. But a rich life is something different, totally different. It's how fully expressed and aligned is our daily experience, the quality of the moments we have in our life, the depth of the relationships, the degree of which we spend our time and use our money to actually reflect our values and the true value, not What's your degree, your zip code, your parents, social media tells you what you want. But when those two things are out of alignment, it shows up in three very specific measurable ways. And so my desire for you is that you live a rich life and a wealthy life, but not just have a statistic in a bank account. Because the three ways that, that show up, and I talk about these as the three drivers, is first financial pressure. Even when the account balance looks fine on paper, you haven't built a life intentionally spending around things that genuinely matter to you. That financial noise never quiets down and the questions keep running in the background. Can I afford this? Should I spend it? What if the market tanks? Is this the right call? And it is relentless and it drains you. And the second driver when we don't get this right is the emotional load. This is the misalignment between what you're building and why you're building it. And it creates this persistent emotional weight that most people can't even quite name. It feels a bit like anxiety, um, or like restless, like something is off, but you can't point to it exactly. And the research backs this up. Chronic financial stress, even in people with significant assets, rewires the brains threat detection systems over time. And that the amygdala starts treating your financial life like a predator, even when it's not, not an actual predator. And then driver number 3, and I call this decision noise. See, when your financial life isn't aligned with your values, it creates this constant background hum of low-grade unresolved choices. And that noise costs you. You're not present. You're not focused. You're not, not available to the people you love. And you can't make the decisions as decisively because there's something in the background that's distracting. Your brain turns out it's not a great multitasking thing when half of it is quietly panicking about whether you're allowed to take a vacation or not. So here's, Here's where this lands because it looked like this for a friend of mine. This one that I told you about, half a billion dollars, 5 airplanes, ah, a schedule that was built entirely around the next conquest. Financial pressure, gone. Account balance was never going to be a problem. Emotional load, through the roof. His health was deteriorating. His relationships were fractured. Decision noise every single day driven by one question: What do I build next? What do I build next? See, he had eliminated the first driver, but he amplified the other two. And he never even saw it happening. Because here's what happens when misalignment comes into play. It doesn't announce itself. It just quietly costs you everything that actually mattered. And the flip side is The reverse is just as real though. When you get the alignment right, when you build wealth with intention, you spend with intention, all 3 of those reverse. Financial pressure becomes clarity because you're moving with a plan. Emotional load becomes peace. And the decision noise becomes presence. And presence is the most valuable thing you can give to people around you. And to your own life. See, this is why I tell people that I work with, build your life plan first, then build a financial plan around it. 3 to 4 visceral joy points in that life plan. The experiences, the moments, the things that give you genuinely lasting fulfillment. Those go into the plan on purpose, not as an afterthought, not as a reward, not as, as, well, I'll get there someday. But on purpose now, as part of the architecture. Here's what I need you to understand about why this matters. A rich life doesn't require lavish wealth. There could be someone living in a tent in Montana who wakes up every morning feeling like they're absolutely, completely living the life they choose. And there could be someone on a yacht in Monaco, who's profoundly empty inside because none of it actually is theirs. They're performing a life rather than living one. Neither the tent nor the yacht is wrong. What's wrong is the living a life that isn't genuinely yours. And my colleague doesn't have a spending problem. He doesn't even have an accumulation problem. He has an alignment problem. And he never stopped to ask, what am I actually building this for? And without that answer, the only thing left to do was to keep building, which is Exactly what he did. And it cost him his health, his relationships, and by his own admission, most of his joy. See, a parade of cash and conquest, it isn't rich. It isn't a rich life. It's a wealthy one. So now you know the trap. Now you know what it costs. But here's what really gets me. The conventional financial advice most people were handed doesn't just fail to solve this. It actually makes it worse. And I need to show you why before we talk about the fix, because I think this is the challenge. See, if you're sitting here wondering what that actual number is, the number your machine needs to produce so you can live that rich life that you actually want, then you need to calculate what I call the Freedom Number. And I have a Freedom Number Calculator is totally free. It takes 2 minutes. Put some numbers in, it'll at least give you a ballpark. It's not precise and you'll have to do some other things to get very precise, but at least it gets you going in the right direction. Go to melabraham.com/number. Like I said, it's totally free and we'll make sure that we get it to you. Now, that leads me to why conventional advice makes this worse. Here's the model that most people are sold. Save, invest, accumulate, contribute to the 401, max out your IRA, build your portfolio. If you go through my book, you'll hear some of those same exact messages. And then when you retire, you start spending it down and you draw it down systematically and you withdraw percentage, percentage each year. And you pray and genuinely pray that your money outlives your life expectancy and not the other way around. That's called a retirement plan by most of the financial industry. That's the problem, is that it's beyond the math. It is a psychologically brutal way for us to start looking at retirement, and we followed it. Think about that model and what it asks you to do. After 30 or 40 years of watching your account balance go up, The number growing, the machine building, the progress feeling like, like it's real and measurable and rewarding. And you're now supposed to just watch it go down intentionally on purpose every single month. Remember what Kahneman said? Losses feel twice as painful as gains feel good. You spend 4 decades conditioning your brain to equate a growing number with safety, with security, with success. With an identity. And now the plan requires you to disassemble that. And that's going to fire off an alarm every single month for the rest of your life. No wonder half of the retirees won't do it. That's not irrational. That's completely predictable based upon the broken model and the conditioning. Studies confirm it. Retirees relying purely on portfolio withdrawals spend less confidently and report a higher level of anxiety than those with the reliable income streams, even at the same identical net worth levels. Same net worth, more anxiety, just because of structure. The spend-down model doesn't just ask you to change your behavior. It asks you to fight your own wiring every single month indefinitely. And the system isn't broken for people who never learned the discipline. It's broken for people who learned it best. So if the conventional model is the problem, what's the solution? That's exactly what we're building towards right now. See, the machine changes everything. The conventional model says build it up, then spend it down. My model says build it large enough that you never have to spend it down. At all. You live off the cash flow, the income-producing assets, the investments, the systems that you build that generate enough that you can fund your life fully and intentionally without dismantling it. The number doesn't shrink. The machine doesn't get smaller. It keeps growing. Think about what that does psychologically. The loss aversion alarm never fires because there's no loss. You're not drawing down, you're drawing off. The output. The account balance isn't your spending account, it's your engine, and you're running the fuel it produces and not burning the engine itself. One of the longest running studies from Harvard on human happiness ever conducted found that the things that most strongly are associated with sustained wellbeing aren't the assets or the net worth. They're the relationships, the time, and the meaningful experiences. Money is the most powerful when it funds those things, not when it sits untouched in an account doing nothing for your actual life. See, the Machine Model gives you real structure and structural permission backed by cash flow to actually live. Let me tell you about a period in my life that proved this in a way I couldn't argue with. And some of you have heard it. But in 2019, I got diagnosed with cancer. Had to go through the battle twice. And when that happened, I did something that would terrify most people in my position. And it terrified me a bit. I stopped. I stepped back from almost everything. All the active work, the hustle, the building, the getting on planes, the speaking. I needed to focus to beat this demon and my health, my family, and all the things to be present for the people I love. And for that period of time, I essentially went quiet professionally. And you know what happened to the machine? It kept running. It kept growing. The income kept coming in because the assets were performing. The cash flow didn't stop because I stopped, because that's the whole point. That was what I had been building towards, a system that worked whether I did or not. See, the machine didn't need me hovering over it micromanaging it. Kind of humbling, honestly, because it didn't really need me. That experience didn't just validate the financial one, it validated the psychological one. I didn't feel the alarms going off. I wasn't watching a number shrink while I was trying to fight cancer. I was living off of the output, something that I built, like drawing water from a well that kept filling itself back up. The machine was the answer to the loss aversion problem, not because I ignored the psychology, but because the model was structured in a way that it never triggered it in the first place. Here's where legacy comes in, and this is the part that matters to me deeply. I'm building this machine not just for myself and Stephanie, but for Jeremy. For his wife, for my grandkids, for the generations in this family tree that I will never meet. See, my wife, she's 12 years younger than me, and the machine needs to outlast me. It needs to take care of her, and then it needs to pass on not just the assets, the skills, the values, the mindset, the understanding of how to run it, grow it wisely, use it. That's a different kind of legacy than most people think about. See, most people think legacy as something that you leave behind when you're gone. The inheritance, the estate, the assets that are distributed. I think legacy is something you live moment by moment, day by day in the choices that you make about how you spend your time and your money while you're still here. See, I was fortunate. My son drew a picture of me when he was 6 years old. A blue stick figure standing in front of 2 computer screens, a phone in each ear, and another one ringing on the desk. That drawing stopped me cold. It was a mirror into my soul saying, you're screwing up, because it was actually exactly right. It's how he saw me. It was a picture of my life, and he was carrying that around in his head and his heart. And I realized in that moment that I was saving life for later. See, the machine isn't just a financial structure. It's permission. You're building wealth isn't just finances. It's permission to be present. It's permission to show up. It's permission to demonstrate to everyone watching that what wealth was actually supposed to be for. Not to make you rich on paper while you live poor in practice. Not to protect the number while you neglect your life. See, the machine exists so you, you have the cash funds and the cash flow to fund your living. And the living shows people around you what fully expressed is, fully funded is, fully intentional life looks like. This is the inflection point of a family tree. See, we've covered the trap. You've seen the cost. You've seen the broken model and the fix. Now let me leave you with this question that changes everything. Lying. I got into a bike accident. I was riding down a hill, 30 miles an hour, trying to pick up speed, and I flipped my bike, ended up on my head. Grade 4 concussion. Couldn't feel anything on the right side of my body. Couldn't speak. And as I laid in that ambulance, all I could do was think about Jeremy. I said, did I give Jeremy what he needed to live a rich life? Because I knew I gave him what he needed to live a wealthy life. And I didn't like the answer that I had at that time. But here's the thing about that question. It doesn't have a final answer. It gets answered every single day. In every choice you make about how you spend your time, how you spend your money, how you spend your presence. And the research tells us almost half the people who build real wealth never let themselves use it. Not because they're greedy, not because they're selfish, but because the very habits that got them there make it feel psychologically dangerous to stop. And the system they were handed makes it worse, not better. But now you know there's another way. Build the machine, build it well, build it large enough to live off of the output without dismantling the engine. And I get it, that's a hard thing to do, but it is not an impossible thing to do because not only have I done it, my son's done it, my clients, my students are— have done it and are doing it. And then with the cash flow that it produces, build a life intentionally, on purpose, aligned with what actually matters to you. You've been handed a certain number of slices of life in your life. May they be many. Okay? But however many they are, the question is the same. How are you using them? How are you giving them away? What are you doing with it? Just having money in an account, that's not rich. That's wealthy. I want rich for you. And I get the psychology behind it, but now you understand where it comes from, what the root is and why it's so prevalent. But you also understand how to fix it because earning more doesn't make you free. A money machine does, but a money machine you never draw from, that's not freedom either. That's just a very expensive storage unit. And so here's the thing I need you to do. I need you to get clear on your values. I need you to get clear on what matters to you. I need you to get clear on the things that you want to do. Make sure that you have the joy points in your plan so you start to learn how to build the machine while at the same time you're learning how to enjoy the machine. So you're developing two sets of habits at the same time. I hope this at home, because as someone who's 64, going to be turning 65, this hit home for me. It made me think about the things that I've done, the things that I could have done differently, the things that I want to do in the coming years, in the coming decades. All right. I hope that this helps. I'd love to hear from you. I'd love to hear your thoughts, your thinking, what you're going to go do differently. Do me a favor, send me a DM, send me a comment. Love to get in conversations with, with you. All right. And if you haven't done so already, give me a thumbs up, give me a like, give me a, uh, a follow, subscribe. It makes the algorithm happy but also warms my heart. And until I see you in the next one or on your path to 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.