Rich People Don’t Buy Luxury...They Buy These 8 Things

Rich people don't buy luxury. They buy these things instead. Now I'm going to say something that might ruffle a few feathers. If your money stops when you do, you're not wealthy, you're just well paid. Most people buy status and call it success. Rich people, they buy leverage and call it freedom. So today I'm going to expose what wealthy people actually spend their money on and why the flashy purchases quietly sabotage most financial futures. And how to build a money machine that works harder than you do. This is Building Your Money Machine, where we help you master your money, eliminate financial stress, and live a life by choice. Because earning more doesn't make you free. And I'm your host, Mel Abraham. And after 30+ years as a CPA, entrepreneur, and a money mentor, I've seen exactly what creates freedom and what creates golden handcuffs. Let's get you the freedom instead. So if you're ready, let's dive in. Let me start with a truth that might sting a little, because most people think that rich people buy stuff. They buy houses, flashy cars, designer labels, vacations that require 3 hashtags and a drone. Okay. Yeah. See, that's the Instagram version of wealth, but here's the real version. Okay? People who stay rich don't start buying lifestyle. They start by buying leverage. They're not trying to look rich. They're trying to be free. And there's a massive difference because most people ask one question before they buy something. Okay? And that is, what's the monthly payment? The wealthy and wealth builders, they ask a very different question and that is, What does this cost my future? That's the, that's the huge difference because that one question alone separates rented lives from free ones. Now, let's get a quick clarification before my comments light up, because I can see it right now. Okay. This doesn't mean that wealthy people never drive nice cars or take great vacations. Look, we do. Okay. And they do. The difference is this. They don't sacrifice their future to fund their present. They build the money machine first. They let the machine pay for the lifestyle. That's the way they look at it is how do I get something else to pay for it instead of me taking my hard-earned money and doing it or going in debt? See, they don't finance fun with debt. They fund fun with systems. That's the game that I want you to think about because here's the thing, most people buy status. Rich people, they buy leverage. And that's, that's the game. So here's, here's the first thing that they buy. Okay? They buy time, not toys. Let that start to sink in because this is a big one. Rich people buy time, not watches, but actual hours in their life because time is the only non-renewable asset. See, money can be replaced, energy can be rebuilt. Time, it's gone forever. Okay, the moments that matter. I talk about legacy and I say, how many of the moments of your life do you, do you control? And it's the stacking of the moments of life that create legacy. It's not what you leave behind. It's not the material goods. It's not the name on the buildings. It's not the wealth. It's the moments that impacted people's lives. So the wealthy will intentionally convert their money into hours, and they remove themselves from the low-value tasks. They remove themselves from repetitive logistics, the things that they do over and over again, and they try to eliminate decision fatigue. Okay? Not because they can't do things, but because it's a terrible use of their unique ability. And here's the distinction that most people miss. Most people wait until they're rich to protect their time. Rich people, they protect their time so they can become rich. And that's the game that I want you to play. It's really what came out of the drawing that Jeremy made at 6 years old of me standing in front of 2 computer screens. The realization is that until I had agency over my time, I would always be beholden and imprisoned by the earnings treadmill, and I would never have a quality life and freedom that I wanted. Now, that might mean that to get your time back, you might mean grocery delivery. It might be cleaning help once or twice a month. It might be automations for bills. It might mean templates instead of reinventing the wheel every Tuesday. Okay. And before someone says, oh, must be nice. Let me be clear. You don't have to outsource everything. Okay. You just need to start with stuff that drains you the most, because every hour you buy back is an hour for you that you can use to think, that you can use to build, that you can use to rest, you can use to create, you can use to earn. Okay, here's the way I look at it. If you don't rise to your goals, you'll sink to your systems. So let's build the system so you can rise to your goals and the systems all at the same time, because rich people don't protect their money first. They protect their time. The second thing that they buy is they buy clarity before comfort. Okay? They stop really focusing on the financial fog. They hate that. And so, what'll happen is that they'll spend money to eliminate the uncertainty by making sure that they have planning in place, that they have the right strategies in place, that they have the right structure in place. And they have an understanding of the tax impact of the choices they're making, and they have legal clarity. Why? Because confusion, it's expensive. Okay? And one bad decision can erase years of progress. Just think about my Ponzi scheme. Okay? Okay. It cost me 1/3 of my net worth. One bad decision. Okay? A little ounce of stupid in my life cost me a bundle. So they're not paying advisors to be smart. They're paying advisors to avoid stupid. And let me say that again, because it is really important. They're paying the advisors to avoid stupid. And that's what they're doing is to avoid making the big mistakes. Now, planning isn't about predicting the future. It's about preparing for it. And you don't have to start by hiring a whole advisory board or anything like that. You start by modeling scenarios, by running projections, by understanding your numbers, by looking at what's going on. Which brings me to something important. If you don't know where your financial freedom actually is, what it actually costs, then you're just guessing. And that's one of the first things that I try to do with my students in the Money Machine Blueprint, the folks that get my book, the people that I work with as clients in the Money Machine Master Plan, is to really start to get an understanding. What's their life look like? What is it gonna cost to have that life? What kind of machine do they need? The freedom number that you need to make it possible. So here's the deal. I have something called the Freedom Number Calculator. It's totally free. It takes about 3 minutes. It takes you a little bit of time. It's not going to be precise, but it is going to put you in the right direction and give you an idea of understanding what your freedom number looks like. Not some fantasy number, not some TikTok millionaire number, but your number. Okay, so you can hook it up down, down below, but you can grab it at MelAbraham.com/number. You know, do that sometime, you know, and then get some clarity because clarity will beat hustle every day of the week. Okay. So remember, they are not paying advisors to be smart. They are paying to avoid stupid. All right. That leads me to number 3. They buy health as an asset class. Okay. This one's big because we can have wealth, we can have all kinds of things.. But if we don't have our health, it's not going to be worthwhile because this is something that I think people like to ignore. Their body. Rich people treat their health like it's an income-producing infrastructure. And it is because energy drives income. Focus drives execution. Longevity determines how long the money machine runs. I know for myself, I invest in, and just like they do, in preventive care. In strength, in mobility, in recovery, in mental health. I make sure that that is a priority. In fact, I block off my mornings many times to make sure that that self-care piece of it is taken care of before I even start the day. Okay. Meaning my, my walks, my runs, my lifting, my, my stretching, all the things. Okay. It's not about vanity. It's about vibrancy. It's about capacity. And you can't compound wealth if you're exhausted, if you're inflamed, if you're burned out, if if you're stressed out, if you're out of shape, out of breath, and you just can't. Okay. And no, this doesn't require you buying $40 smoothies. Okay. Literally things like, hey, are you getting enough sleep at night? Now, this is one I gotta work on. Okay. Sleeping beats supplements. Walking beats gadgets. Consistency beats intensity. Just getting up and moving. During the day, if you can't walk up a flight of stairs or down the street without negotiating with yourself, without being out of breath, we've got bigger problems than your portfolio. Okay. And so I think that we need to look at things through a different set of eyes. Okay. A fourth thing that they buy is they buy future earning power. Okay. This is another quiet move that rich people make. They invest in becoming more valuable. And I hear it now, everyone's talking about AI's gonna replace me, AI's gonna replace me, and they're worried about it. Well, you know what? I get it. But at the same time, this is a time for us to develop our skills, to skill up. The, the person that's gonna survive in a competitive market, in any kind of market, is the one that becomes indispensable and invaluable to their clients, to their companies, to the work that they do. So The wealthy people will develop skills. They'll develop communication skills. They'll develop leadership skills. They'll develop negotiating skills, sales skills, personal brand. Every single person, whether you're an employer or not, needs to think of themselves as a personal brand. And if you thought of yourself as a personal brand, what would that look like? What would it appear outside to the outside world, to your employers, to your customers, to Anyone that looks in. And then they, they invest in technical skills. See, here's the thing. Most people will ask, what does it cost? They don't. They ask, what does this return over the next decade? They think long-term. And this is why I say skills will multiply income, assets will multiply wealth, and you need both. See, degrees, don't create leverage. Capabilities do. And if we're being real, most adults stop learning the moment they get comfortable. But comfort, that's an expensive, expensive purchase. Okay? So understand where that all comes from. That leads me to number 5. They buy environments that make winning easier. Rich people, Don't rely on motivation alone. They engineer behavior. They design a workspace that makes it feasible. I have my workspace that allows me to see the markets, do all kinds of things. I got screens, cameras, everything all around, and I control it all from here. And it's like this little control center that allows me to be productive, to produce content, to serve, to talk, to have to do virtual presentations and speaking and keynotes and all that stuff right from here. They design their calendars, they design their digital environment. How much access does social media get into? They design their living space to give them peace, to give them productivity. See, they realize that they need focus, they need flow, they need simplicity. And rather than decorating their life, Wealth builders design it. Okay? And that might mean decluttering your desk. All right? It might mean blocking focus time on your calendar and not just for productivity and work. How about your personal relationships, your significant other, your children, all that stuff to block that time out, creating a quiet work zone, creating a quiet work time. Creating a quiet relationship time, killing notifications, turning the notifications off or blocking them out for certain periods of the time. See, small changes will create big impact. Motivation comes and goes, but environment, it sticks because you're living in it. And when we create an environment that is rich and nurtures and grows and supports your growth, and your value, man, it's different. It's different. Number 6: they buy liquidity and optionality. Okay, this one separates amateurs from pros. See, cash isn't lazy, although some people say, you know, cash is trash and that kind of thing, but cash is actually strategic. Liquidity creates negotiating power. It's how I got this, this house. Because we had the liquidity. I had the cash to move into, to bring into the deal, and I was above and beyond anyone else. And he knew I could close it in 30 days. And so I was able to negotiate really, really hard with him, and we got an amazing deal on the property to be able to do that. Liquidity creates speed. He wanted to take this thing and put and list it and, and put it on on the sheets and do the open houses and take his time. Well, because I had cash, I turned around and said, you have 4 hours to take or leave my offer. That's all I gave him was 4 hours. It forced speed on him. Liquidity allows you to take advantage of opportunities that might come in. It also reduces stress knowing that you have liquid funds in place that allow you to to survive and thrive. And if things happen, you've got the cash to take care of it, man. And that stress reduction is, it's just immeasurable. Okay. It also gives you freedom of choice. Okay. Freedom of choice. Now, rich people keep what we call dry powder so they can invest when the markets drop, but buy when others are panicking. And they also have the opportunity to walk away from bad deals. They don't have to take what's on the table. See, saying no, they realize, is a strength. But most people spend until they feel rich. Whereas the rich, they hold their liquidity so they can act rich when it matters. Middle-class thinking says cash loses to inflation. Wealth thinking says cash buys me timing. Okay? Now, I don't mean to have over an abundance of cash, but having the right amount strategically placed is what we need. Emergency reserves are not about emergencies. They're about options. And options equal freedom. All right? That's the whole thing. Remember, cash isn't lazy. Cash buys timing. Number 7, they buy ownership, not consumption. This is huge. Rich people bias towards things that will pay them back. Remember, how do I create something that's gonna pay for the lifestyle? So they prefer to buy equities over upgrades. And when I say equity, it might be in stocks, ETFs, index funds. It could be in real estate, business interests, that kind of thing. See, they prefer to buy income streams over flex purchases to parade the Ferrari or the Lambo or, or whatever it is, uh, when you're in debt to do it versus sitting back and saying, I purchased a bunch of assets that create enough cash flow that can buy that for me, that can make the payment for me. They look for things that appreciate over those that depreciate. And they ask a couple questions like, does this grow? If I buy this, if I spend this, does this pay me? Does this compound? Or is it just, I get a benefit and it's gone and that's it? Is it consumable? See, and that's an important nuance to think about because it's not about never enjoying life. It's about sequencing it in a way that you can enjoy life without stressing about how you're enjoying it. They build the money machine first, and then they let the money machine fund the lifestyle. And they don't say never. They just say not yet. They don't need another toy. They need another income stream. And when they have that income stream in place, it's an income stream that funds another portion of their life, that funds the ability to get their their time back to buy back their time, to buy back options. Okay. Number 8, they buy risk reduction. And this is kind of one of the final ones to think through. Rich people don't chase the upside first. They manage the downside. And I know a lot of people say, well, if you're investing or you're an entrepreneur, you like risk. No, we actually don't like risk. We mitigate risk. We shy from risk. We plan around risk. We start to do things to eliminate mitigate and reduce risk. See, we spend money on the proper insurances that make sense. Okay, we will spend— they'll spend on legal structures to protect things. They'll spend on the proper diversification to reduce risk, asset protection strategies, conservative assumptions. They'll look at things through a set of eyes that allows them to reduce risk as much as possible. It's never going to be completely eliminated. And there is no such thing as a risk-free investment or risk-free journey. So the key is to understand the risk. In fact, in the final pillar of the Money Machine Blueprint, we talk about risk classification and we break down the dirty dozen risk and dream destroyers that could be present in someone's life. And how do we mitigate them, eliminate them, insure against them, or do that? So Even though we can't eliminate all risks, we can reduce them as much as possible because you don't get wealthy by swinging harder for the fences. You stay wealthy by not getting knocked out. Average investors will ask, what's the upside? But wealth builders, they ask, what's the worst case? Because they realize that their survival comes before their growth, always. And when they understand, and this is why I built the Wealth Priority Ladder the way I did, an unshakable foundation. Safety first, growth second. And when you start to understand that, now when you start investing from that perspective and you're buying these kinds of things, things will change for you. All right, let me land this for you. See, rich people run every dollar through these questions, and it's a series of 5 questions. One, does this buy me time? Does it buy me time? Does it give me my time back? Does it give me a little more life back? Number 2, does this protect my downside? Is it eliminating the risks or the risk of loss or something else? Number 3, does this increase my earning power? Does it increase my ability to accelerate, to get a bigger shovel of income to use to build my, my money machine? Because that bigger shovel of income will build the money machine Faster. Number 4, does this create ownership or income? One of the two or both. Am I buying or am I spending? Is it appreciating? Is it depreciating? Okay. And number 5, does this move me closer to a life of choice? And that's the biggest question of all. Does this move you, move you closer to the life you envision, a life of choice? And if not, It better bring real joy, not rented status. That's where you go. Because rich people, they aren't allergic to luxury. They just do it differently. They buy it differently. They're allergic to anything that mortgages their future for the moment, for the temptation. They don't build lifestyles first. They build money machines first. Because earning more doesn't make you free. The money machine does. And when that money machine is built the right way, the cash flow from it is what allows them to live the life that they you want without going into debt, without the, the stress, and to be able to choose each and every day. See, if your money stops when you do, you're not free, you're rented. So let's fix that. Let's build your machine. All right, I hope that this helps. I hope that you'll actually look at things and say, which one of these can you start buying? Which one of these can you bring into your life? Because when you do, you will start to transform things. Because remember, 80% of wealth creation is behavioral. And if you start taking on some of the behaviors, the habits, the choices, the discipline and decisions that wealthy people make, well, the math will always math out. All right. I hope that this helps. I hope that, um, it maybe kind of moved you a little bit in the right direction. And I'd love to hear from you. I'd love to hear your comments, your questions, um, or your thoughts around it. So let me know which one hit home., or if you have questions on it, or which one you're gonna focus on first. All right. Until I get a chance to see you on your path to financial freedom, or maybe while I'm out there on the road speaking, make sure you say hi, come by, drop me a comment, send me a DM. And while you're in there, subscribe and gimme a thumbs up. YouTube likes it, the algorithm likes it. And you know what? It warms my heart. All right. Till I get a chance to see you on the next one. As I always say, always, always strive to live a life that values you. See you soon. 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 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'd do me a favor, go to Apple Podcasts 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.