Stop These 8 Habits to Quietly Build Wealth (I wish I knew this sooner)

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. Ever feel like you're doing all the right things? Saving, hustling, maybe even a little investing. But wealth still feels like it's stuck in traffic behind your bills. Yeah. Listen, you're not alone, because here's the twist. It's not always what you're doing. It's what you're still doing that is quietly wrecking your financial future. And in today's episode, we're gonna flip the script. I'm gonna break down the eight habits. You gotta stop if you wanna build wealth that actually sticks. And these are habits that I wish I knew. These aren't things that are the usual suspects. We're talking about financial termites that are disguised as normal behaviors that you wouldn't understand, you wouldn't realize until now. 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 that freedom, it doesn't start with your next race. It starts the moment your money works harder for you than you did for it. Think of this as financial education with a side of sarcasm and a whole lot of heart. And I'm your host, Mel Abraham. And listen, when I started out, I thought success was some beautiful spreadsheet, a corner office that nobody could talk to me and I could just sit there and do it. But fast forward 30 years as a financial expert, an entrepreneur, and a mentor. Let's just say I've learned the hard way, and sometimes fun, that.

Money without meaning is like a treadmill with a view. You're moving, you're getting sweaty, but you're not really going anywhere. So if you're ready to stop sabotaging your wealth one well intentioned mistake at a time, let's do this.

Everyone is obsessed with what to start doing to build wealth. So start budgeting, start investing, start that third side, hustle and caffeine addiction to match. But let me tell you something. Nobody's Talking about, it's not just what you start that builds wealth, but it's what you stop. And so in this video, I want to break down eight habits that are effectively termites to your financial house. They're quiet, they're hidden, you don't know what's going on, and by the time you notice it, the foundation is, is already cracked. All right? And these are habits that I dealt with, and these are habits that I wish I would have known and got rid of a lot sooner than I did. But I'm going to give them to you so we can get rid of them in your life if they happen to be there. All right? And if you're trying to figure out where you are in this journey to financial freedom, I actually have a financial freedom quiz. It's totally free. If you want to understand where you are, go ahead and go to YourFinancialFreedomQuiz.com and I'll put the link below. Take the quiz. You'll get a chance to understand where you are in the journey, what your next steps are, and what are the things to be aware of. All right, with that, let's jump in with habit number one. The first thing is to stop worship worshiping good debt like it's a financial salvation. Yeah, you heard there, there's good debt, there's bad debt. In fact, even I say that there's productive debt, there's destructive debt, but then again, there's also good cholesterol. And yet I'm not necessarily going to order a second helping of that at dinner. You can call it good debt, but it doesn't mean that any amount of good is good. In other words, we can overdo it. In fact, think about this. Water is good for you. Too much water can get you sick, get you ill. All right, so when we talk about debt, what I want to do is understand first off that there is good debt, bad debt, productive debt, and destructive debt. There's a difference. Here's, here's how I look at it. Destructive debt or bad debt is the debt that you're using to finance your lifestyle. It's the lavish vacations, it's the seven year financing on, on cars, it's the big screen TVs that you can't pay for in cash. And Lord knows, if you're using Klarna to pay your doordash bill, you know, you're financing your dinners. That's bad debt. That's a problem. All right, so we're not talking about that because there's other folks, including myself, that say, hey, there's good debt, there's productive debt and that's the debt that you go into to produce cash flow, to build wealth. Things like maybe a mortgage on a rental property or a loan on a piece of equipment that's going to generate income, those kinds of things can happen. But when you do that, it's not without risk. There are two personality traits that all debt has, no matter whether it's good debt, bad debt, and that is one, is that.

All costs, there is an interest cost to debt, okay? But it also all stresses good debt. Bad debt, doesn't matter, is going to stress you financially, it's also going to stress you psychologically. The burden of that. And so when you look at it, and I see it going on now where you only 5% down, why did we end up in the situation in the 2008 financial crisis? Well, part of it was because there was bad loans. Part of it was because they didn't qualify people for the loans and they just gave money out freely. And then when the house of cards came tumbling down, it came tumbling down with it. Part of it was because people over leveraged their properties so they took on debt, you know, no money down, 5% down. And when there was a decline in the value, now all of a sudden there was more debt on the property than there was asset value and now they were negative and they couldn't carry it and now all of a sudden they're in trouble. Now if you follow the wealth party ladder and you have the proper rungs, what you're doing to make sure that you're safe, do you have the unshakable foundation and you do the debt properly, you'll be okay. But the problem is that when you over leverage even good debt, you can get yourself in trouble. It's exactly why Dave Ramsey ended up in bankruptcy. And he's a huge, huge proponent in the personal finance space and he's done some amazing work. Now he is completely debt averse. He thinks all debt is the devil. I'm not of that school of thought, but I understand that if you over leverage and you take on too much debt and, and you don't have the liquidity to carry it, or you have one hiccup on the journey, then you're living in a mirage that's gonna come down and everything. So this first one is to stop worshiping the idea of just good debt. Because good debt can turn into a bad situation if you take on too much of it or you're not properly doing it. Okay? The second habit. The second habit is, and this one was a big one for me, is to stop wearing busy like a badge of honor. Movement doesn't mean progress. Busy isn't a goal. It's not noble, it's not heroic. Okay? If your calendar looks like a toddler's coloring book, you're not productive. The greatest asset, the most finite asset we have is our time. Okay? Is our time. And so how are we using and allocating our time to get the most value out of it, the most benefit out of, the most joy out of it, the most fulfillment out of it? The true wealth. True wealth should be measured in time and not money. How much agency do you have of your time? I literally used to be proud of the fact that I worked 14 hour days. There was one time that I worked so late when I was working in that downtown Los Angeles consulting firm, I worked so late that when I went out to get my car, the parking garage was locked and I couldn't get my car. I had to go back upstairs, sleep on the couch that night until they got back in the morning. I could grab my car, run home, get showered, get changed, and then come back to work. I ask, does what I'm doing work with, without me? You know, and that's the thing that we need to start to look at is say at some point, at some point now, when you start out, you're putting labor in, you're putting work in, you're doing all the things, I get it. That can be a season in your life. Life. It can't be sustainable. It's not sustainable. Okay, so what can you do to build the skills, to build the infrastructure, to build things around? So the things you do are driving the needle. And it's the needle to get results, but it's also the needle to joy and fulfillment. If not, it's just work. It's not wealth. And you got to look at it through those eyes. When I came back from the cancer and I decided to come back to do what I'm doing, which I feel called to serve, this is a chapter in my life, which is a chapter of service. And it's why I have the show, it's why I'm out speaking around the country. And I wrote the book and all the things, I sat with the team members that I were bringing on, I said, here's what I'm doing. I need to focus in on the thousand, $10000 tasks. Those are the only things I want to do. Anything below that, we need to allocate out And I said, look at it in three buckets. Okay? I want to create, I want to relate, I want to deliver. That's it. I want to create content that matters. I want to relate to my audience and have conversations with them. And I want to deliver value results and a journey to help everyone find the path to financial freedom. Because I truly believe that it is your birthright. And so the rest of the tasks, anything that doesn't fall under that or is below the thousand dollar kind of value perspective, I'm either going to delegate, eliminate, or move on. That's where I think we need to get to now. At the beginning, maybe you can't get there. But remember, it's a season and find your pathway there. Don't get acclimated to thinking that a 14 hour workday is a badge of honor. All right, Habit number three, stop waiting for the perfect time. Okay? There is no perfect time. Well, there is a perfect time. People will ask, Mel, is now a good time to invest? The market's at an all time high and go, well, have you been investing before? No, I haven't been investing before. Then now's a good time. Now I didn't tell him what to invest, but the point is, is that what drives wealth is the fact that you're participating in the wealth building journey. And the way you participate in the wealth building journey is you put your money to work for you. That means you're taking on risk. So we to do it smart so you don't flippantly, just speculate, gamble and do those things. But we have to first get over the threshold of saying I'm willing to invest, that I know that there is no perfect time. I'm going to get in the game. Think about this. There was a study done 20 years, 20.

That ended in 2023. So what is that? 2002. 2003 to 2023, where if you put $10,000 into an S&P fund, S&P 500 fund, that $10,000 would grow to $65,000. If you did nothing with it, it would have grown during that time frame. If you tried to get in and out of the market and during that 20 year period, you missed 10 of the biggest days in the market, the 10 of the best days in the market, that is one day every other year, 10 days only. Out of 20 years, that 65,000 was less than 30,000. It's cut in half because you missed 10 days because you weren't on the field playing the game, because you were on the sidelines. Watching the game because you were sitting in the stands. And you know, the crazy thing is seven of the best ten days during that time period were in down markets. So you can't predict it. Okay, that's sitting back and saying, hey, that's like waiting for a toddler to stop asking the question why? Beautiful in theory, but it never comes to real life. And so whether you're starting with $5, $10, $100, you have to step on the field and play the game if you ever intend to win the wealth game. I made a big mistake early on in my career because I didn't understand the things I understand today. I sat in an audience when I was young or younger and there was a commentator up on the stage talking about what was to come in the economy and he was, he was creating this fear and that fear hit me and I literally didn't even finish. Let him finish his lecture. I got up, I walked out to the lobby, I called my stockbroker at the time and said, put me in cash. I don't like what's coming and I'm scared of what's coming. And, and so put me in cash. I don't want to play the game anymore. And I got off the field. Here's the problem is I had excuses to not get back on the field. I got it had excuses not get back in the game because the excuses were either, well, the market's been going up and now I missed the up run. So I'll wait for it to come down. And then when it came down, I looked at go, oh, the market's going down, it's probably going to go down further. I don't want to get in. And I sat on the sidelines for well over a decade and I recently went back because I'm a numbers nerd and said, what would have happened if I kept, did what I was doing before that, investing my 5, $700 a month, 750amonth during that 10 year period and just kept the money in and then kept doing that all along. It was a staggering number.

That what that fear cost me, that sitting on the sidelines cost me, because I was waiting for the perfect time, is that my net worth would have been millions of dollars, $3 million more if I just stayed on the field, stayed in the game. So in this, in this habit this is about, there is no perfect time. Start, start small, start early, stay in, stay often. That's it. All right, Habit number four. I mean, stop letting lifestyle upgrades feel deserved. Here's what I mean, got a raise. Congratulations. I totally get it. That doesn't mean that everything gets upgraded. It doesn't mean that you now go get a better car or a fancier watch or a massage chair with Bluetooth or a bigger home. See, lifestyle creep. It's like a mold. It's silent, it's sneaky. And by the time it smells, it's already spread. It's already done the damage. Okay, now hear me out here. I am not saying not to celebrate. I am not saying not to reward yourself. When I come into info, when I work with clients and when I'm working in consulting and mentoring, when we have a success, then we carve off a piece to celebrate.

And then the rest we put to work for us so we can have more celebrations down the road. But one of the keys is to look at it this way, is I'd like for people to define what the reward will be before the success happens, before the windfall comes in, before the raise comes in, before the bonus comes in. Because when you do that, you take away the emotional idea of spending. Because now all of a sudden, this newfound money going. I found the money. You know, it's interesting. I've got someone that I'm having a conversation with this week because unfortunately, his. His mom passed away. We were high school buddies and his mom passed away and he inherited some money and, and he's now, you know, parentless. And that. I know the feeling because my mom passed away in September. And now, you know, I'm. I'm. I'm the oldest in the family, which is kind of scary. But one of the things I'm going to tell him to do is to do nothing. Because what happens is that when we get a lump sum of money, it comes with emotions, excitement and joy and all these things. And sometimes when our emotions are engaged in the process of money, we don't think straight. So I want the emotions to dissipate. So we'll put it in a high yield savings account for a little while, allow it to dissipate so we can strategically decide what we're going to do. But there'll be a slice of it that we take off and say, let's upgrade your lifestyle. Let's celebrate. Let's make sure that you're rewarded as part of this. So in this habit is being deliberate and saying, I'm going to plan the rewards. I'm going to plan the celebrations so they're not by impulse or emotion. And now the rest of the money can be put to work for me. So it develops and creates a bigger nest egg down the road, bigger celebrations down the road, and more freedom down the road to make that happen. And maybe you don't know exactly what that freedom is, but that's why I have. I have that Freedom Zone quiz. So you can start to look at where you are in that journey and what to do next. And so you can click that link to get it, get ahold of it down below and see where you're at on it. See what your next steps are. All right, habit number five. Stop thinking in the terms of monthly payments. Instead, think of total cost. This is something that, oh, my gosh, everyone has figured this out. Marketers have figured this out. Car salesmen have figured this out. Think about this. You go on a car lot and you walk on, and what do they ask you? They don't ask you what car you want. They ask you, what payment are you looking for? See, they realize that if they can get you to start talking in payment first, it's not a $50,000 car. It's three. It's just $300 a month. Yeah, well, they didn't tell you the rest of the math. $300 a month for eight years plus. You got to have a down payment or you have a residual at the end, so you don't give you the total cost. But what happens is that we start to do payment math and we go, well, it's only $300. It's only $100. The buy now, pay later mentality. It becomes something that we start to stack payments on too, too much. Which is what I did between credit cards, between installment sales back in the day. We, you know, we didn't have buy now, pay later. We had layaways. So that meant that we pay, pay, pay, pay, pay. And if we don't pay, we don't get the. The item. Okay, so we didn't really get the item until we finished paying for it. Okay, but. But that. The kind of thing is, is that it's the wrong kind of thinking, because you could Pay buy a $50,000 asset, and you're paying $300 a month for the rest of your life interest rate. That's. And you're comparing it to a date night at freaking Chili's, but you're buying a yacht or something. It just doesn't make sense. The important thing is for us to understand the total cost. How much. If I wrote a check for it in cash, would it cost? How much is it going to cost me if I take these payments? Total cost and then think about the opportunity cost of that money. Because every dollar you put out today is, is a multiple of dollars in purchasing power in the future that you give up. Okay? If I put a dollar in an investment at 20 years old, it goes up over 80 times. So $1 at 65 at 20 years old at 65 turns into 80, you know, $10,000 or $5,000 turns into $400,000. So the purchasing power lost of a $10,000 payment or cost over time becomes dramatic. I want you to start to think in terms of total cost, total opportunity costs and lost purchasing power. Not so you don't do it, but so you, if you do make the purchase, if you do go into the game, you don't do it because you are looking at it from a payment standpoint. You do it fully conscious, fully aware, fully, fully intentional understanding the total cost and what you give up to do it. Okay? And you then start to understand how much of my future am I giving away for today's convenience? All right, Habit number six. Stop tying your identity to what you earn. And this is a big deal. I think today, especially in the social media world that we're in, because people are parading what they are saying is their real life. And I can tell you from, from knowing some of the truth behind it. A lot of what you're seeing on social media is not the reality. There's a lot of people saying that they're making money, but they ain't keeping it. They're not free, they're stressed out. They're in worlds of debt and worlds of hurt. Okay? But when you start to attach your identity and your self worth to your net worth, to your income, that's not wealth, that, that is, that is an emotional lease that is going to destroy you. Because when the market goes up, your self worth and your identity goes up and it becomes stronger. And when the market goes down, you go down with it. See, when you do it that way and you attach your self worth and you attach it to this, you're not building a life. You're playing financial Jenga. And if you aren't careful, then it erodes your relationships, it erodes the quality of your life, it erodes your mentality. And I've watched people, I've seen people, when they ended up in a bad financial place, take their life. I mean, in worst case. So your value isn't your paycheck, it isn't your bank account, okay? Your value is something completely separate. And our identity needs to be tied to those things. Outside of us, the things that matter to us. Because the bank account will go up and down. When I lost one third of everything I owned in that Ponzi scheme, trust me, my identity as a financial advisor, as a CPA was in question.

But I had to realize that. That the only thing that was gone was the money. Who I was, what I was, what I was capable of doing, the skills, all that stuff were not gone. So if you find that there's this emotional roller coaster that depending what's in the bank account, that you feel it's defining who you are, we need to work on that. Habit number seven. This will feel counterintuitive, but stop obsessing over every penny while ignoring the big picture. Look, do I love financial clarity? Absolutely, I do. Okay? But tracking every $4 latte every morning while ignoring the fact that you are buried in debt.

Isn'T going to help. I mean, it's like sitting back and saying, hey, I'm just going to rearrange the spice rack on the Titanic. Looks great, but the boat is sinking. Okay, Work on the things that actually matter. Your big financial decisions are the things that really cost. The cars, the homes.

The colleges, the student loans, all those big picture things. I know the little things do matter, but if we don't have the big picture right first, the little things aren't going to have that big of an impact. So zoom out, focus on your cash flow, understand the scalability, See what systems you have in place. Look at the big picture. Where is the big dollars? Where are they going out? Where are they coming in? Fix the big rocks first. Then we can get to the little ones. Okay? Habit number eight. Stop delaying freedom until someday, because someday's not coming. Okay, here's what I hear all the time. I'm going to enjoy life when I retire. Listen, take it from someone who got smacked in the face with his mortality.

If you're not enjoying the journey.

We don't know when retirement is going to come. We don't know how effective it'll be. We. We don't know if we'll have. If we'll have the capacity, the health to enjoy it. Tomorrow's not promised, and I took it for granted until the cancer. And so this idea of freedom is, yes, there is financial freedom. Yes, we have to build it to have that kind of freedom. But at the same time, when we build a plan, when I do it like a money machine master plan for my clients, one of the things that are important is to say, let's make sure that we have the joy points in there because it is important for us to enjoy the journey to financial freedom.

If you are stuck. This is one of the challenges I have with the FIRE movement, the financial independence retire early movement. Some of them are putting 70% of their income away. They're living. They're living off of nickels and dimes to try and get to a point where they can retire at 35. But what kind of life are they giving themselves? What kind of joy is there? Okay, this is the kind of kind of thing is like. It's like waiting for freedom until retirement is like buying a front row ticket to a concert that you just may never attend. Retirement isn't a number. It's a choice and a transition to a life of choice. I have effectively been retired for over a decade. And what I mean by that is not that I don't work because I work and I work hard, but I do it by choice. See, I want you to have the ability to choose. And we have a lot more choices in our life than I think we give ourselves credit for. Now I get it. We have to have the jobs to pay the bills and all that stuff. But there's a tipping point where we get beyond that. And financial freedom comes in the bank account and in the psychology around that.

But life, freedom actually comes before that. It's how you see your life. It's how you look at your life, and it's the choices you make. And that choice gets built. It's not by scraping and savings, but by designing a system that works without you. All right, so let me land this plane. Okay? The idea here is this wealth isn't loud. It doesn't need you to flex. It doesn't need you to post or prove anything. It's built quietly. It's built intentionally. It's by doing the boring things. But it's also about stopping some things. It's about stopping renting your freedom. It's about stopping allowing other things to drive the things that you're doing. It's about stopping some habits because 80% of your wealth creation is about behaviors, habits, and decisions. So if we can carve out some of that. The bad habits that I had that were slow erosions of the quality of my life, the freedom and the wealth. We start to move ourselves towards the path of where we want to go. So I hope that this helps. I hope you start to look at this. Do me a favor, let me know down below by telling me which one of these habits kind of hit home. I'd love to hear from you. I'd love to have a conversation around it and see what happens. And remember that if you want to try and figure out where you are in the financial freedom journey, take the Financial Freedom Zone quiz by going to your financial freedomquiz.com and take the quiz. It's totally free and you'll get a special report on what to do next, where you are, what it means. All right? Until then, all right, stay with me. Let's have this conversation and I hope to see you on your path to financial freedom. And until I do, always, always strive to live a life that I lose you. See you in the next one. 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 forward/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 do me a favor, go to Apple, Apple Podcast, or wherever you're listening 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.