Ten Tiny Habits That Build Real Wealth (REALISTIC)

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. What if building real wealth didn't mean massive sacrifices or huge changes in your life? If you've ever felt overwhelmed by the idea of managing money or the thought that wealth was only for the few that could make the big moves, the swing for the fence kind of moves, well, this episode's for you. Because the truth is, wealth is built through small, consistent actions, tiny little habits that anyone can apply. Starting today and in this episode, I'm going to share with you the exact habits that not only create wealth, but they create real wealth and do so in a way that feels manageable, practical, and attainable.

Now, you've probably heard that building wealth takes years of hard work, big investments, and making sacrifices, right? You know, things like living on beans and rice and all of that type of stuff. But if I told you that real wealth was actually built on tiny, realistic habits that anyone can adopt, what would you think? Because here's what I'm going to share with you today is to give you a set of habits. I'm going to give you 10 of them that are tiny habits, that when you bring them into your life, it actually moves the needle over time to building real wealth. They're easy to apply. They make a huge, huge difference over time. And the best part, you can start them today without having some sort of major overhaul in your life. So let's dive in. All right, I'm going to jump to my iPad. We're going to do this one at a time. But the first one is this one is to automate your savings. And I think with that, you're investing. And so here's why we do this. We are. This is. This is classic. This is something that a lot of people have talked about, but it's the thing that's often overlooked. Take the friction out of building wealth. Right now. If you feel like you have to pull the levers, you have to turn the dials, you have to push the buttons to transfer the money, to allocate the money to do all that, that's, that's, that's, that's heavy lifting. That's friction that we don't want. Listen, the, the marketers, they figured out what friction does to buying. They say the more friction there is to the buying decision, the less you buy. So what do they do? They give you credit cards. They allow you to tap your phone. They remove the friction from the buying decisions so you buy more. Well, we need to move, remove the friction from our investing and savings decisions so we save and invest more. And the way you do that is you create automatic transfers to the different accounts. Now, I have an automatic transfer that when the money comes in to my main account, I. There's an automatic transfer that goes to my high yield savings account. Okay. There's an automatic transfer that goes to my investing account. That investing is automatically invested based on the criteria. So you want to do that now? It doesn't matter to me whether you're sitting back and saying, all I can do is $5. $5 is where you start if that's all you got. The key is to make sure that what you're doing is your take. You are making movements towards the right direction. You are exercising the muscle. Here's what we know. Wealth creation is less about the money and more about the behaviors and habits you have. And those behaviors are built on, on the muscle group, the muscle memory in it. And the more that we can develop those behaviors to be second nature, the quicker the better. You will be on the path to financial freedom and building that wealth. And so it is important for us to, to think about it through those eyes and say, how do I develop the behaviors? How do I make it easier to do that? Automate your savings, automate your investing. That's the first thing to do. Interesting data has shown that the National Bureau of Economic Research, people who automate their savings have 80% more in savings than those who don't. 80%.

So that's the first thing. Automate your savings. The second, small habit. This one could be a little painful, though. Okay? I'm not going to lie to you. Track spending for 30 days. Okay? Look, when it slaps you in the face and you see that you're spending stuff, look, it sounds tedious, and it is. And it's. It can be painful because you go, I didn't, I didn't know I spent that kind of money on that. It gives you, though, a crystal clear picture of where your money's going. And without that, we can't make the right choices. I want you to track it without judgment. I don't want you to filter and go, I shouldn't spend it. Just spend it, spend it, track it, log it. Okay? This isn't about you micromanaging. This isn't about you filtering. This isn't about doing. This is simply about one thing. Awareness.

What we know is that when we intentionally make decisions about our money, we intentionally can get our money to do the things it's meant to do for us to build our wealth, our money. They're like our 24, 7, 365 day a year employees. And we need to give it a job description. We need to give each dollar a job description. Some of them are going to be to pay the rent. Some of it's going to be for entertainment. Some of it's going to be for me, it's going to be for clothing or for health or for medical. Some of it is going to be for savings and investing in your financial future. And we need to give each job description each dollar a job description. The challenge is that too often we have money that comes in. Most people have money that comes in. It's not deliberately or intentionally allocated. And therefore it just goes, it's, it just, it just dissipates. The spending expands to use the money at hand. Okay? The spending expands to use the money at hand. And if, if we're not careful. But by tracking it for 30 days, you can, you can get it dialed in. Now, I doesn't matter to me how you track it. You can do it in something like ynab. You need a budget. You can do it in just an Excel spreadsheet. Heck, you could do it with a pencil and paper if you want. I track all of my spending. Just so you know, all of my stuff is in Quicken or QuickBooks. Okay? But I write down everything. When I was doing the 30 days, I write down everything. A coffee, a lunch, an online purchase. And after 30 days I get a chance to look back and I said, oh, I had no idea. Here's some small leaks. Here's some things where I didn't need to spend or I spent otherwise. Here's the interesting thing, okay? If you look at statistics, the average American spends over fifteen hundred dollars a year in non ess items without ever realizing it. Okay? Survey kind of broke it down. That's, that's $125 a month. Imagine if your awareness turn that on. You said, wait, I have $125 extra a month. Because now I'm aware that I can invest towards my Financial future. Think about this. If I took $125 a month and put it away in AN S&P 500 index fund, you're going to get somewhere between 8 and 10% over 30 years. That non essential spending that I now am investing, because I'm aware of it, at 8% will be, will be around $186,000, almost $200,000. At 10%, it'll be $282,000, almost $300,000. So it's not insignificant. When you start to look at the grand scheme of things, it may seem like it's only 100 bucks a month, 1 25amonth. Oh no, it isn't. It's $300,000 to you in 30 years at 10%. That's how we have to look at it now. I'm not saying not to spend it. I just want you to be intentional. I want you to know that you're spending it for the things that truly bring you joy and fulfillment in your life. Not momentary pleasures. Not because of comparison with other people, not because you saw it on Instagram, but because you chose it intentionally. All right, that leads to number three. Number three is the 24 hour rule. Okay, now when I look at it from this perspective, what I want you to do is any large purchase, any impulse buy can be a wealth killer if you're not careful. So I want you to, to create a rule that, that and you can set the parameter. It can be.

It can be anything over $500. It can be anything over $1,000. Set some, some parameter. I don't want you doing this for, but it's something that is an impulse buy. You, you wait 24 hours before you buy it. Give yourself a cooling off period. Sometimes I even push it to 48 hours. Just leave it in the cart, don't purchase it. Don't fall susceptible to, oh, the deadlines and all the marketing speak and all of that stuff. Wait before you click purchase and, and just have, have it remind you and just look at from that perspective. And then 24 hours, 48 hours later, you look and say, do I really want it? Do I still have that same feeling for it? And, and if the answer is no, you don't buy it. There was a Study done by finder.com 88% of people have made impulse purchases at some point, spending an average of $276 a month in unplanned purchases. Unplanned. Remember I said intentional before. Imagine cutting that half in half. That's another fifteen Hundred dollars a year. Okay. The first fifteen hundred, the one hundred twenty five dollars in the last. And the last habit can, can come up to $300,000 in 30 years. This, if I cut out impulse buys and cut it out by 50% and have another 1500 dollars a year, that's another 300,000. It adds up. That's what I'm talking about. It's little habits. Little habits. All right. Number four is, is the 1 1% better. It's, it's, it's, it's a 1% better mindset kind of a thing. Wealth creation isn't built overnight. Instead, instead it's about you just getting 1% better each day. Whether it's increasing your savings account, you're investing just a little bit more, learning to a new skill, just a little better daily improvements. So here's what I want you to do in this one. I want you to set a micro goal, a mini goal each day. It could be simple, as simple as reading a financial article. It could be listening to an episode or watching an episode of my show. It could be moving an extra $5 to your savings account or adjusting your budget. See these small, these small, small actions, they have a compound effect and they stack on each other. And just because, let's say you change this at 1% a day, you actually have more. And I do that every single day. That's 365 days of 1%. It's not 365%. It's far greater because of the compound effect. James Clear in his book Atomic Habits explains that getting 1% better every day compounds to about a 37, 7 times improvement over a year. Imagine plan applying that to your financial habits. Okay, leads me to number five. This is another one that is classic, but people don't do it. Pay yourself first. Said another way. This is about making your wealth creation, your investing a priority. Instead of making money, spending money, seeing what's left to invest, you make money, you invest it and you see what's left to build your life. If you don't like what's left to build your life, we go back to the drawing board and we say, how do I make more money? Or how do I adjust my expenses? But we don't forsake our financial future in the process. This means that paying yourself first means that you are going to put money aside for you and your financial future. You're not sure how to do it. I want you to follow the wealth priority ladder in my book Building youg Money Machine. It's in chapter 12. I break it down for you and give you every step of what you're trying to do first. This makes your financial future a priority, and it gives you a certainty in the outcome down the road. Just, just start with, with 5%. I know in the book I say I want you to, to put 20 to 25% of your, your income away. I know that you can't do that right away. Maybe you can, but most people can't. So start with 5%. Start with 3%. Start. Because I need you on the field to play, play the game. And then you work your way up. And then you work your way up. Consistency is the key to get in the game. And so, so when you look at it from that perspective, it starts to drive everything. In fact, a recent study with Vanguard found that people who have consistently saved 10 to 15% of their income are 90% more likely to retire comfortably. Right. Number six is invest in learning. Invest in your education. Okay. This is really about creating, creating a wealth of knowledge, wisdom, and expertise. Wealth isn't just about money. It's about mindset. It's about knowledge. The more you can learn about financial literacy. In fact, it is the starting point. If we truly expect to be wealthy and to have richness in life, to manage money effectively, we actually have to have the knowledge to do it. We have to skill up to it to do it. And the way we do that is we build our financial literacy. So we need a commitment to invest in our time to learn personal finance. It seems like it's complicated. The way I wrote my book was to do it via story and frameworks in a way that was approachable and usable. Because too many of the money books out there are staunch text and like business conversations. And look, it's stuffy. It's hard to understand.

It's just. This is why people think that I can't learn it. No, it's simple. I try to make it simple for you, and hopefully I did a good job of it in doing that. So take the time to learn about investing, money management, finance, so you can make better decisions. Read, read my book, follow my show, follow others, but commit to learning a little bit each and every week to grow your knowledge so you can grow your wealth in doing it from that perspective. Because those people that have, have educated themselves about financial literacy are typically five times more likely to build lasting wealth than those who don't because they know the rules of the game. They understand the system. Okay, that leads me to number seven is to save unexpected money. What do I mean by this, there's another way to look at it. May not be unexpected money, but lump sums of money. Maybe you do projects, maybe you get big projects here and there and you get a $200,000, $100,000 project. And I did this in my career and I call it leapfrog funding. But maybe you inherited some money. The tendency is to sit back and go, oh, I got this free money and you go out and spend it. I don't want you to spend it all of it. I do want you to use some of it. Here's what I tell people do is I look at and say, if you had a lump sum come in, I want you to take a small sliver and go celebrate with it so you bring some joy and enjoyment out of it. But then I want you to take another sliver that you might need it to live on, okay? And then the remainder I want you to invest. And what happens is that if you get these lump sums that come in because you do a launch or you, you have a big bonus or you have a big project, or you get a gift of some sort, you'll have a little for celebration, you'll have a, a little for operation and you'll have a whole lot for generations. That's what I want you to do. So save the unexpected money, put it into an investments and into a high yield cash account. If you're not sure where to put it, follow the wealth priority ladder in the book to make that happen. Now this next one.

Number eight is what, what I call. It's, it's an increase, it's the 1%. So I had one 1%, but I want you to increase 1% savings every month. Every, actually every six months. What I do. Okay, every six months. Here's what I mean by this. Remember I said that I want you to invest 20 to 25% of your income and the pushback I get is I can't do that. I can only do 1%. I can only do 5%. Great. Start with 5%, start with 5%.

And then in six months increase it to by 2, 6%. In six months more increase it to 7%. In six months more you increase it to 8%. So what I want you to do is I want you to increase your savings in increments. Now you could do it as I'm giving you a leeway to do in six months. I'd love to see you do it in every quarter. Now you get a 4% increase every year because there's four quarters or better. Yet do it every month. The point is to have a systematic increase to your savings, investing in 1% increments that are going to get you ultimately up to that 20 or 25%. Okay, now that leads me to, to number nine, which is similar to this, but different. I want you to split fund your increases. Here's what I mean by this. Say you're working in a job and they say, congratulations, you did a great job. I want you to, we're gonna, we're gonna give you a 5% raise. Here's what I want you to do with that raise. I want you to take half of it and add it to your, your current income. So you're using it, you're enjoying it, you're doing that. I want the other half to go towards your investing. So you'll take 2.5% for living and 2.5% for your future. Point being is that you didn't have any of the 5% before the promotion or before the raise. Now you get two and a half percent and the other two and a half percent going towards your future, you still gain. But what we're doing is I'm starting to ramp up your savings percentage to a point where we get to that 20 or 25%. Now if you're at the 20 to 25% and your plan is in full execution and going well, then we don't have to split it. Okay. We don't even have to increase the savings rate. We just stay on course. But if we're trying to build to that 20 to 25%, we do it in 1% increments on a monthly, quarterly or six month basis. And we do split funding our increases in, in that way. And then, and then number 10, this is kind of a fun one potentially. I don't do it a lot.

But it's to actually, it's not a fun one. This is the number, the fun one is, is a bonus that I'm going to give you number 11. This one is, is actually to remove. Okay, I'm going to come back to this. Samuel. Let's cut it back in. Okay. And that leads me to, to number 10. Okay. Number 10. This one can, can be a painful one for some folks. Is here's what I want you to do. I want you to remove your credit cards from, from all purchase apps. Here's what I mean. If you have a stored credit card in Amazon, if you have a stored credit card in Wayfair, if you have a stored credit card in any of the purchase apps, Uber Eats any shopping platform. I want you to remove it, delete it. Okay? Remember what I said about putting friction in your buying habits? This puts friction. If every time you have to get up, you have want to make a purchase, an impulse buy, you have to go get the credit card and put it in again. Okay. There's a tendency that you won't make that purchase. Okay, I want to put friction in, so I want you to remove it. Now. It doesn't help you if you're someone like me, because I memorize my credit card numbers. So I can literally go in there, go, dah, dah, dah, dah, dah, and it's in. But it's a, it's a. It's one of the sneakiest ways that money slips to our fingertips is that we have these credit cards stored into these different purchase apps, and in single taps, we can go ahead and purchase. Now that there's another thing that happens with this. By removing the credit cards from these purchase apps, if they get hacked, you won't get hacked along with it. You won't get caught along with it. So I want you to go to each of the of the purchase apps and remove the credit card. And it forces an extra step in the purchase decision that you're going to, to make. All right, now, I said I had 10 for you. I've got an 11th bonus one for you also. So number 11, this is the bonus. Okay. Round up your purchases. So here's what I mean by this. It's kind of an interesting thing that you round up your purchase to the next dollar and save the difference. And it's, it's simple enough that you barely even notice it. And there's some apps like Acorns or, or Q Capital that automatically round up every purchase and they move the extra cents, if you will, into a savings or investing for you. So, for instance, if you buy a coffee, $4 for $4.50, it shows the purchase at 5, and the 50 cents goes towards you and towards savings. It replaced. And what happens is that, like Eggcorns has reported that users save an average of 30 to $50 a month just from rounding up purchases without any extra effort. Remember, $125 a month over 30 years at 10% is almost 300,000. So if I got $50 a month, that's almost one third of it. I might get another 50,000. It just adds up. And it's these little, little habits that when you stack them up, make a world of difference. And it's not about dramatic shifts and Changes and, and, and restriction and deprivation and all that stuff that you need to build, build wealth. Now, let me be straight with you. You need a system. You need a process. You need to, to have something to follow that's beyond just these habits, but these habits fit into the process to make it easier. And when you start to develop these kinds of habits, these kinds of behaviors, and build your financial literacy in the process, these things will make a huge difference over time and not have. You need to make massive changes to your life, to everything you're doing. So here's what I'd love for you to do. Go back through this episode. Go back through the 11 habits. I want you to decide which ones you're going to do. I hope that you're going to choose to do all 11. If not, I want you to choose to do at least six or seven of them and do it for a little while so you can see the difference. Remember, at the beginning, you don't see the huge impact, but over time, it's exponential. So, so I wanted to give you something that gave, made it easy. And we looked at things from a, from a little tiny movement standpoint that make big swings in, in the results. They say tiny hinges can swing big doors, and that's what these things will do. All right. I hope that you found this of value and if you have not done so already, make sure that you have subscribed to this channel, subscribe to this show, and share it out. And if you can leave me a review, I'd love to hear from you. Love to have a conversation with you also. So here's the deal. I believe financial freedom is your birthright. I'm here to give you the pathway to go out and claim it. All right? And if I can help you in any way, please let me know. And in the meantime, I hope to see you on the road to financial freedom. I hope to see you at one of my speaking engagements or in the next episode. Until then, always, always strive to live life.

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.

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