The 4 Money Maxims to Live By

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. Hey, there. Welcome to this episode of the affluent Entrepreneur show. And this episode is a little different because what I did was a live livestream training, and this one was on the four maxims, the four money maxims that the wealthy use. And I wanted to broadcast this because I think it's important to get it to the broader community, to my audience, because here's the thing, a lot of people are coming to me and thinking that creating wealth is a complicated task, but it really isn't. When you understand the couple of things that consistently across all millionaires, across all billionaires, across all wealthy people that they do, and you bring those into your life, it moves you faster forward towards your financial destiny. So here's the deal. I hope you enjoyed this episode of the affluent Entrepreneur show. It is alive, so enjoy it. I'll see you on the other side. Cheers.

This is the Affluent Entrepreneur show for entrepreneurs that want to operate at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth so you can have a richer, more fulfilling lifestyle. In this show, you'll learn how business and money intersect so you can scale your business, scale your money, and scale your life while creating a deeper impact and living with complete freedom, because that's what it really means to be an absolute entrepreneur.

All right, so good to be here live with you. Do me a favor, let me know that you're here, that you hear me, that everything is coming through fine. I had the camera flipped, so I had to switch that. So hopefully you're doing well. This was a spontaneous live. I just got finished speaking and I wanted to do a live to talk about a couple things, and it came out of a question that came up from the community and all about wealth and how we deal with that. Because often I hear these conversations around, well, creating wealth and everything is complicated, especially in the current environment. And so I want to be able to have that conversation with You, I'm going to give you a framework, because it ain't a training without a framework if it's from, from me. So we're going to give you a framework. It's what I call the wealth maxim matrix. You know, when you look at wealthy people, when you look at people that have built wealth and you start to strip it down to what they did, you find that there's some commonalities. And when we, when we string those commonalities together, we can create a framework, we can create a way to approach it. What are the, what are the things that they live by? And I think it's important for us to start to look at it from that perspective. Here's the thing. There was a study that came out by fidelity that said 88%, 88, almost 90% of millionaires are first generation millionaires. So what does that mean? That means that they didn't inherit it. That means that it wasn't gifted to them. That means that they didn't, they didn't win the lottery. Okay? They created it, they built it during their lifetime. Here's the beautiful thing. If 88% have done that, there's no reason you can't see. I think financial freedom is your birthright. I truly believe that. And, and it's just a matter of us understanding the, the processes, the priorities and the principles that you need to use to get there. See, wealth creation is less about money. It's more about habits and behaviors and how you show up and the things that you're doing on a consistent, persistent basis to make that happen. And when you do that effectively now, all of a sudden, you will see that wealth accelerates. It's what I call money momentum that comes into play and in everything. So in this 2017 study, the other thing that came out of it was there was another study about, of 10,000 millionaires, the majority of the millionaires built their wealth on $100,000 or less. Okay. So the fact of the matter is, is that, that it doesn't take a lot to do this. It just takes an understanding. And so I want us to have a conversation. I want to start the conversation here. I want to walk through a framework with you, give you some things to consider, to do. We are in a volatile time. We are, I don't even know where the market is today. But you know, yesterday we had the fifth largest loss in the market.

In history. So, so here's the thing. But when you understand it, you can make money at it. I'm making money while the market's going down. It's kind of crazy. Okay. And so, so one of the things to consider here is, is just that, is that what are the things that you need to do to create wealth? What are the things you need to do to keep wealth? What do you need to do to multiply wealth? Those are the things that I think start to drive the things that, that we want. So let's jump into this and let's just go through what I call the, the, the wealth maximum matrix and we'll start. I'm going to jump to my iPad and you'll see it here. And we'll start. Start with this. Okay. There is the first thing that when you talk and you look at the wealthy, when you look at what they've done, there is the first thing that they've done is this, is they made a commitment. They made a commitment, and I mean a commitment to a financial journey. Now, that financial journey not only includes making money, but understanding money, understanding investing. That doesn't mean you're going to be some crazy financial analyst. Some people love that and they do that kind of nerdy like me. But that means that you at least understand it enough that you can get involved with it and you can be part of it. In the session that I just finished just a little bit ago, one of the things keys that I told them is that you must be the captain of your ship. You must have your hands on the wheel. You can't relinquish it, you can't abdicate it. You can't give it away to an advisor or an advisor team. You must be the one that's steering the ship. Okay? So the commitment is the first maxim that they have is that they've got a commitment to this journey. Now there's three things. I'm going to walk you through three things for each of these maxims so you understand how we break it down. There are three things. Three things that what we need to do is look at it through these eyes is that the first thing to have a commitment is that everyone has a vision and a plan. A vision and a plan. Now, one of the mistakes that we often make is that we either arbitrarily set a number out there or we turn around and don't set a number out there. Either one of them is not good. Either one of them is not good. Because what's going to happen is that now you set an arbitrary number out there, you don't even know why you're going after the number. And now all of a sudden you're in a situation where you're chasing a goal that isn't what you want. And so I think it becomes important for us to really start to understand how that will all play out. And so one of the first things is to create a vision. One of the first things that we do with the affluence blueprint with my clients, whether it doesn't matter whether they have millions or they're just starting out, one of the first things that we do with them is to sit back and say, hey, let us make sure, let's make sure that you know exactly, exactly.

Where you're going. What does that look like for you? What is it that, that you want out of it? And then, and remember, it says in here that it was a vision and a plan, okay? Because now that we know the target, then we design the plan to make the target a reality. So you don't want the vision just to be a dream. We want to live it. We want to make it a reality. So at the commitment level that once they have that commitment, they're going to create the vision based on what they want, not, not what society says, not what their parents say, not what the educational institution. What do you want? What do you want from your life? How do you want to experience it? How do you want to live it? It's your life. You get to choose.

And let's create a plan to do that. Then the second, the second piece of this is that once we have the vision and a plan, you, they will communicate and people will go, what are you talking about? Communication? Here's the thing.

I hear these people say, oh, they're self made. Yeah. No one's self made to say it. There's no. I'm not self made, okay?

I'm, I am a product of you, my audience, the people I serve. I am a product of my upbringing. I am a product of my customers. I'm a product of my loved ones. I'm a product of my education. I'm a product of, of all those things. I'm not self made. No one is self made. But here's the thing. If you're in a committed relationship, an intimate relationship, it's important for you to communicate the vision, the plan, and the commitment to a financial goal. So you're on the same page. I don't care if you're on the same line, same word, but I want you on the same page. See, when you have spouses that are not on the same page financially, it creates friction.

It creates conflict. Do you know that the number two cause of divorce. The number two cause of divorce is money behind infidelity. Holy moly. It doesn't need to be. Here's the thing.

Money. Conversations in a relationship do not need to be divisive. They can bring you together. It's important for us to communicate that now. You may even with my. As parents, we should be having these conversations too often. We grew up in a time where we said, talk about money is impolite. We've demonized money. No, no, no, no, no. Money's a tool. Money's a tool. No different than a screwdriver, a hammer, or a saw. It's how we use the tool.

So we should be having conversations around it. I had conversations around money with my son starting when he was young. Not the worship of money, but how money can be used as a tool. Generosity, make a difference, to create a life, to do those things. So we need to communicate now. Here's someone I want to introduce you to because I think it's important for you to see what can happen when this is done right. This is. This is Corinne Kapora. She was actually a guest on my show, and she ended up being a guest on my show because she sent me this direct, this dm. So she sends me this dm, and here's what it says. It says, I'll read it to you. Hey, Mel, just want to drop you a line, let you know that your podcast has really sparked a lot of conversation between my husband and me and has been so good for us from not only a financial perspective, but a relationship perspective. We realize that we have two parallel success stories, but have not only not fully integrated them. After being together more than 20 years, they were together 20, 20 years. We've decided to break down the silos and really be team players for each other rather than rooting each other on from the sidelines. We both really love your take on family and entrepreneurship and how they need to work in harmony. Feels like after so long, we've had some sort of awakening. We even decided to go on a second honeymoon. All right. When we take the time to have conversations around money, not around the money, but around the vision for life.

It brings you together. It doesn't separate you. And so the second piece of commitment is to commit to having those conversations, to have real conversations, not about money. Don't go in there and sit back and say, oh, you're spending this and you're spending that. That is divisive. Okay? But have conversations around your life. Have conversations around the meaning and the desire to have a common vision. My wife and I, we just got back from eight days in Portugal. One of our favorite things is to walk the streets of different cultures, experienced people. We did a cooking class. You know, experience cultures, meet people, and to share that together. It's a common vision that brings us together. And then the financial structure to support that vision comes into play. So what we need to do is have that communication around the vision before we have the communication around the money. So that leads me to number three in the, in the commitment. Peace. And, and that is this, is that patience.

Patience. Oh my gosh. Especially right now. Especially when we are in such an instant gratification economy and, and society. It is ridiculous. And here's the fact of the matter. Your drive to build wealth goes like this. I'm going to. I'll draw this here. Okay. The curve goes like this.

And I call this section here the well flatline. And in this section is the acceleration zone.

Most people don't build wealth.

Because they don't have the patience to burn up the flat line. We have to use this up by consistently and persistently investing savings and building. So then when we get to that pivot point, our money keeps multiplying. It works harder for us than we did for it. But too often we quit too early. So. So patience. So that first maxim is commitment. It's about vision and plan. It's about communication, and it's about patience. When we break that down, it's really about deciding. You simply gotta make a decision. Do you want to be wealthy or not? Is it something you're gonna choose or not? Is it something that you're interested in or committed to?

When you become committed to it, you'll start making the right decisions. You'll start creating the right habits, start having the real conversations, and you'll start doing the right things. Okay, so that leads me to the next piece of this. And the next maxim is cash. Believe it or not, it is cash. The wealthy figure out how to. To make cash. And just like, just like the first maximum commitment, the second maximum has three things that we have associated with it involved. And that is this is the first. Is this getting really clear on their wants and needs? Here's the thing. This goes back to delayed gratification and instant gratification. Again, when you get clear on your wants and needs, you have the opportunity now to then define the excess cash and how you use, use that to build, build wealth. The problem is, too often we confuse our wants as needs. Our needs are our survival Roof over our head, food in our stomach, health care, clothes, transportation, okay? They're not mani pedis, they're not high fashion, they're not fast cars, they're not jewelry. Yes. I'm not saying not to get it. I'm just saying classified properly. Those are wants. I get it. I want them too. We have them, but we don't confuse them and say their needs, okay? Because when we start to strip away and look at it and say, are these truly wants.

That we're getting benefit out of.

Or not? And if we're not, we stop them. Here's the difference. When you start to look at how people live their lives, there is a group of people, most people live their life this way. And this is what I call the wealth priority pathway. Most people, they make money, okay? And once they make money, they then turn around and spend the money. They live their lifestyle, they buy their stuff, they do the things that they want to do. And then once they're done with that, they look at what they have left over and they turn around and they invest what's left. Here's the problem with that. Do you realize that all you're investing is the scraps?

I don't want to build a financial future on scraps. I want to make it a priority. The in the wealthy will make investing a priority. And the way they do that is they reverse this. They'll look at this and say, yeah, great, we made money. But before we spend the money, we turn around and we say, I'm going to invest money first, spend later.

Invest money first, spend later. Now here's the beautiful thing. They also look at and say, well, wait a second, if this doesn't give me the lifestyle I want today.

We don't take away from wealth. We look back to how we make money and say, can we make more money to give us the wealth we need tomorrow and the lifestyle we want today? And the answer is yes, but we need to do it deliberately, intentionally and with purpose. And so when you start to look at wealth and wants and needs, it's about making investing the priority versus lifestyle. Okay? So that's wants and needs. That starts to then give you then the second piece of what drives the wealth maxim. And that is this. Let me go back to the iPad. And as this is income scale.

They the wealthy are really good at finding opportunities to create income. Opportunities to create income. Listen, the market dropped 1300 points. It was the, the worst drop in.

Depending on who which market you compared to in five years or seven years.

Yet when the Market dropped. I still made.

Money in the market because I understand how to make money no matter what is going on. Okay, so we need to be able to income scale. We need to be able to do. It might be a side hustle, it might be an online pro thing that you're doing. Bottom line is that the more we can create additional income, the more we can accelerate our path to wealth, the more we can burn up the flat line, the wealth flatline zone to move us into the acceleration zone. Hopefully that starts to make sense. Okay, then the third piece of this cash is this. The wealthy don't care what the Joneses are doing. I mean, you've heard the saying of keeping keeping up with the Joneses. Here's the problem with keeping up with the Joneses. The Joneses are broke. Listen, we live in a society where people are parading their perfect life, their facade of a perfect life on social media, on Pinterest, on Instagram, on Facebook, on, you know, I don't know, you know, all the different social media platforms, and we're comparing ourselves. It's driving us crazy. And we're buying stuff we shouldn't be buying. We're doing things that we don't even want to do. I found myself swiping and buying stuff.

Wait a second. Ah. So the point being is that there's no reason to buy things.

That you weren't intending to buy just because the neighbor bought. The neighbor buys a Denali or a Tahoe, you need to go and. And buy a Denali. I'm not in competition. I'm going to live my life my way. If that's a temp in Montana or a yacht in Monaco, that's my choice, and I get to do it my way.

We don't keep up with the Joneses. We don't care what other people are doing. Stay in your lane. The wealthy will do that. They don't make their decisions, their life decisions, their investing decisions, or their buying decisions based upon what the people around them are doing. They have the vision and the plan, and they live true to the plan. Okay, that leads me to the third maxim in the wealth maxim matrix. And, and that is this. Oh, if this is deciding, this is earning, okay.

But the third is savings. Savings. They're actually putting money away. Here's one of the things that's important when you start to build this out is to realize that one of the most important numbers you need to understand is your savings rate. This is how much as a percent of your income are you putting away into investments? On a basis. Now, in the affluence blueprint, we have a thing called the wealth priority ladder that gives you a hierarchy of what to do with your cash when. Because we don't just start investing if we have debt. There's some specific criteria to do that. But in a nutshell, what is important, what drives everything is your income and your savings rate.

What percentage of your, of your income are you saving and putting away for the future to build the future? Now, I'm going to tell you that I think that depending on where you are and your age and stage in life, you should be somewhere between 15 and 25%. 15 and 25%. Now you might be sitting back going, oh, hell, there's no way, Mel.

There'S no way I can do 15, 25%. I'm barely paying my bills. Well, now you have a goal. Now you have a target income scale. Wants and needs. Fig fear it out and start to push it back. Because until you start to make that a priority, until you start to build that in there, it's going to be a challenge. So they watch their savings rate. You know, the wealthy will look at it and look at their signature and then they'll do a second thing here, and that is this. They will build margin into their life. And what I mean by this is that space, financial space, they're not living to the edges of their check every single month or beyond their check. Worse, every single month. They aren't allowing their lifestyle to creep with their income when their income goes up. Look, you get the vision and plan for your life. This is the life you want. Yes, you can increase the life. But before you do that, let's look at, can we income scale, build more margin and accelerate our wealth? So wealthy people, during this savings piece of the wealth maximum matrix, they will build margins. So there's three things that happen. One.

They have a cushion.

If something goes wrong. Health issue, economic issue. Look, we are in a volatile time in our economy, recession, all those things, having margin.

Is helpful, okay? Two, it's the margin that allows you to then increase or accelerate your wealth creation. Okay, increase and accelerate your wealth creation. And three, psychologically, it gives you peace of mind.

You feel better because you know that you're not living at the end. You're not sitting back every month going, I hope there isn't more month than money. I hope that I have more money than month. Oh, I hope that that doesn't go down. I, you know, no, we want to give you peace of mind. So you, you build margin into it to make that happen. Okay. And then the third piece of savings is this. They make it automatic. Here's the deal.

We need to take the friction out of our savings and investing.

Need to make take the choice out of it. See, credit card companies are really good at doing that. Marketers are really good at. There's a reason that you can go into a store with your phone and go tap, buy, swipe, buy. They're taking the friction out of the buying decisions. They make it easy for you to buy. We need to make it easy for us to invest, easy for us to create wealth, easy for us to build wealth. And the way you do that is you automate it. You set it on automate automatic. So when money comes in, a certain percent will automatically go to a high yield cash account. A certain percentage will automatically go into investments. A certain percent. It's that savings will automatically. You don't have to think about, you don't have to push the buttons, you don't have to schedule it, you don't have to send it, you don't have to write a check. It is automatic, it is on automatic. And then all of a sudden your wealth creation is on autopilot. You're going to burn through the wealth flatline. You're going to get into the acceleration zone. You're going to wake up one, one morning and go, whoa, what happened? How'd that number get so big?

Okay, and so this is the thing that, that I think that we need to, to look at in making this happen. So that is savings. Now I see a question that came in. I want to make sure I answer it like my dear friend, Rex Anderson. Rex, thank you for being here, my friend. So he says, so how many months of monthly expense budget do we need to have in ready cash reserves? Here's the thing. There are those people out there that are going to say three to six months. I think it's too short. I have said this even before the pandemic, before we're in this. I actually think that you need nine to 18 months. So call it 12 months. You need some room, especially if you're an entrepreneur because we have peaks and valleys in our income generating and everything. Now if your living expenses are vastly are much lower than your revenues, you may not need as much because you have that margin in there if there's a decline in revenues. But if you're, you're tight on that, then I need to build margin, I need to build that. And, and I like to see 12 months, you know, nine to 18 months, depending on your agent stage and the kind of business. And I know it takes time, you're not going to get it overnight. But we do it persistently and systematically over time. That gives you the margin and the space that the average recession lasts 11 months.

So if we are in a recession, let's make sure that we have enough to carry us through that. A great question. All right, that leads me to maximum number four. Maximum number four.

And that. Oh, this one is about keeping it. Okay, so deciding, earning, keeping. And maximum number four. Is time in. What do you mean? See, I will get asked a question.

At least a couple times a week. Is now a good time to invest?

Oh, if truly the curve.

For wealth creation does this.

The sooner we can burn this little piece up.

The better off we are.

That means that time in the market is more important than timing the market.

That means get in the game, get in the game, stay in the game, don't get out of the game. Your investments are for the long term. In the short term they're going to go up and down, but in the long term, markets go up eight out of ten years. Now we might be in a two year drought, who knows? I don't know. I don't have a crystal ball. But I do think that we're in for some, some fun roller coaster rides. Okay.

So we can't make our decisions, our long term decisions based on short term issues. So we're going to invest long term, get in the game. Time in the game is more important than timing the game. It has been shown, statistics have shown that even the most sophisticated investors cannot continually beat the market. Long term they might beat it in a year, two years, maybe three. But not in the long term. So if they can't figure out when to buy and when to sell, we certainly aren't. So the point is to stay in the game. So knowing and when you do that, there's a couple of things that they know. One is they know the difference and get that out of the way between investing and trading. Investing is a long term pursuit. It is putting it in there for the long term growth, knowing it's going to go up and down. Trading is a job and I do both. And trust me, when I'm in a trade that I know I'm in it for, yesterday I was in a trade simply for a couple hours.

Make five figures, move on. But during that trade, it's a stressful time. You're watching the market go up and down, you know. So trading is very different than investing. I'M talking about investing for you long term. Okay? Investing for you long term. Okay. Time in the market. Here's the other thing that they know. They know that now.

Is the best time to start. If you didn't start yesterday, if you didn't start a week ago, if you didn't start before that, then now is the best time to start. Get in the game. The sooner we get in the game, the sooner we use up the flat line, the sooner we get money momentum, the sooner we get the money to work harder for us than we did for it. We have to get in the game. If we don't get in the game, we never going to win the game. You can't win the game from the sidelines or from the stands. You've got to be on the field.

So now is the time to get in the game. Now, that doesn't mean you go and invest. That means that you follow sound principles, priorities and processes to make that happen. If you're unsure about that, if you're unsure of what it is. One of the things that I am doing coming up actually starting tomorrow is a special deep dive training. Okay. Is called the Affluent Entrepreneur Experience. Okay, I'm going to go deep dive. I'm going to give you process, I'm going to give you tools, I'm going to give you frameworks and give you all that stuff. It's totally free. If you want to get there, if you want to be part of it, do me a favor, just go to the affluencelive.com and grab a spot. Grab a spot. Join me tomorrow. Let's go deeper on some of these things. Let's make this happen so you have the ability to, to make that happen. Affluence live.com. let's, let's do this thing together. Now. The last piece of this is this.

The wealthy also understand that they need a team. I have a wealth team. I don't do this as much as I know this. I don't do it all on my own. I need someone to go to, to check my, my thinking. When the emotions get away, when the market's dropping 1100 points to call and go, hey, hey, should I jump off the edge? What are we doing to get them to give me perspective, to give me access so I have a team. But here's the most important thing. They are a team to assist me, not to do it for me. I will make all the decisions, but they're focused on my vision and the plan that we started with. They're committed just the same. And now it's about executing the plan to hit the vision and to keep me in space. So it's about having a team, it's about having a community, it's about having a safe place to have real conversations around money, around wealth, around your journey, no matter how difficult it is right now. Here's what I know.

Principles transcend time, principles transcend geography, principle transcend whatever is going on right now in the economy. And when we use principle, they are universal systems of behavior, it will change the results in the long term. I get it. You may sit back and say, I'm not sure where to even start. That's great. You don't have to be sure where to start. We can help you make that happen. Get involved in the communities, have the conversations, have real conversations around life, not with someone that's biased by trying to sell you investments or insurance or anything of an investment. I don't have that to sell you. I simply want to sell you on the possibility of your dreams, the probability of it happening, to educate you, empower you and give you the tools to make that happen. It's the reason I have the show the Affluent Entrepreneur Show. It's the reason I'm doing the special training starting tomorrow called the Affluent Entrepreneur Experience. I want you to join me there. I want you to be there with me so we can make this happen. It's the reason that I do what I do today because I want to make sure that you claim your birthright. And I truly believe that financial freedom is a birthright. We just aren't taught how to claim it. I want to help you. Let's do this and let's do it together. So that's the, that's the wealth maxim matrix. I think it's something for us to consider. There's some things in there to make that happen and I look forward to. Doesn't matter what's happening. Listen, whatever's going on in the economy right now, it doesn't need to be your economy. It doesn't need to be a recession. It doesn't need to be your bear market, it doesn't need to be your future. You get to define it, you get to choose it, you get to do it the way you want to do it. And.

If I can help, I'd be blessed. It would be a gift to me because it allows me to serve, which is what I'm here to do. So I hope that this helps. I wanted to make sure that I got this out, given the question that came in and maybe Help, help give you perspective, lend you a path, give you an idea of what you can do next, and then invite you to go on a journey with me. You know, it's totally free. Join me@affluencelive.com and let's. Let's make it happen together, okay? I look forward to it. All right, if you have questions or anything that comes up.

Now, before, after, reach out to me. Reach out to me and let's. Let's make it happen together, okay? I want to make sure that you have a place to go, a safe place to have conversations, and a place to make a difference in your life. Your financial destiny is in your hands, and let's give you the tools to mold it just the way you want.

Thank you and God bless you. I'll see you all tomorrow at the affluent entrepreneur Experience. Let's crush it. Thanks. Cheers.

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 do me a favor, go to Apple, Apple Podcast, or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people, because I truly believe that financial freedom is your birthright, and I want to help each and every one of you claim it. Thanks so much.