The Psychology of People Who Grew Up Poor Final

This episode is called the Psychology of People who Grew Up Poor. And by the end of it, you'll understand why earning more money doesn't fix financial stress. And what actually does? Here's the hard truth. Being broke isn't always about not having money. Sometimes it's about thinking broke. Even when the income is there. That mindset will keep you anxious, reactive, and stock, no matter how much you make. Okay, welcome to Building youg Money Machine, where we help you master your money, eliminate financial stress so you can live a life of choice. Because earning more doesn't make you free, A money machine does. And I'm your host, Mel ABRAHAM. And after 30 plus years as a CPA, a money mentor, an entrepreneur, and someone who's walked that financial freedom journey from nothing to something. I've seen the challenges. I've seen the popular beliefs. I have seen survival. Get people there, but then hold people back to the true wealth. And if you want to solve this, let's dive in. Talking about the psychology of people who grew up poor. And if that's you, or if you feel broke even though you're making money, here's the promise. By the end of this, you're going to understand why you think the way you do about money, how to fix it, why it shows up, what it's doing to you, and what to do next. Some of this will feel validating, some of this might be confronting. But both are necessary. So let's look at it. First things first, this really isn't about poverty and poor. It's about your mindset. It's about your psychology. Because you're not broken. You're just trained a certain way. See, if you grew up in a place where you felt poor, you're not bad with money. It was just the upbringing, the training made sense at the time. And when you grow up with that kind of mindset, money doesn't feel like a tool. It feels like a threat. It shows up late, it leaves early, it's not enough. And when it's around, it brings stress with it. Bills are sitting on the counter, sitting on the table. The voice is getting quieter or louder. The tightness, the feeling in the house, the tension that's there. Money doesn't get mentioned. See, you don't learn money from books because you don't think about it. You don't. You learn money from emotions because you see it, you feel it. I remember my dad crying because of a money conversation he was having with my mom. And it was like I was five and a half years old. It's still with me. And that's the thing that people don't understand that matters more than most people realize. And it's not about the money that you make. If you grew up middle class, poor in your eyes, your brain didn't learn how money grows, it learned how money disappears. That perspective. So if you have any anxiousness or any anxiety when it comes to money, if you feel any pressure, we're going to dial that in. Because even savings alone can feel uncomfortable. Planning feels like it's pointless. And that's not the challenge is. It's the conditioning that came to it. Because poverty doesn't just empty wallets, it wires our nervous systems. And that's why I wanted to have this conversation, is to start to understand that if 80% of our behaviors are what drive wealth, then that's driven by our thinking, our mindset around it. And so let's just hit on some of this. No matter where you came from, no matter age, stage or circumstance, I think that this is the challenge. And the first thing is this idea of survival logic. That's where a lot of us start to come up from when it comes to money. And that's not a personal failure. Think about this. When money only appears during stress, your brain treats it like adrenaline. And adrenaline isn't meant to be stored, it's meant to be burned off. So later in life, money doesn't feel calm, it feels urgent. It feels so. If you watched your parents argue, if you watched on the media, like I look at people that were depression babies or recession babies and parents and what that felt like, and so it feels urgent. Urgency is a terrible place to make long term financial decisions from. It's a terrible place to make any long term decisions from. But that's why people who grew up in that state, okay, don't necessarily trust money. See, and often it's not that they don't trust money, they don't trust themselves with the money. And I've seen this pattern for decades. There was a point that I didn't trust myself with the money. When the Ponzi scheme hit, I started to distrust myself. I started to question everything. I started to look at and say, man, how could you get caught? You're an idiot. Okay? And then you go from further along and people are earning more than their parents ever did, yet they're feeling more stressed than their parents ever were. And they say, I don't know where it all goes. I make good money, but it never feels safe. See, it's not the level of money that I think determines this idea of poor. It's the level of mindset, the psychology behind it that starts to drive it. See, you ask yourself, I should be further ahead than this. And I'll tell them the same thing every single time. This isn't an income problem. It's a psychological inheritance problem. We inherited it from our parents, from our upbringing, from our schooling, from the media, from social media, from whatever experiences come through. Because most of our money lessons are caught, not taught. Now, there is a very important distinction here that I want us to talk through. Broke versus thinking broke. One is about math. The other is about mindset, okay? Because this really matters. When you get it right, there are people who don't have money, and I get that. And there are people who still feel broke and they do have money, okay? Money's coming in. Those are not the same problem. Sometimes the issue is really math, okay? Just not enough income, too much debt, no margin in their life. The numbers simply don't work. And if that's the case, a pretending mindset alone won't fix it. It's nonsense. I'm just being upfront. You can't affirm and use affirmations and affirm your way out of a cash flow problem. The math has to be solved. That's why we have the wealth priority layer. That's why we have the money machine blueprint. It's why I wrote the book. But that's part of the problem, the math, okay? Most people don't want to talk about it. There are also those other folks that are making good money who still live with scarcity. They still panic, they still feel trapped. They still have no margin. I've seen people with net worths of, of 2, 3, $4 million. They go, I don't have enough. I don't have enough. And they live in that state of panic, not because they don't earn enough, not because they don't have enough, but because they're running an old operating system. See, they're earning with today's income, but deciding with yesterday's fear, that's a problem. So they feel broke even when they're not. That's not a money problem. That's a mindset and system problem. So money problems have two parts, the numbers and the nervous system. And we have to fix both, okay? No matter age, stage, or circumstances. Okay? So let's look at what I think are the core beliefs that this kind of poor mindset installs. We'll call it the mental operating system. Belief number one is this idea that money is Temporary, okay? You. If every good month was followed by a bad one, your brain learned not to get comfortable, okay? And so when money shows up now there's this voice that says, oh, you better enjoy it while it's still here, okay? And that's not reckless, but that's survival logic at play, okay? Leads me to belief number two. And that belief number two is that money equals stress. Think about this. Every dollar growing up came with pressure. So today, the more money doesn't feel freeing, it feels heavier, like it's watching you. And then belief number three that I see is money is luck, not skill. Well, good things felt accidental when they happened. You didn't trust them. Bad things felt inevitable because you believed that's what your lot in life was. So never fully trusting what you've built and that it can be rebuilt. And I felt this when the Ponzius came in and I go, oh my God. But I was able to rebuild it. Now my level of trust is far greater than it has ever been. And the big one that most people miss is security. Growing up didn't come from systems, it came from people. Overtime, side hustles, borrowing, bailouts. So now effort feels safer than structure. That's where we start to understand what's going on. Because if you grew up with that kind of mentality, your brain is optimized for reaction, not design, not structure, not systems, not optimization. Okay? And it doesn't magically just go away. There's research behind this. Long term financial scarcity shrinks what's called our cognitive bandwidth. Decision making becomes short term planning capacity drops. Tunnel vision sets in. Not because people are incapable, but because the brain is prioritizing survival logic. I have to survive. I just got to get through. You're underwater and you just are trying to fight for oxygen. All you care about is oxygen. Okay? And here's the part no one warns you about that tunnel vision doesn't disappear when the income increases. That's why so many high earners still feel broke. The money has changed, but the wiring in their system is the same. That's the challenge. And so we actually need to rewire things to do things differently, to see things differently. And it shows up in your daily life. Here's how this shows up in real life. When I think about it, you're over focused on income, you're under focused on systems. When you have systems in place, money systems that work for you, they will do the heavy lifting and build your money machine in the background. I mean, investing systems, saving systems, following the wealth priority ladder of that. See, you feel proud when money comes in. Then you are anxious when it just sits still. You avoid accounts. You delay investing. You swing between extreme frugality and sudden splurges. Saving doesn't feel like safety. It feels like money sitting there doing nothing. And there's this anxiety that's in play, the investing. You'd think it's gambling because no one ever taught you the difference between risk and strategy. Here's the line that usually lands the hardest. I think you don't feel rich when you have money. You feel watched. So money never gets a chance to work for you. Remember, the subtitle of my book is to get how to get your money to work harder for you than you did for it. That's the key to choice. That's the key to freedom. But you look at it and say, money's either being earned or spent, rarely being built. All right, but that survival thinking is good for a time, but it has an expiration date. Because I need to be really, really clear with this. I had this survival thinking. The thinking that helped you survive will destroy your future if you don't outgrow it. Survival thinking creates income dependency. All I got to do is earn more, earn more, earn more. You're on the treadmill of earnings over and over again. All you think about is they're going to run faster, faster, longer, longer. Until you hit burnout or breakdown. Or you sacrifice your relationships, your health, your integrity, everything just for income. Because the income dependency is the thing that's going to drive you. Burnout locks people into financial classes for generations if we're not careful. You can't build wealth with a survival brain scarcity. Thinking pays the bills, yes, but it doesn't build a life. Think about that angst that's coming along with it. See, if your money system requires you to keep working forever, that is not success. That's captivity. And the consequences when we do this, if nothing changes, this is what happens. You always feel one crisis away from collapse. More income, no peace. Okay? Activity is mistaken for progress. Busyness isn't progress. And eventually you sit back and go. The stress is being passed on to your spouse, to your significant others and your kids. Not through words, but through reactions, through actions, through how you show up that money anxiety becomes the family language. And the past explains your behavior. But it doesn't get to dictate your future because you have the opportunity to change it. What changes when you break this pattern is huge. When you change the system, the psychology follows. Money stops being emotional it becomes mechanical. Safety stops coming from hustle. It starts to come from having a structure and a system in place. Income, believe it or not, becomes optional. The goal is not to feel rich. The goal is to feel unshakable. Wealth is not how much you have, it's how little you panic. So let's look at this. Let's fix the mindset, let's fix the math. Let's step by step walk through it. I want to get practical because awareness without action just turns it into frustration because you might be sitting there, go, great, I understand this. How do I fix this? What do I want to do? What do I need to do? But we have to fix both the mindset and the math. So let's talk about this. Step one. Separate survival reactions from financial decisions. Some of your money behaviors aren't choices. They're literally survival reflexes. Overspending when stressed, avoiding accounts, freezing instead of planning. Feeling pressure to act in the moment, in the moment that money shows up. Here's your action for the next 30 days. Don't try to fix these behaviors, but label them. When you have the urge to spend and it hits you, say, oh, that's survival talking. When you avoid the numbers, say, ah, that's protection, not reality. Labeling will create space. Space will create choice. This is how the mindset starts to change at the beginning. So start to make sure that you are actually taking stock and inventory as to what is going on underne the spending and the financial choices. It's why when I have people journaling and when you do this exercise, I want you to journal you're spending what you're spending it on, how much is being spent but what you are feeling, what is going on psychologically that's driving the decision. It might be necessity, but it might be stress. It might be something else. And we find the emotional triggers so we can start to look at and say, that's survival, that's emotional. And when we do that, we can start to change it. Step two, get brutally clear on your numbers. No more guessing. Now we're dealing with the math, okay? Because you cannot build wealth on estimates, vibes or hope. You got it. You got to know exactly what's happening. I want you to track every single dollar you spend over the next 90 days. Okay? If you, if you want to shortcut it, then go backwards and look at six months bank statements and credit card statements and categorize every single account, no skipping, even cash. Categorize every expense between three buckets needs. That's your survival. That's Housing, utilities, groceries, and your medical insurance, your transportation and your clothing. That's it, okay? Your wants eating out, subscriptions, shopping, travel, entertainment, all that kind of stuff. And then I want you to look for the noise. The noise. This is the forgotten subscriptions, the fees, the impulse spending, the things you don't even remember making, the spending. The goal here isn't to cut everything. The goal here is to answer one question. What does my life actually cost? Before emotion gets involved, okay? Because once you see this, you now start to understand where you can find margin in your life and use that margin to build your money machine. The difference between the stuff going out the door and the stuff that's coming in the door. But also you're dealing with a mental state around it. Because then and only then can you start to redirect it to building that money machine. Now there are some tools to make this leisure. In fact, it's the reason I built the lifestyle cost calculator. It's totally free. You can put your information into it and it starts to uncover what your actual costs are. So if you want it, we'll hook it up here. But you can go to melabraham.com lifestyle Like I said, it's free. Now let's go to step three. This is to shift yourself from an income thinking to systems thinking. See, income thinking says this. If I can just make more, this gets easier. But systems thinking is this. If income stopped tomorrow, what still works? In other words, you start designing how money flows, not just how it's earned. You want to be able to look at things and say, can I create a system that allows me to earn income without me having to constantly pedal the wheels? Okay? And when you shift from the earnings machine to a money machine mentality, income is typically effort based, but systems are outcome based. The job isn't to just earn income. The job is to earn income and turn it into something that earns income for itself without your efforts. That's how you design a money machine and get money to behave and do the things that you want to do by building a portfolio where the money works harder than you do. Step four, build a predictable safety net. This is what I call the unshakable foundation. In the wealth priority ladder, before investing, before growth, you need safety. And when you feel like you have an unshakable foundation, financial foundation, your mentality, the mindset, the, the survival focus starts to dissipate. That means that liquidity needs to be in place because liquidity buys time. That means that you have to have a Clear debt payment strategy. Not panic payments, but an actual pay down strategy based upon a process. Okay, that means you need stabilized cash flow with fewer surprises. This gives you literally structural safety. That means that what I want you to do here is to look at the bottom rungs of the wealth priority letter. I want to have an emergency fund and peace of mind fund in place. An Emergency fund is three to six months. The Peace of Mind fund is nine to 18 months. But let's get you in place so you have liquidity. At the same time, if you have high interest debt, consumer debt, destructive debt, I need you on a debt payment plan. So we are getting it dialed in now all of a sudden we have an unshakable foundation. Safety first, growth second. That leads us to step number five. Automate your good behavior and block the bad ones. See, discipline is unreliable. Systems, they work no matter what. So automate your savings before you're spending. Automate those debt payments before your emotion, it interferes. Separate accounts to create boundaries between the money that's meant to pay your bills and the money that's meant to build your future and the money that's meant to keep you safe. The money that's meant to keep you safe, put it in a high yield savings account in a different bank. The money for your future should be investing and investing in, in your brokerage accounts or your investment accounts or your 401ks or your IRAs, different accounts. Break it down. Put the boundaries in place so it protects you from mindset slips because they will come and it starts to reinforce and automate good behaviors. That leads me to step number six. Okay? Follow a proven system. You don't need more information. You just need a framework, a recipe, if you will. So you aren't trying to invent this for yourself and you are actually following something that actually works. Okay? If you don't have a system, follow mine. Follow the money machine blueprint. Follow the work. In my book, it's a proven system for decades, okay? Generations have a system that tells you what to focus on, what to ignore, what to build first, what to build second. How to align your money with your life and your values so you don't have to reinvent wealth. You don't have to. You just need to follow a system that already works. And then step seven, rich isn't spending power. Redefine. Rich is step seven. It's choice, it's time, it's peace, it's margin. Rich is money becoming quiet in your life. That's real wealth. All right? Because here's the thing in the end, whether you grew up poor, middle class, or you grew up with money, but you had a poor mindset, you're not broken. And I need you to hear this clearly. You're not broken. You are trained for survival, not sovereignty. Sometimes the problem is the math, though. Sometimes the math is fine, but the thinking's bankrupt. Either way, it can be fixed. Either way, it all needs to be fixed. Your past trained you to to survive. Your future requires you to build. Survival got you here. Systems will take you further. That's the game I want you to play. I hope that this helps. I hope that you'll start to look at things through a different set of eyes. I hope that you'll look at it and at least start to say, ah, I get it now. I was in survival mode. Now let me change the math and let me change the mindset and let's go into building mode. Let's build your money machine together. Because I truly believe, no matter age, stage, or circumstance, financial freedom is your birthright. Let's go claim it. All right? And if I can help, I can't wait. So if you got comments or thoughts, do me a favor, let me know. I'd love to hear from you. And while you're there, give me a subscribe. A subscribe and a thumbs up, all right? It makes YouTube happy and it makes me happy, too. So I can't wait to see you on your path to financial freedom. And until I do, always, always strive to live a life that outlives you. See you in the next one. Cheers. For now,