Why Everyone Is Broke (In A Rich Country)

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. So I had an interesting question the other day about why does it seem like in a rich country like America or other countries, people are financially struggling? Why does it seem like people are actually broke when they shouldn't be? Well, in this episode of the Affluent Entrepreneur show, we're going to dig into it. I'll give you my thoughts, I'll give you my perspective. I'm going to give you some things to make sure that you're not a statistic. All right, see you in the episode.

All right, welcome to this episode of the Affluent Entrepreneur Show. This one's going to be an interesting one. Why does it seem like everyone's broke, especially in rich countries? Well, I think there's some things that contribute to it. Now, some of this is perspective, some of is facts and stats. But I want to make sure that you don't become a statistic on and give you some things to consider. Okay, here's the thing. If we start off with just this idea of how people see money, I think that it's a very telltale sign. I have had the blessing is working for decades as an advisor, as a cpa, helping people build businesses, helping people buy and sell, build wealth, get out of debt holes, kind of recover all those things. I had a chance to get an inkling, an insight into how they see money and the struggles they have with money. And one of the things that I noticed is that a lot of people believe that money is hard and that they should struggle financially. That's just the way of life. This is, and I get it, you hear a lot of it in the media. And this is not to say that people aren't having financial problems. Now, I am one that says that no one has money issues. They have money symptoms. They're symptoms of the choices, decisions, and the behaviors of the past that are coming home to roost. Now. That also means that if it is a result of behaviors and choices, then if I make different choices and have different behaviors, we get different results. Now, I get that it can be confronting. You might sit back and say, no, it's not my behaviors, and you can fight it. But I can tell you that from experience, if we just shift behaviors, we just shift decisions. If we just shift choices, things will be different, okay? But people expect to struggle financially because we talk about it all the time, okay? And there are people that are struggling financially. Part of it is because they haven't been educated. Part of it is because they haven't been given the tools. Part of it is because we demonize money. We don't want to have the conversations, why money is just a tool. Let's have the conversations. Let's give you the skills, let's give you the tools, let's give you the understanding. Because I can promise you this, as complicated as you think it is, it is far less complicated than being in a financial struggle, okay? Money and building wealth is actually a simple process. It takes a handful of things to do, but it needs to be done over time, okay? And we just gotta get you, educate you and give you the tools to make that happen. So rather than sit back and say, look, people struggle financially and saying, I'm willing to accept that as a fact, how do we challenge it, okay? Because so many people just assume or they accept it as a fact. We've normalized financial struggle. We've normalized being in debt. We've normalized the idea of living check to checks. 50, 56%, 61%. I don't remember the exact statistic. I know 56% have said that he cannot sustain themselves. If they had an unexpected bill of $1,000, they'd have to go into debt. They didn't have. They don't have the cash on hand. That is a travesty. That is a problem, but it isn't an unsolvable problem. The problem is solved by education, by training, by income for sure. But if we understand how to deal with the income and do the things right with the income, we won't be in that place in the first. And so when we normalize financial struggle, when we normalize it by constantly highlighting it and making it okay, then we just take it on. And I think it's a mistake that we do that many are living in debt. Okay, here's the next piece. Is that we've not only normalized financial struggle, we've normalized debt. Living and, and living paycheck to paycheck. Like I said, over 60% are living paycheck to paycheck, even, even 40. And they're making over a hundred thousand dollars. They're making six figures. They're still living paycheck to paycheck. How is that? It isn't because of the earnings, it is because of the spending. It's because of not understanding money management. It's not having a process, it's not having a system, it's not following the wealth priority ladder. It's not having a cash resource plan. It's all those things. It's not the income, but we're not having the conversations. So we have a lot of people that are living in debt and we've made it okay because we make it easy. We've got credit cards, we've got 0% financing. Heck, we'll finance cars for 72 months. Are you kidding me? I know I'm on a soapbox here, but, but I think that when we start to understand how this plays out, we, we realize how, how we can also impact it, how we can also reverse it. The other element is that if we are expecting to struggle financially and we accept the fact and we assume and we normalize it and then we're living in debt and we're willing to accept paycheck to paycheck, then we also resolve ourselves and this is the next piece that keeps us in this place to say, well, that's just the way it is.

Just the way it is. And I can't change it. Here's the question.

What can you change? Certainly there's things you can't change. I can't affect that the stock market goes up or down. I can't affect whether we're in a recession or a depression or a boom time. But there are some things I can affect. There are some things that I can control. Your financial journey is built on your ability to control the controllables and prepare for those that you can't control. But when we sit back and just say that's just the way it is and we accept it, what we do is we settle and say, okay, that's not the truth. There's plenty of stories of people that ended up in, look at, I lost one third of everything I own. Between me and two friends. We lost over four and a half million bucks. One third of everything I own. And I could have sat back and said that's just the way it is, or fought back, which was what we did. And I think that's the thing that we need to, to consider is that whatever your facts and circumstances are, okay, whatever they are, you get a chance to make a new decision. You Get a chance to make a new choice. You get a chance to do something different. It doesn't your current circumstances, it's like the wake of the boat. The wake of the boat is behind you. It tells you where you came from. It may inform you, it may educate you, it may prepare you, but it doesn't guide you. It doesn't set your trajectory, it doesn't set your direction. The rudder does. The rudder are your decisions. They're your choices. They're your skills, they're your knowledge, all of that. So just because we've had a rough past, and trust me, I've done my share.

Doesn'T mean that we are destined for a rough future. We gotta make some different choices and we gotta build something differently to make that happen. Okay, here's, here's the other thing that I think keeps us broke is that we start to look at this idea of budgets and people hear it and they go, oh, budgets. Budgets are like diets. And the root word to diet is die. You know, and here's, here's what I mean by this. We tend to look at budgets as restrictive deprivation. Oh, you're going to tell me what I can't spend? I actually reverse it. We talk about it in the context of a cash resource plan. I believe that every dollar that comes into your life needs to have a job description before it ever comes into your life. So if I know that I'm making $3,000 in a month, then I need to allocate every dollar before I make that money. Because you never hire employees without giving them job description, tasks, goals and metrics you're going to measure them against. But we do that with our money. Why? So when we give it a job description, which is the budget or the cash resource plan, not only does the dollar know exactly what to do, you know exactly what to do with the money. And it isn't restrictive. It's your permission to spend guilt free. Think about it. If I build a cash resource plan or a budget, whatever you want to call it, and it says this hundred dollars is for eating out, then you're going to go eat out. And you can spend that. You can spend the hundred dollars guilt free because it's a permission to spend. It's not tying your hands. It's allowing you in advance to say, this is for, for fun stuff. This is for the mortgage, this is for the rent, this is for the utilities, this is for medical, this is for clothes. It's done up front. And now you have the permission to spend. But we tend to look at things like budgets, like diets. We think that it's depriving us, it's holding us back. It's not. Then the other thing that I think keeps us broke, especially in, in some of the developed countries, is this idea of expressing ourselves to the by, by consumption. So driving a luxury vehicle. And maybe we can't because we, we want to see, we want everyone to see us that way. The, you know, the clothes we wear, the we, we're very externally motivated in many cases as a society. Not there, there's plenty of others there aren't. So I don't want to make general statements and I know that I'm kind making general statements here, but I think that when we start to understand what is driving culturally, society, we maybe we start to see things a little differently. But when we are so focused on how we are perceived on the outside, we start to make buying decisions and financial decisions based upon the things that they see of us which require us to buy things. From a consumption standpoint, luxury vacations, big things that I'm parading on social media, all that stuff. And if it's not truly giving you joy, if it's not truly giving you fulfillment, why are we doing it? To satisfy people that we don't know. But what it's doing is, it's causing a societal kind of mechanism that, that gets people to buy things they can't, they can't afford to buy. They put it on debt, so they're struggling and they end up. Why do we end up broke? Because we're making bad money decisions. You know, so, so we end up in that situation because we are so focused on mater.

Versus richness. Richness is how we experience life. Richness can come at the hands of just a. It could be a teepee in Montana. It doesn't need to be some luxury hotel. What are the joy points of your life? What are the things that bring you to it? Look, my wife and I love taking, you know, not lavish but nice vacations. Do you know what we love more? Just sharing. Dining together, walking on the beach, even shopping, even if we don't buy anything, just going and spending time together. And so what ends up happening is that we look for the richness in our lives, the joy points that we have that bring us joy to allow us to make choices and decisions that we know are going to lift the fulfillment line. More so than just buying stuff. We also live in what can be deemed as a rat race culture. Go, go. More, more, more, more, more, more, more. Keep achieving Keep achieving. Keep achieving. Here's, here's the thing. I had a. I got in a bike accident in 1990. Oh my gosh. It was. No, it was 2009. 2009. I got in a bike accident and I flipped a bike. I ended up on my head, ended up with a grade four concussion. I was. Had no feeling on the right side. I was stuttering. And a dear, dear friend of mine comes to me, take me out. I got out of the hospital, I'm in a neck brace. And he takes me out to.

A sandwich shop and he looks across the table at me once we order and he says, how much is enough? What do you mean now? He was retired at 35, 36 years old.

I said, what do you mean? Look, I just, I got a grade four concussion. How are we having a conversation about the philosophy of life? What, what are you talking about? There's no. Seriously, how much is it? You got on that bike distracted and angry and you ended up in an act. You ended up in the hospital. Do you even know where your finish line is? Who's defined the finish line? And I think that we get in this rat race culture of more, more, more, more, more, and we never find fulfillment. We never find the gratitude and the appreciation. What is. And we keep looking at what could be now, what could be is great, let's keep that as a dream. But let's not do it.

Without the gratitude for what we.

Because that's the challenge.

That starts to drive things where we find ourselves in a situation where we're overspending, consuming stuff. And then we wonder why, even when we have all stuff, why we're not happy, why there's no joy.

Two other things that I think contribute to this idea of why is everyone broke in a rich country? And that is we play the debt Ponzi scheme. We're swapping our future for today.

We are taking what we want today.

And we can't afford it. So we put it on credit cards, we put it on financing, we put it on a pay later type of plan. You are, you are sitting back and saying, I am going to forsake what I want most.

For what I want more.

So, and hear that again, if what you want most is financial freedom, but what is driving you is what you want more of today. You're forsaking the big thing the most for the more.

And that's, that's the thing that. And so now all of a sudden, we spend our tomorrows, our dollars that we earn tomorrow by financing it just so we can have something today. And most of the time that something today is a consumable that goes away, but the debt doesn't. The debt stays. And it takes us time to pay it down. And so we're swapping our future for our today. And that's just, it's a way of life. Debt isn't a big deal. We just, we seem to do that and now all of a sudden we're living with a burden of debt. Look, all debt has two characteristics.

It costs, that's interest, it stresses. At some point we got to get rid of the debt. At some point we got to at least get rid of the consumer debt, the destructive debt, the stuff that is for consumables for today. But we live in that society. And you couple that with this last piece and that is this. We've done an extremely good job to create frictionless purchasing. Think about it. All I got to do is tap my phone and I buy something. There's no friction in the buying decisions anymore. Think about what it would be like if every time you had to buy something, you had to count out cash. You're watching a lot of cash just go down. Or you had to go and do a wire transfer, you had friction in the buying decision.

I remember when.

I had a nutritionist and he said, I want you to log everything you eat, everything that passes the lips, including water. I want it to log in this book and we're going to go through it. Now remember.

As I start doing that, I pick something up to eat it, I go, ooh, I gotta log it. And I put it down.

When we have friction. Frictionless buying, we will over buy. And they've done that with credit cards, they've done it with tap apps, they've done it with storing credit cards and systems. What we really need to do is reverse that. We need to put as much friction in our buying decisions, whether it's time and space for a 48 hour time clock that says I'll put it in the cart, if I want it and I still feel compelled to get it in 40 hours, then I'll buy it. And we need to remove the friction from our investing decisions. We need to make our investing into our 401 case, into an IRAS, into our brokerage accounts, into all of our financial future automatic. No friction, no decision. I don't have to push any buttons, I don't have to turn any dials. It happens automatically every time I get paid. But this is why I believe that there's many countries that are considered well to do countries. But people struggle financially. It's because of the expectations, it's because of the culture, it's because of the mindset, it's because of how we practice our spending and all that. So I hope that helps. Okay, here's what I think. You need to do a couple things. I think you need to be deliberate and intentional and conscious and aware of your money, the money that comes in and what the what you're doing with the money. That means that every dollar has a job description. Every dollar before you, before you, you earn the dollar. You know exactly what it's going to do. So when it comes in, there's no question, there's no temptation, there isn't friction, frictionless spending, there's none of that. You avoid consumer debt. You avoid destructive debt. You pay for things in cash as best as you can. I don't mean cash cash. But you don't finance consumables. You make investing a priority and you work to build your income in the process. And you don't allow outside forces, whether it's marketing peers or social media or the media to help you make your buying decisions. You make them based on your values, you and your. Your plan and what you want. And you live your life your way, not based on expectations of anyone else. Right? When you do that, you won't end up as statistic. I hope this helps. All right. Till we get a chance to see each other, another episode, another show, or on the road, always, always strive live a life that helps. 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.

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