Why Most Americans Never Escape the Middle Class Trap

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. Sometimes a live session hits so hard that people blow up my inbox asking for a replay. Well, you asked, you get. You know, ever feel like you're doing everything right, the good job, maybe the house, putting money away and you still can't seem to get ahead? That's the middle class trap. The truth is that most people are chasing a moving target and they. They never even define it. Okay? That's why in this live session, which I got such a huge response from, I had to share it. Here I'm breaking down why the old play it safe model is broken and the three shifts to escape it and how to figure out your exact number for financial freedom. Okay? And if you've never calculated that number before, I've got a free tool called the basic freedom number calculator. You go to melabraham.com number below, grab it for free to make it happen because it'll help you understand your personal target in minutes. Okay? It's a game changer. Now, this is building your money machine, where we help you master your money, eliminate financial stress, and live a life by choice. Think of this as a bit of financial education with a side of sarcasm and a whole lot of heart. I'm your host, Mel Abraham, and I've been at this money game for 30 plus years. Through the market highs, the recessions that, even losing one third of everything I own in a Ponzi scheme game, I've seen what works, what doesn't, and what will keep you stuck forever in this replay. You'll hear me lay it all out live and unfiltered. All right, so here it is, the live session everyone's talking about. Let's do it. This morning I wanted to talk about this whole idea of what I call the middle class trap before we open up for questions. And here's we're going to just say it out loud. The middle class is getting steamrolled is how I see it. Prices are up, wages are flat at best, debt is rising homeownership. Well, good luck with that. At this point, it's getting farther and farther out of reach. We'll have a conversation around homeownership separately saying, does it even matter? But somehow the advice that we still hear is, you know, clip coupons, cut the lattes. You know, seriously, that, I mean, that might have worked in the 80s, it might have worked even in the 90s. But this is 2025, and that math doesn't math anymore. And so the thing is that today we're not just talking about some sort of squeezed. We're talking about why an old model is broken and what you need to do instead. Because here's the truth that I don't think anyone's really talking about. You don't rise above this economy by playing it safe. You rise above it by building a system that works in any economy. So we're not trying to create something just for now. We're trying to create something for forever. We're trying to create something that, that will run the gamut when the market's up, when the market's down, when the economy slows, or it's accelerating. And so I want to break it down a little bit so we can get real and work through it. This is what I call the middle class trap. Here's how it works, okay? And I know I grew up this way, then maybe you did too. You're told to go get a good job, okay? And the translation of that is go get a single income stream with taxes taken out first and try to live your life, okay? We're told then to go buy a house. It's the American dream. When the house, if not done right, becomes just a liability with a paint job, okay? And then you're told to save. Just put money away. Save, save, save your way to rich. And this is only a system to lose value in cash. We can't save our way to wealth. But this is the way that my parents tried to do it. This is the way that generations try to do it. And we haven't really shifted, but we're not having the conversations until now. And that's why I wanted to do this. When you look at that same type of advice and you start to look back at statistics, the median wage has really the real purchasing power. The median wage has barely moved in 20 years. The most dramatic move was in 2023. But it from a real purchasing power to, if you look back just over the decade is about 70 to 80 thousand dollars. That's it. Inflation is still there. It doesn't just go away. It's sneaky. It's like a leaky tire. It's quiet and it's slow. And then before you know it, you're riding on rims, all that stuff. And then there's debt. Let's not talk about student loan debt. I'm sitting there looking at debt and working with one of a family member and looking at the cost of college and some of this stuff. The average American household right now is carrying over $150,000 in debt in a time where interest rates are high. And you feel like, well, I'm listening to everyone. I'm doing what I was told to do. I'm doing everything right. But I'm feeling stuck. And it's not just frustrating to me. This is financial quicksand. And that's why I wanted to have this conversation. The hard truth is this middle class wasn't. And when I say when, I don't like putting people in categories. So I'm not trying to middle class, lower class, upper class, but I think that it serves us to start to just understand what's going on, and that is this. That. I think that this idea of middle class wasn't designed to make you wealthy. It was designed to make you comfortable enough to not question a system. You were trained to work for money instead of getting money to work for you. You are trained to avoid risk, which means that if you're unwilling to take risk, you're unwilling to build wealth. Because in order to build wealth, there is risk. Any investment, there is risk. You are trained to rely on institutions, y'. All. I don't have to tell you that institutions, banks, big banks and all that stuff, they're running low on credibility these days. Okay, but what kind of world are we living in? I literally just came back from the National Speakers Association Conference. The talk of the whole conference is AI, AI AI. And we are in a world where you see that AI is coming in. AI is replacing jobs, maybe tariffs are jacking up costs. The Fed is playing hot potato with the interest rates and the politics of all of that. So the model to sit back and say, play it safe and retired. 65. It's a luxury that few will ever reach and most can never afford. Okay? And so I want us to look at things and say there's some three. There's a handful of strategic shifts that will escape the trap. The things that you should be looking at, the things that we should be focusing in on to help. Now, there's more than this, but I want you to start here. And the first one. And I actually did a whole episode on my building your money machine show around this. And that is first, number one is to stop trading time for money. So you're not the robot that Elon is creating. You're not the assembly line. You're not a salary, you're a value creator. You are a solution provider. You're someone that has knowledge, skills, strengths that make a difference, that provide value. And I think that when we start to look at ourselves as what do we bring to the table from a value standpoint, from a value creation standpoint, we can then start to think about, what's my worth? See, when people say I need to make more money, one of my first questions back is, are you owning your worth? See, we have one of the other things we've been trained into, and when you talk about the group, we call them in a class or even at any class, is we've been entrained into swapping hours for dollars. We've been entrained to a timesheet. I came up as an accountant. We build in six minute increments. We commoditize the value we have. We get paid based on the number of hours. And so we get indoctrinated into a thought process of how can I earn more per hour versus sitting back and saying, how do I create more value with what I have? How do I solve more problems with what I know? How can I. This is the big one. How can I build something once that pays me forever? That's where the whole concept of the money machine came in. Because I knew when Jeremy drew that picture of me, that standing in front of two computer screens and the phone in each ear, that literally I was imprisoned by earnings. I was imprisoned by trying to make money. I was imprisoned by this journey that made no sense because I had no freedom. I had no control, I had no say. And the reality is, is that until I'm able, until we are able to separate the earnings from the efforts to earn it, we will always be imprisoned to the earnings treadmill. Now, I'm not saying not to have a job. I'm not saying any of that. But I am saying that you get a chance to look at this through a different set of eyes, that I am. I am on the earnings treadmill. I make money. I am doing the work. But that work is part to take care of my present, my current expenses, the things that my wife and I do. But it is also in part to build the money machine, to build the future. We Want where each and every day then becomes a choice. Because when we build and we have something that pays us forever or for a long period of time, whether it is investments or recurring income, digital products, coaching, licensing, consulting, real estate, whatever that is for you, when we have that at a level that it takes care of the life that we want, we live every day in choice. The ultimate freedom to get up each and every morning, roll out of bed, put your feet on the ground, and know that today is a choice. It's a choice we get to make. It's a choice to do the things. It's a choice. Today was a choice for me to be here with you. Tomorrow's a choice. The gift of having that, to realize that, yes, I'm building an earnings machine through my job or through my business, but on the other side of that, that earnings machine is funding the building of the money machine. So I have choice in life and we stop selling time for money. We have to see ourselves as value creators and look at the strengths and the things that we bring to the table. Otherwise, we're just a commodity being traded on a market. And I know that's harsh in some ways, but it's the truth. And you're so much more than that. We are so much more than that. So that's the first thing I want us to start to look at is is this value creator mentality and this idea of, of how do I create something that pays me for a period of time without my efforts? How do I separate that? Number two is this. We need to focus on building margin before chasing millions. Okay, I love big goals, but let's be real. You don't need a yacht. You don't need a 10,000 square foot villain, Bali. To say I'm financially free. You need one thing. One thing. Margin. Margin. A buffer, breathing room. Something that gives you something more than what you're spending. See, because if we are living at the ends of our check each and every week, each and every month, we've got no room to grow. We got no room to build the money machine. We've got no room for when there's a dip in the market and we have no room for choice. But when we have a buffer, when we have a margin in our life where we are living below our means, we have more leftover at the end of the month that we can put it to work for us. Listen, the best thing you can do with your money is to put it to work for you. They're the best employees in the world. Every dollar is an employee that goes to work for you 24, 7, 365 days a year. There are no holidays, there's no paid time off, and they're never going to unionize. Get your dol working for you. And the way we do that is margin. Now, that doesn't mean I am not one that believes that you can live a rich life by deprivation and things like that, But I do think that we need to have, in order to have that rich life, we have to have discipline. We can't just flippantly spend money wherever it goes, but we want to spend money. We want to. It grows and it gives us value. It gives us joy in our world. Financial freedom starts the moment you get your money to work harder for you than you did for it. The very reason the subtitle of the book is that, okay, how to get your money to work harder for you than you did for it. That's the key. Number three. I think you need to think differently. Think like a wealthy person, even if you don't feel like you're there yet. See, here's what the wealthy do. They focus on buying assets instead of status. They're not worried about the fancy car that they get to drive down the street. What they're worried about is, did I buy an asset that's going to create cash flow and allow me to have the margin in my life? And the choice. See, they're looking at things and saying, how do I buy something that's going to create cash flow? And it could be real estate, it could be stocks, it could be bonds, it could be crypto, it could be equipment, it could be a business asset. But they're less worried about what it looks like from the outside than what it does on the inside. The other thing that they do is they create leverage, not labor. So they don't start to take things on that require more of their time. They are finding paths and ways to. To create leverage on their time. It's why when I talk about in the book the five incomes, that as we go up the ladder of five incomes, the leverage of our time, the amount of effort it takes to generate it goes down. And the more leveraged income streams we can have, the more time we get back in our life. And I think wealth should be measured in time and not dollars because we can have a lot of dollars, but if we are not, if we don't have agency or control our time, we're not wealthy. We imprisoned. And the third thing that when we talk about wealthy people, what they look at is they build cash flow, not clout. They look at things through the eyes of how much cash flow will this create for me? Because it is in that cash flow that they'll have that freedom. It is in that cash flow that they'll find choice. You don't need a million dollars to start thinking this way. You can start thinking this way now, you can start searching this way now. You can start building this way now. Because when you do that, what you're really doing is you're shifting from consumer to creator, from employee to investor, from fear to freedom. That's the thing that I think we need to do. So the middle class trap the middle class. It doesn't have to be anyone's ceiling. It's some arbitrary thing that the media, the social media people have put out there. But wherever you are, whatever that age or stage, if we just start shifting, shifting some things, this, wherever you are, becomes your launching pad. If you're willing to break the script, you're never too late, you're never too stuck. You're simply one decision away from creating moment momentum. You're one choice away from a different trajectory to keep building that money machine so you can live a life by choice. That's the game. That's the thing that I think we need to look at, is to look at it through those eyes, is that whatever the data is, you know, with a GDP and all that stuff, it doesn't matter. They're going to do their things, but the question is, what are you going to do with it? And the whole idea of everything I do, whether it's on stage, whether it's live here, whether it's in my book or the trainings that I do, is simply to educate, to empower, and to equip you to take control, to grab the reins of your financial future, to know that the dreams in your life are possible and you just need to start working it it now. It doesn't mean that it's easy. Some people might have a big boulder they got to push. Some people have to go up a steep hill, but that doesn't make it impossible. So that's what I. It was on my heart, it was on my soul to just have this conversation with you and hope that I light a spark and hope that you get a chance to look at things and say at things a little differently and see what, what can come from it. Because I truly believe that financial freedom is your birthright. We just got to go claim it. And like I said before, and I've said it over and over again. Doesn't matter what your age, stage, or circumstances are. I don't care what side of the tracks you were born on. I don't care who your parents were, who your siblings are, what your degree is. I didn't come for money. My dad came here at 17 years old as an immigrant just to go to school, became a white collar worker as an engineer. We didn't. We lived in the same house growing up. I had to create it and I had to recreate it because I lost it all. So it's possible I'm no different than you. And I'm hoping that I can put the stepping stones down that I took in hopes that you'll step on those. All right. All right, y'. All. That's what was on my heart and soul this morning. I wanted to make sure I got it to you. Now I want to open it up for questions, see what I can do to help you on your journey. I hope that you found this helpful and we can go from there. 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. Foreign 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 tremendous, 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.