Why Saving Your First $10K Can Change Your Life

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. Have you ever felt overwhelmed by the idea of saving large sums of money? Or maybe you wondered whether small savings could really, truly impact your life? Well, if you have, this episode's for you because we're diving deep into the power of your first $10,000. Uncovering the secrets to turning a modest savings into a major financial breakthrough. Welcome to Building youg Money Machine, where we teach you how to master your money, eliminate financial stress and live a life of choice. I'm your host, Mel Abraham, and after decades as a financial expert, a financial advisor and a best selling author, I have seen how the initial steps of saving can be absolutely transformative to your financial journey. So in today's episode, I'm going to share an inspiring story of someone that you may or may not know, Sylvia Bloom, a woman who quietly saved her way to millions. I'm going to show you how your first 10,000 can lay the foundation for a future of wealth and security. Let's unlock the potential of your savings, set the stage for your financial success. I'll see you in the episode.

$10,000. It doesn't sound like a lot, but it is probably one of the most monumental steps you can make to. For a lot of reasons. And I want to break it down for you so you start to understand why this threshold is so important to your financial journey. Well, and I'm going to do it by highlighting someone by the name of Sylvia Bloom. She, she was actually a, a woman born in 1912. So it was a long time, a pre depression era. She was born. But I want, I want you to understand her journey a little bit, but how it relates to your first $10,000 and why this is so important. She literally worked as a legal secretary for the same law firm, I guess for 67 years. 67 years. By the time she passed away in her 90s, she was worth over $9 million. Okay, $9 million at that point that she ended up ultimately giving away $8 million to set up a scholarship Fund for disadvantaged youths and things like that, and then some other charities and other things that she did. So it's a, it's an inspiring story of someone, but I think what's more inspiring is how she did it and some of the things that, and lessons we can take away from it. So I'm gonna break it down. I'm gonna break down what drives wealth, why it drives, why you need to be in, in this game, and what are the lessons and the things you need to focus in on. And so the first thing is, is to understand this. Look, you may want a million dollars, you may want 10 million, you may want 5 million. It doesn't matter what the number is. But your journey to whatever your number is starts with $1, starts with $1. It starts with us building the muscle to.

Create wealth. If we're looking at wealth creation, and I, I truly believe that wealth creation is a behavior. It's not about the money. And you'll see why in a moment. Because here's the thing. There's a study of, of 10,000 millionaires. 79% of them, 79 of them were first generation millionaires, meaning that they didn't, they didn't inherit it. It wasn't gifted to them. They didn't win it in a lottery somewhere. They created it in their lifetime, y'. All. It's 8 out of 10. 8 out of 10 did it in their lifetime. That's good odds. That's good odds. The question is, what did they do? Well, another part of that star study showed over 30%, 31, 32% of them never made much more than $100,000 a year. So it wasn't like you had all these people that were making gobs and gobs of money. I mean, don't get me wrong, 100,000 is, is good money, but they weren't making hundreds and hundreds of thousands of dollars and millions of dollars. They, they were making about $100,000, and they still became millionaires. So if it isn't the amount of money that matters, what is it? It's behaviors, it's what they did with the money. It's the way that they looked at the money. And I think that that's what is kind of encapsulated in your first $10,000 is to understand how, how this comes into play. And so there are four things that you need to have in place that will drive your wealth journey. And I call them the four wealth drivers in my book, building your money machine. Okay? It's right here. If you don't have it, you need to grab it. All right, but here's the thing. When you understand this now, you can control the four wealth drivers to do that. And so I'm going to jump to my iPad and we're going to walk through the four wealth drivers so you start to understand where this comes into play. The first wealth driver is, is something that a lot of people will come to from the very beginning. They say in order for me to become a millionaire, to become wealthy, I got to make more money, I got to make income. So you're right. The first wealth driver is income. It's, it's really about understanding how much income we have and really driving our income up as much as possible. So here's the interesting thing. Sylvia was at that time, they used the term secretary. She was a, a legal assistant and she got a modest salary. She, she didn't, she didn't.

Make a lot of money. And she worked 67 years at this, at this company. In fact, she worked until, because she loved it so much, she worked until about a year to two years before she, she happened to pass away. And, and, and so she was, she was a pillar at this company. And the question is, how much of your income are you, are you generating? How are you getting a bigger shovel to make that happen? So, but this is the thing that I think people focus on. It's not the most important thing. Okay, yes, we want the income to go up, but the most important thing to this is this other piece, and that is the savings or investing rate. And this, this is all about what is the percentage of your income that, that you are actually investing in in your financial future. What is the percentage of it? And what we really want is the higher percentage of investing. So it's more important to take and push the percentage of savings and investing up than it is to push the income up. Now we want both. Okay? So, so don't get me wrong, I literally want both of these things to, to go up in making that happen. But watch what Sylvia did. Sylvia knew nothing about investing, but she was around people that knew about investing, her bosses. And back in the day, remember 1912 was when she was born. So she lived through the depression here and she was, she was working at, you know, in her, let's call it 20 years old. So she thought that would be 1932 on. And so, so she was making money. But back in those times, in order to make investments, you literally physically had to go and make investment. You couldn't, you didn't have an App, you didn't have any of that stuff. So her bosses would say to her, hey, Sylvia, I need to go make this investment. Take this check down and go make the investment for, for, for me. So her bosses would send her away to go make the investment. Well, she started to think about this. She goes, they know more than I do. And I do know, though, that if I don't invest, I won't create anything outside my salary, and then I have nothing. So what she chose to do is take her modest salary and take a piece of her salary as much as she possibly could. And every time her boss told her, told her to make an investment for him, she came up with how much she could invest from her salary. And she just followed everything her boss did. So when her bosses were investing, she was investing just at a very different level. And so she, she knew that if she kept her lifestyle modest and had money left over, she could follow the path that her bosses did and invest in. So this is how she started. Small amounts. It wasn't a lot to, to invest. And so then that leads to this third piece of, of what it is, and that is the returns. What are you investing in? Okay, because when you invest in things, you're gonna get, you're gonna get certain, certain returns. And, and you want to make sure that again, you want the returns to go up. But one of the things you have to be aware of is as the returns go up, risks go up. And so you want to be careful about, about doing that. But when you think about this.

This is where she started. Look at things and say, I'm just going to make the investments and allow the returns to take care of herself. And she used whatever portfolio that they created. Now, back in the day, you didn't have index funds, you didn't have ETFs, you didn't have any of that type of stuff. You were investing in individual stocks, individual investments, and you had to create the diversified portfolio. Today, this is actually very easy because we talk about using a one fund, two fund, three fund, four fund portfolio, depending on how you want to structure it, to keep it simple for you when you first start. We want to get in the game. Sylvia got in the game, and she was using small dollar amounts to start. You have the capacity now to invest small amounts in 3,000 companies, 500 companies at a time because of the advent of ETFs and index funds. Low cost, low fee in, in doing that. So that's returns. And then the last piece of, of the four wealth drivers matrix is Time. And this one more than anything else, I think that she, she got this one extremely right. And, and, and that was her looking at this and saying, what I know is that if I wait.

And don't invest, I don't create anything. She didn't get caught up in the fact that she wasn't making a lot of money or that she had very little to invest at a time. She just said, okay, as in my words.

She knew she had to get on the field to play the game if she was ever going to win the game. So she wasn't caught up in, well, I'll wait till I make more. I'll wait till I have more. She started because here's the thing. A lot of people will ask me this question, Mel, is now a good time to invest? And my answer is the same. I answer with a question, have you been investing up to now? And if the answer is no, then my answer is yes, it's a good time to invest. And I say that because I know for, and I haven't said what to invest in. But the fact is, is if you're not investing, you can't win the game. You will never win the wealth game standing on the sidelines or sitting in the stands. You have to be on the field. And so she knew that. She got on the field and she won the game. She was winning the game. She built a net worth of $9 million. That is pretty doggone good working. Obviously, she worked for a lot of years, but she loved what she. She gave back so much of it. That's the generosity and all of the stuff to deal with. So these are the four wealth drivers. This is the things that you need to realize. Now let's understand about your first 10,000. More specifically, what does it mean? What is it? What is it? What's the importance for you? Well, here's how I look at it. It's not the $10,000 that is important. It is the journey to it that is important.

It's the fact that you started with $1, $5, $10, $20, and that in order to get to $10,000 saved, you had to do something. You had to be someone, you had to create habits, you had to make certain decisions, you had to set your priorities, you had to do all these things. It's not the 10,000 that is so valuable, although it is, because. And 10,000 invested over time will be 100,000 or more. But it is who you become in creating the 10,000 that becomes the most valuable thing. Because that skill that Identity, that element is going to carry with you the rest of your time. And, and the skills that, that come into play are instrumental and they're paramount to any wealth journey. And we don't come out of the womb sitting back saying I know how to invest, I know about money, I know about investments, I know what an ETF is, I know what the, what, what risk tolerance. You don't know any of that stuff. So when we inform ourselves, when we skill set our ourselves up, we have the opportunity to invest. So let's look at five things that I think come out of your first $10,000 and why it is so significant to your financial journey. And the first one, the first one is this, is that it actually gives you some liquidity in the wealth priority ladder that I talk about in my book. It's all about the bottom rungs of the ladder is about creating an unshakable foundation. And that foundation is to make sure that you do not crash and burn at the first hiccup in the marketplace. So one of the things that we do is we make sure that you have the right amount of peace of mind fund, comfort fund in place, how you've got your debt managed. We create the unshakable foundation. I want safety first, growth second. So having the liquidity is extremely important in having that money in a high yield savings account. If you haven't invested, that kind of thing will give you liquidity for a couple of reasons. One, the liquidity is there to help you in an emergency, to keep you from crashing and burning if something happens. But it's also there to be able to allow you to take advantage of opportunities that come up. Now the market goes up and down. We recently had an 1100 point drop in a single day. And if you add to it, the drop the two days before is almost 2000 points that it dropped. And on that 1100 point drop day, I called my wealth team and said invest, put the money to work. Why? Because, because stuff was on sale, good companies were on sale, and now the market recovered. And so when you have liquidity, you have the opportunity to have the peace of mind that you know you're taking care of that you don't have a problem. If you have a work problem, a job problem, an income problem, a repair, we just had a mainline water line break at the house. You have something like that, you're, you're okay. You also have liquidity to take advantage of opportunities that present themselves when there's volatility in the market or drops in the market. Okay. That then leads to the second thing that I think your ten first $10,000 brings to you. And that is, and I'll couple it with confidence, proof and confidence. This is huge because one of the biggest things that hold us back and in the first part of the book we talk about it and how to break it, is the stuff in our head, the, the stories we tell ourselves. We make bad, make a bad investment, we make a bad.

A bad money decision, and then we lose confidence in our money decisions and we're scared to make the wrong decision. And so what ends up happening is that by saving the first 10,000 and starting to invest in getting these micro successes under your belt, you have proof, one, that you can do it. And if you can do it once, you can do it again. Okay. And you start to build the confidence that is necessary to take bigger moves, to make better decisions, to make more important and decisions that will change things even bigger. So it gives you confidence in your financial journey and your financial management. And I think this is a huge thing that we just don't even spend a lot of time thinking about. But you're, you're the proof of your ability to do it and the confidence to do it is huge. Tell you a quick story of a, of a dear friend of mine. I didn't know this when I first met him. He came into my world in 2012, came, came to one of my live events. We ended up becoming friends. And when I started talking about money and, and working with it, he came to me and he says, listen and know you. 2008, I got involved in a real estate deal and the real estate deal went south. The problem is, is that I, I put my money in and I borrowed from my, my family, my parents, and I put their money in and I lost it all. He says, ever since 2008, 2009, I've been scared. I said, well, what have you been doing your money, just basically stuffing it in the mattress, stuffing it in a savings account. I'm not doing anything because I'm scared to make a wrong move. I feel the guilt, the shame of losing my parents money, my mind and again. But that, that whole thing, was it destroyed now? Part of it was he didn't have a plan, he didn't have a process, he didn't have frameworks to follow. So I gave him the plan, the process and the frameworks to follow and the things that would keep him safe like we talk about on, on the show. And he's back in the game, he's back in the game. But more importantly, he's got now proof that he can do it, and his confidence is coming back, so now he can sustain it over time. All right, so that's number two. Number three. Number three. Like it or not, it's habits. And this is a. The biggest driver is what do you do on a daily basis? The five actions you take on a daily basis will set the trajectory. You know, they talk about this whole idea of, of you will rise to the level of. Of the average of the five people you hang around. I think that you will achieve to the level of the five actions you take on a daily basis. So when you start to take specific habits and they're deliberate and they're intentional, and you follow a recipe and you follow a process, it will allow you to develop. So they're ingrained. So you start to think that way, you start to do that way. Doesn't matter what the decision is. You have a process to follow. And now you have good financial habits that will carry you throughout the years to make that happen. So that first $10,000 is instrumental is developing those habits, those skills, and that mindset to maintain and grow savings and, And. And. And do it from that perspective. Number four, priorities. It's going to help you define and get really clear on what is a priority. Look, we live in a world of temptation and agitation. You pick up any kind of social media on Instagram, y', all, they're marketing to you constantly. And I mean, it's the reason I, I got a $900 coffee maker in there, because I swiped on an Instagram ad. All right, so, so when you do this and you do not have a plan and you do not have the app, the, The. The habits to develop, you will be susceptible to temptation, you will be susceptible to manipulation, you will be susceptible to marketing speak that will get you to start taking buying decisions, spending decisions that you wouldn't otherwise take. And so by building the 10,000, you're forced to set a set of priorities. When, When Jeremy was young, what I did with him is, is I started at 10 years old, started giving. I said, there's four buckets you need to go to. You're going to get paid. I want, I want you to think about four buckets. Giving, savings, investing, and living. And that's what we did. But living was about priorities. Living was about the fact that you couldn't buy everything you wanted now. And so you had to prioritize the things that actually really mattered. And this $10,000, your first $10,000 will help you start to develop the priority muscle to say what really matters. I'm not going to be, you know, pushed by marketing and media and social media and peer pressure and all of that. I. I'm going to live my life to the plan and the vision I have for my life, and it develops that. And then the last piece of it is this is empowerment. And everything I do is about how do I equip you, educate you, and empower you to take control of your financial future. That's why we say this show's about mastering your money, eliminating finance financial stress so you can live a life of choice. This actually, this whole process, when you start to do that, you feel empowered, you feel energized, you actually feel like for once you're in control. And now, like I said, if you do it once, you can do it over and over again. But it gets easier because you've already developed the skill, you've already developed the confidence, you've already developed the habits, and you've already developed the priorities. And that's the key to making it happen. So when I look at the first $10,000, as much as it looks like, well, $10,000 isn't really going to make me rich. No, it's not going to make you rich. But who you become in the journey to $10,000 can set you up to be rich, be wealthy, because it forces you to become something you maybe aren't. It forces you to develop those skills and do that. So I want you to go out there, I want you to start to look at it and say, how do I get to that first $10,000? Maybe you're in debt and you got to get from negative first, but there's a process to do that if you're in debt. Do me a favor, go to melabraham.com nodebt get my debt breakthrough calculator. There's a short training is totally free and get in there and start getting control of the debt and make sure that you're following the processes that we teach here or in my book, to make sure that you're on the road to financial freedom. I truly believe that financial freedom is your birthright. We just got to give you the pathway to claim it. And that's partly on this show and the other things that we do. So I hope that you found this helpful, valuable and that you look at it and say, even though maybe in your eyes $10,000 isn't a lot, the process to get there is worth millions. All right, till I get a chance to see you on the road or at one of my speaking events or anything like that. Always, always strive live a life out. Lose you. See you next time. 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.