Why You Need To Start Automating Wealth Creation

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. Why do so many people struggle to build wealth even when they know exactly what they should be doing? Listen, if you've ever felt like saving or investing or growing your money is a constant battle, or worse, that you're always playing catch up, this episode's for you. The truth is, the wealthiest people do not rely on willpower to build their fortunes. They automate it. And if you're not doing the same, you're making wealth creation way harder than it needs to be.

What if I told you that the wealthiest people aren't working harder for their money? They've simply put their money on autopilot. They have systems that make it happen. And here's. Here's the challenge. I think that people struggle to save, invest, and grow their wealth consistently because they primarily rely on willpower. And I know that was me, okay? The fact of the matter is that that's the way I used to do it and it was a pain in the butt, to be honest with you. And the fact is it was inconsistent and I got inconsistent results. But the solution, especially in today's world with the technology we have, is automating your wealth creation. When you automate wealth creation, it ensures your financial success without this constant effort of constantly having to pull the levers, twist the dials and all the things. Here's how I see it. When you automate wealth creation and why it's so critical. Because the first reason is that it eliminates decision fatigue and procrastination. How many times have you been in a situation where you weren't sure what decision to make because you're just tired or whatever it is, and. And so you don't make a decision, which in effect is a decision. Humans aren't wired to make the right financial choices consistently because we have emotions, we have influences, we have media, we have social media, we have all of that. But when you bring automation, it removes the emotions and it allows the financial decisions just to happen, okay, consistently over time. The second reason I think is this is that it ensures consistency and discipline. You know, wealth isn't about one big bold move that you're going to create wealth, but it is about the small consistent actions you take over time. Whether it's automating your 401k or your transfer to your emergency fund or your debt paydowns. When you start to automate, you make wealth building, wealth creation habitual. And we already know that 80% of wealth creation is behavioral and not monetary. Okay. I think the third thing is this, that it helps overcome the psychological barriers. It avoids temptation spending when you see something in your account. And then it also will protect against market timing mistakes. This is where dollar cost averaging comes into play. The market could go up, the market go down. If you have a systematic investment plan in place that has automatically happened in the background where you're investing $100 a week or $200 a month, whatever the number is, it just happens without you ever looking at it, judging it, criticizing or doing anything else around it. And the next reason I think is it maximizes your compound growth. You get in the game with no matter how much you start. And the earlier start, the more power of time do you have you have on your side. So automating the investments means that you never miss the opportunities. And then I think the last thing is it saves time and reduces stress. You set it at once, you let it run, you watch your wealth grow, you evaluate it at regular intervals, maybe six months or a year to see that it's working and you just go on and live your life. That's it. So what are the steps to make this happen? Well, I'm going to take you through the steps that I think there's seven steps to get automation in place. Step one is to automate cash flow and budgeting. In other words, you should have a direct deposit from your paycheck into a bank account or multiple bank accounts. Now, when I show you this tool, you'll see that we can just get it into one account and it will do the distribution for you. But if you don't have a plan for your money, call it a budget, call it a plan, however you want to look at it. In other words, if you have not decided what your dollars are going to do before you get those dollars, that's when they disappear from the account through temptation, through comparison spending, all of those things that come into play. Now you can use tools like Ynab, you needed a Budget or Monarch Money or Quicken or different tools to track your finances. So you Know what your cash flows in and out are. But that first step is really to automate as much as possible. For instance, the money that goes out to all my bills is absolutely automated. So it's all hands off. It just bills get paid and the money comes in. Bills get paid. Okay, so that's step one. Step two, automate your savings. Now this is about, indirectly about paying yourself first. Okay?

Have a automatic transfer from the, the entry account. When your, your money, your paycheck gets deposited, have an automatic transfer from that account to a high yield savings account. This should represent your peace of mind fund or your emergency fund. Once it's fully funded, then you'll move on to other things. I recommend that you follow the wealth priority ladder so you understand every dollar and what, what's happening. But automate your savings and when I show you get sequence or sequence, you'll, you'll have a chance to see how this can happen right in the background for you. Okay, so that's step two. Step three, automate investing. Listen, we can automate savings, we can automate our debt payments, we can automate our bills. But if we're not automating investing, then our money isn't working harder for us than we did for it. So set up recurring investments in your brokerage accounts. Now, if you're an employee and you have a 401k and you're participating in the 401k, that's automatically happening in the background for you because you've chosen the funds, you've chosen the investments, you've chosen the percentages, and it's doing it. But if you don't have a 401 and you have an IRA or just a brokerage account or anything like that, then you need to set that up. And what you're going to want to do is utilize different advisors, whether it's robo advisors or other brokerages. I use Fidelity and Schwab as my primary brokers in Vanguard. I have money at Wealthfront, but I don't invest the money at Wealthfront. That is where my high yield savings account is. But I want, it's, I want to make sure that it is automated so that every month or every week or every time money hits, hits your account, it automatically gets invested in the proper portfolio structure that you want. And so it's important for you to do that because what I have seen is people will put money in those accounts, but then they don't invest it. You have to make the last step of investing, put it to work for you. The other Way to do this is something called dividend reinvestment plans. Drips. So when we invest in things like an index fund or mutual fund or things like that, and those companies pay dividends, you can take the dividends in cash, but now you have cash that you have to go invest again. Or if they have a drip program, a dividend reinvestment plan, what you can do is when that dividend distributes out, they automatically invest it for you. I am one that says hands off as much as possible. The less decision I have to make, the less levers I have to pull, less dials I have to twist, the easier it will be to stay on track and on the plan towards my financial freedom. Number. Okay, so that's number three. Number four is to automate your debt payments. Okay? If you don't have a debt payment plan and you are in debt and you have destructive debt, meaning high interest, consumer lifestyle debt, not, not necessarily mortgages, if you have that, I want you on a debt payment plan. If you're not sure how to do that, we have a debt breakthrough calculator. You can get it for free. Go to melabraham.com no debt. Get yourself on a debt payment plan where you know exactly what you're paying to each creditor every month and that that you've set it up on automatic so you don't have to think about it. If you're paying $300 towards that Visa card, you're paying $300. It's automatic. It's automatic. So you set it up and you'll either use a debt snowball or a debt avalanche to pay it down. You can, you can decide how you want to do it, but get your debt payments automated. Okay then step 5. Automate your wealth protection. In other words, there are things we do to build wealth, there are things we do to protect wealth. For instance, insurance is a way to protect wealth. Health insurance, disability insurance, life insurance, if necessary, car insurance, homeowners insurance, renters insurance. Those are insurances. There's a certain group of insurances I think that we all should have. Then there's others that I think are.

Scam, quite frankly. But if you don't have insurance when you need it, then you're in trouble. You don't want that insurance policy to lapse. So I want to make sure that you are automating your wealth protection and that comes from making sure that your insurances are funded on a regular basis and your emergency fund or peace of mind fund is fully funded. So you can cover any kind of emergency that comes up that's going to protect you from losing your wealth. Then step six, automate tax efficiency. Now this, this may be a little more complicated depending on your situation. But if you have access to things like IRAs, tax advantaged accounts, HSAs, things like that, then you can actually make sure that those contributions are automatic into those accounts and the investing in those accounts are automatic. So you can fully automate it. Because think about this. If you're in a 20, 30% tax bracket, depending on state, the state, like I'm in one of the most expensive states in California, the more I can save in taxes, the more I have to put to work for myself. And so we lose the benefits if we don't take the deductions or we don't take advantage of the tax code that was put there to use to reduce our taxes. So step six is get a fundamental understanding. Make sure that you're taking advantage of tax advantaged accounts, IRAs, HSA, things like that. And if you are investing, if you are investing, then look at the brokerage accounts and the brokerage houses you're investing through and look at their tax lost harvesting tools.

I'm not going to go into tax loss harvesting in this, in this session. But bottom line is, what we're trying to do is, is say if I have an investment that I've, I've lost money in what I can and I have other investments that I have gains in that, that I am, I sold and now I have to pay tax on those gains, I can sell the loss, offset the gains, not pay the tax, but then take what I sold and rebuy something. Okay, Something similar, but not so similar that it triggers something called the wash wash sale rules. So this is a little more complicated. But the bottom line is automate tax efficiency, which is tax advantaged accounts, the tax loss harvesting. And then the last step is this to automate your growth and your income streams, making sure that you're not just taking the money out of.

The investments and spending. Unless that was the plan. But you're going to get cash flows from real estate or you're going to get dividends from your stocks or you're going to get royalties from something. You're getting income that I call leveraged income because it doesn't take the time to generate it like a job, okay, Like a business. And so when you get that income, take that income and push it back into the machine so the machine continues to grow bigger and bigger. If you don't need the money, there's no reason for you to take the money and spend the money. Because the purpose is to get your money machine large enough that it pays for your whole life, that it cash flows enough to pay for your dream life, the planned life, that affluence, vision life that we talk about, and do it from that perspective. So if you have that money coming in on a regular basis, like I said, dividends, rents, royalties, things like that, let's use it and deploy it back out to earn more money. Okay? Our dollars are our employees. We want Those employees working 365 days a year, 24 hours a day. Okay? That's, that's why we get our. How we get our money to work harder for us than we did for it. So those are the seven steps that I would take you through. What are the things that you can use to make it easier for the tools that make it can make it easier? I think there's a couple tools that you can look at. I'm going to show you one that I have just found. I'm new to it and playing around with it, but I think that there's some really cool stuff around it. When it comes down to automating savings and investing. Look at the accounts and Fidelity, Vanguard, Ally, Bank, Betterment, Water, Wealthfront, all of those accounts have the ability to automate savings and investing. I.

Whichever one you want to use is up to you. I'm not promoting any of them at all. Here's the one caution that I will have. I don't want you going to any account or any app or any platform that gamifies investing. When you gamify investing, you boost the emotions. It's a dopamine dump. And when you gamify it and you have that dopamine attached with investing, all of a sudden we end up making emotional money decisions that have logical, reasoned money decisions. And that's never good. So I avoid the other platforms like a Robinhood and things like that that gamify the investing process and look at it from that perspective. So if you're already investing in Schwab or Vanguard or Fidelity or Wealthfront or any of these, these brokerage houses, just get on the phone with one of their customer service people and say, hey, how do I make this automated how do I automate the savings? How do I automate the investing? How do I make it make it work? Okay.

Then, then the other tool that I wanted to throw at you is something called sequence. Get sequence IO and I'm actually going to show it to you. But imagine your Ability to, to just drag and drop and have your money just go without you having to work from it. This is what, this is what Sequence looks like if you start to look at it. But the reality is that this is money comes in and it automatically will go to these different accounts. This is to pay the credit card. This is going into vacations. You got long vacation, short vacation, weekend trips. This is what you do with, with Sequence is you just decide how you want your money to flow. All of these are little individual bank accounts. They're all insured, FDIC insured. They're set up inside the Sequence app so you don't have to go and sign signature cards and all that. It's really, really easy. You drag and drop and you can set up different, different rules to make it happen, which is really kind of cool. So like here, business income on this side you got business income that comes in and then you allocate. Maybe there's a rule here that says 30% goes to taxes. Okay. How much goes to owners pay. And you can set the rules up so it's automatic. You can set up different ways to do it. This is using a 50, 30, 20 budget structure. So needs, wants and savings. So 50%, you can see that that's 50% automatically. If $3,000 in salary comes in, 50% goes here. And then you have another rule that says it's going to pay that and it's going to pay the student loan. Then you have 30% going towards wants and then this is where it gets spent out of. And then you have 20% going towards savings and that's going to high yield savings and retirement fund. You get a chance to decide and build it by dragging and dropping, setting rules in place. It's really cool. If you have a side hustle, you can have your main income here and have that going in.

And then maybe you're making some TikTok income and you want to put it in a Roth and taxes and you just set it up and it just does it for you. You can have this money move based on the date of the month. You can have the money move based on when the money hits. You can have it moved in certain increments. Then I, I took it and I built out the wealth priority ladder. So this literally builds out all the phases of the wealth priority ladder to get things paid off. Okay. And done based upon the teachings of my, my book. It is, it is such a cool tool. I just, there's something about it that makes it really easy and it and gets Your hands off. Here's the cool thing. I'm not here to necessarily promote, but it was such a cool tool. I went to them and had conversations with the founders and I said, I want, I want some of my audience to try this. So you can get, you can try sequence 25% off for the first month by going to melabraham.com forward/ sequence, use the coupon code MEL25 will get you 25% off. I think you try it because if you don't have automation in place right now, then, then this is an easy way to do it. And you connect your bank account and then you set up how you want it to flow. They have templates in there to make it easy. And then you get this stuff dialed in and now it's happening in the background and your wealth is happening in the background without you having to sit back and go, oh, I forgot to make the deposit this week or I forgot to make that payment or if I got to do that, remember this. Now, hopefully this kind of laid the groundwork and the case for automation. The less friction you have in your wealth creation, the easier and the faster you'll build wealth.

That's the game. And wealth doesn't come from working harder. It comes from setting up systems that will work for you 24. 7. Okay, so this is the time and today's the time, especially with all the uncertainty because all that hesitation, all of that emotion, all of that stuff will cause you to stall out, will cause you to hesitate, will cause you not to make the choices. So let's take the choices out of the game by simply setting up automations for your saving, for your investing, for your spending and for your debt. So everything's happening in the background. Now you can set up manually, you can use something like get sequence, but whatever you use, let's get that, let's get stuff automated. And I'd love to hear from you what tools you used, what tools you find helpful in your automation and your wealth creation journey. Let me know by, by leaving comments below and let me know how it goes. And if you have questions or anything around this, reach out to me because I know this. The sooner I can get you automating your money flow in a way that builds wealth and gives you freedom, the more peace you will have or the more growth you'll have. And when you look back a couple years, handful of years, a decade from now, your whole life will be completely transformed. All right, all right. I hope that this helps and I hope that this gives you what you need to get things automated, and I hope you found it of value. And if you have, do me a favor, make sure that you smash that subscribe button. Stay with me on this journey and share it out to someone else that might need to hear this and get them on the path to financial freedom. After all, I believe that financial freedom is your birthright. Let's go out and claim it. Let's do it together. All right, till I see you on the next one. As I always say, always, always strive to live a life that's.

Thank you for listening to the affluent entrepreneurship 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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