Why Your 9-5 Won't Make You Rich (unless you do this)

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. Did you ever think that working a 9 to 5 means that you'll never be rich? Well, you're actually right unless you do certain things. And in this episode of the Affluent Entrepreneur Show, I'm gonna break it down for you. I'll walk you through the things that you need to do, even in a 9 to 5, that make it possible for you to be rich. All right, see you in the episode.

All right, so here's the interesting thing, is that I had someone tell me the other day that the fact that they work a job, the fact that they work a 9 to 5 means that they'll never be rich. And it isn't the fact that they work a 9 to 5 that they means that they'll never be rich. It's the fact that they have that attitude. So in this episode, I want to start to walk through this idea of a 9 to 5 job. Is it dead? Is it. Is it possible? What do you need to do? How do you do it to navigate it? Because I truly believe that financial freedom is a birthright. It doesn't matter whether you're in a 9 to 5 or you run your own business. It's possible. And we're going to talk about some statistics, some pathways and some things to do it, because here's what we know. The 9 to 5 was originally created as part of. It was before the industrial age, into the industrial age. But what the problem is with the 9 to 5, it was the assembly line, the manufacturing, all of that stuff is it commoditized your talents, it commoditized your skills, it reduced them to time. Okay? It was something that allowed us in a time where the primary industries were manufacturing and agriculture to make it work and make sense. But as we transitioned into information technology, service technology and all of those things, it shifted some things, but we didn't shift with it. See, one of the challenges that back when, when we were doing these, these kind of industrial age thinking things, and I, I've said this before, I think our retirement system is broken and we need to look at it very differently. Is this, is that in that time you would invest your life into a company. You would work, you know, 40, 50 years into a company and then once you retired, they gave you something called a pension plan. And that pension plan is what we would call a lifetime income. So they just said you spent decades of your life here with us. So because you spent decades of your life here with us, we're going to make sure that we take care of you the rest of your life. And there was a lot of companies that did that until they couldn't anymore because it got too expensive. People were living longer. And so now all of a sudden the idea of giving everyone lifetime income became more problematic and more expensive. So what they did is they started to do away with them. And so now you no longer, you had still the industrial age thinking, but you no longer had the pension plans along with it. They gave you 401ks and they gave you IRAs and they gave you these other plans. But these other plans never guaranteed you and income. These other plans only guaranteed whatever you did with it if you put money in it. And now the pension plans were there whether you decided to or not. You participated.

But you can have a 401k plan not contributing, you got nothing. You can have an IRA and not contribute and you got nothing. You're required to put money in. Not only that, you're required to invest it in a pension plan, they invest it for you. I sit on a committee, we run, run a 50 million dollar pension plan and we make the investment decisions for everyone that's invested in that. They don't have to worry about it, we got it. But when it's your own 401k or whether it's your IRA, it's in your lap. And so the challenge is that a lot of people don't necessarily understand it, do it or get themselves involved with it because they say it's complicated, it doesn't have to be. It can be simple. It may not be easy, but it can be simple. We just need to know a few things. And so here's what we know is that, that the demands on those older companies went up and so they could not sustain it and they put it back in your lap. Now you got to look at and say how do we do this? And can you build wealth even in a 9 to 5? And the answer is yes. There's a study of 10,000 millionaires, believe it or not. 10,000 millionaires 79%. Almost 8 out of 10.

Were first generation millionaires. First generation meaning that they built it on their own. It wasn't inherited, it wasn't gifted, it wasn't winning the lottery. They created it. That means 8 out of 10, y'. All. That means that you have a chance to do it in your own lifetime. Here's the most important statistic in this 31%. 31% of them never made much more than $100,000 during their career. What does that tell me? It tells me it wasn't about how much they made. It was about what they did with what they made that made the difference. And so whether you're in a 9 to 5 or, or you have your own business, doesn't matter because there's plenty of people that I know have, have their own business. They're making a lot of money, but they're spend of money. They got nothing to show for it. Then there's Those, they're making 100 grand a year, but they're doing the right things with their money. So their money works harder for them than they did for it. And they find themselves in a place of financial freedom because they built a money machine. And that's the thing that, that I want for you. Here's, here's what we need to understand. There is shifts in employment. There's shifts in the labor market, there's shifts going on. We've got the gig economy. We've got people that are doing second and third jobs to not necessarily make ends meet. Yes, there is, that's a who another discussion with that. But also to realize that it's important for them to have multiple sources of income, to feel more secure, to feel in a place of doing that. And now they also have instead of employee employees, contract employees, where I can go into an organization and be paid more to do a project than I would if I was employed full time. So.

Here'S the biggest things to think about. I want to talk about the benefits of the 9 to 5 first. Then I want to talk about the things that you need to do. Right. The first is this, is that, look, getting a job with a good company comes with a lot of benefits that you would not have automatically if you did this on your own. So you can't disregard it. You can't presume that, that, well, I'm not going to get anywhere if I'm working a 9 to 5. It's not necessary too because with a good company you have the ability to get health care. Like I look at it my wife's company, our healthcare is with my wife's company. We've got great healthcare. Thank God, because of my cancer journey, that we have the healthcare pto. You get paid time off. Will they limit it? Sure they will. Okay. But there's this idea that, oh, I start my business, I have complete control of my time. I got news for you.

Unless your business is run right, the business is controlling you instead of you controlling this. You can't take a month off your business unless it's built. Right? That's a whole nother discussion and a whole nother topic for another time. But just the fact that it's your business doesn't give you the ability to walk away because you realize that you walking away might cut off the cash flow. How do you pay the bills? So working a 9 to 5, you have the security of a paycheck now, is it secure? It's a whole nother conversation. Because you could lose your job at any time. Because most places, yeah, it's, it's, it's based upon their, their performance and that kind of thing, it can happen. But I think that you need to understand the other benefits of pto. You got health care benefits. You can get training and experience at these places. I went to a large consulting firm right out of college and I stayed there for, for a good, you know, five, six years or so. Primarily not because of the pay, trust me, because I was working long, long hours, 10 o' clock at night, you know, for, for not a lot of salary. I mean, my starting salary when I came out of college now, mind you, was a while ago, was 27,000.

But the education and the experience set me up to do some of the things that I got to do today. Okay, so there's benefits to being able to retrain. There's possible matching on retirement plans that you can get from your employees. So you participate in the 401k and they might match the first 3%. So you put 3% of your salary in. They put 3%, that's 100% return. You, you can't ignore that in doing that. Then, then you also have some companies that'll give you long term incentives to stay on. My wife has a long term incentive plan that vests over time that, that kind of keeps her locked in saying, hey, if I leave, I lose part of this, so I'm going to just stay. And so, so all of those things can't be disregarded. When we start to talk about nine to fives and you talk about it won't make you rich, you gotta look at the whole package. Okay? Remember I said 8 out of 10, 79% our first generation and 31% never made more than much more than a hundred thousand dollars. So what do you need to do? Let's talk about the process and what you need to do to make sure that you take advantage and do the right things with your Money in your 9 to 5 to build you and put you on the path to financial freedom and wealth. And the first thing is this is, is to, to automatically first look at it through the eyes of the wealth priority ladder which we talk about and that is this. The first thing I want everyone to do is to have fifteen hundred dollars in a comfort fund put away or one month's expenses. One. One or the other, whichever one's larger. Here's why. This isn't your emergency fund. This is a. I don't have to go into debt. I don't have to sell something, I don't have to dip into something if something unplanned happens, a transmission goes out on the car, okay, you have a problem with the house, you have a medical situation which requires you to pay your deductibles. All those things, they're taken care of in this one month's expenses or this $1,500. So you don't have to go into debt to do that. That's the comfort fund. But then the next piece of that is that once we have that in place.

We need to make sure that you don't have any destructive debt, that you're not using debt to finance your lifestyle, that you're not using debt to finance what we call consumables, the stuff that you use up. Clothing, luxury vacations, luxury items, technology, TVs, you know, furniture, all that stuff. If you cannot pay for it in cash, what that means is you're borrowing from your future to live a lifestyle that's outside your means today. Now, I'm not talking about buying a home, I'm talking about buying a car. As long as you don't over buy a car. I am talking about your regular lifestyle. And so we want to make sure that you have no destructive debt. So the second stage of this is getting that debt, the destructive debt paid down. You got to put yourself on a debt payment plan. If you have consumer debt or destructive debt or lifestyle, first things first, stop the bleeding, we got to stop the spending so we don't, we don't go further into debt. And second, we got to get ourselves on a payment plan. If you need a way to do that. I have a free resource. Go to melabraham.com node and we'll make sure we get it to you. And we'll also make sure that it's in the description below to make sure that you have it. But we need you to get out of destructive debt. At the same time, I want you to be building your peace of mind fund. Some people call it an emergency fund, I call it a peace of mind fund. The same time I want you funding that. Some people say two, three, four, maybe six months. I think you're wrong. I think you need nine to 18 months. Call it 12 on average. I think that you need more space to have peace of mind. So over time I want you to build that up. Put it in a high yield cash account. Out of sight, out of mind. It is there to sustain you if, if there is a prolonged problem.

So comfort fund, get out of destructive debt and build the peace of mind fund. Then we get into investing. Then we turn around and we say, okay, now we're going to invest. This is where I say we're building towards freedom. We're building towards freedom, baby. Here we go. Now this is where we say we want you to ultimately push yourself to a point where you're putting 20 to 25% of your income away. Where do you put it away? The first place to go is to make sure, especially if you're in a 9 to 5 and they have a 401k is to get 100%, 100% of the employ your match. If your company is matching how much you put into your 401k, you make sure you put in enough to get 100% of the match. It is free money. So if they're going to match 4% of your salary, you make sure that at a minimum you're putting 4% away. Because they're going to put 4% for you. I can't tell you that. People just leave. If I walk through your office and I'm dumping $50 bills and $100 bills on the floor, you're going to walk by them. Are you going to pick them up? I think you want to pick them up. Why are we doing that in the 401k, let's pick them up. All right? And so that means that we're going to put the money in. So we're going to get the free money first. And that is making sure that we max out the match. And if you have access to an hsa, a high yield saving or a high deductible health plan with a health savings account. This is the time that I would start to think about funding it. Also, once we know that I've got 100% of the match money in place now, we can look at it and say, all right, so where else can we go? I'm going to take a portion of the money now I'm going to, I'm going to get 100% of the match, then I'm going to move out. And if I qualify to put money in a Roth, I'm going to, I'm going to max out the Roth. Now this year the max on The Roth is 70 or $7,000. So you max out the employer match, you max out the Roth for $7,000 as long as you're not above the income limits. And now you come back to the 401k to match. Why am I doing it this way? Here's why am I doing this way? I'm trying to take advantage of first, the free money, anything that the company is matching second, the tax free money. So the Roth, when I put money into the Roth, that $7,000 I put in the Roth, when I take it out down the road completely tax free. So I want to have tax free dollars down the road. And then we come back to the 401k and we fully fund the 401k. You can max out the 401k this year at $23,000. And if you went, if you're 50 or over, you can go up to 30,500 and that adjusts every year. So you gotta look at the limits. So point being is that there is a recipe to maximize your returns, to get the biggest benefit and to, to build you towards wealth. How do these, how did 31% of the people build their, their millions when they didn't make much more than a hundred thousand dollars during their career? They did it this way. They had a process, they had a recipe and they had a way to something to follow. And that's what I'm giving to you. So start with a comfort fund. Blow out the destructive debt and the consumer debt while building the peace of mind fund. Then start getting 20 to 25% of that income into your, into your investments. Start with maxing out the employer match, max out the Roth, then max out the 401k. And if that's not 20, 25%, then we're going to push to, to other things beyond that. But, but point being is that just because you're in a 9 to 5 doesn't keep you from being rich, there's plenty of people that have done it and you can too. And if you need additional income to do that, you might need to consider supplemental income sources, A second gig gig thing, taking some of your talents and skills and contracting it to somewhere else. Because now all of a sudden, you can put money away. Think about this. $800 put away a month at 8% in 30 years turns into $1.2 million in our bucks. So if you needed to get a little additional income and you made an additional 800 bucks a month and you just use that to invest, put a million bucks in your pocket. Point being is that it isn't about how much you make and it has nothing to do with with whether you're in a 9 to 5 of our business.

Has everything to do with what you do with them. Take the discipline, the behaviors. Remember, wealth creation is less to do about money and more to do about choices, decisions, and behaviors. So if we build these behaviors, whether you're in a 9 to 5 or business, you'll find your pathway to being rich. Follow the recipe, follow the process that we teach, and we'll make sure that we get you there. All you gotta add is the dedication, the discipline. Keep running the miles, right? I hope you found this of value. I hope that this helps you, and I hope that you now see that a 9 to 5 doesn't necessarily mean that you can't be rich. All right, until we get a chance to see each other in another episode on the road, always, always strive for the life. 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.

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 podcasts, 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.