You Can Predict Someone’s Wealth by How Far Ahead They Plan

You can predict someone's wealth by how far ahead they plan. Listen, if it feels like you're working hard and doing the right things and still not getting ahead, hey, you're not crazy. You're human. But most people aren't stuck because they're bad with money. They're stuck because they're forced to plan in a way too short of a term. Okay, today I'm going to show you how planning horizons will quietly shape your wealth and why this feels so Frustrating. And how do you move forward, okay, without blowing up your life? This is Building Your Money Machine, where we help you master your money, eliminate financial stress so you can live a life of choice. Because earning more doesn't make you free, a money machine does. And I'm your host, Mel Abraham, and after 30+ years as a CPA, an entrepreneur, and a money mentor, and someone who's walked this financial freedom journey for himself from nothing to something and then broke it down and had to rebuild it again, I've seen what works. Let's walk through the planning horizons and the key elements that you need to take on in your life to make it real. All right, let's do this. Let me say something that might sting just a little. I can usually predict someone's financial future within 10 minutes of talking to them. And not because I'm psychic, not because I'm special. I mean, let's face it, I'm a CPA, not a wizard. Okay, but it comes down to one thing: how far ahead they plan. And if your current financial strategy sounds like, hopefully nothing breaks next month, then we've got some work to do. Okay, so stick with me because by the end of this episode, you'll know exactly where you're operating, why you maybe feel stuck, and how to move up without another budget spreadsheet that dies by Tuesday. Okay. Now, before you start to think, well, wait a second, I'm just trying to make ends meet. Let's just get really clear because here's the lie we've all been sold. Making more money and that'll solve all the problems and you'll be fine. It's adorable. Okay. And it's wrong. See, high income is just a shinier leash. Okay. And I've watched 6-figure entrepreneurs panic faster than minimum wage workers because their entire life is dependent on next Friday's paycheck. That's not wealth. That's stress in a nice pair of designer shoes. Okay. Wealth doesn't come from income. It comes from building a machine, which is built on planning further ahead. Okay. So, when we start to understand this, I want to walk through what I think is this ladder of planning horizons and what to focus on each time, because it's not a lottery ticket. It's not a hustle. A ladder and each rung represents a planning horizon. And we don't jump levels. You don't hack it. You climb it one rung at a time. And the people that are struggling, they're not failing. They're just standing on the wrong rung wondering why the view never changes. Okay, so let's walk through it because I think it's really important to understand what rung you're on. What you need to focus on and what to do next. Level 1 is survival planning. The time horizon is today to this week. I mean, that's all you're doing. And trust me, I've done this in my life. I've been here. Okay. At this level, money isn't a tool. It is literally a fire alarm. Okay. Every decision is about how do I release the pressure? How do I get relief? You're asking yourself, what do I pay? What bills do I take priority? What can wait? What breaks next? Okay. Planning at this stage, you don't feel like it makes sense. It feels like a luxury for other people. And let me be very clear, and this is important. This is not a character flaw. This is a margin problem. So, you don't plan when you're drowning. You're grabbing for air. And I totally understand that. Okay, how, how you move up from here, this is the thing that people will mess up. They try to invest, they try to optimize here, they try to be disciplined, but they're on the wrong rung. At this level, at this level, your only job, your only job is to stabilize. Okay, at this level, this is about how do I smooth my cash flow? How do I build a tiny buffer? How do I reduce the chaos before chasing some sort of growth? This is where the bottom rungs of the wealth priority ladder of building an unshakable foundation, of getting your debt under control, getting your liquidity under your belt to build that foundation becomes so vitally important. So you're looking at things and planning to build that at this stage. It's not about crypto. It's not about hot stocks, and it's not about some business idea that your cousin told you. The first wealth skill that you need to capture isn't investing. It's calming the money noise in your head. See, and once that noise quiets down, something sneaky starts to happen. You start to think that you arrived, but you haven't. Now, I get it. This survival is a stage that many of us will go through. Now, sometimes many of us live here. We need to move beyond it. And that's why there's those principles in place to get you to the point of stability. That becomes the level 2 in the time horizon, stability planning. That time horizon extends from the day to the week to month to month. So now all of a sudden you're starting to look at things and this is where people start to finally breathe. And I used to do it month to month. And there's a lot of gurus out there in the personal finance space that are telling you to plan from month to month, budget month to month. And I get that. But if that's the only thing you do, then there's a challenge. Now, this is a place where when we're doing this, your bills are getting paid, the refrigerator is full, the chest isn't tight all the time, and You're staring, you're, you're still staring at your feet, but one unexpected expense and you might be back in survival mode. That's the thing. That's the problem. And, and the real problem here is actually not your spending. It's the direction. See, money is no longer screaming, but it doesn't have a job. And remember I say every dollar that comes into your life needs to have a job description before it ever gets into your life. See, money without a job always finds a boss, and that boss is a bad boss. Usually it's you on Amazon at 11:47 PM and saying buy. Okay, now this is a rung where you can start to look at things differently. This is a place where it requires you to name the future, not save more, not be responsible. Define what your 1 to 3 year outcome is. And we do this with the, with the, the Money Machine Blueprint vision process that we walk through. But ask yourself, what should life feel like in 1 to 3 years? What should money do for me? When money has a future job, a job description that's vivid, the present day you behaves better and it changes things. When we give that job description and we make the declaration here that over the next 1 to 3 years, here's what I am going to do with my money. Here's how it's going to drive things and do things that changes the way you behave. And remember, 80% of your wealth creation is, is based on behaviors. All right. So let's start to build them in, in a way that they are Driving towards your dreams. All right. Now, listen, quite pause here for a moment, because I think this matters. If you want to start planning and you say, because people will say, well, okay, I get it, but how do I start planning? And one of the first steps is to understand what your life actually costs. Now, this can be an eye-opener for people. This can hit them between the eyes and it can scare them. That's not what this is about. It's about you knowing what your life costs in a way, not Instagram life, but your real life, real costs in a way that you look at it and, and now know what you're dealing with. And that's exactly why I built the lifestyle cost calculator to allow you to put your information and see what your life's going to cost today, see what your life's going to cost in the future, and understand what you're, what you're dealing with. It's totally free. You get— we'll link it up here. You can go to melabraham.com/lifestyle to get it. Get it dialed in and figure it out. All right, let's go get back to it. So here's the thing, and this is where most people get comfortable and stuck because the next rung demands something really uncomfortable. We started with this idea of, of planning, and now we start to push it even further. Level 3 is now lifestyle planning. This is where the treadmill starts to speed up. Okay, lifestyle planning is, is 3 to 5 years. You're starting to push it out a little further because now you're starting to look at things and say, what do I want my life to be like? Because this is the most crowded rung on the ladder. This is where you're getting hit with promotions, raises, lifestyle upgrades, income grows. So does the stress. There's a lot of things going on, especially those of you in the 30s and 40s. This is your messy middle, but it is the most powerful earning time of your life. And because everything still depends on you showing up, it feels stressful. And if we're on that rung and we're feeling that, that's not freedom. So we need to start to look at things through a different set of eyes because you're still trading time for money. You just may have better benefits. You might have a better title or a fancier title, but this is one of the hardest shifts for people to make because the tendency is to say, I deserve this, I'm entitled to this and that kind of thing. And I get it, you are. And this is the very reason that When we do plans for, with our students and our clients, I say, I want you to build in some visceral, long, sustainable joy points. Because if you don't enjoy the journey to financial freedom, you will not enjoy the destination of financial freedom. But I don't want you to get caught up into temptations and Instagram shopping and those kinds of things that happen in our momentary pleasures, but not sustainable pleasures. And that's why we define it in advance. And we build it into the plan because the hardest shift you're going to make here is this, to delay comfort, to buy leverage back. And when I mean leverage is that your earning capacity and your time, because this thinking about things like what kind of skills that I can bring in to compound, what kind of systems that will start to work for my money without me. What kind of assets can I acquire? Can I bring in that don't need permission? And then the other challenge in this phase is there's the excitement of growth and there's the excitement of more, but there's also the element and the burden of boredom because this is the time to get quiet. This is the time where you're on the flatline of the wealth creation curve, where it doesn't feel like you're making a lot of progress and it's invisible, the things that are going on. And now, now all of a sudden you start to tend to sway or you start to, to drift. And that's when we start to get ourselves in trouble. Okay. See, the wealth gap isn't created by risk. It's created by patience. That's what creates it. And so the real key here is to get a plan in place that's driven by your lifestyle and the lifestyle that you you want, not what the marketers are telling you, not what the peers are telling you, not what your professors say, but you and the ones that are in your life, your significant other, your spouse, to design it in a way and say, this is what's going to define and refine our plan. And we will make decisions based on it. It takes discipline. But if you want to truly end up with the life that you desire, we first have to envision it. Then we have to create it. And anything that doesn't move you closer to it doesn't belong in your life. And I know that's a hard thing, but that's just the truth behind it all. Okay? And here's the cruel joke when it, when it comes down to it, right before this works, it feels like it isn't. And that's where we step down off of that. Okay? But that leads you to level 4. Level 4 is wealth planning. Now, all of a sudden we're looking at 8, 10 years out. We're looking further along. And if I see people that are doing 8 to 10 years out and they're looking at things and they're acting on them and they're allowing that to define what they're doing, I know that they're on the track. Okay? Because this is where you're planting the seeds of wealth down below, like the bamboo where you plant them and they just stay under the ground for years. And then when it pokes, The stock through the ground, it then fully grows within months. That's what you're doing with your wealth. See, this is the wealth that quietly separates you from your income. This is where all of a sudden you start to build a level of income that separates the earnings from the efforts to earn it because you're building engines and you're no longer just chasing paychecks. Now, are you still chasing the paycheck? Yes. But you're in a phase where you're going to find your path to transition from paycheck dependency to paycheck choice. The money's working for you and working harder for you than you did for it. And life might still feel heavy at times, but it's because growth without design creates complexity. But now, if you design it, things start to shift. But over time, it's going to get lighter because you're compressing the spring to get into the accelerations on the wealth creation curve. And here's the thing, if it still feels a little heavy, that's okay. Congrats. You didn't build freedom. Maybe you built a cage for a little bit, but you get a chance to move up because this is where the design for freedom replaces your hustle. And so everything we do from a planning standpoint isn't about growth and just bigger, bigger, more, more. It's about what do we need to be free and have options and choice in our life? This is where you start to look at things like liquidity, your emergency funds, and your peace of mind funds are important, but you're also investing and allowing the money to work for you, building that money machine. You're looking at how do I get options in my life? How do I make sure it's aligned with my lifestyle? Yeah, this becomes a little harder place to plan because there's a lot of mechanisms in play. You're probably in a place where you're starting a family or you have a family, which means that you got to think about stewardship. This is the place where the money machine is being built. This is where you enter money machine territory because it's going to work for you. Even if you don't. That's the game we're playing. Okay? And it is a long-term game. And this is where everything flips. See, money stops being the goal. You start to see it as the tool, or as I call it, the paintbrush to paint the masterpiece called your life. But that moves you to the next level of planning. This is freedom planning. This is 20 to 30 years out. This is the blueprint for laying out a calm life. At this level, people stop asking, how do I make more? And they start asking, how do I want my life to feel? My financial plan is built from a life plan, not the other way around. See, the decisions I make are slowing down. The stress starts to fade and money finally behaves in the way that I want it to behave. Because the plan that we put in place is taking into consideration the decades that we want to have in there. Time buys choice because money buys your time back and choice buys you freedom. This is about integration into your plan, your money, your life, your values, all of them in alignment. When you're spending, when you're investing, when you're living and everything is aligned, that is where you find fulfillment. It's not in the bank account, it's in the life account when we do it. And, but even here, wealth can still die with you if you're not careful. And you have to make a final shift in this planning. And now this is a big step for a lot of people, but I think that it's an important one. Because level 6 is what I call generational planning. Here's the thing. We started out with this idea of day-to-week planning to then a year or so planning and then multiple years, then to decades. Now, I want you to think in terms of generational, because when you start to think in terms of generational, the choices you make will be different. Now, there are some people that say, I don't care about the gen— I just care about me. I get it, you can live that way. But if you're gonna take the time to build the skills, if you're gonna take the time to build the wealth, if you're gonna take the time to build the money machine, why not create it in a way that has an indelible impact, positive impact, that far transcends your time here on Earth? And I think that that's a worthy thing to do. And that's the way we're building it. Generational wealth isn't some pile of money that you might think some spoiled child is gonna inherit. I have a chapter in my book that says, Skill sets before assets. The kids have to, have to prove their worth and they have to earn the right to get the machine. Otherwise, they don't get it. And that's stewardship. It's a way of thinking. And if your kids inherit assets, but not judgment, discipline, and perspective, then you didn't build wealth. Then you just created a delayed collapse. It's been shown that 70% of the wealth is lost in the second generation. 90% is gone by the third. Why? Because we transferred assets instead of skill sets. This is a time for you to instruct, to build, to skill up, to build that stewardship in a way that transcends you and time. It's what I did with my son. It's what we're going to be doing with the grandkids is to allow them to become part of this journey. On this path to live a fulfilled life of choice, not a spoiled life of entitlement. Because if that's the attitude, they get nothing. I just— it's— that's the way it is. But they have to prove that they can do it because generational wealth isn't money that lasts. It's thinking that lasts. So you don't climb this ladder by hustling harder. You climb it by planning further ahead. And every rung gives you less stress, more choice, more life. And the first step is you really stepping into the role that you have as the steward of your financial future. No matter the age or stage, I get it. You could be in survival mode and you're saying, I just want to put food on the table. I get it. Let's start there and let's plan from there and say, how do I get beyond that? And get your thinking beyond that before you get your life beyond that. Because remember, your wealth creation is behavioral, which means that behaviors are driven by thinking. So let's get the thinking right in place. And that's why this episode is so important. So important because earning more doesn't make you free. The money machine does. And that's the thing. And machines are built Over time by people who are willing to plan further ahead than today. And I hope that you'll look at things and say, man, I am just looking from paycheck to paycheck. How can I look a little bit more on the horizon to push to months, then to push to years, then to push to decades, and finally push to generations? Because that will change your thinking. It will change your values. It'll change your communication. It'll change your discipline. It'll change your behaviors and all of that will change your financial destiny. And the life that you live will be in alignment with your values and your vision. And that's when your dream becomes the reality. Okay? This isn't about being idealistic. I get it that it's gonna be hard. It's gonna be challenging. It's gonna be difficult. That doesn't make it impossible. And so I, I'm gonna urge you, I'm gonna implore you, I'm gonna encourage you, I'm gonna help you. Get down that path. All right. I hope that this helps to give you a little different perspective and you start to look at things through a longer lens and what can happen over that time. Because I, trust me, when I look at where I am today, I would have never dreamt that I would be here, but I am. And it came from planning over time and then taking one step at a time with guidance, with mentorship, with stumbles, with falls, with screw-ups, and having to rebuild. But it still made it. All right. I want the same for you. All right. I'd love to hear from you. I'd love to hear your thoughts on this or any comments. Do me a favor, DM me, send me a comment. Let's have a conversation. I love having conversations with the audience and guiding you along the way. All right. Until I get a chance to see you in the next one or on your path to financial freedom, know that I'm here. Know I'm here to help you and help you guide you and be that guiding light and that shining light on the path to financial freedom. Until then, always, always strive to live a life that outlives you. See you in the next one. 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. 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 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.