0:06

This is the affluent entrepreneur show for entrepreneurs that want to operate at a high level and achieve financial liberation. I'm your host, Mel Abraham, and I'll be sharing with you what it takes to create success beyond wealth so you can have a richer, more fulfilling lifestyle. In this show, you'll learn how business and money intersect so you can scale your business, scale your money, and scale your life while creating a deeper impact and living with complete freedom, because that's what it really means to be an absolute entrepreneur.

0:41

So what is it that the top 1%, the top 5% of the wealthy have done to get wealthy and or to stay wealthy? What are they doing and how do they manage their money? How do they make it happen? And so here's the thing that I want to start off first, okay?

0:59

79% and study of 10,000 millionaires showed that 79% of millionaires were first generation millionaires, meaning that they created it. They didn't, it wasn't gifted to them. It wasn't inherited. They didn't win it in some lottery. It wasn't some windfall.

1:17

Okay, so eight out of ten almost created it. That means that, hey, you could be one of the eight.

1:24

Let's make it happen. So when we talk about how they managed their money and how they got there and some of those things, it isn't about the people that might have inherited. And they came from money. Look, even me, okay? I'm a son of an immigrant family. My dad came here at 17 years old with nothing. Nothing. He went to school.

1:44

He got an engineering degree. He was an aerospace engineer.

1:47

We lived a decent life. But it certainly isn't lavish. We were in the same house all my life. In fact, we just sold the house six years ago. So we only had that one house growing up and everything. So it was never that. And it wasn't lavish vacations. So it doesn't matter where you start. It's a matter of moving through it. And the statistics show 79% have done it in their lifetime. Here's another statistic from the same study, though.

2:16

31% of that, they never made more than just a little bit above$100,000 a year during their career. In other words, it wasn't because they sold a company for a windfall.

2:30

It wasn't because they were making 2300, $400,000 a year. No.

2:37

They did some things with what they had that made a huge difference in what they ended up with. Okay, remember, I say wealth creation. It's less about the money and more about the behaviors, more about the decisions the choices and the habits. So I want to make sure that we give you the right behaviors. I want to make sure we give you the right tools, the right tactics. My job is to educate, to equip, and to empower you so you can take control of your financial destiny. I'm not selling you any investments. I'm not selling you any insurance, but I do want to sell you on your dreams. And that's what we're going to do here. So what do they do now? Here's the first thing they do, is they get real with where they are, what they're doing with their money. I'm going to jump to the iPad here.

3:21

So, number one is they get real with what they're doing. Okay? Where are they? Where are they starting from?

3:28

Not. Not to ridicule, not to blame, not to feel bad, but to be aware once they're aware.

3:36

Now they say, oh, this is what I got to work with.

3:40

This is the hand I've been dealt. Let's play the handout. Now, once they do that, here's the other thing they do, is they are very deliberate in their choices, meaning that they follow a process, they follow a budget or a way of making things happen. And I get it. A lot of people do not like the term budget, and they don't like the to budget at all because a budget feels like deprivation. And I. I'm going to talk about a couple types of budgets, but I'm going to talk about why they're important.

4:18

Here's what's actually important behind it, okay?

4:21

It's not a budget in my mind, it's a cash resource plan. It is a plan. So here's how this. This plays out. You need to figure out what you want for your life.

4:36

These folks decided they wanted more for their life.

4:40

They had a vision for it. And so when we look at it through those eyes, what ends up happening is that you start with that vision, okay? And that vision is the thing that informs everything you do. Because we want to move closer to that vision. They don't get taken off course by temptation, by social media, by things too long. I mean, look, I even do it. There's a reason I got a$900 coffee maker in there. It's because I was swiping on Instagram and I said, oh, that looks nice. I can order a coffee from my app.

5:18

So I'm not exempt from it. But we just understand that, by and large, we operate to the vision. Now, why is that important? The reason the vision is important is it actually leads to. To a plan. Okay, what is the plan to reach the vision? And when we have the plan to reach the vision, then from there we have an idea of, okay, if I know what the plan is, what's the strategy to make the plan a reality. And so now we have the strategy, then from that strategy we can turn around and say, great, I now know what the strategies. What are the tactics that I need? These are things like the investments and those kinds of things. And then the last piece is this, great, what are the actions I need to take? But too often what ends up happening is that people are asking questions about this. What do I need to take? What actions do I need to take?

6:20

What investments should I be in? The problem with that question is you can't give a good answer because you don't know what the vision, the plan or the strategy are. You have to start there. You have to start there. And so what happens with the top 1% is they actually have a vision for their life, that develops a plan, that creates a strategy, that informs the tactics, that details the actions they need to take.

6:50

This is where the whole budget or cash resource plan comes in. It isn't about restraining you. It isn't about deprivation. It's actually about permission. Imagine this. You have a plan in place that allows you to say, oh, I already planned for this expense. I already planned to spend this.

7:16

And it allows me to do the things that I want to do. And I know that when I do this, it's moving me closer to the vision I have for my life. That's part of what they do. Now let's just talk about how we, how to do this. I think that, that we look at it through a different, a different set of eyes when you start to play it out this way and that is this. Every single dollar, every single dollar that comes into your life, or pound or euro, whatever the currency is, everything that comes in your life must have a job description.

7:53

And here's the key. Before you earn it, before it ever comes in your life, you have to know what you're going to do with it. The problem is, is that what happens is that we get a paycheck, we get money, and all of a sudden the emotions of temptation come up and you go spend. No rhyme, no reason, no plan doesn't move you closer. 1% don't do that. They know when they get the money, it's already allocated. This thousand dollars is going towards the mortgage. This is for our food, this is for our clothing, this is for this.

8:29

And, and you say we have, then it's restrictive and mel, then I can't do anything. Ah, here's what we want to do in the plan. Not only are you going to give a job description for every, every dollar, you're going to give permission to spend the dollars. You're also going to make sure that the plan is built on your joy points. Your joy points, what are those? Here's, here's what we have. Look, I swiped, bought the coffee maker. Does it bring me sustainable joy? Yeah, I like coffee. I don't drink a lot of it, but I like coffee. Could I have done without it was the other coffee maker we had just good enough?

9:14

Yes. So in my mind, it isn't a visceral, longstanding, sustainable joy. It was a momentary pleasure that was bought out of temptation and emotion. And so now could we afford it? Yes. And so it didn't put us in a bad position.

9:33

I'm not concerned about it. But when these types of purchases are buying or spending, create a situation where you're going in debt, you can't afford to pay other bills, or you're moving further away from your vision and the plan for your, your financial life and your life in general, then I don't want you to do it. So. But here's the thing that I know you will not, if you do not enjoy the path to financial freedom, you will not enjoy the destination of financial freedom. Okay? And the reason I say that is.

10:06

Cause I've watched people do this is that they restrain themselves so much, they deprive themselves so much that they're miserable on the journey. And when they get to the destination, they don't even know what to do. And because they were miserable on the journey, it was tough. So here's what I want people to do. I say, I want you to pick three, maybe four, what I call joy points of life. What are the things that give you visceral joy that is lasting, that is really meaningful, and it's going to be different for everyone. Like, for instance, my wife and I, we love to travel, and we don't travel cheap, okay? But we love to travel. We know that that is one of our biggest joy points about our life. And so we make sure that that is built into the plan, built as part of the strategy, built as part of the tactics. So along the way, those two to four joy points, we are funding, we are living, we are enjoying it. Now, there's some other joy points that are long term that we'll get to as we build the money machine. And do those things. But if we're not creating some visceral level of sustainable joy on the journey, we won't stay on the journey and we'll give up. So in the plan, and this is why, one of the reasons that some of these plans don't do not work, whether it's the 50, 30, 20 or the 75 1015, there's zero based budgeting. They don't work because you're not giving yourself some space for joy. And all it feels like is a diet. You can't have this. You can't do that. You can't do this. No, I want it to be. You can, you can, you can. I want to separate guilt. I want to separate shame. I want to. I want you to do that. Okay? So there needs to be a plan in place, but that plan needs to include some level of joy in the process. And if you look at the top 1%, they work from a plan, okay?

12:08

And they, they, they're simple at first. They get more complicated. My plan is a little more complicated because of what we're doing and how we're doing it. But it was a lot simpler before. Now, the thing that drives it, there's two other things that I want you to know. That, that, that drive it is that if we go back to. Here is that number three. Number three is all about something that I call the wealth priority pathway. Here's, here's the thing. It is really important for you. And what most of the 1% do is that they make investing a priority. So you're going to make income, you're going to spend money. This is what most people do. And then you're going to invest. This is what most people do. What are the 1% do? The problem here is this is you're spending money on a current lifestyle and you're investing what's left.

13:03

You're investing the scraps. It's not what we should be doing, okay? What most people do is this.

13:11

What I want you to do is to flip it. So what I want to do is I want to take the spending and I will move it here. I want to take the investing and I will move it here.

13:22

So what am I going to do? I'm going to make money. I'm going to make investing the priority and I'm going to spend second, okay? So the wealthy make investing the priority. So they make money, they invest the money. And whatever there's left is what they use to build their life today. And if they don't like what's left, they try to figure out how to get more money, how to, how to make sure that they have more money, but they don't forsake that future. So, so what they do, so number three, that that piece is that to make sure that they make investing a priority. And then the last thing that they do is to follow the recipe for building wealth. And our recipe is something that I call the wealth priority ladder.

14:09

I go into a ton of detail in my book and some of my training. So building your money machine. But this is the, basically, when you talk about a recipe, when you talk about a recipe, it's what are the ingredients? How much of the ingredients do you need? When do you put the ingredients in? How are you going to cook it? That's what this does. It literally is the job description for every single dollar that's coming in. How am I going to build my cushion? How am I going to build my emergency fund, or what we call a peace of mind fund? How am I going to build my investing? How am I going to build the money machine? How do I get out of debt? When do I pay my mortgage? When do I pay for the college? College kids? Imagine for a moment that you have a recipe that tells you specifically what to do with each dollar. It takes temptation out. It takes decision and indecision out. It takes all of those things out. And it gives you the criteria to make it happen. This is what they do. So they make investing a priority. They have a plan that's built on a vision.

15:12

They have a process and a recipe that is proven that they follow. And they do it intentionally. They do deliberately over time. So here's what I want you to do. I want you to examine for a moment.

15:27

Cause you can look at this, you can watch this, you can listen to it and say, oh, this was great. But here's what I want you to do.

15:34

I want you to ask yourself first, do I have the right vivid vision for my life? And if not, start there. If you want a way to do it, I talk about it in the book. I give you the tools, I give you the worksheets to make it happen. So get a vision. 1st. 2nd, once you have that vision, say, what's my plan to make it? Third, make sure that you have the right tactics to make the plan a reality which is built on a strategy. Fourth, do you have the recipe? What do you do with every dollar to make sure that the plan becomes a reality? Follow the recipe. If you don't have that recipe, then follow the wealth priority ladder. I think it's the best out there. I think it is something that has been proven over time. It has worked for me, my family, my son, clients. I've got an 18 year old working it right now. All right? And he's on the path.

16:29

He's on the path to make millions. Okay? Just follow the recipe. Stay in the game. That's what the, that's what the 1% do. They weren't gifted it. They didn't inherit it. They created it, they managed it, they built it, and they lived from it. I want you to do the same. All right? So use this as your checklist. If you have any questions or comments, do me a favor.