Claiming Financial Freedom...It's Your Birthright with Mel Abraham

0:02Who's ready to rock today, Fire Nation? JLD here and welcome to Entrepreneurs on Fire, brought to you by the HubSpot podcast podcast network, the audio destination for business professionals with great shows. like content is profit. Today, we'll be breaking down how to claim financial freedom because it is your birthright, Fire Nation. To drop these value bombs, I have brought Mel Abraham into EO Fire Studios. Mel is a CPA, entrepreneur, money mentor, and author of the number one bestseller, The Entrepreneur's Solution, the modern millionaire's path to more profit, fans, and freedom. Mel's upcoming book, Build Your Money Machine, How to Get Your Money to Work harder for you than you did for it.

0:41Lays down a comprehensive roadmap to financial freedom from establishing your vision to creating a self-sustaining money machine. We'll talk about how wealth building can shape generations and the most powerful wealth building tool that we possess as individuals. How most people think making a lot of money is how to build wealth, not true. We'll give you the real answer and so much more. And a big thank you for sponsoring today's episode goes to Mel and our sponsors. Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

1:15Marketing Made Simple brings you practical tips to make your marketing easy, and more importantly, make it work. A recent episode all about how Liquid IV is using marketing to shake up the beverage world dives deep into the strategies that have propelled Liquid IV to remarkable success. A must listen. Listen to Marketing Made Simple wherever you get your podcasts. Yahoo Finance makes it easy to get financial news data and insights fast. For comprehensive financial news and analysis, visit the brand behind every great investor, yahoofinance.com, the number one financial destination, yahoofinance.com.

1:47That's yahoofinance.com. Mel, say what's up to Fire Nation and share something that you believe about becoming successful that most people disagree with. Oh my God. Thank you for having me here, JLD. And here's the thing. I actually think you don't become successful. I think you are successful. Success is in the process, not the destination. Fire Nation, you're going to hear a lot about this theme as we talk about your birthrights, claiming financial freedom. Welcome. Mel, wealth building can shape generations to come. I mean, we just talked about your grandkids. I just had my first child, Beau.

2:33I mean, you start thinking down the line a little bit and you say, what does wealth building look like? So what do you think the single most powerful wealth building tool that we possess as individuals is? If you're an entrepreneur, it's your business. If you're not, it's your income. I mean, the bottom line is that it's the shovel that you're working with to build that. And when you use that properly, and I get there's different ages and stages in people's lives, but no matter the situation, if you just follow some basic principles, you will find yourself there. It may not be easy, but it is simple.

3:14Fire Nation, you don't tune in because you want the easy path to success. Because the reality is, if you've been listening to this podcast long enough, you know there is no easy path. Because if it was easy, everybody'd be doing it and it wouldn't work for anybody. We want a high barrier to entry because that's the lower the competition. Let's talk about failure. We're going to talk a lot about success and strategies and tools, but I want to talk about failure. What do you think our single greatest point of failure is when it comes specifically to building wealth? Here's what I've seen. This really plays on entrepreneurs for sure, as well as wage earners, but is to believe that our business and or our income is our wealth.

4:03It is the generator of wealth. It is the creator of the wealth. If you do it right. We are born into a world where we are taught and told to, you got to earn, get a good job, build a good business, earn, earn, earn, earn, earn. That's one machine, the earnings machine. The problem is, is that the earnings machine was never meant to give us freedom, never meant to give us wealth, never meant to be the wealth, and never meant to give us control. We need to create a second machine. It's what I call the money machine. It's what we do with what we earn that will make that happen. And when we fail to do that, and we think just because I have income, I'm good, that's when we fail to find the financial freedom we deserve.

4:50Now, I want to dive deeper into this point specifically, because we're talking about our single greatest point of failure when it comes to building wealth. Give us a specific example of maybe your past, Mel, where you did this, or maybe one of your clients that you saw do this. Let's get real. Let's get specific. Now I was a single full-time dad. I started raising my son as a single dad when he was five and a half years old. I literally was sitting back going, all right, how do I do this? How do I take care of the greatest gift, the one you're experiencing right now of being a dad, but also have the dream of building a business, doing the things that I want to do.

5:30And so as I built that business, it was growing and I'm taking care of him. But then lo and behold, I'm, you know, I had a martial arts studio. I go in there. I herniate three discs in my back. I mean, to the point of eight, eight millimeters. And I'm barely able to walk. So that took me out of my business. That took me out of the school. It took me out of all the things that were earning money. And here I was sitting back saying, how do I take care of my son? How do I do this? And it was in that moment that I started to realize, wait a second, I have one avenue for income. I have one avenue for financial freedom.

6:11I have one avenue to sustain myself. And now I can't run the race because of because of a health issue, because of this injury. And so that's when I started to look at it and say, I got to do money differently. I got to do business differently. I got to do income differently to not be so dependent on a single line where the planets have to line up to make sure that myself, my family, my son is okay. And that's what got me to start really looking at what do we do differently to start to build this. Okay, let's just paint a picture of a reality or a future where we're successful, where we've built powerful wealth, generational wealth.

6:58Now, you're a father. You're even a grandfather. What are your thoughts about how we use that wealth with our families? What do we do with the money that we've made as individuals, that we've built massive amounts of wealth, putting in the hard work over the years? How does that transition to our children, to our grandchildren? Does it transition? Let's talk about that. I love this question. So it can transition and and and but it doesn't necessarily transition. So the fundamental core belief that I have is you never transfer assets until you transfer skill sets. OK, and so the thing is that when do you do that?

7:45I started with my son when he was 10 years old. I gave him a commission. I taught him about generosity. I taught him about investing. basic, basic stuff. I taught him about cash management. I taught him about all those things. We started having conversations about. We had open conversations around money in an effort to get him to start to understand the principles, to start to understand the things, to grow him at a level so he could be a good steward of the machine that I was building. Because if he didn't earn the right, The birthright isn't because he was my blood, because I'm not going to build something and then have it get squandered for whatever reason.

8:26And we've seen it happen with when we transfer to kids. I wanted to see that he was a good person. I wanted to see he had good values. I wanted to see that he was going to he was going to move through the same movements, the missions and be the good steward so it can pass to his his daughters, too. And so I think we start early. we focus on transferring skill sets and not assets. I have one family that came to me, two kids. This will bring this home. Two boys came to me after their mother died and said, hey, we don't know how to do this stuff. Can you help me out here? And so I look at it. They're worth about$5 million.

9:04Mom dies$5 million. That's pretty good. They're doing all right. And I said, all right, why do you think you can't do it yourself?

9:13They So their dad died five years ago. The family was worth$180 million. What? And in five years, they wiped out$175 million. At$180 million, at 5 % will get$800 ,000 a month without touching it. And so the only way they can lose it, and we had a conversation about it, they were never trained. They were never educated. They were never involved. The assets got transferred without the skill sets. They got bad advisors. They got bad advice that was fraud committed, and they couldn't tell. And so before they knew it,$175 million, gone. Fire Nation, I hope you're listening to this with an open heart because I will tell you that the vast majority, I'm talking over 75 % of entrepreneurs that I talk to, quote, unquote, off the record, they always are saying things along the lines to me of, John, I'm working so hard to build generational wealth so that my kids don't have to work as hard as I work.

10:16They don't have to go through the pain, the struggle, the stress, the anxiety that I went through to make it. I don't want them to experience that. And my answer has always been, really? You really want to take away the most precious gift that I believe a human can have, which is the pride that comes along with making it, with making it on your own, with saying, you know what? I pulled myself up from my bootstraps. Like, yes, I may have had a great support system with my family. Yeah, they may have sheltered me for 18 years. Yes, they may have helped me in my initial college education or whatever they did, or maybe they didn't.

10:57But I'm saying, whatever path you've come from, man, I do just kind of shake my head and say, these entrepreneurs who are killing themselves, thinking that they need to build this unbelievable wealth pile, while, by the way, they're sacrificing time with family, time with those same kids, because they're off trying to build something that they think is going to give their children happiness, joy, or whatever it might be, ends up all blowing in the face, because then they miss being present as a father, as a mother. They miss that time. And they hand their children something that they have no skill sets to handle and poof, and one generation is gone.

11:39I mean, there's a reason why there's so many different phrases of blue collar to white collar to blue collar in three generations. And there's very many versions of that, but it says the same thing. the entrepreneur that went from nothing to the pinnacle the next generation often is back at the bottom because he or she did not transfer that skill set so i love how you brought that up mel it's so important the stats play this out 79 of millionaires are our first generation they created it they didn't win it they didn't didn't inherit it they didn't do anything money magazine did another study. 70 % of the wealth is lost by the second generation.

12:23Fire Nation, if you think we're even close to them talking about this topic and others that are so important to you, your family, your life, you have another think coming. We'll be right back after thinking our sponsors. Things change fast in the online business space. And when you have a team to manage and a business to run, it can be tough to keep up with all the latest and greatest marketing trends. That's why HubSpot created the 2024 State of Marketing Report to pull together the top marketing trends that you need to perfect your marketing strategy this year. The report consists of input from more than 1 ,400 marketing pros from all across the world.

12:59That's a lot of marketers. But don't worry, HubSpot pulled out the top trends shaping marketing this year and beyond and packaged it all up just for you. Awareness, engagement, privacy, efficiency, growth. This This report has all the top areas of interest for marketers and shows you what's working and what isn't. So you can stay ahead of the curve. Do yourself a favor and check out this report. It's exactly what your team has been looking for. Visit HubSpot.com slash State of Marketing to get your free copy of the 2024 State of Marketing Report for all the trends shaping marketing this year. Do you feel tired often, have low energy, or struggle with focus throughout the day?

13:36These are all common feelings when you're missing out on key ingredients that can naturally help you boost all of the above. RUT testosterone booster from Bucked Up is engineered with precision, utilizing clinically dosed ingredients to address vitamin deficiencies, manage stress hormones, and naturally boost free testosterone levels. Say goodbye to limitations and hello to a new level of strength, stamina, drive, and cognitive excellence. These qualities are within reach, and RUT is here to help you achieve them. Build muscle strength, boost your mood, feel more energized, tap into stronger focus, all from RUT Testosterone Booster, which is made from proven ingredients.

14:09And Fire Nation, thanks to Bucked Up, you have a special offer waiting for you. They are doing a buy one, get one free offer on their RUT Testosterone Booster. This offer is not available on the website. Claim it today by texting FIRENATION, all one word, to 312345 or go to getrut.com slash fire. That's G-E-T-R-U-T dot com slash fire. For 127 months in a row, we published a detailed monthly income report to share with you, Fire Nation, so you know we love transparency. I attribute this love of transparency to being brought up in a household where finances weren't a secret. My father taught me at a young age about saving and investing, and as a result, I'm committed to taking full ownership of my financial future.

14:54To do so, I need the right tools, and I know that behind every great investor is Yahoo Finance. Yahoo Finance allows me to get financial news, data, and insights fast, so I can make informed decisions to reach the financial freedom we all want. I love how Yahoo Finance allows me to see all of my investment and retirement accounts in one place, so instead of logging into three or four different sites, I can see it all at yahoofinance.com. For comprehensive financial news and analysis, visit the brand behind every great investor, yahoofinance.com, the number one financial destination, yahoofinance.com.

15:31That's yahoofinance.com. Now we're back and the reality is this, 99 % of people think that making a lot of money is how you build true wealth. Not true, says Mel. What's the real answer? The real answer is what you do with the money. The study of 10 ,000 millionaires and in the majority of those millionaires did not make more than one hundred and fifty thousand dollars average over their career. Wow. So it isn't the amount of money we know. How many people do you know that make a ton of money? Let's just take some popular people. Nicholas Cage, Mike Tyson, all of them. They all made a lot of money and they ended up broke.

16:17Some of them still are. And so it isn't the flow of the money. It's what we do with the money that makes a difference. You know, when my granddaughter was born, someone asked me what I was going to do with the money. I said, how I was going to take it. I said,$500 when she's born,$25, you know, a week. I'm going to put$100 away for the first 20 years of her life. We're going to teach her the skill sets. She's a little young. She's only two right now. But we teach her the skill sets and we get her to understand that granddad gave her$20 ,500 over her lifetime for now. But if she leaves it and does the right thing, she will have a million six by the time she's ready to retire.

17:02So for the cost of a cup of coffee a day, I gave her over a million dollar net worth. You could have just given her a Bitcoin. Yep. Fire Nation, obviously you're talking to somebody who's been there, who's done that, who's drinking the coffee. And you've created four stages in the affluence journey, Mel. I want to talk about those four stages now. So what happens is that I have people that will come and they say, hey, I want to build, I want to be financially free. Okay. But we have to pass through four stages, four gateways, if you want to call them that, that allow us to know that the milestones.

17:41because it's easy to sit back and say, well, that means I need to have$5 million,$10 million. And there's this lofty number we can't get to because it's so far away and we don't think it's possible. So I broke it down into four gateways or stages that you're going to go through. And that first stage is stability, is that we're going to pass through stability. This is when we create enough of a wealth that it's going to pay for our survival. The roof over our head, the clothes on our back, the food in our gut, health care, and the necessities that allow us to survive. Now we have financial stability.

18:22We have to pass through that gateway first. Once we pass through that, we go to the second gateway, which is financial security. This is when you have enough assets that it produces enough income to keep your current lifestyle. In other words, it can pay all your expenses. It's not going to let you grow. It's not going to let you do other things. But you know that your lifestyle isn't going to change. This is when you end up in a work optional type of setting where you get a chance to live a life by choice. That leads you to the third gateway. This is financial independence. At financial independence, this is where you replace 100 % of your income.

19:09You now have a machine that is duplicating the income from your efforts, but without the effort. That's what gives you the independence now to sit back and say, well, now, not only am I paying my bills, I have the additional income that I had before. Everything's good. But there's one level above that. and that's financial freedom and that's the fourth gateway that's the fourth space the thing with financial freedom and this is the thing that drives me crazy with a lot of advisors is they look at your income today and say oh so we got to replace your 60 000 but if 60 000 doesn't give you the vision that you want for your life then it's not enough so financial freedom is not about keeping your current lifestyle, but getting to the vision of what you want your life to be, which means that it takes care of the movements, it takes care of the missions, it takes care of the lifestyle that you desire in the future.

20:08It covers all the dreams. That's what financial freedom is. Fire Nation, these four stages, this is the dream. This is when you do it the right way. And you also believe that there are four things that we need to control to change our financial future once and for all. And if this can be done, if this can be controlled, we're in control. What does that look like? That's where simplicity comes in. We think it's all these complex investments and everything. There's four things that really lead to your wealth. The fact is you can only control three for the most part. And that's the first is your income.

20:50And that's where most people stop. What's your income? But we want to build our income. We want to increase our earnings. We want to have that. That's great. But it doesn't help without the second piece. And the second piece is your savings slash investing rate. So how much as a percentage, and we want our clients to take 20 to 25 % of it, to how much of your income are you putting away for your future? How much of your income are you prioritizing for your future? And so that savings rate, that investing rate actually has far greater impact on your wealth creation and your financial freedom than the income does, especially in your young years.

21:34the third aspect is time and i have people that come to me and say hey mel is today a good time to invest and they say and i my my response to him is have you been investing in the past no then today's a good day bottom line is we can't control what we did in the past wherever we are we are. But the sooner we get in the investing wealth creation game, the sooner we can find ourselves to financial freedom. Sitting on the sidelines isn't going to get us there. So now is always the time. So there is no, you don't change it. You don't put it there and say, well, I'll do it in 10 weeks. I'll do it in three weeks.

22:15No, now time. The answer to time is always now. That's the third piece. The fourth is the returns that you get on your investments. What risk are you taking? Do you go into a diversified portfolio of index funds? Do you get into real estate? Do you get into crypto? What is it? And there's some nuances there. But really, the three things that you actually can control because you sit back and say, now is always the time, is my income, my savings investing rate, and the investments I go into. That's it. It doesn't get more complicated than that, yet we tend to complicate it, which gets us to stop and not do a thing.

22:59Control those, you're good. Fire Nation, I hope you're getting fired up with the simplicity that Mel is laying down here. I mean, we talked about the four stages in the affluence journey, stability, financial security, financial independence, financial freedom, things that you can control, income, your savings and investment rates, the timing now, and risk versus returns, weighing those. Mel, bring this home for us right now because as I mentioned in the intro, you have an upcoming book, Build Your Money Machine, how to get your money to work harder for you than you did for it. What do we need to know about this?

23:40I truly believe that financial freedom is your birthright. We just need to go claim it. We need to understand how to claim it. Yet the schools don't teach us, and most of our money lessons are caught, not taught. We learn them from observation, but we don't really discern who we're observing. And so through my journey, and it has not been a straight line, I have lost more money than some people will make in a lifetime and recovered multiple times. So I learned some lessons. And so I tried to simplify it into core frameworks, simple processes that people can put into their life to build the wealth, but not just the wealth.

24:18It's about creating richness in your life, how you experience life. Here's what I believe is that we are trying to live a legacy, not leave a legacy. Leaving something for someone isn't what legacy is about. Leaving someone within someone is what legacy is about. And the way we do that is taking control of the moments of our life. And the way we take control of the moments of our life is have the wealth to have choice. And when we have choice, we can decide how to spend the moments so they're meaningful, they're valuable, and they're impactful. And when we stack that together, that's the definition of legacy.

24:58Give us a call to action. If Fire Nation wants this legacy in their future, if they want to read this book, what is your call to action for Fire Nation today? Yourmoneymachinebook.com and get access to the book. Get access to the tools. Get access to the technology. It's simple. It's accessible. And then don't just get the book. Start doing the work. The sooner we get you in the game, the sooner you'll find your path to financial freedom. And it is your birth right. Let's go claim it. Fire Nation, you're the average of the five people you spend the most time with. And you have been hanging out with MA and JLD today.

25:36So keep up that heat. For links to everything we talked about, visit eofire.com. Just type Mel, M-E-L, in the search bar and the show notes page will pop right up. And Mel, thank you for sharing your truth, your knowledge, your value with Fire Nation. For that, we salute you and we'll catch you on the flip side. Thank you, my friend. Good to be here. Hey, Fire Nation, a huge thank you to our sponsors and Mel for sponsoring today's episode. And Fire Nation, over the last decade, I've interviewed more than 4 ,000 of the world's most successful entrepreneurs, and I've created a revolutionary 17-step roadmap to your financial freedom and fulfillment.

26:15I put it all into my first traditionally published book, The Common path to uncommon success. It's a step-by-step guide that you need to achieve the lifestyle of your dreams. Endorsed by Seth Godin and Gary Vaynerchuk. Visit UncommonSuccessBook.com and I'll catch you there or on the flip side. Marketing Made Simple, hosted by my friend, Dr. JJ Peterson, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals. Marketing Made Simple brings you practical tips to make your marketing easy and more importantly, make it work. A recent episode all about how Liquid IV is using marketing to shake up the beverage world, dives deep into the strategies that have propelled Liquid IV to remarkable success.

26:56A must listen. Listen to Marketing Makes Simple wherever you get your podcasts. Yahoo Finance makes it easy to get financial news, data, and insights fast. For comprehensive financial news and analysis, visit the brand behind every great investor, yahoofinance.com, the number one financial destination. yahoofinance.com. That's yahoofinance.com.